NU

First BanCorp (FBP) came out with quarterly earnings of $0.63 per share, beating the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.51 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +8.62%. A quarter ago, it was expected that this holding company for FirstBank Puerto Rico would post earnings of $0.54 per share when it actually produced earnings of $0.62, delivering a surprise of +14.81%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. First BanCorp, which belongs to the Zacks Banks - Foreign industry, posted revenues of $260.12 million for the quarter ended September 2026, missing the Zacks Consensus Estimate by 3.75%. This compares to year-ago revenues of $248.71 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. First BanCorp shares have added about 31.9% since the beginning of the year versus the S&P 500's gain of 13.3%. While First BanCorp has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for First BanCorp was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.62 on $273.86 million in revenues for the coming quarter and $2.40 on $1.07 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Foreign is currently in the top 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Nu Holdings Ltd. (NU), has yet to report results for the quarter ended September 2026. This company is expected to post quarterly earnings of $0.23 per share in its upcoming report, which represents a year-over-year change of +35.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Nu Holdings Ltd.'s revenues are expected to be $5.73 billion, up 37.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First BanCorp. (FBP) : Free Stock Analysis Report Nu Holdings Ltd. (NU) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Nu Holdings (NYSE:NU) reports third-quarter results in less than four weeks, its first report since the Brazilian digital bank passed $1 billion in quarterly profit. In the second quarter, that profit reached $1.1 billion, up 49% from a year earlier. But the share of loans more than 90 days overdue rose 35 basis points to 6.9%, while the loan book grew 37% over the year. The question is whether Nu's credit quality can keep up with its growth, and the numbers so far lean toward yes. Nu Holdings was part of our recent list of 13 Best Low Priced Growth Stocks to Invest In Right Now. With 139 million customers, the company runs a digital bank that takes deposits and makes loans. Profit is growing faster than the loan book, so how well those loans get repaid matters more to the stock than how fast it adds customers. Low costs let more of each revenue dollar reach profit. The efficiency ratio, which compares operating costs with revenue, was 19.5% in the second quarter, better than the 21.3% of a year earlier. That gap helps explain why profit grew faster than revenue. Most customers are in Brazil, but Mexico already has 15.8 million and Colombia has passed 5 million, so Brazil is not the only source of growth. If you're interested in digital finance, we recently compiled a report on 10 Most Promising Fintech Stocks to Buy Now. Growth has cooled from its early pace, though. Sales grew about 86% a year over the past five years but about 57% a year over the past three, and revenue rose 39% in the second quarter. That is still fast for a lender, but it is slower than the pace Nu set earlier. Stocks Much of a loan book that grew 37% over the year is recent and has not been through a downturn. Loans more than 90 days overdue made up 6.9% of the portfolio, up 35 basis points. Shorter-term overdue loans improved during the quarter, so the picture is mixed. Because most customers are in Brazil, a weaker Brazilian consumer would show up in these figures first. Against that, cost of credit fell 9% from the first quarter, and profit grew faster than the loan book, so credit costs have not yet eaten the gains. If you own the stock, that is the trade-off: a lender whose profit is outrunning its loans, with one ratio moving the wrong way. For investors looking to add banks, our list of 10 Best Bank Stocks to Buy According to Billionaires covers more names. On forward sales, Nu trades at 3.08 times, about 4% above the 2.96 median for financial companies. That median is the middle multiple for the sector on the same measure, so the stock is priced much like a typical financial company. That is a small premium for a company whose revenue grew 39% in the second quarter. The price appears to assume that growth keeps cooling or that credit losses take a bigger share of revenue. Sales leave out credit losses, which is why the overdue-loan figures matter more than the multiple. If you're looking for cheaper picks, check out 10 Best Undervalued Stocks to Buy in October. So can credit keep up? Through the second quarter, it did: profit and efficiency both improved from a year earlier while cost of credit fell. In the next report, the share of loans that are seriously overdue is the number to watch. If it stops climbing, the stock's ordinary price tag will look low for profit growing this fast, and if it keeps rising, the market's caution will have a reason. While we acknowledge the potential of NU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: Why Does Rocket Companies (RKT) Earn Just 3% on Equity After Doubling Revenue? and Is UWM Holdings (UWMC) the Most Expensive Cheap Stock in Mortgage Lending? This article is originally published at Insider Monkey.

Nu Holdings (NYSE:NU) crossed a line in the second quarter of 2026 that few digital lenders ever reach: $1.1 billion in quarterly net income, up 49% from a year earlier on a currency-neutral basis. That's big-bank money from a company that started out handing Brazilians a no-fee credit card. Today, Nu runs Nubank, a phone-only bank serving 139 million customers across Brazil, Mexico, and Colombia. Most of its money comes from lending through credit cards and personal loans, funded largely by customer deposits. It has no branches to maintain, so its costs look nothing like a traditional bank's, a disruptive model that earned it a spot among the 10 Best Bank Stocks to Buy According to Billionaires. The stock, though, trades at a premium to its peers. Whether that premium holds up depends less on customer sign-ups than on something quieter: how reliably Nu's borrowers keep paying. Nu's edge is cheap operations at enormous scale. Its efficiency ratio (operating expenses as a share of revenue) came in at 19.5% in the second quarter, better than the 21.3% it posted a year earlier. Customers aren't downloading the app and forgetting it, either. 83.5% were active each month, and in Brazil that figure topped 86%. That engagement turns into earning power. Net interest margin, the spread between what Nu earns on loans and what it pays for funding, reached 22.9%, up 180 basis points. Gross revenue hit nearly $5.9 billion, up 39% currency-neutral, and return on equity reached 33%. Those returns put Nu in a high-growth tier alongside Latin American digital finance peers expanding aggressive lending footprints, even as Mercado Pago keeps issuing credit cards as Brazil worries about debt. The newer chapter is unfolding outside Brazil. Nu launched its bank in Mexico and, by its own account, became the country's largest digital bank, with 15.8 million customers at quarter-end. Colombia passed 5 million. Mexico's loan-to-deposit ratio sits at just 35%, so most of the deposits gathered there haven't yet been lent out. That leaves a sizable runway if underwriting holds up, mirroring the ecosystem strategies driving domestic platforms as strong Cash App momentum drives favorable outlook for Block (XYZ). Back home, Nu is adding a full banking license to its Brazilian operations. Its in-house AI model, NuFormer, already runs credit decisions for cards in Brazil and Mexico and for unsecured loans in Brazil. The credit portfolio grew 37% currency-neutral to $39.4 billion, deposits reached $45.3 billion, and average revenue per active customer climbed to roughly $17. Lending this quickly always raises a question about who's on the other side of the loan. Nu's 90-day-plus delinquency ratio rose 35 basis points to 6.9%, and cost of credit still came to $1.7 billion for the quarter. A loan book expanding at 37% also means much of it hasn't been tested through a full downturn. That's especially true in Mexico, where most customers are new. The early-warning signs are more reassuring. The 15-to-90-day delinquency ratio improved 16 basis points to 4.8%, and the cost of credit fell 9% from the prior quarter. Risk-adjusted net interest margin jumped to 12.4% from 9.5%. For now, the returns comfortably cover the losses. Credit is still the risk that could change the story fastest. At 14.81 times forward earnings, as of October 9, Nu costs noticeably more than the sector, which trades at 10.83 times. In plain terms, investors pay about $14.81 for each $1 of expected earnings, versus $10.83 for the typical financial stock. Anyone comparing it with traditional Brazilian lenders, such as evaluating Banco Bradesco's (BBD) economic moat, will spot the gap right away. So what do you get for the extra cost? Mainly growth. Analysts expect earnings per share to grow 28.48% in 2027, a pace few banks of any size can match. That expansion is backed by a 33% return on equity and a quarter that delivered 49% currency-neutral profit growth. Paying under 15 times earnings for all of that doesn't look stretched. The premium also has to absorb risks a domestic US bank doesn't carry. Nu earns its money in Brazilian reais and in Mexican and Colombian pesos, so currency swings can shrink dollar-reported results even when the underlying business performs well. That's why the currency-neutral figures above matter more than the headline dollar ones. Hedge funds have pulled back somewhat, with 92 funds holding the stock in the most recent quarter, down from 104 in the prior one. Short interest stands at 3.50% of the float, which points to relatively limited bearish positioning. Nu has graduated from a growth story to a profit story, and its second-quarter numbers make that hard to dispute. At under 15 times forward earnings, the premium over the sector looks reasonable for a lender whose earnings per share are expected to grow 28.48% in 2027, with a 33% return on equity. The setup suits growth-minded investors who are comfortable with emerging-market currencies and credit cycles. A steady climb in 90-day delinquencies, particularly as Mexico's young loan book matures, would be the clearest sign that the premium has run ahead of the business. While we acknowledge the risk and potential of NU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NU and that has 10,000% upside potential, check out our report about this cheapest AI stock. READ NEXT: Top 10 AI Stocks That Will Skyrocket and 2 Stocks Trump Bought in July Are Now Down 17% to 20%. Time to Buy? Disclosure: None. Follow Insider Monkey on Google News.

