Nu Holdings Ltd. (NYSE: NU | B3: NUBR33), (“Nu” or the
“Company”), one of the world’s largest digital financial services
platforms, released today its Third Quarter 2022 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 5:00pm Eastern time/7:00pm Brasília time.
“Nu reported a net profit of $7.8 million in the third quarter,
breaking even at the holding level with record revenues of $1.3
billion and year-on-year growth of 171%. Our customer base grew to
over 70 million with a record high activity rate of 82% and a
leading customer satisfaction score in our industry. We continue to
launch and cross sell best-in-class products, while keeping a
low-cost tech platform with low cost of funding and a widening
profit margin. While we saw increased delinquency in the quarter,
consistent with the market trend, our risk-adjusted margins
expanded by 100bps, showing we are being able to price increased
risk appropriately. Nu is well capitalized and is positioned to
deliver growth at scale in the long term,” said David Vélez,
founder and CEO.
Q3’22 Results Snapshot Below are Q3’22 performance
highlights of Nu Holdings Ltd.:
Operating Highlights:
- Customer growth: Nu added 5.1 million customers in the
quarter reaching a total of 70.4 million customers in Brazil,
Mexico and Colombia. This represents a 46% growth year-over-year
(YoY) and positions Nu as one of the largest and fastest-growing
digital financial services platforms worldwide, as well as the
sixth largest financial institution in Latin America by number of
active customers.
- Engagement and activity rates: Monthly Average Revenue
per Active Customer (ARPAC) expanded to $7.9, growing by 61% on a
FX neutral basis (FXN)1, reflecting the maturation of Nu’s customer
cohorts, increasing customers’ activity rate and the rollout of new
financial and non-financial products. Activity rate2 hit a new
historical high mark growing to 82%. Nu has become the primary
banking relationship for over 55% of the monthly active customers
that have been with Nu for over a year.
- Low-cost operating platform: Staying consistently stable
throughout the quarters, Monthly Average Cost to Serve Per Active
Customer remained at $0.8, underscoring the Company's ability to
scale its platform leveraging sustainable cost advantages.
- Asset Quality: 15-90 NPL ratio at 4.2% while 90+NPL
reached 4.7%. These come as the result of two main factors: first,
the deceleration of personal loan origination to increase credit
resilience, and the subsequent mathematical increase on NPL ratio
as the volume of originations decreases and therefore the
denominator in the equation. Second, the general macro-trend
deterioration observed across financial institutions in the
region.
Financial Highlights:
- Net & Adjusted Income: Nu reported breakeven at a
holding level, posting a Net Income of $7.8 million in Q3’22 and
Adjusted Net Income3 of $63.1 million. These results reflect the
sustained increase in the number of active customers and higher
consumer engagement, which bolstered the revenue growth, combined
with operating leverage and scale benefits of our low-cost
platform.
- Revenue: we delivered another record quarter with $1.3
billion in revenues, increasing 171% YoY FXN, as Nu continues to
effectively upsell and cross sell its expanding portfolio of
products across different segments.
- Gross Profit: Nu reached a record high gross profit in
Q3’22 with $427.0 million, increasing 90% YoY FXN. On a sequential
basis, the company’s efforts to continuously reduce funding costs
positively impacted gross profit margin, which expanded 2pp to 33%,
after four quarters of compression.
- Capital: Nu reinforces its positioning as one of the
best capitalized players in the region with its adjusted capital
reaching 4x the minimum regulatory capital in the countries in
which it operates.
- Liquidity: Nu maintains significant excess liquidity
with a loan-to-deposit ratio of 25%. On September 30, 2022, Nu had
an interest-earning portfolio of $3.5 billion, while total deposits
were four times this amount at $14.0 billion.
Business highlights:
- Multi-Product Platform: Nu achieved milestones across
the different products of its portfolio with credit cards,
NuAccounts and Personal loans reaching approximately 32 million, 50
million and 5 million active customers, respectively. Furthermore,
NuInvest reached 6 million active customers, likely positioning
itself as the largest digital investments platform in Latin
America. NuCripto grew to 1.3 million active customers since its
full rollout in July 2022, and the base of active SMEs customers
expanded to 2.3 million.
- Customer Base Growth: Nu became the fifth largest
financial institution in Brazil in terms of numbers of active
customers, according to the Brazilian Central Bank. In terms of
total customers, Nu expanded its customer base to 66.9 million,
which represents 39% of the country’s adult population. Purchase
volume increased 75% YoY FXN, reaching US$21.2 billion in Q3’22,
already reaching a market share of approximately 12% of the total
for the industry in Brazil.
