Nu Holdings shares jump after exceeding Wall Street expectations with record quarterly revenue, expanding customer base, and receiving regulatory approval to operate as a bank in Mexico, signalling accelerated growth and regional dominance.
Nu Holdings shares surged on Friday after the company reported quarterly results that beat Wall Street expectations and highlighted continued momentum in Latin America. The Brazilian fintech, best known for its Nubank brand, said IFRS revenue rose 50% year on year to $5.51bn in the second quarter, while adjusted earnings climbed 66% to $0.22 a diluted share, above analysts’ forecasts, according to the company’s earnings release.
Growth was broad-based. Nu added 4 million customers in the quarter, taking its global base to 139 million, up from 122.7 million a year earlier. Expansion remained strongest outside Brazil, with customer growth of 31.7% in Mexico and 55.9% in Colombia, the company said. Payment volume rose 30.3%, outpacing customer growth and suggesting clients are using the platform more frequently rather than merely signing up and sitting idle.
Nu also continued to show unusually strong operating efficiency for a bank-like business. Its return on equity held at 33%, while its efficiency ratio was 19.5%, far below the levels typical at conventional lenders. In banking, a lower efficiency ratio means a business is spending less to generate each unit of income, which is one reason investors have rewarded the digital-only model.
The biggest strategic development came in Mexico. According to reports from Nasdaq and the company’s own Brazilian and Mexican disclosures, Nu Mexico received final authorisation from regulators to operate as a bank, a milestone that clears the way for a broader product offering in one of the region’s most cash-heavy markets. The company has said Mexico already has more than 15 million customers, making it the country’s largest digital bank by client count.
Chief executive David Vélez has described Mexico as Brazil’s path to scale but moving faster, with early customer cohorts monetising more quickly than they did in Nu’s home market. The company is also preparing to enter the United States, where management has discussed building out credit capabilities over the next 12 to 30 months. New finance chief Rob Livingston, who previously worked in Visa’s North American business, is expected to play a key role as Nu pushes beyond its Latin American base.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
