Nu Holdings Ltd. · NYSE:NU
Nu — Q3 2024 Earnings Presentation
40 slides from Nu's earnings presentation, Nov 13, 2024
Slide 1: Q3 2024 Earnings Presentation
Q3 2024 Earnings Presentation Nov 13, 2024 Third Quarter 2024 Results 1
Slide 2: Disclaimer
Disclaimer This presentation speaks at the date hereof and the Company is under no obligation to update or keep current the information contained in this presentation. Any information expressed herein is subject to change without notice. Any market or other third- party data included in this present
Slide 3: Continued Growth of One of the World's Largest Digital Banking Platforms
Continued Growth of One of the World's Largest Digital Banking Platforms Q3’24 Main Highlights Customers (MM) 110 109.7MM US$ 1.3BN 105 Customers +20.7M YoY Gross Profit +67% FXN YoY 99 94 56% of Adult Population of Brazil Gross Profit Margin 46% 89 84% Monthly Activity Rate US$ 553.4MM 79 84 Net In
Slide 4: Compounding Growth Showcasing Robust Cohort Performance
Compounding Growth Showcasing Robust Cohort Performance Revenue by Yearly Cohort (US$MM) 2024 10,933 2023 2022 Revenue Cohort CAGR FXN 2021 8,029 2020 2023 232% 2019 (and earlier) 2022 118% 4,792 2021 123% 2020 124% 2019 51% 1,698 (and earlier) 612 737 2019 2020 2021 2022 2023 Q3'24 - LTM Third Quar
Slide 5: Profitability Momentum Continues; ROE Surpasses 30%, Despite Significant Excess Capital
Profitability Momentum Continues; ROE Surpasses 30%, Despite Significant Excess Capital Financial Performance (US$MM) Metrics Q3’23 Q4'23 Q1’24 Q2’24 Q3’24 Revenues 2,137 2,405 2,736 2,849 2,943 YoY FXN 53% 57% 64% 65% 56% Gross Profit 915 1,143 1,182 1,359 1,349 Margin 43% 48% 43% 48% 46% Net Incom
Slide 6: Q3'24 Results
Q3'24 Results Third Quarter 2024 Results 6
Slide 7: Strong Customer Acquisition and Sustained Growth in Activity Rate
Strong Customer Acquisition and Sustained Growth in Activity Rate Customers YoY: +23% Customers (MM) Active Customers YoY: +24% Active Customers 73.8 78.0 82.6 87.2 91.7 (MM) 109.7 104.5 99.3 89.1 93.9 Activity Rate (%) 83.6% 83.4% 83.1% 83.2% 82.8% Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Third Quarter 2024 R
Slide 8: Compounding Effect of More Engagement and More Cross-sell Driving Ongoing ARPAC Expansion
Compounding Effect of More Engagement and More Cross-sell Driving Ongoing ARPAC Expansion Active Customers Using NuAccount Number of Products Per Monthly ARPAC by Quarterly Cohort as their Primary Banking Account (%) Active Customer (US$ | FX Neutral) US$ month/ Avg. monthly ARPAC of US$11.0/month w
Slide 9: Sustained Revenue Growth Fueled by Customer Acquisition and ARPAC Expansion
Sustained Revenue Growth Fueled by Customer Acquisition and ARPAC Expansion ARPAC (US$) Revenues (US$MM) YoY: 25% YoY: 56% FXN FXN 8% 6% 2% 8% FXN 11.4 FXN 11.2 FXN 12% FXN 2,849 FXN 2,943 6% FXN 10.6 11.0 15% 2,736 FXN 10.0 13% FXN 2,405 2,137 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q
Slide 10: Strong Performance for Both Credit Card and Lending Portfolios
Strong Performance for Both Credit Card and Lending Portfolios, with Lending Gaining More Relevance Over Time Total Portfolio (US$BN) Total Portfolio (%) Lending Credit Cards YoY: 47% Lending Credit Cards FXN Credit Card: 33% FXN Lending: 97% FXN 20.9 20% 20% 23% 24% 8% 8% 27% 11% 19.6 FXN 18.9 FXN
