Benzinga - A leading digital bank in Brazil reported third-quarter financial results and an update on its growth Monday after market close. Here are the key highlights.
What Happened: Fintech company Nu Holdings (NYSE: NU) reported third quarter revenue of $1.31 billion, up 171% year-over-year. Revenue was up from last year’s $480.9 million and $1.16 billion in the second quarter.
The average revenue per active customer in the third quarter was $7.90, up 61% year-over-year. Deposits for the company were up 73% year-over-year to $14.0 billion.
The company reported it added 5.1 million customers in the third quarter to hit a total of 70.4 million, up 46% year-over-year. The company reported record highs for retail customers in the third quarter. Customers were up 41% to 66.9 million in Brazil, the company’s largest market.
Nu posted a net profit of $7.8 million in the third quarter.
“Our customer base grew to over 70 million with a record high activity rate of 82% and a leading customer satisfaction score in our industry. We continue to launch and cross sell best-in-class products, while keeping a low-cost tech platform with low cost of funding and a widening profit margin,” Nu CEO David Velez said.
The company reported its NuCrypto unit had 1.3 million customers since its full rollout in July 2022. The company having exposure to cryptocurrency and offering several Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) related products has generated headlines.
Berkshire Hathaway (NYSE:BRKa) (NYSE: BRKA)(NYSE: BRKB) has a stake in the company with investments in June 2021 and later when the company went public in late 2021 totaling $1 billion. The stake gives Berkshire Hathaway CEO Warren Buffett, who has been a vocal critic of Bitcoin, exposure to the leading cryptocurrency.
Nubank is considered a cryptocurrency-friendly bank and announced it would allocate 1% of its cash to Bitcoin as well.
Related Link: How To Buy Bitcoin
What’s Next: Nu reported third-quarter growth, including record highs for customers. The company said it now covers 39% of the adult population in Brazil.
Of the customers that Nu services, 55% use Nu as their primary bank.
The company is also seeing strong growth outside of Brazil. The company saw its customer base in Mexico up 4x in the last year to 3 million. In Colombia, the company has over 439,000 customers.
“Together, Mexico and Colombia contributed with approximately 500,000 new unique customers in the third quarter,” the company said.
Nu Holdings noted it was the sixth-largest financial institution in Latin America based on the number of active customers in the third quarter.
Nu is focused on being a multi-product company with the launch of additional items. The company now offers credit cards, personal loans, cryptocurrency, insurance, and direct-to-consumer products. Additional product launches and cross-selling are helping the bank's average revenue per customer.
Nu Holdings may become even more cryptocurrency-friendly in the future, with the company announcing in October it was launching its own token called Nucoin. The new token will be launched in the first half of 2023 and will be used to power its loyalty and rewards for customers.
“Nu is well capitalized and is positioned to deliver growth at scale in the long term,” Velez said.
NU Price Action: Nu shares are up 16% to $5.06 in after-hours trading Monday.
Read Next: Nubank Taps Paxos To Cater To Latin America's Growing Thirst For Crypto Trading
Photo: Courtesy of blog.nu.com.mx
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.