Nu Holdings Ltd.

Good afternoon, ladies and gentlemen. Welcome to NU Holdings conference call to discuss the results for the second quarter of 2023. A slide presentation is accompanying today's webcast, which is available in NU's Investor Relations website, www.investors.nu in English and www.investidores.nu in Portuguese. This conference is being recorded and the replay can also be accessed on the company's IR website. This call is also available in Portuguese. To access, you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. After that, select Mute Original Audio. Para acessar nossa conferência em português, clique no ícone do globo ao lado inferior direito da sua tela zoom e selecione a opção Portuguese Room. Ao acessar a nova sala, certifique-se de mutar o áudio original. Please be advised that all participants will be in listen-only mode. You may submit online questions at any time today using the Q&A box on the webcast. I would now like to turn the call over to Mr. Jörg Friedman, Investor Relations Officer at New Holdings. Mr. Friedman, you may proceed.

Thank you very much, Operator, and thank you all for joining our earnings call today. If you have not seen our earnings release, a copy is posted in the Results Center section of our Investor Relations website. With me on today's call are David Vélez, our Founder, Chief Executive Officer and Chairman, Youssef Larache, our President and Chief Operating Officer, and Guilherme Lago, our Chief Financial Officer. Throughout this conference call, we will be presenting null IFRS financial information, including adjusted net income. These are important financial measures for the company, but are not financial measures as defined by IFRS. Reconciliations of the company's non-IFRS financial information to the IFRS financial information are available in our earnings press release. Unless noted otherwise, all growth rates are on a year-over-year FX neutral basis. I would also like to remind to everyone that today's discussion might include forward-looking statements, which are not guarantees of future performance, and therefore you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties and could cause actual results to differ materially from the company's expectations. please refer to the forward-looking statements disclosure in the company's earnings press release. Today, our founder, chairman, and CEO, David Vélez, will discuss the main highlights of our second quarter 2023 results and provide an overview of our operations. Subsequently, Guilherme Lago, our CFO, and Youssef Larache, our President and COO, will take you through our financial and operating performance for the quarter, after which time we will be happy to take your questions. Now, I would like to turn the call over to Davi. Davi, please go ahead.

Thank you, Jorge. Good evening, everyone, and thank you for being with us today. Although the financial sector in Latin America has continued to face challenging conditions over the past quarter, NU has managed to maintain its positive trajectory with operating trends showing resilience and further decoupling from the broader markets. In Q2 23, once again, we achieved strong growth and increased profitability while maintaining healthy asset quality. We continue to be extremely focused and committed to strong execution. one of our core priorities while also maintaining significant investment on future growth opportunities. Turning to the main highlights of the quarter, we continue to grow customers at a strong pace, ending the quarter with 83.7 million clients. Once again, net ads were very robust in Brazil at approximately one and a half million customers per month. We also resume growth in Mexico and expect an acceleration in the coming quarters as Quintanil continues to be rolled out. Most of the Quenta new customers out of this quarter still came via cross-selling from credit cards. Our business model continues to compound growth and profitability. Revenues reached $1.9 billion in the second quarter, expanding 60% year over year. Our gross profit amounted to $782,113% year-over-year increase, while our gross margin expanded again to 42% this quarter, consolidating the recovery initiated last year. Sequential gross margin expansion, alongside ongoing efficiency improvements, drove a substantial increase in net income, which reached $224.9 million, or a 53% quarter-over-quarter growth rate. adjusting that income reached $262.7 million, reflecting a 39% quarter-over-quarter increase. This slide provides a high-level overview of our recent financial performance trends over the past two years, demonstrating our capacity to consistently expand both our customer base and revenues while compounding profits. During this brief period, Nu accomplished a significant milestone by doubling the number of customers from 42 million in mid-2021 to 84 million at the end of the second quarter of 2023. In addition, we surpassed 80 million customers in Brazil in July, establishing ourselves as the fourth biggest financial institution in the country by number of customers. The strong growth of our customer base linked to the increasing cross-sell and up-sell opportunities suggested by the high engagement of our platform resulted in our quarterly revenues multiplying by more than 5x in only two years on a FX-neutral basis, a triple-digit revenue CAGR over this period. The next chart of this slide illustrates our resilient underwriting capabilities. Quarterly gross profit, defined by total revenues deducted by funding costs, transactional expenses, and credit loss allowances, increased by almost 5x in the period, with gross profit margins expanding accordingly, even though credit delinquency has increased over the past 12 months and despite our conservative expected credit loss provisioning. Lastly, all of the aforementioned drivers combined with the strong operating leverage of our platform and the initial maturation of our early products in Brazil has led to a substantial acceleration in net income growth, particularly evident in the chart on the right over the past three quarters. We expect this compounded effect to continue in the coming periods, offering a valuable combination of growth with enhanced profitability in our platform. As we have previously noted, NUS inception in 2013 revolved around the concept of unbundling financial services. However, today, our most significant business opportunities lie in the rebundling of financial services by building a diversified multi-product, multi-segment, and multi-country portfolio of businesses. As shown in this slide, even our adjacent businesses have successfully garnered a million customers, demonstrating our remarkable cross-sell capacity. As we will discuss ahead in this presentation, we believe other critical launches taking place this year will continue to help us earn the right to become primary banking providers of more and more customers, supporting our growth and profitability flywheel. Now, Turning to our profitability, I'd like to highlight the evolution of the key financial metrics we presented over the past quarters. From this quarter on, we will focus only on the numbers of our holding company, as we understand that our Brazilian operations are already well understood. The momentum continued into the second quarter, as you can see by the numbers on this slide. As our three GEOs continue to scale and benefit from the inherent operating leverage of our model, where a holding company is now translating its potential into profits. New holdings recorded an impressive adjusted net income of $263 million in the second quarter, representing an adjusted annualized ROE of 19%. These current levels of profitability already position us on par with many traditional incumbent banks in the Latin American region, even though Mexico and Colombia are still in the early investing stages. Even more remarkable, we achieved these results while maintaining regulatory capital ratios of 20.2% in Brazil and 42.2% in Mexico, significantly above the minimum required of 10.5% in both countries. In addition to the capital in our subsidiaries, it's important to note that our excess cash in the holding level of $2.4 billion means that we're extremely well capitalized to deliver on our expected growth ahead. Finally, it is important to emphasize that we're delivering these sound levels of profitability, despite significant investments in future products and geographies, as well as our robust 60% year-on-year revenue growth rate, which few financial institutions at scale are able to show. As seen, once more, we're very excited with the momentum of the business. And now I'd like to pass it over to our CFO, Guillermo Lago, who will walk you through our numbers in detail. Go ahead, Lago. Thank you.