Nu Holdings Ltd. (NU) Q3 2026 Earnings Call Transcript

Operator: Ladies and gentlemen, welcome to Nu Holdings conference call to discuss the results for the third quarter of 2026. A slide presentation accompanies today's webcast, which is available on Nu's Investor Relations website, www.investors.nu in English and www.investidores.nu in Portuguese. This conference is being recorded, and the replay can also be accessed on the company's IR website. This call is also available in Portuguese. [Operator Instructions] [Foreign Language] I would now like to turn the call over to Mr. Guilherme Souto, Investor Relations Officer at Nu Holdings. Mr. Souto, you may proceed.

Guilherme Souto: Thank you, operator, and thank you, everyone, for joining our earnings call today. With me on today's call are David Velez, our Founder, Chief Executive Officer and Chairman; and Rob Livingston, our Chief Financial Officer. All financial metrics discussed and presented today reflect our managerial P&L framework, which we introduced in the Q4 2025. These managerial measures are important to how we manage the business but are not financial measures as defined under IFRS and may not be comparable to other companies. A full reconciliation report to the most directly comparable IFRS figures is available in our managerial P&L reconciliation report and in the appendix to this presentation. Unless otherwise noted, all growth rates discussed today are presented on a year-over-year FX-neutral basis. Today's discussion may include forward-looking statements, which are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those expressed or implied. Please refer to the forward-looking statements disclosure included in the earnings presentation for additional information. With that, I will now turn the call over to David. Please go ahead, David.

David Velez Osorno: Hello, everyone, and thank you for joining us today. The third quarter was another quarter of growth across every market we serve. We closed it with 143 million customers with 3.7 million net additions and a sequential expansion of our activity rate to 83.6%. In Brazil, we are approaching 120 million customers, and our activity rate expanded for the seventh consecutive quarter to a record 86.3%. That is remarkable at our stage in the country where we already serve more than 65% of the adult population. In Mexico, we had a strong first quarter operating as a bank, reaching 16.6 million customers. And in Colombia, we delivered a record quarter in customer additions, reaching 6.1 million customers. Customer growth combined with ARPAC expansion, now at $18 per active customer, compounded into record gross revenue of $6.3 billion. And we did it with an efficiency ratio of 19%, even as we kept investing in Brazil, Mexico and Colombia and launched Nu U.S. and Nu Global in September. All of these came together in a record net income of $1.1 billion in the quarter. It is the result of millions of customers choosing Nubank and bringing more of their financial lives to us every day in a testament to the tremendous work of our team. And now we're taking the same model beyond Latin America. Brazil, Mexico and Colombia continue to demonstrate the strength of our model, each at a different stage of development with substantial opportunities still ahead. Let me start with Brazil. Brazil continues to demonstrate the strength of our model at scale. We now serve approximately 120 million customers, reaching 65% of the country's adult population. And we remain the #1 financial app in Brazil with 86 million monthly active users, nearly twice as many as the second largest player according to Sensor Tower. Importantly, this scale continues to translate into strong credit growth. In an environment where the market had to decelerate, our disciplined credit methodology gave us the conviction to accelerate in a number of areas. Our credit engine delivered record unsecured personal loan originations of BRL 22.1 billion in the quarter, up 28% year-over-year, with September marking our strongest month ever. In October, Brazil's Central Bank announced new measures to promote responsible lending and prevent excessive indebtedness. These principles are already well aligned with our existing underwriting models and how we offer credit to our customers. We remain committed to growing credit responsibly and sustainably. We're also making significant progress with Croma, our new offering for Super Core customers, combining enhanced credit and everyday benefits to deepen primary banking relationships. Launched in late July, Croma is already approaching the 1 million customer mark after just 3 months. On the engagement side, our relaunched NuCoin loyalty program has already attracted 6.7 million sign-ups. In the third quarter, we partnered with more than 35 merchants, including Amazon, Shopee, Samsung and Uber to offer additional benefits to our customers. This growing ecosystem helps us reward engagement and deepen customer relationships. This is what compounding at scale looks like, continuing to grow our credit business, expanding monetization opportunities and deepening relationships with an already massive customer base. Mexico is where we are now building that same scale. We reached 16.6 million customers, growing 27% year-over-year and now serving 17% of the adult population. This quarter also marked a major milestone in our transition to a full bank. We added 870,000 customers in the quarter, and our Nu banking status makes our proposition even more compelling, starting with a 16-fold increase in deposit insurance coverage from approximately $12,000 to $195,000 per customer. It also opens up new opportunities to deepen primary banking relationships, including through payroll accounts, helping us build an even stronger deposit franchise over time. To mark this new chapter, we launched Unete al lado Nu, a nationwide campaign across television, radio, cinema, streaming and social media, bringing our new positioning as a bank to customers across Mexico. The broader environment is also moving in our favor. On October 20, Mexico's Congress approved new legislation to promote digital payments, another important step in the digitalization of the Mexican economy. The legislation aims to make digital payments more accessible and convenient, expand their acceptance across economic sectors and reduce reliance on cash. Over time, greater digital adoption could also generate richer transaction data to support better financial services and credit decisions. We see these developments as important tailwinds for Nu as the country's largest digital bank, creating more opportunities to deepen engagement and expand financial inclusion. Together, these developments reinforce our opportunity to replicate in Mexico the scale, customer engagement and strong economics we have already demonstrated in Brazil. And Mexico is not the only market where that is happening. Colombia is becoming another clear proof that our model travels. We closed the quarter with 6.1 million customers, already reaching 15% of the country's adult population and growing 62% year-over-year. And importantly, our growth momentum continues to accelerate. Credit cards are leading the way with 3 million credit card holders, we're now #1 in Colombia by number of cardholders, while our credit portfolio grew 80% year-over-year on an FX-neutral basis. Our deposit franchise is also gaining scale. We now have the fourth largest base of individual deposits in the country with a cost of funding at just 76% of the benchmark rate, the lowest relative funding cost across our 3 core markets. And we're seeing another important development in Colombia's financial ecosystem. Bre-B, the country's new instant payment system, has reached 82% penetration of the adult population in its first year and even faster initial adoption than Pix in Brazil. This creates a powerful opportunity to deepen customer engagement and build primary banking relationships. Each market is at a different stage. Brazil is our proven model. Mexico is replicating it with strong economics, and Colombia is now accelerating. Meanwhile, Nu U.S. and Nu Global are laying the foundations for our next phase of growth. What connects them is the same technology platform, operating model and customer-centric approach. We're not building separate businesses from scratch, but taking a proven model into new markets, leveraging what we learn along the way. This quarter marked an important step in taking our model beyond Latin America. On September 10, we launched Nu U.S., beginning the rollout of an account offering 3.5% APY with fee-free transfers to Brazil, Mexico and Colombia and a credit card with no annual fee and a unlimited 1.5% cash back. In just our first few weeks, we already reached customers across all 50 states. The principle is simple, leverage our customer-obsessed culture, cost advantage and analytical capabilities to offer the best everyday banking value proposition for mass affluent customers in the U.S. In only the first few weeks, we have begun seeing the early signs of word-of-mouth growth and virality that reminds us of our early days of Brazil, Mexico and Colombia growth. We expect word of mouth to be an important growth engine from the start, particularly among customers with ties to Latin America. This is exactly the strategy we're pursuing, reaching communities connected to our core markets and offering them a natural bridge between their financial lives in the U.S. and their families and friends back home. Fee free transfer makes that bridge real. Customers can send money directly to Pix accounts in Brazil, to bank accounts in Mexico through CLABE and to Bre-B-enabled accounts in Colombia. We believe that gives them a compelling reason to choose Nu and to recommend it to others. On the same day, we introduced Nu Global, a multicurrency account built on stablecoin infrastructure. The product went live on October 15, and we have already customers in 37 countries, demonstrating the global reach of our proposition from day 1. Importantly, we're approaching both initiatives with discipline. We will scale investment only as we validate product-market fit, see unit economics trending toward our hurdle rates and clear key regulatory and risk checkpoints. Under our current plans, Nu U.S. and Nu Global together remain within our commitment of up to 100 basis points of efficiency ratio impact in each of 2026 and 2027. And as we build this next phase of growth, our core markets remain the foundation of our success. With that, let me turn it over to Rob. Hi, Rob, go for it.

