Good morning, ladies and gentlemen, thank you for waiting. Welcome to Cogna's Earnings Conference Call for the first quarter, 2023. We would like to remind you that this meeting is being recorded and all participants will be in listen only mode during the presentation. Later, we'll start the Q&A. At that time, further instructions will be provided. Should any of you require assistance during the call, please ask for assistance from an operator by pressing star zero. This is also being broadcast live via a webcast and can be accessed at the address ri.cogna.com.br where you will also find the respective presentation. You will be responsible for changing the slides. You can replay the event right after it's closed. You can also submit, via the website, questions for Cogna that will be answered right after the end of the conference. Before proceeding, I would like to remind you that any statements that may be made during this conference call relative to the business outlook of Cogna, projections, operating and financial targets are based on the beliefs and premises of the management of the company, as well as on information currently available. Future considerations are not guarantees of performance as they involve risks, uncertainties and premises, and they refer to future events that depend on circumstances that may or may not occur. Investors and analysts should understand that general conditions, industry conditions and other factors may affect Cogna's future results and lead to results that differ materially from those expressed in such forward-looking statements. With this, I would like to turn it over to Mr. Roberto Valério, Cogna CEO, who will start the presentation. You may proceed, sir. Good morning, everyone. Thank you for participating in today's to discuss results we believe are excellent in the first quarter of 2023. With me today, Frederico Villa, our Finance VP, Guilherme Mélega, Vasta CEO, Eduardo von Sack, our IR and Corporate Finance Director. This call will last approximately 1 hour, 40 minutes of our presentation, and then a 20-minute Q&A session. As I mentioned, we believe the first quarter has posted excellent results. It is our best quarter in the last four years. We feel happy about the results and excited about the prospects for 2023. All our three business units have had a growing revenue. Now, specifically about Kroton. Kroton had an excellent quarter, as I mentioned in 2022. The market could actually see that Kroton had a growing EBITDA and growing profitability, although the revenue was not yet growing in the first and second quarters. I mentioned as soon as revenue began to grow, the results would be even better. This first quarter is clearly showing that higher revenues have helped our results in EBITDA and also in cash generation. Specifically, I'd like to mention that Kroton first quarter had a 15% growth in revenue sustained by a larger student base. This is our fourth quarter of consecutive growth, the 8th quarter when we've had recurring EBITDA growth, 23%. We heard a question about expansion of margin. Well, we have delivered 2.5 percentage points in recurring EBITDA margin. I will give you more color on this. Even gross margin based on operating leverage has improved. All of that sustained by a strong growth, a 10% growth in our student base. Last year we celebrated 1 million students. Well, now in this quarter we're celebrating 1.2 million students. 1,128,000 undergraduate and 75,000 graduate students. 1.2 million students. Our intake is up 4.2% in volume for almost three years now. It is important to grow revenue in the intake cycle because if revenue grows and we have a quality intake, we ensure growth in the future. This 15% growth in net revenue is showing that our student base is growing with quality. That's why we have better results. Now the great highlight, looking at each segment or each product, we delivered freshman ticket growth. I don't remember when companies in our industry have managed to do that. We have delivered freshman tickets increase. It shows that we have an edge in the competition, and we see the possibility for the market to resume growth. For graduate students, we have grown 27% in new enrollments, and the student base is up 20%. Dropout rates remain under control, and we've had a reduction of 1.1 percentage points, which is great. The ADA, which is our proxy for on-time payments. The allocation for doubtful accounts is down 11.13% compared to 13% last year of the net revenue. We've been able to reduce the PDA over net revenue ratio. KrotonMed, one of our growth avenues, the medical programs, is growing 35% in revenue and 62% in recurring EBITDA. Vasta also had great results, growing 17% in the cycle. I mean, if you add the last quarter and this quarter, this result is in line with our guidance. Vasta has delivered 65% of the ACV guidance for this year, so we have great outlook for Vasta performance. The subscription revenue has grown 17.7%, which is part of our strategy, growing in complementary solutions. We've grown 44% in complementary solutions in this quarter when compared to the same quarter last year. EBITDA, recurring EBITDA up 12.2%. Great growth despite the pressure. We've had a higher cost of paper and printing. We've also have a provision because there's a retailer in a judicial recovery process. We've had to make a higher provision for the accounts receivable of this retailer, and you see that being reflected. Now, in terms of quality, we've had a large number of students approved in the best universities in Brazil. At USP, up 27%. 