Nu Holdings Ltd. (NU) Earnings Call Transcript & Summary

And there's still so much more to be done.

We still have many more customers to serve better, more people and businesses to welcome and millions more who still like access to great financial services across the world.

There's so much complexity around the world in multiple markets. Our mission is precisely to fight the complexity on behalf of hundreds of millions of customers.

This is an infinite game for us. And honestly, we're just getting started. Hello, everyone. Good morning. Thank you for being here. It's an honor to welcome you here into our Nu Stadium. We see so many familiar faces, the room is packed, and we have over 10,000 people watching online. So really, really amazing special moment for us to share and an incredible announcement. That video covers 13 years in just a few minutes, I wish building Nubank has that been that smooth. But the reality was conservatively messier. It started with an ordinary moment. In 2012, I moved to Sao Paulo and I needed to open a bank account. Very simple task. I walked into one of those very fancy branches from one of those very fancy banks. And then I hit a wall, I ran into an outrageous experience. I was stuck in a bulletproof revolving door, an alarm started sounding. Armed guards came to see me as almost a criminal and I had to walk out back and leave my backpack outside in a locker and then walk back in. And then just begins 1.5 hour wait begging to get a simple bank account. And that entire process ultimately took over 5 months, 5 months until that final credit card arrived carrying a 1,200% interest rate. I remember thinking, I am trying to give my money to this bank. Why are they treating me like they're doing me a favor? And I would ask my friends, is there something wrong with this bank specifically, or what's the issue? And what I kept hearing was, don't waste your time trying to find a different bank. They're all the same. They're 5, they all look the same. And so what is the point? Another revolving door, another long wait, another set of fees. And just customers were not satisfied. And they had simply stopped believing that anything better or a better experience was possible. And so that was the problem we set ourselves to create 13 years ago. We set ourselves to build a financial institution that was simple, transparent and truly on the customer side. We started with a small team. You saw the little house in the beginning. Plenty of skeptics, plenty of naysayers. Most of that came from the -- outside the banking system. And would they have licenses or special connections with regulators or an established brand? We were a complete team of outsiders. What we did was we had a very clear conviction on the problem we were trying to solve. Technology had enabled the reinvention and financial services, and perhaps that also enabled us to create something most people thought was impossible: products and services that customers loved fanatically. We began with one very simple product, a purple credit card with no annual fee, or roxhinho as we call it in Brazil. And we put it in customers' hands, listened carefully, improved and iterated very quickly, and then obsessed about solving every single little detail. And then something happened that none of us had put in our original business plan. People became fans. People painted their cars in purple. They did their birthday parties on Nubank. They had their dogs become customers. This became a fanatical brand, something you had never seen in financial services anywhere around the world. People never behave that way towards a bank. And this behavior told us that customers were readier for this type of experience. They were readier to be treated well, to be treated like human beings, Banking had become a source of constant unnecessary anxiety. And when you remove that anxiety and get people back a little control, they notice. We used to track, I remember this very well, the name of every new customer coming in through Slack. And we would celebrate every single customer. And then those 12 customers went into 1,000 and 1,000 to 1 million in less than 2 years. It exploded. The channel in Slack like went down immediately. And that 1 million became 5 million and then 10 million and then 100 million. And today, more than 140 million customers in Latin America use Nu and make it their most preferred financial services institution. Take a second to think about that number, 140 million people. But scale can become an abstract very quickly, so let me bring it down to think about it specifically about every single 1 of our customers. And we met them incredibly well, and some of them are actually here with us. It's Ada, it's Dario. It is the people who started you saw up there that we were trying to show and they were trying to put front and center. Thank you for trusting us and for pushing us keep getting better every single day. But as we grew, one question kept coming back. Is this fanaticism just uniquely to Brazil? Is this something specific about Brazil that is making this explosion in terms of customers? When we thought about first principles, we just didn't think so. Every banking system around the world in every country has its own rules and history and regulation, of course, it's a local business. But from a customer's point of view, the problems look remarkably familiar. People want to be treated well and they want to be treated as we treat their -- our friends and our families and our partners. And the details are actually very similar around the world: high cost, unnecessary complexity per service, product design around the institution, wanting to figure out how to increase revenues versus increased consumer experience. So then a few years ago, we decided to test that idea. Could the new bank model travel across borders? And we would enter each new market the way we build Nu in Brazil. We started very focused, earn the trust of each customer one at a time, and then build more of what people need. So in 2018, we entered Mexico. And today, Nu is the largest digital bank in the country with over 16 million customers in Mexico. The business is profitable, growing very quickly, and the model traveled. Mexicans found a new way to manage and trade their money. And then in 2021, we entered Colombia. I'm Colombian. I was born there, so it was a very, very meaningful moment for me as we launched Nu in Colombia. And then we got surprised once again as Colombian customers responded incredibly quickly. And when you look at the course in Colombia and Mexico and Brazil, everyone grows faster and faster than the rest. So the same model that worked in Brazil and Mexico was working again: 3 countries, different systems, but the same basic customer need. People just want to be treated well. And across those markets, the impact we've had over 13 years is actually incredibly substantial. So since then, we've earned -- paid over $10 billion in yield for our customers. And that is money working for customers, that is not sitting idle in some bank accounts. We estimate that we have saved them over $28 billion in banking fees that, if we were not around, would still be -- have been removed from our customers' pockets in fees back to those big banks. And then the most incredible statistics, we actually did the calculation, and we think we've returned more than 77,000 years of time that otherwise -- more valuable than money is time. And so 77,000 years that otherwise all this 140 million customers would have spent being locked in a banking branch, waiting to be let in and begging to open a single bank account, navigating that bureaucracy or waiting to get actually be served well with bad customer service. So 77,000 years, and that time goes back to their families and to their friends, to the things that they actually love to do. So this is not separate from our business model. This is the business model. Technology enable the opportunity to operate at a significantly lower cost than our competitors. And so we return that efficiency back to our customers via better price, better product and just a much faster customer experience. Customers stay, use more of Nu, and then they tell their people and they tell their friends and becomes a viral, viral brand. And when customers win, this business gets stronger. And when the business gets stronger, we can create even more value for customers. Brazil, Mexico and Colombia still offer enormous opportunity for growth. It's day 1 for us even in Brazil. But they have also taught us something important, that the model can trouble. Because the problems we're solving are not specific to Brazilians or Mexicans and Colombians. These products are global in nature, not specific to any single country. And this is the most incredible statistics I think I'll present. More than 95% of the world's banking still happens today in 2026 through very big, fancy, expensive banking branches owned by incumbents. After a decade of fintech around the world, it's so early in the development of this market. All of that market continues to be in banking branches. And this means high fees, every single customer is paying very high fees, for an infrastructure they actually don't need. It's almost as if every single customer was paying for a rent of an apartment that they're actually not even using. So after a while, banks forget the one thing that actually gives them the right to exist, which is the customer. And that's for the people who actually have a bank account. There are still close to 3 billion people in the world that remain unbanked or under-banked that they don't even have the luxury of getting into a banking branch. They don't even get welcome to be trapped in a bulletproof door. So for us, as we think about the next few decades, the answer became obvious: continue expanding our model globally beyond our core markets and try to serve those customers incredibly well, whatever they are. We know how to enter markets, start with focus, earn trust, obsess about solving each little problem and expand the relationship over time. And today, we're ready to take the next step, and I'd like to invite my Co-Founder, Cris, to tell us about it. Go ahead, Cris. Come on.

