Good evening, ladies and gentlemen. Welcome to Nu Holdings conference call to discuss the results for the second quarter of 2025. 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] [Operator Instructions] I would now like to turn the call over to Mr. Guilherme Souto, Investor Relations Officer at Nu Holdings. Mr. Souto, you may proceed.

Thank you, operator, and thank you, everyone, for joining the earnings call today. If you have not seen the earnings release already, a copy is posted in the Investor Relations website. With me on today's call are David Velez, our Founder, Chief Executive Officer and Chairman; and Guilherme Lago, our Chief Financial Officer. Throughout this conference call, we'll be presenting non-IFRS financial information, including adjusted net income. These are important financial measures for Nu Holdings but are not financial measures as defined by IFRS and may not be comparable to similar measures from other companies. Reconciliations of the non-IFRS to the IFRS financial information are available in the earnings press release. Unless noted otherwise, all growth rates are on a year-over-year FX neutral basis. I would also like to remind everyone that today's discussion might include forward-looking statements, which are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties and could cause actual results to differ materially from our expectations. Please refer to the forward-looking statements disclosure in the earnings release. I will now turn the call over to David. Please go ahead, David.

Hello, everyone, and thank you for joining us today. In Q2 2025, we delivered another quarter of strong growth as we continue to strengthen our position as the leading digital bank in Latin America and one of the leading financial technology platforms in the world, our customer base expanding to nearly 123 million customers with over 4.1 million net additions, all while maintaining an activity rate above 83%, underscoring the depth of engagement across our platform. In Mexico, we surpassed 12 million customers now serving approximately 13% of the adult population. And in Colombia, nearly 10% of the population is already choosing Nu as their financial partner. The combination of sustained customer growth and a 34% ARPAC CAGR since 2021 has created a powerful compounding effect, driving revenues to $3.7 billion in Q2, representing an 85% annualized growth rate since 2021. Gross profit has risen 78% annually, reaching $1.5 billion as we capture benefits of scale, cutting our efficiency ratio by more than half to 28.3% in Q2 2025. Quarterly net income has almost tripled in the past 2 years to $637 million. These results come despite our ongoing investments in growth and most importantly, in keeping our customers loving us fanatically. And we will continue to invest with focus and intention. This performance reinforces a key message. Growth isn't coming at the expense of sustainable results. Quite the opposite. We're proving that it's possible to scale efficiently with discipline and still generate strong earnings. Taken together, these elements have broadened our platform into a powerful multiproduct, multisegment and multi-geo growth engine. Today, 104.7 million mass market customers, 3 million high-income clients and 5.2 million small businesses engage with Nubank through a diverse suite of products ranging from credit and insurance to investments in crypto. This spread is no accident.…

Thank you, David, and good evening, everyone. Let me start by reinforcing how our business model creates value. We acquire customers at scale, increase engagement over time, monetize as cohorts mature and we do all of this on a low-cost, highly efficient platform. On the left side of this slide, you see monthly ARPAC consistently increasing across all cohorts, reaching $27.3 for customers who have been with us for longer. And even among these more mature customer cohorts, monetization keeps expanding. In the second quarter of 2025, our monthly ARPAC crossed the $12 mark for the first time, reaching $12.2, up 18% year-over-year. Meanwhile, as you can see on the right side of the slide, cost to serve remains stable at $0.80 per active customer, reflecting the efficiency of our platform. This operating leverage is one of the most important and competitive advantages of Nubank. It is what allows us to offer better pricing to customers while consistently increasing our earnings power. Moving to our credit portfolio. Total balances reached $27.3 billion in the second quarter, up 40% year-over-year on an FX neutral basis. All segments contributed to this growth. Secured lending grew 200% on an FX neutral basis, unsecured loans 70% and credit cards 24%. The continued diversification has been a mark of our credit portfolio quarter after quarter. Secured and unsecured loans now represent more than 1/3 of our total portfolio, up from 25% just a year ago. This shift in mix is intentional, and it speaks to our ability to expand our credit portfolio spectrum over time and better serve customers in every single market where we operate. Moving to loan originations. We are operating a retail credit business at scale across Brazil, Mexico and Colombia. In the second quarter, we maintained a strong pace from the…

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

Thank you, operator. Could you please open the line for Eduardo Rosman from BTG?

