Afya reports steady Q2 2025 growth despite margin compression

Afya Limited reported steady revenue growth of 12% year-over-year in the second quarter of 2025, driven by expansion in its core medical education and healthcare services segments. The company posted total revenue of $345.6 million for the period, up from $308.5 million in the same quarter last year.

Net income rose 8% to $68.2 million, though net margins narrowed to 19.7% from 21.3% in Q2 2024. Executives attributed the margin compression to higher operational costs, including investments in technology and infrastructure, as well as increased staffing expenses. Despite the pressure, management emphasized progress in efficiency initiatives aimed at offsetting cost pressures in the medium term.

Operating cash flow increased 15% to $92.4 million, reflecting strong operational performance. The company’s medical education segment, which accounts for approximately 60% of total revenue, continued to expand, with student enrollment up 11% year-over-year. Healthcare services, the second-largest segment, grew 14% in the quarter.

Afya maintained its full-year 2025 guidance, reaffirming revenue growth expectations of 10-12% and adjusted net income growth of 5-7%. The company’s CEO stated that the outlook remains supported by strong demand for healthcare professionals and continued investment in digital learning platforms.

Shares of Afya were little changed in pre-market trading following the results, indicating investor focus on margin trends rather than headline growth. Analysts noted that while revenue growth remains robust, the pace of margin recovery will be a key monitorable for the stock in the coming quarters.