Vasta Platform Q2 2025 Earnings Report

Vasta Platform EPS Results

• Actual EPS: -$0.06
• Consensus EPS: $0.03
• Beat/Miss: Missed by -$0.09
• One Year Ago EPS: N/A

Vasta Platform Revenue Results

• Actual Revenue: $63.28 million
• Expected Revenue: $434.00 million
• Beat/Miss: Missed by -$370.72 million
• YoY Revenue Growth: N/A

Vasta Platform Announcement Details

• Quarter: Q2 2025
• Date: 8/6/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 5:00PM ET

Vasta Platform (NASDAQ:VSTA), Inc. (NASDAQ: VSTA) is a technology company specializing in cloud-based talent acquisition solutions for the staffing and recruiting industry. The company’s origins trace back to The SysLogic Group, founded in 1980 to deliver workforce management and software services. In January 2023, its recruiting software division was rebranded as Vasta Platform, marking a strategic focus on AI-driven hiring and workforce optimization.

At the core of Vasta’s offering is an integrated software suite designed to streamline the entire recruiting lifecycle. Key components include an Applicant Tracking System (ATS) to manage candidate workflows, a Candidate Relationship Management (CRM) module for nurturing talent pools, automated communication tools for multi-channel outreach, built-in skills assessments and behavioral profiling, and advanced analytics to measure recruiter performance and placement quality. Through a single-platform architecture, staffing firms can reduce manual processes, enhance candidate engagement and accelerate time-to-fill.

Vasta Platform primarily serves staffing agencies and recruiting firms across North America, providing scalable solutions for small, mid-market and enterprise-level operations. The company supports remote and hybrid workforces, leveraging cloud infrastructure to ensure continuous uptime and data security. Its platform is accessible via web and mobile interfaces, enabling recruiters to source, screen and communicate with candidates from any location.

Headquartered in Plymouth, Minnesota, Vasta Platform maintains a professional services team that assists clients with onboarding, training and ongoing support. By combining decades of domain expertise with modern software design, Vasta aims to deliver actionable insights that help organizations attract, assess and retain top talent in an increasingly competitive labor market.

Vasta Platform Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Vasta’s subscription revenue increased 16% to BRL 1.34 billion in the 2025 sales cycle, sustaining fourth consecutive year of double-digit growth while complementary solutions grew 24%.
• Positive Sentiment: Adjusted EBITDA for the cycle rose 8% to BRL 462 million with a 31.1% margin, and Q2 alone delivered BRL 42 million at an 11.7% margin, reflecting improved profitability.
• Positive Sentiment: Free cash flow jumped 147% year-over-year to BRL 223 million in the cycle and the free cash flow/EBITDA conversion rate climbed to 57.7%, driving net debt/EBITDA down to 1.9×.
• Negative Sentiment: B2G net revenue in the cycle fell 78% to BRL 15 million versus BRL 69 million last year due to the Para contract timing, though the second semester of Para and new state wins are expected to drive recovery.
• Positive Sentiment: Start Anglo Bilingual School expanded to seven operating units with over 50 signed contracts and plans to open eight more schools in 2026 as a key growth avenue.

Presentation

[Operator]

Good afternoon, and welcome to Vasta Platform's Second Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' remarks, we will conduct a question and answer session. Before we begin, I would like to read a forward looking statement. During today's presentation, our executives will make forward looking statements.

[Operator]

Forward looking statements generally relate to future events or future financial or operating performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those contemplated by these forward looking statements. Forward looking statements in this presentation include, but are not limited to, statements related to our business and financial performance, expectations for future periods, our expectations regarding our strategic product initiatives and their related benefits and our expectations regarding the market. Forward looking statements are based on our management's beliefs and assumptions and on information currently available to our management. These risks include those set forth in the press release that we are issuing today as well as those more fully described in our filings with the Securities and Exchange Commission. The forward looking statements in this presentation are based on the information available to us as of today.

[Operator]

You should not rely on them as predictions of future events, and we disclaim any obligation to update any forward looking statements except as required by law. In addition, management may reference non IFRS financial measures on this call. The non IFRS financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with IFRS. I would now like to turn the call over to Cesar Silva, Chief Financial Officer. Thank you. Please go ahead.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

Hello, everyone. Good evening and thank you for joining us in this conference call to discuss Vasta Platform's 2025 results. I'm Cesar Silva, Vasta's CFO and today we have the presence of Guilhana Malaga, Vasta's CEO, who will be joining me on the call. Let me now hand over the floor to Guilhana Melaga, our CFO to make his opening statements.

