NU Q2 Earnings Call Highlights

Key Points

• Record profitability: Nu reported $1.1 billion in Q2 2026 net income, up 49% year over year, with return on equity reaching a record 33%. Net revenue exceeded $4 billion for the first time.
• Strong customer and credit growth: The customer base reached 139 million, while the credit portfolio grew 37% year over year to $39.4 billion. Net interest margin expanded to 22.9%, although 90-plus-day delinquencies increased to 6.9%.
• Expansion and technology investments: Mexico’s newly approved banking license expands Nu’s potential product offerings, while the company continues targeting higher-income and small-business customers in Brazil. Its AI platform now handles more than 60% of Brazilian customer-support conversations.

NU NYSE: NU reported second-quarter 2026 net income of $1.1 billion, its first quarter above the $1 billion mark, as customer growth, deeper engagement and expanding credit income supported profitability. Net income rose 49% year over year and 17% sequentially, while return on equity reached a record 33%.

Founder, Chief Executive Officer and Chairman David Vélez said the company’s customer base reached 139 million, including nearly 118 million in Brazil and more than 5 million in Colombia. Mexico reached 16 million customers at the end of July. The company’s activity rate rose sequentially to 83.5%, while Brazil’s activity rate surpassed 86% for the first time.

Average revenue per active customer, or ARPAC, reached $17, and gross revenue totaled nearly $5.9 billion. Nu maintained an efficiency ratio near 20% while continuing to invest in Brazil, Mexico, Colombia and international expansion, Vélez said.

Credit Growth and Margins

Chief Financial Officer Rob Livingston said Nu’s consolidated credit portfolio reached $39.4 billion, up 37% year over year and 5% from the prior quarter. Credit card balances rose 35% to $26 billion, unsecured lending increased 45% to $10.3 billion, and secured lending grew 30% to $3.1 billion.

Deposits ended the quarter at $45.3 billion, up 18% year over year and 6% sequentially. Brazil accounted for $36.4 billion of deposits, followed by Mexico with $5.7 billion and Colombia with $3.3 billion. Mexico deposits declined modestly as part of an ongoing deposit-optimization strategy, Livingston said, while the company’s loan-to-deposit ratio remained 35%.

Net interest income reached $3.7 billion, up 9%, and net interest margin expanded 180 basis points to 22.9%. Risk-adjusted net interest margin climbed to a record 12.4%, from 9.5% in the prior quarter, supported by lending growth, a greater mix of unsecured lending and lower cost of credit.

Cost of credit fell sequentially to $1.7 billion. Livingston said Brazil’s Desenrola debt-renegotiation program accounted for about 5% of the cost-of-credit impact and helped nearly 1.8 million customers renegotiate overdue balances. In a question-and-answer session, he said Desenrola contributed to the improvement in risk-adjusted margin but represented a minority of the quarterly gain.

Nu said 15- to 90-day delinquencies improved 16 basis points sequentially to 4.8%, while 90-plus-day delinquencies increased 35 basis points to 6.9%, reflecting the seasonal migration of earlier delinquencies. The company said its allowance for expected credit losses increased to $6.6 billion from $6.1 billion, primarily due to portfolio growth and intentional risk expansion. Total coverage over 90-plus-day nonperforming loans stood at 244%.

Livingston said Nu did not see evidence of broad-based consumer-credit weakening in its portfolio, though the company remains vigilant. Vélez said Nu’s underwriting assumes conditions will deteriorate and that its relatively short-duration products and primary banking relationships provide flexibility to respond to changing conditions.

Revenue, Expenses and Outlook

Gross profit rose 43% year over year and 25% sequentially to $2.4 billion. Nu said credit represented 41% of gross profit during the quarter, with fees accounting for 25% and float income making up 34%.

Net revenue surpassed $4 billion for the first time, reaching $4.1 billion, up 8% sequentially. Operating expenses totaled $806 million, rising 20% from the first quarter as real-estate and marketing spending shifted into the second quarter and the company continued to invest internationally.

The efficiency ratio was 19.5%, compared with 17.6% in the first quarter. Livingston said the first-quarter figure benefited from temporary timing effects and reiterated that Nu expects its full-year efficiency ratio to average about 20%.

Addressing margin expectations, Livingston said the company expects risk-adjusted net interest margin to remain “in the same region” as current levels for the foreseeable future, though he emphasized that 12.4% should not be viewed as a floor. He attributed the quarter’s outperformance versus prior expectations partly to Desenrola, solid credit performance and stronger-than-expected balances generating yield during the quarter.

Brazil Segmentation and Mexico Banking License

Vélez identified Brazil as Nu’s largest growth opportunity, particularly through expanding its share of customers’ financial activity. The company launched Croma in July, a subscription-based offering for what it calls “super core” customers between its mass-market and high-income segments. Croma includes enhanced credit offerings, banking and lifestyle benefits, NuCel and a ChatGPT Gold subscription.

Nu also continues to target higher-income consumers through Ultravioleta, which had nearly 1 million customers. Ultravioleta purchase volumes and assets under custody increased 41% and 37%, respectively, year over year in the second quarter.

For small businesses, Nu said it serves 6.8 million customers in Brazil, making it the country’s largest financial institution by number of business customers. Vélez said the company still reaches only about one-third of that market.

In Mexico, regulators approved Nu’s banking license earlier in the month. Vélez said the license enables capabilities including payroll direct deposits, higher deposit insurance, broader credit products and expansion into additional customer segments. Mexico ARPAC was $12.3 at a comparable stage of development, compared with $5.6 in Brazil, according to Vélez.

Nu said it broke even in Mexico after six years, compared with eight years in Brazil. Vélez said the company now reaches 16.5% of Mexico’s adult population and sees regulatory changes designed to simplify payment experiences as a potential driver of further digital-payment adoption.

AI, Workforce and U.S. Plans

Vélez said Nu’s nuFormer artificial-intelligence platform is being deployed across underwriting, customer support, growth and optimization decisions. AI agents now handle more than 60% of customer-support conversations in Brazil, with customer ratings at or above human parity, he said.

The company said its newest nuFormer generation increased context length, training speed and inference speed while lowering production costs. Vélez said the platform can achieve the same predictive performance with 20 million fine-tuning data rows that previously required more than 400 million.

Nu ended the quarter with about 10,400 employees, slightly below the prior level following attrition tied to its return-to-office policy, Vélez said. He does not expect headcount to rise or decline significantly, but said AI could make employees two to five times more productive over the coming years.

On a future U.S. entry, Livingston said Nu expects the underlying platform and credit-risk expertise to transfer quickly, but building U.S.-specific data and confidence in lending models could take roughly 12 to 30 months. He said the company initially intends to test, learn and develop its data set rather than pursue rapid expansion.

About NU (NYSE:NU)

Nu Holdings Ltd NYSE: NU, commonly known by its consumer brand Nubank, is a Latin American financial technology company that provides digital banking and financial services through a mobile-first platform. The company’s core offerings include no-fee digital checking accounts, credit cards, personal loans, payments and transfers, and a range of savings and investment products. Nubank emphasizes a streamlined customer experience delivered via its smartphone app, combined with data-driven underwriting and automated customer service tools.

Founded in 2013 by David Vélez, Cristina Junqueira and Edward Wible, Nu grew rapidly by targeting underbanked and digitally savvy consumers in Latin America with low-fee, transparent products.

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