Nu Holdings (NYSE: NU) has reached a milestone that would have seemed almost impossible when it launched in 2013. The company just generated more than $1 billion in quarterly net income in the second quarter of 2026, up 49% year over year on a foreign-exchange-neutral basis. Revenue also climbed 39% to $5.9 billion. While this milestone is important, investors shouldn't focus on the $1 billion figure alone. The more important thing is what this milestone tells us about the business and its future. Missed AI's "Act 1"? Act 2 Could Be 14x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue » For years, the Nu Holdings story was primarily about customer growth, and there was plenty of it. The company added roughly 4 million customers during Q2, bringing its total to 139 million across Brazil, Mexico, and Colombia. But Nu Holdings is no longer simply adding customers and hoping they eventually become profitable. It is increasingly monetizing its existing customers. Monthly average revenue per active customer, or ARPAC, reached approximately $17 in Q2. That figure has been rising quarter after quarter, up from just $8 in the same period in 2022. This is an important development. A digital bank becomes much more valuable when customers stop treating it as an extra financial app and start using it as their primary banking facility. Once that happens, Nu Holdings has more opportunities to earn revenue from the same customer. That is how customer growth can eventually turn into much larger earnings growth. That brings us to the most important part of the $1 billion milestone. Nu Holdings doesn't necessarily need another 100 million customers to dramatically increase its profits. It can deepen its relationship with its existing 139 million customers. Consider what happens if a customer who once used Nubank primarily for a credit card begins to keep their salary there, pay bills through the platform, hold savings, take a loan, and eventually use investment products. The customer count hasn't changed, but the economic value of that customer has. Besides, ARPAC growth doesn't tell the whole story, since it's a mix of more mature markets like Brazil and newer markets like Mexico. As the latter market matures, the ARPAC will expand further. In other words, Nu Holdings runs a business that gets better over time. More customers create a larger base to sell products to, while more products increase revenue per customer. Moreover, a larger revenue base can spread Nu Holdings' technology and operating costs across more customers. $1 billion might be a milestone worth celebrating, but investors should not get carried away. A $1 billion quarterly profit doesn't automatically mean Nu Holdings can generate $4 billion every year indefinitely. Banking earnings can fluctuate, particularly when credit losses change. For perspective, the 90-plus-day non-performing loans reached 6.9% in Q2, up from 5.8% in Q2 2023. However , this isn't a simple three-year upward trend. The ratio has fluctuated over time, and it reached around 7% in the third quarter of 2024 before declining. That's an important distinction. The concern isn't that Nu Holdings' credit quality is suddenly deteriorating. Rather, investors need to watch whether the company can maintain its strong profitability as it takes on more credit risk and expands its balance sheet. If Nu Holdings can continue growing its loan book, increasing revenue per customer, and maintaining strong credit discipline, its earnings power could continue expanding. Nu Holdings' first $1 billion quarterly profit is an impressive milestone. But for long-term investors, the number itself isn't the investment thesis. The real opportunity lies in what comes next. The bank now has 139 million customers, rising revenue per customer, and a rapidly growing financial ecosystem. If it can continue deepening relationships while maintaining credit discipline, today's $1 billion quarterly profit could eventually look like the beginning, rather than the end, of its earnings story. The most important thing is whether the company can sustain and compound its profitability as it becomes a much larger bank. That's what investors should watch going forward. Before you buy stock in Nu Holdings, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nu Holdings wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $379,123!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,408,822!* Now, it's worth noting Stock Advisor's total average return is 950% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 12, 2026. Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nu Holdings. The Motley Fool has a disclosure policy. Nu Holdings Crossed a $1 Billion Quarterly Profit Milestone. Here's Why It Matters. was originally published by The Motley Fool

Nubank, the digital bank owned by Nu Holdings (NYSE: NU), is one of the fastest-growing banks in the world. It posted record results in the most recent quarter, and yet the stock price is floundering, down about 13% year to date. Are investors missing the boat on this Brazilian banking powerhouse? Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » São Paulo-based Nubank launched 13 years ago as something new in its Brazilian market: a fully online digital bank. With no branches and little overhead, the idea was to reduce expenses, serve customers where they are, and operate more efficiently. Nubank has achieved that, and then some. It has expanded into Mexico and Colombia and now has 139 million customers, adding 4 million in the second quarter alone. Most of them, about 118 million, are in Brazil, while Mexico has 16 million and Colombia has 5 million customers. Nubank will soon be expanding into the United States. In January, it got conditional approval from the Office of the Comptroller of the Currency (OCC) to launch Nubank NA, a national digital bank in the United States. The customer growth numbers are accompanied by its increasingly engaged and active user base. In the second quarter, the average revenue per active customer (ARPAC) was $17, up from $16 in the previous quarter. Further, the monthly activity rate, which counts people actively using the app, jumped to 83.5% overall, up from 83% in Q1. In Brazil, it hit 86% for the first time. The bank's efficiency has been outstanding. Its efficiency ratio, which measures how much the bank spends for every dollar of revenue, is 19.5%. That is extremely low, as most banks with branches are happy to have an efficiency ratio in the 50%-60% range. However, the efficiency ratio is up from 17.3% in Q1. The higher Q2 ratio is due to real estate and marketing expenses shifted from Q1, as well as costs for international expansion. When you consider the efficiency, engagement, and customer growth, you get blowout earnings results. Nu generated $5.9 billion in revenue in Q2, up 39% year over year. Net interest income hit $3.7 billion, up 9% from the previous quarter, while net interest margin increased 180 basis points to 22.9%. Nu set a record for profitability with $1.1 billion in net income in Q2, up 17% from Q1 and 49% year over year. Also, the return on equity (ROE) rose to 33%, from 29% the previous quarter. One of the concerns earlier this year was Nu's credit quality, as non-performing loans (NPL) had increased to 5%, up 89 basis points from Q4. But year over year, it was only up from 4.8%. In Q2, the NPL rate improved to 4.8% but was still up from 4.4% a year ago. The 90-plus-day NPL rate was 6.9% in Q2, up from 6.6% in the same quarter a year ago. Nu's stock is up about 7% since the second-quarter earnings report came out on Aug. 13, signaling improving investor sentiment. It is trading at 20 times earnings and has a low PEG ratio of about 0.9, which means it is cheap relative to its long-term growth expectations. Before you buy stock in Nu Holdings, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nu Holdings wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $446,157!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,377,357!* Now, it’s worth noting Stock Advisor’s total average return is 984% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of September 3, 2026. Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nu Holdings. The Motley Fool has a disclosure policy. Nu Holdings Cleared $1 Billion in Quarterly Net Income With 139 Million Customers was originally published by The Motley Fool

The end of the earnings season is always a good time to take a step back and see who shined (and who didn’t). Let’s take a look at how personal loan stocks fared in Q1, starting with Nubank (NYSE:NU). Personal loan providers offer unsecured credit for various consumer needs. The sector benefits from digital application processes, increasing consumer comfort with online financial services, and opportunities in underserved credit segments. Headwinds include credit risk management in unsecured lending, regulatory oversight of lending practices, and intense competition affecting margins from both traditional and fintech lenders. The 9 personal loan stocks we track reported a very strong Q1. As a group, revenues beat analysts’ consensus estimates by 9.3% while next quarter’s revenue guidance was 3.6% above. While some personal loan stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.1% since the latest earnings results. With well over one hundred million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE:NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America. Nubank reported revenues of $5.32 billion, up 57.6% year on year. This print exceeded analysts’ expectations by 48.9%. Overall, it was a strong quarter for the company. Nubank scored the biggest analyst estimate beat in the group. Unsurprisingly, the stock is up 12.3% since reporting and currently trades at $14.52. Read why we think that Nubank is one of the best personal loan stocks, our full report is free. Founded by PayPal co-founder Max Levchin with a mission to create honest financial products, Affirm (NASDAQ:AFRM) provides a payment network that allows consumers to make purchases and pay for them over time with transparent, flexible installment loans. Affirm reported revenues of $1.17 billion, up 33% year on year, outperforming analysts’ expectations by 5.2%. The business had a stunning quarter with a beat of analysts’ EPS and EBITDA estimates. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 5.5% since reporting. It currently trades at $74.27. Is now the time to buy Affirm? Access our full analysis of the earnings results here, it’s free. Dating back to 1912 and formerly known as Springleaf, OneMain Holdings (NYSE:OMF) provides personal loans, auto financing, and credit cards to nonprime consumers who have limited access to traditional banking services. OneMain reported revenues of $1.29 billion, up 6.9% year on year, exceeding analysts’ expectations by 1.4%. It was a satisfactory quarter as it also posted a narrow beat of analysts’ net interest income estimates but a significant miss of analysts’ EBITDA estimates. The stock is flat since the results and currently trades at $62.47. Read our full analysis of OneMain’s results here. Pioneering online lending since 2004 with a massive database of over 65 terabytes of customer behavior data, Enova International (NYSE:ENVA) provides online financial services including installment loans and lines of credit to non-prime consumers and small businesses in the United States and Brazil. Enova reported revenues of $928.9 million, up 21.6% year on year. This number topped analysts’ expectations by 2.1%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ EBITDA and EPS estimates. The stock is up 4.1% since reporting and currently trades at $226.74. Read our full, actionable report on Enova here, it’s free. Pioneering peer-to-peer lending in the US before evolving into a digital bank, Happen Bank (NASDAQ:HAPN) operates a marketplace that connects borrowers with lenders, offering personal loans, auto refinancing, and banking services. Happen Bank reported revenues of $262.9 million, up 5.8% year on year. This result met analysts’ expectations. It was an exceptional quarter as it also put up full-year EPS guidance exceeding analysts’ expectations and a beat of analysts’ EPS estimates. Happen Bank had the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 6.2% since reporting and currently trades at $17.59. Read our full, actionable report on Happen Bank here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

On August 13, Nu Holdings Ltd. (NYSE:NU) reported second-quarter results built around a number the digital bank had never posted before: $1.1 billion in net income, up 49% year over year and 17% from the first quarter. The company also crossed 139 million customers across Brazil, Mexico and Colombia, and a newly approved banking license turned what had been a credit-first fintech in Mexico into a full-scale bank. Behind that headline figure sits a business leaning harder on artificial intelligence and new customer tiers to keep growth compounding, even as expenses and past-due loans both crept higher in the same period. Profitability improved across nearly every measure management pointed to. Net interest margin expanded 180 basis points to 22.9%, and risk-adjusted net interest margin jumped to 12.4% from 9.5% the prior quarter, driven mostly by credit income and a lower cost of credit. Return on equity held at 33% even as the company kept investing in three markets at once. Nubank is also trying to capture more of each customer's wallet rather than just adding new ones. In July, it launched Croma, a subscription tier aimed at a "Super Core" segment between its mass-market base and its Ultravioleta high-income brand, where purchase volumes grew 41% year over year. It already counts 6.8 million small-business customers, more than any other financial institution in Brazil. Mexico may be the bigger story long term. At a similar stage of adult-population penetration, Nubank's Mexican customers are generating $12.3 in average revenue per active customer versus $5.6 in Brazil at that same point, and the company reached breakeven there in six years versus eight in Brazil. Underneath all of it sits NuFormer, the company's proprietary AI model, which management said now handles more than 60% of Brazilian customer-support conversations at ratings on par with humans, after a redesign that quadrupled training and inference speed. Not every metric moved in the right direction. Loans more than 90 days past due rose 35 basis points to 6.9%, which the company attributed to the normal seasonal migration of earlier delinquencies rather than a shift in underlying credit quality. Operating expenses jumped 20% sequentially to $806 million as real estate and marketing costs shifted between quarters and international expansion spending picked up, pushing the efficiency ratio to 19.5% after an unusually low 17.6% in the first quarter that management had already flagged as not sustainable. The allowance for credit losses grew to $6.6 billion, with roughly half of the increase tied to deliberate expansion into higher-risk borrower segments rather than pure portfolio growth. There is also a new cost line on the horizon: the company plans to spend no more than 100 basis points of its efficiency ratio testing a U.S. entry over the next 12 to 30 months, an unproven bet in a market where Nubank has no track record yet. Hedge fund ownership fell from 104 funds to 92 in the most recent quarter, a pullback even as the stock delivered its strongest earnings on record. Short interest sits at just 3.44% of float, a level that suggests little organized skepticism despite the drop in institutional holders. As of August 27, shares trade at a forward P/E of 21.01, a multiple that assumes continued double-digit growth rather than pricing in the delinquency and expense trends flagged above. That combination leaves the market's read on Nubank somewhat unsettled. Nubank's first billion-dollar quarter shows a company that has found several new levers at once: a banking license in Mexico, a fresh subscription tier in Brazil, and an AI platform its executives say is compounding gains across the business. Whether that combination holds up depends on two things playing out as management expects. For the growth story to keep working, Mexico's monetization curve and the new customer tiers need to scale the way Brazil's did. While we acknowledge the potential of NU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In. Disclosure: None. Follow Insider Monkey on Google News.

