As of the end of the second quarter, about 118 million of them -- more than half the country, before even narrowing the count to adults -- were customers of Nu Holdings (NYSE: NU), the digital bank behind the Nubank brand. The company reported second-quarter results after the closing bell on Thursday, and the headline number was profit. Net income surpassed $1 billion for the first time, rising 49% year over year on a currency-neutral basis, with a 33% return on equity.
This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia.
Continue » But the numbers that describe saturation may matter more for the long run. Nu's monthly activity rate in Brazil surpassed 86% for the first time, meaning the accounts aren't just open -- they're being used. So what does growth look like for a bank that has, in one sense, already won its home market?
Nu added about 4 million customers in the quarter, reaching 138.9 million globally, up 13% year over year. That is a solid rate, and also a slowing one. It is the natural arithmetic of a company running out of Brazilians to sign up.
The growth now comes from each customer, not just more of them. Monthly average revenue per active customer (ARPAC) reached $17.10 in the quarter, up 22% year over year in currency-neutral terms, while the monthly cost to serve an active customer held around $1. In annual terms, that is about $205 of revenue per active customer against about $12 of cost to serve.
The overall monthly activity rate expanded sequentially to 83.5%, with Brazil above 86%. The balance sheet is scaling with the engagement. On a currency-neutral basis, Nu's credit portfolio grew 37% year over year to $39.4 billion, deposits grew 18% to $45.3 billion, and gross profit climbed 43% to $2.4 billion.
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