12% up for UNASP and up also in UNICAMP. We are leaders in the SISU exam, showing the top quality of our products and the positive impact in the lives of our students. Now looking at the future, we begin operations with a bilingual premium franchise with a good performance because we have included elements from Anglo, which is a very strong brand, and Melissa will talk a little bit about that. The Start Anglo, which opens up a new avenue for Vasta operations. Second highlight, Vasta is now working with the public sector, providing our solutions. Obviously, this segment is much bigger. You know, 5x more students than the private sector. Not only do we have a great performance in our core business, but we now have these two future possibilities that may have a good impact in the future. Talking about Cogna, because all business units are doing well, including Saber, that had a great result in the first quarter. Cogna had net revenue growing 13%, also recovering EBITDA up 12% for the eighth consecutive quarter, showing consistency and all business units contributing positively. Our OCG post CapEx up 27%, which is an increase of 5.8 percentage points in recurring EBITDA conversion. In closing, talking about leverage, we've reduced our leverage. We're now at 2.03x over EBITDA, and the covenants have a threshold of 3x, we are in a comfortable position. All our initiatives of liability management, together with the certainty of cash generation, because of the very good results from our business units, we did a buyback for BRL 1 billion of our debt. This buyback has already been concluded with gains of BRL 10 million because we were able to buy back below par, showing our strength and our confidence in terms of cash generation. As regards debt, this is an important topic. We follow this number weekly, but we feel very confident that this number is under control, and we do not have any points of attention for 2025. With that, I will move on to slide five to talk about our student intake cycle. The volume of student intake is growing, but look at the average ticket in all segments. A 100% on-site upPremium distance learning also growing and 100% online, which is of course, the most competitive segment, remains stable, which is good news. Let me go back to say that more important than growing volume, we want to grow revenue year after year. As we have growing revenue, and we've had that 15% higher revenue for Kroton, which proves our strategy is correct, and we've been able to pursue this strategy for the last three years. Moving on to the next slide. Talking about our student base, a 10% growth. I'd like to highlight we are growing on high on-site attendance, and we are also growing in low on-site attendance. That is, we're growing in all segments. You can see the dropout rate is down, especially in high on-site attendance. When you look at low on-site attendance, there is pressure because as we have a large number of freshmen, that has an impact on the dropout rate. Let me highlight, this is the seventh quarter in a row when we've had student base growth. Last year, we celebrated 1 million students. Now we are celebrating 1.2 million students if we add graduate students. Seven consecutive quarters of growth. It will lead us to more revenue growth. The new students have a higher average ticket, so we feel confident these are top quality students. We have a number of gateways. The students have to pay their bills, they have to sign their contracts, they have to show continuity before they are recognized as a student. We feel confident that there will be growth in the near future. Now, slide seven. I have spoken about the 15% growth of our net revenue year-on-year. This is because we are growing in student intake, we are growing in re-enrollments, and we have greater efficiency in discounts. The credit quality of our students has improved. We are a bit harder in the renegotiations to improve the quality of our student base. Look at this chart showing the evolution of the net revenue beginning in the first quarter quarter of 2021 until now, until Q1 2023. There is a steady growth, as we mentioned in the past. Talking about the second quarter of 2023, it's coming on strong. We believe we will have a double-digit growth again for the fourth consecutive quarter. Slide eight is really interesting. I'd like to dedicate some time to it. If you remember, as we closed last year in the fourth quarter, we received a few questions about opportunities. I mean, where could Kroton improve its results further? We mentioned we could improve gross margin, which is a result of operating leverage. That's fixed cost versus revenue of 100% online students. For every BRL 100 additional BRL in revenue, we add very few BRL in costs. Look at the gross revenue, two percentage points up on digital, on medical programs. Corporate expense, we've been able to reduce, you know, as a proportion, as a ratio of net