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Thank you for holding, and welcome to Cogna's Earnings Conference Call. We have here with us Mr. Valerio, CEO; Fred Villa, CFO; and Mario Ghio, Vasta's CEO. [Operator Instructions]. This event is also being broadcast live on the Internet and maybe accessed at ir.cogna.com.br, where you will also find the presentation. The slides will be controlled by you and the replay of this event will be available right after the end of the conference. We would like to inform you that this conference call is being simultaneously translated into English for the benefit of our foreign investors. We would like also to let you know that any forward-looking statements made during this conference call on Cogna's financial targets, projections and business prospects are based on the beliefs of the company and currently available information.
Future considerations are not performance guarantees. They involve risks, uncertainties and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect future results of the company and could lead to results that differ materially from those expressed in such forward-looking statements. Now I will turn the conference to Mr. Roberto Valerio, who will start the presentation. You may proceed, sir.
Thank you. Good morning, everyone. Thank you for joining us in today's conference call to discuss about the results delivered in Q2 2022 by Cogna. With me on this call, Frederico Villa, our Financial VP, Mario Ghio, our Vasta CEO; Bruno Giardino, Vasta CFO; and Eduardo Honzák, our IRO and Corporate CFO. I'd like to start today's call on Slide 3, where you can see our strategic reading of the results delivered this quarter at Kroton and Vasta vertical units, and then we will look at Cogna's consolidated numbers. At Kroton, this was another quarter improving our main financial and operating metrics. So Q2, now for 5 consecutive quarters, Kroton has improved, reducing revenue year-on-year, but with a growing recurring EBITDA. So it translates into a higher margin. We've had an important growth in our base, graduation growing 12.5% and post-grad growing 23%, showing the power of our capacity to attract new students and also to retain our current students.
Kroton and I always like to highlight that shows metrics that we hardly find all together. And now we see these results, the simultaneous results at Kroton. So a growing student base, a higher intake in the last trade cycle and -- but also a reduction in the cost of customer acquisition, the TAC, so we are more efficient. We've reduced our delinquency rate, showing that new students as well as renewal students have a higher quality. As a consequence, we also see a lower student dropout. So this combination has helped us attain these results is something very hard to have all of these great results in so many different metrics. Also, in the last 2 quarters, we had a growth of EBITDA margin despite all the effects on the economy and that's really important, and it shows the strength of the work we did between '20 and '21, our constant search for efficiency. Also looking at Kroton strategic pillars, Kroton Med has met all of our expectations this quarter. Our revenue is growing strongly this quarter compared to last year, so showing that our capacity to grow organically is really robust.
And from the viewpoint of customer experience, we are focused on improving customer experience. Our strategy is for us to have a contactless and a frictionless journey. Of course, our on-campus content is still our priority, and it shows that we have the best grade comparing companies of education that have -- public education companies. Now talking about Vasta, our net revenue growth has come to 34.5% in the quarter. It means that we are moving towards achieving the ACV target of BRL 1 billion. We will provide further details, but this is strongly supported by the growth of partner schools in our customer base growth of more than 50%. And of course, an increased penetration of complementary content in the customer base. In addition, I'd like to highlight the top quality of this revenue, more concentrated in subscription products which is our strategy as we have announced. And it means that we have been able to do this with very high quality.
Vasta is also advancing towards being a complete and end-to-end K-12 platform. We have this new investment in Educbank to provide more services to our partner schools in addition to the services we already have available on the platform for partner schools. As regards ESG, we have launched our first sustainability report of Vasta, showing our commitment to disclose the company's results. So this has been excellent work. Congratulations to our team. Talking about Cogna, I believe that -- my first highlight, and I will announce that in great joy. This is the fifth consecutive quarter that we show operating improvements in this competitive scenario and still facing the challenges post COVID. We have been able to maintain consistent improvements our EBITDA margin growth driven by Kroton and Vasta. And we also had improvements in recurring OCG with cash conversion of over 38%. We know, of course, EBITDA and EBITDA margin is very important. But OCG really shows the quality of the management work.
