Nu Holdings (NYSE:NU), the parent
company of Nubank, continues to prove why it remains one of the most exciting
fintech growth stories in the world. Its Q3 2025 earnings delivered exceptional
results, showcasing not only rapid revenue and earnings expansion but also
impressive profitability and operational efficiency. As Latin America’s largest
digital bank, Nu is successfully capturing millions of new customers while
deepening engagement with its existing base, all through a scalable, low-cost
digital model. In this article we will dive into Nu Holdings recent earnings,
stock performance & valuation, growth potential, and the risks investor
should consider.
About Nu Holdings
Nu Holdings, the parent company
of Nubank, was founded in 2013 with a mission to provide low-cost, fee-free
digital banking to underserved customers across Latin America. Today, it has
grown into one of the world’s largest fintech platforms, operating in Brazil,
Mexico, Colombia, and more. Its offerings include digital accounts, credit
cards, payments, loans, investments, insurance, and crypto services. Nu’s
digital-first, low-cost model has enabled rapid scaling, strong customer
adoption, and a competitive edge in the region’s financial landscape.
Nu Holdings Financial
Performance
Nu Holdings delivered an
exceptional Q3 2025 performance, with revenue reaching $4.17 billion, up 41.78%
from $2.94 billion in Q3 2024. Quarterly EPS also rose sharply to $0.16,
increasing 40.9% from $0.11 a year earlier. On a trailing-twelve-month basis,
revenue climbed to $14.08 billion, a 28.72% increase from $10.93 billion,
while TTM EPS reached $0.52, up 41.55% from $0.36. Looking at the profitability
side it remained strong with an operating profit margin of 55.99%, net profit margin
of 39.76%, Return on asset of 4.32%, and Return on equity of 27.8%.
From 2020 to 2024, Nu Holdings’
revenue before provisions for credit losses grew at 102.9%, and its net income
turned positive in 2023 and continues to rise rapidly. This shows that Nu
Holdings has been able to grow quickly and consistently, and it is still
projected to maintain strong growth in the coming years.
Nu Holdings Fiscal 2025
Financial Forecast
Looking ahead, analysts forecast
2025 revenue of $15.64 billion, representing 35.83% growth over 2024’s $11.52
billion, and expect EPS to rise to $0.59, a 45.95% increase from $0.40. Wall
Street analyst maintains a bullish view, assigning a Buy rating with an average
price target of $18.43 representing upside potential of 5.43% and a highest
target of $22, implying potential upside of 25.82%.
NU Stock Price Performance and
Valuation
At the time this article was written Nu Holdings stock was trading at $17.48 per share. Nu Holdings has delivered strong stock performance, rising 45.6% over the past year and significantly outperforming the S&P 500’s 12.7% gain in the same period. Since IPO in December 2021, the stock is up 47.5%, slightly ahead of the S&P 500’s 44.5% increase.
Despite this impressive run, Nu’s valuation remains reasonable
for a high growth company, with a Price to Sales P/S ratio (TTM) of 6.06, forward
P/S of 5.41, Price to earnings P/E ratio (TTM) of 33.89, and forward P/E of
29.69.
Based on Fiscal.ai data, when we
look at the valuation since 2023, the forward P/S is above the average while
the forward P/E is below the average. These forward multiples suggest that the
market is pricing in continued growth while still offering reasonable entry
points. Given the company’s rapid revenue and earnings expansion, strong
profitability metrics, and long-term growth potential, the valuation appears
justified and remains favorable for investors seeking exposure to a high-growth
fintech leader.
Nu Holdings Growth Potential
Nu Holdings growth potential
remains strong, driven by several factors.
- Accelerated Customer Base
Expansion and Market Penetration
Nu Holdings continued its strong expansion in Q3 2025, reaching 127 million customers globally, with over 4 million net additions in the quarter, a 16% year-over-year increase in new users. Growth is accelerating beyond Brazil: Nu Mexico surpassed 13 million customers, covering about 14% of the country’s adult population, with engagement above 83%, while Colombia is nearing 4 million customers, reflecting rapid regional penetration.
