Why did NU's Q4 2024 earnings fall short?

Nu Holdings Ltd. (NYSE: NU) experienced a notable decline in its Q4 2024 earnings, with revenues coming in below expectations. Here are the key reasons for this outcome:

1. Currency Fluctuations: Nu's financial results are significantly influenced by currency fluctuations, particularly in Latin America, where the company operates. The volatile currencies in the region make it challenging to compare the company's performance across periods and with expectations.
2. Revenue Mix: The revenue mix within Nu's business has an impact on profitability. For instance, the company's lending portfolio saw a 97% year-over-year increase, but this segment might not yet be at the scale of its established segments like consumer finance and credit cards. The revenue per active customer is growing, but it takes time for customers to reach their full revenue contribution potential.

In summary, Nu's Q4 2024 earnings were impacted by currency fluctuations and revenue mix.