Rob Livingston: Thank you, David, and thank you all for joining us. Let me start with our consolidated credit portfolio. The portfolio reached $41.6 billion, up 33% year-over-year and 6% sequentially on an FX-neutral basis. Credit cards grew 32% year-over-year to $27.2 billion. Unsecured lending grew 39% to $11.0 billion and secured lending rose 23% to $3.4 billion. This quarter, unsecured lending grew 7.5% sequentially on an FX-neutral basis. And as David mentioned, we delivered record unsecured personal loan originations in Brazil with September marking our strongest month ever, while maintaining underwriting discipline. Secured lending also gained traction, growing from $3.1 billion to $3.4 billion in the quarter with record high originations. Improvements in both public and private payroll lending allowed us to offset the headwind from FGTS-backed loans and overall originations are now running at a higher pace than before that decline. Private payroll originations continue to accelerate month-over-month as we gain confidence in scaling the product supported by improving underwriting models and increasingly mature processes across the market that help reduce operational risk. Given the strong growth across products, our portfolio mix has remained broadly stable with credit cards representing 65% of the total. Now let me turn to deposits. Total deposits reached $47.5 billion, up 19% year-over-year on an FX-neutral basis. Brazil closed the quarter at $38.6 billion, Mexico at $5.3 billion and Colombia at $3.5 billion. In Mexico, we continue to deliberately optimize our deposit base towards lower cost funding while maintaining ample liquidity. Becoming a bank further strengthens our position. Deposit insurance coverage is now 16x higher than it was before and the ability to offer payroll accounts creates an opportunity to build a stickier funding base as we deepen primary banking relationships. Our consolidated cost of deposits improved to 87% of the interbank rate, 1 percentage point lower than last quarter and 2 points lower than a year ago. This reflects our ability to keep growing our deposit franchise while improving its underlying funding economics. Net interest income reached $3.9 billion, up from $3.7 billion last quarter, with net interest margin at 22.5%. Cost of credit was $1.8 billion compared to $1.7 billion in the second quarter. And as a result, on a reported basis, risk-adjusted NIM was 12.1% this quarter compared to 12.4% in the second quarter and in line with our expectations. I also want to acknowledge 2 one-off items that affected reported risk-adjusted NIM in the second and third quarters. In Q2, Desenrola contributed 55 basis points to risk-adjusted NIM and only had an immaterial benefit in Q3. In the third quarter, we recorded a onetime charge on receivables acquired from payment institutions that were subsequently placed under extrajudicial liquidation by Brazil Central Bank, reducing risk-adjusted NIM by 63 basis points. This was unrelated to the credit performance of our customer loan portfolio. So excluding these events, our recurring risk-adjusted NIM expanded from 11.9% in Q2 to 12.7% in Q3. This reinforces the underlying strength in our risk-adjusted returns and the sustainability of current levels, driven by competitive and fair offers to our customers, disciplined underwriting, portfolio optimization and increasingly efficient balance sheet management. Since credit quality is central to these economics, let me now turn to our asset quality trends. The charts on the top of this page show our delinquency ratios over the total portfolio. Our 15- to 90-day ratio was 4.9% compared to 4.8% last quarter, while our 90-plus ratio increased from 6.9% to 7.3%. In order to interpret these numbers, one structural shift matters. As we optimize for risk-adjusted returns, a growing share of our portfolio earns interest. Interest-earning balances reached 61% of the total portfolio this quarter, up from 59% last quarter and 44% 3 years ago. This matters because delinquency is concentrated in interest-earning balances rather than in credit card purchases that customers pay in full every month. As their share grows, delinquency measured over the total portfolio naturally increases even without a deterioration in underlying credit performance or an increase in exposure. So the charts at the bottom of this page show the same delinquency ratios but measured against our interest-earning portfolio, IEP. On that basis, our 15- to 90-day ratio improved to 8.0% from 8.2% last quarter, while our 90-plus ratio increased to 12.1% from 11.6%. Importantly, both ratios remain below their levels of 3 years ago, even as we've deliberately expanded credit to more customers. In other words, headline NPLs reflect not only delinquency trends, but also the structural evolution of our portfolio towards higher interest-earning penetration. Now let me walk you through the drivers of early delinquency and our allowance. All right. Let's dive in deeper. Comparing last quarter with this quarter, our 15- to 90-day delinquency ratio was essentially stable, moving from 4.83% to 4.86%. Seasonality reduced the