NYSE: NU · Company dashboard · Priced $11.82 on 2026-11-02
Nu Holdings Ltd.
Three credit cycles, one dollar income statement
The argument
Nu earns in reais, pesos and Colombian pesos and reports in dollars, so the equity is a levered bet on three consumer credit cycles at once. The franchise side keeps compounding: 139 million customers at June 2026, $1.93bn of earnings already banked in the first half, and a base case that compounds earnings to $1.98 a share by FY2029. The credit bill is the offset. Losses took 30.5% of revenue in H1 2026 against 26.7% in FY2025 and Brazilian household delinquency sits at 5.99%, though the Selic has now been cut five times to 13.75%. The whole base case is one line: cost of risk on the book falling from 20% this year to 16.5% by FY2029.
Traded price
NYSE: NU · priced 2026-11-02
$11.82
Base IRR to 2029
exit at 15x FY2029E EPS of $1.98
34%
Return on equity
FY2026E; 30% in FY2025
30%
Credit losses / revenueRisk
H1 2026, from 26.7% in FY2025
30.5%
Brazil delinquencyRisk
+2.24pp over two years
5.99%
01
The environment
Two charts that between them explain most of what happens to this stock. Delinquency sets the loss rate; the policy rate sets both the cost of funding and the customer's ability to pay. Beneath them, Nu's own book: whether the system's delinquency is showing up in Nu's loans.
Figure 01NU · 01
Brazilian households are 2.2 points more delinquent than two years ago; Colombia is improving
Consumer credit delinquency · System-wide, Nu's three markets, last 24 months
Brazil5.99%
Two years ago3.75%
Change+2.24 pp
Each regulator publishes on its own bucket, so read the trend, not the gap between lines. Brazil: households 90+ days (BCB SGS 21084). Mexico: commercial-bank credit cards, past-due (stage 3, 90+ days) over total card book (Banxico SIE). Colombia: credit cards 30+ days (Superfinanciera).
Figure 02NU · 02
The Selic has come down from 15.00% to 13.75%, and is still the highest of the three
Central bank policy rate · Sets Nu's funding cost and its customers' capacity to repay
Brazil13.75%
Peak15.00%
Two years ago11.25%
End-of-month headline policy rate.Source: Bank for International Settlements (WS_CBPOL).
Figure 03NU · 03
Nu's 90-day arrears have held between 6.4% and 7.0% for 9 quarters while the early bucket moves with the season
Nu's own delinquency · Non-performing loans, % of the Nu Holdings credit portfolio, Q2'24 to Q2'26
90+ days6.9%
15-90 days4.8%
90+ range, Q2'24–Q2'266.4–7.0%
15-90 days is the early bucket and leads 90+ by about a quarter: the jump to 5.0% in Q1'26 migrated into 90+ at 6.9% in Q2'26, which Nu attributes to seasonality, while 15-90 had already eased to 4.8%. Across the nine quarters 90+ held between 6.4% and 7.0%. Nu publishes these two buckets only, with no 30+ ratio.Source: Nu Holdings Historical Data 2Q26, cross-checked against the 1Q26 data file and the 1Q26 and 2Q26 earnings releases.
02
Translation and the credit bill
A dollar reporter earning in three softer currencies carries a translation effect that has nothing to do with operations. Beside it, the chart that matters most: whether the macro has reached the income statement.
Figure 04NU · 04
The real is 6% stronger than two years ago, which flatters every dollar figure on this page
Currency strength versus the US dollar · Indexed to 100 two years ago. Above 100 flatters reported dollar results
Month-end spot rates, inverted and rebased so a rising line means a stronger local currency.Source: Yahoo Finance.
Figure 05NU · 05
Credit losses took 30.5% of revenue in H1 2026, the most since FY2022, and the model keeps them near thirty
Credit losses as a share of revenue · Expected credit loss over total revenue, %. Stone bars are modelled
H1 202630.5%
FY202526.7%
FY2027E31.2%
Expected credit loss over total revenue. This is the IFRS 9 P&L charge, not cash written off: most of it is the provision Nu books against loans that are still performing, so it moves when the book grows or the outlook darkens, ahead of any actual default — and it reverses if those loans cure. That is why it spikes with first-quarter delinquency, and why it holds near thirty percent of revenue in the forecast even as the loss rate falls: the credit book grows faster than revenue. The driver that falls is cost of risk on the book.Source: Nu Holdings IFRS filings through Q2 2026.
