UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2022

Commission File Number: 001-39519

Vitru Limited

(Exact name of registrant as specified in its charter)

Rodovia José Carlos Daux, 5500, Torre Jurerê A,

2nd floor, Saco Grande, Florianópolis, State of

Santa Catarina, 88032-005, Brazil

+55 (47) 3281-9500

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F

X

Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes

No

X

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes

No

X


TABLE OF CONTENTS

Exhibit No.

Description

99.1

Earnings Release dated May 16, 2022 – Vitru Limited First Quarter 2022 Financial Results

99.2

Vitru Limited – Unaudited Interim Condensed Consolidated Financial Statements for the three-month ended March 31, 2022


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Vitru Limited.

By:

/s/ Carlos Henrique Boquimpani de Freitas

Name:

Carlos Henrique Boquimpani de Freitas

Title:

Chief Financial Officer

Date: May 16, 2022


Exhibit 99.1   

Uma imagem contendo Diagrama de Venn

Descrição gerada automaticamente

Vitru Limited

announces
First Quarter 2022

Financial Results


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Florianopolis, Brazil, May 16, 2022 – Vitru Limited, or Vitru (Nasdaq: VTRU), the leading pure-player in the post-secondary digital education market in Brazil, today reported financial and operating results for the three-month period ended March 31, 2022 (first quarter 2022 or 1Q22). Financial results are expressed in Brazilian Reais and are presented in accordance with International Financial Reporting Standards (IFRS). Vitru operates its hubs under the UNIASSELVI brand with 382.1 thousand students in digital education undergraduate and graduate courses, approximately 3.5 thousand dedicated tutors and 981 hubs distributed throughout Brazil.

Vitru delivers a 29.6% growth in Net Revenues in its Digital Education Undergraduate segment in the 1Q22 and is prepared to start the integration of Unicesumar

To our shareholders

Vitru delivered another quarter of solid growth trajectory combined with operational and quality drivers. We have achieved our goals related to the expansion of the capillarity across the country as well as intake figures, students base and profitability, while also preparing for the business combination with Unicesumar.

During the 1Q22, the intake figures of the DE Undergraduate segment (related to the intake process of the first semester of 2022, which is still running) accumulated a growth of 36.2% when compared to the 1Q21. The average ticket in this segment, our core business, reached R$300.6 this quarter, 8.5% higher when compared to the average ticket of 1Q21. The solid increases in intake and average ticket of the DE Undergraduate segment confirm the resilience of our academic hybrid model and the differentiation of our business positioning.

Growth is noticeable across the entire country, especially in the Southeast Region, Brazil’s largest in population, in which the number of hubs increased 46% in the last 12 months. In total, Vitru amounted to 981 hubs all over Brazil and most of them are still in maturation, allowing us to sustainably expand our presence at limited execution risk. More and more students can benefit from our high-satisfaction academic model at an affordable price. At the end of the 1Q22 quarter, 342.4 thousand students were enrolled in our DE Undergraduate courses.

The successful growth of the operational and quality indicators was reflected in the financial performance. Consolidated Net Revenue grew 18.0% YoY and the Consolidated Adjusted EBITDA increased 17.9% reaching R$47.4 million, with a 26.7% Adjusted EBITDA margin, which was stable vs the same period of last year.

Finally, on April 30th, 2022, Vitru received clearance from CADE (Brazil’s antitrust authority) for its Business Combination with Unicesumar, with no remedies. As part of CADE’s standard procedures, there is an additional 15-day waiting period (after the official publication of the authorization) for this decision to become final, which is due on May 17th, 2022. Once the waiting period expires and to the extent no review is requested, the business combination can close, and we will begin to integrate the activities of Unicesumar with Vitru.

Looking forward, we are about to step into one of our main goals for 2022: the transformation union of two leading institutions that share similar values and cultures. We strongly believe in our ability to deliver a smooth transition and build an even stronger and purpose-driven company, by bringing together the best solutions and technology for our students and maximizing commercial and cost synergies. We are committed to fulfilling our mission of positively impacting the lives of hundreds of thousands of Brazilians through our high-quality digital education offerings. Go Vitru!

Sincerely,

Pedro Graça

Vitru's CEO

1Q22 Results

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CONFERENCE CALL AND WEBCAST INFORMATION

Vitru will discuss its first quarter 2022 results via conference call

When: Monday, May 16, 2022 at 4:30 p.m. EST (5:30 p.m. BR)

Dial-in: +(833) 614-1391 (U.S. Toll-Free); +1 (914) 987-7112 (International)

Conference ID: 3969115

Webcast: https://investors.vitru.com.br/

Replay: available at our website

Carlos Freitas

Chief Financial and Investor Relations Officer

Maria Carolina de Freitas Gonçalves

Investor Relations Contact

Investor Relations Manager

ir@vitru.com.br

1Q22 Results

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1Q22 HIGHLIGHTS

Announcement on April 29, 2022, of the antitrust clearance for the Business Combination with Unicesumar, approved by the General Superintendence of CADE (Administrative Council for Economic Defense – Brazilian antitrust authority). According to Law No. 12,529/2011, there is an additional 15-day waiting period for CADE's decision to become final, which will expire on May 17, 2022. During this period, commissioners may request further review of the case.

Unicesumar is a leading education institution focused on the Digital Education (DE) segment with the highest quality indicators in Brazil, in addition to a sizeable presence in health-related on-campus courses, particularly Medicine;

382,000 digital education students as of 1Q22, with a 36.2% increase in the 1Q22 intake cycle vs 1Q21 in the Digital Education undergraduate segment;
Average ticket in the DE Undergraduate segment increased 8.5% in 1Q22 when compared to 1Q21, reaching R$300.6 per student, confirming the resilience of our business model;
Net revenue in the core Digital Education Undergraduate business was 29.6% higher in 1Q22 vs 1Q21, with Consolidated Net Revenue up 18.0%;
Consolidated Adjusted EBITDA increased 17.9% in 1Q22 vs 1Q21, with Adjusted EBITDA Margin stable at 26.7% in 1Q22;
Adjusted Net Income up 65.6% in 1Q22 vs 1Q21, positively impacted by a higher Adjusted EBITDA and an increase in the financial income; and
Adjusted Cash Flow from Operations increased 19.6% to R$46.9 million in 1Q22, with an Adjusted Cash Flow Conversion from Operations of 115.7%.

Table 1: Key financial highlights

R$ million
(except otherwise stated)

    

1Q22

1Q21

% Chg

Net Revenue

177.8

150.7

18.0%

DE Undergraduate Net Revenue

156.0

120.4

29.6%

Adjusted EBITDA1

47.4

40.2

17.9%

Adjusted EBITDA Margin

26.7%

26.7%

0.0 p.p.

Adjusted Net Income2

26.5

16.0

65.6%

Adjusted Cash Flow from Operations3

46.9

39.2

19.6%

Adjusted Cash Flow Conversion from Operations3

115.7%

107.1%

8.6 p.p.

(1)For a reconciliation of Adjusted EBITDA, see “—Reconciliations of Non-GAAP Financial Measures—Reconciliation of Adjusted EBITDA” at the end of this document.
(2)For a reconciliation of Adjusted Net Income, see “—Reconciliations of Non-GAAP Financial Measures—Reconciliation of Adjusted Net Income” at the end of this document.
(3)For a reconciliation of Adjusted Cash Flow from Operations and Adjusted Cash Flow Conversion from Operations, see “—Reconciliations of Non-GAAP Financial Measures—Reconciliation of Adjusted Cash Flow Conversion from Operations” at the end of this document.