revenue. Higher operating expenses, of course, because we have more on-site activities, more marketing investments, basically related to this strategy of consolidating our brands. We're all starting Anhanguera, consolidating in a single brand makes sense for us to invest more in marketing. We already had a very positive ratio. We thought we had room to increase marketing expenses, and this is what you see on the chart. We also spoke about this opportunity to improve our provision for doubtful accounts because of higher efficiency, reduction of default rate. Here it is. All these three lines, I mean, especially these two lines, total cost, so gross margin and PDA as a ratio of net revenue. We mentioned these were the greatest opportunities, and now we can show we have delivered these results. This process, we believe, will continue, and the result so far has been a 2.5 percentage points gross margin gain, which we believe is an excellent result. Slide nine. As a result of all of these factors, EBITDA up 23% and the margin is no longer 33.9%, it is now 36.4%, you know, as a result of the aspects I've mentioned. On slide 10, you always ask us about campus productivity. Well, this chart is a answer to this question. It's showing our productivity between the first quarter of 2020 and now the first quarter of 2023. For high attendance students, that is the students that really use our classrooms, our laboratories. We had 1,949 students per campus. Today, 2,402. A 23% productivity gain. This is because we've had a 10% growth in student base, but also because we shut down a few hubs. We used to have 176 hubs, today 102 hubs, that has helped us improve our productivity. Rental costs are relevant for us, we are paying close attention to our rental contracts. Whenever we have an opportunity to renegotiate the rental or make a change and streamline our campuses to improve results. Of course, it does not impact EBITDA because of IFRS 16, it is part of our strategy to continue to review the cost of campus operations. Slide 11, talking about the Average Collection Period or ACP. This is a reflex of default. Our default rates are improving, the average collection period is coming down. It was 72 days in the first quarter of 2021, now in the first quarter of 2023, it's 45 days. The coverage ratio remains steady, as you can see. Now moving on to slide 12, Kroton Med. The highlights here, we've had a great result from Kroton Med, up 35% revenue, up 62% EBITDA. We've had margin gains. We have already mentioned that after we had the spin-off of Kroton operation, as we now have the Kroton Med, we can have a different view, a dedicated team, and we mentioned that we would find opportunities to gain efficiency. This is the result. Now you have efficiency in the negotiation of re-enrollments. Of course, these students have a high purchasing power and their commercial conditions was more similar to the average of Kroton. Now we are tapping this opportunity for our medical seats. We still have the Ponta Porã unit, which will start operations in 2024, in addition to the fact that we've been able to pass on the inflation rate to both freshmen as well as students. When you can do that, I mean, not only in medical programs, but we've been able to do that in other healthcare programs. We've had a one-off effect of FIES contracts because it was in the fourth quarter of 2022, and it was finally posted now. It's not relevant to the point of making a difference. I mean, the operating result has created this higher margin and higher EBITDA. Now let me give the floor to Guilherme Mélega, a Vasta CEO, to talk about Vasta results. Thank you very much, Roberto. Good morning to all. I would like to start with slide 14, to discuss Vasta's revenue. In the first quarter, we had BRL 403 million, with an increase of 16.6%. We would like to focus on the fourth quarter plus the first quarter because this better reflects our performance. In accumulated figures, we reached growth of 16.6%. Decomposing this number, the total of subscription was BRL 801 million, a growth of 17%. With this, the result of subscription reached BRL 703 million, up 28%, which is the focus of our strategy. In the subscription products, the highlight goes to complementary products, which, as Roberto mentioned, grew 44%, and they are central to our growth strategy. Moving on to slide 15. We'll give you an overview of our costs and expenses at Vasta. Considering this cycle, there was an increase of 19.1% in costs and expenses driven by SG&A. That grew 20% because of the price increases in paper and printing. I think it's important to highlight as well is the provision for doubt, so accounts plus equity, that grew 2.5%. The justification for that is that there was PDA that was extraordinary because of the judicial recovery of a large retailer. Also, our investment in the equity in Educbank that didn't exist before. The combination of these two factors explain our growth. We had productivity in operating expenses, corporate expenses, and also expenses with marketing and sales. There, the concentration will start from Q2- Q4. Going to slide 16. In EBITDA, we reached a total in the cycle of BRL 323 million. 