Essential Highlights
- Nu Holdings (NU) delivered Q4 net income of $894.8 million, a remarkable 50% increase compared to the prior year
- Total revenue surged 45% to reach $4.86 billion as the digital bank expanded its user base to 131 million across Brazil, Mexico, and Colombia
- Stock price fell 9.55% to $15.06 on Feb. 26 despite exceeding analyst revenue forecasts
- Investors worried about escalating operating expenses and management’s vague margin projections
- In January 2026, the fintech received preliminary OCC authorization to establish a U.S. national banking operation
Nu Holdings (NU) released its fourth-quarter 2025 earnings on Feb. 25, 2026, showcasing exceptional financial achievements, but the stock experienced a sharp 9.55% drop the following day, closing at $15.06.
The negative price movement caught numerous market watchers off guard, particularly considering the strength of the company’s quarterly performance.
Net income for the quarter totaled $894.8 million, a substantial 50% increase from the $552.6 million posted in the same period of 2024. Revenue hit $4.86 billion, demonstrating 45% year-over-year expansion and surpassing analyst consensus estimates of roughly $4.55 billion.
The Latin American digital banking pioneer posted a 33% return on equity alongside an enhanced efficiency ratio of 20%.
User growth momentum continued with 17 million additional customers acquired throughout the quarter. Nubank’s customer base reached 131 million by the conclusion of 2025 across its three active markets—Brazil, Mexico, and Colombia. This figure represented 15% growth annually and captured 62% of Brazil’s adult population.
Average revenue per active customer (ARPAC) jumped 27% from the previous year to $15, driven by expansion in credit offerings, interest income from deposits, and fee-generating services.
The lending portfolio expanded 40% to reach $32.7 billion. Asset quality showed modest improvement as the delinquency rate for loans overdue by 90-plus days decreased by 0.1 percentage points to 6.6%.
Investor Worries Behind the Stock Drop
JPMorgan analysts noted that the earnings beat derived mainly from favorable tax treatment rather than fundamental operating improvements. This perspective resonated with cautious market participants.
Citi characterized the quarterly performance as demonstrating “strong top-line” results while raising red flags about cost of risk metrics and operating expense trajectories that muddied the investment thesis.
Investors also expressed frustration with management’s reluctance to provide concrete forward guidance regarding profitability margins, leaving questions about sustainability unanswered.
The stock initially jumped 4% in the immediate aftermath of the earnings announcement, but sentiment quickly soured. By the end of trading on Feb. 26, NU had plummeted 9.55%. Extended trading hours revealed additional softness with shares settling near $15.07.
Chief Financial Officer Guilherme Lago credited the profit expansion to growing customer adoption, enhanced per-user monetization, and disciplined cost management. Chief Executive David Vélez described 2025 as a “fantastic year” for the organization.
Expanding Into United States Territory
A major development emerged in January 2026 when Nubank received preliminary OCC authorization for a U.S. national bank charter—representing the initial step of three mandatory regulatory approvals. The company has 12 months to fulfill capital adequacy requirements.
Vélez acknowledged the formidable competitive environment in American banking while pointing to promising opportunities within specific customer demographics.
For 2026, management outlined critical strategic objectives: obtaining a banking license in Mexico, broadening product offerings for small-to-medium businesses and high-net-worth individuals, and deploying artificial intelligence capabilities across the platform.
Analyst sentiment remains predominantly optimistic. Price targets for the coming 12 months range from $18.05 to $22.00, implying upside potential of 20% to 46% from present levels. Most analyst ratings fall within the Buy category.
The stock has fluctuated between $9.01 and $18.98 during the past 52 weeks, with the recent high near $18.98 achieved in late January 2026. The company’s market capitalization currently sits between $78 billion and $80 billion.
Nu Holdings will report first-quarter 2026 results on May 14, 2026.
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