Nu Holdings Ltd (NYSE:NU) stock rallies 8.29% (As on May 16, 10:16:14 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the first quarter of FY 23. Nu added 4.5 million customers in Q1’23 and 19.5 million year-over-year (YoY), reaching a total of 79.1 million customers globally. This represents a 33% growth YoY, which underscores Nu’s position as one of the largest and fastest-growing digital financial services platforms worldwide and the fifth-largest financial institution in Latin America by number of active customers. Monthly Average Revenue per Active Customer (ARPAC) increased to $8.6, expanding 30% YoY on FX neutral basis (FXN). Nu has become the primary banking relationship for over 57% of the monthly active customers that have been with Nu for over a year.

Moreover, In Mexico, Nu’s customer base grew 52% YoY to 3.2 million, and in Colombia, to 635,000 customers, which represents a 200% increase YoY. Nu keeps expanding its products portfolio with credit cards, NuAccounts and Personal loans reaching approximately 35 million, 56 million, and 6 million active customers, respectively. Adjusted Net Income, reached $182.4 million compared to an Adjusted Net Income of $10.1 million in Q1’22. In Brazil specifically, Net Income grew to $171 million in the last quarter with an annualized ROE of 37%, one of the highest in the industry.

NU in the first quarter of FY 23 has reported the adjusted earnings per share of 4 cents, beating the analysts’ estimates for the adjusted earnings per share of 3 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue of $1.62 billion in the first quarter of FY 23, beating the analysts’ estimates for revenue by 7.26%. This nearly doubles what the company posted in Q1’22, on a FX-neutral basis. This comes as a result of the compounding effect of customer growth and higher levels of customer monetization in Brazil, which alone responded to $1.5 billion of the quarter’s revenues. Nu’s Q1’23 gross profit expanded to $650.9 million, with a 124% increase YoY FX neutral. Gross profit margin expanded to 40% from 34% in Q1’2022, reaching its highest level since 2021 and reinforcing Nu’s operational leverage capacity. On March 31st, 2022, Nu had an interest-earning portfolio of $5.2 billion, while total deposits were three times this amount at $15.8 billion. Nu continues optimizing the use of deposits quarter after quarter, as reflected in its 33% loan-to-deposit ratio.