Since February 2026, Nubank has been in a holding pattern, posting a small return of 1.2% while floating around $15.16. The stock also fell short of the S&P 500’s 11.7% gain during that period. Is now the time to buy NU? Find out in our full research report, it’s free. With well over one hundred million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE:NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America. A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Nubank’s 88.5% annualized revenue growth over the last five years was incredible. Its growth beat the average financials company and shows its offerings resonate with customers. Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions. Nubank’s full-year EPS flipped from negative to positive over the last four years. This is a good sign and shows it’s at an inflection point. Return on equity, or ROE, quantifies financial firm profitability relative to shareholder equity — an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth. Over the last five years, Nubank has averaged an ROE of 14%, healthy for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Nubank has a decent competitive moat. These are just a few reasons why we think Nubank is one of the best financials companies out there. With its shares trailing the market in recent months, the stock trades at 16.2× forward P/E (or $15.16 per share). Is now the right time to buy? See for yourself in our full research report, it’s free. WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Nu Holdings (NYSE: NU) has been an incredible long-term success story. Founded in 2013, the online-only bank now has nearly 140 million customers across just three countries: Brazil, Colombia, and Mexico. Year-over-year revenue growth has consistently been in the double digits, sometimes exceeding 100%. Some analysts worry that the fintech's biggest days of growth are behind it. After all, the competition is catching on to Nu's asset-light business model. But a few key figures from the company's recent quarterly earnings announcement suggest that the fintech stock remains a long-term buy. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » As I detailed earlier this month, Nu is facing increased competition, but its competitive advantages continue to give it a durable edge. In recent years, competing banks have acquired more customers, but at the expense of declining credit quality and rising deposit costs. Meanwhile, Nu has been able to maintain high revenue and customer growth without sacrificing borrower quality or net interest margins. This quarter, the company posted a consolidated cost of deposits of 88% the interbank rate, three percentage points lower than a year ago. Its efficiency ratio (a measure of how well the bank is managing operating costs) and asset quality metrics also improved. In total, investors are seeing no indication that Nu's competitive advantages are waning. In fact, investors should come away with greater confidence in the durability of Nu's business model, as many of its key metrics continued to improve despite intensifying competitive headwinds. Trading at less than 20 times earnings despite a durable business model and rapid revenue and profit expansion continues to make Nu stock my top fintech stock on the market today. Before you buy stock in Nu Holdings, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nu Holdings wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $429,223!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,317,883!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 23, 2026. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nu Holdings. The Motley Fool has a disclosure policy. Should You Buy, Sell, or Hold Nu Holdings Now That Its Earnings Are Out? was originally published by The Motley Fool

Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 6:00 p.m. ET Investor Relations Officer - Guilherme Souto Founder, Chief Executive Officer and Chairman - David Velez-Osomo Chief Financial Officer - Rob Livingston Operator: Good evening, ladies and gentlemen. Welcome to Nu Holdings conference call to discuss the results for the second quarter of 2026. A slide presentation is accompanying today's webcast, which is available in Nu Investor Relations website, www.investors.nu in English and www.investidores.nu in Portuguese. This conference is being recorded, and the replay can also be accessed on the company's IR website. This call is also available in Portuguese [Operator Instructions] [Foreign Language] I would now like to turn the call over to Mr. Guilherme Souto, Investor Relations Officer at Nu Holdings. Mr. Souto, you may proceed. Guilherme Souto: Thank you, operator, and thank you, everyone, for joining our earnings call today. With me on today's call are David Velez, our Founder, Chief Executive Officer and Chairman; and Rob Livingston, our Chief Financial Officer. All financial metrics discussed and presented today reflect our managerial P&L framework, which we introduced in the Q4 2025. These managerial measures are important to how we manage the business, but are not financial measures as defined under IFRS and may not be comparable to other companies. A full reconciliation report to the most directly comparable IFRS figures is available in our managerial P&L reconciliation report and in the appendix to this presentation. Unless otherwise noted, all growth rates discussed today are presented on a year-over-year FX-neutral basis. Today's discussion may include forward-looking statements, which are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those expressed or implied. Please refer to the forward-looking statements disclosure included in the earnings presentation for additional information. With that, I will now turn the call over to David. Please go ahead, David. David Velez-Osomo: Hello, everyone, and thank you for joining us today. 13 years ago, we started with a simple hypothesis that a bank built on technology with no branches and no legacy to defend could serve hundreds of millions of people better and at a fraction of the cost. Today, I'm proud to announce that in the past quarter, for the first time, we generated more than $1 billion in net income. This milestone is the result of our customer obsession translated into an earnings-generating formula. It is also a testament to the tremendous work of our team here at Nubank. 13 years later, that hypothesis continues to play out exactly as we envisioned. Our customer base reached 139 million customers, including almost 118 million in Brazil, more than 5 million in Colombia. And in the end of July, Mexico just reached 16 million customers. Engagement continued to deepen alongside that growth. Our activity rate expanded sequentially to 83.5%, while Brazil surpassed 86% for the first time. The combination of more customers and deeper engagement continues to drive monetization with ARPAC reaching $17. Together, they generated $5.9 billion in gross revenue while maintaining a highly efficient operating model with an efficiency ratio of 20%. This operating leverage allows us to continue investing in our three core markets: Brazil, Mexico and Colombia, while laying the foundation for our international expansion. That is what we have always meant by optimizing for the long term. It is why we can continue building for the next decade while delivering a quarter like this one. Let me walk you through both, starting with Brazil. Brazil remains our largest growth opportunity, and most of it lies within our existing customer base. The mass market alone represents roughly $30 billion in industry gross profit. We already serve most of that segment, and we're the primary account for approximately 60% of those customers. Even so, there is significant room to deepen those relationships and capture more of that profit pool. That is possible because of the capabilities we have built over the past 13 years. They allow us to expand financial access while delivering a better customer experience, lower costs and increasingly personalized products. As we built one of the leading financial services brands in Latin America for the mass market, we found ourselves attracting millions of higher-income Brazilians that unfortunately, we were not able to serve well at the time. In 2021, we launched Ultravioleta, a high income focused brand and product where nearly 1 million Ultravioleta customers have significantly higher purchase volumes and assets under custody than the rest of our portfolio with both continuing to grow strongly, up 41% and 37% year-over-year, respectively, in Q2 2026. However, we have realized that there is a meaningful segment between mass market and high income that we could also be serving better. We call this segment Super Core. And in July, we launched Croma, a subscription-based tier for our super core customers, a segment with an even larger profit pool than high income and one where we already have significant penetration. Croma gives them a dedicated experience, enhanced credit offerings and a broader set of banking and lifestyle benefits designed to reward customers for concentrating more of their financial lives with Nubank. That includes NuCel, a free ChatGPT Go subscription, accelerated savings products and other benefits across our own ecosystem and partners. Our goal is to develop primary banking relationships and Croma is a significant step in this direction for this segment. Of course, the opportunity also extends beyond consumers. We already serve 6.8 million small businesses, making Nubank the largest financial institution in Brazil by number of business customers. Here we still reach only about 1/3 of that market. This is how we see the next chapter of growth in Brazil, continuing to expand our customer base while increasingly serving a larger share of our customers' financial lives through better product and segmentation. Now let me turn to our other core market. Earlier this month, Mexican regulators approved our banking license in the country, and we're happy to be born as the largest digital bank in Mexico with more than 16 million customers. That completes our transformation from a credit-first fintech into a full-scale digital bank, and it unlocks capabilities we did not have before. Payroll direct deposits strengthen primary banking relationships and customer engagement. Higher deposit insurance increases confidence in holding balances with us. Those deposits for a broader credit offering while allowing us to expand into new products and customer segments over time. Financial inclusion has been a defining part of the journey. For 35% of our customers, we were their first bank account. For 52%, their first credit card. Today, our customers leave in 98% of Mexico municipalities with nearly 80% outside the country's major cities, demonstrating how technology lets us reach customers everywhere. But what excites us most is what comes next. Mexico remains at an earlier stage of digital financial adoption. Bank account penetration has increased from 44% to 63% over the past decade, yet 85% of Mexicans still prefer to pay in cash. Yet the pace of change is accelerating. Digital payments in Mexico continue to compound year after year. In the first half of this year, pay transfers below $5 grew more than 60%. And today, nearly half of all transfers in the country are less than $25. These are everyday transactions and a clear sign that cash is steadily giving way to digital payments. In June, the Central Bank introduced new rules that every financial institution must implement by the end of the year. The objective is to simplify the experience across different payment rails. Going forward, consumers will see a standardized interface and follow the same steps regardless of who they are paying or how they choose to pay. Since these rules are mandatory for the entire financial system, they strengthen network effects and should further accelerate digital payment adoption. We have seen this movie before. In Brazil, the regulatory agenda foster competition and digital innovation, expanding financial inclusion, driving everyday usage and ultimately accelerating credit adoption. PIX is the clearest example. We offer a simple and seamless experience from the very beginning, became the market leader in transaction volume and turned that into primary banking relationships. That environment rewarded exactly the digital model we had built. We believe Mexico is following a similar path. We can already see it in our numbers. Today, we reached 16.5% of Mexico's adult population, essentially the same penetration we had in Brazil in 2020. But the cohorts are monetizing earlier. At the same stage, ARPAC in Mexico is $12.3 against $5.6 in Brazil. That reflects higher income per capita, better unit economics in the credit card product and higher interest-earning balances, all at a lower cost to serve. Mexico is Brazil's playbook running faster and with the benefit of the scale we have today. That's how we broke even in six years in Mexico compared with 8 years in Brazil. To recap, customer behavior, technology and regulation are now all moving in the same direction. Taken together, they create one of the most compelling opportunities we have ever seen in Mexico. As more financial activity moves onto our platform, we build deeper customer relationships, gain better underwriting insights and expand our ability to serve a larger share of our customers' financial lives. For the first time, we now have the full set of capabilities to capture that opportunity in Mexico. And Brazil and Mexico run on the same technology stack and increasingly on the same brain. Let me show you what that means. About a year ago, we introduced the NuFormer, our foundation model for financial behavior. Since then, we have focused on one objective, building a single AI platform that powers business and customer decisions across Nubank. That work spans every layer of the stack. We increased and upgraded our own GPU fleet, giving us full control of the compute layer. We expanded our architecture research efforts, and we continue building on one of our greatest advantages, more than a decade of transaction history across more than 100 million customers in three countries. That research is unlocking compounding gains in efficiency and model quality. We recently advanced NuFormer to a hybrid linear attention design, the same architectural approach behind frontier models like Kimi K3 and Qwen3.5, and we trained it with Muon, the same class of optimizer powering today's most efficient large language models. By decoupling NuFormer's core backbone from specific downstream decisions, any improvement to the central model can instantly upgrade performance across all our business lines with a costly retraining. The latest generation quadrupled context length training speed and inference speed while reducing the cost of running models in production. As we've scaled pretraining, the base models understanding of how our customers behave has become deep enough to change how we build every model on top of it. To give you one example, today, we can achieve the same predictive performance with 20 million fine-tuning data rows that previously required over $400 million, cutting development cycles from weeks to days. The platform now reaches nearly every decision we make. We first deployed NuFormer in our flagship credit portfolio in Brazil. Through 2025, we replicated the model in Mexico, demonstrating that the platform generalizes across markets. During the first half of this year, we extended it to unsecured lending in Brazil and to the next generation of our core credit models. We're now testing it in credit cards for SMEs and for our Colombian customers. But underwriting is only one application. Today, AI agents handle more than 60% of customer support conversation in Brazil with customer ratings at or above human parity. Beyond underwriting and customer support, we're using artificial intelligence to optimize decisions across credit, deposits and growth, moving from predicting outcomes to determining the actions that maximize value under real-world constraints. And at the same understanding of transactions that predicts credit risk also predicts what a customer wants next. It allows us to recommend the products that maximize long-term customer value, personalize the app experience and move toward our vision of an AI private banker. NuFormer is also improving how we grow. As the model learns a representation of how every customer behaves, we use it to put each campaign in front of the customers most likely to find it useful and more than 100 campaigns have already run this way. One AI platform now powers underwriting, customer support, optimization and growth. Every improvement we make benefits every application built on top of it. We're incredibly excited about the progress Nubank has had to date, leveraging AI as a transformative technology and have strong confidence our approach will be a meaningful differentiation going forward. Before we turn to our financial results, I want to say a few words about our CFO transition. As we announced in early June, Rob Livingston has succeeded Guilherme Lago as our Chief Financial Officer. Lago spent seven years with us, five of them as CFO, and he handed over the role at the strongest moment in our history with our first $1 billion quarter. He has been an incredible partner, and I am glad we will keep working together in his new role as special adviser. Rob has spent the past few weeks working alongside Lago and our teams, and we're very excited to be able to come with his significant experience. Rob, welcome. Over to you. Rob Livingston: Thank you, David. It is a privilege to step into this role at such an important moment for the company. Since joining Nubank, I have spent time with our teams across the organization. What has impressed me most is the customer obsession, the consistency of the business model and the discipline with which it has been executed. I'm excited to help lead the next phase of Nubank's journey. And today, I'm pleased to walk you through our Q2 2026 financial results. Let's start with our consolidated credit portfolio. The portfolio reached $39.4 billion, up 37% year-over-year and 5% sequentially. Growth remained broad-based. Credit cards increased 35% year-over-year to $26 billion. Unsecured lending grew 45% to $10.3 billion and secured lending increased 30% to $3.1 billion. Sequential growth remained solid while normalizing after a period of exceptionally strong expansion. Origination does not expand in a straight line, and we see that as a healthy dynamic. Throughout the quarter, our underwriting framework remained unchanged and growth remained strong relative to the broader market. As we'll discuss in the next few slides, we're comfortable with the quality of the portfolio and the performance of the vintages we're originating. Now turning to deposits. We ended the quarter with $45.3 billion in deposits, up 18% year-over-year and 6% sequentially, recovering the seasonal outflows we discussed last quarter. Brazil closed at $36.4 billion, Mexico at $5.7 billion and Colombia at $3.3 billion. In Mexico, deposits declined modestly again this quarter, reflecting our ongoing deposit optimization strategy. This continues to improve our cost of funding while maintaining ample liquidity with our loan-to-deposit ratio still at just 35%. Our cost of deposits was 88% of the interbank rate, essentially unchanged from last quarter and 3 percentage points lower than a year ago. Overall, we're pleased with both the growth and pricing of our deposits franchise across all three markets. As always, our objective is not simply to maximize deposits, but to build a resilient funding base that deepens customer relationships, supports profitable growth and strengthens the long-term economics of the business. Net interest income reached $3.7 billion, up 9% and net interest margin expanded 180 basis points to 22.9%. That is the result of what we laid out last quarter, the growth we put on the books, a mix weighted further towards unsecured lending and the deliberate risk expansions we made. Cost of credit reduced quarter-over-quarter to $1.7 billion. Desenrola, the government debt renegotiation program impacted this number by just about 5%. And even more important than the accounting impact, the program allowed us to help nearly 1.8 million customers renegotiate past due balances and get their finances back on track. With margin up and cost of credit down, risk-adjusted net interest margin expanded to a record 12.4%, up from 9.5%. I'm going to walk you through the drivers of this expansion in risk-adjusted net interest margin in more detail. That brings us to the risk-adjusted net interest margin bridge, and I want to focus on the expansion between Q1 and Q2. Credit income was a primary driver of risk-adjusted NIM expansion, contributing 178 basis points to the quarter-over-quarter increase compared to 152 basis points in Q1. This acceleration was driven by our strong loan growth in cards and unsecured lending in Q1 reflected in our improving loan-to-deposit ratio. Lower cost of credit contributed a further 115 basis points. The majority of the improvement in cost of credit came from the expected seasonal patterns we observed and disciplined underlying business performance rather than onetime items. Float income and funding costs both remained broadly neutral. Together, these dynamics explain the strong expansion in risk-adjusted NIM this quarter and continue to demonstrate the resilience of our underlying unit economics, supporting the sustainability of current levels going forward. Now let me turn to asset quality. As expected, our NPL metrics continue to follow their normal seasonal pattern. 15- to 90-day delinquencies improved 16 basis points to 4.8%. That improvement reflects several underlying dynamics, which I'll unpack on the next slide. 90-plus delinquencies increased 35 basis points to 6.9%, broadly reflecting the seasonal migration of first quarter early delinquencies into the 90-plus bucket. Taken together, these metrics are consistent with the seasonal dynamics we expected and continue to support our view that the underlying quality of the portfolio remains robust. Looking at the drivers of early delinquency, this bridge explains why the 15- to 90-day ratio improved sequentially. Seasonality reduced the ratio by 37 basis points. Against that, our intentional risk expansions in the first half of the year added back 24 basis points. Those were deliberate decisions to serve cohorts with higher expected losses, but which also generate higher risk-adjusted returns, as you've seen in our risk-adjusted margin performance. Product mix and the remaining drivers were broadly neutral. We don't see any evidence in our portfolio of a broad-based weakening in consumer credit, yet we remain vigilant as always. Altogether, the 15- to 90-day ratio improved 16 basis points during the quarter. The allowance bridge tells a similar story from the balance sheet perspective. The allowance increased from $6.1 billion to $6.6 billion. The largest driver by far was portfolio growth, contributing $342 million. Under IFRS 9, we recognize expected credit losses at origination. So growth increases the allowance before the associated interest income is earned. The intentional risk expansions we just discussed contributed another $170 million, while all other movements were immaterial, including Desenrola, which primarily affects recoveries rather than the ECL allowance due to the accounting treatment of renegotiated loans. Together, these two bridges reinforce the same message. The quarter's credit dynamics were driven by growth, seasonality and disciplined risk expansion, not by any deterioration in the underlying quality of the portfolio. Our approach to provisioning and coverage remains disciplined and consistent. Starting with the chart on the left, we built allowances equal to 113% of new 15-plus delinquency formation during the quarter, broadly in line with our historical averages. The chart on the right reinforces the same point. Total coverage