Congrats on the numbers. I have a question for David. In recent months, we have seen important changes, right, in the management team, including the announcement of a new CTO this week. So could you please help us understand the significance of these changes for Nubank in this next phase? And please, if you could also connect this topic to the company's kind of international expansion, right, that would be great as well. Specifically, do these new additions suggest also a possible acceleration of the growth outside Brazil, including entering new markets beyond Mexico and Colombia?

Rosman, thank you. Thanks a lot for the question. We -- as we've said in the past, we have made this number of changes over the past couple of months really thinking about the next 5 to 10 years. We think we are -- we have ahead one of the most interesting opportunities in technology in the world. Financial services is still the largest market in the world that hasn't really been disrupted by technology. Over 95% of the market capital financial services globally, over $8 trillion, is still very much dominated by all traditional banks. And that is very different from what has happened in all our different segments. So as we think about the next 5, 10 years, we are preparing to play in the world -- in the top leagues, in the world class. And as we prepare to play in the world leagues, we are bringing a world-class team. And this likely is going to mean adding talent sometimes that come from Latin America globally but also some talent that comes from some of the top world-class technology companies. And so that is a bit what we are preparing here. I think the addition of Roberto is very strategic in helping us strengthen our positioning in Latin America. We have regulated entities in the 3 markets that we operate. We will have many more regulated entities later on as we internationalize. So regulators are a key counterparty of us. We've always been ahead in terms of regulatory compliance, and we treat that very, very seriously. Public policy is a key aspect of also of what we do as a regulated financial institution. And in Roberto, we also were able to find all of that knowledge but also a lot of technology and strategy knowledge. So it was a very key strategic addition to the team, and it has been truly phenomenal to being able to work with him here and the team over the past month already. And with the addition of Eric and Ethan, I think we are saying we are on the way to build one of the world-class products in financial services. We already have one of the most sophisticated technology stacks of any company in Latin America. We're in the middle of an AI transformation that we're taking extremely seriously, and we want to take advantage of all these opportunities that open ahead. And so I think as we bring somebody like Ethan with his knowledge of having run products for hundreds of millions of customers and the same also, Eric, we are just getting prepared for the next stage. So to summarize, I do think these additions are -- help us both strengthening the market-leading position we have in Brazil and Latin America by upping up our game and also prepare us to really go play in the big leagues as we think about internationalization over the next few years.

Operator, could you open the line for Jorge Kuri for Morgan Stanley?

Congrats on the numbers. Great quarter. I wanted to maybe double click on your Slide 11, your loan origination. You have 1% FX neutral growth, which is a very different number from what we've seen over the last year, where the quarter-on-quarter growth were in the double digit. And I appreciate that the year-on-year number is really strong, 43% FX neutral, and that's certainly a better way to look at it. But just given some of the things that happened in the quarter, specifically on your credit line increases, your clips on credit cards that you started to implement and reach record levels for the company, given that you are extracting more value out of your Hyperplane acquisition, given that we saw a big acceleration of Pix at the end of the first quarter that we assumed it was going to continue or has continued during the quarter, so if you can help us understand if some of these things are just not reflected in the numbers, going to get reflected going forward. And any other dynamics for us to understand this different half of originations in the second quarter versus what we've seen over the last year?