1Q22 Results

4


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Businesses Seasonality

Vitru’s digital education undergraduate courses are structured around semesters with separate monthly modules within each semester. This enables students to enroll in digital education courses at any time during a semester. Despite this flexibility, Vitru generally experiences a higher number of enrollments in the first semester of each year than in the second semester of each year, due to the high school calendar in Brazil, in which classes conclude in December. New enrollments in Digital Education Undergraduate courses are concentrated in the first and third quarters (beginning of academic semesters in Brazil).

The seasonality in enrollments has a direct effect on revenues. In addition, Vitru generally records higher revenue in the second and fourth quarters of each year reflecting the effect of the dynamics of the intake cycle.

Additionally, a significant portion of expenses are also seasonal. For example, due to the nature of the intake cycle, a relevant amount of selling and marketing expenses are incurred in connection with the first semester intake, particularly in the first quarter of each year.

Below is the breakdown of the consolidated Adjusted EBITDA and the intake of the Digital Education Undergraduate segment over the past four quarters of the financial year ended on December 31, 2021 and the first quarter of 2022:

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1Q22 Results

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OPERATING RESULTS

Student base and hubs

The number of enrolled students is a relevant operational metric for Vitru. As of March 31, 2022, Vitru had 389.2 thousand students enrolled in the courses provided, an increase of 18.4% over the same period of the prior year, purely on an organic basis.

Another relevant metric is the percentage of digital education students to total enrolled students, which we believe best demonstrates the focus on digital education (comprising both undergraduate courses and continuing education courses) and its relevance to the services offered. As of March 31, 2022, students enrolled in digital education represented 98.2% of the total number of enrolled students, up 0.7 p.p. from the same period of the prior year.

It is important to highlight that the number of hubs is one of the drivers that enable the Company to increase its enrolled student base. A relevant portion of Vitru’s growth is driven by the expansion and subsequent maturation of the hubs.

Vitru has substantially expanded its operations and geographic presence throughout Brazil with the opening of new hubs in the last few years. In fact, 91.4% of the current 981 hubs are still ramping up, representing a substantial growth avenue: the current maturation ratio of such hubs is only 37.1%. The Company estimates that a typical hub reaches its full capacity in terms of the number of students (and hence is deemed to be mature) after seven or eight years of operations.

Table 2: Student base and hubs

'000
(except otherwise stated)

    

1Q22

1Q21

4Q21

Δ1Q22 x 1Q21

Δ1Q22 x 4Q21

Total enrolled students

389.2

328.8

365.4

18.4%

6.5%

% Digital education to total enrolled students

98.2%

97.5%

98.3%

0.7 p.p.

(0.1) p.p.

Number of digital education students

382.1

320.6

359.2

19.2%

6.4%

Undergraduate students

342.4

272.8

304.1

25.5%

12.6%

Graduate students

39.7

47.8

55.1

(16.9)%

(27.9)%

Number of hubs

981

743

939

32.0%

4.5%

% of Expansion hubs (i.e., excluding Base hubs)

91.4%

88.8%

91.1%

2.6 p.p.

0.3 p.p.

Theoretical maturation index1

37.1%

32.1%

32.9%

5.0 p.p.

4.2 p.p.

(1)The Company calculates the theoretical maturation index as the actual number of students per hub of the Expansion hubs divided by the theoretical number of students it expects to achieve as of the maturity of the same hubs. The index comprises all Expansion hubs as of the end of each period, and hence it can actually decrease in a given quarter as new Expansion hubs are opened.

1Q22 Results

6


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Tuitions and Ticket

Table 3: Tuitions and ticket

R$ million
(except otherwise stated)

    

1Q22

1Q21

% Chg

Digital Education Undergraduate Tuitions1

246.6

181.9

35.6%

Average Ticket DE undergraduate (R$/month)2

300.6

277.0

8.5%

(1)Tuitions are net of cancellations.
(2)In the first quarter of each year, the Company calculates the “Average Ticket DE undergraduate (R$/month)” as the sum of the Digital Education Undergraduate Tuitions net of cancellations of the quarter divided by the average number of students between the beginning and the end of the quarter.

The compelling strength of Vitru’s model and the sustainability of its growth can be demonstrated by the total amount charged for course tuitions from digital education undergraduate students (which is the sum of gross revenue and the hub partners’ portion of the tuitions less other academic revenue and cancellations).

DE Undergraduate tuitions for 1Q22 amounted to R$246.6 million, 35.6% higher than the R$181.9 million recorded in 1Q21. Such growth rate reflects mostly the maturation of expansion hubs (hubs not yet considered mature) through the organic increase in the number of students enrolled in digital education undergraduate courses.

The average monthly ticket of Digital Education Undergraduate courses increased by 8.5%, from R$277.0 in 1Q21 to R$300.6 in 1Q22. We believe that this increase in the average ticket in DE Undergraduate segment, despite the challenging macroeconomic conditions in Brazil, is indicative of the resilience of Vitru’s academic model. In addition, it is a signal of the contribution of courses with higher monthly tickets, such as Nursing.

Finally, in the last quarters we have been observing a continued reduction in the average age of our new students, which confirms the change in paradigm brought by the COVID-19 pandemic, in which more and more the new generations are accepting digital education as their natural solution of choice for post-secondary education.

1Q22 Results

7


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FINANCIAL RESULTS

Net Revenue

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Consolidated Net Revenue in 1Q22 was R$177.8 million, up 18.0% from 1Q21. This organic growth was mainly driven by the increase in the number of enrolled students in the DE Undergraduate segment.

Net Revenue from digital education undergraduate courses in 1Q22 was R$156.0 million, up 29.6% from R$120.4 million in 1Q21, solely on an organic basis. This achievement was primarily driven by the 25.5% increase in the student base, as a result of the aforementioned expansion and maturation of operational hubs, but also by a higher average ticket in this segment as previously presented.

Net Revenue from continuing education courses for 1Q22 was R$11.8 million, down 30.6% from R$17.0 million in 1Q21, negatively impacted by the reduction in the average duration of the graduate courses compared to the previous year, as a result of the current market trends. It is important to highlight that most of the shift is over. Besides the graduated courses, our continuing education business includes technical courses and professional qualification courses. We believe this has the potential to represent a significant additional source of revenue for us and is part of our strategy to expand complementary offerings throughout the students’ lifelong journey.

Net Revenue from on-campus undergraduate courses in 1Q22 amounted to R$10.0 million, a decrease of 24.8% from R$13.3 million in 1Q21. The decrease was primarily attributable to the ongoing shift to digital education, due to the increased number and attractiveness of digital education undergraduate courses. The decline in the contribution of the on-campus segment in our numbers is in line with the Company’s expectation and strategic vision for the overall Higher Education business in Brazil.

Table 4: Net Revenue Breakdown

R$ million

    

1Q22

1Q21

% Chg

Digital education undergraduate

156.0

120.4

29.6%

Continuing education

11.8

17.0

(30.6)%

On-campus undergraduate

10.0

13.3

(24.8)%

Net Revenue

177.8

150.7

18.0%

1Q22 Results

8


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Cost of Services

Cost of services in 1Q22 amounted to R$65.1 million, 22.8% higher than the R$53.0 million reported in 1Q21. This increase was partially attributable to an increase in personnel costs with the hiring of new tutors to support the growth of our business, as well as a R$3.3 million one-off recovery of past costs in our On-campus segment in 1Q21, as the settlement of a dispute with a given third-party. It is important to bear in mind that the cost of services includes certain restructuring costs as well as depreciation and amortization expenses, which combined amounted to R$14.9 million in 1Q22 and R$13.7 million in 1Q21.

