Nu Holdings Ltd. Q1 2026 Earnings Summary
Business Context and Reporting Period
This Form 6-K filing summarizes Nu Holdings Ltd.'s Q1 2026 earnings presentation released on May 14, 2026. The company operates a multi-product, multi-country digital banking platform primarily in Brazil, Mexico, and Colombia. The reporting period covers the three months ended March 31, 2026. Management introduced a new "Managerial P&L" framework to better align financial disclosure with operational substance, alongside a continued focus on AI transformation and US market expansion.
Key Financial Metrics
- Revenue: Total Revenue (Managerial P&L) was $5.32 billion, up 57% year-over-year (YoY) on an FX-neutral basis. Net Interest Income (NII) reached $3.25 billion.
- Profitability: Net Income was $871.4 million, representing a 56% YoY increase. Adjusted Net Income was $937.1 million. Return on Equity (ROE) was 29%, with Adjusted ROE at 31%.
- Efficiency: The reported Efficiency Ratio improved to 17.6% (down from 19.9% in Q4 2025). The Core Efficiency Ratio, excluding expansion and AI investments, was 16.6%.
- Balance Sheet: Total Credit Portfolio grew to $37.2 billion (+7% FX-neutral YoY). Total Deposits reached $42.4 billion (+22% YoY FX-neutral). Cost of deposits was 88% of the interbank rate.
- Liquidity & Capital: Available funding totaled $39.1 billion, providing 1.7x coverage of the net credit portfolio. Capital position across regulated entities and Nu Holdings cash stood at $9.4 billion.
- Customer Metrics: Monthly ARPAC (Average Revenue Per Active Customer) was $15.90. Cost to Serve was $1.00 per active customer.
Material Changes vs. Prior Period
- Growth Acceleration: Credit portfolio growth was driven by Credit Cards (+36% YoY) and Unsecured Lending (+53% YoY). Total exposure grew 44% YoY.
- Margin Expansion: Risk-Adjusted NIM was 9.5%, while standard NIM was 21.1%. Gross Profit grew 27% YoY to $1.88 billion, with a shift in mix toward Fees and Float.
- Expense Management: Operating expenses decreased 3% FX-neutral YoY to $648 million, despite revenue growth, demonstrating significant operating leverage.
- Deposit Dynamics: Deposit growth slowed slightly in Q1 2026 (-4% FX-neutral QoQ) compared to double-digit growth in prior quarters, though YoY growth remained strong at 22%.
Outlook, Risks, and Management Commentary
- AI Transformation: Management highlighted a shift from "AI Assistance" to "AI Transformation," citing 50% higher engineering throughput and 10x weekly token consumption. AI is being integrated into underwriting and customer journeys (e.g., Pix with AI).
- US Expansion: The company views the US market entry as having "bounded downside" (max 100 bps efficiency ratio headwind in 2026-2027) and "uncapped upside."
- Credit Quality: Early delinquency (15-90 days) rose to 5.0% in Q1 2026, attributed to seasonality and intentional risk expansion. Late delinquency (90+ days) remained stable at 6.5%. Coverage ratios remain robust, with Total Coverage over NPL 90+ at 249.0%.
- Market Opportunity: Brazil remains the primary growth engine with a 7% gross profit market share. Mexico is viewed as a massive opportunity with a projected 15% industry CAGR, though Nu's current share is <1%.
Investor Verification Checklist
- Verify the reconciliation between the new "Managerial P&L" and standard IFRS financial statements to understand the impact of tax-equivalency adjustments.
- Monitor the sustainability of the 17.6% Efficiency Ratio as US expansion costs materialize in 2026-2027.
- Track the trajectory of 15-90 day delinquency rates to ensure seasonal spikes do not indicate a structural credit deterioration.
- Assess the actual impact of AI initiatives on cost-to-serve and underwriting speed in subsequent quarters.
- Review the specific regulatory capital requirements for the US entity once operations commence.