Nu posted US$2.1 billion in revenues in Q3’23, resulting in US$303 million net income and US$356 million adjusted net income, with ARPAC reaching US$10. The record results reflect the company’s strong and continued growth in customer base, engagement, and monetization while keeping an efficient, low-cost operating platform.

In this issue of our corporate newsletter, you’ll read more about our financial results, as well as an increase in the annual yield of Cajitas in Mexico (now at 15%), and more.

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Nu posted another quarter of record results, driving net income to US$303 million in Q3’23, and adjusted net income to US$356 million. The company’s customer base surpassed 90 million in October, with ever-increasing principality and engagement rates. This drove global revenues to US$2.1 billion in the period, and ARPAC (Monthly Average Revenue per Active Customer) broke the two-digit mark, at US$10.0. Cost to serve remained below the dollar level, and annualized ROE reached 21%, with annualized adjusted ROE at 25%, showcasing our operational leverage. 

“It’s important to note that we are achieving these strong levels of profitability while keeping asset quality in line with expectations and continuing to invest in product portfolio and geo expansion”, highlights David Vélez, founder and CEO. In Brazil, the company is growing its portfolio and market share, with special attention to secured credit, where Nu is taking its first steps. The most recent launch in this arena was the payroll product for retirees and pensioners who are beneficiaries of the INSS (National Institute of Social Security). Additionally, Nu has been continuously diversifying its transaction financing product portfolio, with particular emphasis on Pix financing. Nubank is the leader among Pix service providers in Brazil.

Internationally, Nu continues to register accelerated growth with new additions to its portfolio. Nu Mexico has recently applied for a banking license aiming to broaden its portfolio with investments and payroll portability, among other products. Cuenta Nu has already reached 2.4 million Mexican customers, and the growth trajectory in Colombia is expected to accelerate with the upcoming launch of the local savings product in the cou​​ntry.

Earlier in October, Moody’s assigned Nu Financeira the prestigious investment-grade rating of AAA.br and Ba2 on a global scale, based on the already strong previous quarter’s results (Q2’23). In another report, Moody’s also shared a positive outtake on Nu Mexico’s request for a banking license to further expand its product portfolio in the country, highlighting good opportunities in credit.

Q3’23 Results Highlights:

Financial

• Global revenues: US$2.1 billion (53% growth YoY FXN)
• Net income: US$303 million
• Annualized ROE: 21%
• Adjusted net income: US$355.6 million
• Annualized adjusted ROE: 25%
• Interest-earning portfolio: US$6.7 billion
• Total deposits: US$19.1 billion
  • Loan-to-deposit ratio: 35%

Operational and business

• Customers (total): 89.1 million* 
  • 5.4 million added in Q2’23
• ARPAC: US$10.0, with mature cohorts above US$26
• Cost to Serve per Active Customer: US$0.9
• Activity rate: 82.8%
• Primary banking relationship for over 59% of the monthly active customers who have been with Nu for over a year
• Consumer finance asset quality (Brazil): 15-90 NPL ratio of 4.2% | 90+ NPL ratio of 6.1%
• Efficiency ratio: 35,0%

*Nu reached 90 million customers in October.

Cuenta Nu fueling international growth. In Mexico, the customer base surged to 4.3 million, propelled by Cuenta. Nu has just raised the annual yield of the local Cajitas from 9% to 15%, making this savings offering one of the most competitive in the market, attracting even more customers and deposits. Additionally, customers are now able to create multiple Cajitas, further improving financial organization through the app.

Awards and recognition. Nu’s continuous growth, impact, and reputation were recognized in awards throughout the past month. 

• Digital Bank of the Year by LatinFinance. The publication highlights Nu’s continuous growth in the customer base and record profits in H1’23 largely thanks to a strong credit portfolio. 
• Folha de S. Paulo Top of Mind. #1 most-remembered credit card brand by Brazilians, tying in 1st place with Visa.
• Most admired company in the Product field in Brazil. #1 according to a study conducted by PM3 in partnership with Bain & Company.
• Caliber Ranking Trust and Admiration, by Meio & Mensagem. Nu claimed #7 overall, and #1 in the financial sector.
• Most Admired Brands in Brazil, by BandNews radio. #1 in the Finance and Fintech category.
• Respect award, by Consumidor Moderno magazine. Nu was once again considered the Neobank that respects customers the most.

Ultravioleta. Nu is evolving its value proposition for high-income customers, one of the company’s top priorities. Ultravioleta, Nu’s black credit card, now goes beyond the regular benefits of the category and offers exclusive solutions for this segment. UV customers count on priority customer service, added protection and higher reimbursement for unauthorized transactions, free membership in Rappi Prime (a delivery service app in Brazil), and more.

Security. A new feature in the app will automatically block incoming calls from potentially fraudulent phone numbers. Nubank customers will count on this extra layer of protection against scammers that mask the caller digits, substituting them for an official Nu contact, and pretending to be from the company’s customer service team.

Loyalty token. Nucoin, Nubank’s free-of-charge native token that rewards users’ engagement through a loyalty program, now features an informative dashboard. The block explorer, as this type of feature is known, adds transparency to key indicators, such as the number of transactions, price, and liquidity, among others. The token had 10.5 million active customers at the end of Q3’23.

• Nu’s continued growth in customer base and its monetization was one of the main drivers for the company's record financial results this quarter. Nu already surpassed the ROE of incumbent banks in Brazil while maintaining solid capitalization. All of that while investing in portfolio growth and international expansion, which are possible due to our efficient business model, as explained by Neofeed.
   
• In a report from October, Morgan Stanley estimated that Nu could reach a US$ 100 billion valuation by 2026. The analysts highlight the large potential of cross-selling products in Brazil and the ability to efficiently replicate the business model in Mexico and Colombia.
   
• Nu Mexico's request for a banking license is a strategic move to expand our offerings in the country and attract and delight even more customers, growing the company’s second-largest market, reports Reuters.
   
• Nu held an event for local journalists in its Mexico office in October, where management team members discussed the local market and future opportunities for the company. In an interview with El Universal, David highlighted the large potential due to high technology adoption and low access to banking services in the country.
   
• David talked about his vision of eliminating bureaucracy and coming up with innovative solutions for the financial sector in Latin America in a special feature for Colombia’s Caracol TV, also featuring Cris' participation. Nu’s leadership in revolutionizing the financial services industry in LatAm was also the topic of The Room Podcast with Cris.
   
• “If we’re able to unlock financial mobility for people, this has the potential of raising the economic potential of the region”, said Jag Duggal, Nubank’s Chief Product Officer, in an in-depth interview with Forbes Colombia. He analyzes the market opportunities of the region and explains how Nu scales in different countries.

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