ratio by 9 basis points, partially offsetting 13 basis points from intentional risk expansion. This is a deliberate trade-off reflected in the risk-adjusted NIM expansion I described earlier. Product mix and other factors had little net impact. The allowance bridge provides a complementary view. Our allowance increased from $6.6 billion to $7.1 billion. Portfolio growth was by far the largest driver, contributing $332 million as under IFRS 9, we recognize expected credit losses at origination before the related income is earned. Intentional risk expansions added another $135 million, while all other movements were relatively small. So the quarter's credit dynamics primarily reflect portfolio growth and deliberate risk expansions. This remains consistent with our strategy of optimizing risk-adjusted returns. Our approach to provisioning remains disciplined and consistent. Starting with the chart on the left, our allowance build represented 102% of new 15-plus day delinquency formation in the quarter, the same level as a year ago. We have remained at or above 100% in every quarter shown, consistently building allowances in line with or ahead of early delinquency formation. The chart on the right shows total coverage over NPL 90-plus at 234% compared to 244% last quarter. We continue to carry allowances of more than twice our 90-plus delinquent balances within the range we have maintained over the past 3 years. These ratios naturally fluctuate from quarter-to-quarter. What matters is that our provisioning continues to keep pace with new delinquency formation while maintaining substantial coverage as our credit portfolio expands. Let me close our credit discussion with a broader perspective on how our performance compares with the Brazilian banking industry. As we've discussed, we continue to expand our credit portfolio, deliberately taking some additional risk when the expected returns justify it. What gives us confidence in this strategy is the strength of our underwriting and the resilience of our credit performance. These charts show credit card delinquency across 3 income segments in Brazil. While industry benchmarks have generally deteriorated across all 3 segments, our 90-plus day delinquency has remained relatively stable across multiple income segments. A key part of this resilience comes from our primary banking relationships. The more customers concentrate their financial lives with Nu, the richer the data we generate, the better we can assess their credit risk and the more important our position becomes in their payment priorities. This creates a powerful reinforcing cycle. Deeper customer relationships support better underwriting, which in turn allows us to keep expanding credit while optimizing risk-adjusted returns. Once again, this is why we view customer primacy as a fundamental component of our credit superpower. That brings us to our income statement. Gross revenue reached a record $6.3 billion, up 37% year-over-year on an FX-neutral basis. Gross profit reached $2.6 billion, up 35% year-over-year and up from $2.4 billion last quarter. Our gross profit continues to benefit from a healthy and diversified mix of fees, credit and float. All 3 grew in absolute dollars year-over-year despite the specific counterparty event I mentioned earlier, weighing on credit profitability this quarter. Turning now to operating leverage. Net revenues reached $4.4 billion, up from $4.1 billion last quarter, while operating expenses were $846 million. Our efficiency ratio, therefore, stood at 19.3% compared to 20.3% a year ago. Expenses came in somewhat below our expectations. Personnel costs were lower than planned as we hired thoughtfully given the capacity gains, we're seeing from AI and other factors. Some expenses also shifted to later in the year, including spending related to our new in-office working model and other discretionary items. These were partially offset by higher technology costs. As some of this spending has been shifted into the fourth quarter, we do expect the efficiency ratio to increase sequentially. For the full year, however, we now expect an efficiency ratio between 19% to 19.5%, slightly below our previous guidance of around 20% for the full year, which takes me to our bottom line. To conclude, net income reached a record $1.1 billion, up 31% year-over-year on an FX-neutral basis with a return on equity of 32%. This result did include the impact of the nonrecurring items we discussed earlier. Together, these items reduced net income by approximately $53 million. This result also reflects a sequential increase of our effective tax rate to 19.2%. After a volatile 2026, we expect our 2027 ETR to settle in the low to mid-20% range. We delivered these results in the third quarter while continuing to invest across our markets and laying the foundations for our next phase of growth. And that brings me to our upcoming Investor Day. On December 8, we will host our first Investor Day, where we will share more about our long-term strategy, our growth opportunities and the drivers of value creation. We look forward to seeing you there. With that, let's open the call for your questions.

