Financials
Financials in One Page
Nu Holdings is no longer a digital-bank story you have to fund with hope. In FY2025 the company generated $11.2B of revenue (+26.8% YoY), $3.87B of operating income (34.6% margin), and $2.87B of net income (25.6% margin). Operating cash flow hit $3.5B and free cash flow $3.49B — capex is essentially zero on the cash flow statement, so OCF and FCF are nearly identical, converting at roughly 1.2× of net income. Shareholders' equity has compounded to $11.3B and book value per share to $2.30, with ROE at 30.3%. The balance sheet is asset-heavy ($74.9B), but that is loan book and deposit-funded liquidity, not corporate leverage; long-term debt is just $4.4B against $24.5B of cash. The unsolved problem in FY2026 is valuation: at roughly 28× trailing earnings and 7× book, Nu is priced like a software company while it underwrites Brazilian and Mexican consumer credit. The metric that matters most right now is net interest margin (NIM) and the related early-stage NPL ratio — Q1 2026 showed NIM compressing from 10.5% to 9.5% and 15–90-day NPLs ticking up to ~5%, the signal that arbitrates the credit-cycle question.
Revenue FY2025 ($M)
Operating Margin
Free Cash Flow ($M)
Return on Equity
Diluted EPS ($)
Book Value / Share ($)
P/E (TTM)
Price / Book
How to read these. Revenue for a digital bank = net interest income + fees, before credit-loss provisions. Operating margin compares pre-tax operating income against that gross revenue line. ROE measures profit against shareholders' equity — for banks, this is the headline quality metric. P/B is price relative to book equity per share; banks typically trade between 1x and 2x P/B unless ROE is exceptional.
Nu earns roughly 30% on equity at scale, more than 3x what mature Brazilian banks earn, but the market already pays bank-of-history-defying multiples for it. The investment question is not whether Nu is good — it clearly is — but whether the next leg of the multiple is paid for by growth or by re-rating.
Revenue, Margins, and Earnings Power
Nu's revenue line is net interest income (interest earned on credit cards and personal loans minus interest paid on deposits) plus non-interest income (interchange, fees, asset-management). Provisions for credit losses sit below this revenue line — they are a real cost of doing business, but the company reports revenue before taking them. Watch all three lines together.
Revenue trajectory: from $0.3B to $11.2B in seven years
Two things to register. First, the revenue mix has shifted decisively toward interest income: NII was 43% of revenue in 2018; it is 79% in 2025. This is what happens when a credit-card platform turns into a full-stack consumer bank — the asset side (loans, cards) compounds faster than the activity side (interchange, fees). Second, the revenue ramp is non-linear: the 5-year CAGR is 73%, but the 1-year FY2025 growth is 27%. That deceleration is normal as the base grows, but it is also exactly why valuation discipline matters now.
Margins inflected in 2023 and have kept expanding
FY2023 was the cleavage. Up to FY2022 Nu was investment-mode: spending on customer acquisition, building Mexico and Colombia, absorbing SBC, and provisioning aggressively for a maturing credit book. From FY2023 onward, operating margin has stair-stepped from 25.7% → 32.2% → 34.5%, and net margin from 17.2% → 22.7% → 25.6%. Two drivers: SG&A grew only 25% from 2023 to 2025 while revenue grew 87%, and the credit book scaled past its provision burden so each incremental dollar of NII drops disproportionately to operating income.
Recent quarterly trajectory — operating margin holds, NIM compresses
Eight straight quarters of sequential revenue growth and operating margin sustained near 38% by Q4 2025. The flag is what management disclosed for Q1 2026: NIM stepped down from 10.5% to 9.5% as the loan mix shifted toward lower-yielding, lower-risk public payroll loans, and 15–90-day NPLs rose to ~5% on Q1 seasonality. The Q1 2026 print missed EPS by a penny ($0.18 vs $0.19 consensus) on higher provisions even as revenue beat at $4.96B. Margin durability through FY2026 is now the live question.
Cash Flow and Earnings Quality
For a bank, the most useful cash-quality check is operating cash flow vs net income. Capex is trivially small for a digital-only model (no branches, no ATMs, no fleet), so OCF and FCF are essentially the same number. Free cash flow is the cash the business generates after operating needs and the (tiny) capex bill.
OCF and FCF track and exceed net income
Three observations. First, OCF/NI ratio is 1.22x in FY2025, in line with FY2024 (1.22x) and FY2023 (1.23x) — earnings are converting to cash at a stable, above-100% rate, which is what you want to see in a maturing financial company. Second, capex is $7M on $3.5B of OCF (0.2% of revenue): there is essentially no capex drag, which is why this business throws off so much cash relative to a branch-based bank. Third, FY2021 OCF was deeply negative ($-2.9B) because Nu was funding hyper-growth in the loan book through working capital — that pattern has reversed completely now that deposit funding outpaces loan growth.