Customer monetization also strengthened, as ARPAC rose to $13.4, up 20% year-over-year on an FX-neutral basis. Although Brazil still represents about 80% of the total base, rising adoption in Mexico and Colombia highlights effective geographic diversification. The company’s ability to consistently add millions of customers while maintaining high activity rates underscores strong product-market fit and sustainable long-term growth. - Credit Portfolio
Diversification and Secured Lending Growth
Nu's total credit portfolio expanded 42% year-over-year to $30.4 billion, driven by significant growth in secured lending, which surged 133%, and unsecured lending, up 63%. The interest-earning portfolio increased 54% to $17.7 billion. Secured and unsecured loans now represent nearly 35% of total balances, up from 27% a year ago, diversifying revenue beyond the traditional credit card business. Net interest income reached a record $2.3 billion, rising 32% on a foreign exchange-neutral basis, becoming the largest revenue source.
Despite aggressive credit growth, the 15 to 90-day non-performing loan ratio declined by 20 basis points to 4.2%, reflecting disciplined underwriting and risk management. The 90-day-plus NPL ratio rose slightly to 6.8%, in line with expected seasonality. Nu's advanced AI-driven underwriting utilizing over 30,000 data points per customer supports both growth and credit quality maintenance simultaneously. - AI-First Platform Strategy and
Operational Efficiency
Nu Holdings has implemented an AI-first strategy, embedding foundational AI models deeply into its banking operations to create an AI-native interface. The company developed nuFormer, a proprietary AI model analyzing customer behavior, which enabled safer expansion of credit card limits in Brazil while maintaining disciplined risk management. Operational efficiency is high, with a cost-to-serve per customer at $0.90, an 80% reduction driven by automation and digital-native infrastructure. AI accelerates product development from months to just a week.
The strategy extends AI use to personalized customer recommendations, app improvements, and intelligent transaction guidance alongside backend functions like collections, fraud prevention, and AI engineering productivity. This comprehensive AI integration enhances customer experience and operational efficiency, building a sustainable competitive moat strengthened by the continuous accumulation of transaction data. This positions Nu strongly against traditional banks and digital competitors.
Risks to Consider
While Nu Holdings growth
potential remains solid, we should be mindful of potential risks.
- Credit Risk
Nu Holdings expansion in unsecured and secured lending increases the risk of borrower defaults and higher non-performing loans (NPLs). Although NPL ratios have recently improved, concerns linger over the effectiveness of its credit risk management. These worries are heightened by potential credit cycle downturns, particularly in Brazil, where economic volatility could negatively impact loan portfolios and profitability, challenging the company’s overall financial stability. - Foreign Exchange (FX)
Volatility
Nu Holdings faces notable headwinds from currency fluctuations across its key Latin American markets, particularly Brazil, which can affect revenue visibility, capital allocation efficiency, and overall financial performance. These FX swings may also influence key operating metrics and contribute to greater stock price volatility. If currency pressures persist or worsen, they could undermine the company’s growth momentum, weaken investor confidence, and create a more challenging environment for sustained long-term expansion. - Competition and Market
Expansion
The fintech sector is highly competitive, with pressure from traditional banks and established players like Mercado Pago. NU’s expansion into new markets such as the U.S., Argentina, Asia faces regulatory, consumer behavior, and competitive challenges. Failure to manage these risks effectively could slow growth or reduce profitability, making successful navigation of these complexities crucial for sustaining NU’s expansion and financial performance in diverse regions.
Conclusion
Nu Holdings continues to shine as one of the fastest-growing fintech companies, combining strong financial performance with expanding market reach. Q3 2025 results show impressive revenue and EPS growth, rising customer engagement, and rapid adoption across Brazil, Mexico, and Colombia. With rising ARPAC, strong profitability, and analyst forecasts pointing to continued double-digit growth, the company remains well-positioned for long-term success. Despite some risks, Nu’s digital-first model, scalability, and market leadership make the stock an attractive investment opportunity.
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