Operator: [Operator Instructions] I would like to turn the call over to Mr. Guilherme Souto, Investor Relations Officer.

Guilherme Souto: Thank you, operator. Could you please open the line for Mr. Tito Labarta from Goldman Sachs, please.

Daer Labarta: Congratulations on another strong quarter. I guess the main question that we've been getting really more going forward from here, just given the challenging macro scenario in Brazil, I mean, pretty impressive, Rob, you mentioned I think this is a record quarter for -- or a record month in September for unsecured personal loan origination. But how should we think about continued growth in credit quality into 2027, given all the concerns about macro and I guess, the sustainability of earnings, particularly, I guess, on the risk-adjusted NIM, right? I mean, if excluding the onetime item, 12.7%, much higher than what you had before. Is that something that's sustainable? I mean I know you may not have guidance for next year, but just how should we think about some of the macro risk given the strong growth that you've been delivering?

David Velez Osorno: Tito, David here. Thank you for your question. So a few things I think is important to remember to consider as they kind of lead the way we operate and make decisions on credit. The first thing is since the very beginning, we've never differently from the big incumbent banks, we don't take a position on -- sorry, there is some echo somewhere. I don't know. Okay. Thank you. So we don't necessarily take a macro position about the economy. We just simply assume that the future is going to be much worse than the past because unfortunately, that's what we've seen since we began in 2013. The macro environment we have seen in the past 13 years has been not great to use a great word. So the only thing we have seen, unfortunately, is bad macro. And so when we make a credit decision, we assume the future will be worse than the past. And therefore, we have to use a significant buffer on underwriting decisions. And even then, that decision would have to be positive NPV. We don't make decisions based on a specific NPL or delinquency number we have to hit. We make a decision based on is this decision, this credit loan, is this credit limit NPV positive, assuming a worsening scenario, yes or no. And that's how we make the decision. So from that perspective, all of our credit decisions right now and the way we continue are covered with a significant buffer for them to be good decisions. The second point is we are to consider is we are still very small in the overall Brazilian market. And this means that we have effectively grown and continue to grow cherry-picking some of the best credit and risk-adjusted opportunities in the market. We are effectively operating in products that have very short-term duration that are very information-rich and that allow us to accelerate or decelerate relatively quickly as we see different opportunities. And therefore, being small, we can continue growing mainly by taking market share from our competitors in the market, and that opportunity will continue in 2027 and beyond as we are -- everything we have done in challenging scenario has been effectively taking market share, and we expect that we'll continue taking market share given the significant operating advantages and competitive advantages that our model has. And finally, I think it's important to just highlight one point that Rob made, which is we have reached a position that is very unique in the Brazilian market and very soon also in Mexico and Colombia, which is we are the largest primary bank account in the country, 2x largest, we think, than the other -- the second player. And being the primary bank account means effectively you get positive selection, not negative selection, you get positive selection. And you are, in a way, senior in the credit stack of the customer. You are the card that consumers will pay first. And so that gives us a huge advantage in underwriting credit and managing delinquency in a tougher scenario. We're not the marginal lender. We're not the one that's giving the fifth card or the sixth card or the sixth loan. We're the primary relationship for the majority of our customers, for 60% of our customers. And so that's a very strategic position because we get that positive selection. And obviously, that also brings a lot of proprietary data that then is fed into perhaps the most sophisticated credit stack in the world, which we think we're increasingly building that here in the markets that we operate, significant advantage on credit underwriting. So anyway, all those data points kind of tells you -- I won't give you specific guidance on growth rates, but we think as we have done in all cycles, if there is a cycle coming in, we continue to think that our growth is more secular. It's more in a way, a little uncorrelated with the market because people continue to transfer markets -- transfer market share away from some of the big incumbent banks towards Nubank, and that's the trend that will continue irrespective of the macro scenario.

