Nu Stock Surges 8% as Q2 2025 Earnings Reveal 40% Revenue Growth

Nu Holdings (NU) has experienced remarkable post-earnings enthusiasm, with its shares surging 8% after the release of its Q2 2025 results. The company reported a GAAP EPS of $0.13, aligning with Wall Street estimates, and revenue reached $3.7 billion, marking a substantial year-over-year increase of 40%. The adjusted gross margin expanded by 160 basis points to 42.2%, and net income saw a notable rise of 42%, totaling $637 million. Adjusted net income closely followed, recording a similar growth to $694.5 million. The robust performance in net interest income, which climbed 33% to $2.1 billion, indicates strong demand within Nu Holdings' customer base.

Deposits increased to $36.6 billion, up 41% compared to the previous year, while active customers grew by 17%, now totaling 122.7 million. The company anticipates continued growth driven by increased customer engagement and entry into new markets, with investments in technology and customer service aimed at maintaining high activity rates.

Further insights into Nu Holdings' Q2 financials reveal an adjusted operating income of $1.2 billion, up 30% year-over-year, and adjusted operating expenses totaling $1.5 billion, reflecting a 20% increase. Free cash flow rose by 25%, reaching $500 million, with the effective tax rate standing at 25%, an increase from 22% the previous year. Monthly average revenue per active customer grew by 18%, now at $12.2, while the cost to serve remained steady at $0.80 per customer.

The non-performing loan (NPL) metrics drew attention, with the 15-to-90-day NPL ratio decreasing by 30 basis points to 4.4%, while the 90+ NPL ratio marginally increased by 10 basis points to 6.6%. CEO David Vélez commented on the results, emphasizing the company's efficient scaling while achieving strong earnings and laying down a foundation for sustained success.

Analyzing credit growth and portfolio composition shows a record surge in loan volume, with origination levels up 64% year-over-year. Notably, traction in unsecured and public payroll loans within Nu's portfolio underscores growth, coupled with a significant increase in secured loan balances by 300% year-over-year.

The Mexican market displays promising growth, with banking revenue nearly doubling to $245 million, following the award of a full banking license last quarter. Investors will closely monitor new product rollouts and the expansion of the deposit base.

Nu Holdings continues to operate efficiently, maintaining cost per customer below $1, while average revenue per active customer improves across cohorts. Operating leverage in Brazil is a critical factor in sustaining the long-term bullish outlook for the company.

While consolidated net interest margin (NIM) fell to 17.5%, margins in Brazil remained steady despite seasonal impacts and the allocation of funds toward deposit expansion in newer markets. The emphasis on FGTS and private payroll lending expansion showcases Nu's leading share in Brazil's FGTS market while pushing private payroll loans as a burgeoning segment.

The upcoming Q2 earnings report will provide further clarity on Latin American economic conditions and competitive dynamics. Analyst forecasts position Nu Holdings for continued upswing, noting a projected revenue of $27.4 billion and earnings of $5.1 billion by 2028, necessitating substantial annual growth rates.

With these developments, Nu Holdings exhibits resilience in maintaining customer acquisition and engagement while navigating the credit risk landscape associated with an expanding loan book. The strategic appointment of Roberto Campos Neto, former Brazilian Central Bank President, as Vice Chairman and Global Head of Public Policy aligns with international expansion efforts and risk management considerations.

As investors digest these earnings and leadership movements, Nu Holdings remains poised for substantial growth, bolstered by its innovative approach and extensive customer reach across Latin America.