YDUQ3

YDUQS Participações S.A. is one of the largest private higher education groups in Brazil and its common shares are traded on B3 under the ticker YDUQ3. The group’s origins date back to the creation of Faculdade de Direito Estácio de Sá in 1970, in Rio de Janeiro, conceived as a non-profit institution by judge João Uchôa Cavalcanti Netto. Throughout the 1970s and early 1980s, the organization expanded its course offerings, becoming Faculdades Integradas Estácio de Sá in 1972 and achieving university status in 1988, which broadened its activities in teaching, research, and extension. Starting in 2005, a corporate reorganization process began, transforming the former supporting entities into for-profit private companies, a phase that was completed in 2007 and prepared the company to access the capital markets.

In 2007, then Estácio Participações carried out a public offering of primary and secondary distribution of Units, raising funds and opening its shareholder base to new investors. In 2008, it signed an agreement to join the Novo Mercado segment of the then BM&FBOVESPA, now B3, thus beginning to operate under more demanding corporate governance practices. Over the following years, the company executed a consolidation strategy in the higher education sector, marked by successive acquisitions of colleges and university centers in several Brazilian regions, such as Roraima, Rio Grande do Norte, Amapá, Maranhão, Paraíba, Rio Grande do Sul, Santa Catarina, Pará, Amazonas, and Piauí, among other states. This movement resulted in strong geographic expansion and an increase in the student base, consolidating the group’s position in Brazil’s higher education market.

From 2013 onward, with new share offerings and additional fundraising in the capital markets, the company intensified its inorganic growth strategy, incorporating educational institutions in state capitals and mid-sized cities, while also strengthening its presence in on-campus and distance learning courses. In 2014, the company’s American Depositary Receipts (ADRs) began trading on the US OTCQX International Premier market, increasing its visibility among foreign investors. In 2019, the group adopted the corporate brand YDUQS, unifying its institutional identity and updating the trading code of its shares on B3 to YDUQ3, as well as the ADR ticker to YDUQY, in a move to reinforce its positioning strategy as a multi-brand higher education platform.

YDUQS’s business model is centered on providing higher education and graduate educational services, with a predominant focus on generating revenue from tuition fees for traditional undergraduate, technological undergraduate, distance learning, specialization, master’s, doctoral, extension, non-degree, and preparatory courses. In 2024, net revenue from educational services totaled R$ 5.36 billion, fully linked to this scope of services, and is internally segmented into three business lines: Premium, Digital Education, and On-Campus. Most of its revenue comes from recurring tuition payments, supplemented by academic fees related to administrative services such as issuance of documents, grade review, and entrance exam registration, in addition to subscription revenues tied to digital content focused on competitive exams and tests.

The company operates with a brand portfolio that targets different audience profiles and market positions in Brazilian higher education. The main academic brands include Estácio, Ibmec, IDOMED, and Wyden, covering everything from generalist undergraduate courses to more specialized programs such as medicine and executive education. YDUQS also controls brands focused on preparatory education, such as Damásio, Hardwork Medicina, and Grupo Q, dedicated to preparation for competitive exams, bar exams, and specific tests. EnsineMe operates as an academic and technological support vertical, responsible for developing methodologies, digital platforms, audiovisual content, and learning management solutions, supplying the group’s on-campus and digital education ecosystem.

YDUQS’s student base is one of the largest in the country among private higher education providers. On December 31, 2024, the company had approximately 1.32 million students enrolled in undergraduate, graduate, master’s, doctoral, preparatory, and non-degree courses, across on-campus, blended, and digital modalities. Traditional undergraduate programs accounted for around 59% of the total base, while graduate and other programs represented the remaining 41%. In the same period, YDUQS maintained one university, 23 university centers, and 49 colleges accredited by the Ministry of Education, with roughly 106 physical campuses and more than 2,500 distance-learning hubs distributed across all Brazilian states and the Federal District. This demonstrates significant national reach without dependence on major individual clients, since no student or entity accounts for more than 10% of net revenue.

In terms of pedagogy and operations, YDUQS adopts a structured and standardized academic model supported by educational technology and proprietary methodologies. EnsineMe develops content, platforms, and digital experiences at scale, with intensive production of videos, learning objects, and interactive resources. The Aura methodology, applied to on-campus and digital learning, seeks to integrate different modalities through a unified curriculum matrix and assessment tools based on Item Response Theory (IRT), which makes it possible to measure student proficiency, calibrate assessment difficulty levels, and generate data to track the academic journey. Beyond undergraduate courses, YDUQS offers lato sensu and stricto sensu programs of varying durations, as well as multiple admission pathways, including entrance exams, use of ENEM scores, public programs such as ProUni, second degrees, external transfers, reactivation of enrollment, and international processes aimed at Ibmec and IDOMED.

The group’s operations are subject to heavy government regulation, a characteristic of Brazil’s higher education sector. The educational institutions maintained by YDUQS depend on authorizations, accreditations, reaccreditations, and course recognitions granted by the Ministry of Education, which works in conjunction with the National Education Council, the National Institute for Educational Studies and Research Anísio Teixeira (INEP), and the National Commission for the Evaluation of Higher Education (CONAES). These bodies are responsible for setting guidelines, conducting on-site evaluations, regulating the opening of new institutions, campuses, and courses, as well as monitoring academic quality indicators. Over its history, the company has accumulated experience in dealing with this regulatory framework, including participation in government programs such as Mais Médicos, through the authorization of medical courses in different municipalities.

In terms of management and stakeholder relations, YDUQS emphasizes information transparency and the maintenance of structured communication channels with students, faculty, employees, and investors. The company develops specific initiatives for attracting, engaging, and retaining students, with dedicated areas for academic experience and multichannel support, including on-campus registries, remote service centers, apps, and digital platforms. The company states that it incorporates sustainability practices into its strategy, covering social, environmental, economic, and governance dimensions, while also seeking to maintain financial discipline and a focus on operational efficiency—relevant aspects for analyzing its shares traded on B3 under the code YDUQ3 and its ADR programs in the international market.