Jorge, this is Lago. Thanks for the question. So let me try to unpack this in -- by asset classes. So let me talk about kind of the Slide 11 to which you allude brings kind of the evolution of originations only for loans. I'm going to try to address unsecured, then secured and then credit cards, which are not here. So starting with unsecured, we have had now a fairly robust set of kind of growth figures over the past quarters. We had an exceptionally strong first quarter of 2025, especially because it was a quarter in which we launched a few new kind of models and policies that allow us to embrace customers that were not eligible for unsecured credit lines at that point in time. And usually, when you do so, you have kind of the first-time effect of early kind of adopters of the new policy, which kind of increases the origination volumes. And also first quarter for unsecured credit is typically a seasonally strong quarter. We do expect, Jorge, that we will continue to grow unsecured lending originations fairly strongly throughout the remainder of 2025 and 2026 as long as we continue to see the asset quality numbers that we are seeing in our book. Not only until the end of the second quarter but until now today, August 14, everything seems to be super on track. We believe that we now account for over 20% of the origination market share of new unsecured loans in Brazil. And this should not only continue to gain speed, but it should be complemented by lending products in Mexico that have recently been launched. So feeling fairly good about the evolution of unsecured loans. Now going to the secured loan story, Jorge. I think, here, I would have…

Lago, that was super clear. And congrats on the quarter and all of the great new hires.

Thanks, Jorge. Operator, could you please open the line for Yuri Fernandes from JPMorgan.

Also congrats on the margin, the risk-adjusted margin expansion and the good quarter. I have a follow-up also to Lago just on asset quality. Most metrics, they look good, right, stable overage 15 to 90 days improving slightly better than seasonality. The only thing that caught my attention, Lago, was a higher Stage 3 formation, up quarter-over-quarter. I would like to get your view on this because when I go to 2024 and 2023, I also saw some seasonality in the second Q. So just checking if this is basically seasonal. From your answer to Kuri, I get an impression that you feel comfortable with asset quality but even we have many investors concerned with the macro situation in Brazil? It would be good to get your feeling on the formation and also how you see asset fund.

No, thanks, Yuri, for the question. So the short answer is yes. I think the increase in NPL formation as well as in Stage 3 formation that you can see on Slide 26 of our presentation is almost entirely explained by the seasonality of basically the spike in seasonal delinquency in the first quarter kind of flowing through the second quarter. Now broadly on asset quality, we are fairly mindful of the macroeconomic kind of situations in the markets where we operate, Brazil, Mexico and Colombia, also how it may impact credit cycles. And this is a concern that has lingered not only with us but also with many investors and other stakeholders since late last year and early this year. So far, and I say so far until now, August 14, we haven't seen kind of that deterioration playing out materially in our asset quality figures. All of our asset quality figures are performing largely as expected. That doesn't, of course, mean that we have to assume that this will stay as it is going forward. We continue to underwrite with kind of largely 2 kind of pillars in our mind. Pillar #1, we always assume that the future will be worse than the past. So irrespective of where any of us here the company may think we are in the credit cycle, when it comes to credit underwriting decisions, we always assume that there's going to be a deterioration in the credit cycle over the next 12, 24 and 36 months. And then above and beyond that, which is Pillar #2, every cohort of unsecured credit that we underwrite has to abide by the following kind of a stress test, which is losses have to go up -- can go up by up to 2x, and that cohort still has to be NPV positive. So with that, we built enough credit buffer resilience that will allow us to continue to grow conservatively and with conviction that we can withstand kind of unfavorable economic cycles over time.

Operator, could you please open the line to Geoffrey Elliott from Autonomous.

Could we talk about the mix of credit card balances? The last 5 quarters, interest earning installments have been between 27% and 29% of total balances. Are we now in a range which is normalized and where you'd expect to stay? Or is there scope for that to move higher with increased originations of Pix credit?

Thanks, Geoff. Look, I think I would say they should stay more or less where it is, maybe kind of small variations up or down, maybe a little bit upside risk here depending on how pronounced Pix financing and other transaction financing products may unfold. But I wouldn't suggest that there is a lot of room for us to go materially beyond the 29% that you alluded.

Operator, could you please open the line for Neha Agarwala from HSBC.

Congratulations on the numbers. Quickly on the deposit side of the franchise, 2 notable trends. First, on the Brazil, there was a big pickup sequentially on the deposits. What was the driver for that? Are you trying -- are you being more active consciously in trying to gather more deposits in Brazil? So any explanation on that? And on the Mexico side, you brought down the rates quite significantly, lowered the gap versus the [ TA ]. What have been the early reactions from the customers? Are you seeing outflow of deposits in July, early August? Or has that been fairly stable?

