Nu Holdings slides 6% on EPS miss despite record quarterly profit
Latin American digital bank posts $895M net income but earnings shortfall of $0.19 vs $0.20 estimate triggers after-hours sell-off
Nu Holdings shares fell 6.3% in after-hours trading to $15.60 after the Latin American digital bank reported quarterly earnings that fell short of analyst expectations, despite posting record revenue and net income for the fourth quarter of 2025.
The São Paulo-based company, which operates as Nubank across Brazil, Mexico, and Colombia, reported non-GAAP earnings per share of $0.19, missing the analyst consensus estimate of $0.1988. The slight earnings shortfall overshadowed what was otherwise a strong quarter operationally, with revenue reaching $4.9 billion—beating analyst estimates that ranged between $3.79 billion and $4.55 billion.
The company's net income surged 50% year-over-year to a record $895 million, while full-year 2025 net income reached $2.9 billion, representing a 45% increase from the previous year. Nu's customer base expanded by 4 million during the quarter to reach 131 million globally, a 15% year-over-year increase that underscores the digital bank's continued penetration across its core Latin American markets.
David Vélez, Nu's founder and chief executive, highlighted the company's ability to combine growth with profitability in a statement accompanying the results. "In Q4, we increased scale, deepened engagement, and expanded profitability, closing the year with 131 million customers," Vélez said. "Strong engagement and higher monetization drove record quarterly revenues and an all-time high net income, resulting in a Return on Equity of 33%."
The company's efficiency ratio, a key measure of operating performance for financial institutions, improved to 19.9% from 20.3% in the third quarter, demonstrating the operating leverage inherent in Nu's digital-first banking model. Analysts have long pointed to Nu's low cost structure as a competitive advantage, with the company maintaining an average monthly cost to serve per active customer of approximately $0.80.
Despite the after-hours decline, Nu Holdings shares had been performing strongly leading up to the earnings release. The stock closed Wednesday's regular session at $16.65, up 0.7% on the day, and has gained approximately 18% year-to-date through the end of February 2026. The company's market capitalization stands at approximately $80.1 billion.
Analysts remain broadly positive on the stock's long-term prospects. The consensus rating among analysts is a "buy," with an average price target of $19.99, implying roughly 20% upside from current levels. Of the 18 analysts covering the stock, 16 rate it a buy while two maintain hold ratings, according to data compiled in February.
The slight earnings miss comes as Nu continues to expand its geographic footprint and product offerings. The company received conditional approval from the Office of the Comptroller of the Currency for a U.S. national bank charter in early 2026, opening the door for potential expansion into the world's largest banking market. Management has indicated that stepped-up investment and platformization initiatives could create some near-term pressure on the efficiency ratio even as they position the company for longer-term growth.
Looking ahead, investors will be watching for signs that Nu can sustain its impressive customer acquisition and engagement metrics while navigating increasing competition in Latin America's digital banking sector. The company's ability to maintain high activity rates—currently 83% of customers are active—while continuing to improve profitability will be critical to supporting its current valuation of 31.8 times trailing earnings.
The after-hours decline to $15.60 represents a pullback from recent highs but leaves the stock well above its 52-week low of $9.01, reflecting the significant investor enthusiasm that has built around Nu's growth story since its public listing.