FCF margin is at 50% — a software-like print on a bank-like business
FCF margin of 50% in FY2025 is the kind of number you see at mature software companies, not banks. The 2020 spike and 2021 trough reflect working-capital swings around the credit-card receivables cycle, not real economics. From FY2022 onward the trend is steady upward — 40% → 34% → 43% → 50% — driven by SG&A leverage and a more disciplined provisioning cadence.
Earnings-quality watchouts
SBC at 2.4% of revenue is reasonable for a tech-led financial; the line to watch is provisions, which scaled to $4.2B in FY2025 (38% of revenue before provisions). That is the number most exposed to a cyclical credit downturn.
Balance Sheet and Financial Resilience
For a bank, balance-sheet analysis is different. Most "liabilities" are customer deposits — the cheapest funding in finance, not corporate debt. The risk is not interest coverage; it is asset quality, capital adequacy, and funding mix.
Liquidity, deposit base, and equity have all scaled together
Net cash position is consistently large: $24.5B of cash against just $4.4B of long-term debt at year-end FY2025. Equity has compounded 23x since FY2018 — partly because of the December 2021 IPO ($2.6B equity raise), and partly because retained earnings have flipped from accumulated deficit to $6.4B of retained earnings. Long-term debt is rising (from $1.1B in 2023 to $4.4B in 2025), but this is wholesale funding of the loan book at the holding-company level, not distress; assets-to-equity dropped from 23x (FY2020) to 6.6x (FY2025), the safest leverage profile in Nu's history.
Bank-specific resilience: capital, asset quality, and funding
Three things matter here. Loan-to-deposit at 58% means Nu is still funded with substantially more deposits than it has lent — a fortress position that lets the credit book grow another 30–40% before funding gets tight. Cash at 33% of assets is far higher than any incumbent Brazilian bank — Nu deliberately runs hot on liquidity. Goodwill / assets at 0.5% confirms growth is organic; there is no large M&A balance-sheet risk to mark down.
Asset quality is the real watch item
The 15–90-day NPL ratio rose to ~5% in Q1 2026 (up 89 bps from year-end on seasonality), and management said NIM will stay closer to the 9.5% Q1 level than the 10.5% Q4 level near term. Coverage is over 150% of NPL formation, which is conservative, but the trajectory of provisions ($4.2B in FY2025, up 33% YoY) tells you Nu is still front-loading credit costs against a fast-growing book. A genuine Brazilian credit cycle would test this.
The fragility in this story is not the balance sheet — it is the credit cycle. Nu is well-capitalized, deposit-rich, and barely leveraged. But a serious deterioration in Brazilian consumer credit would crush provisions and operating income within two quarters. The balance sheet absorbs the loss; the P/E ratio does not.
Returns, Reinvestment, and Capital Allocation
Three questions: is ROE high and rising? Is the company reinvesting at high incremental returns? Is per-share value compounding faster than the share count?
ROE has moved from -33% to 30% in five years
ROE at 30.3% in FY2025 is more than double what Itaú prints in a strong year, and 5x what Bradesco managed. ROA at 4.7% is also exceptional for a bank — a function of the asset-light digital model that doesn't carry branch real estate. Management has guided ROE to remain around 30%+ in Q4 2025; whether that holds through a credit downturn is the real test.
Capital allocation: organic reinvestment dominates, buybacks are minimal
Almost everything Nu earns is going back into the loan book — that is the reinvestment story. There is no dividend, no material buyback ($6.2M in FY2025), and no M&A ($1.5M). The shareholder yield is essentially zero by design. Whether that is the right call depends on whether Nu can keep earning 30%+ ROE on retained capital — at present, the math supports the choice, but a maturing customer base in Brazil will eventually push management toward returning cash.
Share count: dilution has slowed sharply
The 2021–2022 jump was the IPO. Since then, dilution has been under 1.5% per year, dominated by employee stock vesting. SBC as % of revenue fell from 33% (2022) to 3.9% (2025). For a tech-flavored bank this is well-controlled.
Per-share value compounding
Book value per share has doubled in three years, and tangible book is barely below reported book — goodwill is small and intangibles are real (software, customer relationships). With ROE near 30%, book should keep compounding at high-teens to mid-20s annually if growth holds.