With this operating cash generation, we've been able to keep a stable leverage. We are having consistent drops in leverage. We are very distant from the covenant of 3x. And looking ahead, we see positive operating cash generation. And so our leverage will continue to be reduced. On the ESG front, we are making progress on a number of fronts. We've launched our greenhouse gas inventory. We were the first education company to do that. And at Vasta, they have this program, Somos Afro. This is an inclusion program to include the black and mixed race population, which is extremely interesting. And only to give you a few numbers, this quarter, we conducted more than 220 social projects, including 50,000 people who received these services, especially health care and education. We need talents, and we are very happy because we have just received the great Place to Work award. It shows the work we have done on culture building, and we will continue to do that.
We've launched [Hub], which is Cogna's Innovation Hub. We call it a factory of startups, that is we now have a team dedicated to supporting thesis that are developed in the company with founders that may create products that today we do not have in our portfolio, but they may potentialize our growth in the future. With that, I'd like to move on to Slide 5 to talk about Kroton results. Our student base has grown more than 12% in total, led by low on-campus content programs, which is the previous premium and 100% online. So a growth of almost 14%.
It doesn't mean that we are not growing in higher on-campus content programs with laboratories that's also growing about 9% the high on-site attendance or high on-campus content. And this is precisely our strategy. That is the focus of our company. And this growth was supported by different initiatives, commercial marketing initiatives, but also the expansion of more than 1,000 hubs last year, which has supported this growth in the first 2 quarters of 2022, and it will continue to help us grow in the future in addition to our greater portfolio of online programs. So all of that has helped us reach this growth.
Regarding undergraduate student dropout, the average is stable, dropout of high on campus content or high on-site attendance is coming down because of many initiatives to gain efficiency and processes. But also, let me remind you, this is only the second quarter. So we are showing you the dropout rate by the midpoint of this semester that is at the end of the first quarter. And we usually have a higher dropout rate at the end of the year. But anyway, this is an extraordinary number, and we hope to keep it in the third quarter, which is, of course, much more challenging. Now on Slide 6, let us talk about our net revenue. In the lower chart, you can see our net revenue evolution. So it's been a number of quarters that we announced that the revenue growth would be slower and then it will reach a point of inflection. So in the first quarter, we had minus 4.9 million. Second quarter, minus 3.4%.
The point of inflection will be in 2023. I mean this is what we announced. But looking at our performance now in the first quarter, we believe we will begin to see revenue growing already in the fourth quarter this year. So we are very happy with this. On Slide 7, talking about average ticket, I think this is a topic that always receives a number of questions from analysts. Now when you look at first at freshman year, we see a big supply. So we do not have a lot of control on the average ticket for freshmen. We are not engaged in a price war. We try to maintain our prices. When you compare 100% digital in the previous trade cycle to the current trade cycle, we can see that our tickets have remained stable. And of course, maybe we did not have as much volume as we could, but this was our strategy to maintain the average ticket. And now because we have more students on premium distance learning, we have this impact on the average ticket. So we believe that the best view of trade ticket -- of average ticket is to work on the opportunity to leverage our operating results, so we can gain more scale on digital products.
Basically, the programs that have a higher digital content, every new student you have in the system, you have a lower cost per student because digital programs, they have a fixed cost and a variable cost for every new student is much lower than those programs when you have a higher on-campus content. So since you can maintain the same cost on digital programs, your margins tend to grow in time. That's why our strategy has always been, and if you look back, it's been 5 trade cycles that we've been talking not only about the volume, the number of students that have enrolled, but we also compare the revenue from one trade cycle to the previous one because we see that every trade cycle, we have more operating leverage. So this is what you see on Slide 7 to help you understand this. So the average ticket, looking at freshmen, this is a competitive market, as I mentioned. So as I said, we keep stable prices, but this is a competitive market. There's not much we can do. But of course, we can gain scale.
