Arco Platform, an educational software company that offers technology, services and content from kindergarten to high school, has announced a first quarter 2022 net profit of 102.7 million reais (£16.7 million), up from a net profit of 11.8 million reais reported for the first quarter of 2021.

The São Paulo-based company reported net revenue for the quarter of 430 million reais, up from 331.7 million reais reported for Q1 2021.

Arco founder and chief executive Ari de Sá Cavalcante Neto said: “The year started at a very strong pace, favoured by the resumption of classes in the Brazilian private K12 schools and the return of students who dropped-out during the pandemic. There was a significant increase in additional orders of our bookings during the quarter and, for some of these orders that were received late in the quarter, delivery to customers was concluded in April. Consequently, revenues that are traditionally recognised in the first quarter slipped to the next quarter. We took advantage of this positive environment to invest in selling initiatives, anticipating our marketing/commercial activities to the very beginning of the year, with an emphasis on our cross-selling strategy, which already shows very positives signs to date. On the cost side, we are confident our integration and efficiency initiatives will outpace inflationary pressures in Brazil and drive our margins this year to meet the adjusted EBITDA margin guidance provided for 2022. The conclusion of the incorporation of COC and Dom Bosco, combined with a more normalized capex level and a high level of neither due nor impaired receivables put us on track to deliver healthy cash generation in 2022 and forward. We are very confident on the full conversion of our ACV into revenues this year, as evidenced by the fact that we have already delivered approximately 66% of our ACV cycle to date – from October 2021 through April 2022 – the highest revenue recognition for the period over the past several years.”

Date Published: 10 June 2022

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