Cost of services as reported in the Adjusted EBITDA calculation (without the aforementioned restructuring costs as well as depreciation and amortization expenses) was R$50.2 million in 1Q22 and R$39.3 million in 1Q21, representing a year-over-year increase of 27.7%, and an increase of 2.1 p.p. as a percentage of Net Revenue, particularly given the R$3.3 million one-off recovery of costs in 1Q21 as explained above.

Table 5: Cost of Services

R$ million

    

1Q22

1Q21

% Chg

Cost of Services

65.1

53.0

22.8%

(-) Depreciation and amortization

(13.0)

(10.9)

19.3%

(-) Restructuring expenses

(1.9)

(2.8)

(32.1)%

Cost of Services for Adj. EBITDA calculation

50.2

39.3

27.7%

as % of Net Revenue

28.2%

26.1%

2.1 p.p.

Gross Profit and Gross Margin

Gross Profit in 1Q22 was R$112.7 million, 15.4% higher than the R$97.7 million in 1Q21, while Gross Margin decreased 1.4 p.p. to 63.4% from 64.8% in 1Q21. This decrease in the Gross Margin was attributable to the increase in Cost of Services as a percentage of Net Revenue, for the reasons previously explained, as well as the lower contribution of the Continuing Education segment (the one with usually the highest margins among our three segments) to the consolidated Gross Profit.

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1Q22 Results

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Operating Expenses

Selling Expenses

Selling expenses in 1Q22 amounted to R$48.0 million, an increase of 24.7% compared to R$38.5 million in 1Q21. This increase is attributable mostly to our focus on the Digital Education segment, in which most of our selling expenses with online and broadcast television advertising are aimed at attracting new students.

Selling expenses as reported in the Adjusted EBITDA calculation (i.e., excluding the depreciation and amortization expenses) were R$47.8 million in 1Q22 and R$38.5 million in 1Q21, representing a year-on-year increase of 24.2%.

Table 6: Selling expenses

R$ million

    

1Q22

1Q21

% Chg

Selling Expenses

48.0

38.5

24.7%

(-) M&A and pre-offering expenses

(0.2)

-

n.a.

Selling Expenses for Adj. EBITDA calculation

47.8

38.5

24.2%

as % of Net Revenue

26.9%

25.5%

1.4 p.p.

Nevertheless, despite these issues, the Customer Acquisition Cost (CAC) decreased 8.9% in 1Q22 to R$279.8 per new student in the DE Undergraduate segment, compared to R$306.9 per new student in 1Q21, as provided in the table below:

Table 7: Customer Acquisition Cost1

R$ million

    

1Q22

1Q21

% Chg

Selling expenses for Adj. EBITDA calculation

47.8

38.5

24.2%

Number of intake students (DE Undergraduate)

170.9

125.4

36.2%

Selling expenses per intake

279.8

306.9

(8.9)%

(1)For simplification purposes, the Customer Acquisition Cost, or CAC, is equal to the selling expenses in a given period divided by the intake in the DE Undergraduate segment in the same period.

1Q22 Results

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General and Administrative Expenses

General and Administrative (G&A) expenses in 1Q22 were R$13.8 million, a decrease of 36.7%, compared to 1Q21, mainly due to optimizations in personnel expenses and lower expenses related to our share-based compensation plans.

G&A expenses as reported in the Adjusted EBITDA calculation were R$12.6 million in 1Q22 and R$13.0 million in 1Q21, representing a decrease of 3.1%, which reflects the continued efforts of Vitru to maintain a lean and agile corporate structure. It is important to highlight that Adjusted G&A expenses as a percentage of Net Revenue were 7.1% in 1Q22, a decrease of 1.5 p.p. compared to 8.6% in 1Q21.

Table 8: G&A expenses

R$ million

    

1Q22

1Q21

% Chg

General and Administrative (G&A) Expenses

13.8

21.8

(36.7)%

(-) Depreciation and amortization expenses

(1.9)

(3.0)

(36.7)%

(-) Share-based compensation plan

5.5

(5.0)

(210.0)%

(-) Restructuring, M&A and pre-offering expenses

(4.8)

(0.8)

500.0%

G&A Expenses for Adj. EBITDA calculation

12.6

13.0

(3.1)%

as % of Net Revenue

7.1%

8.6%

(1.5) p.p.

Net impairment losses on financial assets (PDA)

Net impairment losses on financial assets represent the provisions for doubtful accounts. Since 2020, the Company has adopted a stricter policy for the calculation of the PDA, which has been in place since then.

In 1Q22, the PDA effect was R$25.7 million, which represents 14.5% of the Net Revenue in the period (lower than the average percentage of Net Revenue in 2020 and 2021), while in 1Q21 the PDA was R$25.0 million, equivalent to 16.6% of the Net Revenue. The decrease of 2.1 p.p. in our PDA expenses as a ratio of Net Revenue in 1Q22 vs 1Q21 was mainly explained by the increase in our recovery performance, as well as the lower contribution of the Continuing Education segment (the one with usually the highest PDA ratios among our three segments) to the consolidated figures.

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1Q22 Results

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Adjusted EBITDA

Adjusted EBITDA in 1Q22 totaled R$47.4 million, up 17.9% from R$40.2 million in 1Q21. Adjusted EBITDA Margin was stable at the same level of 26.7%, reflecting the slight decrease in the Gross Margin and the slight improvements in G&A expenses and PDA as a percentage of Net Revenue, as stated earlier.

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Notes: (i) all figures in this graph include the adjustments applied in our definition of Adjusted EBITDA; (ii) PDA is defined as “Net impairment losses on financial assets” in our Financials Statements.

Adjusted Net Income

Adjusted Net Income in 1Q22 was R$26.5 million, up 65.6% from the same period of the prior year. This year-on-year increase reflects the growth in Adjusted EBITDA in 1Q22 vs 1Q21 as mentioned previously, as well as the increase in our financial income mainly related to higher interest rates in Brazil (SELIC) in 1Q21.

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1Q22 Results

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Cash Flow and Cash Conversion from Operations

Adjusted Cash Flow from Operations amounted to R$46.9 million in 1Q22, an increase of 19.6% compared to the number presented in 1Q21, as a result of the continued discipline in receivables management and lower income taxes paid compared to 1Q21. This reduction in income tax payments in 1Q22 was mainly due to the tax shield of higher interest expenses in our taxable basis, as well as the lower taxable profit of our Continuing Education segment (which does not benefit from the PROUNI exemptions).

Table 9: Cash Flow & Cash Conversion

R$ million

    

1Q22

1Q21

% Chg

Cash Flow from Operations

50.7

45.9

10.5%

(+) Income tax paid

(3.8)

(6.7)

(43.3)%

Adjusted Cash Flow from Operations

46.9

39.2

19.6%

Adjusted EBITDA

47.4

40.2

17.9%

(-) Non-recurring expenses

(6.9)

(3.6)

91.7%

Adjusted EBITDA excluding Non-recurring Expenses

40.5

36.6

10.7%

Adjusted Cash Flow Conversion from Operations1

115.7%

107.1%

8.6 p.p.

(1)The Company calculates Adjusted Cash Flow Conversion from Operations as adjusted cash flow from operations (which we calculate as cash from operations plus income tax paid) divided by Adjusted EBITDA (as defined above but without taking non-recurring expenses into consideration). Adjusted Cash Flow Conversion from Operations is a non-GAAP measure. The calculation of Adjusted Cash Flow Conversion from Operations may be different from the calculation used by other companies, including competitors in the industry, and therefore, the Company’s measures may not be comparable to those of other companies. For further information see “Reconciliations of Non-GAAP Financial Measures”.