Hello, and good morning. Thank you for coming. It's great to see so many familiar faces. Thanks for everyone that showed up today. We had a big turnout today, so I want to acknowledge that. Thank you. So happy to be here. So let's talk about the next step. Like David did in Brazil some 13 years ago, I had to open a bank account when I arrived here in the last, last year. I have to get the account, get a credit card. And after a while, I got that account, and then eventually, months later, they told me, finally, they were ready to approve a credit card for me. Of course, it took months, but it was like, okay, now we're ready. But then they said, no, no, wait a minute. We approved you a credit card, but we don't have proof of your address. But that was the same thing they had in my mortgage. So they had it right there to -- of course, they said, no, but that's the mortgage people, right? Like the credit card people don't see that. Great. Thank you. Same bank, same building probably, and they couldn't talk to each other. And it wasn't just me. I bet any -- everyone in this room has some story that looks like that. Even Pope Leo is an immune to bureaucracy and bad customer service. I don't know if you guys saw the story. But of course, he became Pope and he moved to Europe. So he had to call his bank back in Chicago to switch addresses. And he went through all the security questions. He cleared them all. But still, they insisted that he had to come into a branch in Chicago to do so, to which, of course, he said, "I really can't. I mean the Vatican, because I'm the Pope" and they can [indiscernible] for him. So anyway, if the system is this broken for the Pope, you can imagine how it feels for millions of other people across this country who are just drowned in paperwork and stuck in those endless lines. And then you go through all that and what happens. You get your account, but then your money just sits there, right? How does that make sense in a country like the U.S.? Here, if you work hard at something consistently, it builds into something real. Your skills compound, your career compounds, your relationships get deeper the longer investing them. There's a reason people call compound interest the most powerful force in the universe. But your money doesn't compound, not here. Again, it just sits there. Fees eat at it, inflation eats the rest. You know the drill. You can get cash back on this category, but not on that one. You get those sign-up bonuses or you get miles, but then they expire before you can use them. And then you pay hundreds and hundreds of dollars on annual fees, for a card that doesn't even look that nice. The U.S. still writes more paper checks than any developed country on earth. Not because people here deserve less, but because the system had never had a reason to change. Think about the number of financial apps on your phone. Most of us here are based out of the U.S. They just [indiscernible] [ without end ]. And somewhere in our minds, we've got to run through this whole checklist just to make sense of what you've got to do when and where not to be tricked by some fine print. All that nonsense has a name, it's called complexity. And it's the thing that we've been fighting for over 13 years now. And that's why we've been getting so much noise from our customers, people that grew up with us with Nu in Brazil, Mexico and Colombia, but then moved here for school, for work, for family. And then they had to open an account at a bank that still makes you wait in a line at a branch. These people have seen this before. They have seen us before, and they really miss us. Not just in theory. They miss us every time they have to write one of those paper checks or when they get slapped with an unexpected fee. I'll let Camilla tell you herself.

