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    NU
    Earnings call· Dec 2025(Q4 FY25)

    Nu Holdings Q4 FY25 earnings call NU

    Feb 25, 2026 Source

    Executive summary

    Nu Holdings Q4 FY25 — Record Profitability and Strategic Investments for Global Expansion

    Nu Holdings delivered a strong Q4 FY25, marked by record profitability and significant customer growth, driven by deeper monetization and effective credit underwriting. The company is strategically investing in AI, global expansion, and its core markets, particularly Brazil and Mexico, positioning for a transition to a global digital banking platform in 2026. While these investments are expected to create near-term pressure on the efficiency ratio, management anticipates continued improvement over the medium term.

    Highlights

    5

    • Closed the year with 131 million customers, adding 17 million net new customers and maintaining an 83% activity rate.

    • ARPAC reached $15 per active customer, up approximately 9% quarter-over-quarter and 27% year-over-year.

    • Revenues in Q4 FY25 reached $4.9 billion, up 45% year-over-year, with gross profit nearly $2 billion, up 38% year-over-year.

    • Achieved a record 33% return on equity, with net income reaching $895 million, up 50% year-over-year.

    • Efficiency ratio declined to 19.9% under the new methodology, falling below 20% for the first time in company history.

    Concerns

    5

    • New FGTS regulations reduced new loan originations by more than 50% since November 1, 2025.

    • Recorded a one-off extraordinary contribution of approximately $25 million to Prosofipo in Mexico, reflected in interest expenses.

    • Recognized approximately $22 million of transition expenses provisions related to the return-to-office decision.

    • 2026 is an "investment year" with anticipated "upward pressure on the efficiency ratio" in the near term (next 4-6 quarters) due to investments in RTO, AI, and globalization.

    • The CSLL rate increase in Brazil will be a medium-term headwind for the effective tax rate, despite a one-time positive DTA remeasurement impact in Q4 FY25.

    Guidance & targets

    8
    CategoryTargetConfidence
    Company Transition
    Transitioning from a Latin American leader to a global digital banking platform
    medium materiality
    Medium
    Core Market Focus
    Brazil and Mexico will continue to absorb the majority of our capital and management attention
    medium materiality
    High
    Mexico Banking License
    Finalizing our banking license process is critical as it unlocks the next phase of credit growth and customer depth
    medium materiality
    High
    U.S. International Expansion
    Lay the operational groundwork for our U.S. opportunity
    medium materiality
    Medium
    AI Expansion (nuFormer)
    Expand nuFormer to lending in Brazil and credit cards in Mexico
    medium materiality
    High
    Efficiency Ratio
    Efficiency to continue improving over the medium term
    medium materiality
    Medium
    Public Payroll Loans Growth
    Even faster growth in 2026
    medium materiality
    High
    Private Payroll Loans
    Matter of when, not a matter of if
    low materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Brazil
    Scale and engagement continue to reinforce each other, making Nu the largest private financial institution by number of customers.
    Customers: 113 millionActivity rate: 86%Largest private financial institution by customer count
    		————
    Mexico
    Advanced banking license process, reinforcing Nu's role in expanding access to credit for a significant portion of its customer base.
    Customers: 14 millionFirst credit card through Nu: ~50% of customers
    		————
    Colombia
    The subscription-based credit card significantly increased approval rates while maintaining healthy unit economics.
    Customers: >4 million
    		————
    Digital Ecosystem
    Includes initiatives such as NuCel, NuPay, and NuTravel, showing compelling growth and satisfaction indicators despite early adoption relative to the base.
    Unique active customers: >12 million
    		————

    Operational metrics

    19
    ARPAC
    $15+9% QoQ, +27% YoY
    Q4 FY25

    Driven by deeper monetization across the platform.

    Unsecured lending balance
    $8 billion
    Q4 FY25

    With record-high originations of $4 billion in the fourth quarter.

    Secured lending growth
    3.8%QoQ
    Q4 FY25

    Recent changes to FGTS regulations reduced new originations by more than half, but impact on outstanding portfolio remains limited.

    Cost of deposits
    87%
    Q4 FY25

    Reflecting mixed dynamics, disciplined pricing, and seasonality.

