Nu (NU) Q2 2024 earnings summary

Executive summary

• Customer base reached 105 million by Q2 2024, up 60% from two years ago, with strong growth in Brazil, Mexico, and Colombia, representing 56% of Brazil's adult population and an 83% monthly activity rate.

• Revenue hit a record $2.8 billion, up 65% year-over-year (FXN), and gross profit rose 88% to $1.4 billion, with a gross margin of up to 48%.

• Net income was $487.3 million, up 134% year-over-year, with adjusted net income at $563 million, up 131%.

• Nu is now the primary banking account for 60% of monthly active customers in Brazil, with high engagement and 4.1 products per active customer.

• Added 5.2 million new customers in Q2 2024 and 20.8 million year-over-year.

Financial highlights

• Net interest income grew 77% year-over-year to $1.72 billion, with net interest margin up to 19.8%.

• Deposits increased 64% year-over-year to $25.2 billion, with Mexico surpassing $3.3 billion in deposits.

• Consumer finance portfolio grew 49% year-over-year FXN to $18.9 billion; interest-earning portfolio up 81% to $9.8 billion.

• Adjusted annualized ROE reached 33%, with annualized ROE at 28%.

• Efficiency ratio improved to 32%, over 300 basis points better year-over-year.

Outlook and guidance

• Management expects continued customer and revenue growth, with further balance sheet optimization and profitability in new markets.

• Focus remains on cross-selling, up-selling, and expanding product offerings to drive ARPAC and engagement.

• Anticipates further growth in secured lending originations and expects interest-earning installment balances in credit cards to stabilize.

• Sees continued opportunity to expand loan-to-deposit ratio, supporting future net interest margin growth.

• Remains focused on long-term value creation, even if it requires short-term investments.