Nu Holdings Ltd. Reports Second 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 Second 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 6:00pm Eastern time/7:00pm Brasília time.

"This quarter, Nu continued to expand its customer base, engagement, and monetization, increasing ARPAC above $9 for the first time, while keeping cost to serve stable below the dollar level. This combination led to revenue growing 5x in the last two years to a record of $1.9 billion, and net income reaching $225 million, over 50% higher than the last quarter, which reinforces Nu’s strong operational leverage and earning-generating power. We continue to showcase leading indicators in the region for operating efficiency, and solidity. In Brazil, our growth trajectory continues, as one in every two adults is a Nu customer, and we have become the fourth largest financial institution in the country in number of customers”, said David Vélez, founder and CEO of Nubank.

Q2’23 Results Snapshot
Below are the Q2’23 performance highlights of Nu Holdings Ltd.:

Operating Highlights:

• Customer growth: Nu added 4.6 million customers in Q2’23 and 18.4 million year-over-year (YoY), reaching a total of 83.7 million customers globally by June 30th, 2023. This represents a 28% growth YoY, which 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 79.4 million by June 30th, 2023, accounting for 49% of the country’s adult population and becoming the fourth-largest financial institution by number of customers, according to Brazilian Central Bank data. In July 2023, after the closing of Q2’23, Nu surpassed the mark of 85 million customers globally and 80 million in Brazil.
• Engagement and activity rates: Monthly Average Revenue per Active Customer (ARPAC) reached $9.3, surpassing for the first time the $9 mark and expanding 18% YoY on FX neutral basis (FXN)¹ - with more mature cohorts already above $24. Engagement and principality also continued to increase, with Nu becoming the primary banking relationship for over 58% of the monthly active customers that have been with Nu for over a year, and activity rate² hitting 82.2%, from 80.2% a year ago. The compound effect resulting from the expansion of the customer base and heightened engagement, coupled with the advancing in cross-selling and upselling capabilities, has enabled the company to achieve yet another quarter of strong revenue growth, which underscores its ability to effectively monetize its expanding customer base.
• 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 $0.8. The company’s efficiency ratio, which reflects Nu’s operating leverage, achieved 35.4%, strengthening Nu’s position as one of the most efficient companies in Latin America.
• Asset Quality: Nu’s 15-90 NPL ratio hit 4.3%, decreasing 10 basis points from Q1’23, in line with expectations and partly related to the improvement of personal loan portfolio cohorts. The 90+ NPL ratio increased to 5.9% 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: