How efficient is NU's expense management?

Nu Holdings (NYSE: NU) demonstrates efficient expense management as evidenced by its strong financial performance and profitability metrics. 1. **Low Cost-to-Serve Ratio**: Nu's monthly average cost to serve per active customer remains below the dollar level, at $0.8, which underscores the company's ability to scale its platform while maintaining sustainable cost advantages. 2. **High Profitability**: The company has achieved impressive profitability, with a 17.1% net profit margin in 2024, up from 12.8% the previous year. This indicates effective management of expenses in relation to revenue generation. 3. **Revenue Growth Outpaces Expense Growth**: Nu's revenue growth has been substantial, with a nearly 19-fold increase between 2019 and 2024. This growth outpaces any corresponding increase in expenses, suggesting that the company is able to expand its service offerings and customer base while keeping costs under control. 4. **Efficient Customer Acquisition**: Nu's customer acquisition costs are low, as reflected by the company's ability to add millions of customers at a relatively low expense. For instance, in Q1'22, Nu was the conglomerate that added the most customers, with 17 million, significantly outpacing competitors. 5. **Sustainable Financial Health**: The company's market cap has advanced to over $50 billion, with a dominant position in Brazil, Mexico, and Colombia. This financial strength allows Nu to invest in technology and expand its service offerings without being constrained by high expenses. In conclusion, Nu Holdings exhibits efficient expense management, as indicated by its low cost-to-serve ratio, high profitability, and strong revenue growth. The company's ability to acquire customers at a low cost and maintain a sustainable financial position further underscores its effective expense management.