Nu Holdings Ltd. Q1 2024 Financial Summary
Business Context and Reporting Period
This Form 6-K reports the First Quarter 2024 financial results for Nu Holdings Ltd. (NYSE: NU), a leading digital banking platform operating in Brazil, Mexico, and Colombia. The reporting period ended March 31, 2024, with results released on May 14, 2024. The company serves over 100 million customers globally, having surpassed this milestone in May 2024 shortly after the quarter close.
Key Financial Metrics
| Metric | Q1 2024 | Q1 2023 | Change (YoY FXN) |
|---|---|---|---|
| Revenue | $2.7 billion | $1.65 billion (implied) | +64% |
| Net Income | $378.8 million | $141.8 million | +167% |
| Adjusted Net Income | $442.7 million | $182.4 million | +143% |
| Gross Profit | $1.18 billion | $0.67 billion (implied) | +76% |
| Gross Profit Margin | 43.2% | 40.2% | +300 bps |
| Return on Equity (ROE) | 23% (Annualized) | N/A | N/A |
| Adjusted ROE | 27% (Annualized) | N/A | N/A |
| Efficiency Ratio | 32.1% | N/A | N/A |
| Total Deposits | $24.3 billion | N/A | N/A |
| Interest-Earning Portfolio | $9.7 billion | N/A | +86% |
| Loan-to-Deposit Ratio | 40% | 34% (Q4 2023) | +600 bps |
Operational Metrics: Total customers reached 99.3 million by March 31, 2024 (up 5.5 million in Q1). Monthly Average Revenue Per Active Customer (ARPAC) grew 30% YoY (FXN) to $11.4. Cost to serve per active customer remained at $0.9. Brazil's consumer credit 15-90 NPL ratio was 5.0%.
Material Changes vs. Prior Period
- Profitability Surge: Net income more than doubled year-over-year, driven by a 64% revenue increase and improved gross margins.
- Customer Base Expansion: The company added 5.5 million customers in Q1, with international markets (Mexico and Colombia) showing accelerated growth rates compared to Brazil's historical trajectory.
- Asset Growth: The interest-earning portfolio rose 86% YoY, reflecting a ramp-up in personal loans and credit card receivables.
- Capital Position: The holding company maintains $2.4 billion in excess capital, contributing to a high ROE despite over-capitalization at the holding level.
Outlook, Risks, and Management Commentary
Management highlighted that the business model is fueled by expanding revenue and stable costs, with Brazil operations achieving an ROE over 40%. Mexico is outpacing Brazil in key KPIs, having surpassed 7 million customers and $2.3 billion in deposits. Colombia is in early expansion phases with over 900,000 customers.
Risks and Contingencies: The filing includes standard forward-looking statement disclaimers regarding risks such as market conditions, regulatory changes, and execution of expansion plans. Asset quality risks are noted regarding the expansion down the credit spectrum, though NPL ratios remain in line with expectations and historical seasonality.
Investor Verification Checklist
- Verify the reconciliation of Adjusted Net Income ($442.7M) to GAAP/IFRS Net Income ($378.8M) to understand the impact of share-based compensation and hedge accounting.
- Confirm the specific regulatory Capital Adequacy Ratios (CARs) for Brazil, Mexico, and Colombia to validate the "comfortable margins" claim.
- Review the detailed breakdown of the $2.4 billion excess capital at the holding level and its deployment strategy.
- Monitor the 90+ NPL ratio trend (currently 6.3%) as the company expands credit to lower-tier customers.
- Assess the sustainability of the 30% YoY ARPAC growth as the customer base matures.