So we're trying to increase the number of freshmen to have a higher revenue. And because the variable cost for digital products is very low, it means that in time, we'll have a higher profitability. This is our strategy. So the average ticket of out-of-pocket students had a drop of EUR 652 in the first quarter to EUR 635 million in the second quarter. But -- I'm sorry, in the first quarter '21 compared to the first quarter '22. But if you look at the revenue, it has grown 12.4%. The average ticket had a drop, but the volume is growing. So again, it means that our revenue on low on-campus content has grown 8%. And that is comparing apples-to-apples. So higher on-campus content or lower on-campus content comparing to trade cycles so that we have a fair comparison for the average ticket. So this is what is happening, and this is a result of our product mix. The final highlight here, if you look at the press release, you will see we have lost [FIS] and PEP students because they're graduating. They had -- historically, they had higher average tickets.
And so you see this impact because of the mix adjustment. So it used to be -- it was 12%. The share of these students is now 7%. So -- we have the inflation of payroll and also operational costs, and we are working on it to -- otherwise, the impact would be much greater, but we know that PDA and marketing have contributed. I think that is an important thing to highlight. Here is the growth of our EBITDA margin even when confronted with this scenario. And many times, we get questions about our PDA and whether the PDA reduction is reflected in extraordinary expenses, but we wanted to show you year-on-year that we had 18% last year. It's now down to 13%. It was 13% on the first quarter. So the percentage of net income is lower, and we understand that PDA as a proportion of net income is stable. That's why our payments are now more stable. So these are not related to anything but a more efficient operation. Now helping us with margins. We have been working on to reduce our acquisition costs and this is reflected in the contribution of marketing.
Now moving on to Slide #9. Just a quick comment in relation to our accounts receivable to the right. If you consider the out-of-pocket accounts receivable, it's been dropping even though the out-of-pocket is growing. Our PDA in that regard is decreasing because our students now have more payment ability and the average term of receivables has spiraled down and we had in the -- we had a reduction of over 16 days. We are now at for the average time of receivables. And going back to the left side of the slide, you can see that total account receivables is now stable at BRL 5 million with slight growth from PMT and episode. This is only natural because of the maturing cycle of PP students. We know that we are not enrolling new PP students for several trade cycles. But of course, there is an evolution semester by semester because this is only natural. And I think that the highlight here is not -- accounts receivable is no longer a problem for us. We're feeling very comfortable about the results we have achieved.
Now closing, Slide 10. Kroton Med is a very important segment for our strategy. We have an organic growth plan with maturity at over 850 seats. Today, we have 556 medical seats. So there's still room to mature organically, but I think that we have to underscore the growth of revenue in the first half. And here, we had growth of over 30%, showing our strength to grow organically. We announced guidance for the market during our Cogna team, and we have surpassed it both in EBITDA and revenue, 50% of the year is now spent. We have surpassed 50% of the guidance and 54% of EBITDA. We know that the second half of the year always has greater numbers of students enrolled. So we will exceed the guidance given, and we're feeling very confident about this vertical, which is one of our top growth opportunities. With this, I close Kroton, and I'll hand it over to Mario Ghio, Vasta's CEO, for his presentation.
Thank you very much. I would like to start our presentation talking about the operational data. Now at the close of the semester, which is when we have the basis of schools and students, we closed with over 1.1 million students using our core products and approximately 5,400 partner schools and the use of complementary content represented an addition of 100,000 student star-base. We have now 400,000 students that use at least one complementary content solution, reaching 1,300 schools in those complementary solutions as well. Since the IPO, we have taken several initiatives to expand our sources of revenue, launching new products and solutions. And I would like to mention that we have now concluded the integration of the level Learning system. And we are now put into operation our Fibonacci learning system and signed a distribution agreement with Mackenzie. As for our complementary solutions, well, they were expanded.