Slide 11: Interest Earning Portfolio over Total Portfolio Consistently Outperforms the Market
Interest Earning Portfolio over Total Portfolio Consistently Outperforms the Market as Nu Expands Financial Products and Features Credit Card IEP Evolution Nu Interest Earning Installments Balance Nu Revolving Balance Nu Non-Interest Earning Balance (% of Total Receivables – Brazil Only) Market Inte
Slide 12: Sustained Sequential Growth in Secured and Unsecured Loan Origination
Sustained Sequential Growth in Secured and Unsecured Loan Origination Originations (R$BN) YoY: 79% Brazil Only BRL Unsecured Lending Secured Lending 22% BRL 15.9 6% BRL 13.0 39% 2.5 23% BRL 12.3 6% BRL Credit 12% BRL 1.8 13.4 Yield 10.0 70% 20% BRL BRL 1.7 BRL (%) 8.9 6% 233% BRL 11.2 BRL 1.0 18% 10
Slide 13: Robust Deposit Franchise Fueled By Volume Growth
Robust Deposit Franchise Fueled By Volume Growth and Cost of Deposits Aligned with Nu’s Strategy in New Geos Deposits (US$BN) YoY: 60% Brazil FXN Mexico 9% Colombia 16% FXN 28.3 5% FXN 24.3 FXN 25.2 299% 0.9 23.7 FXN 20% FXN 61% 0.2 3.9 119% 27% Cost of 1.0 FXN 2.3 FXN 3.3 FXN 19.1 518% FXN 22.7 22.
Slide 14: Net Interest Income Expansion Driven by Growth in Interest Earning Portfolio
Net Interest Income Expansion Driven by Growth in Interest Earning Portfolio NII (US$MM) & NIM (%) YoY: 63% FXN 4% 14% FXN 1,718.1 FXN 1,712.8 21% FXN 1,619.5 13% FXN 1,345.7 1,195.0 NIM (%) 19.5% 19.8% 18.8% 18.3% 18.4% Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Note 1: ‘NII’ stands for Net Interest Income and
Slide 15: Low Cost to Serve Underscores Operating Leverage Potential
Low Cost to Serve Underscores Operating Leverage Potential Cost to Serve per Active Customer (US$) YoY: -4% FXN Adjusted by one-off: 2% 4% 0% 8% 0.9 0.9 0.9 0.9 FXN FXN FXN -15% FXN 0.8 -10% FXN adjusted Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Note 1: Amounts are presented in US dollars and growth rates on an
Slide 16: Sustained Gross Profit Growth, Despite FX Headwinds
Sustained Gross Profit Growth, Despite FX Headwinds Gross Profit (US$MM) YoY: 67% FXN 1,359.4 3% FXN 1,348.6 1,143.2 1,181.6 23% FXN 4% FXN Gross Profit 914.8 26% FXN Margin (%) 47.5% 47.7% 45.8% 42.8% 43.2% Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Third Quarter 2024 Results 16 Note 1: Amounts are presented in
Slide 17: Strong Track Record of Driving Operating Leverage as Business Scales
Strong Track Record of Driving Operating Leverage as Business Scales Efficiency 91.6% NII + F&C (US$MM) Costs (US$MM) Efficiency Ratio 75.8% 2,183.5 4% 2,182.2 72.7% 2,075.2 13% FXN 72.3% 16% FXN FXN 13% 1,799.3 65.6% FXN 12% 1,599.1 16% FXN 1,415.2 58.2% 11% FXN 55.1% FXN 1,178.5 1,043.0 22% 750.0
Slide 18: Sustained Growth in Both Net Income and Adjusted Net Income
Sustained Growth in Both Net Income and Adjusted Net Income Adjusted Net Income YoY: Net Income (US$MM) +89% FXN Adj. Net Income (MM) 355.6 395.8 442.7 562.5 592.2 Adj. Net Income Margin (%) 17% 17% 16% 20% 20% YoY: 107% FXN 18% FXN 553.4 38% FXN 487.3 Net Income Margin (%) 6% 20% 360.9 FXN 378.8 30