[Guilherme Alves Mélega, CEO at Vasta Platform]

Thank you, Cesar. Thank you all for participating in our earnings call.

[Guilherme Alves Mélega, CEO at Vasta Platform]

Let's move to slide number three with some highlights of 2025. We are now entering the final portion of 2025 sales cycle, which runs from October 2024 to September 2025. I'm pleased to report that in the second quarter, we continue to deliver solid financial and operation performance with consistent growth across both our core and complementary solutions. A particular highlight this quarter was our free cash flow. Subscription revenue reached million in the cycle to date, 16% increase compared to the same period of 2024.

[Guilherme Alves Mélega, CEO at Vasta Platform]

This result demonstrates our ability to sustain double digit growth in our core business for the fourth consecutive year. Our Companetary Solution business grew 24% supported by accelerated expansion in both student base and market penetration. As a result, net revenue in 2025 cycle to date reached billion dollars a 14% increase compared to the same period in 2024. This growth was driven by the successful conversion of ACV bookings into revenue along with the strong performance of complementary business. In the B2G segment, we recorded $9,000,000 in revenue from new customers totaling million in the cycle to date.

[Guilherme Alves Mélega, CEO at Vasta Platform]

Over the last two quarters, we generated 14,000,000 from new customers, mainly municipalities, who began using our product and service, confirming that our strategy is on the right track and diversifying our B2G portfolio into states and municipalities. In the 2024 sales cycle, we booked BRL69 million in revenue from the Para contract, which was recognized all at once covering the first and second semester. And in the current cycle, the first semester of Para was booking in Q4 twenty twenty four. And the second semester is expected to be performed in the 2025. On the profitability front, adjusted EBITDA reached million, an 8% increase compared to the previous cycle.

[Guilherme Alves Mélega, CEO at Vasta Platform]

The EBITDA margin was 31.1% reflecting a different product mix, lower year to date B2G revenue and higher marketing expenses related to business expansion. In Q2 alone adjusted EBITDA was BRL42 million with a margin of 11.7%, up 2.9 percentage points from Q2 twenty twenty four. Free cash flow remains a key strength. In the cycle today, free cash flow totaled million dollars an increase of R133 million dollars year over year. In Q2 twenty twenty five, free cash flow reached R80 million dollars 108% increase compared to Q2 twenty twenty four.

[Guilherme Alves Mélega, CEO at Vasta Platform]

Our last twelve months free cash flow to EBITDA conversion rate improved to 57.7% driven by growth and sustained efficiency measures. These results reflect our ongoing efforts in operational discipline from automation and collection process to centralized payment scheduling and renegotiation of supplier terms. We also continue to make progress in deleveraging with net debt EBITDA last twelve months at 1.9 times, down from 2.28 times in Q2 twenty twenty four. Turning to Start Anglo Bilingual School, another important growth avenue, we can say that our operations continue to expand. We implemented five new operating units this year and together with our two flagship schools, we now have seven units in operation.

[Guilherme Alves Mélega, CEO at Vasta Platform]

Closing this quarter, we have signed over 50 contracts and we are actively working to deliver another strong growth cycle in this business line. Finally, we remain committed to innovation and inclusion. As we prepare for 2026, Plural dot ai will introduce new tools focusing on equity and personalized learning. The individualized education plan EEP will empower educators with tailored pedagogical recommendations supporting inclusive practice and transforming challenges into opportunities for growth. We are confident in our strategy and proud of the progress made so far.

[Guilherme Alves Mélega, CEO at Vasta Platform]

I'll now turn back to Cesar Silva, who will walk us through the financial results.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

Thank you, Melania. In slide number four, we present the composition of Faster's net revenue. On the left side, you can observe the organic growth for the second quarter in total net revenue, which increased by 21.8% reaching million dollars Cost of subscription revenue achieved in the 2025, R320 million dollars a 15% increase comparing to the same quarter of 2024. Non subscription revenues increased 98% to R29 million dollars due to a seasonal effect between the first and second quarters related to deliver of books. And in the government segment in this quarter we generated million in revenues.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

