Nubank quarterly net profit beats estimates, topping $1 billion for first time

Brazilian digital lender Nubank reported a quarterly net profit of $1.06 billion for the April-June period, marking its first time surpassing the $1 billion mark and exceeding analysts' estimates by 49%. Shares in Nubank surged after the bell on Thursday, jumping 9.5% to around $15.25 each. The company serves nearly 139 million clients across Brazil, Mexico, and Colombia, and is set to begin operations in the U.S. Higher revenue and an improvement in risk-adjusted net interest margin contributed to the profit boost.

Nubank's revenue grew 39% to $5.88 billion, surpassing the $5.60 billion forecast, while the risk-adjusted net interest margin rose to 12.4% from 9.9% a year earlier. CFO Rob Livingston stated that this improvement in risk-adjusted net interest margin is sustainable in the foreseeable future, with current levels at around 11%. The credit portfolio expanded 37% year-over-year and 5% quarter-over-quarter, reaching $39.4 billion.

Despite an increase in early delinquency rates to 4.8%, Livingston noted that this was due to seasonal factors and accounted for only about 5% of the bank's total cost of credit.