Nu Holdings Ltd. (NU) saw its stock price plummet 5.02% in after-hours trading on Tuesday, following the release of its first-quarter 2025 financial results that fell short of analyst expectations. The digital banking platform, which has been expanding rapidly in Latin America, reported earnings per share (EPS) of $0.12, missing the estimated $0.13, while sales came in at $3.20 billion, slightly below the forecasted $3.23 billion.

Despite reporting a strong return on equity of 27% and a gross profit of $1.3 billion for the quarter, investors seemed to focus on the earnings miss. The company's adjusted net profit of $606.5 million also fell short of the $630.5 million projected in a Lseg poll. These figures suggest that while Nu Holdings continues to grow, it may be facing challenges in maintaining profitability at the pace expected by the market.

Adding to investor concerns, Nu Holdings reported a 90-day default ratio of 6.5% in Brazil for Q1, which could signal potential credit quality issues in its largest market. However, the company did report some positive metrics, including a consolidated loan book reaching $24.1 billion and a gross margin of 40.6%. As Nu Holdings continues its expansion efforts, the market will likely be watching closely to see if the company can improve its profitability and manage credit risks effectively in the coming quarters.