03
The customer base
Seven quarters of reported history, nothing modelled. The base still adds about four million a quarter, and the revenue each of those customers produces has risen in every single one of them.
Figure 06NU · 06
The base grew 22% over these 7 quarters while the quarterly intake eased from 4.4m to 3.7m
Customers and net additions · Millions, Q4'24 to Q2'26, as reported
Customers138.9m
Net adds, latest3.7m
Growth since Q4'2422%
That is the arithmetic of a maturing base, not a broken one: the same four million a quarter is a smaller percentage each time.Source: Nu earnings releases.
Figure 07NU · 07
Revenue per active customer is up 54% in 7 quarters, and rose in every one of them
Revenue per active customer · Monthly ARPAC, US$, as reported each quarter
Q2'26$17.1
Q4'24$11.1
FY2029E in the model$20.5
Nu's definition: average monthly revenue divided by average monthly active customers. The model carries it to $20.54 by FY2029, a slower climb than the one these bars have already delivered.Source: Nu earnings releases.
04
Unit economics
The compounding argument in two charts: what it costs to serve a customer against what that customer pays, and how much balance sheet each one carries.
Figure 08NU · 08
Each customer now pays 17 times what it costs to serve, against 14 times at the start
Cost to serve and the leverage on it · Q4'24 to Q2'26, company definitions
Cost to serve$1.00
ARPAC / cost17.1x
Q4'2413.9x
Cost to serve rose 25% over the period, on return-to-office costs and international expansion, and Nu has said it expects to hold around a dollar. Definition includes transactional expenses as well as support and operations.Source: Nu earnings releases.
Figure 09NU · 09
Lending per customer goes from $253 to $514 by FY2030E while deposits per customer grow far more slowly
Balance sheet per active customer · US$ per active customer. Solid to FY2025, dotted is modelled
The gap between the two lines is the funding cushion expressed per customer, and the model has it closing: lending per customer roughly doubles by FY2029 while deposits per customer grow far more slowly. Brazilian incumbents carry several times this much credit per client, which is the room the thesis is paying for.
05
The franchise
Revenue compounded at 49% a year from FY2022 to FY2025 and the first half of 2026 ran ahead of it. The question is no longer whether it grows, it is what the growth costs.
Figure 10NU · 10
Revenue compounded at 49% a year to FY2025; the base case carries it to $45bn by FY2030
Revenue and gross profit · US$ billions by fiscal year. Stone bars are modelled
FY2025 revenue$15.8bn
FY2030E revenue$45.3bn
Gross profit FY2025$6.6bn
Source: Nu Holdings IFRS filings and the Aadi institutional model, base case. Forecast years carry the model's operating-ratio assumptions.
Figure 11NU · 11
Operating cost per dollar of revenue fell from 41% to 19%; the gross line is where credit costs bite
Margin structure · Operating leverage is real; the gross line is where credit costs bite
Opex / revenue19.2%
FY202241.1%
Net margin18.4%
Each line as a percentage of total revenue. H1 2026 is six months of trading, directly comparable on ratios.
06
Profitability
Quarterly earnings against the equity that produced them. The first quarter of each year is seasonally the weakest, which is worth holding in mind before reading any single print as a trend.
Figure 12NU · 12
Return on equity reached 33%; both lines dip in every first quarter and recover
Net margin and return on equity · Per cent. Net income over managerial revenue, against reported ROE
ROE, latest33%
Net margin18.1%
ROE, a year ago28%
Shaded columns are first quarters: Brazilian delinquencies peak early and the credit provision follows them. Read Q1 against Q1, not against the quarter before it. Margin is on the managerial revenue base, which is how Nu reports ARPAC too.Source: Nu earnings releases.
Figure 13NU · 13
A 31% return on equity, earned on an equity base that is 16% of assets
Returns and capital · A thirty-percent return, on an equity base holding near a sixth of assets
Return on equity uses average equity; H1 2026 net income is annualised. Both lines are percentages, one scale.
