Shares of Nu Holdings Ltd dropped almost 5% in afternoon trading today following the release of the company's first-quarter 2026 financial report, which was issued after the previous session closed. The quarter showed robust top-line growth but a weaker-than-expected bottom line, prompting investor concern around credit quality and near-term profitability.
Quarterly results in brief
For Q1 2026, Nu reported managerial net income of $871.4 million on total revenue of $5,315.5 million. By comparison, the company posted $557.2 million of managerial net income on $3,372.7 million of revenue in the same quarter a year earlier. While total revenue comfortably outpaced analyst forecasts, the headline market response focused on the profit miss driven by higher credit provisions.
Margins and provisions
The firm’s risk-adjusted net interest margin registered at 9.5% in the quarter, a 100 basis point decline from the 10.5% reported sequentially. Company management indicated they expect the margin to move back toward second-half 2025 levels as first-quarter dynamics normalize. Nevertheless, the earnings-per-share shortfall was attributed primarily to elevated credit provisions, which the company linked to seasonal patterns and portfolio growth rather than an isolated deterioration in underwriting standards.
Delinquency metrics reinforced those concerns: the 15-to-90-day delinquency rate printed at 5% for the quarter, an increase of 89 basis points from year-end. Management said this uptick aligns with seasonal patterns observed in both 2024 and 2025, but the market reaction suggests investors are prioritizing the near-term credit picture over the revenue acceleration.
Cost posture and capital allocation
Chief Financial Officer Guilherme Lago described 2026 as an "investment year," noting several drivers of higher near-term costs. Return-to-office expenses are expected to pressure efficiency by roughly 80 to 100 basis points. The company also flagged increased spending on artificial intelligence and GPU infrastructure, along with costs tied to international expansion. That forward-looking cost commentary tempered investor enthusiasm, even among bullish holders focused on Nu’s rapid top-line growth.
Insider activity and market context
Investor unease was compounded by notable insider selling. Over the past three months, insiders have sold $4.4 million worth of shares. In addition, a Form 144 filing dated May 15 signaled a potential additional insider sale, which market participants interpreted as an added near-term liquidity signal.
Competitor activity did not drive the move. Regional rivals Itaú Unibanco and Banco Bradesco were not reported to have released material news today, indicating the pressure on Nu was company-specific. The broader equity market provided little support, as both the S&P 500 and the Nasdaq retreated sharply today after reaching fresh all-time highs in the prior session.
Outlook and analyst stance
Despite the short-term headwinds, Nu projects continued growth. The company’s forward EPS range for upcoming quarters sits between $0.22 and $0.27. Analysts remain broadly bullish and maintain price targets that imply considerable upside from current levels. For now, however, the market narrative is dominated by near-term credit concerns, the elevated cost posture for 2026, and recent insider stock sales.
Summary
Nu Holdings delivered a quarter of strong revenue growth but missed on EPS after booking higher credit provisions. A compressed risk-adjusted net interest margin, a rise in short-term delinquencies, an intentional increase in spending as management frames 2026 as an investment year, and insider selling combined to drive a nearly 5% intraday share decline. Broader market weakness amplified the reaction, while company guidance and analyst sentiment suggest continued growth potential despite immediate credit-related concerns.