After embarking on a wave of consolidation in higher education and spending the last four years restructuring its operations—the popular " back to basics" approach that has recently marked several companies—the Cogna Group has opened a new chapter and is now investing to grow in other business areas.

Supported by a leaner and more profitable Kroton , the education company aims to increase its market share in basic education and government offerings, as well as online courses, an addressable market it estimates to be worth around R$ 100 billion.

“We talk a lot about having this ambidexterity within the company,” says Roberto Valério, CEO of Cogna, to NeoFeed . “Initially, we focused on performing our core business efficiently to return to growth. Once that's done, we're looking at internal competencies to build new products, because we're no longer just a consolidator of higher education.”

While restructuring, reducing its university campus base from 170 to 113, closing unprofitable courses, and ceasing operations at schools, Cogna was creating new businesses, especially in the areas of basic education and government, as part of an effort to diversify its revenue streams.

In basic education, handled by Vasta, the company began to focus on the development and offering of teaching systems. With recognized brands in its portfolio, such as Anglo and pH, Cogna began to offer complementary solutions for schools in areas such as socio-emotional skills and robotics.

The company also created a bilingual school franchise, Start Anglo, targeting parents' demand for schools that offer English as a secondary language. In this format, Cogna provides the teaching system, brand, and know-how to school owners.

Launched in 2023, the franchise network currently has over 50 signed contracts with school owners who want to offer bilingual content. The company already has six schools in operation and expects to reach 30 by 2027.

Valério highlights the initiative as an example of Cogna's strategy of capturing value by using resources from the structure it has built in recent years.

“We already had Anglo, which is a tremendous success rate for university entrance exams, and the content from Macmillan [an English textbook publisher], with whom we have a partnership, and we combined both to create these franchises. We didn't do M&A to do this; the skills were already in-house,” says the CEO.

Another area where Cogna plans to grow is in B2G, business to government , with the sale of educational materials to the government, under the Saber vertical. One of the objectives is to gain market share in the National Textbook and Educational Material Program (PNLD), the federal government 's textbook distribution program.

Cogna held between 15% and 20% of the market share, even though it owned some of the leading textbook publishers, such as Saraiva, Scipione, and Ática. Through an effort to broaden its product range, this share increased to 33%.

The company also sees room to develop other products for municipal and state education departments. One product already on the market is materials to reinforce the teaching of subjects such as Portuguese and mathematics in schools, used by the government of Pará .

The initial results are generating considerable expectation. The company managed to increase its average revenue from government solutions from approximately R$40 million in 2021 to R$300 million in 2024, and the expectation is for continued growth, given the size of the market.

"State and municipal governments alone have a budget of over R$ 50 billion for discretionary spending on education," says Valério.

Another business area the company is investing in is infoproduct creators, part of the Cogna vertical, which also handles B2B solutions. Cogna developed a platform called Voomp, aimed at people who produce content such as courses and e-books and who can offer open courses, targeting a market that grows 50% annually.

Growth and profitability

Valério emphasizes that the new product offering comes with a concern about not losing the profitability gains achieved through the company's restructuring. According to him, new initiatives need to show an IRR of at least 25%.

In terms of revenue, Cogna expects that, with these new business fronts, the other areas will increasingly account for revenue, which in the third quarter reached R$ 4.8 billion, a 13% increase.

Since 2018, when it acquired Somos Educação for R$ 4.6 billion and expanded its operations in basic education, Cogna has reduced the weight of higher education in its revenue from almost 99% to a level above 60%. With the new products, the expectation is that, in the long term, the other business areas can account for half of the revenue.

“But it’s kind of hard to say when that will happen, because higher education is growing quite a lot,” says Valério, highlighting that Kroton’s revenue reached R$ 3.4 billion in the accumulated total for 2025, showing growth of 17.4%. “The other businesses are growing quite a lot, but since higher education is also expanding, the increase in market share won’t be as rapid, but the trend is that they will gain market share over time.”

He states that Cogna does not intend to carry out large or numerous M&As to consolidate or accelerate the expansion of these new areas, although some acquisition may be made. "We are more focused on growing organically," says Valério.

This approach to mergers and acquisitions is part of a new philosophy regarding the use of capital. In the case of M&As, the intention is to return to the market in a focused manner, with smaller and more strategic operations, complementing the current offering.

The most recent transaction was in August, with the acquisition of the Faculty of Medicine of Dourados (FMD), in Mato Grosso do Sul, for R$ 54.4 million.

Within this capital allocation strategy, Cogna aims to return resources to shareholders after five years without profitability and reduce net debt to pay less interest. The intention is to maintain long-term financial leverage between 1x and 1.5x – in the third quarter of 2025, this ratio reached 1.1x, the lowest in 28 quarters.

These two areas present good prospects given the results the company has achieved with the adjustments made, plus the effects of the improved economy. Cogna's EBITDA has grown for 19 consecutive quarters, closing the third quarter at R$ 431.7 million, a 14.4% increase year-on-year.

Operating cash flow increased from R$640 million in 2021 to R$1.05 billion in 2024, and the expectation is for continued growth. In a report released earlier this year, JP Morgan upgraded its recommendation for Cogna shares from neutral to buy, with a target price of R$6.50, given the company's positive growth prospects.

Analysts have revised upward their revenue growth projections for 2026, from 5% to 12%, based on the growth rate of Kroton and also the basic education segment. They also highlighted that Cogna's shares are significantly discounted, trading at a P/E multiple of 5.4 times for this year and 4.2 times for next year.

According to Valério, the change in recommendation is yet another sign of the market's shift in perception of the company, something that materialized last year when Cogna's shares closed with a cumulative increase of over 250%, with the company registering a market value of R$ 7.4 billion.