Nubank (NU -2.20%) recently finished its first quarter after going public late in 2021 and it posted a huge amount on the revenue front. In this clip from "The Future of Fintech" on Motley Fool Live, recorded on May 19, Fool.com contributor Bram Berkowitz discusses the company's impressive expansion and growth throughout Latin America.
Bram Berkowitz: They just went public in December, they got the backing from Buffett and Berkshire, but probably not a Buffett investment per se, probably one of his lieutenants. But I thought they had a nice quarter. I think their earnings were pretty much in line with what the analysts had, they broke even on a GAAP basis or a small loss, adjusted net income of $10 million.
But the big beat was on revenue. They did about $877 million which was $230 million above the consensus forecasts, so they absolutely crushed the revenue estimates, and they were up for a little, I think the stock. Then as the volatility in the regular 1,000-point down days we've seen brought it back down.
But yeah, I thought the business is moving in the right direction, and I actually wanted to share my screen just to show one slide that I think is very important for people who follow the stock. Basically, if you didn't know, they got their start in Latin America by disrupting the banking scene, which is categorized by a lot of high fees. It's difficult to get accounts, it's much more difficult than in the U.S., there is a few incumbent banks that really control it.
They offered this digital experience which was much easier for people to sign up, there was less fees on credit cards, and they've built out from there, they have a ton of customers now they're up to 60 million. If you look at any of the U.S. fintech stocks, if you think about SoFi just got to 4 million or LendingClub, they're at 4 million, a bunch four, 10. I think Chime is not a public company but big, and they have like 13-15 million. This has 60 million.
They're banking 33% of the Brazilian population, and they're starting to grow in Mexico and Colombia. But a key thing for them is revenue per customer, average revenue per active customer, RPAC. Because of their model with fewer fees, I think a big question has been, can they do a realistic RPAC to monetize their customer base?
If you look at this third chart to the right, they grew their average monthly RPAC to $6.70, that's up from $5.70 in the last quarter, and it's up from like $3.50 a year ago. They're growing it nicely. But I think that an even more interesting thing is that if you look at the customers that have been with the bank, the longest, they call them cohorts. If you look at the ones that have been there since 2017, those have RPACs of $19 per month.
That's actually really starting to grow nicely, and I think they said an income and bank in Brazil will have an RPAC of $40, so they still have a long way to go, but they are with their mature cohorts starting to really monetize that revenue base, and I think that's a big factor for them. That's what you want to see. You want to see the mature cohorts increasing RPAC, and then the average one moving up as well.
They are doing this because they have a lot of products, they have bank accounts, they have credit cards, personal loans, and they've launched a marketplace where you can buy stuff in the app with your accounts, they have insurance. They're starting to really expand and grow.