Digital Financial Services Firm Nu Holdings Ltd. Reports Fourth Quarter and Full Year 2022 Financial Results

Nu Holdings Ltd. (NYSE: NU), one of the world’s largest digital financial services platforms, released its Fourth Quarter & Full Year 2022 financial results.

Financial results are “expressed in U.S. dollars and are presented in accordance with International Financial Reporting Standards (IFRS).” The full earnings release has been made available “on the Company’s Investor Relations website.”

David Vélez, founder and CEO, said:

“Nu posted record results this quarter, with growth across all metrics and a meaningful increase in profits. Net Income grew to over $58 million in Q4’22 at holding level, excluding the one-time non-cash effects of the CSA termination announced last November. We reached a total of 75 million customers in Brazil, Mexico and Colombia, increasing engagement, cross-sell and up-sell – all to consolidate Nu’s position as Brazil’s fifth largest financial institution in terms of active customers. In Brazil specifically, we saw net income grow to $138 million in the last quarter, with an annualized ROE of 35% – among the highest in the industry, providing evidence for the profit potential of our business model. Despite the macroeconomic challenges of 2022, Nu was able to beat every key metric: maintained accelerated growth, gained share in products and markets, kept delinquency in check through superior credit underwriting, and improved operating leverage.”

Q4’22 & Full Year’22 Results Snapshot

Below are Q4’22 and FY’22 performance highlights of Nu Holdings Ltd.:

Operating Highlights:

  • Customer growth: Nu added 4.2 million customers in Q4’22 and 20.7 million in 2022, closing the year with a total of 74.6 million customers globally. This represents a 38% growth year-over-year (YoY), which solidifies Nu’s position as Brazil’s fifth largest financial institution and Latin America’s sixth largest, both by number of active customers.
  • Engagement and activity rates: Monthly Average Revenue per Active Customer (ARPAC) increased to $8.2, expanding 37% YoY on a FX neutral basis (FXN)1. This expansion is motivated by the increase of primary banking relationship with customers, the maturation of customers cohorts, and the rollout of new products that foster further cross-sell as well as growing transaction and purchase volumes (up-sell). Activity rate2 hit yet another historical mark at 82%. Nu has become the primary banking relationship for over 58% of the monthly active customers that have been with Nu for over a year.
  • Low-cost operating platform: Consistently stable throughout the quarters, Monthly Average Cost to Serve Per Active Customer at year-end was at $0.9, reflecting Nu’s focus on operating efficiency while delivering a sustained expansion of its ecosystem at scale. The company’s efficiency ratio, which reflects Nu’s operating leverage, has improved consistently throughout the past four consecutive quarters to reach an all-time low at 47.4%, already comparable with incumbent levels in the region and yet with far more potential as the company continues to expand with one of the lowest cost to acquire in the incumbent and fintech industry.

Financial Highlights:

  • Net & Adjusted Income: Nu reported a Net Income of $58 million for Q4’22, delivering its second consecutive quarter of profit, excluding the one-time non-cash effect of the CSA termination announced in November 2022, which amounts to $355.6 million. Regarding Adjusted Net Income3 the company reported $113.8 million in Q4’22. In Brazil specifically, Net Income grew to $138 million in the last quarter with an annualized ROE of 35%, one of the highest in the industry.
  • Revenue: Nu posted $1.45 billion in revenues for Q4’22 and $4.8 billion for FY’22, an all time record high with a 168% annual expansion YoY FXN. This comes as a result of the compounding effect of customer growth and higher levels of customer monetization in Brazil, which alone responded for $4.5 billion of 2022 total revenues.

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