over NPL 90-plus stood at 244%, meaning we continue to carry allowances equal to almost 2.5x our 90-plus balances. This provides a strong balance sheet cushion and remains consistent with the levels we've maintained over the past several years, even as the portfolio has continued to grow. Together, these two metrics reinforce an important point. While the portfolio continues to grow across products and customer segments, our provisioning philosophy remains disciplined and consistent through the cycle. Now one final point on credit risk, and this is an important one. As David mentioned, Nubank leads the Brazilian market in primary banking relationships. That leadership reflects the trust customers place in us. Combined with the analytical rigor of our underwriting models and the quality of the data generated through those relationships, it creates a structural edge in credit. You can see that clearly on this slide, showing the percent of credit card outstandings that are 90-plus days past due in Brazil. Across every income band, our credit risk performance has been steady. This strong and stable performance is driven by customers who have Nubank as their primary banking relationship. The delinquency measures of these customers is roughly half the portfolio average. What's the implication? That customer primacy is not only a growth and revenue advantage, it is also a credit advantage. A deeper relationship gives us richer behavioral data, strengthens our underwriting and places Nubank at the top of our customers' payment hierarchy. Together, these factors produce consistently better credit outcomes. That is why we continue to view customer primacy as a key pillar of our credit superpower. Now turning to our income statement. Gross revenues reached nearly $5.9 billion, up 39% year-over-year. Gross profit reached $2.4 billion during the quarter, up 43% year-over-year and 25% sequentially. As credit normalized in line with its expected seasonal pattern, its contribution to gross profit increased 41% this quarter, while fees represented 25% and float 34%. These shares naturally fluctuate from quarter-to-quarter. What matters is that all three components continue to grow in absolute dollars, reflecting the diversification of our business model. Looking ahead, we remain confident that credit, fees and float will continue to complement one another as drivers of long-term gross profit growth. Turning to operating leverage. Net revenues surpassed $4 billion for the first time, reaching $4.1 billion, up 8% sequentially. Operating expenses totaled $806 million, up 20% quarter-over-quarter as real estate and marketing expenses shifted from the first quarter into the second, alongside our continued investments in international expansion. As a result, our efficiency ratio ended the quarter at 19.5%. As we discussed last quarter, the 17.6% reported in Q1 was not a run rate. Roughly 2/3 of that improvement reflected temporary timing effects, which reversed as expected this quarter. Looking ahead, we continue to expect the efficiency ratio for the full year to average about 20%. More importantly, our long-term view remains unchanged. We will continue to invest while maintaining operating leverage as we scale. To conclude, net income reached $1.1 billion for the first time in Nubank's history, up 17% from the first quarter and 49% year-over-year. More importantly, we delivered that result while sustaining a record 33% return on equity and continuing to invest across our three markets and in our long-term opportunities. I believe this quarter reflects the strength of the business model David described earlier. The investments we've made in technology, AI, underwriting and customer experience continue to translate into profitable growth at scale. I'm excited to be part of this next chapter, and I look forward to continuing to build on this momentum. And with that, we'll open the call for your questions. Operator: We will now start the Q&A session for investors and analysts. [Operator Instructions] I would like to turn the call over to Mr. Guilherme Souto, Investor Relations Officer. Guilherme Souto: Thank you, operator. Could you please open the line for Mr. Tito from Goldman Sachs. Daer Labarta: Congrats on the strong results. Just to clarify and understand a little bit the Desenrola impact because Rob, you mentioned a few different numbers. I think you said maybe 5% of provisions, but not sure if that necessarily impacted the bottom line. And just thinking because on prior calls, you had mentioned risk-adjusted margin getting back to 10.8%, well above that this quarter, very good performance there for sure. But just to understand, was there an impact from Desenrola on that risk-adjusted margin given the different moving parts? And then I'll have a follow-up after that. Rob Livingston: All right. Thanks so much, Tito. Let me take that, and good to hear from you again. Yes, I did mention that Desenrola had an impact of about 5% on our cost of credit. That's the main metric that we're looking at there. And so as a result, it did also have an impact on our risk-adjusted net interest margin. If you think about the progress that we made from last quarter to this quarter of almost 3% expansion in the metric, the majority of it did come from lending growth, and this was really due to the strong growth that we saw in Q4 last year, Q1 last year and the matriculation of that into revenues in Q2. Now the cost of credit also contributed 115 basis points, and you're right that Desenrola would be part of that. It's a minority of the impact. The majority did come from seasonality, but also just really solid underlying credit performance. Daer Labarta: Okay. No, very helpful, Rob. And I think also just to think in terms of the context, what everybody is worried about is going into next year. I mean, you mentioned overall credit quality trends look good, you feel comfortable. But given the macro that we're seeing in Brazil, how do you think about the growth outlook maybe going into 2027 and the ability to this level of risk-adjusted NIMs? David Velez-Osomo: Tito, David here. So as we've said a few times to investors, we don't take a directional view necessarily on the economy. Our base assumption when we underwrite a loan is that the future will be worse than the past, that things will actually be much worse than everything we have seen. So a lot of -- everything -- every single underwriting decision already assumes a deterioration by default and has a pretty significant cushion in terms of what do we need to see for that decision to continue to be NPV positive. Obviously, we're in an environment where there is a lot of caution. We are actively looking at every single sign that we have. So far, we don't really see any significant or structural deterioration in our numbers. And we continue to operate with very significant cushion in this environment. We are also in a position where we -- while we have a large consumer base, we're still a very small percentage of the market. As we've said in the last call and this call, we have 7% market share of that profit pool. So we're still a small player in that big market, and we get to cherry pick our customers. cherry-pick them with loans and products that have very short-term duration, which gives us a huge amount of ability to react quickly, have a lot of conviction on a lot of the underwriting capabilities, as we mentioned. And then primarily, we have this huge advantage, as Rob mentioned, of being the largest primary bank account in the country today. Over 60% of our mass market customers use us as their primary bank account. So that's a huge advantage because, as Rob mentioned, positions us effectively as being senior in the credit stack of a customer. And so when you combine strong analytics, significant cushion being the primary bank account and having that seniority, then there is a lot of conditions for us to continue growing at a very good pace. I won't necessarily give you a specific number of growth, but we continue to see the conditions to continue growing and taking share as we use a lot of these levers to do that very effectively. Rob Livingston: Yes. And to your question on net interest margin or risk-adjusted net interest margin for the foreseeable future, we see it as being in the same region as where we are today. We think that it is sustainable. Guilherme Souto: Operator, could you please open the line for Mr. Jorge Kuri from Morgan Stanley. Jorge Kuri: Congrats on the great numbers. I wanted, I guess, to go back to the risk-adjusted NIM at 12.4% and maybe tie this to the usage of AI and the sophistication on your credit line increases and overall, your ability to take on more risk with lower losses. And now that you've seen maybe a full year vintage of people that you improve their offer with AI models and that you've been tracking them, would you mind sharing some of the KPIs that you've seen? And to what extent they're tied to this 12% risk-adjusted margins because you evidently seem very confident about this being the new level, not only you said it, Rob, right now, but also in an interview with Bloomberg earlier. And in the past, we have seen volatility in that number based on mix. And so I guess, yes, I just want to get to a little bit more of the KPIs that are driving that and to what extent is the AI models and get more comfort on that being a floor from here? Rob Livingston: Yes. So thank you so much for the question, Jorge. I think a few things to say there. The first is that it certainly is the case that our AI sort of generated models and assisted models are more powerful than traditional logistic regression models that is incontrovertible. And we are tracking them, though, in the exact same way that we would have tracked our historical models. We're looking at the degree of predictability, the variance at the low end and the high end of the predictive range as well as the outcomes across both back testing as well as forward testing of that model in production. So the macro point is that our risk approach and our credit monitoring hasn't actually shifted in this dynamic. And in fact, we are very happy to continue to have that same level of discipline going forward. I would correct one thing you said, though, where you said that 12% is a floor. I didn't say that it was a floor. I said we'd be in that ballpark. And so I don't want to overcommit there. But what we are seeing is that our strategy that has been partially enabled by stronger models to make intentional risk expansions that produce more risk-adjusted margin is paying off, and that's what we're seeing for the foreseeable future. David Velez-Osomo: I think, Jorge, the additional factor obviously to take into account is the increasing LDR and what LDR brings to the business model. This is something we mentioned a few times that if you look at our balance sheet, it continues to be very unlevered. You'll see in Slide 16, how that LDR has evolved over the past few quarters. Q1 had significant growth, but then a large cost of credit, mainly because of seasonality. As we go into Q2, we start seeing the benefits of a lot of the growth and the sort of optimization of the balance sheet. And there's a significant opportunity going forward. We will continue to optimize the balance sheet, obviously, as we continue to grow our credit portfolio. And that just will simply be reallocating a lot of deposits that they are earning CDI or rate towards a much higher-yielding asset, and that obviously falls directly into margin and into ROE. So that's a very strong dynamic that is also happening within the business model. Guilherme Souto: Operator, could you open the line for Mr. Eduardo Rosman from BTG Pactual. Eduardo Rosman: Congrats on the numbers. I have a question for David regarding AI. I think we read recently that you became a part of the Board of OpenAI. So it would be great if you could share with us how do you believe you can help OpenAI, but more importantly, how this experience might help you here at Nubank? David Velez-Osomo: Sure. Thanks, Ed. So