São Paulo, August 14, 2026 – Shares of Nu Holdings Ltd. (NYSE:NU) surged more than 10% in premarket trading on Friday after the digital lender reported its first-ever quarterly net income exceeding $1 billion, reigniting investor confidence in its profitability trajectory.
The company posted second-quarter net income of $1.06 billion, surpassing the Visible Alpha consensus of $967.2 million by 9.6%. Revenue also came in ahead of expectations, reaching $5.88 billion against an estimated $5.60 billion, a 5.0% beat. The stock was indicated at $15.33, up from Thursday's close of $13.93.
Margin Recovery Stuns Analysts
The standout metric was the risk-adjusted net interest margin, which climbed to 12.4% from 9.5% in the previous quarter—a 290 basis point improvement. According to JPMorgan analysts, even the most optimistic forecasts had anticipated a margin of around 11%. This recovery was fueled by a $100 million reduction in credit costs and a 20 basis point improvement in early-stage delinquencies.
Chief Financial Officer Rob Livingston described the current margin level as sustainable in the near term, noting that Brazil's Desenrola refinancing program contributed only about 5% to credit costs. He emphasized that seasonal improvements would have materialized even without the program.
Credit Quality and Portfolio Growth
Credit costs fell to $1.69 billion from $1.79 billion in the prior quarter, a 5.6% decline. The 15–90 day delinquency rate improved to 4.8% from 5.0%. The credit portfolio expanded by 5.9% sequentially to $39.4 billion, though growth moderated from the first quarter's pace. Livingston attributed the slowdown to an unusually robust expansion in the earlier period.
Customer growth remained solid, with the company serving nearly 139 million clients across Brazil, Mexico, and Colombia—an increase of approximately 3.8 million from the end of March.
Buyback and Capital Position
Nu's strong performance bolsters its capital case. In June, the board approved a share buyback program of up to $1 billion over 12 months. Management reiterated that funding for expansion into new markets and regulatory capital buffers remain intact.
Analyst Divergence Persists
Despite the positive earnings surprise, analysts remain divided on the stock's outlook. Price targets range from $10 to $20, implying potential moves of -35% to +30% from the premarket price. Recent actions include JPMorgan raising its target to $20 (Buy), Needham initiating at $17 (Buy), while Citi and Susquehanna cut ratings to Hold with $13 targets, and BofA Securities holds a Sell with a $10 target.
Risks and Outlook
Risks remain, including early-stage delinquencies still 30 basis points higher year-over-year and credit costs up 60%. Currency fluctuations, the Brazilian economic environment, and the upcoming U.S. rollout could also weigh on returns. Friday's rally does not resolve the analyst debate; it shifts focus to whether Nu can sustain its above-12% margin as loan growth normalizes. Execution will be key as investors reward the broader margin cushion but remain wary of further credit deterioration.