And together with this BRL5 million booked last quarter, we totaled BRL14 million in new customers. So in the sales cycle, we achieved BRL15 million, a decrease of 28% in comparison to BRL69 million of 2024 as there was explained by Guilherme before. Moving to the right side, you have the numbers of the net revenue for the 2025 sales cycle to date. We achieved an organic growth revenue of 13.6% in the 2025 sales cycle to date, amounting to R1.488 billion dollars The main factors for this performance were firstly, the subscription revenue had increased 16% reaching R1,340 million dollars and continues to be the major contributor to our total revenue, representing now 90% of the revenue share. Non subscription revenue increased 11% to R98 million dollars This growth is mainly driven by two effects, the new revenue for our flagship start Angulo sale in Sao Paulo that did not exist in 2024 and the growth in the number of students in the Angulo Para University course, which enrolled 21% more students than last year.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

Moving to slide number five, we can say that in this quarter, our adjusted EBITDA amounted to BRL42 million with a margin of 11.7%, an increase of 62% from BRL26 million in the 2024, mainly due to the growth in core content and B2G net revenue. On the right side, we see that adjusted EBITDA in 2025 sales cycle increased by 8.1% to reach R462 million dollars with a margin of 31.1%. Let's now move on to the next slide and explain the breakdown of the adjusted EBITDA margin. In slide number six, we can see that the adjusted EBITDA margin achieved 31.1% in the sales cycle, 1.6 percentage points lower than the same period of 2024. Our gross margin reached 62%, a decrease of 2.4 percentage points from 64.4% in the 2024 sales cycle due to a lower revenue in B2G and a different product mix.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

Provisions for doubtful accounts achieved 3.1% in relation to the net revenue and have an improvement of 0.9 percentage points when compared to 2024. This indication has been showing improvement during the year despite the very challenging history to credit environment for non premium brands and we still have foreseen some challenge in the credit scenario for the next month. As a percentage of net revenue, our commercial expense increased by 0.6 percentage points driven by higher expenses related to business expansion of the commercial cycle of 2026 and remain stable year 17%. And finally, adjusted G and A expenses improved by 0.5 percentage points, mainly driven by workforce optimization, budgetary discipline measures. Moving to slide number seven, we show the adjusted net profit.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

In the 2025, adjusted net losses totaled minus R29 million dollars showing an improvement from the adjusted net loss of minus R37 million dollars in the same quarter of 2024. In the sales cycle, adjusted net profit reached BRL111 million and there has been a slight increase of 1% from adjusted net profit of million in 2024. Moving to slide number eight, we show the free cash flow evolution. In the 2025, the free cash flow totaled R8 million dollars representing a relevant increase compared to R38 million dollars in the same period of 2024. And in the 2025 sales cycle, our free cash flow reached R223 million dollars an increase of 147% from 2024.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

The cash flow generation in this cycle has an outstanding performance and achieved the highest level of conversion related to the adjusted EBITDA in the last years achieving 57.7%. This is 26% better than the same indicator as last year. This improvement is explained by certain measures company has implemented and they are showing results. We can mention some of these measures. In our collection process, we implemented automatized process like reminders and press to notification to the customers.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

We created a customer classification measure to make it faster renegotiation of overdue receivables. On the payment side, we implemented several initiatives to enhance discipline in payments such as Hegro's financial planning, centralized payment scheduling and negotiation longer payment terms with suppliers. Additionally, the first semester of twenty twenty five benefited from early collections of the 2025 sales cycle, which are expected to be normalized throughout the next quarters of the year. Is it worth mentioning that for the year we expect that we will achieve a conversion rate of about 50% in the 2025 fixed sale year at the end of the year. This will represent a relevant increase from 41.8 compared to the same indicators in the last year of 2024.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

Moving to slide nine, we show the provision for doubtful accounts. Total expenses with PDA in the 2025 totaled R11 million dollars representing 3.1% of net revenue, an improvement from the comparable quarter in 2024 when the PGA achieved 3.4% of net revenue. In the sales cycle of 2025, EBITDA amounted to R45 million dollars compared to R52 million in 2024. Provision for doubtful accounts represent 3.1 of net revenue in 2024 sorry 2025, an improvement of 0.9 percentage points in comparison to 2024. As explained before, we still foresee some difficulty in credit scenario mainly for the school related to mainstream brands.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