Slide 19: Q3'24 Credit Underwriting
Q3'24 Credit Underwriting Third Quarter 2024 Results 19
Slide 20: Delinquency Ratios Tracking Expectations
Delinquency Ratios Tracking Expectations 15-90 NPLs 90+ NPLs Brazil Consumer Credit Portfolio Brazil Consumer Credit Portfolio 7.0% 7.2% 6.2% 6.1% 5.9% 5.6% 5.5% 6.3% 6.1% 5.0% 5.0% 5.1% 5.1% 5.2% 5.2% 4.4% 4.5% 5.1% 5.1% 5.0% 4.2% 4.3% 4.9% 5.0% 4.7% 3.7% 4.4% 4.5% 3.4% 4.2% 4.1% 4.1% 3.1% 3.0% 3.7
Slide 21: NPL Ratios Over IEP Balance Imply Stable Credit Risk Through the Product Cycle
NPL Ratios Over IEP Balance Imply Stable Credit Risk Through the Product Cycle 15-90 NPLs Over IEP Balance 90+ NPLs Over IEP Balance Brazil Consumer IEP Brazil Consumer IEP 36.8% 35.5% 28.8% 25.4% 19.9% 15.1% 14.3% 13.0% 13.6% 14.1% 12.9% 13.9% 12.8% 12.1% 15.6% 12.1% 10.7% 10.4% 10.2% 14.1% 10.0% 8
Slide 22: Risk-Adjusted NIM Performance Demonstrates Effective Pricing for Marginal Risk
Risk-Adjusted NIM Performance Demonstrates Effective Pricing for Marginal Risk Credit Loss Allowance & Risk Adj. NIM 830.7 -2% 6% FXN 759.8 FXN 774.1 41% FXN 627.5 -5% FXN 592.5 Risk Adj. NIM (%) 11.0% 10.2% 10.1% 9.5% 9.0% Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Note 1: ‘CLA’ stands for Credit Loss Allowance
Slide 23: Q&A
Q&A Third Quarter 2024 Results 23
Slide 24: Appendix
appendix 24 Third Quarter 2024 Results
Slide 25: Purchase Volume Growth Remains Strong YoY
Purchase Volume Growth Remains Strong YoY Purchase Volume (US$BN) Purchase Volume per Customer (US$) $400 FXN US$ Prepaid/Debit Cards Credit Cards YoY: 21% month/ customer For constant risk mix analysis, please refer to Adj. Purchase Volume slide FXN $350 Credit Card: 21% FXN Prepaid/Debit Card: 21%
Slide 26: Consistent Growth and ARPAC Acceleration Across All Cohorts Adjusted By Constant Risk Mix
Consistent Growth and ARPAC Acceleration Across All Cohorts Adjusted By Constant Risk Mix Adj. Purchase Volume (US$) Adj. ARPAC (US$) per Customer $30 $450 FXN US$ FXN US$ month/ Brazil Only month/ Brazil Only customer customer $400 $25 $350 $20 $300 $250 $15 $200 $150 Q1’17 2017 $10 Q1’17 2017 $100
Slide 27: Comfortable Capital and Liquidity Positions
Comfortable Capital and Liquidity Positions Capital Position (US$Bn) Liquidity Position (US$Bn) Nu Holdings Cash & 6.0 28.3 Equivalents LDR Capital Excess 40% 1.6 x Capital Requireme nt 2.4 3.7 1.6 1.6 11.2 2.0 2.0 Capital in our Geos Nu Holdings Interest Earning Portfolio Total Deposits Third Quart
Slide 28: Formation Ratios Tracking Expectations
Formation Ratios Tracking Expectations NPL Formation Stage 3 Formation Brazil Consumer Credit Portfolio Brazil Consumer Credit Portfolio 3.9% 3.5% 4.2% 3.0% 3.2% 3.2% 3.3% 3.7% 3.6% 2.9% 2.9% 2.9% 3.0%3.0% 3.4% 3.4%3.3%3.4% 2.5% 2.6% 2.6% 3.1%3.2% 3.1% 2.9% 2.7% 2.6% 1.9%2.0%1.9% 2.1% 2.5% 1.8% 1.7%
Slide 29: Coverage Ratios Reflect NPL Dynamics
Coverage Ratios Reflect NPL Dynamics Coverage Ratio Over Total Balance Coverage Ratio Over NPL 90+ Brazil Consumer Credit Portfolio Brazil Consumer Credit Portfolio 15.3% 14.8% 14.4% 13.7% 262.6% 257.5% 263.9% 13.5% 12.6% 242.5% 235.2% 222.2% 229.1% 11.6% 10.9% 213.3% 211.9% 238.0% 10.6% 199.0% 223.
