Nu Holdings Ltd. Q3 FY2026 earnings call

• Record Financial Results: Achieved record gross revenue of $6.3 billion (+37% YoY) and record net income of $1.1 billion (+31% YoY). Efficiency ratio improved to 19.3%, with full-year guidance lowered to 19%-19.5%.
• Customer Growth: Total customers reached 143 million (+3.7 million net additions). Brazil has ~120 million customers (86.3% activity rate); Mexico reached 16.6 million; Colombia reached 6.1 million.
• Brazil Market Leadership: Maintained #1 position with 86 million monthly active users. Delivered record unsecured personal loan originations of BRL 22.1 billion (+28% YoY). Launched 'Croma' offering, approaching 1 million customers.
• Mexico Banking Transition: Officially launched as a bank, increasing deposit insurance coverage from ~$12,000 to $195,000. Added 870,000 customers. Benefiting from new digital payment legislation.
• Colombia Acceleration: Reached 6.1 million customers (+62% YoY). Became #1 in credit card holders (3 million). Deposit franchise is the 4th largest in the country with low funding costs.
• Global Expansion Launches: Launched Nu U.S. (offering 3.5% APY and fee-free transfers to LatAm) and Nu Global (multicurrency stablecoin account) in September/October. Early word-of-mouth growth observed.
• Credit Quality & Underwriting: Risk-adjusted NIM expanded to 12.7% (excluding one-offs). Delinquency metrics are interpreted in context of shifting portfolio mix toward interest-earning balances. Provisioning remains robust at >100% of new delinquency formation.

The provided transcript does not break down financial performance by specific product segments (e.g., Credit Cards vs. Loans) in terms of absolute revenue contribution percentages for each segment. It reports consolidated figures: Gross Revenue of $6.3 billion, Net Income of $1.1 billion, and Net Interest Income of $3.9 billion. The credit portfolio mix is noted as Credit Cards representing 65% of the total $41.6 billion portfolio.

• Efficiency Ratio: Full-year efficiency ratio expected between 19% and 19.5%, revised downward from previous guidance of ~20%. Sequential increase expected in Q4 due to office re-opening costs and hiring.
• Tax Rate: Effective Tax Rate (ETR) settled at 19.2% in Q3; 2027 ETR expected to settle in the low-to-mid 20% range.
• Investment Cap: Nu U.S. and Nu Global investments remain within the commitment of up to 100 basis points of efficiency ratio impact in 2026 and 2027.
• No Specific Loan Growth Guidance: Management declined to provide specific loan growth rates for 2027, citing cyclical nature and strategic discretion.

• Macroeconomic Environment: Potential headwinds from over-leveraged households in Brazil and broader economic slowdowns, though management argues their model is secular and less correlated to macro cycles.
• Regulatory Changes: New Central Bank measures in Brazil regarding responsible lending; potential changes to usury laws in Colombia which could create black markets if not liberalized.
• Asset Quality Shifts: Structural shift toward higher interest-earning balances increases headline delinquency ratios even if underlying credit performance is stable.
• Operational Execution in New Markets: Risks associated with scaling Nu U.S. and Nu Global, including regulatory checkpoints, unit economics validation, and data collection challenges in the U.S. market compared to mature LatAm markets.

Q: Tito Labarta (Goldman Sachs) asked about sustainability of risk-adjusted NIM (~12.7% ex-one-off) and credit growth into 2027 given Brazil's macro challenges. / A: David Velez explained that underwriting assumes future conditions will be worse than the past, creating a significant buffer. He emphasized that Nu acts as the primary bank account for most customers, providing positive selection and seniority in the credit stack, which stabilizes delinquencies even in tough cycles. Rob Livingston added that near-term NIM strength is sustainable, but cautioned that Q1 seasonality and faster growth could increase upfront provisions, making long-term guidance difficult.