NU: 1Q Miss on Provisions Drives Shares

Research evidence excerpt

NU: 1Q Miss on Provisions Drives Shares

Payments, Processors, & IT Services

FLASH

FLASH: NU HOLDINGS LTD. (NU) May 14, 2026

NU: 1Q Miss on Provisions Drives Shares Rating:

Outperform

Price:

●NU reported 1Q26 results AMC, which were below the Street. Total revenue $12.93

of $4.97bn (+53%) came in below our estimate of $5.19bn and the Street's Price Target:

estimate of $5.03bn. GP grew 41% Y/Y to $1.87bn, below our $2.16bn and $18

the Street's $2.22bn. Adjusted net income of $937mn was below our model at % Upside: 39.2%

$962mn and the Street at $1,002mn. Shares are down ~7% after market given

the miss on top line, particularly gross profit on a 26% miss on provisions, Source: FactSet, Wolfe Research

driving an op-income miss of ~30% and adj EPS miss of 6%. NU's credit card Priced as of 05/14/26

portfolio continues to grow rapidly at scale (+36% FXN) and ARPAC grew

to $15.9 (from $15 LQ). Customer growth KPIs were in line but investors

have been increasingly focused on credit quality across Brazil (see our recent

note here on credit concerns in Brazil), and we suspect these results will

continue to underscore those questions. We look to the call for detail on NU's Darrin Peller

provision levels and margin expectations (both in terms of expense and credit dpeller@wolferesearch.com

(646) 582-9310

cost trajectories). View Darrin’s Research

View NU Model

View Comp Table ●Gross Profit of $1.87bn came in below our $2.16bn and the Street's $2.22bn,

representing a margin of 37.5% (vs. 41.5% LQ and 40.6% 1Q25). Credit Griffen Drebing

gdrebing@wolferesearch.com

loss allowance expense of $1,718mn came in well above (26%) the Street's (646) 582-9314

$1,360mn. Operating margin of 19.2% was below with the Street's 27.2%.

Scott Wurtzel

NU's efficiency ratio declined to 18% (vs. 21% LQ).