CAPEX

Capital Expenditures in 1Q22 totaled R$10.2 million, 8.5% higher than the amount spent in 1Q21 due to higher investments in internal project development and software acquisitions to support our business operations as part of the strategy to reinforce our presence in Brazil.

Table 10: CAPEX

R$ million

    

1Q22

1Q21

% Chg

Property and equipment

2.1

2.3

(8.7)%

Intangible assets

8.1

7.1

14.1%

Investing activities

10.2

9.4

8.5%

as % of Net Revenue

5.7%

6.2%

(0.5) p.p.

1Q22 Results

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ABOUT VITRU (NASDAQ: VTRU)

VITRU is the leading pure-player in the postsecondary digital education market in Brazil based on the number of enrolled undergraduate students as of December 31, 2020 according to the annual census released by the Brazilian Ministry of Education (Ministério da Educação), or the MEC, in February 2022.

Vitru has been listed on the Nasdaq stock exchange in the United States (ticker symbol: VTRU) since September 18, 2020, and its mission is to democratize access to education in Brazil through a digital ecosystem and empower every student to create their own successful story.

Through its subsidiaries, Vitru provides a complete pedagogical ecosystem focused on a hybrid distance learning experience for undergraduate and continuing education students. All the academic content is delivered in multiple formats (videos, eBooks, podcasts and html text, among others) through its proprietary Virtual Learning Environment, or VLE. The pedagogical model also incorporates in-person weekly meetings hosted by dedicated tutors who are mostly local working professionals in the subject area they teach. The Company believes that this unique tutor-centric learning experience sets it apart, creating a stronger sense of community and belonging and contributing to higher engagement and retention rates of its student base.

The Company’s results are based on three operating segments:

Digital education undergraduate courses. What differentiates Vitru’s digital education model is its hybrid methodology, which consists of weekly in-person meetings with on-site tutors, alongside the benefit of the virtual learning environment, where students are able to study where and when they prefer. The Company’s portfolio of courses is composed mainly of pedagogy, business administration, accounting, physical education, vocational, engineering and health-related courses.
Continuing education courses. Vitru offers continuing education and graduate courses predominantly in pedagogy, finance and business, but also in other subjects such as law, engineering, IT and health-related courses. Courses are offered in three different versions, consisting of (i) hybrid model, (ii) 100% online, and (iii) on-campus.
On-campus undergraduate courses. Vitru has 14 campuses that offer traditional on-campus undergraduate courses, including engineering, law and health-related courses.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements, other than statements of historical fact, could be deemed forward-looking, including risks and uncertainties related to statements about the proposed business combination, including the benefits of the business combination, integration plans, expected synergies and revenue opportunities, anticipated future financial and operating performance and results, including estimates for growth, the expected management and governance of the combined company, and the expected timing of the business combination; the effect of the COVID-19 outbreak on general economic and business conditions in Brazil and globally, and any restrictive measures imposed by governmental authorities in response to the outbreak; our ability to implement, in a timely and efficient manner, any measure necessary to respond to, or reduce the effects of, the COVID-19 outbreak on our business, operations, cash flow, prospects, liquidity and financial condition; our ability to efficiently predict, and react to, temporary or long-lasting changes in consumer behavior resulting from the COVID-19 outbreak, including after the outbreak has been sufficiently controlled; our competition; our ability to implement our business strategy; our ability to adapt to technological changes in the educational sector; the availability of government authorizations on terms and conditions and within periods acceptable to us; our ability to continue attracting and retaining new students; our ability to maintain the academic quality of our programs; our ability to maintain the relationships with

1Q22 Results

14


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our hub partners; our ability to collect tuition fees; the availability of qualified personnel and the ability to retain such personnel; changes in government regulations applicable to the education industry in Brazil; government interventions in education industry programs, which affect the economic or tax regime, the collection of tuition fees or the regulatory framework applicable to educational institutions; a decline in the number of students enrolled in our programs or the amount of tuition we can charge; our ability to compete and conduct our business in the future; the success of operating initiatives, including advertising and promotional efforts and new product, service and concept development by us and our competitors; changes in consumer demands and preferences and technological advances, and our ability to innovate to respond to such changes; changes in labor, distribution and other operating costs; our compliance with, and changes to, government laws, regulations and tax matters that currently apply to us; general market, political, economic and business conditions; and our financial targets. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the potential effects of the COVID-19 pandemic on our business operations, financial results and financial position and on the Brazilian economy.

The forward-looking statements can be identified, in certain cases, through the use of words such as “believe,” “may,” “might,” “can,” “could,” “is designed to,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “forecast,” “plan,” “predict,” “potential,” “aspiration,” “should,” “purpose,” “belief,” and similar, or variations of, or the negative of, such words and expressions. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events. The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. Readers should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent management’s beliefs and assumptions only as of the date such statements are made. Further information on these and other factors that could affect the Company’s financial results is included in filings made with the U.S. Securities and Exchange Commission (“SEC”) from time to time, including the section titled “Item 3. Key Information—D. Risk Factors” in the most recent Annual Report on Form 20-F of the Company. These documents are available on the SEC Filings section of the investor relations section of our website at investors.vitru.com.br.

NON-GAAP FINANCIAL MEASURES

To supplement the Company’s consolidated financial statements, which are prepared and presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board—IASB, VITRU uses Adjusted EBITDA, Adjusted Net Income and Adjusted Cash Flow Conversion from Operations information, which are non-GAAP financial measures, for the convenience of the investment community. A non-GAAP financial measure is generally defined as one that purports to measure financial performance but excludes or includes amounts that would not be so adjusted in the most comparable GAAP measure.

VITRU calculates Adjusted EBITDA as the net income (loss) for the period plus:

deferred and current income tax, which is calculated based on income, adjusted based on certain additions and exclusions provided for in applicable legislation. The income taxes in Brazil consist of corporate income tax (Imposto de Renda Pessoa Jurídica), or IRPJ, and CSLL, which are social contribution taxes;
financial results, which consist of interest expenses less interest income;
depreciation and amortization;

1Q22 Results

15


Graphic

interest on tuition fees paid in arrears, which refers to interest received from students on late payments of monthly tuition fees and which is added back;
impairment of non-current assets, which consists of impairment charges associated with the on-campus undergraduate courses segment, given the deterioration in the prospects of this business;
share-based compensation plan, which consists of non-cash expenses related to the grant of share-based compensation, as well as fair value adjustments for share-based compensation expenses classified as a liability in the consolidated financial statements;
other income (expenses), net, which consists of other expenses such as contractual indemnities and deductible donations among others; and
M&A, pre-offering expenses and restructuring expenses, which consists of adjustments that the Company believes are appropriate to provide additional information to investors about certain material non-recurring items. Such M&A, pre-offering expenses and restructuring expenses comprise: mergers and acquisitions, or M&A, and pre-offering expenses, which are expenses related to mergers, acquisitions and divestments (including due diligence, transaction and integration costs), as well as the expenses related to the preparation of offerings; and restructuring expenses, which refers to expenses related to employee severance costs in connection with organizational and academic restructurings.

