How Nu Holdings Is Building a Defensible Earnings Model in Latin American FinTech

The Stock’s Momentum and Market Positioning

Nu Holdings’ equity performance has climbed substantially over the past twelve months, outpacing broader sector benchmarks. At current valuation levels, the company trades at a forward price-to-earnings multiple of 21.55X, positioning it above the industry average of 10.71X. This premium valuation reflects investor confidence in what matters most to equity holders: the company’s ability to demonstrate sustained earnings power. Recent consensus estimate revisions from Zacks have moved upward over the preceding month, and the stock carries a Zacks Rank #2 designation indicating buy-rated status.

Why Recurring Revenue Streams Matter Most

The fundamental investment thesis hinges on Nu Holdings’ transition from user acquisition to revenue per customer expansion. During Q3 2025, the fintech platform extended its customer roster to 127 million users while maintaining an engagement rate above 83%. What matters most here is not simply adding new accounts—it’s the compounding effect of deepening monetization.

The company’s third-quarter revenues reached $4.2 billion, representing 39% year-over-year expansion on a currency-adjusted basis. This growth trajectory reflects a deliberate shift in the business model. Rather than pursuing aggressive credit issuance to artificially inflate quarterly results, Nu Holdings has constructed a revenue architecture anchored in payments processing, deposit accumulation, insurance offerings and cross-sell penetration. These revenue categories carry inherent stability because they depend on customer behavior patterns rather than favorable credit cycles.

Platform Economics and Operating Leverage

The distinguishing feature of Nu Holdings’ business structure is its technology-first architecture. Unlike traditional banking institutions burdened by physical branch networks and legacy compliance infrastructure, the platform operates with lean physical capital requirements. This creates a powerful dynamic: each incremental product adoption by existing customers flows directly into operating leverage.

As the average customer deploys two, three or four financial products through the platform, several things happen simultaneously. Revenue per active user climbs. The cost to serve incremental demand decreases. Quarterly volatility diminishes because revenue becomes less concentrated in any single product or customer cohort. This is what gives what matters most—revenue durability—its strategic potency.

For a banking platform operating in Latin America where macroeconomic volatility and currency fluctuations are endemic, this model provides substantial protection. Competitors anchored in traditional banking face structurally higher cost bases. Nu Holdings’ advantages compound as scale increases.

The Competitive Landscape: Lessons From Block and SoFi

Block operates a multi-product ecosystem that expands wallet penetration through Cash App and Square. The company’s trajectory demonstrates how financial platforms can organically grow revenue per user by bundling payments, credit, and deposit services. Block’s success in converting service adoption into revenue growth validates the cross-selling model that Nu Holdings is executing.

SoFi Technologies provides a domestic fintech benchmark showing how digital-first institutions can convert rapid user growth into sustainable revenue engines. SoFi’s recent results underscore the revenue acceleration that comes from offering loans, investment accounts, and deposit products through a single interface. The company illustrates that frictionless product expansion can transform scale into durable, defensible cash generation.

Both comparables suggest that what matters most—the shift from transaction-driven to relationship-driven banking—creates structural advantages for platforms that execute cross-sell strategies effectively.

What Investors Should Monitor

The key metric to watch going forward is not headline customer growth but rather average revenue per user trends and product adoption rates. If Nu Holdings can maintain the current trajectory of cross-sell penetration while keeping acquisition economics disciplined, the revenue durability thesis gains credibility. Conversely, any deterioration in user retention or product adoption rates would challenge the premium valuation multiple.

The fintech platform’s path forward depends on whether it can sustain what matters most: converting its 127-million-user base into an increasingly diverse revenue stream. If successful, the model supports the elevated valuation and positions Nu Holdings as a structural outperformer relative to traditional banking incumbents across the Latin American region.