Neha, thanks for the question. So let me try to break it down. In Brazil, we did see or we continue to see an increase in deposits there. I think that has to do primarily with the increase in engagement and share of wallet that we have had with our customers. I would not ascribe a lot of value to that to any kind of initiatives to pay up for deposits in Brazil, even though we have launched a few new features that kind of a reward customer engagement and loyalty over time. If you were to compare, for example, the cost of funding of Brazil in isolation, it would have been practically unchanged over the past 2 quarters at kind of low 80s. So I wouldn't justify the increase in deposits based on increase in cost of funding but largely on increasing customer engagement and sequential gains in shares of wallet. Also, kind of progressively as we make some strides into more affluent segments, it's natural that we should also see increases in deposits over time. So that's the story about Brazil. The story about Mexico, just to maybe put everyone in perspective, Neha, if you allow me, so we did announce some material shifts to the design and the pricing of our deposits in Mexico in early July, and that is expected to lead to kind of the lowering of our cost of funding in Mexico. None of that, however, is reflected in the numbers that we see here in the second quarter. So those are things that we will see throughout the remainder of 2025. Now back to your question, Neha, look, we have been watching this super carefully since we've made the movements. Everything has been kind of evolving as expected. As we continue to offer the -- what we call the money box capped now at MXN 25,000, it basically allows us to even better serve and offer an even stronger value proposition for the vast majority of our customers, nearly 90% of the customers. And so we believe that we will be able to maintain customer engagement NPS at the segments that we care the most. We did run kind of some risk of having what people call the yield seekers eventually moving their money out. That outflow has not been material so far, even though we watch this carefully. So so far, so good. Now if things continue to play out as we have seen, we do expect to be able to continue to have a fairly robust local currency, low-cost retail deposits in Mexico that has already materially derisked our funding strategy in the country but progressively at lower funding costs.

I would just add one more point here to Lago, which is the following. When we launched Mexico, our savings account product was fairly basic. It was an online saving account without a lot of the functionalities. We didn't even have ability to allow customers to deposit off-line or to withdraw, which is very key in a market like Mexico. So in a way, it was a product -- it was truly an MVP as we launched. That meant that we had to pay higher yield. As we launch additional products and the product gets much more robust, we've added OXXO as a distribution channel. Customers are now able to withdraw cash. We've added a number of, what we call, self-driving bank functionalities inside our app. Then the value proposition increases. That means we have to compensate less on the yield. And that's why we've been able to decrease yield without seeing significant changes in the flows of deposits we're seeing into Mexico. And the same strategy has really been applied to Brazil and Colombia.

Super clear. If I can have my follow-up on a separate topic but a brief one. The Hyperplane expansion and the credit limit that you talked about, is there any particular segment of customer base where it is more targeted towards higher income or mass market or your super core segments because that will eventually have an impact on probably stronger loan growth in the second half of -- or in 2026 for your loan book?

So far has been mostly focused on mass market, but we expect that a lot of these new AI-enabled architecture will be now applied to a number of different models. The amazing opportunity of Hyperplane is that it's not only a modeling -- the team did not only bring a number of modeling capabilities but also a true new platform that allows us to put into production and develop a number of different models at the same time. And so this model was the first one. We expect a number of new models coming in for a number of different segments for the different countries and for different applications, such as collections, fraud, cross-sell. So we're very excited about this, and it's early days of applying this new technology to a lot of the decisioning that we have across Nubank. But we expect to see meaningful changes across the board.

Operator, could you please open the line for Pedro Leduc from Itau.

