The fintech landscape in Latin America is witnessing a remarkable surge, particularly with the performance of Nu Holdings, a company often hailed as a pioneer in the digital banking realm. Over the past year, Nu Holdings has seen its stock appreciate by more than 50%, drawing significant market interest due to compelling growth in customer acquisition, revenue, and earnings.
NuBank, the company’s flagship offering, is now recognized as the largest digital-only direct bank across the region, operating in key markets including Brazil, Mexico, and Colombia. By focusing on an online banking model that features no-fee credit cards, Nu has outpaced traditional banking institutions. The firm has effectively broadened its services by introducing new lending options, e-commerce solutions, and cryptocurrency trading capabilities.
From the end of 2021 to the third quarter of 2025, Nu’s customer base more than doubled, expanding from 53.9 million to a staggering 127 million. This surge also coincided with an increase in the monthly activity rate among users, climbing from 76% to 83%. Moreover, Nu has substantially increased its average revenue per active customer (ARPAC), which nearly tripled from $4.50 to $13.40, while maintaining a stable average monthly service cost per active customer at $0.90. This indicates that the company is succeeding in cross-selling financial products without undermining its profit margins.
Between 2021 and 2024, Nu’s revenue demonstrated an impressive compound annual growth rate (CAGR) of 89%. Notably, the company achieved profitability under generally accepted accounting principles (GAAP) in 2023, and its earnings per share (EPS) nearly doubled in 2024. This impressive growth trajectory has continued despite challenging conditions in some of its primary markets, including political instability and hyperinflation.
However, while Nu has maintained a pace of growth, there has been a noticeable deceleration in its year-over-year customer growth rate, with sequential declines observed in its monthly activity rate. Factors like currency fluctuations and heightened investments have contributed to an increase in the cost of servicing active customers, even as ARPAC has risen. This resulted in a stabilization of total revenue growth during the first half of 2025, with a resurgence noted in the third quarter.
Recent quarterly metrics showcase the trends, with customer growth rates and revenue growth stabilizing, albeit at a slower pace than initially experienced. The gross and net interest margins have also seen pressure as Nu increases its presence in newer markets like Mexico and Colombia, which requires higher funding costs compared to its more established Brazilian market.
Looking ahead, analysts forecast substantial growth for Nu in the coming years, expecting a 36% rise in revenue and a 46% jump in EPS for the current year. Projections indicate that from 2025 to 2027, revenue and EPS could increase at a CAGR of 30% and 37%, respectively. The company’s newly acquired banking license in Mexico and an application for a full banking license in Brazil are anticipated to bolster this growth, enhancing credibility and compliance with emerging fintech regulations.
Additionally, Nu’s recent application for a U.S. bank charter further signifies its ambition to expand into the American market, potentially increasing its market share and strengthening its competitive stance against both fintech and traditional banking entities. The integration of NuBank’s NuPay with Amazon’s Brazilian platform could also offer strategic advantages in a competitive landscape that includes formidable players like MercadoLibre.
Given its current valuation at approximately 20 times the projected earnings of next year, there is a compelling investment case for Nu Holdings, particularly for those who believe the fintech firm will meet analysts’ optimistic forecasts. The ongoing macroeconomic challenges in Latin America may be constraining its valuation, but any improvement in this area could further heighten investor interest as Nu continues to expand its customer base and service offerings in advance of its upcoming fourth-quarter earnings report in February.
