Nu Holdings announces strong Q2 results, with revenue and net profit exceeding estimates

What Happened

Nu Holdings (NU) announced significant financial performance for its second quarter, with both revenue and net profit exceeding market estimations. The neobank reported its first quarterly net profit surpassing $1 billion since its inception in 2013. The company's revenue rose by 39% year-over-year to $5.9 billion, while net profit increased by 49% to $1.1 billion for the second quarter. Earnings per share for the quarter stood at $0.22, higher than the analyst consensus of $0.20.

Key financial indicators also showed strong improvement, with Nu Holdings' adjusted net interest margin (NIM) reaching a record 12.4%, up from 9.9% in the previous year. The company's management indicated that this margin profile is sustainable. Additionally, the cost of credit saw a sequential decrease, and customer growth remained strong, adding 4 million new customers to reach a total of 139 million. The board of directors also authorized a $1 billion share buyback program.

Technical analysis also supported a positive outlook for NU shares, with the stock crossing its 20-day moving average, suggesting a resumption of bullish momentum.

Background

Nu Holdings was founded in 2013 and operates as a digital bank. The company's performance in the second quarter marks a significant milestone, achieving over $1 billion in net profit for the first time.

Key Facts

• Nu Holdings reported Q2 revenue of $5.9 billion, a 39% year-over-year increase.
• Q2 net profit reached $1.1 billion, a 49% year-over-year increase.
• This is the first quarter Nu Holdings has reported a net profit exceeding $1 billion.
• Earnings per share were $0.22, surpassing analyst expectations of $0.20.
• Adjusted net interest margin (NIM) hit a record 12.4%.
• Customer base grew by 4 million to 139 million.
• The board authorized a $1 billion share buyback.
• The company's stock crossed its 20-day moving average.