Both on cards, please. First, the number that you give us, and this has to do with Pix financing, that the number of clients using it transactionally fell a bit, 17.3 to 17.1 this quarter. In the last call, you had mentioned that you had slightly become more comfortable to gradually resume the product to those certain clusters you had withdrawn from after tests have worked well. So can you give us an update on the Pix financing process? When -- how you see it roll out, when you can see it get more traction? And then the second question, just -- it's sort of related, has to do with the number of active credit cards and that has also fallen a bit. And we can see that you're rolling out more limits. I'd sort of expect the opposite, no more active cards. So if you can help us square this out a little bit.

So Leduc, thanks for the question. Let me try to touch on each of them separately. So Pix financing. Pix financing or better said, the whole transactional financing kind of a family of products, of which today Pix financing is by far the biggest one, but that continues to grow. We did show in the last quarter that we had resumed growth there that we were at the end of the first quarter already at a -- with a bigger kind of Pix financing and transactional financing portfolio than we had in the second quarter of 2024 when we decided to pull back. That only continue to increase. So today, we are even ahead of what -- where we were in the first quarter of 2025. The performance of the portfolio continues to be fairly robust, and it has been widely adopted by our customer base. So you may see, Leduc, here a few kind of noise in seasonality when you go from 1 quarter to another. But by all measures, it has been kind of a remarkable success for the customers. It has been adopted by -- so I think as of the end of the second quarter, over 40% of our credit card customers were also active with some type of transactional financing, primarily Pix financing functionality. So the attach rate there is very high, very healthy, not only in the first order but also in the second order impact. So we do expect this to continue to grow. It certainly has a high correlation with the overall usage of Pix in the economy, but we don't have any concerns as we discussed when we presented the results of the third quarter of 2024. So far, so good. Second question that I also wanted to address, which is…

Operator, could you please open the line for Mario Pierry from Bank of America.

Congrats on the quarter. Lago, I wanted to discuss a little bit the private payroll product. You -- it doesn't seem like Nubank is too excited about the product or at least I haven't heard you guys talk too much about the opportunity. When we talk to other industry players, right, they think this is one of the best products to come to Brazil in the last, I don't know, 20 years. So -- and again, they talk about the potential size of this market being significant. Can you discuss a little bit about your strategy in the private payroll product? Like looking at origination data, right, we haven't seen Nubank being very active yet. When do you think you're going to be more active? Why are you holding back? Are you seeing this product as an opportunity? Or do you think this is a threat to your business?

Mario, thanks for the question. Look, we are very excited about private payroll loan product. We think that has been a fairly important and thoughtful product innovation that has been added to Brazil. And I think new bank has much more to gain than to lose with this product by a wide margin. Let me share a few thoughts on this, right? So we -- differently from kind of the more established kind of incumbent banks, we don't have kind of a B2B2C distribution channel to kind of -- to compete for corporate payroll loan business in Brazil, which is a fairly important one. And basically, the private payroll loan product allow us to basically break into this segment in a very profitable manner, right? I don't need necessarily now to have a B2B contract with company X to be able to access all of the employees of this company and also enjoy the benefits of the payroll flow that goes through the bank account. I can have access to tons of data that, so far, we have been kind of precluded from having access to. So we expect that this product will improve kind of collaterals across the board. We'll lower data, symmetry and therefore, we'll help the overall economy lower spreads and materially increase the size of the pie. So far, so good. Why are -- why have we not been kind of as aggressive at inception of this product? So the product was announced in late March. We launched the product right after this in early April. But we have not yet been kind of fully -- kind of we haven't been able to raise our comfort levels to adequate levels with respect to the quality of the collateral, right? So I think some of the collateral…

Yes. Okay. No, that's clear. Some of the players that we're seeing, right, already more active in this segment, they are talking about, yes, we're seeing higher -- elevated provisions and delinquencies, however, they still think that this is a 30% ROE product right now. So it feels like it could get even better. So I was just wondering, right, like I understand your concerns about the quality of the collateral. It's a new product. However, right, Nubank is always moving ahead of everyone else and trying to innovate. So that's why I was a little bit surprised that you're not more active right now, but I fully understand your concerns.

Operator, could you please open the line for Tito Labarta from Goldman Sachs?

