I think this hits the nail on the head for Nu's investment thesis. One additional point is that incremental ARPAC drops almost 100% to the bottom-line as there is no incremental cost to serve. So it should not come as a surprise for earnings to grow at a faster clip on further inflection.
While there is no incremental cost to serve, it’s important to note that cost to serve only covers transactional expenses, customer support, and operations. It does not include the gross costs associated with credit, which has been the key driver of revenue growth over the past several years. In Q2, the gross margin was 42% (though slightly understated due to credit one-offs), so in my view, this figure is a more accurate reflection of the incremental impact.
I think this hits the nail on the head for Nu's investment thesis. One additional point is that incremental ARPAC drops almost 100% to the bottom-line as there is no incremental cost to serve. So it should not come as a surprise for earnings to grow at a faster clip on further inflection.
While there is no incremental cost to serve, it’s important to note that cost to serve only covers transactional expenses, customer support, and operations. It does not include the gross costs associated with credit, which has been the key driver of revenue growth over the past several years. In Q2, the gross margin was 42% (though slightly understated due to credit one-offs), so in my view, this figure is a more accurate reflection of the incremental impact.