Nu Holdings Ltd (BVMF:ROXO34). (NYSE: NU), a leading digital banking platform, announced a robust financial performance for the third quarter ended September 30, 2024. The company added 5.2 million new customers during the quarter, reaching a total of 109.7 million customers, a significant increase from the previous year.
The company reported a net income of $553.4 million, a substantial rise from $303.0 million in the same period last year. Adjusted net income also saw an increase to $592.2 million from $355.6 million in Q3'23. Revenue surged by 56% year-over-year on a FX-neutral basis, setting a new record at $2.9 billion. Monthly Average Revenue per Active Customer (ARPAC) increased 25% year-over-year FX-neutral, reaching $11.0.
Deposits grew by 60% year-over-year FX-neutral to $28.3 billion, with funding costs rising to 89% of the blended interbank rates for the quarter. The Loan-to-Deposit ratio (LDR) stood at 40%. Total (EPA:TTEF) receivables from the company's credit card and lending portfolios increased by 47% year-over-year and 8% quarter-over-quarter FX-neutral, totaling $20.9 billion. The Interest-Earning Portfolio (IEP) expanded by 81% FX-neutral to $11.2 billion.
Asset quality indicators showed the 15-90 day Non-Performing Loan (NPL) ratio for the Brazil Consumer Credit Portfolio dropped 10 basis points sequentially to 4.4%, while the 90+ NPL ratio increased to 7.2%, in line with expectations. Risk-adjusted Net Interest Margin (NIM) reached 10.1%, reflecting an expansion from a year ago.
These results demonstrate Nu Holdings’ continued growth trajectory and solidify its position as a dominant player in the digital financial services sector, particularly in Latin America. The company's focus on customer acquisition, asset quality, and revenue growth has yielded significant financial gains, as evidenced by the strong performance metrics reported in this latest quarter. The information is based on a press release statement.
In other recent news, digital banking firm Nu Holdings (NYSE:NU), also known as Nubank, has been the subject of several analyst updates. Jefferies maintained a Buy rating and raised its price target to $18.90, reflecting an extended growth outlook to 2030. This update comes as Nubank prepares to release its third-quarter 2024 earnings, with a pre-tax profit consensus set at $747 million.
Nubank's growth was further underscored by its Q2 earnings, which revealed a 65% year-over-year increase in revenue to $2.8 billion and a significant surge in net income to $487 million. The company also added 5.2 million new customers, bringing the total to 104.5 million.
In other analyst updates, Citi maintained a Neutral stance with a steady price target of $14.60, while BofA Securities raised its price target to $15.00. Redburn-Atlantic increased its price target to $18.50, maintaining a Buy rating, and Morgan Stanley (NYSE:MS) reaffirmed its Overweight rating.
InvestingPro Insights
Nu Holdings' impressive third-quarter results are further supported by real-time data from InvestingPro. The company's market capitalization stands at a robust $75.86 billion, reflecting investor confidence in its growth trajectory. Nu's revenue growth of 86% over the last twelve months aligns with the strong performance reported in the latest quarter, underscoring its ability to capitalize on the expanding digital banking market in Latin America.
InvestingPro Tips highlight that Nu Holdings is trading near its 52-week high, with a strong return over the last month and three months. This aligns with the company's reported financial success and customer growth. Additionally, analysts predict the company will be profitable this year, which is consistent with the substantial net income increase reported in the third quarter.
For investors seeking a deeper understanding of Nu Holdings' potential, InvestingPro offers 11 additional tips, providing a comprehensive analysis of the company's financial health and market position.
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