Our portfolio is now more robust. And I would like to mention that we have moved into the B2B2C segment with the launch of [indiscernible] [Pura Adapter] for private tutoring. And very soon, these lines will be more significant to our revenue. In Digital Services, we look at the schools and institutions that need to have their operations upgraded. So we have added several brands such as [Sell M] and Phidelis to our portfolio with the goal of meeting the demand of our partner schools. And especially in this quarter, we took a very significant step forward, as we announced our minority investment that will be consolidated in our net worth results with the investment of Educbank.
Educbank is very important for us because it ensures predictability and recurrence of revenue. And we believe that Educbank, together with Phidelis, which is our ERP system, those will be very important tools to boost the efficiency of our schools together with their profitability. We know that there are around BRL 70 billion in this market. And in our estimates, the partner schools of Vasta now have been acquired BRL 17 billion. This is the tuition volume that Educbank could provide if all schools were reached through this partnership with Vasta.
In the next Slide #13, I would like to talk a little bit of our net revenue. We grew 35%, approximately reaching BRL 190 million in the quarter year-to-date from the fourth quarter last year to the second quarter. This year, we grew to BRL 960 million in net revenue. This is significantly higher than the previous period. And here, we have subscription products with BRL 450 million in the cycle, and we have recognized a little over 85% of the ACV that has been converted into revenue. And we are feeling confident that all the rest of this ACV will be converted in the next semester. Now moving on to Slide 14 to discuss ACV conversion. As I said, more than 85% of the ACV has been captured and has been transformed into net revenue. And we have different seasonal impact because Mackenzie, for example, has more revenue in the second semester. So as such, we will have less concentration and with the growth of Mackenzie in the following years, we will have a semester that will be a little heftier than the previous semesters in the previous cycle.
So therefore, we have less concentration in subscription revenue when compared to previous cycles. Now for the next semester, we expect that the additional 14.5% of ACV will be fully converted into revenue at the close of the cycle, ending on the third quarter and from the fourth quarter on, we will have the ACV for 2023. Now looking at EBITDA on Slide 15. In the cycle, recurring EBITDA grew 68%, totaling a little above BRL 990 million with margin growth of 7.4 percentage points. We credit this expansion of margin from net revenue growth, but also to the efficiency gains in our financial discipline and also our integration with Eleva exploring our synergies and improving our line of costs and expenses.
And by the way, our cash generation reached BRL 103 million in the second quarter, and we were able to reverse our cash generation losses in the comparison, and this substantial improvement in cash generation comes from the improvement in EBITDA and our receivables and a reduction in the PDA of schools that have now neared historical levels and, of course, the contribution of our working capital. So thank you very much for your attention. And now I'll hand it over to Fred Villa.
Thank you very much, Ghio. I will start my presentation on Saber on Slide 17, speaking of the main financial highlights. Here, we know that Saber benefits from the national textbook program and Red Balloon also represents around 50% of our revenue. In the quarter, we had a reduction of revenue of around 19% in the semester, around 8%. Well, in spite of the growth that we reported in Red Balloon, we saw new schools being added approximately 8 of them, and there was also expansion in the student base. So revenue grew in Red Balloon, but there was a reduction in revenue obtained through the national textbook program. And this was by reason of the greater seasonality of the National Textbook business calendar. The reflection was felt in our recurring EBITDA and margin in the -- there was a reduction in EBITDA in the accumulated semester. EBITDA reached BRL 29 million in the first half and in the second just 22, a reduction of 22.6%. That is explained by the seasonality of the national textbook program, as I explained.
