Nu Holdings Ltd. Q4 FY2025 earnings call

• 2025 was a fantastic year for Nubank with key indicators moving in the right direction while investing in long-term growth. Closed the year with 131 million customers, ARPAC at $15, up 9% q/q and 27% y/y. Launched over 100 new products and features across markets. - Priorities in 2025 included building the largest and most loved retail banking franchise in Latin America, making progress in Brazil, Mexico, and Colombia. Digital ecosystem reached over 12 million unique active customers. AI foundation model in production for credit decisioning in Brazil and testing in other use cases. Received conditional approval for U.S. national bank charter. - 2026 is an inflection year, with priorities around winning in core markets, strengthening foundations for international expansion, and AI as a superpower. In core markets, focus on experience, principality, and monetization. For international expansion, laying operational groundwork for U.S. opportunity. Expanding AI use in lending and credit cards.

In Q4 2025, revenues reached $4.9 billion, up 45% year over year. Gross profit was nearly $2 billion, up 38% year over year. Total portfolio was $32.7 billion, up 40% year over year, driven by credit cards and unsecured lending. Deposits ended at $41.9 billion, up 29% year over year. Net interest income increased 13% quarter over quarter. Credit loss allowance increased due to portfolio growth. Risk adjusted NIM closed at 10.5%. Consolidated NPL metrics showed early stage delinquencies improved and 90 plus NPLs declined. Gross profit composition included float contribution, fees, and credit component. Efficiency ratio under new methodology declined to 19.9%, but 2026 is an investment year with potential upward pressure on efficiency ratio. Net income was $895 million, up 50% year over year, with record ROE of 33%.

• 2026 is an investment year, laying operational foundations for global expansion and accelerating AI adoption, which may put upward pressure on efficiency ratio in the near term but expects efficiency to improve over medium term as investments generate returns. - In core markets, will deepen leadership in mass market, expand share of wallets and ARPAC, strengthen small businesses, and grow high-income presence. In Mexico, finalizing banking license process is critical. In Colombia, continue scaling credit and launching new products. - AI will be expanded to lending in Brazil and credit cards in Mexico, moving closer to AI-powered personal banker vision.

• Actual results may differ materially from forward-looking statements. - Potential disruption from AI in business models relying on simple money movement. - Impact of regulatory changes such as the increase in corporate income tax applicable to FinTechs and one-off expenses like ProSofipo levy. - Operational complexities and challenges in secure lending products, including portability and integration issues. - Seasonal trends in NPLs with expected uptick in first quarter of 2026.

Q: Do you see a risk that Nu could be disrupted by AI, or do you see Nu as a potential winner in this transformation?

A: It is both a challenge and opportunity. More opportunity than challenge. Businesses relying on simple money movement are at higher risk of disruption. Nu is well positioned given strength in credit and ability to use AI for revenue and cost enhancement.

Q: Can you help us dimension the impact that your clip increases are having on your credit card growth? To what extent, how much of the acceleration in credit cards do you think is still going to roll over into 2026? And then the second part is on FGTS. Is there a way to quantify what was the headwind on your loan book based on FGTS?

A: Clip increases allowed customers to increase credit limits, unused credit limits went from $18 billion to $29 billion. Market share and purchase volume in Brazil increased. FGTS regulations led to 50%-60% drop in FGTS loan originations, without FGTS portfolio would have grown 13%-14% q/q.

Q: As you look into 2026, can you go into detail about the drivers of the efficiency trajectory and revenue drivers?

A: Return to office policy, investments in AI and new technologies, and globalization will put upward pressure on efficiency ratio in near term. Revenues driven by portfolio growth, AI use for cross-sell and new products, and continued growth in core markets.

Q: What drove the lower accounting tax this quarter?

A: Non-recurring remeasurement of deferred tax assets due to corporate income tax increase for FinTechs, and recurring technology investment tax breaks.

Q: What happened with provisions in the quarter and about NPLs?

A: Provisions increased due to portfolio growth, not asset quality deterioration. Consolidated NPL metrics provide better view, NPLs stable with seasonality.

Q: Regarding credit products and client mix, especially private payroll loans and affluent market?

A: Private payroll loans have complexities, but market is growing. Affluent market has good growth, with opportunities to improve credit limits and value proposition.

Q: Follow up on private payroll segment and cannibalization risk?

A: Mindful of cannibalization and structural subordination risks, but no material evidence yet. Benefits of collateral for higher risk customers not material enough yet.

Q: Follow up on U.S. expansion and operating expenses?

A: U.S. expansion will be targeted, investing in team building and product. Operating expenses in quarter had seasonal marketing increase and technology investment related DEX breaks.