Rob Livingston: Great. And maybe if I can jump in, Tito, to answer your question on risk-adjusted NIM. We did have strong performance in Q3 both on an adjusted as well as on a recurring basis. And we expect risk-adjusted NIM to keep its underlying economic strength into Q4. We see no reason why that would be shifting. Keep in mind that when we take risks, it's deliberate. We expand into segments when the risk-adjusted returns justify it and where we can offer market-leading pricing. That's our approach. Now for next year, we're not giving guidance. And I would just remind the audience that in Q1, there is a higher seasonal cost of risk. And if there is faster growth in our portfolio, there would be more upfront provisions. It's another reason why we don't want to look too out in the future on this metric. But for the near term, it looks fairly sustainable.

Guilherme Souto: Operator, could you please open the line for Mr. Yuri Fernandes from JPMorgan.

Yuri Fernandes: I have one for David regarding inorganic opportunities. I think this was a topic during this quarter, some headlines regarding potential M&A. So David, can you explain to us a little bit how do you see inorganic? I think in the past, you never said no for M&A. It was more like strategic if this was something that could support your growth for the future, like your long-term goals. But I think for some investors, depending on the size, maybe this is -- maybe the question, right? Like are you open for big M&As? Or usually, this is a small M&A. So just trying to understand a little bit about the appetite for inorganic acquisitions.

David Velez Osorno: Sure. So a couple of things. First, as we've increasingly said since the beginning, we think we are executing a global opportunity. The opportunity of transforming financial services around the world towards a model that is consumer-obsessed digitally first is global in nature. And we've always followed a very disciplined path to focus in a number of different countries over the past 13 years. And as we launch U.S. and global, we start looking beyond also these core markets. So that's the first thing to consider. The second one is we are at a moment where we are generating significant capital and generating significant cash. And so that gives us a lot of optionality and a lot of opportunities to also consider how do we execute on that thesis. And so that means that we will look at potential M&A. We have in the past. We've announced, for example, an investment in Tyme in South Africa and the Philippines. We've done a small investment in India. We've done a number of investments like that. And we will consider -- we can consider M&As. But I would say our strong preference is for organic growth. And I don't say -- never say never. The bar would have to be extremely high for us to do a full M&A. I wouldn't say it's impossible, but it's a very, very, very high bar. And again, our preference continues to be organic growth. So anyway, it could be a lever, but it would have to be something that we feel with strong conviction about accelerating our mission and our thesis and that obviously would be a phenomenal opportunity to deploy capital. And so I would expect that if it happens or if that happens, would be very, very rare as an opportunity.

Yuri Fernandes: Super clear. And congrats, David, very strong EBIT, especially when we adjust for the one-time provisions on the payment company.

Guilherme Souto: Operator, could you please open the line for Mr. Thiago Batista from UBS.

Thiago Bovolenta Batista: Congrats for the solid results once again. My question is about the overleverage of the Brazilian segment. So we are seeing Central Bank discussing potential macroprudential measures in part to try to reduce this overleverage of the household segment. Do you agree that we have a situation in Brazil where the individuals are overleveraged? And connecting with that, do you see any impact already from the sporting bet ban that we saw in Brazil a couple of months ago, a couple of weeks ago?

Rob Livingston: Sure. Thanks so much for the question. I'll take this one. I think that we are looking very closely at indebtedness in the marketplace. And of course, this is something that we are sort of concerned about holistically, but also more importantly, individually at the customer-by-customer level because that's where we make lending decisions is for each individual one at a time. Our underwriting philosophy, as David mentioned earlier, has always been quite conservative. We assume that there is going to be a downturn in the next day and that losses will double. And we still have to remain profitable even under those circumstances. And that's been one of the core underwriting philosophies we've had since day 1. As far as the actual macro prudential measures go that the Central Bank has just announced, we believe that these rules reward responsible underwriting and transparency, and that's always guided how we offer credit. We are waiting for these rules to go into effect, of course. But at this point, we are very well prepared for them, again, both individually as well as holistically in terms of the impact on our business. The other question that you asked was around the impact of the betting -- sorry, the betting ban that took place a few weeks ago. We have seen an impact of that in terms of, obviously, as you would expect, a complete curtailment of any activity in that sector. We haven't seen any material impact on our PV or our spending nor on our balance in or balance out across the entire portfolio. So as of right now, I wouldn't say that there's been any impact, positive or negative. And for example, on delinquency, no material positive impact on spend, no material negative impact.

Guilherme Souto: Operator, could you please open the line for Mr. Eduardo Rosman from BTG.

Eduardo Rosman: A question to David. I think I know you've been traveling a lot, right? So questions here on Mexico and Colombia, right? On Mexico, if you can share your thoughts on the digital economy law and how relevant do you think it could be? Do you believe the government is really pushing for that? Are we going to see the regulators helping more or you're going to have to do all the job yourself, right? And then on Colombia, right, do you have expectations or any expectations regarding a potential change on how the usury law is calculated, the rate, right? And how important that would be such a change for the growth of the business?

