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Digital financial services company Nu Holdings Ltd (NYSE:NU) reported fourth-quarter and full-year financial results after market close Tuesday. Here are the key highlights.
What Happened: Nu Holdings reported fourth-quarter revenue of $1.45 billion, which missed a Street estimate of $1.47 billion according to data from Benzinga Pro.
Net income for the company was $58 million in the fourth quarter, marking a second consecutive quarter of profit.
The company added 4.2 million customers in the fourth quarter, taking its total to 74.6 million globally. Nu had monthly average revenue per active customer of $8.20 in the fourth quarter, up 37% year-over-year with growth coming from cross-selling and new products launched.
“Nu posted record results this quarter, with growth across all metrics and a meaningful increase in profits,” Nu founder and CEO David Velez said. “We reached a total of 75 million customers in Brazil, Mexico and Colombia, increasing engagement, cross-sell and up-sell.”
Full-year revenue for Nu Holdings was $4.8 billion, a yearly record for the company. Brazil represented $4.5 billion of the company’s 2022 full-year revenue.
The company added 20.7 million new customers in fiscal 2022, which was 38% year-over-year growth.
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Why It’s Important: Nu ended the year as the fifth-largest financial institution in Brazil and sixth-largest in Latin America based on the number of active customers.
Nu was named as the primary banking relationship for over 58% of its monthly active customers that have had accounts for a year or more.
The company highlighted the strong results from Brazil and the opportunity for expansion in more regions.
One item highlighted was its NuInvest, which reaches seven million active customers and is one of the largest digital investment platforms in Latin America.
The company also has NuCripto, which has grown to 1.3 million active customers since it rolled out in July 2022.
With its interest in cryptocurrency, Benzinga previously reported that an investment in Nu Holdings gave Warren Buffett exposure to a sector that he has spoken ill of for years.
Buffett famously called Bitcoin “rat poison squared.”
The legendary investor took a $500 million stake in Nubank in June 2021 with Berkshire Hathaway Inc (NYSE:BRKA)(NYSE:BRKB). Berkshire added to its position in December 2021 when Nu Holdings went public. Buffett’s company owns a stake in Nu Holdings that was previously valued at over $1 billion before the price of the digital bank fell.
Nu Holdings launched new cryptocurrency trading platforms and announced it would allocate 1% of all its cash to Bitcoin (CRYPTO: BTC).
With its investment in Nu Holdings, Buffett could be investing in the growth of digital banking in the Latin America region, while also getting indirect exposure to the growth of cryptocurrency in the region.
NU Price Action: Nu Holdings shares are up 5.40% to $5.27 in after-hours trading Tuesday versus a 52-week trading range of $3.26 to $11.83.
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Photo: Mohamed Hassan from Pixabay