It was actually a big surprise for me. I was told that I needed to send a fax. And I did not know that fax still was a thing here, when in reality I could just solve everything to myself. Right now, banking is that thing that you have to do, but it's so annoying and it's time-consuming and it's never easy. But Nubank changes all of that. I'm here talking about new bank is because I believe how incredible it is and how amazing it will be when it enters the North American market.

And it wasn't just them. It wasn't just people like Camilla who move here. Over the years, we've lost count of how many messages we got asking us to bring Nu here. People from all over the country, people from California from Silicon Valley, people from New York, people from Texas, people right here from Florida, people who found us through Inner Miami or through the Mercedes F1 team, or people that just live here, but they're very tired of all the bureaucracy. People like Chris.

In my day-to-day life, I value seamless experiences, whether I'm working out eating out or taking a trip. Nu could really add value to all of those experiences by helping to make sure that the financial aspect of those experiences really and seamless and adding value and allowing me to live life at my pace.

Well, guess what, that future that he's talking about already exists. It just hasn't arrived here yet. But today, it does. Today, we are launching Nu in the United States. I know. I know. We're all very excited. All right. There's a lot to talk about. Let's see what that looks like. [Presentation]

All right. What does that actually mean for you? As you may have understood from what we've been talking about, we want to be an institution that you love and that loves your back. So your money here will actually compound, as it should rather than sitting idle. You will earn 3.5% APY on every single dollar. Not a separate savings account, you have to remember the fee or ask permission to move. No subscriptions, no minimums, no loopholes. That's the default. And coming soon, when you pair it with the Nu credit card, your earnings will be boosted into 4.5%. In the Nu credit card, won't just lock more yield for you. It will offer you a truly premium card experience but with 0 annual fees. It will be, for the first users that come in, a limited edition beautiful card. It is a metal credit card from our partner MasterCard that we're very happy to have here with us tonight -- today, with a limited 1.5% cash-back on every purchase. But we want to reward your loyalty. We want to earn your business. So coming soon, that cash-back will be boosted to 2% when you bring in your direct deposit to the account. So you're going to get cash-back with no categories, no [ caps ] and nothing to track, every benefit that people usually pay hundreds and hundreds of dollars a year for included. It's that simple. And if you ever need to talk to someone, a real person who actually gives a damn, will pick up and speak to you in English or Spanish or Portuguese, whatever you need, 24/7, 365 days a year. Now think about it. You get the accounts, the debit card, your savings, your credit card, transfers, including to Brazil, Mexico and to Colombia, and soon to many more countries, in one app. So many of those random financial apps that you have in your phone and those log-in and credentials, no longer necessary. We are already able to bring all of this to you today with our partner, Lead Bank, who's also here today. Yes. Where your deposits will be held at FDIC insured. But as you may have heard earlier this year, federal regulators approved our plans to build a national bank in the U.S. And we can wait to open the doors of the bank next year and be able to offer even more to our customers. We believe you deserve someone who's going to work hard every day to earn your business and not make it feel like you're doing -- they're doing them -- you a favor. Because a relationship built on transparency and trust works for both sides. We mean it. We put our name on the stadium. We brought an F1 car to the stadium. And we're building our operation and our team here. And I personally packed a husband, 4 kids, including a 6-month old baby and moved my family here. We have a lot of conviction that we can reset your expectations about how to handle your money. Trust isn't a feeling, it's embedded in everything that we do. And you're probably being told that it's pointless to switch banks, like David was back in Brazil, that they all work the same way and there's nothing to be done about it. But the nonsense that we've been trained to accept here, that it's okay for banks to work that way, that's not normal, and it's surely not necessary. But that's not all that we have to tell you today. David?