Segment and Unit Economics
Nu reports as a single operating segment: digital banking and financial services. Geographic disclosure is similarly thin (Brazil dominant; Mexico and Colombia small but growing). The most useful unit economics come from management commentary, not segmented financials.
The economics that matter: monthly ARPAC of ~$16 in Q1 2026 vs ~$11 a year earlier — a 45% per-customer revenue lift while the customer base grew 24%. The cross-sell engine is alive. Mexico reaching break-even is the single most important strategic milestone of FY2026 — it proves the Brazilian playbook ports. Brazil at ~7% of the addressable profit pool is management's framing for why this is still an early-innings story even at 115M customers.
Granular segmented financials (revenue, profit, capital allocation by country) are not publicly disclosed. The single-segment reporting structure is a real disclosure limitation: a credit-quality problem confined to one geography could be obscured in the consolidated numbers.
Valuation and Market Expectations
The valuation debate is binary. Bulls say Nu deserves a premium because of 30%+ ROE, 50% FCF margin, and 25%+ revenue growth. Bears say no bank, even an excellent one, deserves 28x earnings and 7x book in a country with a structurally high cost of capital.
Current multiples vs Nu's own history
Two history lessons. First, Nu was unprofitable in FY2021–FY2022 so trailing P/E was meaningless; the real anchor is FY2023 onward, where P/E has compressed from 39x to 28.6x as earnings have grown faster than price. Second, P/B has expanded from 3.9x (FY2022) to 7.2x (FY2025) even as book value has more than doubled — the market is awarding a richer multiple to richer book. This works only if ROE stays above 25%.
What the market is pricing
The sell-side is leaning bullish. Median price target is $19.50 versus a current price near $13, implying ~50% upside. The forward P/E at ~17x on FY2026 EPS doesn't look extreme on consensus growth (+52% EPS), but the comp set of mature banks trades at ~11x. The premium is paid for digital scale and ROE persistence.
Bear / Base / Bull frame
At ~$13 today, you are roughly halfway between the bear and base cases — a market that respects the growth but no longer pays for blue-sky optionality. The risk/reward is asymmetric to the upside if credit holds and Mexico scales, and asymmetric to the downside if Brazil's consumer cycle turns.
Nu is not "cheap" by any conventional metric. It is fairly priced for very high-quality bank earnings, with a kicker for international expansion. The case for owning the stock rests on whether 30% ROE persists through a real credit cycle — that has not yet been tested.
Peer Financial Comparison
A bank's peer comp lives or dies on three metrics: ROE, revenue growth, and valuation. Currency and balance-sheet structure differ across the comp set, so the comparison is conceptual, not line-by-line.
BRL-reporting peers (ITUB, BBD, BSBR, STNE, PAGS) converted at ~5.0 BRL/USD for revenue/net income; market caps already in USD. Peer ratios are approximate FY2025 figures from each company's snapshot.
The grid tells a clean story. Among Brazilian banks, Nu is the only name combining 25%+ revenue growth and 30%+ ROE — Itaú leads on absolute net income ($8.8B), but its ROE is 20.5% and growth ~10%. Bradesco and Santander Brasil are in single-digit ROE territory; their cheap multiples (1.2x and 0.4x P/B) are deserved. Among fintech-style peers, MercadoLibre has higher growth (35%) but lower net margin and similar ROE, and trades at 41x P/E and 12x book — making Nu look reasonable. Among Brazilian fintech peers, StoneCo and PagSeguro trade at low multiples because their economics are weaker: PAGS at 15% ROE and 13% growth, STNE at 15% ROE and shrinking revenue.
The premium Nu commands over incumbent banks is earned by growth and ROE and not yet earned over MercadoLibre, which is the closest comparable on profile.
What to Watch in the Financials
The financials confirm that Nu has built a durable, high-quality earnings engine: 30%+ ROE, 50% FCF margin, dominant deposit franchise, and capital allocation that compounds book value at 20%+ per year. They contradict the simplistic "expensive bank stock" framing — at 28x trailing P/E the multiple is high, but at 17x forward it is defensible given the growth and profitability profile.
What they leave open is the credit cycle. Brazil has not had a serious consumer-credit downturn since Nu became dominant; the NIM compression and NPL uptick in Q1 2026 are the first whispers of pressure. If they turn into shouts, provisions can absorb $1–2B of operating income in a quarter and the multiple compresses to a true bank P/E in months.
The first financial metric to watch is the 15–90-day NPL ratio in Q2 2026: if it stays at or below 5% with coverage above 150%, the bull case keeps compounding; if it pushes through 6% with falling coverage, this stock re-rates fast.