    Prosofipo extraordinary contribution
    $25 million
    Q4 FY25

    One-time nonrecurring regulatory levy in Mexico, reflected in interest expenses.

    DTA remeasurement impact
    $58 million
    Q4 FY25

    Positive impact on net income related to the remeasurement of deferred tax assets following the CSLL rate increase in Brazil.

    Return-to-office transition expenses
    $22 million
    Q4 FY25

    Temporary cost provisions recognized in Q4 FY25, not indicative of ongoing run rate.

    Total capital (holdings level)
    $8.9 billion
    Q4 FY25

    Comprising regulatory requirements, excess capital in operating entities, and unrestricted cash at Nu Holdings.

    Regulatory capital coverage
    $3.6 billion
    Q4 FY25

    Covers regulatory requirements across the three geographies.

    Excess capital (operating entities)
    $2.2 billion
    Q4 FY25

    Represents excess capital in the company's operating entities.

    Unrestricted cash (Nu Holdings)
    $3 billion
    Q4 FY25

    Available to fund continued growth in core markets and global ambitions.

    Available funding
    $38.8 billion
    Q4 FY25

    Approximately twice the net credit portfolio, providing significant headroom.

    Net credit portfolio
    $19 billion
    Q4 FY25

    Gross credit portfolio net of credit card accounts payable.

    Pix with AI monthly active users
    >10 million
    Q4 FY25

    AI is already improving underwriting, conversion, and service quality.

    High-income segment growth
    ~40%YoY
    FY25

    Segment defined as customers making above BRL 12,000 per month.

    Super core segment growth
    ~100%
    FY25

    Segment defined as customers earning from BRL 5,000 to BRL 12,000 per month.

    FGTS loan origination drop
    50-60%
    Since Nov 1, 2025

    Due to new regulations, more than offset by growth in public consignado.

    Unused credit limits
    $29 billion+60% ($11 billion increase)
    Q4 FY25

    Reflects deployment of new technologies and approach to credit underwriting.

    Effective tax rate
    lower
    Q4 FY25

    Impacted by nonrecurring and recurring factors.

    Industry KPIs

    10
    MetricValueDetails
    Loans$32.7 billionUSD
    Deposits$41.9 billionUSD
    Rotce ROE33%%
    Fee income linesperformed wellN/A
    Allowance reservesstrongN/A
    Net interest incomeincreased 13%%
    Net interest margin10.5%%
    Net charge offs npls4.1% (15-90 NPLs), 6.6% (90+ NPLs)%
    Provision for credit lossesincreasedN/A
    Efficiency ratio operating leverage19.9%%

    Product announcements

    12
    ProductTypeDetails
    Pix with AI-enabled featuresupdate
    Instant paymentslaunch
    Mexico cash in and cash out networkexpansion
    New payroll loan modalitieslaunch
    Subscription-based credit cardlaunch
    Fresh Start programlaunch
    Under 18 credit cardlaunch
    Charging Assistantlaunch
    nuFormermilestone
    U.S. national bank chartermilestone
    Frequent flyer loungelaunch
    Investment platformexpansion

    Risks & headwinds

    8
    FGTS regulations impact on loan originationsSince November 1, 2025

    Reduced new originations by more than 50%

    Mitigation: Ongoing dialogue with the government to influence the agenda for 2026 and 2027.

    Extraordinary regulatory levy (Prosofipo)Q4 FY25 (one-time)

    $25 million

    Mitigation: Identified as a nonrecurring item, not reflective of credit quality or financial health.

    Return-to-office transition expensesQ4 FY25 (one-time provision)

    $22 million

    Mitigation: Identified as temporary costs, not indicative of the ongoing run rate; expected to bring long-term benefits.

    Upward pressure on efficiency ratioNear term (next 4-6 quarters)

    80 to 100 basis points (from RTO alone)

    Mitigation: Deliberate investments in RTO, AI, and globalization for long-term capacity building; structural drivers of operating leverage remain unchanged, expecting medium-term improvement.

    Effective tax rate headwindStarting 2026 and over the next 2 years

    Progressive increase in corporate income tax from 40% to 45%

    Mitigation: Benefiting from technology investment tax breaks, which partially offset the impact.

    Seasonal uptick in NPLsQ1 2026

    Expected uptick in 15-90 NPLs

    Mitigation: This pattern is expected and aligned with historical trends; no signs of deterioration in credit quality.

    Private payroll loan market collateral effectivenessCurrent

    First losses of low double digits

    Mitigation: Awaiting mature improvements in credit risk and collateral mechanisms before leaning in more heavily, driven by conservatism with credit risk.

    U.S. market competitivenessOngoing

    Very competitive and sophisticated market in certain areas

    Mitigation: Pursuing a very targeted and disciplined strategy, focusing on specific niches and subsegments.

    Q&A highlights

    8

    Is Nu at risk from AI or positioned to win, given recent market concerns about AI's impact on financial services?

    David Velez stated that AI presents both challenges and significant opportunities. He believes businesses that merely act as brokers in financial services are most at risk. Nu is well-positioned due to the sustainable nature of credit revenue, which is capital-intensive and regulatory. AI enhances revenue through cross-sell and new products, aiming to increase ARPAC from $15 towards $40, and reduces costs across functions like customer service and compliance. Nu's lower cost structure compared to incumbent banks positions it as a winner in this technology shift.

    “Net-net, we think it's more opportunity than challenge for us.”

    asked by Eduardo Rosman · answered by David Velez-Osomo

    2 min read6 chapters

    Detailed Narrative

    01

    Managerial P&L Framework Introduction

    Nu Holdings introduced a new managerial P&L framework to provide a clearer view of value creation and internal performance, derived entirely from IFRS results. This framework reorganizes IFRS line items to enhance comparability and better reflect economic contribution, preserving net income, cash flow, equity, and regulatory capital. The company has published a detailed reconciliation report and updated historical data back to Q1 2021 under this new methodology.

    02

    Credit Underwriting and AI Leverage

    The company successfully deployed new technologies and AI-driven approaches to credit underwriting, particularly in Brazil, leading to a significant increase in unused credit limits. Unused credit limits grew by $11 billion, a 60% increase, enabling a 50 basis point gain in Brazil's credit card purchase volume market share in Q4 FY25, the largest in over 10 quarters. This predictive AI technology is also being exported to Mexico and Colombia for credit and fraud management.

    03

    Secured Lending Portfolio Strategy

    Nu's secured loan portfolio is segmented into FGTS, public payroll, and private payroll loans. FGTS originations dropped by 50-60% due to new regulations, though the company is engaging with the government for future agenda. Public payroll loans (SIAPE and INSS) are viewed bullishly, with expectations for faster growth in 2026 driven by increased efficiency, portability, and a favorable interest rate cycle. Private payroll loans are structurally optimistic, but the company is awaiting improvements in collateral effectiveness before leaning in more heavily.

    04

    High-Income and Super Core Segment Growth

    The company is actively expanding its presence in the affluent market, targeting customers earning above BRL 12,000 per month, where 40% are already Nubank customers. Efforts include improving credit limits, enhancing the Ultravioleta product value proposition with features like NuTravel integration and a frequent flyer lounge, and building a comprehensive investment platform. The 'super core' segment (BRL 5,000 to BRL 12,000 monthly income) is experiencing the fastest growth, approximately 100% in 2025.

    05

    Global Expansion and AI Investments

    Nu Holdings is positioning 2026 as an inflection year for global expansion, laying operational groundwork for its U.S. opportunity following conditional OCC approval for a national bank charter. Investments in the U.S. are currently focused on team building and product development. The company is also accelerating AI adoption, expanding its nuFormer foundation model to lending in Brazil and credit cards in Mexico, aiming for an AI-powered personal banker for every customer.

    06

    Strong Capital and Liquidity Position

    The company maintains robust capital buffers and liquidity, with total capital at the holdings level of $8.9 billion, including $3 billion in unrestricted cash and equivalents. Available funding stands at $38.8 billion, approximately twice its net credit portfolio of $19 billion. This strong financial position provides significant headroom to scale credit responsibly, seize balance sheet optimization opportunities, and fund both core market growth and global ambitions.

    AI-generated summary of the company’s earnings call. Not investment advice.