Afya: 3 Key Takeaways for Long-Term Investors

On its third-quarter of 2026 earnings call, held on Nov. 12, 2026, Afya (NASDAQ:AFYA) announced that revenue grew 6% year over year to 985 million Brazilian reals in the third quarter. High student occupancy in core medical programs underpins long-term cash flow generation. Three things management said stand out.

1. Core Medical Programs Drive Revenue and Margin Gains

Undergraduate medical education remains the engine powering the business model. By expanding health science enrollment at existing campuses, the company spreads fixed costs across more students, boosting profitability.

Notably, 85% of this revenue comes from the medical program and 93% from health-related courses, reinforcing our strategic focus and leadership in the sector.
-- Luis Andre Blanco, Chief Financial Officer

2. Short-Duration Courses Weaken Continuing Education Revenue

Physicians are turning to shorter, lower-cost training options rather than committing to lengthy specialization tracks. That mix shift increases overall student headcounts but suppresses revenue per student across the segment.

The mix effect here is that we have much more student applying for short duration programs, more related to procedure, new technicals for some specialties. And that -- the consequence direction of that is that the revenue does not come because the tuition is much lower.
-- Virgilio Deloy Gibbon, Chief Executive Officer

3. Operational Cash Generation Supports Shareholder Capital Returns

The company turned nearly all of adjusted EBITDA into operating cash flow, giving leadership room to reward investors. Share repurchases reduced total shares outstanding, helping earnings per share outpace net income growth.

At the corporate level, supported by strong cash generation, we returned BRL 459 million to shareholders through dividends and share repurchases in the 9 months of 2026.
-- Virgilio Deloy Gibbon, Chief Executive Officer

Looking Ahead

Cash flow remains reliable as undergraduate enrollments remain full, giving management flexibility despite margin pressure in medical practice solutions. The company relies on its high medical school seat occupancy and steady tuition increases to protect core profitability while watching pricing discipline and student adoption curves.

Overall, these results reflect Afya's abilities to continue generating solid cash flow while delivering consistent growth in profitability and shareholder returns.
-- Luis Andre Blanco, Chief Financial Officer

Leadership is establishing a broader operational base across medical training and software services to capture long-term market demand. Management expects this platform expansion to sustain fundamental growth through upcoming academic cycles.

This result shows the strength of our business model and our ecosystem, while creating the foundations we need to keep growing and unlock the next chapter in the company's history.
-- Virgilio Deloy Gibbon, Chief Executive Officer

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