Afya Ltd. Form 20-F Summary (Fiscal Year Ended December 31, 2025)
Business Context and Reporting Period
Company: Afya Ltd. (Cayman Islands exempted company; operations primarily in Brazil via Afya Participações S.A.)
Reporting Period: Fiscal year ended December 31, 2025.
Business Model: Largest medical education group in Brazil by approved seats. Operates an end-to-end physician-centric ecosystem across three segments: Undergraduate (medical schools), Continuing Education (residency prep/graduate courses), and Medical Practice Solutions (digital health tools).
Key Metric: As of December 31, 2025, Afya operated 62 campuses with 3,755 approved medical school seats and 86,025 total enrolled students.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 (R$ millions) | 2024 (R$ millions) | Change (%) |
|---|---|---|---|
| Revenue | 3,697.3 | 3,304.3 | 11.9% |
| Net Income | 768.4 | 648.9 | 18.4% |
| Operating Income | 1,213.1 | 1,012.1 | 19.9% |
| Adjusted EBITDA | 1,680.3 | 1,455.6 | 15.4% |
| Operating Cash Flow | 1,531.6 | 1,432.7 | 6.9% |
| Cash & Equivalents | 1,125.4 | 911.0 | 23.5% |
| Total Debt (Loans & Financing) | 2,054.3 | 2,195.2 | (6.4%) |
Note: Revenue growth was driven by organic maturation of medical school seats, a 2.8% increase in average medical school ticket price (R$9,060), and consolidation of recent acquisitions (FUNIC, Unidom).
Material Changes vs. Prior Period
- Acquisitions: Completed acquisition of FUNIC (60 seats) in May 2025. Continued integration of Unidom (acquired July 2024), which contributed 300 authorized seats (125 final, 175 subject to court proceedings).
- Taxation (Pillar Two): Implementation of Brazil's OECD Pillar Two global minimum tax (Law 15,079/2024) effective Jan 1, 2025. This resulted in an additional income tax expense of R$109.5 million in 2025, increasing the effective tax rate from 4.1% (2024) to 10.7% (2025). Afya has filed a writ of mandamus challenging the enforceability of this tax.
- Debt Management: Repurchased all Series A perpetual convertible preferred shares from SoftBank for R$831.6 million in November 2025. Fully repaid Banco Itaú loan (R$309.5m) and Debentures (R$526.9m) in 2025. Issued R$1.5 billion in new Commercial Notes in October 2025.
- Regulatory: MEC cancelled the "Mais Médicos III" public call in February 2026, halting a planned expansion of ~5,700 new seats nationwide. However, Afya received specific authorizations for 63 additional seats at ITPAC Porto in February 2026.
Guidance, Outlook, and Risks
- Outlook: Management expects continued growth through the maturation of existing medical school seats (6-year cycle) and cross-selling within the physician ecosystem. Budgeted capital expenditures for 2026 are R$360.8 million.
- Dividends: Board approved a dividend of R$307.4 million (40% of 2025 net income), payable in USD on April 6, 2026.
- Key Risks:
- Regulatory: Dependence on MEC authorizations for new seats; potential sanctions if ENAMED (medical exam) scores remain low (some programs received scores of 2 in 2025).
- Tax: Uncertainty regarding the final treatment of PROUNI tax benefits under Pillar Two rules and potential new dividend withholding taxes effective Jan 1, 2026.
- Macroeconomic: Exposure to Brazilian inflation, interest rates (SELIC at 15%), and exchange rate volatility (Real appreciated 11.1% vs USD in 2025).
- Competition: Increased competition from municipal institutions operating outside federal frameworks and potential entry of new players.
Investor Verification Checklist
- Pillar Two Tax Impact: Verify the status of the judicial challenge against the additional CSLL tax and the potential impact on future effective tax rates if PROUNI benefits are not treated as qualified credits.
- Unidom Seat Authorization: Monitor the court proceedings regarding the 175 medical school seats at Unidom, as contingent consideration payments are tied to their maintenance.
- ENAMED Performance: Review future ENAMED results for Afya's medical programs to assess risk of regulatory sanctions or enrollment caps.
- Debt Covenants: Confirm compliance with Net Debt/Adjusted EBITDA covenants (max 3.0x) under the new Commercial Notes and IFC loan agreements.
- Dividend Taxation: Assess the impact of the new 10% withholding tax on cross-border dividends effective Jan 1, 2026, on net shareholder returns.