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Buffett-backed Nubank beats revenue estimates on strong client additions

·1 min read
FILE PHOTO: Nubank, a Brazilian FinTech startup celebrates the company's IPO at the NYSE in New York

(Reuters) -Nubank on Monday posted a surge in revenue that beat expectations, as the Warren Buffett-backed digital bank benefited from a healthy loan book and strong client additions, sending its shares surging nearly 8% in extended trading.

The fintech firm has managed to sidestep a rise in defaults in its main Brazilian banking market, given its focus on low-risk, low-yielding credit card receivables, prompting some analysts to call it an "outlier".

"This is the strongest quarter in Nu's history. We reached nearly 60 million customers and a record-high activity rate of 78%," Chief Executive Officer David Velez said.

Nubank added 5.7 million new clients this quarter, while its monthly average revenue per active client rose to $6.7, up $3.2 from a year earlier. On average, cost per client decreased to 70 cents per month from 80 cents a year ago.

The company said net loss shrunk to $45.1 million from $49.4 million a year earlier.

Revenue more than tripled to $877.2 million from a year earlier, well above analysts' estimates of $624.15 million, according to data from Refinitiv.

Earlier this month, the company modified its final lock-up terms and set the end for May 17.

Nubank's U.S.-listed shares have shed 61% since their debut on Wall Street in December.

(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Devika Syamnath and Anil D'Silva)

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