Nu Holdings Ltd.

Good afternoon, ladies and gentlemen. Welcome to NU Holdings conference call to discuss the results for the third quarter of 2023. A slide presentation is accompanied 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 earliest call today. If you have not seen our earnest release, a copy is posted in the Results Center section of our Investor Relations website. With me on today's call are Davi Velas, our Founder, Chief Executive Officer and Chairman, Youssef Larache, our President and Chief Operating Officer, Guilherme Lago, our Chief Financial Officer, and Jagi Dugal, our Chief Product Officer. Throughout this conference call, we will be presenting null IFRS financial information, including adjusted net income. These are important financial measures for new holdings, but are not financial measures as defined by IFRS and may not be comparable to similar measures from other companies. Reconciliations of our null IFRS financial information to the IFRS financial information are available in our early express release. Unless noted otherwise, all growth rates are on an year-over-year FX neutral basis. I would also like to remind 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 our expectations. Please refer to the forward-looking statements disclosure in our earnings release. Today, our founder, chairman and CEO, David Ellis, will discuss the main highlights of our third quarter 2023 results and provide an overview of our company flywheel. Subsequently, Guilherme Lago, our CFO, and Yusif Lores, 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'd like to turn the call over to Davi. Davi, please go ahead.

Thank you, Jörg. Good evening, everyone, and thank you for being with us today. Once again, in Q3 23, Nuuk continued its remarkable upward trajectory, demonstrating strong operating performance, fast growth, and increasingly robust profitability. We remain focused on executing our business plan without distractions, while keeping an eye on the significant growth opportunities we have as a company in the long run. Reflecting on one of the key milestones of the third quarter, our pace of customer growth exceeded our expectations, culminating in over 89 million customers at the end of the quarter. Once again, we witnessed robust customer acquisition in Brazil, Mexico, and Colombia, with slightly more than 1.5 million new customers per month. Over the past 12 months, our customer base growth in Brazil has outpaced that of the five largest incumbent banks combined. Additionally, we welcomed over 700,000 new customers in Mexico during the quarter, driven by the rollout and continued expansion of Cuentanu and the unlocking of our member-can-member referral programs potential. Our business model continues to demonstrate its ability to drive both growth and profitability. In the third quarter, our revenue surged to $2.1 billion, marking a 53% year-over-year increase. Our gross profit reached $915 million, doubling year-over-year, while our gross margin expanded once more, reaching 43% this quarter, solidifying the upward trajectory initiated last year. Sequential gross margin expansion, coupled with further efficiency improvements, significantly boosted our net income, which reached $303 million and adjusted net income stood at $356 million. reflecting a 34% quarter-over-quarter increase on an FX neutral basis for both. This slide provides a high-level overview of our financial performance trends over the past two years. It underscores our ability to consistently expand our customer base and increase revenues while driving profitability. Notably, in October, we reached a significant milestone by surpassing 90 million customers. firmly establishing us as the fourth largest financial institution in Brazil in terms of the number of customers, whereas the second largest measured by the number of customers with access to a credit product. The robust growth of our customer base, driven by the growing cross-selling and up-selling opportunities facilitated by our highly engaged platform, resulted in a more than fourfold increase in quarterly revenues in just two years on an FX-neutral basis. This translates to a triple-digit revenue annual compounded growth rate over this period. The third chart of this slide effectively illustrates our prudent pricing strategy and robust underwriting capabilities. or quarterly gross profit calculated as total revenues minus funding costs, transactional expenses, and credit loss allowances, also increased by more than fourfold in the same period. This growth was achieved while maintaining healthy gross profit margins, despite increased credit delinquency observed in the market over the past 12 months. Lastly, we believe the synergistic impact of the mentioned factors, combined with the potent operating leverage of our platform and the maturation of our early products in Brazil, has led to a significant acceleration in net income growth. This growth is evident in the chart on the right, covering the past three quarters. We anticipate this compounding effect to continue in the coming periods, resulting from the combination of sustained growth and enhanced profitability within our platform. As evident from this slide, our platform continues to showcase its cross selling potential, offering our customers comprehensive solutions as we continue to expand the scope and diversity of our product offerings. While our initial focus was primarily oriented towards unbundling financial services, as our platform has evolved, Today we expect our most significant opportunities to lie in the re-bundling of financial services by creating a diversified, multi-product, multi-segment, and multi-country portfolio of businesses. As illustrated on this slide, even our complementary businesses have successfully attracted millions of customers, highlighting our impressive cross-selling capabilities. As we will delve into later in this presentation, we believe that critical product launches announced this year and insulated for 2024 will help further solidify our position as the preferred banking partner for an increasing number of customers. We expect this, in turn, will drive the expansion of our growth and profitability engines. I'd like to take a moment to delve into our company's flywheel. pivotal driver of our past growth, and an essential foundation for future success. The core element of our strategy is very simple. We work extremely hard to make customers love us fanatically, as we build what we think are the very best products and services in the markets we operate. This obsession for our customers' experience enables our customer base to expand, both in terms of size and engagement. By the end of Q3 23, we had achieved an impressive milestone with over 50% of Brazil's adult population as part of our customer base and steadily increasing market shares in Mexico and Colombia. This level of scale allows us to aggregate both structured and unstructured data, which becomes an invaluable competitive asset as we currently accumulate over 30,000 data points on each active customer annually, and this is growing exponentially over time. Through harnessing cutting edge technology, we've transformed these data into actionable intelligence, continually enhancing our credit underwriting and customer insights models. These model refinements, in turn, empower us to broaden the scope of our product offerings, reaching even larger segments of the populations we serve. This scale also allows us to reduce our operational costs, efficiency which we then decide to pass to our customers via lower prices, helping us to provide better products and services at competitive rates, and thus starting the virtuous cycle again. The momentum we're seeing over the past 12 months is a direct result of this flywheel accelerating. And in Q3, we had the opportunity to throw fuel to the flywheel with the introduction of new lending products such as payroll lending, where we decided to price at very competitive price points. The efficiency of our model also enables us to make these pricing decisions while maintaining healthy unit economics. We're seeing meaningful price elasticity in these products and are excited about the opportunity to use our efficient cost structure and data sophistication on our customers' behalf. Now, I'd like to highlight how our flywheel isn't just driving customer acquisition and data growth, but also sustaining strong momentum in our key financial metrics. As our three geographic regions continue to expand, benefiting from the inner and operating leverage of our model, our holding company is effectively converting its potential into profits. In the third quarter, new holdings achieved an impressive adjusted net income of $356 million. reflecting an adjusted annualized return on equity of 25%. We believe our current level of profitability already positions us ahead of most traditional incumbent banks in the Latin American region. It's worth noting that we achieved this remarkable result even as Mexico and Colombia continue to be in the early stages of investments, and we believe NU maintains a considerably larger capital base compared to our peers. As a reminder, we're holding company holds $2.3 billion in excess capital, which can be strategically allocated to our operating subsidiaries as we continue to grow. As a reference, if we take our Brazilian operation, considering this excess cash, we could cover 3.1x the required capital for Brazil. It's important to underscore that we're achieving these strong levels of profitability while making substantial investments in future products and geographic expansion. Simultaneously, we're delivering a robust 53% year-over-year revenue growth rate, a feat that we believe few financial institutions at our scale can match. As you can see, we're once again thrilled with the momentum of our business, and now I'd like to pass the floor to our CFO, Guilherme Lago, who will guide you through our financial numbers. Over to you, Lago.