Just to close the presentation on Saber, we now move on to Slide 19 to speak about Cogna. And here, I start with the main financial indicators, net revenue and recurring EBITDA. Looking at the quarter and semester, I think that the key message here last year, we said that 2022 would be the inflection point for Cogna's revenue growth. So in spite of the fact that we are flat in revenue growth at 0.2% in the quarter, in the semester, we observed 3.3% growth, reaching INR 2,332 million. So in the semester, the growth is explained by everything that [Madu] Valerio and [Madu] Ghio said, the evolution in Kroton while there was a positive cycle and growth was very significant in vast growing revenue at 34%. Now moving from net revenue where we have positive news in the semester, we look at recurring EBITDA and margin. In the second quarter, EBITDA grew 11.4% and margin reached 30.7%. So in addition to revenue growth, we see the effect of our efficiencies in our business.
In Kroton, there was an improvement in delinquency rates that is reflected in PDA. And here, in terms of corporate expenses, there was a reduction of around 9%. This, of course, boosts our efficiency. And for the fifth consecutive quarter, we post growth in EBITDA. I think that the most important message is the one we see on Slide 20. We have reinforced in recent conference calls, the importance of our operating cash generation. So on the slide to the right from the first semester of 2021, in this comparison, which is the best way of demonstrating this because as you probably remember, there was a mismatch with the anticipation of receivables in the first semester 2021. So in the semester, we have reached BRL 291 million with growth of 47% and in the comparison from the first half '21 to '22, our operating cash generation from zero in 2020, reached BRL 291 million. And the focus, of course, for the coming semesters will show that the improvement in the quality of our students will lead to very positive delinquency rates at the level of today.
And now moving on and finishing Cogna's presentation in Slide 21, we take a look at leverage, and our leverage ratio is under control. As you can see on the upper part of the slide, our net debt over adjusted EBITDA is shown as an evolution. And in the last 5 quarters where we went from leverage of 2.13. We are now down to 2.09. And remember that we had interbank interest rate at the time of around 3% at that time, and now we are over 13%. So our focus on operating cash generation has paid off, and we have been able to maintain our leverage flat. Now looking at the debt composition, our company finishes the first semester with BRL 3.7 billion in cash and cash equivalents with a reduction of BRL 3.1 million in net debt.
And to the right, we see a chart showing that in the month of August, we will have an amortization of approximately BRL 2 million, and the company reinforces the message that with the current cash and operating cash generation that we have seen in the last quarters, we will be able to amortize our debt in the short and medium term. We emphasize now that at the end of the second quarter, some initiatives. And considering the increase in interest rate, we have bought back some of our debt below par, and we also had issuance of approximately BRL 500 million with an average lower cost than the less debt raise in 2021 and with the lengthening of our debt profile. So the message here is that leverage and debt are both under control in the company. With this, I close on Slide 21, this brief presentation, and I'll turn it over to Mr. Valerio for his final remarks.
Thank you very much, Fred. Moving on to Slide 22. I think that the first point I would like to highlight is that Kroton had good retention and enrollment results. So we believe that the inflection point for revenue will be anticipated, and we can expect growth of revenue still this year with the resumption of growth in Kroton. And both the growth team and the customer experience teams in Kroton have worked very hard to make it a reality. So we are feeling very excited about it. And secondly, something I have said is that the reduction of delinquency rates is the fruit of our labors in the student base, both in enrollments and reenrollments. We were able to cleanse our base, and this will take us to a new PDA over net revenue ratio. This is another important factor. So together with revenue growth, we have a new perspective for PDA.
All of this shows that we have a solid operating and EBITDA margins and looking at recurring EBITDA margins, the outlook is positive. So cautiously positive because of the current situation in Brazil, but I think that the tough times for Kroton are in the past, and we continue to make advances to deliver everything that our teams can. In Vasta, I think what Ghio has mentioned show our strength in Vasta, our competence and our ability to deliver. In 2021, Vasta was affected by the pandemic, but this is now in the past. Growth is feeling -- is coming on very strongly, both in learning systems and also on this focus on subscription. All of the restructuring conducted by Ghio is also driving growth of margin in a perennial way. It's not something that's only short term. And the diversification through several initiatives also shows our commitment to continue to offer new solutions to our schools. So this is just the early days of a new cycle of ideas, and we're feeling very optimistic about Vasta in the near future.
