Vitru : Financial Statements

Vitru Brasil Empreendimentos, Participações e Comércio S.A. Individual and consolidated interim financial statements

March 31, 2024 and 2023

Vitru Brasil Empreendimentos, Participações e Comércio S.A.

Balance Sheets

(In thousands of Brazilian reais - R$)

			Parent			Consolidated
	Note	03/31/2024			12/31/2023	03/31/2024	12/31/2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	6		803			1,065	9,149	12,971
Short-term investments	6		18,330			39,818	362,236	220,301
Trade receivables	7		35,657			34,509	217,713	235,560
Income taxes recoverable			5,106			5,698	7,899	2,300
Prepaid expenses	9		1,459			1,308	27,582	19,710
Receivables from hub partners	10		-			-	16,081	39,351
Other current assets			298			299		36,217		40,447
TOTAL CURRENT ASSETS			61,653			82,697	676,877	570,640
NON-CURRENT ASSETS
Trade receivables	7		4			6	74,900	69,127
Indemnification assets			-			-	26,087	28,426
Deferred tax assets	8					116,950	115,639	226,959
Receivables from hub partners	10		-			-	79,383	57,277
Other non-current assets			482			503	9,613	11,100
Investment in subsidiaries	11		5,115,282			5,011,079	-	-
Right-of-use assets	12		-			-	347,513	349,683
Property and equipment	13		-			-	203,957	205,852
Intangible assets	14		20,113			17,610		4,318,634		4,342,160
TOTAL NON-CURRENT ASSETS			5,135,881			5,146,148	5,175,726	5,290,584
TOTAL ASSETS			5,197,534			5,228,845		5,852,603		5,861,224

The accompanying notes are an integral part of the individual and consolidated interim financial statements.

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Vitru Brasil Empreendimentos, Participações e Comércio S.A.

Balance Sheets

(In thousands of Brazilian reais - R$)

			Parent			Consolidated
	Note	03/31/2024			12/31/2023	03/31/2024	12/31/2023
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade payables			5,259			6,421	117,321	111,726
Loans and financing	15		176,969			151,120	176,969	151,120
Lease liabilities	12		-			-	51,904	51,621
Labor and social obligations	16		18,355			28,215	93,731	90,426
Income taxes payable			-			-	3,188	-
Taxes payable			432			421	20,041	17,370
Prepayments from customers			2,001			1,902	48,356	45,331
Dividends payable	20		17,021			19,485	17,021	19,485
Other current liabilities			873			1,241		25,453		24,640
TOTAL CURRENT LIABILITIES			220,910			208,805	553,984	511,719
NON-CURRENT LIABILITIES
Loans and financing	15		2,102,699			2,030,699	2,102,699	2,030,699
Lease liabilities	12		-			-	277,234	276,213
Taxes payable			-			-	541	6,075
Deferred tax liabilities	8		603,322			730,896	603,322	730,896
Provisions for contingencies	17		-			-	39,976	41,878
Related parties	21		8,200			8,201	8,201	8,201
Other liabilities			12			11		4,255		5,310
TOTAL NON-CURRENT LIABILITIES			2,714,233			2,769,807	3,036,228	3,099,272
TOTAL LIABILITIES			2,935,143			2,978,612	3,590,212	3,610,991
EQUITY	18
Share capital			2,031,408			2,031,408	2,031,408	2,031,408
Capital reserves			47,779			43,605	47,779	43,605
Earnings reserves			183,204			175,220		183,204		175,220
TOTAL EQUITY			2,262,391			2,250,233	2,262,391	2,250,233
TOTAL LIABILITIES AND EQUITY			5,197,534			5,228,845		5,852,603		5,861,224

The accompanying notes are an integral part of the individual and consolidated interim financial statements.

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Vitru Brasil Empreendimentos, Participações e Comércio S.A.

Statements of profit and loss for the three-month period ended March 31, 2024 and 2023.