Slide 30: Portfolio Growth Continues to be the Main Factor of Provision Balance Increase
Portfolio Growth Continues to be the Main Factor of Provision Balance Increase Provisions Bridge (US$MM, FXN) (165) 462 327900% 298200% 3,279 2,982 0% 0% Q2'24 ECL Growth Other Q3'24 ECL Note 1: The information presented is for Nu Holdings and includes both credit card and lending provision balance.
Slide 31: Revenue by Yearly Cohort
Revenue by Yearly Cohort Revenue by Yearly Cohort (US$MM) 2024 5% 2% 10% 11% 9% 2023 11% 17% 2022 21% 2021 25% 18% 2020 20% 2019 (and earlier) 22% 20% 100% 19% 90% 17% 64% 49% 39% 33% 2019 2020 2021 2022 2023 Q3'24 - LTM Third Quarter 2024 Results 31 Note 1: ‘LTM’ is last twelve months for the perio
Slide 32: Loan Portfolio (FX Neutral) (1/2) Steady Credit Book Expansion
Loan Portfolio (FX Neutral) (1/2) Steady Credit Book Expansion Total Portfolio (FXN US$BN) YoY: 47% Lending FXN Credit Card IEP Lending: 97% FXN Credit Card IEP: 67% FXN Credit Card non-IEP Credit Card non-IEP: 21% FXN 8% FXN 20.9 8% FXN 19.4 11% FXN 18.0 19% 14% 16.2 17% FXN 5.7 FXN FXN 4.8 14.2 24
Slide 33: Loan Portfolio (FX Neutral) (2/2) Steady Credit Book Expansion
Loan Portfolio (FX Neutral) (2/2) Steady Credit Book Expansion Total Portfolio (FXN US$BN) YoY: 47% Lending FXN Credit Card IEP Lending: 97% FXN Credit Card IEP: 67% FXN Credit Card non-IEP Credit Card non-IEP: 21% FXN 8% FXN 20.9 8% FXN 19.4 11% FXN 18.0 19% 14% 16.2 17% FXN 5.7 FXN FXN 4.8 14.2 24
Slide 34: Non-IFRS Financial Measures and Reconciliations
Non-IFRS Financial Measures and Reconciliations This presentation includes financial measures defined as “non-IFRS financial measures” by the SEC, including: Adjusted Net Income and certain FX Neutral measures and provides reconciliations to the most directly comparable IFRS financial measure. A non
Slide 35: Non-IFRS Financial Measures and Reconciliations
Non-IFRS Financial Measures and Reconciliations Adjusted Net Income As reported Nu Holdings - Consolidated For the three months ended September 30, Adjusted Net Income (US$ million) 2024 2023 Profit attributable to shareholders of the parent company 553.4 303.0 Share-based compensation 87.2 71.2 All
Slide 36: Non-IFRS Financial Measures and Reconciliations
Non-IFRS Financial Measures and Reconciliations Q4’22 and FY22 Metrics adjusted by the CSA cancellation Nu Holdings - Consolidated December 31, 2022 As presented in the financial CSA termination As presented in the earnings US$ million statements adjustment presentation Net income (loss) – for the t
Slide 37: Non-IFRS Financial Measures and Reconciliations
Non-IFRS Financial Measures and Reconciliations Equity and Annualized ROE/Adjusted ROE US$ million Reconciliation - ROE Nu Holdings - Consolidated Q3'23 Q4'23 Q1’24 Q2’24 Q3’24 Total equity at the end of the period 5,889.3 6,406.4 6,802.7 6,923.4 7,644.3 Net Income for the period 303.0 360.9 378,8 4
Slide 38: Non-IFRS Financial Measures and Reconciliations
Non-IFRS Financial Measures and Reconciliations FX Neutral measures are prepared and presented to eliminate the effect of foreign exchange, or “FX,” volatility between the comparison periods, allowing management and investors to evaluate financial performance despite variations in foreign currency e
Slide 39: Non-IFRS Financial Measures and Reconciliations
Non-IFRS Financial Measures and Reconciliations FX Rates - On a monthly basis, Nu translates its subsidiaries figures from their individual functional currency into Nu Holdings functional currency, the U.S. Dollars ("US$"), following the requirements of IAS 21 "The Effects of Changes in Foreign Exch
Slide 40: www.investors.nu investors@nubank.com.br
www.investors.nu investors@nubank.com.br Third Quarter 2024 Results 40