VITRU calculates Adjusted Net Income as net income (loss) for the period plus:

share-based compensation plan, as defined above;
M&A, pre-offering expenses and restructuring expenses, as defined above;
impairment of non-current assets, as defined above;
amortization of intangible assets recognized as a result of business combinations, which refers to the amortization of the following intangible assets from business combinations: software, trademark, distance learning operation licenses, non-compete agreements, customer relationship and teaching-learning material. For more information, see notes to the unaudited interim condensed consolidated financial statements in the Company’s filings with the U.S. Securities and Exchange Commission;
interest accrued at the original effective interest rate (excluding restatement as a result of inflation) on the accounts payable from the acquisition of subsidiaries, related to the acquisition of our operating units from Kroton in 2016 and 2017. See notes to the unaudited interim condensed consolidated financial statements in the Company’s filings with the U.S. Securities and Exchange Commission; and
corresponding tax effects on adjustments, which represents the tax effect of pre-tax items excluded from adjusted net income (loss). The tax effect of pre-tax items excluded from adjusted net income (loss) is computed using the statutory rate related to the jurisdiction that was affected by the adjustment after taking into account the effect of permanent differences and valuation allowances.

VITRU calculates Adjusted Cash Flow Conversion from Operations as adjusted cash flow from operations (which is calculated as cash from operations plus income tax paid) divided by Adjusted EBITDA (as defined above but without taking M&A, pre-offering expenses and restructuring expenses into consideration).

Adjusted EBITDA, Adjusted Net Income and Adjusted Cash Flow Conversion from Operations are the key performance indicators used by Vitru to measure the financial performance of its core operations, and Vitru believes that these measures facilitate period-to-period comparisons on a consistent basis. As a result, its management believes that these non-GAAP financial measures provide useful information to the investment community. These summarized, non-audited or non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with IFRS. Additionally, the calculations of Adjusted EBITDA, Adjusted Net Income and Adjusted Cash Flow Conversion from Operations may be different from the calculations used by other companies, including competitors in the education services industry, and therefore, Vitru’s measures may not be comparable to those of other companies. For a reconciliation of Adjusted EBITDA, Adjusted Net Income and Adjusted Cash Flow Conversion from Operations to the most directly comparable IFRS measure, see the tables at the end of this document.

1Q22 Results

16


Graphic

FINANCIAL TABLES

Unaudited interim condensed consolidated statements of profit or loss and other comprehensive income for the three-month period ended March 31, 2022 and 2021

Three Months Ended March 31,

R$ million (except earnings per share)

    

2022

2021

NET REVENUE

177.8

150.7

Cost of services rendered

(65.1)

(53.0)

GROSS PROFIT

112.7

97.7

General and administrative expenses

(13.8)

(21.8)

Selling expenses

(48.0)

(38.5)

Net impairment losses on financial assets

(25.7)

(25.0)

Other income (expenses), net

0.3

0.3

Operating expenses

(87.2)

(85.0)

OPERATING PROFIT

25.5

12.7

Financial income

15.0

9.2

Financial expenses

(14.0)

(13.5)

Financial results

1.0

(4.3)

PROFIT BEFORE TAXES

26.5

8.4

Current income taxes

(2.9)

(10.8)

Deferred income taxes

0.4

24.1

Income taxes

(2.5)

13.3

NET INCOME FOR THE PERIOD

24.0

21.7

Other comprehensive income

-

-

TOTAL COMPREHENSIVE INCOME

24.0

21.7

Basic earnings per share (R$)

1.04

0.94

Diluted earnings per share (R$)

0.98

0.88

1Q22 Results

17


Graphic

Unaudited interim condensed consolidated statements of financial position as of March 31, 2022 and December 31, 2021

March 31,

December 31,

R$ million

2022

2021

ASSETS

 

CURRENT ASSETS

Cash and cash equivalents

96.8

75.6

Short-term investments

259.4

253.0

Trade receivables

152.8

140.6

Income taxes recoverable

8.2

7.7

Prepaid expenses

42.7

35.0

Other current assets

2.9

2.9

TOTAL CURRENT ASSETS

562.8

514.8

NON-CURRENT ASSETS

Trade receivables

5.8

5.9

Indemnification assets

8.6

8.6

Deferred tax assets

83.7

83.4

Other non-current assets

1.9

1.6

Right-of-use assets

140.2

136.1

Property and equipment

104.4

106.8

Intangible assets

672.3

670.2

TOTAL NON-CURRENT ASSETS

1,016.9

1,012.6

TOTAL ASSETS

1,579.7

1,527.4

1Q22 Results

18


Graphic

March 31,

December 31,

R$ million

2022

2021

LIABILITIES

CURRENT LIABILITIES

Trade payables

61.0

41.7

Lease liabilities

29.7

27.2

Labor and social obligations

29.7

25.0

Taxes payable

3.6

3.3

Prepayments from customers

12.3

10.3

Accounts payable from acquisition of subsidiaries

153.6

149.8

Other current liabilities

2.2

2.1

TOTAL CURRENT LIABILITIES

292.1

259.4

NON-CURRENT

Lease liabilities

136.5

134.3

Share-based compensation

40.2

52.3

Provisions for contingencies

14.6

14.9

Other non-current liabilities

0.4

0.4

TOTAL NON-CURRENT LIABILITIES

191.7

201.9

TOTAL LIABILITIES

483.8

461.3

EQUITY

Share capital

0.0

0.0

Capital reserves

1,045.4

1,039.6

Retained earnings

50.5

26.5

TOTAL EQUITY

1,095.9

1,066.1

TOTAL LIABILITIES AND EQUITY

1,579.7

1,527.4

1Q22 Results

19


Graphic

Unaudited interim condensed consolidated statements of cash flows for the three-month period ended March 31, 2022 and 2021

Three Months Ended March 31,

R$ million

    

2022

2021

Cash flows from operating activities

Profit before taxes

26.4

8.4

Adjustments to reconcile income before taxes to cash provided on operating activities

Depreciation and amortization

14.9

13.8

Net impairment losses on financial assets

25.7

25.0

Provision for revenue cancellation

0.2

0.1

Provision for contingencies

0.7

1.4

Accrued interests

(5.6)

4.4

Share-based compensation

(5.5)

5.0

Modification of lease contracts

(0.3)

(0.1)

Changes in operating assets and liabilities

Trade receivables

(31.7)

(29.2)

Prepayments

(0.4)

(2.2)

Other assets

(0.0)

4.0

Trade payables

19.3

2.6

Labor and social obligations

4.7

10.3

Other taxes payable

0.4

0.4

Prepayments from customers

2.0

1.3

Other payables

0.1

0.8

Cash from operations

50.7

45.9

Income tax paid

(3.8)

(6.7)

Interest paid

(4.1)

(6.5)

Contingencies paid

(1.1)

(1.1)

Net cash provided by operating activities

41.6

31.5

Cash flows from investing activities

Purchase of property and equipment

(2.1)

(2.3)

Purchase and capitalization of intangible assets

(8.1)

(7.1)

Payments for the acquisition of interests in subsidiaries

(1.3)

(10.6)

Acquisition of short-term investments, net

1.4

0.4

Net cash used in investing activities

(10.1)

(19.5)

Cash flows from financing activities

Payments of lease liabilities

(3.6)

(2.4)

Costs related to future issuances

(7.3)

-

Capital contributions

0.6

-

Net cash used in financing activities

(10.3)

(2.4)

Net increase in cash and cash equivalents

21.2

9.6

Cash and cash equivalents at the beginning of the year

75.6

85.9

Cash and cash equivalents at the end of the year

96.8

95.5

1Q22 Results

20


Graphic

Reconciliations of Non-GAAP Financial Measures

Reconciliation of Adjusted EBITDA

Three Months Ended March 31,

R$ million

    

2022

2021

Net income for the period

24.0

21.7

(+) Deferred and current income tax

2.5

(13.3)

(+) Financial result

(1.0)

4.3

(+) Depreciation and amortization

14.9

13.9

(+) Interest on tuition fees paid in arrears

5.9

5.3

(+) Share-based compensation plan

(5.5)

5.0

(+) Other income (expenses), net

(0.3)

(0.3)