12.2% up in the comparison with the previous cycle. Even with the impact of costs in paper and printing, our EBITDA continues to grow thanks to the recovery of our business after COVID. Now I would like to make some highlights of our operations. This year we started off with two major growth projects. One of them is Start Anglo, that we are now announcing at Bett. It's our franchise of bilingual schools with management systems and also marketing systems with support for enrollments and financial management. It's a full stop solution for the business entrepreneurs in the area of high performance bilingualism in association with the Anglo brand. Then we have our return to the public sector. As you know, this area has 5x as many students as the private sector, and Vasta could not afford to be away from this market with our current portfolio. We segmented this market and identified BRL 1.9 billion of addressable market, and this will be our focus in the first year of operations, and operations that is already in go-to-market phase and that we see in a very positive light. For the rest of the year, we continue to be very optimistic with the performance we had in 2023 and with the building of the commercial cycle and the prospects for growth in 2024. With this, I close Vasta's presentation. I turn it over to Frederico Villa, who will give you the results on Saber. Good morning, everyone. I'll start speaking about Saber in a brief presentation. We are now on slide 18. Just to remind everyone, Saber comprehends the National Textbook Program, by Red Balloon as in other initiatives. We start on slide 18. Net revenue grew 31% with good performance in all of Saber operations. We were able to capture in the first quarter also the larger part of the purchasing cycle in the National Textbook Program, which is making us feel optimistic for the next quarters. In terms of recurring EBITDA, Saber grew 7.3% due to the increase in net revenue, which offset the decrease in the recurring EBITDA margin because there was a very strong increase in paper and printing costs amounting to 26% approximately. Well, we now move on to Cogna, as Roberto mentioned before when also Mélega explaining Vasta and I spoke about Saber. Our three units grew. In Vasta, growth is 5.1, Saber 31%, and Kroton 14.9% in growth. All of these units, when summed, led to growth in Cogna of 13% and of recurring EBITDA growth of 12.6%. The growth, as we said before, growth of revenue and also operating efficiencies in our business units make this effect very positive for Cogna. Advancing to slide 21, we turn to leverage and indebtedness. This is a very important topic for the organization. What we want to demonstrate to you is that leverage had been constant in the last four quarters. In this quarter we are down to 2.03x, considering that our covenant is at 3x. We were able to reduce net debt in 0.5% or BRL 17 million. Additionally, we are reducing the average cost of new intake and funding. This is a very important matter, and it's only a matter of concern because the interest rate is Selic, which is high. If you look to the curve, you see that it's slanting downwards as of the fourth quarter. Now turning to slide 22. The strong revenue generation and also improvements in gross margin and EBITDA led to post-CapEx operating cash generation of 7.4% in 1Q 2023, reaching BRL 227 million, with conversion of recurring EBITDA into OCG of 50.2%. This growth reflects operating leverage and revenue quality gains at Kroton. In Saber also, this reflects the longer purchasing cycle we were able to capture. Moving on to the final part of my presentation, still speaking about cash and indebtedness. In the first quarter we raised BRL 500 million. We amortized approximately BRL 1.4 billion. We repurchased the principal and paid off the interest of this debt that we wouldn't pay this quarter, but we moved this payment forward. We also had gains of approximately BRL 10 million in the quarter. In an incentive line, we've raised BRL 85 million at an average cost of 63% of the interbank interest rate. The combination of all of these actions, and with our robust cash generation, we were able to meet our financial requirements for 2023, and there is no more need for raising more funding. Now, speaking of net cash generation, that was negative at BRL 625 million. It's important to say that here we have amortizations. I had repurchase of BRL 1 million, in addition to some payments of acquisitions and stock repurchase. All this had an impact in net cash, but we're still very excited, and this is an affair that's being handled by the financial department together with the senior management of the company. With this, I turn it over back to Roberto Valério for his final remarks. Thank you. Thank you very much, Frederico. Now on slide 24, final considerations, general messages. Kroton continues to make significant progress, both in intake, average tickets, and this is reflected also in the increase of our student base. We are very optimistic in relation to the cycle that's starting now because we consolidated some brands in Anhanguera. By analyzing Google searches, we see that there is higher interest and more desirability associated with enrollments in our brands. Anhanguera is up in the searches 37%. We are now starting the second cycle with