obviously, this is not OpenAI's earnings call, so I won't get into too much of a lot. But I think effectively is we discussed very openly that -- internally and externally that we think artificial intelligence is the most important technology transformation in our history. And it will be one of the most technologically impactful shift in any business, in any industry around the world. So this is a global trend and a very powerful trend. Businesses are going to see significant transformation. And it's early days, but we're seeing it very clearly inside Nubank. We've discussed here today a lot of the different applications from credit and underwriting, but even customer-facing. And we're in the middle of a significant transformation across our organization around how we're using, putting AI in front and center as a technological trend and what will deliver effectively an advantage. So from that perspective, for me, getting closer to a company like OpenAI obviously provides a very interesting insight. Me personally also, I think it's a great opportunity to make sure that some of these great AI companies builds something great for humanity, and I have a huge amount of respect for the OpenAI team and the way they are executing this mission. So I think it's a win-win. And clearly, I mean, it's early days, but I hope I can be able to contribute significantly to the way the organization is executing. Guilherme Souto: Operator, could you please open the line for Mr. Pedro Leduc from Itau BBA. Pedro Leduc: Two questions. The first, a little more homework technical. The portfolio that you now have with clients under the government renegotiation program, that appeared in Stage 3, maybe in your personal loan book, and I'm assuming with a little bit less expected default, loss given default, given the coverage. Just that's the homework question as I'm trying to interpret here the movements. And then the second, a little bit back to business. In the prepared remarks, when going over the unsecured lending, you mentioned the pace, you made some comments around that. If you can give us a little bit more color, and I also want on your latest update on how you are on payroll, including private payroll. Rob Livingston: Okay. Well, let me start with the technical question there. There was a small impact on expected credit losses, as I mentioned in my prepared remarks, but it wasn't material, less than $10 million. And it does appear in Stage 3 of lending is where it shows up. I do think that we are going to see a little bit more impact from Desenrola in Q3, but we've already seen more than 4/5 of that hitting us in or benefiting us in Q2. And I hope that answers your question. Pedro Leduc: The portfolio that you now have under the program, it is a Stage 3 portfolio or starts in Stage 1. Rob Livingston: Right. So that -- no, it's in the Stage 3 portfolio. David Velez-Osomo: Yes, sure. And on private payroll, we are accelerating month-over-month. We are slowly getting more comfortable with the product. There's been a significant progress in how the product is set up in the Brazilian market, the way companies are able to get the collateral, the way the systems are working. So as we've said many times, we found asymmetric an asymmetric bet to go too fast too quickly on a product that has so many question marks. We think we're getting close to a system that makes a lot of sense, and we are accelerating. And ultimately, the lowest cost provider and whoever treats the customer best will win this market. And so we think we're extremely well positioned to be one of the leading players in this market over the next 18, 24 months. So we have -- and we think it's a good thing for the market. The other part that is also starting to change slightly is counter to most people's intuitions, the first people that started taking these loans were very high risk. These were not the use cases that you would expect of people refinancing -- low-risk people refinancing high-cost debt. It was actually very high-risk customers. And so from that perspective, it just didn't make a lot of sense for us to be opening the door for that as we understand the true level of risk and there is a bit of a change of behavior. Customers actually -- good customers actually seeing the opportunity to refinance, then this becomes a much more attractive product for consumers. We would love to do the trade. There's been a lot of conversations that we are fearful of cannibalizing ourselves or that we don't want it to be successful. Like we'll be super happy being able to refinance all of the customers that want a lower interest rate for a product that has that collateral, it would be very beneficial for us to have a more diversification in our portfolio. It would have more resilience. It would be less cyclical. So strategically, it's a product that we are very -- we think in the long run will be very good, and we are very well positioned to do it. We just are going at the right pace, and we're getting more comfortable by the month. Guilherme Souto: Operator, could you please open the line for Mr. Yuri Fernandes from JPMorgan. Yuri Fernandes: So congrats, David. Congrats, Rob. I have a question regarding the over $1 billion net income, and congrats on that, David. I was checking here at Itau Unibanco, one of the leading banks in Brazil. And when I look to the retail operation, it is around $1.1 billion, right? So you are very close to that. And my question is how to continue increasing this net income, David? I know your ROA are higher, you have better cost to income. You have this efficiency tailwind, but you are getting very big, right? So if you can help us understand if this is just an ARPAC normalization, you have like your mature cohorts coming or it's about new products or is this about Mexico. So trying to congratulate you on the $1 billion, but I also ask how to keep growing this sizable profitability. David Velez-Osomo: Sure. A couple of points. You are right that at some point, we're not there yet. At some point, we're going to run out of Brazilian customers. We have been saying that for about 4 years. We continue to get close to 1 million customers in Brazil every quarter. And so we're -- sorry, every month. And so we're in very good shape in terms of user count, but there will be a time where the number of Brazilian customers will decrease. Then the opportunity is ARPAC. And as you'll see in Slide 6, the ARPAC expansion is pretty significantly. We've gone from 13 to 17. A lot of the incumbent banks, if you look at the ARPAC, they are at 40 to 45. We don't think necessarily we'll get to 40 or 45 because there is a lot of fees that we don't charge. There might be a lot of products that we don't offer. But we'll certainly -- there is significant upside from the 17 and above. And when you look at all the cohorts, customers that have been with us for seven, eight years, they're already in the mid-20s ARPAC and high ARPAC. So from that perspective, there's going to be a lot of the opportunity in Brazil is to continue increasing ARPAC. Then we have the opportunity in Mexico and Colombia. As we've said, we think Mexico, a base case for Mexico is a business that could be 60%, 70% of Brazil. If utilization in Mexico happens and a real-time payment system works, could be as big of Brazil. It's a lower population but has 30% higher income per capita. And the ARPACs that we're seeing in Mexico are equal or above Brazil. So significant opportunity in Mexico. There is also a significant opportunity in Colombia. We are -- our business there is significantly overperforming and we're very happy with the opportunity there. So there is a huge amount of avenues of growth. Going back a little bit to Brazil. What we do see is that we need to have a better segmented portfolio, and that's why we announced Croma. Now we have three core segments and value propositions to serve better other segments like super core and high income, where we already have a lot of customers, but we're not serving them well. We have a low share of wallet. We gave them -- they came for a credit card. We gave them a very low credit limit. And because of the sophistication and improvement in our models, we're finally able to improve our credit underwriting capability for these segments and the value proposition for a lot of the products. And then finally, SME, we highlighted here on Slide 7. This is a blue ocean. This is a big opportunity. We are already the largest SME player in Brazil, over 6.5 million SMEs. We're just beginning to monetize that entire base and the cost structure advantage that we have, especially for the small businesses is pretty significant. So net-net, yes, over $1 billion in net income, but we're looking at a gross profit pool of $100 billion from that perspective and a lot of opportunities still to grow even in our core market like Brazil. Yuri Fernandes: Super clear, if I may, just a follow-up on Croma. Do you have -- can you share any market share you have today and any goal you have for this segment? David Velez-Osomo: I can tell you that we already have three out of five Brazilians in this bracket as customers of new. So it's not our opportunity necessarily we have to go out in the market and acquire these customers and spend a lot of money on marketing. They're already inside our base. We are -- we just haven't treated them as good as they deserve. We just haven't given them the product set and the bundles that they should need. And so that is the opportunity. There's a huge opportunity to increase the share of wallet within those three to five Brazilians that represent -- that exist in that base. Guilherme Souto: Operator, could you please open the line for Mr. Geoffrey Elliott from Autonomous. Geoffrey Elliott: I noticed that the number of employees is down, is down from 10,500 to 10,400, which doesn't sound like a big change, but it had been growing pretty quickly up until now. What are your hiring plans? And how is AI allowing you to use the workforce more effectively? David Velez-Osomo: Sure. I mean I think we -- as you might remember, we announced getting back to the office end of last year, and that announcement caused a number of -- a meaningful amount of people to decide not to work at Nubank anymore. So there was some attrition because of that. We have rehired effectively a lot of that attrition. And so you end up being something about flat. Looking forward, we are seeing a huge amount of productivity increase with AI, and we're very excited about the potential that, that creates. But the list of things that we also want to do, the list of things that we want to build is also infinite. And so it just opens up a larger opportunity of things that we can try. So net-net, I don't see us significantly increasing that number. I also don't necessarily see us decreasing the number that feels more or less right, but it's certainly 10,400 employees that will be 2, 3, 4, 5x more productive over the next few years as we really integrate more AI with that. And then obviously, the output of that headcount will be much larger than what we're able to provide today. And so we're very excited about that. Geoffrey Elliott: And then staying on headcount, thinking about the expansion employees in the U.S. are pretty expensive. You're moving into the U.S. How far do you see the headcount shifting towards the U.S. David Velez-Osomo: I don't think it's going to be a significant change in the way we are distributed today where our majority of employees are in Brazil and Latin America. We are hiring more in the U.S. and specifically in certain areas where we are able to find a certain level of talent and experience that we just cannot find in Latin America, especially around AI. So we will increase the number of headcount we have in the U.S., but it will not move the needle. I mean it might go from 1% to 2% total, and that's sort of the level of changes. But obviously, it's talent that we would be adding that will be very impactful. And then as we launch U.S. as a market and we start growing that market, then