Live: Nu Holdings Reports Q1 Earnings. Could Tonight Be the Start of a Rally?

That wraps up our initial coverage of Nu Holdings’ Q1 results. Thank you for stopping by!

Check out the company’s earnings call for more updates!

Revisiting the Pre-Earnings Bear Case

Heading in, bears flagged four concerns. Here’s how each held up.

• Rising credit provisions: Confirmed. Expected credit losses hit $1.72 billion, up 76.8% YoY.
• Margin compression: Partially confirmed. EPS of $0.1776 missed the $0.1874 estimate.
• Brazil macro/capital: Mixed. Operating cash flow turned negative at -$1.21 billion.
• FX drag: Neutral. BRL sits at 0.20078681 USD, broadly stable.

Bears will point to the 10% initial drop and revenue miss of 1.82% as validation that the investment year squeezes profitability.

Bulls counter with the efficiency ratio improving to 17.6%, ROE holding at 29%, Mexico hitting break-even, and the credit book expanding 40% YoY to $37.2 billion, signaling that provisioning reflects growth rather than deterioration.

Does Nu’s 10% Drop Match the Numbers?

The post-earnings reaction looks proportionate to the underlying results. Nu Holdings (NYSE:NU) missed on both lines, with EPS of $0.1776 against a $0.1874 consensus and revenue of $4.97B versus $5.06B expected. The market is fixating on expected credit losses ballooning to $1.72B from $973.54M, and operating cash flow swinging to negative $1.21B.

Was -10% an Overreaction?

Net income still climbed 56.39% YoY, and the reaction mirrors last quarter’s -9.55% post-earnings move, suggesting a familiar pattern rather than panic. With Nu trading at 19x forward earnings and the average analyst target sitting at $19.87, the selloff feels like a rational move given the double miss. However, it seems like the underlying business continues to improve.

Success in Mexico may have been one of the biggest takeaways from Nu’s first quarter. The company reached break-even in the country while surpassing 15 million customers, making Nu the third-largest financial institution in Mexico by customer count.

Management also said Mexico’s customer base has grown roughly sevenfold in four years, while ARPAC (average revenue per active customer) has nearly doubled, and efficiency ratios have improved by 78 percentage points. The results suggest Nu’s operating model may be successfully replicating outside of Brazil.

While most investors focus on customer additions and revenue growth, Nu’s efficiency ratio may be becoming the more important long-term metric. The company remarkably improved its efficiency ratio to 17.6% in Q1 from 19.9% last quarter, despite continued investments into AI infrastructure and international expansion.

Nu now serves more than 135 million customers while reporting a monthly cost-to-serve per active customer of just $1.00, which helps explain why return on equity remained exceptionally high at 29% even as the company aggressively expanded lending.

Today, Nu Holdings revealed its proprietary “NuFormer” AI models are already making real-time lending decisions in Brazil and Mexico, pricing and approving personal loans individually in under a second.

That matters because Nu’s credit portfolio has now expanded to $37.2 billion, up 40% year over year, while management says AI is helping the company grow limits “with resilience, not just speed.”

The company is increasingly positioning AI as a direct driver of lending growth and profitability.

Nu Holdings reported strong Q1 results, with revenue surpassing $5 billion for the first time as customer growth, lending expansion, and AI adoption continued scaling across the platform.

However, the stock is initially down 10%.

Key highlights:

• Adjusted EPS came in at $0.21, matching estimates
• Revenue neared $5 billion, roughly in line with expectations
• Net income climbed 41% year over year to $871 million
• Return on equity remained strong at 29%
• Credit portfolio grew 40% YoY to $37.2 billion
• Total customers surpassed 135 million

Management emphasized that AI is becoming central to Nu’s long-term strategy. The company said its AI Private Banker now serves more than 15 million monthly active users, while NuFormer AI underwriting models are already live in both Brazil and Mexico.

Mexico also reached break-even during the quarter while surpassing 15 million customers, marking another step forward in Nu’s international expansion story.

CEO David Vélez framed the company’s AI push aggressively, saying: “We are not adding AI to banking, we are rebuilding banking around AI.”

Fresh Wild Cards for Tonight’s Earnings Report

Building on the four catalysts flagged earlier, here are additional surprise factors sell-side analysts have barely modeled.

• FGTS regulatory cliff. New rules effective November 1, 2025 drove a 50% to 60% decline in FGTS loan originations. Q1 will be the first full quarter absorbing this.
• Fintech tax step-up. Brazil’s corporate income tax for fintechs rises progressively from ~40% to 45% starting 2026, a medium-term effective-rate headwind beginning this quarter.
• Credit-limit conversion. Unused limits expanded from ~$18 billion to $29 billion. Investors will want proof that limits are translating into purchase volume.
• Return-to-office provision. The July 1 policy carries an 80 to 100 basis points efficiency-ratio impact that could be pre-announced tonight.

