The 3 Most Important Metrics to Watch for Nu Holdings. And No, It's Not Customer Numbers.

Source Motley_fool

Key Points

  • Nu is becoming more valuable not just by adding customers but by generating more revenue from each one.

  • A 33% ROE suggests Nu is producing strong profits relative to the capital required to run the business.

  • As the loan portfolio grows, investors need to watch whether credit losses remain manageable.

  • 10 stocks we like better than Nu Holdings ›

Nu Holdings (NYSE: NU) has become one of the most interesting financial companies in the world. The digital bank now serves nearly 139 million customers across Brazil, Mexico, and Colombia. In the second quarter of 2026, it generated $1.1 billion in net income, its first quarterly profit above $1 billion.

But investors don't need to follow dozens of financial metrics to understand whether the business is moving in the right direction. If I could track just three numbers, they would be average revenue per active customer (ARPAC), return on equity, and credit quality.

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Together, they tell us whether Nu Holdings is making its customers more valuable, generating attractive returns, and keeping its biggest risk under control.

Person uses phone for online banking.

Image source: Getty Images.

1. Average revenue per active customer (ARPAC)

In simple terms, ARPAC indicates how much revenue Nu Holdings generates per active customer per month. In the second quarter, ARPAC reached approximately $17, up from $13 a year earlier and roughly $8 in the second quarter of 2022. Why does this matter?

Well, imagine Nu Holdings has 100 customers. If each customer generates only $5 of monthly revenue, adding more customers is helpful. But the economics become much more interesting if those same customers eventually generate $10 or $15 in revenue, since the company can save on customer acquisition costs.

That is what makes ARPAC so important. Nu Holdings doesn't necessarily need another 100 million customers to significantly grow its earnings. It can also increase revenue from its existing customers and gain operating leverage.

In other words, as customers become more active and adopt additional products -- such as loans, savings, payments, and investments -- their economic value will increase. For investors, I'd watch whether ARPAC continues to rise over the next several years.

2. Return on equity (ROE)

The second number is return on equity (ROE). This sounds complicated, but the basic idea is simple: A bank needs shareholders' capital to operate. ROE tells us how much profit the company generates relative to the capital it uses. Think of it as a measure of how efficiently management is using shareholders' money.

Nu Holdings generated a 33% ROE in the second quarter (annualized), up from 28% a year earlier. That is important because rapid growth by itself isn't necessarily valuable. A company could double its loan book and revenue while requiring substantial additional capital. If returns remain low, shareholders may not benefit much.

Nu is showing something different. It is growing rapidly while currently generating very high returns on capital. The question now is whether Nu Holdings can maintain an attractive ROE as the business grows significantly over the next few years.

3. 90+ non-performing loan (NPL) ratio

The third number is the least exciting, but potentially the most important. It is the percentage of loans that are more than 90 days past due, known as the 90+ non-performing loan, or NPL, ratio.

Why should investors care? Because lending is one of Nu's biggest businesses. Its credit portfolio reached $39.4 billion in the second quarter of 2026, up from $27.3 billion a year earlier. When a bank lends money, some customers inevitably don't repay their loans. If those losses become too large, they can wipe out a significant portion of the profits generated by lending.

Nu Holdings' 90+ NPL ratio was 6.9% in the second quarter, compared with 6.5% in the first quarter. The company said the quarterly increase largely reflected the seasonal migration of earlier delinquencies. The faster Nu Holdings grows its lending business, the more important it becomes to prove that it can control credit losses. That's why 90+ NPL ratio is a number worth watching closely.

What does it mean for investors?

ARPAC tells us whether customers are becoming more valuable. ROE tells us whether Nu Holdings is turning capital into profits efficiently. 90+ NPL ratio tells us how much credit risk sits behind those profits. We want the first two numbers to remain strong while the third stays under control.

This is particularly important, as the company has already proven that it can attract customers at an extraordinary scale. Now investors need to see whether it can continue to make those customers more valuable without taking excessive credit risk.

If it can, the $1 billion quarterly profit milestone may eventually look much less impressive than what comes next.

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Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nu Holdings. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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