(In thousands of Brazilian reais - R$)

			Parent			Consolidated
	Note		2024			2023		2024		2023
NET REVENUE	22	13,610			11,131	504,321	444,224
Cost of services rendered	23		(5,076)			(7,267)		(157,336)		(151,273)
GROSS PROFIT			8,534			3,864		346,985		292,951
General and administrative expenses	23	(24,127)			(19,870)	(60,061)	(54,083)
Selling expenses	23	(16,750)			(15,567)	(125,977)	(90,139)
Net impairment losses on financial assets	7	(3,930)			(2,872)	(58,029)	(47,677)
Other income (expenses), net	24		(1)			(14)		257		313
Operating expenses			(44,808)			(38,323)		(243,810)		(191,586)
Share of profits of subsidiaries	11	130,104			131,178	-	-
OPERATING PROFIT		93,830			96,719	103,175	101,365
Financial income	25	1,564			475	13,869	10,783
Financial expenses	25		(98,034)			(71,883)		(110,999)		(84,998)
Financial results		(96,470)			(71,408)	(97,130)	(74,215)
PROFIT (LOSS) BEFORE TAXES		(2,640)			25,311	6,045	27,150
Current income taxes	8	-			-	(14,315)	(4,070)
Deferred income taxes	8		10,624			31,482		16,254		33,713
Income taxes			10,624			31,482		1,939		29,643
NET INCOME FOR THE PERIOD			7,984			56,793		7,984		56,793
Basic and diluted earnings per share (R$)	19	0.00			0.03	0.00	0.03

The accompanying notes are an integral part of the individual and consolidated interim financial statements.

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Vitru Brasil Empreendimentos, Participações e Comércio S.A.

Statements of comprehensive income for the three-month period ended March 31, 2024 and 2023.

(In thousands of Brazilian reais - R$)

	Parent and consolidated
	2024		2023
NET INCOME FOR THE PERIOD	7,984	56,793
Other comprehensive income	-		-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	7,984		56,793

The accompanying notes are an integral part of the interim financial statements.

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Vitru Brasil Empreendimentos, Participações e Comércio S.A.

Statements of changes in equity for the three-month period ended March 31, 2024 and 2023.

(In thousands of Brazilian reais - R$)

			Capital reserves		Earnings reserves
			Share-based		Legal		Bylaws	Profit for the
	Capital		compensation		reserve		reserves	period		Total
DECEMBER 31, 2022	2,031,408		51,924		4,720	89,670	-		2,177,722
Profit for the year	-		-	-	-	56,793	56,793
Employee share program	-		(914)		-		-	-		(914)
MARCH 31, 2023	2,031,408		51,010	4,720	89,670	56,793	2,233,601
DECEMBER 31, 2023	2,031,408		43,605		10,854	164,366	-		2,250,233
Profit for the period	-		-	-	-	7,984	7,984
Employee share program	-		4,174		-		-	-		4,174
MARCH 31, 2024	2,031,408		47,779		10,854	164,366	7,984		2,262,391

The accompanying notes are an integral part of the interim financial statements.

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Vitru Brasil Empreendimentos, Participações e Comércio S.A.

Statements of cash flows for the three-monthperiod ended March 31, 2024 and 2023. (In thousands of Brazilian reais - R$)

			Parent			Consolidated
	Note		2024			2023	2024	2023
Cash flows from operating activities
Profit (loss) before taxes			(2,640)			25,311	6,045	27,150
Adjustments to reconcile income before taxes to cash
provided on operating activities
Depreciation and amortization	12 / 13 / 14		31,537			28,314	53,489	52,306
Net impairment losses on financial assets	7		3,930			2,872	58,029	47,677
Provision for revenue cancellation	7		-			-	4,268	252
Provision for contingencies			-			-	1,271	2,436
Accrued interests, net of income from short-term
investments			96,844			70,913	94,700	78,916
Share-based compensation	20		128			(2,742)	3,668	74
Loss on sale or disposal of non-current assets			-			-	(155)	44
Share of profit (loss) of subsidiaries			(130,104)			(131,178)	-	-
Modification/write-off of lease contracts			-			-	-	(628)
Changes in operating assets and liabilities:
Trade receivables			(4,838)			(2,716)	(45,509)	(59,813)
Prepaid expenses			(151)			(528)	(7,872)	(929)
Other assets			22			1,206	(1,763)	(4,505)
Trade payables			(1,162)			(4,528)	7,626	(27,348)
Labor and social obligations			(9,860)			575	3,305	11,913
Other taxes payable			603			(167)	(2,863)	(2,603)
Prepayments from customers			99			2,182	3,025	9,324
Other payables			(2,368)			44		(242)		(1,521)
Cash (used in) provided by operating activities			(15,960)			(10,442)		178,022		132,745
Income tax and social contribution paid			-			-	(5,599)	(3,129)
Interest paid	12 / 15		-			-	(8,584)	(8,351)
Contingencies paid	17		-			-		(4,694)		(1,526)
Net cash (used in) provided by operating activities			(15,960)			(10,442)	159,145	119,739
Cash flows from investing activities
Purchase of property and equipment	13		-			-	(6,435)	(4,886)
Purchase and capitalization of intangible assets	14		(2,793)			-	(15,041)	(15,027)
Proceeds from the sale of property and equipment		-	-			879	-
Dividends received/capital increase			(1,300)			12,800	-	-
Amount received from (invested in) short-term investments,
net	6		22,255			(2,224)		(134,033)	(124,130)
Net cash (used in) provided by investing activities			18,162			10,576	(154,630)	(144,043)
Cash flows from financing activities
Payments of lease liabilities	12		-			-	(5,873)	(5,168)
Payment of dividends			(2,464)			-		(2,464)		-
Net cash used in financing activities			(2,464)			-	(8,337)	(5,168)
Net increase (decrease) in cash and cash equivalents, net			(262)			134		(3,822)		(29,472)
Cash and cash equivalents at the beginning of the year			1,065			561	12,971	35,130
Cash and cash equivalents at the end of the year			803			695		9,149		5,658
			(262)			134		(3,822)		(29,472)