Moving to the next slide, we observed that the average payment terms of Vaca's account receivable portfolio was one hundred and fifty three days in the 2025, which is one day higher than the comparable quarter in line with the present business model seasonality. Moving to the next slide, let's take a closer look at the net debt movement. In the 2025, Vasta had a net debt position of R917 million dollars $46,000,000 lower than the previous quarter. This achievement is due to the positive cash flow generated during the period in the amount of R80 million dollars which surpassed the impact of interest accrual of R34 million dollars Moving to the right side of the slide, the net debt position decreased by R123 million in the sales cycle to date. This decrease was driven also by the free cash flow generated in 2025, which was partially offset by the financial interest costs.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

I will conclude my part of this presentation with Slide 12, explaining some more detail about our net debt composition, which represents R917 million dollars at the end of the quarter. This amount is composed of R717 million dollars on the debentures issued to the parent company in addition to R462 million dollars on accounts payables for business combination, mainly related to 11 acquisitions. These numbers were offset by R315 million dollars on cash that the company owns. In the lower left part of this slide, we can see that in the 2025, the net debt to last twelve months adjusted EBITDA ratio has decreased 0.16 times from the last quarter and now stands at 1.9 times. We would like to reinforce our commitment to continuing to generate free cash flow and leverage the company.

[Cesar Silva, Chief Financial Officer at Vasta Platform]

Having said that, I'll finish our presentation. Invite you all to the Q and A session.

[Operator]

Our first question comes from Marcelo Santos from JPMorgan. Please go ahead. Your line is open.

[Marcelo Peev Santos, Senior sell-side Equity Analyst - TMT & Education at JP Morgan Chase & Co]

Hi, good evening. Thanks for the presentation and the opportunity to make questions. I wonder if you could comment a bit on the commercial cycle and the competitive environment And focus on core and complementary, how these two are going? And the second question is regarding the outlook for B2G contract for new states. And if the election year is a good year or is a bad year to close this kind of contracts? Thank you very much.

[Guilherme Alves Mélega, CEO at Vasta Platform]

Thank you Marcelo for your questions. Let me give you some flavor about the commercial cycle. We are keeping the pace in our commercial cycle for 2026. We are seeing a very positive outlook for complementary products. The penetration in our school base keeps running, keeps improving.

[Guilherme Alves Mélega, CEO at Vasta Platform]

There is definitely demand for bilingual, social emotional and maker products. We have been growing with more than 20% on complementary and we don't see that changing a lot for the next cycle. In terms of renews contracts, I would say so far it had been a very good year. So we keep a very positive outlook for 2026. And but that's mainly because we have a very strong portfolio, very complementary to the school needs.

[Guilherme Alves Mélega, CEO at Vasta Platform]

And I think we reached a very unique position to keep the growth. The market is very competitive, but we are moving ahead on that. In terms of B2G, we our strategy to keep growing on B2G is being performed. We have around 10 new customers in the year to date totaling BRL50 million in new contracts year to date. So we are working also in retail in B2G.

[Guilherme Alves Mélega, CEO at Vasta Platform]

Now we are we have municipalities on our base benefiting from the learning of composition and Saedi preparatory. We still have the second semester of Para contract to be booked. We start receiving the orders and we expect at least one new state by year end. And that's pretty much the outlook. It's very positive for B2G also.

[Marcelo Peev Santos, Senior sell-side Equity Analyst - TMT & Education at JP Morgan Chase & Co]

Thanks. And just follow-up. Conceptually, is an election year a normal year, a good year, a bad year? Like I know, of course, you don't have a crystal ball, but what can you say about the differences between selling during an election year and not selling in the election year?

[Guilherme Alves Mélega, CEO at Vasta Platform]

Yes. We don't have much history on that since it's quite new business. And I pretty much give my guess that if you are doing an important and if we're helping the state or the client, probably election year wouldn't be such a problem to keep the contract. And definitely with elections, we you have a new governors and mayors willing to do new things on their mandates. So let's wait and see. So far we have a positive outlook.

[Marcelo Peev Santos, Senior sell-side Equity Analyst - TMT & Education at JP Morgan Chase & Co]

All right. Thanks a lot.

[Operator]

Our next question comes from Flavio Yoshida from Bank of America. Please go ahead. Your line is open.