a very well-aligned strategy, concentration in a single brand, more investment in marketing, which is giving us more traction. This is just the start of the funnel. We are now creating leads, and they're gonna go into our funnel of conversion. Just to explain why we're feeling more optimistic about the cycle and Kroton's results. We have mentioned that there are opportunities for improvement in margins and profitability. We continue to believe that primary margins can improve thanks to operating leverage as we have a wider base of online and part-time on-campus courses. This will improve. We also have opportunities for efficiency gains in our own operations. Actually this creates in us the trust that's recurring a bit, that will continue to be positive as it is now. As for cash generation, I think that the streamlining of the campus portfolios help us also reduce maintenance CapEx. We have long-term agreements, as the lease agreements expire, we'll try to capture these savings because leases are a significant expense. Finally, just to close my remarks about Kroton, the first six months of an operation are determinant for the result of the year. We have had a good six months, and we're feeling optimistic about the future. In relation to Vasta, considering the products will continue to grow, as Valério mentioned, but we're also feeling excited at the start of a cycle with the launch of the bilingual franchise that has a longer maturity cycle because, of course, we have to convert and make the franchise agreements. The government, of course, we have with the government, we believe that the results will come in sooner. We believe that paper and printing costs, while the increase is something that is just a circumstance after COVID, but even with this pressure, we were able to keep our margins healthy and improve our results. We are having the Bett Brasil Trade Fair, which is the most important one for K-12 education. We were there, showcasing our products massively, and the reactions of our customer base was very positive. As a consequence of that, Cogna. Well, we are very optimistic about the fact that both Kroton and Vasta are going well, and also because Saber has the bulk of its results concentrated on the 1st quarter because of the National Textbook Program. We know that there will be large repurchase operations this year. This gives us the confidence that the results for Sabesp will be highly positive. By the way, all of the businesses comprised by Sabesp, Red Balloon and so forth, et cetera, they're smaller operations, but we see this segment as very, very positive. Since we operate in different segments, we can be this as the best. We believe that 2023 is going to be a good year for us. Thank you. We now can open for questions. Ladies and gentlemen, we will now start the Q&A. To ask a question, please press star one. To remove your question from the line, please press star two. Our first question is from Marcelo Santos, J.P. Morgan. Good morning, everyone. Claudio, Frederico, Mallika, the whole team. I have two questions. The first is about Kroton gross margin. You have mentioned, and you have delivered results, and you have spoken about a larger 100% online student base. Can you compare the margins between and 100% online student and a 100% on-site student so that we can play with these numbers and understand what would happen if you have more online students or more on-site students? Also, you've mentioned an improved competitive environment. Could you give us some more color on that, talking about high on-site and low on-site attendance, please? Thank you, Marcelo, for your questions. Yes, I will try to give you a summary on gross margin. This is not really so simple, but the basic concept is operating leverage. One distance learning student with an average ticket of BRL 200, when I add that student to my student base, my variable cost will not grow significantly. Why? Well, because the administrative services are there, they're automated. I don't need additional content. I don't need additional professors because the classes have already been recorded, so the only cost is technology and cloud. Then, well, tutoring. Tutor are assistant professors, and it's a very low cost for each additional 100% online student. The leverage is very good because this is a digital business. New students that have a higher average ticket, it means that the margin delta is even more favorable. That is why we have such bright prospects. For 100% on-site, you add more students, and there is a limit because you cannot have more than 50 or say 60 students per classroom. If you have more students, you need, you know, more cleaning, more professors, more security on campus. I mean, the operating leverage is much higher for digital programs than for high on-site attendance programs. You can continue this conversation with the IR team, but conceptually, this is the difference. We have been talking about this. We believe in this, and that's why we want to grow revenue, not only student base. Because if we can have more revenue and keep approximately the same cost, this will help our results. The second question about the competitive environment, there are some positive effects. You know, if you look in time, all