And adding up to organizations, while this would represent around 90% of the company's results. So because of this, we're feeling very excited about the future in Cogna. In 2021, we had to pursue our profitability or this resumption of profitability. And then during Cogna Day, we said that we needed to improve our profitability and at the same time, make improvements in revenue growth. Vasta is delivering this. Cogna is about to deliver this, and all of this shows that our strategy is coming to fruition. With the increase of our interest rates in Brazil, we have to take some countermeasures. But Fred did a great job. He has mentioned 2 aspects in the buyback for the quarter, and there are other initiatives underway. Everything with the purpose of reducing the debt service.
And the final message in terms of leverage is that we are at a healthy level under control. Our cash generation is more than enough to pay off everything that we need to amortize in our debt and to continue growing. So just before I conclude, I would like to reinforce that the IR team will be happy to answer any of your questions. We'll be opening now for the Q&A, but both the presentation and all of the information have been posted to our website. So if there is anything that we are unable to answer to you here during the conference call, you can go and look up that information.
[Operator Instructions]. Our first question comes from Lucca Marquezini, Itau BBA.
At Kroton, looking at marketing expense, there is a trend of more investment on advertising for student intake, but we see stability compared to last year. Can you give us some more color on your strategy about marketing? Can we consider this level as stable for the future?
This is Roberto. Thank you for your question. We have focused on a number of initiatives many of them focusing on more digital that is more online than offline. We have more assertiveness to measure results by doing that. We'll continue to focus on that. Also, the investment team wants to broaden our distribution, increasing our sales capacity in smaller towns. And this, of course, will have a lower cost because it is usually a lower cost to penetrate smaller towns. Of course, I am not going to talk about our strategy because the competition may be listening to this conference call, but our strategy is to maintain stability in marketing expenses and probably I would say that it can even grow a little bit on marketing expenses. And I can tell you why, our LTV on CAC ratio is already above 5x. And we believe this is already optimum. So we could, in fact, invest a bit more in marketing to bring more volume.
But answering your question on practical terms, today's level will remain stable. Maybe we will spend a bit more in the future, but there will be no big difference. We're focusing on margin, as you know. We believe we have room to invest a bit more in marketing to bring more volume. But remember, this is a highly competitive market. A lot of what we do is try not to burn money in marketing in times when the results will not be so favorable in terms of volume growth. Thank you for the question.
Perfect. Thank you.
Our next question comes from Marcelo Santos from the JPMorgan Bank.
Good morning, everyone. Good morning, Valerio, Ghio, Fred. My first question. Can you share your view on your intake strategy for the second half of the year? How much you've invested and what you expect? Second question, you've mentioned average tickets for high on-campus content or lower on-campus content. You mentioned there will be continued pressure because of the product mix. When will we reach stability? When do you expect we reach stability in that?
Perfect. Thank you. I will answer your questions. Thank you for your questions, Marcelo. Talking about student intake, we are in the middle of the trade cycle. Classes began last week. So it is only natural that we will have an acceleration of enrollments when classes begin. Many people leave that for the last minute. So we are prudently or cautiously optimistic. In both segments, we're growing student intake, both in high on-campus content as well as in low on-campus content because July and August were months when the enrollments lost momentum, obviously, because of the economic context in the country. We are still growing on both segments. But this is a game that may change every minute. I mean, we have another 45 days of student intake. But we feel cautiously optimistic, all right, Marcelo. Regarding the product mix change, everything related to mix takes a while for the change to consolidate because of our trade cycles. We have graduations every 6 months and new enrollments every 6 months. And graduation time is usually ranging between 3 and 4 years. A student coming in today will graduate in 3 or 4 years.
