Now, parent of the Renowned Latin American neobank Nubank, much to the disappointment of investors, announced its financial performance for the fourth quarter and 2021 last night.
Since its major offering last year, Nu’s shares have fallen in value from a high north of $12 a share — the company is listed on the New York Stock Exchange and a local exchange — to just under $9 a share. stock before reporting its results. In early morning trading today, Nu’s stock rose in the wake of the company’s earnings report, but when regular trading began, the company slumped to a loss of about 9%.
Despite recent declines, Nu is still worth nearly $37 billion this morning, according to data from Yahoo Finance.
For the burgeoning neo-bank sector, where countless startups around the world have raised huge sums of money to build consumer-friendly digital banking services, Nu’s IPO was a pivotal moment. It offered an early answer to the question of how the value of the still private neobanks would be converted into the public markets.
Despite the early issues, investors appear to be pleased with what the company laid out in the fourth quarter. Let’s go through the results, then discuss what they — and the resulting investor response — mean for Chime and other neobanks poised to pursue their own public offerings.
Now it generated revenue of $635.97 million in Q4 2021, up from $202.57 million in the same quarter a year ago. As of now, sales grew 224.3% year-over-year on a forex neutral basis in the last quarter of 2021. That’s fast.
The company’s revenue comes from two main buckets. In its most recent three-month period, the company’s interest income was $439.55 million, while “commission income” revenue was $196.42 million.
The company’s earnings have three core costs: interest costs, transaction costs and credit losses. In total, those expenses in the quarter totaled $409.08 million, making Nu’s fourth-quarter gross profit of $226.89 million.