(+) M&A, pre-offering expenses and restructuring expenses

6.9

3.6

Adjusted EBITDA

47.4

40.2

Reconciliation of Adjusted Net Income

Three Months Ended March 31,

R$ million

2022

2021

Net income for the period

24.0

21.7

(+) M&A, pre-offering expenses and restructuring expenses

6.9

3.6

(+) Share-based compensation plan

(5.5)

5.0

(+) Amortization of intangible assets from business combinations

0.9

2.8

(+) Interest accrued on accounts payable from the acquisition of subsidiaries

1.0

3.0

(-) Corresponding tax effects on adjustments

(0.8)

(20.1)

Adjusted Net Income

26.5

16.0

Reconciliation of Adjusted Cash Flow Conversion from Operations

Three Months Ended December 31,

R$ million

2021

2020

Cash from Operations

50.7

45.9

(+) Income tax paid

(3.8)

(6.7)

Adjusted Cash Flow from Operations

46.9

39.2

Adjusted EBITDA

47.4

40.2

(-) M&A, pre-offering expenses and restructuring expenses

(6.9)

(3.6)

Adjusted EBITDA excluding M&A, pre-offering expenses and restructuring expenses

40.5

36.6

Adjusted Cash Flow Conversion from Operations

115.7%

107.1%

1Q22 Results

21


Exhibit 99.2      

Graphic

Vitru Limited

Unaudited interim

condensed consolidated

financial statements

March 31, 2022


Vitru Limited

Unaudited interim condensed consolidated statements of financial position at

(In thousands of Brazilian Reais)

  

March 31, 

December 31, 

Note

2022

2021

ASSETS

CURRENT ASSETS

Cash and cash equivalents

5

96,821

75,587

Short-term investments

5

259,353

253,042

Trade receivables

6

152,844

140,560

Income taxes recoverable

8,206

7,747

Prepaid expenses

8

42,673

34,957

Other current assets

2,901

2,891

TOTAL CURRENT ASSETS

562,798

514,784

NON-CURRENT ASSETS

Trade receivables

6

5,825

5,933

Indemnification assets

8,552

8,624

Deferred tax assets

7

83,742

83,350

Other non-current assets

1,851

1,641

Right-of-use assets

9

140,151

136,104

Property and equipment

10

104,434

106,839

Intangible assets

10

672,341

670,152

TOTAL NON-CURRENT ASSETS

1,016,896

1,012,643

TOTAL ASSETS

1,579,694

1,527,427

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

1


Vitru Limited

Unaudited interim condensed consolidated statements of financial position at

(In thousands of Brazilian Reais)

March 31, 

December 31, 

Note

2022

2021

LIABILITIES

CURRENT LIABILITIES

Trade payables

60,979

41,706

Lease liabilities

9

29,693

27,204

Labor and social obligations

11

29,668

25,015

Taxes payable

3,615

3,253

Prepayments from customers

12,289

10,321

Accounts payable from acquisition of subsidiaries

12

153,594

149,765

Other current liabilities

2,234

2,078

TOTAL CURRENT LIABILITIES

292,072

259,342

NON-CURRENT

Lease liabilities

9

136,520

134,328

Share-based compensation

15

40,236

52,283

Provisions for contingencies

14,606

14,872

Other non-current liabilities

398

474

TOTAL NON-CURRENT LIABILITIES

191,760

201,957

TOTAL LIABILITIES

483,832

461,299

EQUITY

13

Share capital

6

6

Capital reserves

1,045,384

1,039,588

Retained earnings

50,472

26,534

TOTAL EQUITY

1,095,862

1,066,128

TOTAL LIABILITIES AND EQUITY

1,579,694

1,527,427

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

2


Vitru Limited

Unaudited interim condensed consolidated statements of profit or loss and other comprehensive income for the three months period ended March 31.

(In thousands of Brazilian Reais, except earnings per share)

Three Months Ended

March 31, 

Note

2022

    

2021

NET REVENUE

17

177,789

 

150,694

Cost of services rendered

18

(65,148)

 

(52,947)

GROSS PROFIT

112,641

 

97,747

General and administrative expenses

18

(13,830)

 

(21,797)

Selling expenses

18

(47,956)

 

(38,524)

Net impairment losses on financial assets

6

(25,720)

 

(25,018)

Other income (expenses), net

19

265

 

313

Operating expenses

(87,241)

 

(85,026)

OPERATING PROFIT

25,400

 

12,721

Financial income

20

15,020

 

9,192

Financial expenses

20

(14,018)

 

(13,498)

Financial results

1,002

 

(4,306)

PROFIT BEFORE TAXES

26,402

 

8,415

Current income taxes

7

(2,856)

 

(10,840)

Deferred income taxes

7

392

 

24,113

Income taxes

(2,464)

 

13,273

NET INCOME FOR THE PERIOD

23,938

 

21,688

Other comprehensive income

-

 

-

TOTAL COMPREHENSIVE INCOME

23,938

 

21,688

Basic earnings per share (R$)

14

1.04

 

0.94

Diluted earnings per share (R$)

14

0.98

 

0.88

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

3


Vitru Limited

Unaudited interim condensed consolidated statement of changes in equity for the three months period ended March 31, 2022 and 2021.

(In thousands of Brazilian Reais)

Capital reserves

 

    

Share capital

Additional paid-in capital

Share-based compensation

Retained earnings (accumulated losses)

Total

DECEMBER 31, 2020

 

6

1,020,541

1,515

(44,114)

977,948

Profit for the period

 

-

-

-

21,688

21,688

Employee share program

-

-

-

-

-

Value of employee services

-

-

1,350

-

1,350

MARCH 31, 2021

 

6

1,020,541

2,865

(22,426)

1,000,986

DECEMBER 31, 2021

6

1,030,792

8,796

26,534

1,066,128

Profit for the period

 

-

-

-

23,938

23,938

Capital contributions

 

-

579

-

-

579

Issue of shares to employees

-

5,199

(5,199)

-

-

Value of employee services

 

-

-

5,217

-

5,217

MARCH 31, 2022

 

6

1,036,570

8,814

50,472

1,095,862

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

4


Vitru Limited

Unaudited interim condensed consolidated statement of cash flows for the three months period ended March 31.

(In thousands of Brazilian Reais)

Three Months Ended March 31, 

Note

2022

2021

Cash flows from operating activities

Profit before taxes

26,402

8,415

Adjustments to reconcile income before taxes to cash provided on operating activities

Depreciation and amortization

9 / 10

14,873

13,837

Net impairment losses on financial assets

6

25,720

25,018

Provision for revenue cancellation

6

242

132

Provision for contingencies

726

1,391

Accrued interests

(5,637)

4,366

Share-based compensation

15

(5,495)

4,979

Modification of lease contracts

(257)

(88)

Changes in operating assets and liabilities:

Trade receivables

(31,743)

(29,221)

Prepayments

(414)

(2,241)

Other assets

(43)

3,990

Trade payables

19,273

2,584

Labor and social obligations

4,653

10,312

Other taxes payable

362

353

Prepayments from customers

1,968

1,257

Other payables

80

813

Cash from operations

50,710

45,897

Income tax paid

(3,835)

(6,746)

Interest paid

9 / 11 / 12

(4,139)

(6,528)

Contingencies paid

(1,097)

(1,137)

Net cash provided by operating activities

41,639

31,486

Cash flows from investing activities

Purchase of property and equipment

10

(2,121)

(2,302)

Purchase and capitalization of intangible assets

10

(8,057)

(7,071)

Payments for the acquisition of interests in subsidiaries

12

(1,278)

(10,557)

Acquisition of short-term investments, net

1,362

435

Net cash used in investing activities

(10,094)

(19,495)

Cash flows from financing activities

Payments of lease liabilities

9

(3,588)

(2,437)

Costs related to future issuances

8

(7,302)

-

Capital contributions

579

-

Net cash used in financing activities

(10,311)

(2,437)

Net increase in cash and cash equivalents

21,234

9,554

Cash and cash equivalents at the beginning of the period

75,587

85,930

Cash and cash equivalents at the end of the period

96,821

95,484

21,234

9,554

See Note 21 for the main transactions in investing and financing activities not affecting cash.

v

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

5


Vitru Limited

Notes to the unaudited interim condensed consolidated financial statements.