See Note 28 for the main transactions in investing and financing activities not affecting cash.

The accompanying notes are an integral part of the interim financial statements.

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Vitru Brasil Empreendimentos, Participações e Comércio S.A.

Statements of value added for the three-monthperiod ended March 31, 2024 and 2023. (In thousands of Brazilian reais - R$)

		Parent			Consolidated
		2024			2023		2024		2023
Revenue
Service revenue	13,964			11,449		651,718		556,300
Allowance for expected credit loss, net of reversals	(3,930)			(2,872)	(58,029)	(47,677)
Revenue deductions	-			(26)	(127,002)	(97,044)
		10,034			8,551		466,687		411,579
Inputs acquired from third parties
Services provided by individuals and legal entities	(2,408)			(5,232)	(38,612)	(9,319)
Publicity and advertising	(3,655)			(1,798)	(96,958)	(71,212)
Materials	37			(3)	(5,774)	(7,453)
Other	(1,502)			(191)	(7,724)	(26,381)
		(7,528)			(7,224)	(149,068)	(114,365)
Gross value added	2,506			1,327		317,619		297,214
Depreciation and amortization	(31,537)			(31,248)	(53,489)	(52,306)
Wealth created by the entity	(29,031)			(29,921)	264,130		244,908
Wealth received in transfer
Share of profit of subsidiaries	130,104			131,178		-		-
Financial income	1,564			615		13,869		10,783
Wealth for distribution	102,637			101,872		277,999		255,691
Wealth distributed
Personnel and charges:
Payroll	6,349			3,304		118,185		105,362
		6,349			3,304		118,185		105,362
Taxes, fees and contributions:
Federal	(9,855)			(29,350)	24,226		(4,519)
Municipal	125			249		16,495		12,217
		(9,730)			(29,101)	40,721		7,698
Lenders and lessors:
Interest	98,034			70,876		110,999		83,954
Rentals	-			-		110		1,884
		98,034			70,876		111,109		85,838
Shareholders:
Retained earnings	7,984			56,793		7,984		56,793
		7,984			56,793		7,984		56,793
Wealth distributed		102,637			101,872		277,999		255,691

The accompanying notes are an integral part of the interim financial statements.

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Vitru Brasil Empreendimentos, Participações e Comércio S.A.

Notes to the interim financial statements for the three-month period ended March 31, 2024 and 2023.

(In thousands of Brazilian reais - R$)