So I would tell you that considering our strategy for ACV that began a year ago, we will need another 2 or 2 years or maybe 4 or 5 cycles to see the full reflections, the full impact of these initiatives, maybe a bit shorter. So we will see more impact every quarter, every semester. That's my view. Final point, so the student intake has already stabilized. So now we need time to see that reflected on the student base, right? Is that how I can read your answer. Yes, I think it is a great interpretation of my answer. Actually, even an even better explanation if you consider student intake. And then the distribution between lower on-campus content and higher on-campus content, we believe that higher on-campus content will accelerate further. We expected that, and it is actually accelerating at the expected pace. But when you look at 100% digital and once-a-week model that is more stable. That has been stable for a number of cycles now. So your interpretation is correct. Thank you very much.
Our next question comes from Pedro Lima from the BTG Pactual Bank.
On our side, we have 2 questions. The first is about the PDA levels. We have seen this improvement after you've taken some initiatives. So this number, 13%, is that the recurring level you expect to have that you consider healthy? And can you provide some more color on the initiatives that led to the improvement in receivables because the PAP reduction for PEP students, you no longer have an intake. And there was also a change in the format of the National Textbook Program. This was my first question. The second question is about Kroton Med. You have started that more recently. Are you looking for a strategic partner, or do you believe in the future you may have an IPO? What's on your radar?
Thank you, Pedro. Fred, would you like to answer about PDA?
Yes, your first question about PDA. We believe our current PDA level is right. As you know as the market knows, we made a change in the end of 2020, and we believe this is the right criteria. Looking ahead, I believe we have shown in the presentation. Valerio spoke about that. And the best way to view that is PDA on net revenue. So for 4 quarters now, we've capped it at 13%, and that's what we believe will continue. I mean we may have a slight variation up or down, but this is the right level. Our PDA, after we had this change in 2020, it is closely related to cash generation. So we see an improvement in PDA because we had an improvement in delinquency levels.
We do not disclose these numbers because our competitors don't disclose that number, but we were talking about this percentage of PDA over net revenue, which is the number we use for management. And so this is what I can expect for the future on student intake. We have made improvements in the level of student credit. So we now have students who are more financially sound and more focus on cash. We had a number of internal initiatives to improve operating cash generation and collections. And so my final message is that, yes, our PDA is managed at this level of the 3%.
Okay. Pedro, you also asked about PMT. We discontinued that for freshmen in 2019, right? So we did not have student intake, a PEP student intake in '20, '21, '22. So we only have a few PEP students already in the student base about to graduate. And PMT, we made a change from the first to the second trade cycle of 2021 because in the past, it was paid at the end, as the students graduated. Today, students pay monthly, they make monthly payments. And so that improves our receivables because they're already paying. It's less, but they're already paying for that during the program. About the Kroton Med, as I mentioned, we are growing robustly in Kroton Med. We're growing organically. And I believe we will reach a maturity point above 800 places, above 800 students. So we still have room for organic growth. This is a good segment. It's a good business. We prepared the company. We made a carve-out. We already have independent reports.
And the company is perfectly prepared for us to adopt different business models in terms of the organization chart. Now looking at our current leverage, we have enough cash to make small acquisitions on the medical front, but because this segment has opportunities, maybe, yes, if we find a good match, a good financial partner who can make the investments that we deem correct because we don't really need capital. The idea is not to capitalize Kroton Med to change our leverage, no. We want Kroton Med to grow more, I mean, to grow faster in medical programs, especially because organic growth can continue for a number of years, but we are in no hurry. About IPO for Kroton Med, we're very far from that. This is a company that has to continue to grow. We're very far from an IPO. I think that's it. I hope I've answered your question.
Our next question is from Vitor Tomita, Goldman Sachs.
