Why Is Nu Holdings Stock Gaining Friday?

Nu Holdings Ltd. (NYSE:NU) shares experienced a surge in Friday's premarket trading following a strong third-quarter performance. The company's net income climbed by 31% on an FX-neutral basis to $1.1 billion, while revenue reached $6.3 billion, marking a 37% increase. Earnings of 22 cents per share matched analyst expectations.

Nu added 3.7 million customers, bringing its total to 143 million. The company's customer base in Mexico surged 27% year-over-year to 16.6 million, accounting for 17% of adults. CEO David Vélez highlighted the significant growth potential in Mexico, noting that the credit card penetration rate remains at 12%, compared to 75%-80% in Brazil.

Brazil and Colombia contributed to strong growth, with Brazil serving approximately 120 million customers and Colombia becoming Nu's largest credit card issuer. Nu's U.S. market expansion launched on September 10, offering a 3.5% annual percentage yield, fee-free transfers to Latin America, and a no-annual-fee credit card with unlimited cash back.

The company expects these ventures to affect its efficiency ratio by no more than 100 basis points in 2026 and 2027. Despite a slight rise in the 90-plus-day delinquency ratio to 7.3% from 6.9%, management attributed the increase to a growing share of interest-earning balances. Nu's allowance for credit losses rose to $7.1 billion from $6.6 billion. The stock was trading up 4.06% at $12.31 in premarket trading on Friday.