1. Corporate information
   Vitru Brasil Empreendimentos, Participações e Comércio S.A. ("Vitru" or "Company") is a privately-held Brazilian company, organized and operating in accordance with the laws of Brazil, established on June 27, 2014. The Company's head office is located at Rod. José Carlos Daux, 5500 Torre Jurerê A - Sala 212, Florianópolis, state of Santa Catarina, Brazil.
   The Company is principally engaged is making investments in companies providing educational services and the provision of distance continuing education services through the operating structure of its subsidiaries.
   Vitru Limited, headquartered in the Cayman Islands, was incorporated on September 2, 2020 for the initial issuance of shares on NASDAQ, became the sole parent company of Vitru Brasil and its subsidiaries (collectively, the "Group"), which are primarily engaged in the provision of educational services in Brazil, in particular undergraduate and continuing education courses, in person at their eight campuses located in three different states, or distance learning, through 2,499 learning centers ("hubs") throughout Brazil.
   These individual and consolidated interim financial statements were authorized for issue by the Executive Board on May 7, 2024, and approved by the governance bodies on May 9, 2024.
   Management reviewed the Company's position and concluded that the Company has the capacity to continue as a going concern. Accordingly, this interim financial information has been prepared on a going concern basis.
   Significant events during the period Seasonality
   Distance learning undergraduate courses are structured in independent monthly modules. This allows students to enroll in distance learning courses at any time during a six-month period. Despite this flexibility, there is generally a higher number of enrollments in distance learning courses in the first and third quarters of each year. These periods coincide with the start of academic semesters in Brazil. In addition, there is a higher number of enrollments at the beginning of the first six-month period of each year than at the beginning of the second six-month period of each year. In order to attract and encourage potential new students to enroll in undergraduate courses at the end of the six-month period, the Group usually offers discounts, generally equivalent to the number of months elapsed in the six-month period. As a result, because revenue from six-month contracts is recognized throughout the six-month period, revenue is generally higher in the second and fourth quarters of each year, as additional students enroll at the end of the six-month period. Revenue is also higher at the end of the six- month period due to lower drop-out rates in the period.
2. Basis of preparation of the individual and consolidated interim financial information
   The Company's individual and consolidated interim financial information has been prepared in conformity with technical pronouncement CPC 21 (R1) (Interim Financial Reporting) and international standard IAS 34 and is being presented pursuant to the standards issued by the Brazilian Securities and Exchange Commission.
   The accounting practices, policies, key accounting judgments and sources of estimation uncertainties adopted in the preparation of the individual and consolidated interim financial information are consistent with those adopted and disclosed in the notes to the financial statements for the year ended December 31, 2023.
   The accounting policies adopted are consistent with the accounting policies adopted in the previous year and corresponding reporting period. The Group decided not to early adopt any other standard, interpretation or amendment that has been issued but is not yet effective.
   The interim financial information is presented in thousands of Brazilian reais ("R$"), which is the Company's functional and presentation currency.
   The presentation of the individual and consolidated Statement of Value Added is required by the Brazilian Corporate Law and accounting practices adopted in Brazil applicable to publicly-held companies. The International Financial Reporting Standards (IFRS) do not require the presentation of this statement. As a result, for IFRS purposes, this statement is presented as supplemental information, without prejudice to the set of individual and consolidated interim financial statements.
   All amounts disclosed in the interim financial statements and notes thereto have been rounded to the nearest thousand, unless otherwise indicated.

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Vitru Brasil Empreendimentos, Participações e Comércio S.A.

Notes to the interim financial statements for the three-month period ended March 31, 2024 and 2023.

(In thousands of Brazilian reais - R$)

2.1. Critical accounting judgments and key estimates and assumptions

The preparation of the Group's individual and consolidated interim financial information requires Management to make judgments and estimates and adopt assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. Actual results may differ from those estimates.

In preparing the interim financial information, significant judgments and estimates made by the Group's Management in managing the application of accounting policies and the key sources of estimation uncertainties were the same as those defined in the individual and consolidated interim financial statements for the year ended December 31, 2023.

1. Notes not presented in the interim financial information
   The interim financial information is presented in conformity with CPC 21 (R1) and IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) and the provisions set forth in CVM Circular Letter SNC/SEP 003/2011, of April 28, 2011. The preparation of this interim financial information requires the Company´s Management to make judgments on the relevance and the changes that should be disclosed in explanatory notes. Accordingly, this interim financial information includes selected explanatory notes and do not comprise all the explanatory notes presented in the financial statements for the year ended December 31, 2023. As permitted by CVM Circular Letter 03/2011, the following explanatory notes are presented and their references to the December 31, 2023 financial statements are no longer presented:
2. • Significant accounting policies and practices (note 2.5); and
   • Critical accounting judgments and key sources of estimation uncertainty (note 3).
3. Financial assets and financial liabilities

4.1.	Financial assets
		Parent			Consolidated
		03/31/2024			12/31/2023	03/31/2024	12/31/2023
	At amortized cost
	Cash and cash equivalents	803			1,065	9,149	12,971
	Short-term investments	18,330			39,818	362,236	220,301
	Trade receivables	35,661			34,515	292,613	304,687
	Total	54,794			75,398	663,998	537,959
	Current	54,790			75,392	589,098	468,832
	Non-current	4			6	74,900	69,127

4.2. Financial liabilities

	Parent			Consolidated
	03/31/2024			12/31/2023	03/31/2024	12/31/2023
At amortized cost
Trade payables	5,259			6,421	117,321	111,726
Lease liabilities	-			-	329,138	327,834
Loans and financing	2,279,668			2,181,819	2,279,668	2,181,819
Total	2,284,927			2,188,240	2,726,127	2,621,379
Current	182,228			157,541	346,194	314,467
Non-current	2,102,669			2,030,699	2,379,933	2,306,912

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