[Flavio Yoshida, Vice President - Equity Research Analyst at Bank of America Merrill Lynch]

Hi, good evening everyone. I have two questions on my side. The first one is on the EBITDA margin, which came in very good shape, by lower provisions, right? So I would like to understand if the premium schools the fact that premium schools are gaining share on the mix helped this trend? And also if we should expect this provisioning levels to continue improving going forward?

[Flavio Yoshida, Vice President - Equity Research Analyst at Bank of America Merrill Lynch]

And then my second question is also on B2G. So I was wondering if you guys could share expectations for the second half of this year, if we could expect a similar level from last year or you could expect some growth compared to the same period of last year? Thank you.

[Guilherme Alves Mélega, CEO at Vasta Platform]

Thank you, Flavio. Talking about margins, yes, the margin is a reflect of premium products that we are selling. We are and also the growth. The growth has been a very important driver for margins since it dilutes a very significant fixed cost that we have. And we expect Q4 to be a very important quarter because we recognize all the growth for 2026 and revenues and margins should be slightly above the 30% level.

[Guilherme Alves Mélega, CEO at Vasta Platform]

In terms of B2G, yes, we do have a very positive outlook for second semester. We expect to record the second half of the biggest contract that we have which is Para. We booked it first semester in Q4 twenty twenty four and we are receiving the orders for the second 2025. On top of that, we have 10 new customers with more shipments in Q3 and Q4. And we expect to have new customers in municipalities, are smaller contracts, is enhancing our base.

[Guilherme Alves Mélega, CEO at Vasta Platform]

And we expect to grow in a state for Q4 twenty twenty five. So that's the outlook. It's a positive trend.

[Flavio Yoshida, Vice President - Equity Research Analyst at Bank of America Merrill Lynch]

Okay. That's very clear. Thank you.

[Operator]

Our next question comes from Lucas Nagano from Morgan Stanley. Please go ahead. Your line is open. Lucas Nagano from Morgan Stanley, your line is open. Please go ahead.

[Lucas Dai Nagano, Equity Research Associate at Morgan Stanley]

Hi, can you hear me? Sorry, I was on mute. So, yes, thanks. Good evening. We have two questions.

[Lucas Dai Nagano, Equity Research Associate at Morgan Stanley]

The first is related to start Anglo. From the contracts you already signed, do you expect all of them to begin operations already in 2026? And the second question is related to the non subscription revenue. If you could provide some more color on this line, because you mentioned that the performance was kind of seasonal, but even when you look at the cycle to date growth, it's growing pretty decently. So what's driving this? Thank you.

[Guilherme Alves Mélega, CEO at Vasta Platform]

Thank you, Lucas. The new contracts we have around 50 new contracts for Start Anglo. We are already operating seven schools, two flagships and five franchisees. We expect to have more eight new units in 2026 and the remaining will be opening 2027 and 2028 with a huge concentration in 2027. Regarding the non subscription, yes, have a seasonality in terms of revenue recognition in Q2.

[Guilherme Alves Mélega, CEO at Vasta Platform]

We have more recognition, but the growth when you look at the cycle to date is mainly driven by the tuitions that we have on our two flagships of starts San Jose De Rio Treato and Lisio Pasta in Sao Paulo together with the prep courses that grew prep courses that also grew. So the cycle to date reflects best the trend of this business, which now accounts for tuitions from our two flagship schools. And that's pretty much the trend for the non subscription.

[Lucas Dai Nagano, Equity Research Associate at Morgan Stanley]

Very clear. Thank you, Malaga.

[Operator]

We have no further questions. I'd like to turn the call back over to our CEO, Guilherme Malaga for closing remarks.

[Guilherme Alves Mélega, CEO at Vasta Platform]

Thank you all for participating in our call. The 2025 sales cycle to date continues reflecting Vasta's solid execution and strategic focus. Our consistent revenue growth, strong cash flow generation and expansion in core business and complementary products together with the two growth avenues of Stata Anglo and V2G reflects the commitment to delivering long term value for our stakeholders. So thank you all to continue supporting us. We look forward to see you on the next call. Thank you all.

[Operator]

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Cesar Silva, Chief Financial Officer
• Guilherme Alves Mélega, CEO

Analysts

• Marcelo Peev Santos, Senior sell-side Equity Analyst - TMT & Education at JP Morgan Chase & Co
• Flavio Yoshida, Vice President - Equity Research Analyst at Bank of America Merrill Lynch
• Lucas Dai Nagano, Equity Research Associate at Morgan Stanley