Nu Holdings Ltd. Reports Third Quarter 2023 Financial Results

Nu Holdings Ltd. (NYSE: NU), (“Nu” or the “Company”), one of the world’s largest digital financial services platforms, released today its Third Quarter 2023 financial results. Financial results are expressed in U.S. dollars and are presented in accordance with International Financial Reporting Standards (IFRS). The full earnings release has been made available on the Company’s Investor Relations website at www.investors.nu, as well as the details of the Earnings Conference Call Nu will hold today at 5:00 pm Eastern time/7:00 pm Brasília time.

“Nu is on a remarkable upward trajectory, demonstrating solid operating performance, continued growth, and increasingly robust profitability. We reached 90 million customers in October, and closed Q3’23 with ever-increasing principality and engagement rates, cost to serve remaining below the dollar level, and efficiency ratio further improving 40bp QoQ to 35.0%. ARPAC broke double digits for the first time, at US$10.0, annualized ROE achieved 21% and annualized adjusted ROE reached 25%, showcasing our operational leverage. All of that led to a record revenue for the period, surpassing the US$2 billion mark, resulting in a net income of US$303 million and an adjusted net income of US$356 million. It’s important to note that we are achieving these strong levels of profitability while keeping asset quality in line with expectations and continuing to invest in product portfolio and geo expansion,” said David Vélez, founder and CEO of Nubank.

Q3’23 Results Snapshot

Below are the Q3’23 performance highlights of Nu Holdings Ltd.:

Operating Highlights:

• Customer growth: Nu added 5.4 million customers in Q3’23 and 18.7 million year-over-year (YoY), reaching a total of 89.1 million customers globally by September 30, 2023. This achievement underscores Nu's position as one of the largest and fastest-growing digital financial services platforms worldwide and the fifth-largest financial institution in Latin America by number of customers. In Brazil, Nu’s customer base reached 84 million by September 30, 2023, accounting for 51% of the country’s adult population, up from 49% in the previous quarter. Nu is the fourth-largest financial institution by number of customers in the country, according to Brazilian Central Bank data. When measured by the number of customers with access to a credit product, Nu is the second-largest. In October 2023, after the closing of Q3’23, Nu surpassed the mark of 90 million customers globally and 85 million in Brazil.
• Engagement and activity rates: Monthly Average Revenue per Active Customer (ARPAC) reached a new milestone, breaking into double digits at $10.0, an 18% expansion YoY on FX neutral basis (FXN)¹ and with more mature cohorts already above $26. Engagement and principality also continued to increase, driving revenues up, with Nu becoming the primary banking relationship for over 59% of the monthly active customers that have been with Nu for over a year, and activity rate² growing to 82.8%. Moreover, Nucoin, a free-of-charge native token that rewards users’ engagement through a loyalty program launched in March 2023, reached 10.5 million active customers.
• Low-cost operating platform: While ARPAC keeps expanding quarter over quarter, Monthly Average Cost to Serve Per Active Customer remained virtually unchanged and below the dollar level at $0.9. The company’s efficiency ratio, which reflects Nu’s operating leverage, continued to improve for the seventh consecutive quarter, reaching another all-time low of 35.0%. This strengthens Nu’s position as one of the most efficient companies in Latin America.
• Asset Quality: Nu’s 15-90 NPL ratio hit 4.2%, decreasing 10 basis points quarter over quarter, in line with expectations. The 90+ NPL ratio increased 20 basis points quarter over quarter to 6.1% given the expected stacking behavior of the early delinquency buckets from previous periods. Much like in other quarters, Nu continued to outperform the industry on a like-for-like basis, across different income bands, and with an even more pronounced comparative advantage for the lower income bands.

Financial Highlights: