Nu Holdings, widely recognized as one of the most rapidly advancing fintech firms in Latin America, has witnessed a substantial increase in its stock value, appreciating by over 50% in the past year. This surge has been largely driven by its impressive expansion in customer acquisition, revenue generation, and profitability gains.
As the company approaches the release of its fourth-quarter earnings report scheduled for February, a detailed review of Nu's operational framework, growth trends, and valuation metrics can provide valuable insights for potential investors.
Company Growth and Market Presence
NuBank, the principal digital banking platform of Nu Holdings, stands as the largest exclusively digital direct bank across Latin America, with Brazil, Mexico, and Colombia representing its primary markets. The firm's business model, centered on delivering straightforward online banking services and fee-free credit cards, has facilitated accelerated market penetration relative to conventional physical banks.
To sustain its accelerated development, Nu has diversified its product suite, including lending solutions, e-commerce capabilities, and cryptocurrency trading functionalities. Between the end of 2021 and the third quarter of 2025, the customer base expanded impressively from 53.9 million to 127.0 million individuals. Concurrently, the monthly active customer ratio improved from 76% to 83%, indicating heightened user engagement.
Furthermore, the average revenue generated per active customer (ARPAC) witnessed a near threefold increase, ascending from $4.50 to $13.40. Notably, the average monthly cost to serve each active customer remained stable at approximately $0.90 during this interval, underscoring the company’s ability to escalate revenue without sacrificing operational efficiency or profit margins.
From 2021 onward, Nu’s revenue experienced a compounded annual growth rate (CAGR) of 89%. The company reached GAAP profitability in 2023 and reported a near doubling of earnings per share (EPS) in 2024. These robust financial achievements occurred despite enduring macroeconomic challenges such as political upheavals and hyperinflation in its core markets.
Key Financial and Operational Developments in 2024 and 2025
While Nu Holdings continues swift growth, recent data reflect a moderation in year-over-year customer growth, which fell from 23% in the third quarter of 2024 to 16% by the third quarter of 2025. The monthly activity rate displayed minor sequential fluctuations, generally declining slightly before reaching a modest improvement of 83.4% in Q3 2025.
| Metric | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|---|---|---|---|---|---|
| Customer Growth (YOY) | 23% | 22% | 19% | 17% | 16% |
| Monthly Activity Rate | 84% | 83.1% | 83.2% | 83.2% | 83.4% |
| ARPAC | $11.00 | $10.70 | $11.20 | $12.20 | $13.40 |
| Avg. Monthly Cost per Active Customer | $0.70 | $0.80 | $0.70 | $0.80 | $0.90 |
| Revenue Growth (YOY)* | 56% | 58% | 40% | 40% | 42% |
Note: Revenue growth is measured on a currency-neutral basis.
These dynamics arose alongside some external challenges. Currency fluctuations and investments in market expansion led to higher average costs of servicing active users. Nevertheless, as customers increasingly engaged with a wider array of financial services, ARPAC grew materially, contributing to revenue growth stabilization and eventual acceleration by the third quarter of 2025.
Examining margin performance, the company encountered pressures as it expanded into Mexico and Colombia. These markets, while offering higher growth potential, are more capital intensive and necessitate increased funding costs and credit loss provisions relative to its more mature Brazilian market. This expansion into secured lending and payroll-backed loans, both capital demanding segments, led to declines in gross margin (from 46% to 43.5%) and net interest margin (from 18.4% to 17.3%) over the observed period.
| Metric | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|---|---|---|---|---|---|
| Gross Margin | 46% | 45.6% | 40.6% | 42.2% | 43.5% |
| Net Interest Margin | 18.4% | 17.7% | 17.5% | 17.7% | 17.3% |
| Net Income Growth (YOY)* | 63% | 85% | 74% | 42% | 41% |
Note: Net income growth is measured on a currency-neutral basis.
Consequently, despite solid top-line revenue momentum, net income growth slowed during the same timeframe.
Forward-Looking Projections and Strategic Initiatives
Analysts currently forecast that Nu’s revenue and EPS will grow by 36% and 46% respectively for the full year. Additionally, from 2025 through 2027, expectations indicate compound annual growth rates of 30% for revenue and 37% for EPS. This expansion hinges on continued customer acquisition and broader financial product cross-selling.
Key strategic developments include the acquisition of a banking license in Mexico and a pending full banking application in Brazil—moves poised to secure regulatory compliance under updated fintech regulations. These licenses are expected to reinforce the firm's market credibility, enhance service offerings, and increase market penetration in these crucial territories.
Moreover, Nu’s pursuit of a U.S. banking charter may signal ambitions for expansion into the American market.
The company’s growing moat, supported by these licenses and partnerships, could help it defend against competition from diversified entities such as MercadoLibre, which operates the Mercado Pago payments platform, and traditional banking institutions. For example, Amazon’s integration of NuBank’s NuPay on its Brazilian e-commerce platform may increase competitive barriers by fortifying Nu’s payment processing capabilities.
Investment Considerations Ahead of February Earnings
Currently, Nu Holdings shares trade around $17, implying a price-to-earnings ratio near 20 based on projected earnings for next year. This valuation may be subdued by prevailing economic uncertainties affecting the Latin American region. Should these macroeconomic challenges ease, investor interest in the stock could intensify substantially.
For investors who anticipate Nu will meet or surpass analysts’ expectations regarding customer growth and revenue expansion, purchasing shares before the forthcoming earnings announcement could represent an attractive opportunity to capitalize on the company’s strong operational momentum.