David Velez Osorno: Sure, Rosman. It's a super positive development in Mexico. We've always said that a base case for us in Mexico is Mexico being maybe 70% of Brazil. In an upside case is Mexico being as big as Brazil for Nu. And the difference between base and upside is effectively whether the Mexican economy manages to digitalize as much as Brazil has digitalized because when a company like ours is forced to compete in the offline world with physical cash, we're very uncompetitive. We don't have banking branches. We cannot receive cash. And so in an environment of a lot of physical cash, we struggle a bit. Even then, obviously, we -- I think it's 70% of Brazil, which means it would be a very big business. But increasingly, I think the bet, and I think if you kind of look forward a few years from now, one of those trends in financial services that is hard to debate at this time is that cash will disappear and that every single country around the world will digitalize. And then there will be detailed system payments. And I think Mexico, after a few years of testing at different approaches, we see in President Sheinbaum, really real conviction of going in this direction. Digitalized in Mexico means more access to financial services for more people. Mexico still has 12% credit card penetration. So it's tiny really, a lot of cash heavy. That also means decreasing informality. That also means decreasing crime. That means increasing access to credit because once you digitalize, then you generate a lot of data that can be used by firms like us to provide credit. So anyway, it kind of goes very much in the direction of what the government has been saying about financial inclusion. And with the new law that was passed by Congress, they definitely go in this direction. They're even willing to make a number of moves that are ahead of what Brazil did. So making governments accept just payments only via digital payments, or forcing certain sectors to only be paid in digital payments. There have been rumors about gas stations, only digital payments, or tolls. So we're very excited about the proposal here. It won't happen overnight, but this could grow very fast. And we've seen it in Colombia, a very good example of a system like Bre-B that actually is growing way faster than Pix in Brazil and is having significant impact in the country and the digitalization. So very excited on Mexico. On Colombia, there is -- I think there is a good chance that there will be some kind of change in the way the interest rate cap is calculated. It's maybe less likely that it will be removed completely. But the way it's currently calculated makes no sense because it's an average of consumer and corporate credit, and they both have very different risk profiles. So -- and it is -- I think it's becoming clearer and clearer that having such a low cap basically means the creation of a very large black market where customers are -- majority of customers in Colombia are getting lending and credit at 1,000% interest rate from loan sharks. It's one of those laws that have good intentions about protecting consumers from high interest rates. But in reality, it just throws everybody to -- or the majority of the population to the black market and then you don't have any protection, any regulation and you pay way higher rates. So I think it's high likelihood that there is a rethinking how at least as a first step on how this rate is calculated to liberalize a little bit. And depending on what that means, there could be a significant improvement in access to credit because similar to Mexico, Colombia also has something like 14% credit card penetration versus Brazil at 75% or 80%. So these 2 markets are significantly underpenetrated.

Guilherme Souto: Operator, could you please open the line for Mr. Marcelo Mizrahi from Bradesco.

Marcelo Mizrahi: Congratulations for the results. My question is regarding the guidance or the indication of the efficiency ratio around 20%. You guys already said that there is a seasonality here, but the results are coming really much better than we were expecting. So looking forward, so you still believe that this 20% is the level that you guys will be running until the end of the year and in the next quarters? That's the first question. And the second one is regarding the data on the Stage 2 formation on credit card, if there's anything important here to mention the negative direction of the formation of credit card on Stage 2 formation.

Rob Livingston: All right. Thank you, Marcelo. Let me take those questions. So first, in terms of the efficiency ratio, we are expecting still a step-up in Q4. I know that we've said last quarter that we were expecting one in Q3, and it didn't materialize. But I think I've already explained in the prepared remarks why that was the case. We do expect to see that increase. And yet for the full year, we're expecting to be between 19% and 19.5%, which is lower than what we guided before. Some of the reasons why we do expect to see this step-up is as we fully get everybody back in the office and all of our new offices come online, that spending fully materializes. We also were quite thoughtful and judicious around personnel growth in the second and third quarters this year, and we now have confidence to go forward and hire a bit more in line with our previous plan. But generally speaking, our efficiency ratio is in the range that we want it to be at. It's incredibly competitive against any other bank in Brazil or across Latin America or even across the world. And it gives us room to sort of continue to benefit from scale advantage in Brazil while reinvesting in other opportunities across our footprint. And then the second question on -- you asked, which was on the sort of Stage 2 developments on the credit card side. The way that I would describe that is to actually turn your attention back to Page 17 of our presentation when we talk about our risk metrics with ECL allowance and NPL 15 to 90 because it's really the same dynamic that's happening there that's happening in Stage 2 formation, and that has to do with the product mix adding a little bit of risk, but really intentional risk expansions being the other factor that's primarily driving the increase. So those intentional risk expansions, as I've described earlier, are where we feel more confident than we have in the past because of more powerful credit decisioning models and know that we can extend credit and get the returns on that extension of risk that we need and so go ahead and make those expansions. I think you're seeing the proof of that in the continued strength of our risk-adjusted net interest margin. In our minds, that's the strongest proof point of the power of the strategy.

Guilherme Souto: Operator, could you please open the line for Mr. James Friedman from SIG.

James Friedman: So I'm sure you're going to get into this on December 8 at the Analyst Day, but we get questions here from the U.S. investors. So I just -- I'm curious, David, how you would characterize the similarities but differences as you enter the U.S. market? And when you look at the core competencies of the company, which you've been very consistent in articulating, how those translate into the U.S. theater?