We have 2 questions, in fact. Could you please elaborate on the higher CapEx level and investments in expansion that we saw in the semester and what can we expect for the second semester, second half? And with the sale of schools at the end of last year and also going back to medical, how do you view the space for pursuing strategic alternatives for other business areas at Cogna? And do you consider closing Vasta's capital considering the current valuation and your trust in its business potential?
Thank you very much, Vitor, for the questions. I will hand it over to Fred to answer about CapEx, and then I will continue.
Thank you very much. Fred here, your question about CapEx growth. We have invested in content and also in IT. So this increase of around 13% in expansion was resulted from the purchase of learning books at Vasta, a very innovative solution for Vasta's activities. It's important to mention that this was just a transfer or dislodgement. When we look at Vasta as a whole, we see that CapEx in the year is very close to what we delivered in '21, and there will be a gradual reduction in CapEx in coming years in the near future because we are also investing heavily in technology. By the way, in 2021, we delivered our new system, the SAP. And in 2022, we are also participating in a transformation program that we call student-focused transformation program. So this is where the increase resulted from. It's a one-off increase, but this is a line that will be correlated to what we delivered in 2021 and that there will be a gradual reduction.
Thank you, Fred. Well, in relation to alternatives and other business areas to drive our growth, I think there are several fronts. We have our innovation hub. It can be used for the discovery of other educational segments and also careers. Those are premises and these are projects that will mature more slowly. We have a platform for young adult education. We'll be launching on the third quarter, both the digital account and other platforms. So those are initiatives. I can mention 2 more examples. [Piaui] product for mobiles and tech, which is a technology, free education program. It's now running on beta. So there are several initiatives going forward when we have several options. And considering our size of BRL 5 billion, of course, it will take a while to mature some projects, at least 2 or 3 years, but we are keeping our eyes spilled to see any opportunities, but there is nothing very relevant in the short term. As for Vasta, we have no intention of delisting it. Vasta is a fast-growing company with lots of opportunities in the future. So we continue to believe in the thesis that led to its IPO.
Our next question is from Pedro Caravina, Crédit Suisse.
Can you hear me well?
Yes, we can.
Two questions. First of all, could you comment on the outlook for the new DL programs, law and psychology in relation to the ticket, the average ticket? And what about your deleveraging plans? What can we expect in that regard?
Thank you very much, Pedro, for your questions. Well, I will talk firstly about DL. Well, law and psychology are 2 programs that we applied for with the Ministry of Education a long time ago, it's a lengthy process to get the approvals from the Ministry of Education. Well, the go-to-market is ready when everything is ready, but we're still expecting the approval for DL programs. So I cannot give you any more info in terms of possible dates or anything. But just to let you know that whenever we get the approval and authorization for the programs, everything is ready for implementation.
Thank you, Fred here about your question. I think it's important to mention that next week, we'll be amortizing BRL 2 million in our -- this is part of our payment schedule. And we have several initiatives. Well, we have bought back 347 of papers that were below par. This is an initiative that adds value to the company. We also had issuance of BRL 500 million to lengthen our debt profile at a lower capital cost than in the past. Several other initiatives are being conducted, but most importantly, operating cash generation in the company is positive because of our operations, and we are open to opportunities. So in the next quarters you will be able to see in our financial performance the effect of these initiatives that we are currently involved in. And we believe that probably there will be reduction semester on semester as the result of the operating results. And after the election, there will be also a gradual reduction in leverage.
Thank you very much, very clear.
We have closed our questions-and-answer session. Let me now give the floor to Mr. Roberto Valerio for his final considerations. Please, Mr. Valerio.
Well, I'd like to thank you all for having joined us in this conference call. I could see you had a problem for those who were in the meeting in Portuguese through the webcast. Those of you who have missed a portion, it will be available in a few minutes on our website. One more time, thank you. Congratulations to our teams at Vasta Cogna Saber, and I'll see you in the next quarter.
Thank you all very much. Today's Cogna's conference call is now closed. We thank you all for joining us. Have a great afternoon, and thank you for using Chorus Call.