- International Expansion: In Mexico, our second largest
market, Nu’s customer base increased to 3 million, consolidating
its position as the largest issuer of net new credit cards in the
country since H2’21. In Colombia, we reached 439,000 customers.
Together, both Mexico and Colombia contributed with 500,000 new
unique customers in the third quarter.
Footnotes 1 FX neutral measures were calculated to
present what such measures in preceding periods/years would have
been had exchange rates remained stable from these preceding
periods/years until the date of the Company’s more recent financial
information. 2 Activity rate is defined as monthly active customers
divided by the total number of customers as of a specific date. 3
Adjusted Net Income (Loss) is a non-IFRS measure calculated using
Net Income adjusted for expenses related to our share-based
compensation as well as the tax effects applicable to these items.
For more information, please see “Non-IFRS Financial Measures -
Reconciliation of Adjusted Net Income section" of our financial
statements.
CONFERENCE EARNINGS CALL
DETAILS
Nu will hold a Conference Earnings Call
today at 5:00pm Eastern time/7:00pm Brasília time with simultaneous
translation in Portuguese and English.
To pre-register for this call, please
click here.
A replay of the webcast will be made
available after the call on the Investor Relations page: click
here.
Note on forward-looking statements and non-IFRS financial
measures This release speaks at the date hereof and the Company
is under no obligation to update or keep current the information
contained in this release. Any information expressed herein is
subject to change without notice. Any market or other third-party
data included in this release has been obtained by the Company from
third party sources. While the Company has compiled and extracted
the market data, it can provide no assurances of the accuracy and
completeness of such information and takes no responsibility for
such data.
This release contains forward-looking statements. All statements
other than statements of historical fact contained in this release
may be forward-looking statements and include, but are not limited
to, statements regarding the Company’s intent, belief or current
expectations. These forward-looking statements are subject to risks
and uncertainties, and may include, among others, financial
forecasts and estimates based on assumptions or statements
regarding plans, objectives and expectations. Although the Company
believes that these estimates and forward-looking statements are
based upon reasonable assumptions, they are subject to several
risks and uncertainties and are made in light of information
currently available, and actual results may differ materially from
those expressed or implied in the forward-looking statements due to
various factors, including those risks and uncertainties included
under the captions “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in our
prospectus dated December 8, 2021 filed with the Securities and
Exchange Commission pursuant to Rule 424(b) under the Securities
Act of 1933, as amended, and in our Annual Report on Form 20-F for
the year ended December 31, 2021, which was filed with the
Securities and Exchange Commission on April 20, 2022. The Company,
its advisers and each of their respective directors, officers and
employees disclaim any obligation to update the Company’s view of
such risks and uncertainties or to publicly announce the result of
any revision to the forward-looking statements made herein, except
where it would be required to do so under applicable law. The
forward-looking statements can be identified, in certain cases,
through the use of words such as “believe,” “may,” “might,” “can,”
“could,” “is designed to,” “will,” “aim,” “estimate,” “continue,”
“anticipate,” “intend,” “expect,” “forecast”, “plan”, “predict”,
“potential”, “aspiration,” “should,” “purpose,” “belief,” and
similar, or variations of, or the negative of such words and
expressions.
The financial information in this document includes forecasts,
projections and other predictive statements that represent the
Company’s assumptions and expectations in light of currently
available information. These forecasts, projections and other
predictive statements are based on the Company’s expectations and
are subject to variables and uncertainties. The Company’s actual
performance results may differ. Consequently, no guarantee is
presented or implied as to the accuracy of specific forecasts,
projections or predictive statements contained herein, and undue
reliance should not be placed on the forward-looking statements in
this press release, which are inherently uncertain.
In addition to IFRS financials, this presentation includes
certain summarized, non-audited or non-IFRS financial information.
These summarized, non-audited or non-IFRS financial measures are in
addition to, and not a substitute for or superior to, measures of
financial performance prepared in accordance with IFRS. References
in this presentation to “R$” refer to the Brazilian real, the
official currency of Brazil.
About Nu Nu is one of the world’s largest digital
financial services platforms, serving over 70 million customers
across Brazil, Mexico and Colombia. As one of the leading
technology companies in the world, Nu leverages proprietary
technologies and innovative business practices to create new
financial solutions and experiences for individuals and SMEs that
are simple, intuitive, convenient, low-cost, empowering and human.
Guided by a mission to fight complexity and empower people, Nu is
fostering the access to financial services across Latin America,
connecting profit and purpose to create value for its stakeholders
and have a positive impact on the communities it serves. For more
information, please visit www.nubank.com.br.
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version on businesswire.com: https://www.businesswire.com/news/home/20221114005974/en/
Investors Relations Jorg Friedemann
investors@nubank.com.br
Media Relations Leila Suwwan press@nubank.com.br
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