Nu Holdings (NYSE: NU), the Brazilian fintech powerhouse, faced a sharp 7.9% decline in after-hours trading on Thursday after releasing its Q4 2024 earnings report. Despite posting strong year-over-year growth, the company missed revenue expectations and saw a slowdown in new customer acquisition, causing investor concern.
Nu Holdings Q4 2024 Earnings Snapshot
- GAAP EPS: $0.11 (Met expectations, unchanged from Q3, up from $0.07 in Q4 2023)
- Revenue: $2.99 billion (Missed Wall Street’s estimate of $3.17 billion, but up from $2.94 billion in Q3 and $2.40 billion in Q4 2023)
- Operating Expenses: $595.9 million (Lower than Q3’s $624.8 million but higher than $583.3 million a year ago)
- Purchase Volume: $32.2 billion (Up from $30.9 billion in Q3 but slightly below $32.6 billion in Q4 2023)
Customer Growth Slows Despite Expanding Base
Nu Holdings continued to expand its user base, adding 4.5 million new customers in Q4 and bringing its total customer count to 114.2 million. However, this represented a slowdown compared to the 5.2 million new customers added in Q3, raising concerns about the firm’s growth momentum.
- Monthly Average Revenue per Active Customer: $10.7 (Down from $11.0 in Q3, slightly up from $10.6 in Q4 2023)
- Monthly Average Cost to Serve per Active Customer: $0.8 (Up from $0.7 in Q3, lower than $0.9 a year ago)
Investor Reaction and Market Implications
Despite positive trends in purchase volume and cost control, the revenue miss and decelerating customer growth overshadowed the quarter’s gains. The stock’s nearly 8% drop in after-hours trading underscores investor concerns about Nu Holdings’ ability to sustain its rapid expansion and meet revenue expectations in Latin America’s highly competitive digital banking sector.
With digital banking adoption on the rise, all eyes will be on Nu Holdings’ strategic initiatives to enhance monetization and accelerate customer acquisition in 2025. Investors and analysts will closely monitor upcoming quarters to gauge whether the fintech giant can regain its growth momentum and rebuild investor confidence.
