Brazilian Digital Banking Company Nu Holding Tops Q3 Estimates On Strong Customer Growth & Monetization

Nu Holdings Ltd NU posted Q3 FY23 revenue growth of 64% Y/Y to $2.14 billion, beating the consensus of $2.05 billion.

Revenue growth was led by customer growth and higher levels of customer monetization in Brazil.

Nu added 5.4 million customers in Q3, reaching 89.1 million globally as of September 30, 2023.

Monthly Average Revenue per Active Customer (ARPAC) stood at $10.0, increasing 18% Y/Y on FX neutral basis (FXN).

Gross profit expanded to $915 million, up 100% Y/Y FXN, with the margin rising to 43% from 33% a year ago.

Adjusted net income rose significantly to $355.6 million from $63.1 million prior year.

Adjusted EPS was $0.07, beating the consensus of $0.06. 

Net Interest Margin (NIM) expanded 770 bps Y/Y to 18.8%, an all-time high, in the quarter. Deposits rose 26% Y/Y FXN to $19.1 billion in the quarter. 

The total receivables from credit card and lending portfolios increased 48% Y/Y FXN to $15.4 billion, with Interest-Earning Portfolio (IEP) standing at $6.7 billion, reflecting higher personal loans (+48% Y/Y FXN) and credit card receivables (+46% Y/Y FXN). 

As of September 30, 2023, cash and cash equivalents stood at $3.21 billion. 

David Vélez, founder and CEO, said, "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%." 

Price Action: NU shares are trading lower by 1.47% to $8.70 premarket on the last check Wednesday.