Nu Holdings Shares Down 18% on Revenue Miss

Nu Holdings Ltd. (NYSE: NU) shares are down 18% after hours, trading at $12.37 at the time of publication Thursday, following the company's fourth-quarter financial results. Here's a rundown of the report.

Q4 Revenue: $2.99 billion, versus estimates of $3.29 billion
Q4 EPS: 11 cents, versus estimates of 11 cents
Nu added 4.5 million customers in the fourth quarter, bringing total global customers up to 114.2 million as of Dec. 31, up 22% year-over-year. The company said it became the third-largest financial institution by number of customers in Brazil in the quarter.
"We advanced in all of our priorities with significant strides in our High-Income strategy in Brazil, expanded our footprint in Mexico, and broadened our portfolio with NuCel and NuTravel," said Nubank founder and CEO David Vélez. "As we prepare to scale up our products and services globally, we remain focused on execution, customer-centric innovation and sustainable growth in our current markets."
Nu's executive team will further discuss the company's quarterly results on a conference call at 5 p.m. ET.



Nu Holdings reported a revenue miss in Q4 2024, with revenues of $2.99 billion, a 37.74% increase year-over-year, which fell short of analyst estimates of $3.29 billion. This revenue miss can be attributed to several factors, including lower-than-expected revenue growth in Brazil, expansion into new markets, and seasonality.

Lower-than-expected revenue growth in Brazil: Nu Holdings' High-Income strategy in Brazil did not meet expectations, leading to slower revenue growth in the region. This can be seen in the company's revenue growth rate, which was lower than historical performance and some of its industry peers.

Expansion into new markets: While Nu Holdings has been expanding its footprint in Mexico and Colombia, the initial lower activity levels in these countries temporarily impacted the company's consolidated activity rate. This slower engagement in new markets contributed to the revenue miss.

Seasonality: The fourth quarter is typically a seasonally weak period for financial services companies, which may have also contributed to the revenue miss.



Nu Holdings' revenue miss could have significant consequences for the company's financial health and growth trajectory. The company will need to address the underlying issues that contributed to the revenue miss and take appropriate actions to maintain its current growth trajectory. Nu Holdings should focus on improving its High-Income strategy in Brazil, accelerating customer engagement in new markets, and diversifying its revenue streams to reduce its dependence on a single market or customer segment and better navigate seasonality.

In conclusion, Nu Holdings' revenue miss is a setback for the company, but it is not insurmountable. With the right strategies and execution, Nu Holdings can overcome this challenge and continue to grow and succeed in the long term.