Nu Holdings (NU) – Fun Milestone & a Credit Rating Boost – May 11, 2024
Nu Holdings reports earnings next week. The data should be excellent. Structural tailwinds are firmly in place and cyclical tailwinds are beginning to ramp as Brazil and others cut rates. What will the stock do? If this earnings season has been any indication… who the heck knows. I’ll focus on the data.
This week, Nu crossed 100 million total users compared to 93.9 million as of the end of 2023. It’s worth noting that this includes about 1 month’s contribution from calendar Q2, but this is still encouraging. The 6.1 million net adds, when excluding the implied Q2 impact, remained at consistently strong levels. But more encouragingly, Mexico added 1.8 million consumers to reach 7 million as of this press release. That’s 2x the 900,000 customer adds it saw there last quarter; this marks a roughly 50% acceleration in monthly adds without the Q2 contribution. The high yield savings product, since broadly launching last year, is clearly thriving.
Nu is now the largest consumer banking platform outside of Asia by customer count. Its net promoter score (NPS) is also 3x higher than incumbents. I always take this subjectively calculated metric with a grain of salt, but still worth noting. Nu is powering broader financial inclusion in Latin America… delivering explosive, increasingly profitable growth… and pricing risk effectively across cycles. It’s winning, and I expect that winning to continue in a few days when it reports.
In other news, S&P Global upgraded Nu’s credit to BB globally and brAAA in Brazil. This brings it up to par with the highest quality incumbent banks there and should help grow the already tangible cost of capital lead vs. the pack. The deep dive will be published after this earnings report. It is ready to go, but I wanted to update it with more current financial data.