there'll be more hiring in the U.S. And hopefully, we can be very productive and efficient as we launch our market and relying on a lot of the AI capabilities that we're using. Guilherme Souto: Operator, could you please open the line for Mr. Mario Pierry from Bank of America. Let's move on for the next one. Could you please open the line from Mr. Daniel Vaz from Safra. Daniel Vaz: Again, welcome to Nubank. David, on your Slide 11, you show deposit and credit financing, price optimization still in testing with AI. So I was wondering on the credit card financing, where is the biggest price for you there? I mean, is to reprice the existing revolvers, maybe you're using personalized rate to convert more transactors who never did credit card finance before. So you want to offer them a cheap interest rate there. So trying to understand where is the biggest price there for you on credit card finance? And second, on deposits, right? So your loan to deposit is very low, as you mentioned. So how should we read that primarily as a funding cost lever? So you want to bring your funding costs down, so you stimulate people to put deposits there on your platform or doesn't have to do anything with that. So you want to bring more deposits, maybe pay more with -- for people who doesn't have deposits today. So kind of understand that where is the biggest price for AI applicable in these two businesses. David Velez-Osomo: Sure. So just as a reminder, one of the most important metrics for us is Net Promoter Score, NPS or a number of different metrics around product quality. And we seek to -- we think that the way our model works is that if we build the very best product in the market, then customers will come and financial results will follow. So a lot of this optimization is not necessarily about minimizing cost, but it could also be about optimizing quality. And the sort of the sense or the opportunity is that whenever we have a price, be it a price for a loan or a credit product or be it a yield that we offer in a deposit or truly any other product that has a price, then every single customer we're going to have a price which will maximize that equation of quality and cost, being able to offer higher quality at a lower cost. And so that is the analytical exercise that we're increasingly investing in. Specifically on the deposit, we just get to an equation whether we -- it would be our decision to decide if we want to optimize cost, then we would be able to optimize that funding cost, but we would know specifically what would be what we're giving up in terms of quality and competitiveness in that opportunity. So I wouldn't necessarily think in the short term that this will drive an improvement in funding costs because we might decide to reinvest all of those gains back into the customer, especially in countries like Mexico, where we're so early and Colombia and Brazil in some of these segments, we want -- we are still very much on day one We're still very much on the challenging mode. We're not in a mode of optimizing for net income or increasing earnings. We're investing a lot in growth. We're investing a lot of in improving our products and our customer experience. And a lot of what we can do with this new model is being able to make a better decision as we trade off quality with cost, product quality. Guilherme Souto: Operator, could you please open the line for Mr. Mario Pierry from Bank of America. Mario Pierry: Sorry about that before. Congratulations on the quarter. It definitely was better than what we were expecting. But two questions here from my part. So on the previous call, right, in the first quarter results, you guys talked about net interest risk-adjusted margin going back to the levels of the second half of last year by the end of this year. So we're talking about 10.8% to 10.5%, and you jumped to 12.4%. So I'm trying to understand where is the surprise coming from, from what you guys were expecting? Is it that your credit models are better, that you're able to grow faster than you expected? Or like because it is a big beat versus what you guys were expecting? And then my second question is a little bit more technical, and I appreciate you guys showing the slide on Page 20 that shows the NPLs by income. But I was trying to reconcile that slide on Page 20 of Page 17 because on Page 17, you show that NPLs have some seasonality. And then when I look at this slide on Page 20, it doesn't appear like there's much seasonality on that data. In fact, right, if we look at your NPLs I think you showed July 25 to now, it has improved for every income segment that you showed. But then when we look at the overall NPL, we actually deteriorated 40 basis points. So does it mean that the entire deterioration that we're seeing and all the seasonality that we're seeing is coming primarily from your unsecured personal loans? Because, again, credit cards are 65% of your loan book, and that is not showing any deterioration at all. Rob Livingston: Yes. Thank you so much for those questions. I'll start with the second one first. So on Page 20, as you're looking at the credit performance that we have relative to other banks in Brazil, keep in mind that this is credit card only, of course, and the other graph is for the whole company, and it's smooth. So that's in the mice type at the bottom of the page here is that we're taking a rolling average, and that's why you're not seeing the seasonality that does actually exist in these numbers. Going back to your first question, though, around the overperformance of risk-adjusted NIM. If you recall, at the time of the Q1 earnings, Desenrola was not clearly laid out at that time. And so about 1/3 of that benefit relative to what we were expecting is coming from Desenrola. But 2/3 are coming from two things. One is just really solid credit performance across the board and in some cases, better than expected. And the other is the increase in our balances that were earning yield in Q2 at the very beginning that was driven by the growth in Q1 continuing to ramp up. And so that did slightly come in better than we expected, and we're happy to have it now. Daniel Vaz: Okay. Rob, but just let me follow up then. Even -- okay, I see the footnote here that says you smoothed out the trends. But the starting point is higher than the current point for your NPLs. And when I look at your overall NPL, it's higher. So again, is the deterioration primarily coming in the unsecured personal loans? Rob Livingston: So it's -- I wouldn't quite characterize it as that as much as I would characterize it as a mix shift that we are seeing. And so what you see on Page 20 is essentially a disaggregated view of the portfolio by income bracket. And when you look at it that way, you do see this steady, if not decreasing performance across all three segments in Brazil. But when you look at our overall portfolio, there are shifts in terms of where we are lending money, and it's primarily those shifts rather than deterioration within unsecured lending that's driving that increase over time. Does that make sense? Daniel Vaz: A little bit. But yes, we can follow up later. That's fine. Rob Livingston: So think of -- yes, it's more of a mix shift rather than a dynamic where it's all coming from one product segment. And we can talk about it later. Daniel Vaz: Yes. I think that the problem that I have is then it's not like seasonal, right? It's more like a change in mix, the volatility in NPL is more because of change in mix rather than seasonal. Rob Livingston: Well, the seasonal is still there. It's more this idea that if you look at Slide 17 and you look at 90-plus over the past two years, the general trend is upwards, and that's being driven by the mix. That was my point. Guilherme Souto: Operator, please, could you open the line for Mr. Craig Maurer from FT Partners. Craig Maurer: Question specifically for Rob. Having -- with your background and new moving into the U.S., you spent a lot of time today discussing your data advantages in terms of lending, credit is a superpower and so on and so forth. How do you think your models will hold up in the U.S. considering the change in demographics? And how much legwork do you have to do to rebuild those models before you can have the same degree of confidence? Rob Livingston: It's a really good question, and I think it dovetails nicely with our commitment that we've made that we are not planning to spend more than 100 basis points. in our efficiency ratio on the U.S. entry. And the reason is it will take us some time to build up the same confidence in our credit risk models in the U.S. as we have in Brazil and Mexico and Colombia, where we've been operating for years. The way to think about it is that the platform, the NuFormer platform for credit models and the credit risk expertise that we have in the company will translate very, very quickly across the border. But the actual data richness and building the experience of foundational testing and having the models in place that are specifically tooled for the U.S. market will take somewhere between 12 and 30 months, depending on the degree of maturation of those curves. So our priority at the beginning of our entry into the U.S. market when that happens, will be to test, learn, build out our data set and then be ready to expand once we have that same level of confidence there that we do in our core markets. Guilherme Souto: Okay. With that, we -- sorry, we've now surpassed 60 minutes of this session. So we are now concluding today's call. On behalf of Nu Holdings and our Investor Relations team, I want to thank you very much for your time and participation in our earnings call today. Over the coming days, we will be following up with the questions received via our platform. And with those that attended, we were not able to ask -- to make questions tonight. So please do not hesitate to reach out to our team if you have any further questions. Thank you, and have a good night. Operator: The Nu Holdings conference call has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Nu Holdings, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nu Holdings wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,621!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,314!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 20, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Nu Holdings. The Motley Fool has a disclosure policy. Nu (NU) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Nu Holdings (NYSE: NU) is a leading digital banking platform in Latin America. Although it sports a market capitalization of $71 billion, there's a good chance that U.S. investors haven't heard of the company. But it's a smart move to get familiar with Nu, as it has been a major disruptor in a big market. This business is operating at an impressive level. It added 4 million customers last quarter, bringing the total to 139 million users, with 118 million in Brazil, its home market. Is the fintech stock priced for this growth? Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Nu's most recent financial results gave investors plenty of reasons to be bullish. During the second quarter, the company reported revenue of $5.9 billion, up 39% year over year on a currency-neutral basis. A higher customer count is the main driver of top-line gains. It's important to pay attention to the unit economics here. Nu's monthly average revenue per active customer (ARPAC) increased 22% year over year to $17.10 in Q2. User growth will naturally decelerate as Nu scales, but it's extremely encouraging to see improved monetization from the existing customer base, likely due to cross-selling. There might be no more powerful catalyst lifting this business than the fact that Latin America has a large unbanked and underbanked population. And Nu is capturing the opportunity. For instance, 35% of its customers in Mexico have never had a bank account. And 52% of customers never had a line of credit. This is what disruption looks like. Nu's deposit base has also exploded, going from $18 billion in Q2 2023 to $45.3 billion today. This provides the funding to power it lending business. Deposits often are sticky, supported by high switching costs for customers. Profitability is robust. Net income surged 49% to nearly $1.1 billion, exceeding $1 billion for the first time ever. And the net profit margin was 18.1%, better than the 16.4% posted in the second quarter of 2025. Going back to the unit economics, it costs Nu on average $1 per month to serve each customer. That's only 5.8% of the ARPAC. What's more, the efficiency ratio, a bank's measure of operating expenses relative to net interest income and fee income, was 20% in the second quarter, down from 50% four years ago. A lower number is better, demonstrating improving operating leverage. As of Aug. 18, Nu shares trade 23% below their peak, a high-water mark established in January. They have fallen 14% just this year. However, the stock has risen by more than 80% during the past 36 months, bypassing the S&P 500 index over the same period. It still trades at a compelling valuation. Investors can buy Nu at a forward price-to-earnings ratio of about 20. The business is growing rapidly, but it doesn't appear that the market is fully appreciating the growth story. This is a compelling setup for prospective investors. There are risks to be aware of, though. Operating in Latin America, a developing region with volatile currencies, commodity-based economies, and unstable political and regulatory backdrops, introduces greater uncertainty. This is particularly true for a lender. Macroeconomic conditions in Latin America often are less stable than in the U.S. Furthermore, Nu's $39 billion credit portfolio deserves some attention. Of this figure, 66% is credit cards, and 26% comes from unsecured loans, two product lines with a higher-risk profile. Non-performing loans, those that were 90 days or more past due, stood at 6.9% as of June 30. This metric has steadily increased during the past few years, but management doesn't appear too concerned. Still, I believe it's worth considering Nu as an investment. Strong growth and a low starting valuation can result in winning returns. Before you buy stock in Nu Holdings, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nu Holdings wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,970!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,381,040!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 19, 2026. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nu Holdings. The Motley Fool has a disclosure policy. Nu Holdings Added Millions of Customers Again Last Quarter. Is the Stock Priced for That Growth? was originally published by The Motley Fool

This article first appeared on GuruFocus. Net Income: Reached $1.1 billion in Q2 2026, the first time exceeding $1 billion, up 17% from Q1 and 49% year over year. Gross Revenue: Nearly $5.9 billion, up 39% year over year. Net Revenues: Surpassed $4 billion for the first time, reaching $4.1 billion, up 8% sequentially. Gross Profit: $2.4 billion, up 43% year over year and 25% sequentially. Net Interest Income: $3.7 billion, up 9%. Net Interest Margin: Expanded 180 basis points to 22.9%. Risk-Adjusted Net Interest Margin: Expanded to a record 12.4%, up from 9.5%. Cost of Credit: Reduced quarter over quarter to $1.7 billion. Operating Expenses: Totaled $806 million, up 20% quarter over quarter. Efficiency Ratio: Ended the quarter at 19.5%, with full-year expectation of about 20%. Return on Equity: Sustained a record 33%. Credit Portfolio: Reached $39.4 billion, up 37% year over year and 5% sequentially. Credit Cards: Increased 35% year over year to $26 billion. Unsecured Lending: Grew 45% to $10.3 billion. Secured Lending: Increased 30% to $3.1 billion. Deposits: Ended the quarter at $45.3 billion, up 18% year over year and 6% sequentially. Cost of Deposits: 88% of the interbank rate, essentially unchanged from last quarter and 3 percentage points lower than a year ago. NPL 15-90 Days: Improved 16 basis points to 4.8%. NPL 90+ Days: Increased 35 basis points to 6.9%. Allowance: Increased from $6.1 billion to $6.6 billion. Customer Base: Reached 139 million customers, including almost 118 million in Brazil, more than 5 million in Colombia, and 16 million in Mexico. Activity Rate: Expanded sequentially to 83.5%, with Brazil surpassing 86%. ARPAC: Reached $17. Ultravioleta Customers: Purchase volumes and assets under custody grew 41% and 37% year over year, respectively. Small Businesses: Served 6.8 million, making Nubank the largest financial institution in Brazil by number of business customers. Mexico ARPAC: $12.3, compared to $5.6 in Brazil at the same stage. Warning! GuruFocus has detected 5 Warning Signs with NSE:STANLEY. Is NU fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record net income of $1.1 billion, surpassing $1 billion for the first time, with a 49% year-over-year increase. Customer base grew to 139 million, with activity rate expanding to 83.5% and ARPAC reaching $17. Risk-adjusted net interest margin expanded to a record 12.4%, driven by strong credit income and lower cost of credit. Mexico banking license approved, enabling full-scale digital bank operations and unlocking new growth opportunities. AI platform NuFormer improved underwriting efficiency, reducing fine-tuning data needs by 95% and cutting development cycles from weeks to days. 90-plus day delinquencies increased 35 basis points to 6.9%, reflecting seasonal migration and intentional risk expansions. Efficiency ratio rose to 19.5% from 17.6% in Q1, with full-year guidance around 20% due to timing effects and investments. Deposits in Mexico declined modestly again, reflecting ongoing deposit optimization strategy. Desenrola program impacted cost of credit by about 5%, with a small impact on expected credit losses. US market entry will require 12-30 months to build credit risk models, with initial spending limited to 100 basis points of efficiency ratio. Q: Can you explain the drivers behind the record 12.4% risk-adjusted net interest margin (NIM) and whether this level is sustainable?A: CFO Rob Livingston stated that the expansion was driven by strong loan growth from Q1, which matured into revenue in Q2, and a lower cost of credit. He noted that the majority of the cost of credit improvement came from seasonality and solid underlying credit performance, with the government's Desenrola program contributing only a minority impact. Livingston confirmed that the company sees this level of risk-adjusted NIM as sustainable for the foreseeable future, though he cautioned against calling it a "floor." Q: How should we think about the growth outlook for 2027 and the sustainability of risk-adjusted NIMs given the macro environment in Brazil?A: CEO David Velez explained that Nubank does not take a directional view on the economy and underwrites loans assuming the future will be worse than the past. He highlighted the company's small market share (7% of the profit pool), short-duration products, and its position as the primary bank for over 60% of its mass-market customers as key advantages. CFO Rob Livingston added that the company sees risk-adjusted NIM remaining in the same region as current levels. Q: What is driving the overperformance in risk-adjusted NIM versus your previous guidance, and can you provide more color on the Desenrola impact?A: CFO Rob Livingston clarified that when they gave Q1 guidance, Desenrola was not clearly laid out. About one-third of the benefit relative to expectations came from Desenrola, while two-thirds came from solid credit performance and higher-yielding balances from Q1 growth. He also noted that Desenrola had a ~5% impact on cost of credit and a small, immaterial impact on expected credit losses (less than $10 million), which appears in the Stage 3 lending portfolio. Q: How is AI contributing to the improved credit performance and the ability to take on more risk with lower losses?A: CFO Rob Livingston stated that AI-generated models are more powerful than traditional logistic regression models and are tracked with the same discipline. CEO David Velez added that the increasing loan-to-deposit ratio (LDR) is a significant factor, as the company reallocates deposits earning CDI rates toward higher-yielding credit assets, which directly boosts margin and ROE. The intentional risk expansions enabled by stronger models are paying off in higher risk-adjusted margins. Q: How do you plan to continue growing net income past the $1 billion milestone, and what are the key growth avenues?A: CEO David Velez outlined several growth drivers: increasing ARPAC from the current $17 toward the mid-20s seen in mature cohorts, the significant opportunity in Mexico (which could be 60-70% of Brazil's business), the overperforming Colombia business, and the launch of Croma for the "Super Core" segment. He also highlighted the SME market as a "blue ocean" opportunity, where Nubank is already the largest player with 6.8 million customers but only reaches one-third of the market. Q: Can you provide details on the launch of Croma and the opportunity in the "Super Core" segment?A: CEO David Velez explained that Croma is a subscription-based tier launched in July for the Super Core segment, which sits between the mass market and high income. He noted that Nubank already serves three out of five Brazilians in this bracket, so the opportunity is not about acquiring new customers but increasing share of wallet by offering better products and bundles. The segment has an even larger profit pool than high income. Q: How is the company's AI strategy evolving, and what is the significance of the NuFormer model?A: CEO David Velez detailed that NuFormer, their foundation model for financial behavior, has been advanced to a hybrid linear attention design and trained with the Muon optimizer. The latest generation quadrupled context length, training speed, and inference speed while reducing production costs. The platform now powers underwriting, customer support (handling 60%+ of conversations), optimization, and growth campaigns. Velez noted that the same predictive performance can now be achieved with 20 million fine-tuning data rows that previously required over $400 million. Q: What is the status of the private payroll lending product, and how is the company approaching this market?A: CEO David Velez stated that private payroll is accelerating month over month as the company gets more comfortable with the product and the market infrastructure improves. He noted that early adopters were very high-risk customers, which didn't make sense to serve initially, but the customer base is shifting toward better-quality borrowers. Velez emphasized that Nubank is well-positioned to be a leading player in this market over the next 18-24 months and sees the product as strategically beneficial for portfolio diversification and resilience. Q: How will the company's credit models translate to the US market, and what is the timeline for building confidence?A: CFO Rob Livingston explained that the NuFormer platform and credit risk expertise will translate quickly across borders, but building the specific data richness and models tooled for the US market will take 12-30 months. He reiterated the company's commitment to not spend more than 100 basis points of efficiency ratio on the US entry, prioritizing a test-and-learn approach before expanding aggressively. Q: Can you explain the discrepancy between the stable NPL trends by income bracket and the overall deterioration in NPLs?A: CFO Rob Livingston clarified that the slide showing NPLs by income bracket is credit-card-only and uses a rolling average, which smooths out seasonality. The overall portfolio deterioration is driven by a mix shift in where the company is lending, rather than deterioration within any specific product segment. He emphasized that the increase in 90-plus delinquencies is primarily due to this mix shift and seasonal migration, not broad-based weakening in consumer credit. For the complete transcript of the earnings call, please refer to the full earnings call transcript.