We're at the midpoint of January. And that means investors are starting to get ready for earnings season to kick off in earnest. This is a critical time when companies reveal their latest financial figures, so it's important to understand what's coming up.
A business that might be of interest is Nu Holdings (NU +0.09%). Its shares have performed exceptionally well, rising 350% in the past three years (as of Jan. 14). There are reasons to be both bullish and bearish.
This fintech stock reports Q4 2025 (ended Dec. 31) financial results on Feb. 25. Should investors buy Nu shares before then?
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Nu Holdings is dominating the financial services industry in Latin America
Nu operates a digital-only banking platform that serves customers in Latin America. It has registered phenomenal growth in the past. And it's likely to continue doing so. That's because this part of the world has a high concentration of unbanked and underbanked citizens. This has created the perfect opportunity for a disruptor like Nu to leverage the internet, mobile phones, and technology to serve customers.
Revenue increased 31% year over year to $11.1 billion through the first nine months of 2025. Nu ended Q3 (as of Sept. 30) with 127 million customers after adding 17.3 million net new ones in the prior 12 months. It counts 60% of the Brazilian adult population as its customers. And there are a combined 17 million customers in Mexico and Colombia.
The company is highly profitable as well. It collected $2 billion in net income in the first nine months of 2025. Credit goes to Nu's stellar unit economics. The monthly average cost to serve a customer in Q3 was just $0.90. However, the monthly average revenue per active customer was significantly higher at $13.40. With monetization looking like this, it makes sense that growing the customer base is a priority.
The leadership continues to think about the future. Unsurprisingly, artificial intelligence (AI) is a strategic focus.
"Our vision is to become AI-first, which means integrating foundation models deeply into our operations to drive an AI-native interface to banking, while creating meaningful benefits for both our customers and our business," CEO David Vélez said on the Q3 2025 earnings call.
Risks are always present
Nu's success thus far is noteworthy. However, it faces a risk in the form of competition. MercadoLibre and Itau Unibanco are both large financial institutions. And given the ongoing development of Latin America, it's expected that others will also spot the lucrative opportunity to serve these people. This will require Nu to operate on top of its game to keep its success going.
And as any banking provider knows, macroeconomic risks can't be ignored, either. Lending money to customers involves accepting that interest rates, economic growth, or unemployment can work against you without any warning. This is why it's important to adopt quality credit standards, especially since these customers might be new to financial services.
Nu also doesn't operate in a developed market such as the United States. Latin America presents unique challenges. In addition to macro factors just mentioned, there are political instability and currency fluctuations to be mindful of. And regulatory regimes could change unpredictably.
NYSE: NU
Key Data Points
Investors don't have to wait to buy the stock
Waiting until the end of February for Nu to report its Q4 financials might appear to be a smart move. After this date, investors will have greater clarity about the state of the business. This could help you make a more informed decision, as you'll have key insights about Q4 results that include metrics like customer growth, revenue, net income, deposits, and credit loss allowance expense. Plus, any commentary from the management team will be valuable.
However, I don't think investors have to wait. The company continues to put up impressive financial gains. And this should continue for the foreseeable future, barring a major economic disturbance occurring in the markets that Nu operates in.
Another reason to consider buying this fintech stock right now is because its valuation is compelling. At a forward price-to-earnings (P/E) ratio of 20.7, the market is offering investors a good deal to add Nu to their portfolios.