March 31, 2022 and 2021.

(In thousands of Brazilian Reais, except as otherwise indicated)

1.Corporate information

Vitru Limited (“Vitru”) and its subsidiaries (collectively, the “Company” or “Group”) is a holding company incorporated under the laws of the Cayman Islands on March 05, 2020 and whose shares are publicly traded on the National Association of Securities Dealers Automated Quotations Payments exchange (NASDAQ) under the ticker symbol “VTRU”.

Until the contribution of Vitru Brazil shares to Vitru Limited, in September 2020, Vitru Limited did not have commenced operations and had only nominal assets and liabilities and no material contingent liabilities or commitments. Accordingly, Vitru Limited’s consolidated financial information substantially reflect the operations of Vitru Brazil after the corporate reorganization.

Vitru is a holding company whose principal shareholders are Vinci Partners, through the investments funds “Vinci Capital Partners II FIP Multiestratégia”, “Agresti Investments LLC”, “Botticelli Investments LLC”, Raffaello Investments LLC”, the Carlyle Group, through the fund “Mundi Holdings I, L.L.C.”, SPX Capital, through the investment fund “Mundi Holdings II, L.L.C.” and Neuberger
Berman, through the investment fund NB Verrochio LP.

The Company is principally engaged in providing educational services in Brazil, mainly undergraduate and continuing education courses, presentially through its eight campuses in two states, or via distance learning, through 981 (December 31, 2021 – 939) learning centers (“hubs”) across the country.

These unaudited interim consolidated financial statements were authorized for issue by the Board of Directors on May 12th, 2022.

1.1.

Significant events during the period

a)Operating events

Seasonality:

The distance learning undergraduate courses are structured around separate monthly modules. This enables students to enroll in distance learning courses at any time during a semester. Despite this flexibility, generally a higher number of enrollments in distance learning courses occurs in the first and third quarters of each year. These periods coincide with the beginning of academic semesters in Brazil. Furthermore, there is a higher number of enrollments at the beginning of the first semester of each year than at the beginning of the second semester of each year. In order to attract and encourage potential new students to enroll in undergraduate courses later in the semester, the Group often offers discounts, generally equivalent to the number of months that have passed in the semester. As a result, given revenue from semiannual contracts are recorded over the time in a semester, revenue is generally higher in the second and fourth quarters of each year, as additional students enroll in later in the semester. Revenue is also higher later in the semester due to lower dropout rates during that same period.

Leases (Note 9):

With the opening of new hubs according to the Group’s expansion strategy, new lease contracts were signed for the Group’s own hubs during the three months ended March 31, 2022. During this period, the Group also concluded renegotiation of terms of a few lease contracts for the extension of lease period at reduced prices. Such new and amended lease contracts resulted in an increment of R$ 949 to both right-of-use assets and lease liabilities.

Capital contributions:

On February 2022 SOP participants settled 6,200 new shares that were issued on September 2020, regarding the realization of SOP options. The amount paid for the shares was R$ 579.

Share-based compensation (Note 15)

In the months of February and March 2022, first Stock Options Program (SOP) participants sold 195,742 shares on the market, thus ending the Company's purchase obligation, and changing the SOP from cash settled into equity settled. The impact caused by this operation was a reversal of R$ 15,755 in liabilities and a constitution of reserve in equity of R$ 5,199.

2.

Basis of preparation of the unaudited interim condensed consolidated financial statements

The unaudited interim condensed consolidated financial statements of the Group as of March 31, 2022, and for the three months ended March 31, 2022 have been prepared in accordance with IAS 34 – Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”). The information does not meet all disclosure requirements for the presentation of full annual consolidated

6


Vitru Limited

Notes to the unaudited interim condensed consolidated financial statements.

March 31, 2022 and 2021.

(In thousands of Brazilian Reais, except as otherwise indicated)

financial statements and thus should be read in conjunction with the Group’s consolidated financial statements for the year ended December 31, 2021, prepared in accordance with International Financial Reporting Standards (“IFRS”).

The accounting policies adopted are consistent with those of the previous fiscal year and corresponding interim reporting period. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

The unaudited interim condensed consolidated financial statements are presented in Brazilian reais (“R$”), and all amounts disclosed in the financial statements and notes have been rounded off to the nearest thousand currency units unless otherwise stated.

There were no changes since December 31, 2021 in the accounting practices adopted for consolidation and in the direct and indirect interests of the Company in its subsidiaries for the purposes of these unaudited interim condensed consolidated financial statements.

2.1.

Significant accounting estimates and assumptions

The preparation of unaudited interim condensed consolidated financial statements of the Group requires management to make judgments and estimates and to adopt assumptions that affect the amounts presented referring to revenues, expenses, assets and liabilities at the reporting date. Actual results may differ from these estimates.

In preparing these unaudited interim condensed consolidated financial statements, the significant judgements and estimates made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that are set the consolidated financial statements for the year ended December 31, 2021.

2.2.

Financial instruments risk management objectives and policies

The unaudited interim condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual consolidated financial statements; they should be read in conjunction with the Group’s annual consolidated financial statements as of December 31, 2021. There have been no changes in the risk management department or in any risk management policies since the year-end.

3.Segment reporting

Segment information is presented consistently with the internal reports provided to the Senior management team, consisting of the chief executive officer, the chief financial officer and other executives, which is the Chief Operating Decision Maker (CODM) and is responsible for allocating resources, assessing the performance of the Company's operating segments, and making the Company’s strategic decisions.

In reviewing the operational performance of the Company and allocating resources, the CODM reviews selected items of the statement of profit or loss and of comprehensive income, based on relevant financial data for each of the Company’s operating segments, represented by the Company’s main lines of service from which it generates revenue, as follows:

Digital education undergraduate courses
Continuing education courses
On-campus undergraduate courses

Segment performance is primarily evaluated based on net revenue and on adjusted earnings before interest, tax, depreciation and amortization (Adjusted EBITDA). The Adjusted EBITDA is calculated as operating profit plus depreciation and amortization plus interest received on late payments of monthly tuition fees and adjusted by the elimination of effects from share-based compensation plus/minus exceptional expenses. General and administrative expenses (except for intangible assets’ amortization and impairment expenses), finance results (other than interest on tuition fees paid in arrears) and income taxes are managed on a Company’s consolidated basis and are not allocated to operating segments.

There were no inter-segment revenues in the period ended March 31, 2022 and 2021. There were no adjustments or eliminations in the profit or loss between segments.

The CODM do not make strategic decisions or evaluate performance based on geographic regions. Currently, the Company operates solely in Brazil and all the assets, liabilities and results are located in Brazil.

7


Vitru Limited

Notes to the unaudited interim condensed consolidated financial statements.

March 31, 2022 and 2021.

