Nu HoldingsNU

Regulators in Mexico have given Nu the green light to begin operating as a full bank. The company now has 30 days to finish the paperwork and technical steps to complete this transformation.

This is a major win because a banking license allows Nu to take deposits and offer more profitable lending products in Mexico, just as it does in Brazil. Mexico is the company's most important growth market, and this license is the foundation it needs to prove its low-cost digital model can win in other countries.

Key highlights

• Revenue outlook steady: Management expects full year 2026 revenue to be between $1.35 billion and $1.50 billion, which would be a change of negative 9% to positive 1% compared to the prior year. The company is also forecasting second quarter revenue of $330 million to $360 million as it prepares for a major product rollout later this year.
• Customer base shrinking: The number of customers fell 14% to 669,535 compared to the same time last year. This decline in users, along with an 8% drop in paid affiliates to 120,850, shows the company is struggling to keep its sales force and buyers engaged while it transitions to a new digital platform.
• Profit margins narrowing: Adjusted operating margin, which shows the profit left after paying for the costs of running the business, dropped to 3.6% from 6.4% a year ago. This squeeze happened because selling expenses rose to 34.3% of revenue, up from 32.5% last year, as the company spent more to support its sales leaders.
• Global sales declining: Total revenue fell 12% to $320.6 million for the quarter, even though foreign currency changes actually helped results by $3.9 million. This drop reflects a volatile environment across the roughly 50 markets where the company sells its beauty and wellness products.
• Innovation pipeline focus: The company is betting on its new Prysm iO platform to reverse these trends, with a full consumer rollout planned for the second half of 2026. This platform uses biomarker tracking, which measures biological data to track health, to try and move customers toward monthly product subscriptions.

Our take: A weak quarter that shows the business is still shrinking as it waits for new products to arrive. The double digit drop in customers and narrowing profit margins are concerning, but the steady full year outlook suggests management sees a recovery ahead. We need to see the new digital platform actually stop the user losses before we can feel confident in a turnaround.