NU Q4 Earnings Call Highlights

Core Insights - The company introduced a new Managerial P&L framework aimed at enhancing comparability and reflecting economic contributions without altering net income, cash flow, equity, or regulatory capital [1] - Engagement metrics improved significantly, with ARPAC reaching $15, reflecting a 9% quarter-over-quarter and 27% year-over-year increase, indicating deeper monetization across the platform [2] - The company ended 2025 with 131 million customers, adding 17 million net new customers while maintaining an 83% activity rate, showcasing strong customer growth [3] Financial Performance - In Q4 2025, the company reported revenue of $4.9 billion, a 45% year-over-year increase, and net income of $895 million, up 50% year-over-year, achieving a record ROE of 33% [5][9] - The total portfolio reached $32.7 billion, up 40% year-over-year, with deposits of $41.9 billion, reflecting a 29% year-over-year growth [5][10] - The efficiency ratio improved to 19.9%, marking the first time it fell below 20%, attributed to operating leverage as net revenues grew faster than operating expenses [6] Credit and Lending Trends - Credit card balances rose 12.2% quarter-over-quarter, marking the strongest growth since the end of 2023, driven by limit expansion in Brazil [7] - Unsecured lending surpassed $8 billion, with record originations of $4 billion in Q4, while secure lending grew 3.8% quarter-over-quarter [8] - Early-stage delinquencies improved for the fourth consecutive quarter, declining to 4.1%, while the 90+ day NPL ratio decreased to 6.6% [13] Strategic Initiatives and Future Outlook - The company plans to focus on core-market execution, groundwork for U.S. expansion, and broader use of artificial intelligence in 2026 [4][18] - The AI strategy includes expanding the use of nuFormer for credit decisioning and enhancing customer engagement through AI-enabled features [14][15] - Management indicated that 2026 will be an investment year, which may temporarily pressure efficiency due to increased hiring and spending related to AI and global expansion [16] Capital and Funding - The company ended the quarter with $8.9 billion of total capital, including $3.0 billion in unrestricted cash, providing significant headroom to scale credit [19] - Consolidated funding costs improved, with the cost of deposits declining to 87% of the interbank rate by quarter end [10]