Nubank published its Financial Results for the second quarter of 2023 this week. The company posted record net income at the holding level, of US$225 million, an increase of over 50% in just one quarter. 

The consistent improvement in operational leverage is clear across multiple metrics, including ARPAC (monthly average revenue per active customer), which surpassed US$9 – this indicator reaches US$24 in more mature cohorts. In number of customers, Nu is now the fourth-largest financial institution in Brazil according to the Central Bank, serving one in every two adults in the country, and reached 85 million people and SMEs across Latin America in July.

In this issue of our corporate newsletter, you will read more about the results, as well as recent recognition for customer service excellence, the launch of an enhanced experience for credit lines in the app, and more.

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Nubank shared its Q2’23 Financial Results this week. The company continued to expand its customer base, engagement, and monetization, increasing ARPAC above US$9 for the first time (with more mature cohorts surpassing US$24), while keeping the cost to serve virtually unchanged, at US$0.8. 

This combination led to a record revenue of US$1.9 billion, a 5x increase in two years FXN, and a net income of US$225 million, 53% higher than Q1’23, which reinforces Nu’s strong operational leverage and earning-generating power. The company continues to showcase leading indicators in the region for operating efficiency, 35.4%, and solidity (Basel Index in Brazil of 20.2%).

In Brazil, half of the adult population (49%) is a customer, and Nubank has become the fourth largest financial institution in number of customers according to the Central Bank. 

Highlights:

Financial

• Net Income: US$224.9MM
• Global revenues: US$1.9 billion (60% growth YoY FXN)
• Basel Index in Brazil: 20.2%
   
• Interest-earning portfolio: US$6.3 billion
• Total deposits: US$18.0 billion
  • Loan-to-deposit ratio: 35%
• Efficiency ratio: 35.4%

Operational and business

• Customers (total): 83.7MM* (28% growth YoY)
  • 4.6MM added in Q2’23
  • Total customers Brazil: 79.4MM* (3.1MM SMEs)
  • Total customers Mexico: 3.6MM
  • Total customers Colombia: 0.7MM
• Monthly Average Revenue per Active Customer (ARPAC): US$9.3 (18% growth YoY FXN), with mature cohorts above US$24.
• Cost to Serve per Active Customer: US$0.8
• Activity rate: 82.2%
• Primary banking relationship for over 58% of the monthly active customers who have been with Nu for over a year
• Consumer finance asset quality: 15-90 NPL ratio of 4.3% | 90+ NPL ratio of 5.9%

*Nu reached 85MM customers in Latin America and 80MM in Brazil in July.

Customer service excellence. Reclame Aqui, one of Brazil’s largest customer advocacy platforms, awarded Nubank with its highest recognition: the RA1000 seal. Among the five largest financial institutions in the country, Nu is the only one with the seal, which represents high satisfaction rates (above 90%) when a complaint is resolved. Nu is also the 3rd financial institution with the lowest complaint rate, according to the Central Bank of Brazil.

New office in Mexico. Nu opened a new office space in Mexico City for the 1,200 employees who work in a hybrid schedule in the country. In the inaugural event, co-founder Cristina Junqueira and Nu Mexico General Manager Iván Canales presented keynotes and were interviewed by the press. Nu is consolidating its presence in the country through a multi-product platform that already encompasses credit card, debit card, and account – the latter having reached 1MM users in just one month after the official launch.

Disney Magic Run. Nubank Ultravioleta is sponsoring the 7th edition of Disney Magic Run 2023 in São Paulo. The event – a race where participants are invited to dress up as characters – offers exclusive benefits for our Mastercard Black customers, including a 7-day pre-sale from July 31, with a 30% discount.

Enhanced experience for credit lines. Nubank’s responsible credit philosophy is reflected in the way it offers additional lines tailored to fit specific customer needs and purchases. To provide even more transparency and help with financial organization, Nu is launching Meus Limites (My Limits) in Brazil. The new app feature displays all of the customer’s credit lines on a single page. Read more about each additional line and check out the new visualization here.

Insurance expansion. Nubank launched Lar Seguro, its home insurance product in partnership with Chubb. The product leverages Nu’s intuitive and customer-centric platform to extend the options of affordable and personalized protection. The company’s insurance portfolio already includes options for life (for the individual and as a gift for others), mobile, car, and personal loans.

Expiring virtual cards. Customers can now count on a new safety feature for online purchases: virtual cards that expire in 24 hours. This new option makes it simple and fast to create a virtual card that will be available for a limited period, preventing fraud that may occur through the merchant’s websites.

Nubank Shopping partnerships. The company is taking another step in its expansion beyond financial services through a partnership with Hopper, a leading travel app in North America. Starting next year, Nu customers in Brazil will have access to a comprehensive travel portal within Nubank Shopping, with special deals and added flexibility for trips. Additionally, the company’s marketplace has recently been upgraded with a direct, in-app shopping experience, for major retailer Casas Bahia.

Nubank has been able to stay “insulated” and deliver record results even during a downturn in the global banking industry, reports Reuters. Bloomberg Línea focused on our secured lending approach, highlighting the strong opportunities in the payroll loan market.
 

The company’s consistent growth is a statement of its products’ better quality at lower fees, said David in an interview with CNBC. He also spoke to Valor Econômico about the company’s earnings release. The article brings an overview of the results and how they relate to Nubank’s strategy of sustained growth and profitability. “We are amplifying monetization in a machine that’s becoming increasingly more efficient,” he said. 
 

Analyst reports published after the release of financial results focused on how Nubank was able to once again beat consensus. “After an excellent first quarter, the bar was high for the second quarter, but Nubank was able to surpass it again”, wrote BTG analysts.
 

“We are investing more than one decade of Nubank’s experience here,” said Cris Junqueira about Nu Mexico’s operation in an event for the press in the new office. “We are leveraging all previous knowledge and using it to develop new products that adapt to the Mexican market and customers.” 
 

Marcela Torres, General Manager of Nu Colombia, shared with Portafolio the most important insights from her first weeks at Nu and key messages about what's coming for the company in the country, including plans for Cuenta and her vision for growth.
 

In just 10 years, Nubank achieved impressive metrics, from number of customers to capitalization. The Business Breakdowns podcast brought an overview of the business, assessing how Nu successfully challenged the banking industry in Latin America.
 

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