Arco Platform : 2Q23 Earnings Presentation

2Q23 Earnings Presentation

August 2023

Disclaimer

This presentation contains forward-looking statements as pertains to Arco Platform Limited (the "Company") 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 our competition; our ability to attract, upsell and retain customers; our ability to increase the price of our solutions; our ability to expand our sales and marketing capabilities; general market, political, economic, and business conditions, and our financial targets such as revenue, share count and IFRS and non-IFRS financial measures including gross margin, operating margin, net income (loss) per diluted share, and free cash flow.

We undertake no obligation to update any forward-looking statements made in this presentation to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

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. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management's beliefs and assumptions only as of the date such statements are made. Further information on these and other factors that could affect our financial results is included in filings we make with the Securities and Exchange Commission from time to time, including the section titled "Risk Factors" in our most recent Forms 20-F,6-K and our Rule 424(b) prospectus. These documents are available on the SEC Filings section of the Investor Relations section of our website at: https://investor.arcoplatform.com/.

We prepared this presentation solely for informational purposes. The information in this presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, any of our securities or securities of our subsidiaries or affiliates, nor should it or any part of it form the basis of, or be relied on in connection with any contract to purchase or subscribe for any of our securities or any of our subsidiaries or affiliates nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.

We have included in this presentation our Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net Income Margin, Free Cash Flow and Adjusted Free Cash Flow, which are non-GAAP financial measures, together with their reconciliations, for the periods indicated. We understand that, although Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net Income Margin, Free Cash Flow and Adjusted Free Cash Flow are used by investors and securities analysts in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations as reported under IFRS. Additionally, our calculations of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net Income Margin, Free Cash Flow and Adjusted Free Cash Flow may be different from the calculation used by other companies, including our competitors in the education services industry, and therefore, our measures may not be comparable to those of other companies.

Consolidated 2Q23: Positive cash generation trend continues

In R$, M

Pe d a g o g i c a l c y c l e	… A n d c o n s i s t e n t c a s h	F & M d e l i v e r e d r e c o r d
c o n t i n u e s w i t h s o l i d	g e n e r a t i o n p r o f i l e	q u a r t e r l y m a r g i n s
o p e r a t i o n a l r e s u l t s …	i m p r o v e m e n t	w i t h s t r o n g g r o w t h

A d j . E B I T D A - C A P E X		P e d a g o g i c a l F r e e C a s h					N e t r e v e n u e
C y c l e t o D a t e ¹				F l o w t o F i r m ³			A d j . E B I T D A m a r g i n
	Adj. EBITDA - CAPEX margin						% of net revenue				Net revenue	Adj. EBITDA mg.
		7p.p.
		29.6%								150						400
								20p.p.
22.4%														350
						13.4%
								100				+104%		300
		453.4													250
291.1							205.2	50					75.3	200
											150
											36.9
					-6.2%				0						100
CTD 22	CTD 23					-88.3%	-2.4%
			-80.7					50
				CTD22	CTD23	-50			2Q22²	2Q23	0

1) Cycle to date ("CTD") figures includes 4Q results from previous year and 1Q and 2Q results for the year and cut-offs, reflecting pedagogical business cycle. 2) 2022 figures are prior to isaac's acquisition by Arco and are being disclosed for comparisons purposes only.	3
3) Refers to managerial free cash flow on slide 30 for additional details.

We a re rep o r t in g segm en t s a s we m a n a ge o p era t io n s:

Pe d a g o g i c a l s o l u t i o n s a n d F i n a n c i a l a n d M a n a g e m e n t s o l u t i o n s ( F & M )

TEACHERS

P E D A G O G I C A L

S O L U T I O N S

CORE LEARNING SYSTEMS

SUPPLEMENTAL SOLUTIONS

TUTORING & TEST PREP.

PEDAGOGICAL CONSULTING

STUDENTS

SCHOOL

OWNERS

F I N A N C I A L &

M A N A G E M E N T

S O L U T I O N S

ERP &

MANAGERIAL SYSTEMS

COLLECTION & "REVENUE GUARANTEE"

FINANCING & PAYMENTS

INSURANCE

FAMILIES

4

Pedagogical

2 Q 2 3 R E S U L T S

C O R E & S U P P L E M E N TA L S O L U T I O N S

F I N A N C I A L & M A N A G E M E N T S O L U T I O N S