All right. Super exciting. Thank you, Cris. All right, who's excited to be a customer of Nu in the U.S.? Let's hear it. All right. There you go. Awesome. So super exciting to be able to make this announcement and bring our products and services to the biggest market in the world. So we're very focused and it's an important moment for us. Is that it? It's not. We got a couple more surprises to share with you all. And we're ready, finally, to even go beyond, because, as I said earlier, we have concluded that these are some of the problems that are global, and we want to go beyond. For the next decade, we want to continue building and taking the way we do banking to the U.S. and beyond. What about all those billions of customers that could benefit from our approach in financial services? That are still going through those banking branches? That are still begging to get a simple bank account or that have a credit? For them, today, we're also introducing for them a great new product called Nu Global. So Nu Global is our first step towards serving customers in other 35 countries. So who is this for exactly? Many of you know from your own lives that money no longer stays neatly inside one country. Most of you live lives in multiple countries at the same time. People study abroad. They build careers far from where they were born. They support family across borders. Their financial lives have become global. While most financial products and banks remain stubbornly local. Customers often use one app to hold money, another different to transfer it. And think about the last time that you had to send money from one country to the next, was so painful, was so expensive. You only have to compare rates, search for fees, wait for the transfer. Customers end up once again managing all that complexity that shouldn't really exist for them to handle. And we think that there is a way to do it much more simpler. Like this. Let's take a look. [Presentation]

So let me walk you through what you can actually do with Nu Global, if you're in 1 of those 35 different countries that we're announcing initially. First, you can earn, the same value proposition. It's a multicurrency account that saves some stablecoins, where customers can hold digital dollars and euros with a 3.5% annual yield on dollars and 2.2% in euros, paid daily. Finally, your money compounds also across the world. Your money will keep working for you without you having to think about it. Second, spend. You can create a virtual card with our partner, Mastercard, added to your wallets, with no international transaction fees or hidden markup to spend as you go around the world. And finally, we liberate money. Money can move across for more than 35 countries quickly, no transfer fees, no exchange rate spreads. You don't get that anywhere else. Finally, you can also diversify your funds with a selected range of digital assets carefully curated. Now put these pieces together. Today, customers assemble their financial lives across multiple apps. Each one solves a narrow problem and the customer has to make the whole thing work. Nu Global brings it all together in one place. Our ambition is to earn the primary financial relationship with these customers one useful interaction at a time. And the opportunity is much larger. We already serve more than 140 million customers across Brazil, Mexico and Colombia. If you are U.S. and 35 countries on Nu Global, you have the opportunity to build a global payment network where people can send and receive money real time for free. Now let's imagine that world in which all these Nu customers are connected no matter where they are. And sending money should be as easy as sending a text message, real time, for free. This is what we're building towards over the next decades. And we strongly believe that the future of global retail financial services will belong to consumer-obsessed, digitally-native firms such as Nu. Cris, why don't you join me here to close it up?

Yes. So as David was saying, this is the future that we envision, and that's why this moment is just so special for us. This is just the first step, but it is the right step into the next phase of our journey to build that future. We've been working so hard on this for a few years now. And we've waited a long time to say this. So that question that we kept getting from so many people from so many different countries, when is Nu coming? When can I have this? Well, today is when. [Presentation]

So if you're here in this room or if you're watching from home, is because you want to be a part of that future. So here's the ask. Take out your phone now or if you're online, just go into a browser right now, we're sitting here, and sign up on nu.com because, starting today, we will release the Nu experience to customers here in the U.S. and very soon to many more countries. And the first people that sign up to Nu in the U.S. will get the beautiful limited edition card that we showed, along with some other surprises. And that's the invitation today because you don't want to be just customers. We're pretty good to our customers, but you also want to be able to say many years from now that you were among the first to see this come to life here. And then please tell somebody. Tell the people that you care about. Tell them today so that they can also learn that they don't have to settle for less anymore.

Thirteen years ago, people told us that better financial services in Brazil and Latin America was impossible. Our customers proved otherwise. And to everyone who helped build Nu, including our many partners sitting down here or friends or family or Nubankers or all our friends, to everyone with us here for the first time, welcome. We are just getting started, it's the first minute of the first half of that game, and we're excited to play this game together with you. Thank you, everybody.

Thanks, everyone. Thank you.