Nu shares fall in fourth quarter results, a canary for fintechs still private – Techdoxx

Deepak Gupta February 23, 2022
Updated 2022/02/23 at 4:39 PM

Naked, father of well-known Latin American neobank Nubank, reported its financial performance in the fourth quarter and 2021 last night to the apparent disappointment of investors.

Since its offering last year in a grand offering, Nu’s stock has plummeted from $12 a share — the company is listed on the New York Stock Exchange and a local exchange — to just under $9 a share. action before releasing its results. . In today’s morning trading, Nu’s shares rose after the company’s earnings report, but when regular trading began, the company dropped to a loss of around 9%.

Despite recent declines, Nu is still worth nearly $37 billion as of this morning, according to Yahoo Finance data.

For the burgeoning neobanking sector, which has seen countless startups across the world raise huge sums of money to build consumer-friendly digital banking services, Nu’s IPO was a critical moment. It provided an initial answer to the question of how the value of still-private neobanks would convert to public markets.

Despite the initial problems, investors seem excited by what the company has detailed in its fourth quarter. We’ll talk about the results and then discuss what they – and the resulting investor response – mean for Chime and other neobanks on the cusp of pursuing their own public offerings.

Results

Nu generated revenue of $635.97 million in the fourth quarter of 2021, up from $202.57 million in the same quarter last year. Per Nu, its revenue grew 224.3% year-over-year on a forex-neutral basis in the last quarter of 2021. That’s fast.

The company’s revenue stems from two main buckets. In its most recent three-month period, the company’s interest-derived income amounted to $439.55 million, while “fee and commission income” income totaled $196.42 million.

The company’s revenue has three main costs: interest expenses, transaction expenses, and credit losses. All in all, those costs amounted to $409.08 million in the quarter, leaving Nu with a gross profit of $226.89 million in the fourth quarter.

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