 2Q20 Net revenues up 71 Year-Over-Year, reaffirming Arcos resilient business model and high-quality solutions. SÃO PAULO, Brazil, Aug. 17, 2020 GLOBE NEWSWIRE -- Arco Platform Limited, or Arco Nasdaq: ARCE, today reported financial and operating results for the second quarter 2020 ended June 30, 2020.The superior academic results are possible because we have a customer-oriented culture, attached to our always-evolving proprietary methodology, break-through technology-driven platform and tailored pedagogical consultancy. These pillars are not established overnight. They come from over 50 years of experience in education with a clear focus on quality.First Half 2020 Results Net Revenue of R496.4 million; Net Profit of R20.1 million; Adjusted Net Income of R114.1 million; and Adjusted EBITDA of R197.5 million.Second Quarter 2020 Results Net Revenue of R234.9 million; Net Profit of R16.2 million; Adjusted Net Income of R57.9 million; and Adjusted EBITDA of R100.6 million.Revenue Recognition and SeasonalityAs we report the second quarter 2020 results, it is important to highlight the revenue recognition and seasonality of our business.We typically deliver our Core Curriculum content four times each year, in March, June, August and December and our Supplemental Solutions content twice each year, in June and December, usually two to three months prior to the start of each school quarter. The amount of revenue recognized is proportional to the amount of content made available, which is not linearly distributed among the quarters, which causes revenue seasonality in our business.A significant portion of our expenses is also seasonal. Due to the nature of our business cycle, we require significant working capital, typically in September or October of each year, to cover costs related to production and accumulation of inventory, selling and marketing expenses, and delivery of our teaching materials at the end of each fiscal year in preparation for the beginning of each school year. Therefore, such operating expenses are generally incurred in the period between September and December of each year.Full Year 2020 guidance: Adjusted EBITDA Margin is expected to be in the range of 35.5 to 37.5.Completion of Positivos corporate restructuring: On July 07, 2020, according to a resolution approved by the Board of Directors and registered at the Board of Trade of Ceará, the corporate name of the subsidiary EAS Educação S.A. was changed to PSD Educação S.A.On August 01, 2020, continuing the corporate restructuring, PSD Educação S.A. incorporated the Companies Positivo Soluções Didáticas Ltda. and Editora Piá Ltda. When PSD Educação S.A. acquired these entities, goodwill and fair value adjustments recognized in the amount of R830,028 and R726,876, respectively, were treated as not deductible. However, after this transaction, PSD Educação S.A has the tax benefit of the deductibility of the goodwill and fair value adjustments of R529,347. The fair value adjustments should be deductible over the next 5 to 20 years, according to the useful life of the identified asset and the goodwill should be deductible for at least 5 years, under of Brazilian tax laws, depending on the utilization curve established by the Company in the initial use of the benefit.At the end of each fiscal year, if the tax benefit is greater than the taxable income, the Company will recognize a deferred tax asset from the tax loss, which may be offset in the next fiscal years, limited to 30 of taxable income.Information related to COVID-19 pandemic: As discussed in more detail in our June 30, 2020 condensed consolidated financial statements submitted to the Securities and Exchange Commission on Form 6-K, the COVID-19 pandemic has not had a material impact on the Companys operations, distribution capacity and revenue recognition so far. As of June 30, 2020, there was a total impact of R7,898 on the Companys condensed consolidated financial statements related to the Covid-19 pandemic mainly related to: i revision of the Companys estimated credit losses from its trade receivables based on expected increases in financial default and in unemployment rates in Brazil for the next months, which resulted in an increase of R4,028 thousand, ii the Company incurred additional expenses of R3,680 related to IT, network infrastructure and an integrated teaching platform, as well as expenses to maintain protective measures.Despite legally mandated school closures, the Company did not suspend its activities and, following health and social distancing guidelines, its workforce continues to work remotely from home, with the exception of teams from the distribution centers that are working on site, however, with several safety rules, in accordance with health and social distancing guidelines. In this scenario, the Company made investments in IT and network infrastructure, had additional expenses for cleaning and disinfecting the installations, bought alcohol and masks, funded COVID-19 tests and H1N1 flu vaccination campaigns with the objective of taking care of employees, reducing the demand for care in health units and to facilitate the diagnosis of COVID-19 in order to safeguard the health and safety of its employees, customers and suppliers. Our content production continues according to the scheduled curriculum calendar and the current educational material has been delivered to the schools according to the planned schedule, enabling the Company to recognize the revenues on these products.The future impact of the COVID-19 pandemic on an ongoing basis is still uncertain, and the Companys management team will continue to closely monitor and assess the potential impacts it may have on the Companys business, its financial performance and position.The extent to which the coronavirus COVID-19 impacts our financial results and operations will depend on future developments, which are uncertain, including new information which may emerge concerning the severity of the coronavirus and the actions to contain the impact of the coronavirus COVID-19 pandemic. Based on future developments of the coronavirus COVID-19, it is possible that we may, in the future, be required to take actions or steps in relation to our business that could have a disruptive or a material and adverse effect on our business. About Arco Platform Limited Nasdaq: ARCEArco has empowered hundreds of thousands of students to rewrite their futures through education. Our data-driven learning, interactive proprietary content, and scalable curriculum allows students to personalize their learning experience with high-quality solutions while enabling schools to provide a broader approach to education.Forward-Looking StatementsThis press release contains forward-looking statements as pertains to Arco Platform Limited the Company within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, the Companys expectations or predictions of future financial or business performance conditions. The achievement or success of the matters covered by statements herein involves substantial known and unknown risks, uncertainties, and assumptions, including with respect to the COVID-19 pandemic. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Companys results could differ materially from the results expressed or implied by the statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward looking statements are made based on the Companys current expectations and projections relating to its financial conditions, result of operations, plans, objectives, future performance and business, and these statements are not guarantees of future performance.Statements which herein address activities, events, conditions or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. You can generally identify forward-looking statements by the use of forward-looking terminology such as anticipate, believe, can, continue, could, estimate, evaluate, expect, explore, forecast, guidance, intend, likely, may, might, outlook, plan, potential, predict, probable, project, seek, should, view, or will, or the negative thereof or other variations thereon or comparable terminology. 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 in Brazil or abroad; and our financial targets which include revenue, share count and other IFRS measures, as well as non-IFRS financial measures including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net Income Margin, Free Cash Flow and Adjusted Free Cash Flow.Forward-looking statements represent the Company managements beliefs and assumptions only as of the date such statements are made, and the Company undertakes 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.Further information on these and other factors that could affect the Companys financial results is included in filings the Company makes with the Securities and Exchange Commission from time to time, including the section titled Risk Factors in the Companys most recent Forms 20-F and 6-K. 