Nu Holdings Surpasses 110 Million Customers, Enhances Profitability Model
- Customer Base Expansion: Nu Holdings has surpassed 110 million customers in Brazil, representing about 60% of the adult population, successfully attracting tens of millions through free digital accounts and no-annual-fee credit cards, significantly disrupting the traditional banking landscape.
- Profitability Enhancement: In the third quarter, Nu's average revenue per active customer (ARPAC) reached $13.40, a 20% year-over-year increase, indicating that as customers adopt more products, the company's long-term monetization potential is strengthening.
- Market Expansion Plans: Nu is expanding into Mexico and Colombia, with over 13 million customers in Mexico, representing 14% of the adult population, and plans to acquire a small bank next year to gain legitimate banking status, enhancing market trust and capital access.
- Utilization of Digital Trends: With smartphone adoption in Latin America projected to reach 400 million, Nu leverages its low-cost, digital-first model to meet the growing consumer demand for mobile banking services, further driving the company's growth potential.
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- Nu Holdings Growth: As of February 2, Nu Holdings' shares surged 284% over the past three years, boasting 110 million customers in Brazil and tapping into the vast unbanked population in Latin America, indicating significant future growth potential.
- Revenue and Profit Surge: In Q3, Nu's revenue climbed 42% year-over-year, with net income up 41%, driven by a scalable business model that eliminates branch costs, thereby enhancing profitability.
- SoFi's Technological Innovation: SoFi Technologies saw a 38% surge in adjusted net revenue in 2025, adding 1 million new customers to reach a total of 13.7 million, with projected adjusted net income of $825 million in 2026, reflecting a 72% year-over-year increase.
- Market Potential Comparison: Both companies excel in their respective markets, with Nu focusing on Latin America and SoFi thriving in the U.S., making a case for investing in both as they hold substantial growth potential over the next five years.
- Customer Base Surge: From the end of 2021 to Q3 2025, NuBank's customer base more than doubled from 53.9 million to 127 million, showcasing its online model's robust expansion in Brazil, Mexico, and Colombia, thereby solidifying its leadership in the Latin American fintech sector.
- Active Customer Ratio Increase: The activity rate of NuBank rose from 76% to 83%, indicating enhanced customer retention and the successful locking in of users through new fintech services, which boosts overall business stability and profitability.
- Revenue Growth Potential: Analysts project Nu's revenue to grow at a CAGR of 30% from 2024 to 2027, with earnings per share turning positive in 2023 and expected to nearly double in 2024 at a CAGR of 41%, reflecting strong future profitability prospects.
- Market Valuation Compression: Despite being impacted by geopolitical tensions, inflation, and currency devaluation, Nu's market valuation may be compressed; however, as these headwinds dissipate, it is expected to continue expanding over the next decade, positioning itself as a leader in the Latin American fintech market.
Emerging Markets Performance: U.S. equities have struggled in 2023, while emerging markets have shown strong performance, particularly driven by renewed interest in commodities and non-dollar assets, with the MSCI Emerging Markets ETF up 10.5% year-to-date compared to just 1.8% for the S&P 500 ETF.
South Africa's Currency Strength: The South African rand has appreciated nearly 25% against the U.S. dollar over the past year, contributing to significant gains in the MSCI South Africa ETF, which is up almost 15% year-to-date and over 84% in the last 12 months.
Investment Opportunities in Latin America: Companies like Mercado Libre, DLocal, and Nu Holdings are highlighted as key players in the Latin American fintech and e-commerce sectors, with strong growth potential and expanding user bases, particularly in Mexico and Colombia.
Market Recommendations: Analysts recommend five emerging market stocks for investors looking to diversify outside the U.S., emphasizing their potential for growth and value without extreme valuations, suggesting a balanced approach to investing in these markets.
- Digital Banking Surge: Nu Holdings has rapidly expanded in Brazil, Mexico, and Colombia, becoming the largest financial institution in Brazil with 61% of the adult population as customers, showcasing its strong appeal and growth potential in the Latin American market.
- Market Expansion Plans: Nu is set to open new offices in the U.S., including Miami, Palo Alto, and Washington, D.C., indicating its strategic focus on international markets and future growth, which is expected to further drive user acquisition.
- Investment Return Comparison: Although Berkshire Hathaway completely exited Nu Holdings by the end of 2024, the company's performance in 2025 has outpaced other top Berkshire stocks, highlighting potential missteps in investment decisions and Nu's robust market performance.
- Sustained Growth Expectations: Nu continues to rapidly add new customers in the Brazilian market, with expectations for higher growth in the coming years, reflecting its competitive advantages and market opportunities in the digital banking sector.
- Buffett's Exit: Warren Buffett completely sold his stake in Nu Holdings at the end of 2024, despite the company becoming Brazil's largest financial institution, indicating a potential missed opportunity for Berkshire Hathaway to capitalize on future gains in a rapidly growing market.
- Strong Market Performance: Following Berkshire's divestment, Nu's stock outperformed all other Buffett holdings in 2025, already up 11% at the start of the year, highlighting its robust growth potential in the competitive fintech landscape.
- User Base Expansion: Over the past decade, Nu Holdings has rapidly grown to become the largest financial institution in Brazil, with 61% of the adult population on its platform, and penetration rates of 14% in Mexico and 10% in Colombia, showcasing its significant influence in the Latin American market.
- New Market Plans: Nu is set to open offices in the U.S., including Miami, Palo Alto, and Washington, D.C., further expanding its market share and expected to drive future growth, although it carries a higher risk profile compared to traditional Buffett investments.
- Significant Growth: Nu Holdings reported a 42% year-over-year revenue increase in Q3 2025, reaching $4.2 billion, indicating strong performance in the financial services sector, with a projected 31% revenue growth in 2026 further solidifying its market position.
- Market Share Expansion: With 110 million customers in Brazil, representing over 60% of the adult population, and an additional 13 million in Mexico and 4 million in Colombia, Nu demonstrates extensive coverage and growth potential in the Latin American market.
- Profitability Improvement: The company achieved a net profit margin of 18.8% in Q3 2025, a significant increase from 0.6% in Q3 2022, showcasing the effectiveness of its low-cost operating model, which is expected to drive further profit growth.
- Reasonable Valuation: As of January 29, Nu's forward price-to-earnings ratio stands at 23.4, which is considered reasonable given its strong growth prospects, attracting investor interest and likely to continue driving stock price appreciation.