David Velez Osorno: Yes, sure. So it is -- there's a number of different capabilities and a number of different segments where the combination of both actually end up resembling a lot of the markets that we've always operated. And I'll give you a little bit more detail on that. First, the U.S. is a gigantic market. And when you kind of dig in and double-click in some of the areas, what you realize is that there is a segment of the market that is incredibly well served, very competitive. Lots of different banks compete for these customers, very high income. You need banking branches to serve them well. You have millions of dollars. And then you have the largest percentage of the market that increasingly actually have less access to financial services, and there is actually less competition. And when you start realizing what that lack of competition means, you start realizing that consumers in the U.S. are actually paying a lot of money for banking services in nonobvious ways. So for example, over 60% to 70% of all deposits in the U.S., banks are paying 0. That's actually a very similar metric that what we saw in Brazil and Mexico, where big banks paid 0 to something like 70% of deposits before we began. The fact that we were able to build a consumer brand and use the significant cost structure advantage that we have to offer high yield and pass the yield to our customers is one way to use our cost structure advantage to effectively shift the profit pool that the big incumbent banks have that today is going to pay banking branches all the way to the consumer. And so that's one opportunity. There is a lot of fees. The amount of fees when you look at fee revenue as a percent of total revenue is similar to what we saw in Latin America 15 years ago. It's partly is also a function of lack of competition, frankly, especially in the mass market consumer. You're paying very high fees for checking accounts, savings accounts, overdraft and remittances, which is an area where we obviously launch 5% to 10% to send money. So there is a lot of -- once you add all the different fees, when you add the lack of a yield, when you add some of the interest rates in certain segments, this is a very expensive banking system. And so from that perspective, if you think about it from first principles, it's a bit of the same of what we saw in Brazil and Mexico. One thing that people sometimes don't realize is the majority of our customers in Brazil were banked customers, something like 70% of our customers were banked. They were not unbanked. And so for those banked customers, they had the same -- they were paying the same high cost for poor experience in the big incumbent banks. And the fact that we have this cost structure advantage and our consumer obsession and our technology capabilities that allowed us to offer these banked customers that were underserved a much better product at a lower cost. So from first principles, for some subsegments and niches in the U.S., it's the same in some ways, a very similar playbook. And we have a number of different advantages that also are not obvious, for example, on credit capabilities. We think we are, as I said earlier, perhaps one of the best, if not the best in the world and now really knowing how to underwrite credit on behalf of our consumers. And a lot of that was because we brought a lot of DNA from some of the top lenders in the U.S. since the beginning. So this credit as a superpower, which would be huge in a market like the U.S. that requires credit. And a lot of people ask, why haven't fintechs cracked the U.S.? Well, some of them sort of have, but partly it's also because none of them really were able to do or willing to do credit well, while at the same time, building a great brand and consumer obsession and becoming a primary bank account and kind of playing all the elements of our business model. So anyway, we think it's a very big opportunity. We'll disclose more and explain more on our Investor Day. And finally, we think that what's happening today with AI and with AI agents, it is the beginning of the end for a lot of those profit pools because that's just going to bring so much transparency to the market that will be a very, very important catalyst for some of those profit pools to be rearranged in the market.

Guilherme Souto: Operator, could you please open the line for Mrs. Neha Agarwala from HSBC.

Neha Agarwala: Congratulations on the results. I wanted to talk a bit about loan growth. We are already seeing a slowdown in loan growth for the system as a whole. You showed that how you've been able to grow much above the system. But how should we think about loan growth in 2027 as well as in the fourth quarter? And specifically speaking more about the payroll loan segment, while we've seen some acceleration in the private payroll, as you mentioned. Is this a product that you're now comfortable with in terms of growing in a much faster manner in the coming quarters so that gain share in the portfolio? And how are you seeing the delinquencies for the newer cohorts that you're underwriting for the private payroll segment? And are you seeing customers repay the unsecured loan or over-index themselves with the new line of credit that is now available in the market?. So any color on loan growth as well as on private payroll segment would be very helpful.

Rob Livingston: Great. Let me respond to that, Neha. Thank you so much for the question. So first, in terms of loan growth, we're not giving guidance for next year. But as you do point out, we have had very strong loan growth this past quarter and just in general, for the past couple of quarters, if you look at a year-over-year basis. What I'd ask this community to do is not to focus too much on individual quarter loan growth or quarter-over-quarter because we sometimes will expand our lending opportunistically. For example, when we have a new generation of credit models that are launched, that provides an opportunity to, for example, offer credit line increases or new loans for existing customer segments. With that being said, as David and I both discussed earlier, we're not seeing anything at this point that would cause us to expect a dramatic decrease in the near future in terms of our loan growth. We understand that there is a -- it's a fraught economic environment, but we are -- our underwriting approach is built for that. Now the second part of your question was about private payroll. And the short answer is yes; we are getting very comfortable with private payroll at this point. As you know, we didn't launch at the same time as other banks last year because we were concerned both about the credit risk as well as the operational risk elements within the private payroll space. We now have enough performance data as well as the operational processes in the industry and the environment have improved enough where we can accelerate in that space. It's growing very quickly right now, doubling quarter-over-quarter off of a small base, just to be clear. And we see no reason why we shouldn't be one of the leading, if not the leading private payroll providers at some point in the next year. Your question also was around the performance of payroll and how that is sort of interplaying with the unsecured portfolio. And generally, the way that we underwrite is we look at the total debt carry of a consumer and then consider the private payroll loan on top of that and whether or not it can be carried or whether it needs to be substitutional. That's the fundamental question for underwriting in that space. I do think that a lot of, again, the early movers in the private payroll space discovered that there was more of an addition to overall debt burden than they may have expected. And our approach at this point means that we're quite confident to handle it where that's the case but also try to aim for where it's substitutionary. One thing I would point out is that on our current portfolio or our existing portfolio, we do not see any sort of negative impact that can be explained by subordination to payroll loans at other banks. So yes, people who have a payroll loan are higher risk on average, but that's true in their underlying sort of characteristics and our models would have predicted that, whether or not they had a payroll loan. So we feel quite confident both in terms of going after the private payroll space, but also about the overall development of that market, not having a material impact or negative second order effect on our existing portfolio.

