Nu Holdings Ltd.

Scaled LatAm digital-banking franchise compounding revenue ~43% with top-decile returns, margins and a durable low-cost moat.

Strengths

• ROE 25.8% (85.8 pct), ROA 3.95% (86.6 pct), net margin 17.1% (82.3 pct)
• Revenue +43% and net income +91%; lowest-cost-to-serve model with massive scale (95M+ customers)
• $9.2B+ cash, strong deposit funding franchise

Risks

• Concentrated founder voting control (~74%)
• Brazil/Mexico/Colombia macro, FX and credit-cycle exposure (NPL 90+ at 6.6%)
• Regulatory change risk in core markets

Notable findings

• Customer concentration~85% of revenue from one customer/distributor — As a result, we estimate that our cost to serve and general and administrative expense per active customer is approximately 85% lower than those of incumbent financial institutions in Brazil, based on
• Strong balance sheetStrong balance sheet — $9.2B cash & investments
• Insider sellingInsider selling — 3 open-market sale(s) by 2 insider(s) (cluster of 2 insiders, ~$5M, last 6mo) Form 4 ↗