Congratulations on the strong results. A little bit of a follow-up, but just how do you think about your loan growth along with your deposit growth, right? Because loan growth seems to be accelerating. You're doing well there, but deposit growth remains very strong. On the one hand, it's a headwind to earnings. But on the other hand, it's good for client engagement and client addition. Are you comfortable just continuing to grow that deposit book and get these clients even if it is a bit of a headwind to earnings? Or at some point, would you want to try to slow down the deposit growth to match the loan growth? Just how do you think about, I guess, the assets and the liabilities growing in conjunction?

Tito, thanks so much for the question. Look, a few thoughts there on how we are thinking about kind of deposits from both a financial standpoint but also from a strategic standpoint. I would say that from a financial standpoint, we are very comfortable with the loan- to-deposit ratio that we see in Brazil, Mexico and Colombia not only with respect to the quantum but also with respect to the duration and with the resilience of the retail deposits. If anything, we have buffer to either grow credit more rapidly, but we don't think that growing kind of credit more rapidly just because you have more funding is the most kind of wise approach to this, or we would have the ability to eventually lower prices and bring deposits down. That's from a purely financial standpoint. However, from a strategic standpoint, especially in markets where kind of information asymmetry is lowering very fast, including in Brazil with open finance, we do believe that we need to be the best place for our customers across Latin America to receive payments, make payments and store value. And to that extent, having a very competitive and compelling kind of a deposit design, which includes, but is not limited, price is paramount to our primary banking relationship customers. So we don't expect that we will play down with no deposit rates in Brazil anytime soon. We do expect that in Mexico and Colombia, we will continue to actively kind of reshape the size and the price of the deposits to optimize the value proposition for the customers, loan to deposit and liquidity resilience there. So that's our thought process there. I think Mexico and Colombia, you should see increases in NIM as a result of that optimization. In Brazil, I think you should see kind of a relatively stable NIM with respect to the deposits only.

Okay. No, that's great. Very helpful. And if I can, just a quick follow-up, I guess. When you think of client monetization, I'm looking at Slide 18, [indiscernible] gross profit breakdown, right? I mean credit is still a big component. Fees have been around this 30% level for some time and then the rest is float. Do you think that's an optimal level? Is there an optimal level that you would like to get to? Just how do you think about that breakdown between, I guess, lending, fees and other sources of monetization?

So Tito, the one thing that I would point out is I would kind of respond to this by sending you to another slide, which is Slide 9, right? If you take a look at this slide, which is a very clear comparison between the revenues per active customers that we have and the cost per active customers that we have. Today, we have a weighted average ARPAC at about $12.2. The more mature cohorts are already at $27, $28. The ARPAC of incumbent banks are largely at $45. So we do expect over time that we will take the ARPAC from 12 to 15 to 20 and onwards towards the levels of incumbent banks, while our cost to serve will remain at or below $1. So that is kind of the power of the operating leverage of our digital banking model. Now what are the main levers for us to bring kind of the ARPAC from $12 to $30 to $40? If you take a look at the profit pool of retail banking in Latin America as a proxy, about 70% -- 65% to 70% of that is credit. So credit is expected to be kind of the book of that growth going forward. That does not mean, however, that all credit are created equally. You will have more secure credit, more unsecured credit, so the mix of credit will kind of shift, but I wouldn't be surprised if credit accounts for a substantial part of the ARPAC expansion. And it's one of the reasons why we are so excited with kind of digital banking models that are able to provide competitive solutions and resilient solutions for credit for -- at scale because that is really where kind of the book of the profit pool is not only in Latin America but across many other markets in the globe.

Congrats again.

So thank you, everyone. We now have approached 60 minutes of the call. So we are now concluding today's call. On behalf of Nu Holdings, our investor relations team, I want to thank you very much for your time and participation on Nu earnings call today. Over the coming days, we'll be following up with questions received tonight but we are not able to answer. And please do not hesitate to reach out to our team if you have any further questions. Thank you, and have a good night.

The Nu Holdings conference call has now concluded. Thank you for attending today's presentation. You may now disconnect.