Nu's Customer Growth and ARPU Gains Offset by Unresolved Credit Risks

What happened

Nu Holdings added 4 million customers in the second quarter, bringing total customers to approximately 139 million, and received bank charters in both Mexico and Brazil, expanding its regulated footprint. Average revenue per user jumped from $11.60 to $17.10, a 47% increase that signals stronger monetization of its customer base. Despite these positive developments, the stock remains 20% below its 52-week high, reflecting investor concerns about rising credit costs and capital consumption that emerged in Q1 2026. Q1 2026 saw Nu's Brazil CET1 ratio fall to 11.3% from 13.0% and its risk-adjusted net interest margin decline to 9.5%, indicating that growth is straining balance sheet resources. The new customer and ARPU figures suggest operational momentum is intact, but they do not by themselves resolve whether credit quality and capital generation will stabilize in the coming quarters.

Implication

The 47% increase in ARPU is a materially positive signal that Nu's cross-selling and deposit-led monetization are working, which could eventually offset higher credit costs if sustained. Receiving bank charters in Mexico and Brazil removes product restrictions and opens new revenue streams, but it also raises regulatory capital requirements and execution risk. Investors should not extrapolate the Q2 customer additions without seeing accompanying credit metrics: the Q1 filing showed NPL 15-90 rising to 5.0% and managerial cost of credit nearly doubling year-over-year. The critical near-term indicators are whether Brazil CET1 stabilizes above 11.3% and risk-adjusted NIM recovers from 9.5%, as outlined in the master report's 90-day checkpoints. If the upcoming Q2 report (expected in November) shows improvement in these metrics, the stock may re-rate toward the $15-16 fair value; otherwise, the bear scenario of $11 becomes more likely, so maintaining a wait stance is prudent.

Thesis delta

The new article's data on customer growth and ARPU strengthens the bull case that Nu's monetization engine is intact, but it does not address the core uncertainties around credit quality and capital consumption highlighted in the master report. The thesis remains wait until Q2 financials confirm stabilization in CET1 and risk-adjusted NIM. The positive operational metrics reduce the probability of immediate downside but are insufficient to upgrade the rating from wait.