of us in this industry, we have seen that price war may bring some vol in the short term, but in the long term, it's not going to help grow revenue, so it's not going to help have healthy results. In markets where you have a large number of players, it takes a while for all players to understand that, I believe that companies in our industry are now more aware. The price elasticity does not really make any more effect. I mean, even if you lower prices, you will not have a much higher volume. Well, companies stop reducing prices when they see that it's not helping volume. I believe this would be the overall picture. We see more competition in 100% online in other segments. You know, you have the impact of your brand, of the quality of your campus. There are other drivers, not only price. However, yes, I do see our market is more, you know, is acting smarter. To provide some more concrete information about your first question. You know, also as general information, EBITDA margin in 100% on-site under 20% and for distance learning it twice as much. As I mentioned, you can continue this conversation with our IR team. This gap is basically gross margin, right? I mean, what you explained is about gross margin, if I understood you well. Yes, it's more related to gross margin. Thank you. It's clear. Our next question comes from Lucas Nagano from Morgan Stanley. Good morning. Thank you for this opportunity. I have two questions on our side. The first is about this quarter. I mean, although Kroton has a very good position, it seems like the intake growth is not as fast, especially when you look at 100% online. Is that because of market conditions? Are you facing stronger competition in low on-campus attendance? My second question would be about your ADA in this quarter. It is, of course, the result of the initiatives you mentioned. For 2023, do you plan to keep the same value, the same number? Well, I think I can answer these two questions. About ADA or PDA, yes, we believe it will continue to fall. Why? Well, if you look at our on-time payment, you can see that we have improved our on-time payment, making some adjustments, improving our own operation. If macro conditions improve in the second half of the year, then yes, then I believe we can keep the PDA as a percentage of our revenue down. We usually have an improvement in on-time payments, and then we can improve PDA. That's why we feel confident today. About your first question, volume, student intake. Lucas, I apologize, but about distance learning student intake. Of course, growing 15% or 20% in an operation of our size, I mean, it is a large number if you look at it in absolute terms. However, it's important to understand that we want to grow revenue. I mean, if we don't grow volume, we are looking at revenue. We want to have a higher revenue and higher gross margin. I know it may sound simplistic, our decision-making process, I mean, if you look at volume and improve average ticket, we always look at having a balance. We test markets, we test offerings. You know, as for me, you know, my personal opinion, because I'm always looking at the numbers of Google interest for Anhanguera, for example. I always look at the implementations we make, you know, process improvements, CRM initiatives to improve our conversion rate. I mean, in addition to the growth of a few channels, our channel of affiliates, you know, third-party sales force, they sell especially 100% online programs. I believe that in the second cycle, our growth will be higher in 100% on online programs. I believe we'll have a better result in the next quarters. I view this segment as a growth potential because of some adjustments we're making. Thank you very much, Valério. The next question is from Marcio Osako, Bradesco BBI. Good morning. Thank you very much. I have three questions, please. About the ticket, could you please clarify for freshmen, if we exclude the effect of the mix, especially in on-campus, where does there an increase in relation to the past? What can you tell us about the freshmen average ticket last year? Now, I would like you to say a few words about default and collection of PEP and PMT. You said out-of-pocket is going well, can you give us also some color on how punctually the payments are for those students on financing plans PMT, for example? Also dropout. Distance learning has been growing fast in intake, at the same time we're seeing an increase in dropout rates. It's actually higher than in on-campus. How much of that volume will return in the future? Just to try to understand how sustainable DL actually is. These are the questions. Thank you. Marcio, thank you very much. I'll take two of them, and Fred will answer on, you know, on time payments and PMT. In relation to the average tickets last year for freshmen, on slide five we showed this effect. For example, if you look at on-campus, that was your question, the volume of student dropped, but revenue didn't fall as sharply, which means that the ticket is growing. This decrease was expected because we are reducing the number of units, and we are also reducing our offerings of on-campus programs. Does it mean that we're leaving opportunities on the table? Because these students that would enroll in on-campus