Nu Holdings has demonstrated strong revenue growth, with Q1 adjusted net income increasing to $606.5 million and revenue reaching $3.2 billion, a 40% year-over-year increase on a foreign exchange neutral basis. Net interest income also increased 34% year-over-year, reaching a new all-time high of $1.8 billion. However, revenue missed consensus estimates by $30 million, and net interest margin compressed to 17.5% from 17.7% in Q4 2024 and 19.5% in Q1 2024.

Nu Holdings is focused on deepening its market presence in Brazil, Mexico, and Colombia, aiming to increase principality and expand TAM for payroll loans. The company added 4.3 million new customers in Q1 2025, reaching a total of 118.6 million. However, slower revenue growth, higher cost of risk, and lower return on equity are concerns. The company's CEO, David Velez, understands that the exits of top executives look scary to investors, but the company is bringing in a new set of executives for the new phase.

The stock has experienced volatility, with a 9% slump after Q4 earnings due to revenue and purchase volume misses. However, it has shown resilience, rebounding after initial sell-offs. Recent news of management layer cuts led to a 2.8% increase in the stock price. Analyst ratings are mixed, with some downgrades to 'Hold' and others maintaining a 'Buy' rating.

Nu Holdings faces several risks, including slower revenue growth, higher cost of risk, and lower return on equity. Macroeconomic uncertainty in Brazil and its impact on asset quality are also concerns. Analyst concerns include NIM compression, funding cost pressures in new geographies, and the pace of PIX financing growth. The company's Q1 earnings included a net income benefit of $42M from the usage of deferred tax assets, a non-recurring item.

Nu Holdings is expanding its product offerings, including increased deposit limits and a payroll account in Mexico, as well as multiplying deposit insurance coverage. The company is also refining its PIX financing offer and plans to launch new products under its Money Platform strategy. However, there are no details on the innovation of the products.

Citi downgraded Nu Holdings to Sell from Neutral as it faces a tougher road for growth after rapid expansion. Citi reiterates its Buy rating for Inter & Co., noting that the company is still in the early stage of growth in unsecured loans and its diversification efforts could support even faster growth in NII/NIM.

BofA Securities analyst Mario Pierry pointed to slower revenue growth, higher cost of risk and lower return on equity. The miss reflected a sharper compression in risk-adjusted net interest margin (-120bp Q/Q to 7.0%), mainly reflecting higher cost of risk (17.1% of avg loans up from 15.5% in 4Q), and lower credit spreads (on higher funding costs, weaker loan mix, geographic expansion).

Nu Holdings targets 70% TAM for Brazil payroll loans amid $28.9B deposit growth. The company is also expanding into Mexico and Colombia, with impressive results. In Mexico, the company received an initial license for banking, but it could take three to five quarters before Nubank can operate fully as a bank.

Warren Buffett's Berkshire Hathaway trimmed stakes in Nu Holdings to 86.4M shares from 107M. The company's CEO, David Velez, understands that the exits look scary to investors, but the company is bringing in a new set of executives for the new phase.