Nu Holdings Ltd. said artificial intelligence features it started to deploy in Brazil helped the fintech increase credit-card limits for some clients, boosting third-quarter revenue and profit.

Nubank, as the company is known, said its portfolio rose 42% to $30.4 billion through September, according to financial statements Thursday. Chief Financial Officer Guilherme Lago said AI helped increase underwriting capabilities, something Nubank predicts will allow it to grow its business without commensurate increases in risk.

“The one that has provided so far the biggest impact is improvements in credit underwriting, and we could say this better underwriting can help us accelerate growth with the same risk level,” Lago said in an interview before results were released.

The credit jump contributed to a surge in earnings, which came in at $829 million for the quarter, a 40% increase from a year earlier and ahead of the $770.4 million average expected by analysts surveyed by Bloomberg.

Nubank’s shares surged as much as 3.4% in New York, and were up 3% at 9:58 a.m.

Pedro Leduc, an analyst for Itau BBA, said that while the earnings beat was tied to better efficiency, it was still a positive. “While investors usually prefer top-line-driven beats, this was a comprehensive quarter combining solid operating indicators and profitability,” he wrote in a note.

What Bloomberg Intelligence Says

“Nubank keeps delivering. After another stop-and-go earlier this year, the quarter indicates it will remain in ‘go’ mode.”

— Gabriel Gusan, BI Senior Industry Analyst

Nubank started rolling out a new risk-analysis model partly sped up by the acquisition of Hyperplane, a Silicon Valley data-intelligence company it bought in June of 2024. According to Lago, the new model is more precise in identifying risks than the previous one, which means that the bank can give higher limits to clients it previously had less exposure to.

The new model is being rolled out in Brazil, initially for its credit-card businesses, and should start being used for credit decisions in Mexico by December, Lago said. Eventually, Nubank wants to use it to initially evaluate new clients.

In Brazil, the limit-increase program started in the second quarter of this year, and the full effects on revenue should appear by mid-2026, Lago said during a conference call Thursday. He added that the quality of the increased credit showed “nothing that deviates or forces us to revisit” the program.

Delinquencies in Brazil reached 6.8% in the third quarter, decreasing 0.4 percentage points on a yearly basis, for loans with payments more than 90 days late.

Nu will start operating as a bank in Mexico next year, in an attempt to expand its product offerings and capture new clients in the country. It has been operating there with a non-bank lending license that allows it to offer credit cards and take deposits. Once it receives full authorization, the lender will focus on payrolls.

Lago said that Mexico already shows better figures than Brazil for some lines compared to when the Brazilian unit had a similar client count, in 2019.

“By no means I would say Mexico is identical to Brazil, but the business model we developed in Brazil and adapted to Mexico has been working quite well,” he said.

The company reached 127 million customers through September, adding 4.3 million new ones during the third quarter.

International Battle

Nubank is also looking beyond Latin America. The company applied for a US bank charter in late September, saying it will help open doors to reach Latin American expats but also a broader client pool in the country.

Read More: Nubank Sees Chance to Lure More Than Expats in US Expansion

The company isn’t the only fintech looking to the US market. London-based Revolut Ltd. also has plans to come to the country, following its push into Latin America. In October, Revolut received approvals for a bank operation in Mexico and to create a bank in Colombia, moving into the other two countries in which Nubank currently operates.

Nubank recently hired Michael Rihani as crypto officer as it seeks to strengthen its crypto offering in the near term and build a bridge between its traditional banking services and digital assets.

“Michael will be a very important player within the bank on how to develop the strategy for us to play there, not only in Brazil or Mexico, but globally,” Lago said.

Other key third-quarter results:

• Revenue grew 39% year-over-year to $4.2 billion, ahead of estimates.
• The client count rose to 110.1 million in Brazil, 13.1 million in Mexico and 3.8 million in Colombia.