Why Nu Holdings Shares Are Higher Today

Nu Holdings Ltd NU shares are trading higher by around 3% after the company reported better-than-expected Q2 FY23 results.

The company posted revenue growth of 60% Y/Y to $1.87 billion, an all-time, beating the consensus of $1.75 billion, led by customer growth and higher levels of customer monetization in Brazil.

Nu added 4.6 million customers in Q2, reaching 83.7 million globally as of June 30, 2023.

Monthly Average Revenue per Active Customer (ARPAC) stood at $9.3, increasing 18% Y/Y on FX neutral basis (FXN).

Gross profit expanded to $782 million, up 113% Y/Y FXN, with the margin rising to 42% from 31% a year ago.

Adjusted net income rose significantly to $262.7 million from $17.0 million prior year.

The company's Q2 EPS was $0.0464 vs. EPS loss of $(0.0064) the prior year. 

Net Interest Margin expanded 860 bps Y/Y to 18.3%, an all-time high, in the quarter. 

Deposits rose 23% Y/Y FXN to $18.0 billion in the quarter. 

The total portfolio increased 48% Y/Y FXN to $14.8 billion, with Interest-Earning Portfolio (IEP) standing at $6.3 billion, reflecting higher personal loans (+33% Y/Y FXN) and credit card receivables (+54% Y/Y FXN). 

As of June 30, 2023, cash and cash equivalents stood at $6.2 billion. 

"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.

Price Action: NU shares are up 4.17% to $8.24 premarket on the last check Wednesday.