programs are now taking high online content programs. I wouldn't say that the mix is as concentrated as in the past. We have been focusing on programs with high LTV for at least two years. When we make the comparison between the mix 2023 and 2022, you see that there's a concentration in a high added value programs such as dentistry and medical, but the mix didn't change. It's actually coming from the ticket increase and also premium DL volume growth 15 and revenue growth 10%. Those are the traditional nursing engineering programs that need labs, and we have the same mix. There is no difference in mix. There are no relevant program launches between the second quarter 2022 and 2023. It really reflects the improvement in tickets. The effect, of course, is the same in terms of mix in the segments. They are very similar between 2022 and 2023. To speak about dropouts, I think that's the most important indicator. For that we can look at it from different angles, but there is no better indicator than growth in your base of students. What's the point of having high intake cycles and the base doesn't grow? We can see of course, that there is a natural level of dropout rates because there is a very high volume, especially in 100% DL, but it shows growth. I think that the question is this a never-ending process? The student enrolls and then he drops out and he abandons in the next cycle. No, they don't abandon the segment. Many of them end up returning. A large share of the students, especially the older ones that are enrolled in, especially in digital, are students that have enrolled in the past but that didn't complete even the six months of study. There's this concept of win back our students that we can recover. Since high there are high dropout rates in the first semester, it means that they didn't even conclude six months of study. Okay, now I'll turn it over to Fred. Hello, Marcio. Thanks for your question on on-time payments and default. Just to remind you, PEP does not exist anymore, and even PMT was a product that we made adjustments to before. Only after graduation students had to pay. This is now a program that is paid off by students along the program. This means that the default rates for out-of-pocket and PMT are connected because, you know, they pay the enrollment in the PMT. You know, if it's an on-time payment student in out-of-pocket, it would be an on-time student, also an on-time payment student on PMT. In PEP, we see also default rates improving. It's just a slight improvement right now because we don't have a solid base of payments. Payments are being made, but I think that for both default rates are positive. I mean, this will reflect in our cash and there is also a reflection on PDA or provision for doubtful accounts. We're feeling very comfortable about our provision for doubtful accounts. The best metric is PDA over net revenue, this is what ensures us that we'll have cash and the sufficient coverage. Looking to the future, our PDA will remain very close to what we saw in the first six months, with a small improvement. Okay. We saw the slight improvement that Fred was talking about. There's a team that tracks only PEP students and uses some scripts for communicating with them. We also have an app containing information so that we can have a closer relationship with the students. In fact, it's a number of initiatives that are really oriented to the individual student. Thank you very much, Fred and Valério. Just to clarify, in terms of the ticket, on the table slide five, medical programs are not included, right? Marcio, yes. It includes medical programs on campus. It's the same basis. Thank you. Our next question is from Mauricio Cepeda, Credit Suisse. Good morning, everyone. Thank you for taking this question. I have two questions. Firstly, could you give us an update? The industry has been discussing FIES. What is the current status of discussions? What has been proposed? Secondly, could you please explain or give us more indications of the drivers, qualitative drivers in the industry? You know, everybody is reporting solid intakes, but at the same time, we see that the economy is not really. I think it's moving sideways. What do you think has led to the improved intake cycles? Do you believe that the economic factors could lead to higher dropout rates along the year? Or could it interfere in the intake cycle for next semester? How can you explain this improvement in the industry? Hello, Mauricio. I'll take these questions. Well, FIES, we don't have any additional information. All we know is what is being reported by the media. We have a team in Brasília trying to support us in this process, there is also a working group working on it and a number of suggestions that were made by the industry to the Ministry of Education. What we believe is that very soon they will give us some feedback on them. I really have no additional information besides what's in the public domain. About the positive outlook for all companies, with stronger intake cycles, what I can say is that if everybody's getting better or doing better, it means that, you know, there are better trends in macro trends. I think that in the medium and long term, the trend is positive. I don't think that the