(In thousands of Brazilian Reais, except as otherwise indicated)

a)Measures of performance

Digital

education

Continuing

On-campus

undergraduate

education

undergraduate

Three Months Ended March 31, 

courses

courses

courses

Total allocated

2022

  

Net revenue

155,966

11,845

9,978

177,789

Adjusted EBITDA

50,115

6,891

4,032

61,038

% Adjusted EBITDA margin

32.13%

58.18%

40.41%

34.33%

2021

  

  

  

  

Net revenue

120,365

17,048

13,281

150,694

Adjusted EBITDA

35,887

9,443

9,575

54,905

% Adjusted EBITDA margin

29.82%

55.39%

72.10%

36.43%

The total of the reportable segments’ net revenues represents the Company’s net revenue. A reconciliation of the Company’s loss before taxes to the allocated Adjusted EBITDA is shown below:

Three Months Ended

March 31, 

2022

2021

Income before taxes

26,402

8,415

(+) Financial result

(1,002)

4,306

(+) Depreciation and amortization

14,873

13,837

(+) Interest on tuition fees paid in arrears

5,875

5,343

(+) Share-based compensation plan

(5,495)

4,979

(+) Other income (expenses), net

(265)

(313)

(+) Restructuring expenses

6,426

3,055

(+) M&A and Offering Expenses

534

560

(+) Other operational expenses unallocated

13,690

14,723

Adjusted EBITDA allocated to segments

61,038

54,905

b)

Other profit and loss disclosure

Digital

education

Continuing

On-campus

undergraduate

education

undergraduate

Three Months Ended March 31, 

courses

courses

courses

Unallocated

Total

2022

  

  

  

  

  

Net impairment losses on financial assets

22,533

2,535

652

-

25,720

Depreciation and amortization

10,872

222

2,749

1,030

14,873

Interest on tuition fees paid in arrears

5,074

228

573

-

5,875

2021

  

  

  

  

  

Net impairment losses on financial assets

18,338

5,133

1,547

-

25,018

Depreciation and amortization

9,307

572

2,318

1,640

13,837

Interest on tuition fees paid in arrears

4,272

166

905

-

5,343

4.Fair Value Measurement

As of March 31, 2022, the Company has only Share-based compensation liabilities measured at fair value, in the amount of R$ 40,236, which are classified in Level 3 of fair value measurement hierarchy given significant unobservable inputs used.

There were no transfers between Levels during the three months ended March 31, 2022.


8


Vitru Limited

Notes to the unaudited interim condensed consolidated financial statements.

March 31, 2022 and 2021.

(In thousands of Brazilian Reais, except as otherwise indicated)

The following table presents the changes in level 3 items for the three months ended March 31, 2022 and 2021 for recurring fair value measurements:

Share-based compensation

2022

2021

At the beginning of the year

52,283

46,260

Reclassification from (to) equity

-

(1,256)

Adjusted through profit and loss – general and administrative

(12,047)

4,979

As of March 31, 

40,236

49,983

The Company assessed that the fair values of financial instruments at amortized cost such as cash and cash equivalents, short-term investments, current trade receivables and trade payables approximate their carrying amounts largely due to the short-term maturities of these instruments. Non-current trade receivables, lease liabilities, accounts payable from acquisition of subsidiaries and loans and financing have their carrying amount adjusted by their respective effective interest rate in order to be presented as close as possible to its fair value.

The following table summarizes the quantitative information about the significant inputs used in level 3 fair value measurements:

Weighted 
average inputs

As of March 31, 

Unobservable inputs

2022

2021

Relationship of unobservable inputs to fair value

Net operating revenue growth rate (i)

24.8%

22.5%

2021: Increased growth rate (+200 basis points (bps)) and lower discount rate (-100 bps) would increase FV by R$ 435; lower growth rate (-200 bps) and higher discount rate (+100 bps) would decrease FV by R$ 433.

Pre-tax discount rate (ii)

11.2%

11.4%

2020: Increased growth rate (+200 basis points (bps)) and lower discount rate (-100 bps) would increase FV by R$ 553; lower growth rate (-200 bps) and higher discount rate (+100 bps) would decrease FV by R$ 548.

(i) The growth rate of net operating revenue is based on the historical growth of the student base and management’s expectations of market development.

(ii) Pre-tax discount rate reflects specific risks relating to the segment and country in which the Company operates.

5.Cash and cash equivalents and short-term investments

March 31, 

December 31, 

2022

2021

Cash equivalents and bank deposits in foreign currency (i)

12,985

15,722

Cash and cash equivalents (ii)

83,836

59,865

96,821

75,587

Investment funds (iii)

259,353

253,042

(i) Short-term deposits (mainly proceeds from the IPO) maintained in U.S. dollar.

(ii) Cash equivalents are comprised of short-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value, readily convertible into cash.

(iii) Short-term investments, increased by the proceeds from the IPO, correspond to financial investments in Investment Funds, with highly rated financial institutions. As of March 31, 2022, the average interest on these Investment Funds is 10.27% p.a., corresponding to 101.68% of CDI. Despite the fact these investments have high liquidity and have insignificant risk of changes in value, they do not qualify as cash equivalents given the nature of investment portfolio and their maturity. Due to the short-term nature of these investments, their carrying amount is the same as their fair value.

9


Vitru Limited

Notes to the unaudited interim condensed consolidated financial statements.

March 31, 2022 and 2021.

(In thousands of Brazilian Reais, except as otherwise indicated)

6.Trade receivables

March 31, 

December 31, 

2022

2021

Tuition fees

267,879

247,419

FIES and UNIEDU Guaranteed Credits

2,217

2,103

PEP - Special Installment Payment (i)

14,505

15,096

Provision for revenue cancellation

(4,433)

(4,191)

Allowance for expected credit losses of trade receivables

(121,499)

(113,934)

Total trade receivables

158,669

146,493

Current

152,844

140,560

Non-current

5,825

5,933

(i) In 2015, a special private installment payment program (PEP) was introduced to facilitate the entry of students who could not qualify for FIES, due to changes occurred to the program at the time. These receivables bear interests of 1.34% and, given the long term of the installments, they have been discounted at an interbank rate of 2.76%.

The aging list of trade receivables is as follows:

March 31, 

December 31, 

2022

2021

Receivables falling due

92,337

72,338

Receivables past due

From 1 to 30 days

31,000

27,368

From 31 to 60 days

22,769

25,949

From 61 to 90 days

9,727

22,782

From 91 to 180 days

52,852

40,326

From 181 to 365 days

75,916

75,855

Provision for revenue cancellation

(4,433)

(4,191)

Allowance for estimated credit losses

(121,499)

(113,934)

158,669

146,493

Cancellations consist of deductions of the revenue to adjust it to the extension it is probable that it will not be reversed, generally related to students that have not attended classes and do not recognize the service provided or are dissatisfied with the services being provided. A provision for cancellation is estimated using the expected value method, which considers accumulated experience and is updated at the end of each period for changes in expectations.

Changes in the Company’s revenue cancellation provision are as follows:

2022

2021

At the beginning of the year

 

(4,191)

 

(3,136)

Additions

 

(4,214)

 

(2,733)

Reversals

 

3,972

 

2,601

As of March 31, 

 

(4,433)

 

(3,268)

The Company records the allowance for expected credit losses of trade receivables on a monthly basis by analyzing the amounts invoiced in the month, the monthly volume of receivables and the respective outstanding amounts by late payment range, calculating the recovery performance. Under this methodology, the monthly billed amount and each late payment range is assigned a percentage of probability of loss that is accrued for on a recurring basis.

When the delay exceeds 365 days, the receivable is written down. Even for written-off receivables, collection efforts continue, and their receipt is recognized directly in the statement of profit or loss, when incurred, as recovery of losses.

Changes in the Company’s allowance for expected credit losses are as follows:

2022

2021

At the beginning of the year