Nu Holdings Ltd. Q2 2022 Financial Summary
Business Context and Reporting Period
This Form 6-K filing reports the Second Quarter 2022 financial results for Nu Holdings Ltd., a leading digital banking platform operating in Brazil, Mexico, and Colombia. The reporting period ended June 30, 2022, with results released on August 15, 2022. Financial data is presented in U.S. dollars in accordance with International Financial Reporting Standards (IFRS).
Key Financial Metrics
- Revenue: Total revenue reached a record $1.2 billion, representing a 230% year-over-year (YoY) increase on a foreign exchange neutral (FXN) basis.
- Profitability: Gross profit totaled $363.5 million (109% YoY FXN growth) with a gross margin of 31%. Adjusted Net Income was $17 million for the quarter. NuBrazil achieved an accounting net income of $13.0 million for the first half of 2022.
- Liquidity and Capital: NuFin's adjusted capital stood at $3.9 billion, with 79% held in cash and cash equivalents. Total deposits reached $13.3 billion, while the interest-earning portfolio was $3.2 billion.
- Asset Quality: Non-performing loans (NPL) 15-90 days remained stable at 3.7%, and NPL 90+ days were at 4.1%, consistent with post-pandemic normalization expectations.
- Operational Efficiency: Average Revenue Per Active Customer (ARPAC) grew to $7.8 (105% YoY FXN). The cost to serve per active customer remained flat at $0.8 monthly.
Material Changes vs. Prior Period
- Customer Growth: The company added 5.7 million customers in Q2, reaching a total of 65.3 million across all markets (57% YoY growth). Brazilian customers grew 51% YoY to 62.3 million.
- Market Position: Nu became the fourth-largest card player in Brazil by purchase volume ($20 billion in Q2). In Mexico and Colombia, Nu is the #1 issuer of new credit cards.
- Product Expansion: Active customers for core products (Credit Cards, NuConta, Personal Loans) reached 29 million, 45 million, and 4 million, respectively. New offerings like NuCripto reached 1 million customers within three weeks of launch.
- Engagement: The activity rate hit a historical high of 80%, with over 55% of monthly active customers (tenure >1 year) using Nu as their primary bank.
Outlook, Risks, and Management Commentary
Management highlighted a "very strong quarter" characterized by growth and profitability in the core business. CEO David Vélez emphasized the company's progress toward becoming a multi-product, multi-country platform, citing profitability in Brazil as a catalyst for reinvestment in adjacent verticals and international expansion. The company recently received license approval to continue expansion in Colombia.
Risks and Contingencies: The filing includes standard forward-looking statement disclaimers. Actual results may differ materially due to risks outlined in the company's prospectus and Form 20-F, including market volatility, regulatory changes, and execution risks associated with international expansion. The filing notes that non-IFRS measures (such as Adjusted Net Income) are not a substitute for IFRS measures.
Investor Verification Checklist
- Verify the reconciliation of Adjusted Net Income ($17 million) to IFRS Net Income to understand the impact of share-based compensation adjustments.
- Confirm the sustainability of the 31% gross profit margin as the company scales into new international markets (Mexico, Colombia).
- Monitor the trajectory of NPL ratios (currently 3.7% for 15-90 days) against the stated "normalization post pandemic" expectations.
- Assess the capital adequacy of the $3.9 billion adjusted capital position relative to the rapid expansion of the loan book and deposit base.
- Review the specific regulatory status and license approvals in Colombia and Mexico to validate the #1 new credit card issuer claim.