Last quarter’s reaction was -9.55%, so any of these could impact the market’s reaction to tonight’s earnings.

What to Watch When Numbers Hit

With Nu Holdings (NYSE:NU) reporting very soon, the Q4 baseline sets the bar: revenue of $4.86 billion, net income of $895 million, and ROE of 33%. Anything that holds those lines should feel reassuring to bulls.

Trigger Points

• Credit quality: the 90+ day NPL ratio at 6.1% is the single most-watched number. A move higher likely overshadows any revenue beat.
• Deposits and customers: sequential growth above $41.9B deposits and 131 million customers signals engagement is intact.
• CET1: stabilization above 13.0% would calm capital adequacy concerns.

With shares at $12.93 versus an analyst target of $19.87, it’s possible the stock could see a rebound on strong results and guidance.

Technical Setup Heading Into the Bell

With Nu Holdings (NYSE:NU) set to report Q1 numbers shortly, shares are trading at $12.93, up 0.86% intraday off yesterday’s $12.82 close.

Key Levels to Watch

• Resistance: $14.48 (one-week-ago pivot) and $14.95 (one-month start).
• Support: $12.82 recent low, then the $13.14 one-year base.
• Last earnings range: $15.04 low to $15.94 high, closing at $15.06.

Shares trade well below the $16.74 December 31 mark, signaling NU is firmly below its 50- and 200-day trendlines. Reddit sentiment holds bullish at 68-74, while the composite reading sits at 64.47.

Given last quarter’s -9.55% reaction, a beat could trigger a sharp reclaim toward $14.50.

With Nu Holdings releasing Q1 earnings results tonight at 4:50 PM EST, here are some of the top factors that could impact the market’s reaction:

The Consensus Bar

• Q1 2026 EPS estimate: $0.19, matching Q4 2025’s reported figure
• Track record: 4 beats, 2 misses, and 2 in-line prints across the last 8 quarters

What Could Move Shares

Price action skews defensive: Shares are off 11.46% over the past week and 14.25% over the past month, closing at $12.93. Last quarter’s day-of reaction was -9.55%, resetting expectations lower.

A clean beat paired with stable Brazil credit quality and continued ARPAC expansion could fuel a relief rally toward the $19.87 average analyst target. A miss driven by rising provisions or NIM compression risks a retest of recent lows.

Wild Cards Not in Consensus

Beyond the bull/bear setup, four under-discussed catalysts could swing tonight’s reaction for Nu stock.

• BRL translation drag. The Brazilian real sits at 0.20087741 USD. Any deviation between operational BRL growth and USD-reported figures could distort the headline beat or miss.
• Selic path. Brazilian Central Bank policy directly shapes Nu’s net interest margin and credit demand. A hawkish commentary could pressure 2026 guidance even on a clean quarter.
• Mexico cost ramp. Peso exposure and deposit-pricing competition with incumbents remain unmodeled by many sell-side desks.
• NPL trajectory. With $5.0B in expected credit losses against a $10.9B gross book, a tick higher in delinquencies could overshadow ARPAC strength.

Reddit sentiment reads bullish at 68-74, leaving little cushion for surprises.

Nu Holdings (NYSE:NU) reports Q1 earnings tonight. Here’s the Bull vs. Bear case for the stock:

Bull Case

• FY2025 revenue hit $15.77B (+42.06% YoY) with net income of $2.87B and a 33% Q4 return on equity.
• The customer base reached 131 million, while deposits grew to $41.9B.
• Conditional OCC approval in January 2026 opens U.S. expansion optionality.
• Average analyst price target sits at $19.87 with 19 buys vs. 2 holds. This implies significant upside from the stock’s current price of about $13.

Bear Case

• Expected credit loss exposure stands at $5.0B as loans grew to $10.9B gross.
• Gross profit growth of 29.89% trailed revenue growth of 42.06%, hinting at margin compression.
• Capex jumped 94.74% YoY and total liabilities expanded 50.35% to $63.57B.
• Brazil CAR slipped to 16.6% from 18.1% amid CSLL tax headwinds.

With shares already down 23.42% YTD and last quarter’s reaction at -9.55%, expectations are reset lower heading into tonight.

Last quarter, Nu delivered another record quarter, but the stock still sold off as investors worried that heavier 2026 investment spending could pressure the operating leverage that fueled the original bull case. Now, the focus in Q1 is likely going to shift to whether management can prove the long-term growth engine remains intact.

Investors will likely watch three areas closely:

1. Credit quality
2. ARPAC expansion
3. Management’s ability to frame a clear path through the current cost ramp

With the stock down roughly 23% year-to-date, a strong update from management could quickly improve sentiment. If not, investors may continue to view Nu as a stock going through an “investment year,” as management previously framed 2026 would look like.