macroeconomic factors will deteriorate. Probably as interest rates go down, we'll benefit even further. Overall, I think that the scenario is positive, but I also believe that companies are all seeking greater efficiencies. Everybody is relying more and more on technology. It's only natural that more opportunities are captured in the market. Let's remember that there are 32 million Brazilians without, you know, post-secondary education. They don't wake up one morning and go look for a school. All players are trying to create interest. I think it's a mix of the two. It's a positive scenario on one side, and on the other side, companies being more efficient. That's clear. Thank you. Our next question comes from Lucas Marchesini from Itaú BBA. Morning, everyone. Thank you for taking my questions. About high on-site attendance programs, we can see you have shut down a few campuses. Are we still going to see that? Are you still going to close more units in 2023? What do you expect in terms of student base in this segment? Hello, Lucas. Thank you for the question. No, we do not have any expectations or any plans of closing down units in 2023. The number of units and campuses we'll have today is considered correct. Of course, we're always looking at our rental contracts, and we may see changes of address or something like that, but it's not in our plan. About 100% on-site programs, we see a higher interest. Also, hybrid programs have had an improvement. We will still feel some pressure on high on-site attendance. Maybe if we have good news on FIES, we will have improvements faster. Thank you, Valério. Our next question comes from Yan Cesquim from BTG Pactual. Good morning, Valério. Good morning, Fred, the whole team. We have two questions on our side. They're very specific. The first question would be more directed to Fred. Looking at your financial expenses this quarter, the contingency update was lower than in the last quarters. In the last quarters, you had expense of BRL 30 million, BRL 40 million, and this semester, this quarter, sorry, only BRL 1 million. I'd like to understand a bit more about contingency. What happened with this line? My second question is about the National Textbook Program for this year. Most of the deliveries usually happen in the second half of the year, do you have any information about, you know, numbers? What do you expect in terms of deliveries in this program this year? Thank you. Hello, this is Fred. Thank you for the question. About financial expenses and contingencies, yes, we had a few reversals, some BRL millions, some BRL tens of millions in contingency. We've been able to reverse them because these, they prescribed, they expired. These amounts would not be updated. In the next quarters, this number will come down because the principal amount is coming down. This is, of course, a percentage of the base, it will possibly be reduced in the next quarters unless we have new contingencies. Now, in the first quarter and looking at the future, we don't see any indications it might happen. The second question, I think Roberto will answer. Yes, I can answer that. Yan, about the National Textbook Program, this year there are two programs. The, you know, both for K-12, for the first cycle and the second cycle. That is why we believe the revenue will be higher as well as the EBITDA. To provide numbers, I think you can talk to our IR team. The easiest way to project that is to look at the magnitude of the program in previous years, looking at the number of students and average ticket, and then use our take rate or our market share of the overall program. Come and talk to the IR team. As I cannot provide a guidance, I cannot really provide a number, but we can help you build your number. Clear. Thank you. Ladies and gentlemen, if you have a question, please dial star one. Our next question is from Lucas Nagano, Morgan Stanley. Just one more question, if I may. It's about Kroton Med. In last year, there was a carve-out. I would like to know about the strategy for the unit. What are the prospects for expansion this year and in coming years? Hello, Lucas. Thank you for your question. Well, we have a positive outlook in terms of operations. We have opportunities for operating efficiency improvements also in NPS. This will drive, of course, some opportunities in synergies of content and between units. There are opportunities. As for our maturity of openings, there are many openings yet that are still maturing. We are also building the Minha Médica unit that will be ready in early 2024. It's a very positive outlook. Now, going into the details, this continues to be a growth avenue for us. Thank you, Valério. With this, we close now our Q&A. I will turn the floor over now to Mr. Roberto Valério for his final remarks. I would like to thank all who listened in. We are feeling very satisfied with the results of the first quarter, and we believe that the prospects for the year are also very encouraging. Please know that our IR team can support you. If you have any other questions or comments, please make sure you get in touch. Have a great day. Thank you. Cogna's conference call is now closed. We thank you all for participating, and we wish you a great day. Thank you for using Chorus Call.