Figure 14NU · 14
Net income is 118% higher than 9 quarters ago, on revenue 104% higher
Revenue and net income · Quarterly, Q2'24 to Q2'26, managerial basis
Revenue, Q2'26$5.88bn
Net income, Q2'26$1,061m
Net income growth+118%
Total revenue is Nu's managerial figure, gross of revenue-based taxes: the headline in its earnings releases since Q4'25, restated by Nu for earlier quarters. Releases before Q4'25 quoted IFRS revenue, which is lower (Q2'24 $2,848.7m against $2,878.0m here); net income is the same on both bases.Source: Nu Holdings Historical Data 2Q26, checked against the 1Q26 data file and every quarterly earnings release from Q2'24 to Q2'26.
07
Funding
Deposits funding a smaller credit book is the structural advantage. Through H1 2026 the book grew faster than the deposits behind it, so the gap between the two lines is closing and the cushion is being spent.
Figure 15NU · 15
The credit book now equals 72% of deposits, up from 66% at FY2025: the cushion is being spent
Credit book versus deposit funding · US$ billions at period end. Credit book is cards plus loans, gross
Credit book$32.8bn
Deposits$45.3bn
Book / deposits72%
Credit book is card receivables plus loans to customers, gross. The gap narrowed sharply through H1 2026 as lending outgrew deposits.Source: Nu Holdings balance sheet.
Figure 16NU · 16
Deposits grew 57% across these quarters, but the pace is easing and one first quarter was flat
Deposits and deposit growth · Q4'24 to Q2'26, reported in US dollars
Deposits$45.3bn
Latest quarter+6.8%
Since Q4'24+57%
Growth here is in dollars, so it carries translation; Nu quotes +18% year on year FX-neutral for Q2'26 against +24% in reported dollars. Cost of deposits held at 88% of the interbank rate.Source: Nu earnings releases.
08
Valuation
Three routes, a factor of two apart. Residual income lands over the traded price, the exit multiple lands at 2.3x it, and which one you believe is the entire investment decision.
Figure 17NU · 17
On residual income the shares are close to fairly priced at a 13.0% cost of equity; the upside is an argument about the multiple
Excess-return value per share · Residual income, US$. Shares trade at $11.82; warm cells sit below that, cool above
The model charges 13.0% for equity — CAPM plus a blended country risk premium. Read down that column: on a residual-income basis the shares are close to fairly priced, and the upside in this page is an argument about the multiple, not about the discount rate.
Figure 18NU · 18
The routes disagree by a factor of 2.1, and which one you believe is the entire decision
Value per share by method · US$ per share. Brick bars sit below the $11.82 traded price, ink above; the rule is the price
Residual income charges for the equity that growth consumes and lands above the price. The exit-multiple route capitalises FY2030 earnings and lands at 2.3x it. The disagreement is the finding, not a rounding error: this is a multiple story, not a discounted-value story.
09
What would change the view
The things worth watching, in the order they would move the estimate.
01
Cost of risk falls from the H1 2026 run-rateRisk
The base needs 20% of the average book this year and 16.5% by FY2029. Q1 2026 annualised at 23%, Q2 at roughly 18% as early delinquencies normalised. Every point it fails to fall is about $0.11 of FY2029 EPS against a base of $1.98. This is the whole argument.
02
Brazilian delinquency stops risingRisk
Household 90-day arrears moved +2.24 points over two years. Nu's book is more concentrated in exactly the borrower this series describes.
03
The easing cycle keeps runningWatch
Copom has cut five times from 15.0%, most recently to 13.75% on 17 September 2026, a net +2.50 points over two years. Cuts help twice: cheaper deposits and healthier borrowers. The base case has the annual average at 12.0% in FY2027 and 9.3% by FY2030, so a pause costs it.
04
Deposits keep up with the credit bookWatch
They did not in H1 2026. Lending grew far faster than funding and the balance-sheet ratio went from 66% of deposits at FY2025 to 72% at June. The base case takes it to 91% by FY2029, which is still conservative for a bank, but the cheap-funding cushion is being spent.
05
Mexico and Colombia keep improvingSupport
Colombian card delinquency has fallen steadily and Banxico has been cutting. Nu took a full banking licence in Mexico in August 2026 and passed five million customers in Colombia. If the non-Brazil business scales into that, the diversification stops being a story and starts being earnings.