Neha Agarwala: That's very helpful. If I can just have a quick follow-up on the impact of Desenrola on NPL ratio and cost of risk this quarter.

Rob Livingston: Sure thing. So on cost of credit, the impact was, as I said before, immaterial, less than 1/4 of what it was in Q2. So there was a very minor benefit there. It is starting to, of course, show up, as you might expect, in some of our delinquency rates because now that these customers have come back on the books, they are going delinquent, but it is also immaterial in terms of the negative effect there, less than 10 basis points. So net-net, it's not been a big impact in Q3 and really Q2 was where the majority of that impact came. Just one point though on Desenrola is that taking a big step back on the program, it's easy not to focus on the fundamental benefit that it drove for Brazilian consumers, and we're very proud that we were able to help 2.8 million consumers through the program.

Guilherme Souto: Operator, could you please open the line for Mr. Daniel Vaz from Safra.

Daniel Vaz: I was just trying to remember, David, you said like Nu may be the best credit underwriting right now in the world because of these models and its people, right? So you've been hiring many capable executives in credit from Capital One and so on and so forth. And in the U.S., maybe you're going to start without the years of local data that you've been acquiring in Brazil since you built that edge. I think it was in 2013, then you started accelerating the credit in late 2019, maybe. So how fast today can you collect and process data in the U.S. compared to Brazil back in the time? Because right now, we have like the AI capabilities. We know you've been very excited with AI. So maybe the question is like how does that pace compare to Brazil when you want to scale the credit in the U.S. and we'll look into a credit underwriting perspective and data collection perspective.

David Velez Osorno: Yes, sure. So there are some differences between Brazil and the U.S. Obviously, in the U.S., you end up having a positive credit bureau and a FICO score readily available for anybody that comes in as a newbie in the market. In Brazil, we didn't really have that. So that took a long time for us in Brazil. It also took us several years to -- and we continue to do so to optimize our -- basically our team, our credit infrastructure, the way we do our policies, testing a number of different algorithms. And so that entire credit muscle took a learning curve that by the time we got to Mexico and Colombia was much more developed. And now that we get to the U.S. is a very well-tuned system that can iterate very fast in developing new models and allow us to test and learn much faster. That being said, obviously, this is credit. You do -- it does take some time. You need losses so that your model learns from the losses. In a way, losses tend to be -- is the CapEx, is the R&D investment. So these models need to have some losses, you need to iterate. You need to do foundational models. So it's effectively provided different type of credits and different type of modalities to different type of segments so that your models start learning. And that will take some time to learn and get it for a new market. There are other efforts that we are now experimenting with. We talked a lot about AI and our nuFormer model about a couple of years ago that we published our first foundation model. I think we were one of the first, if not the first, financial services firm in the world that built its own AI foundation model with some data for credit. We are in V3 of that. And one of the interesting potential implications is that, that model, the same way your LLM, your favorite LLM is trained on a language and then helps you learn a new language as you train it with less data, the same way our foundation model from one country or for several countries where we have over 140 million customers can help us faster understand new markets and new populations. So this is something that we still kind of need to prove out, but we see good evidence for that. And there's also other opportunities. So for example, since a lot of our first customers in the U.S. and a meaningful percentage there are Mexicans, Colombians and Brazilians, we can use the credit information that we have on those customers in our core markets to help them get a credit card faster. One of the big pain points you'll hear from a lot of these populations is that they're new in the U.S. It might take them years to get a credit card, even though they had a very good credit in their home country. So that's something that we can immediately or fast enough solve given the significant information we have. So long answer to basically say, it's still -- it will still take a little time. It's not your traditional consumer internet product that you can scale to millions of customers on day 1. You need a lot of testing. You need some foundational testing, but it will definitely be much faster and better than any other country we've done in the past.

Guilherme Souto: We have now surpassed 60 minutes of this session. So we are now concluding today's call. On behalf of Nu Holdings and our Investor Relations team, I want to thank you very much for your time and participation in our earnings call today. Over the coming days, we'll be following up with questions received via our platform and with those that attempted but were not able to ask questions tonight. So please do not hesitate to reach out to our team if you have any further questions. Thank you, and have a good night.