Nu Holdings Q2 FY26 earnings call NU

Nu Holdings achieved its first quarter with over $1 billion in net income, reaching $1.1 billion, a 49% year-over-year increase. This milestone was driven by a growing customer base, which expanded to 139 million globally, including 118 million in Brazil, 16 million in Mexico, and 5 million in Colombia. Customer engagement deepened, with the activity rate expanding sequentially to 83.5%, and Brazil's activity rate surpassing 86% for the first time. RPAC (Revenue Per Active Customer) reached $17, contributing to $5.9 billion in gross revenue.

Mexican regulators approved Nu's banking license, completing its transformation into a full-scale digital bank in the country. This approval unlocks capabilities such as payroll direct deposit and increased deposit insurance, strengthening primary banking relationships and enabling broader credit offerings. Nu already serves 16 million customers in Mexico, with ARPAC at $12.3, significantly higher than Brazil's ARPAC at a similar stage, indicating faster monetization and a compelling growth opportunity.

To further deepen relationships and capture more profitability within its existing customer base, Nu launched Chroma in July, a subscription-based tier for 'Supercore' customers. This segment, positioned between mass market and high-income, represents a large profit pool where Nu already has significant penetration. Chroma offers dedicated experiences, enhanced credit, and lifestyle benefits, aiming to increase the share of wallet among the 3 out of 5 Brazilians in this bracket who are already Nu customers. Additionally, Nu serves 6.8 million small businesses in Brazil, representing a significant blue ocean opportunity for monetization.

Nu's AI platform, nuFormer, is a central component of its strategy, powering business and customer decisions across the organization. The platform has significantly improved credit underwriting models, quadrupling context length, training speed, and inference speed while reducing production costs. It has also been extended to customer support, with AI agents handling over 60% of conversations in Brazil at human parity ratings. This AI-driven approach is expected to provide a meaningful differentiation and enhance productivity across all business lines.

The company's credit portfolio grew 37% year-over-year to $39.4 billion, with NPL metrics following expected seasonal patterns. While 15- to 90-day delinquencies improved by 16 basis points to 4.8%, 90-plus delinquencies increased by 35 basis points to 6.9% due to seasonal migration. Management emphasized that credit dynamics were driven by growth, seasonality, and disciplined risk expansion, not a deterioration in underlying portfolio quality. Customer primacy, with 60% of mass market customers using Nu as their primary bank, provides a structural edge in credit underwriting and better outcomes.

Rob Livingston officially succeeded Guilherme Lago as Chief Financial Officer, with Lago transitioning to a special adviser role. Livingston expressed confidence in Nu's business model and its disciplined execution. The company maintained a strong efficiency ratio of 19.5% for the quarter, reflecting its ability to invest in international expansion and long-term opportunities while sustaining operating leverage. Operating expenses totaled $806 million, up 20% quarter-over-quarter, partly due to shifts in real estate and marketing expenses.