Earnings release
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Nelnet Reports Second Quarter 2026 Results LINCOLN , Neb . , August 6 , 2026 - Nelnet ( NYSE : NNI ) today reported GAAP net income of $ 66.7 million , or $ 1.85 per share , for the second quarter of 2026 , compared with GAAP net income of $ 181.5 million , or $ 4.97 per share , for the same period a year ago . Net income , excluding derivative market value adjustments¹ , was $ 63.9 million , or $ 1.77 per share , for the second quarter of 2026 , compared with $ 184.4 million , or $ 5.05 per share , for the same period in 2025 . Included in the operating results for the second quarter of 2025 is a gain of $ 175.0 million ( $ 133.0 million after tax , or $ 3.65 per share ) related to the partial redemption of Nelnet's investment in ALLO , a fiber - optic telecommunications company . Excluding this gain , GAAP net income for the second quarter of 2025 was $ 48.5 million , or $ 1.32 per share . " We delivered another quarter of solid results , reflecting the strength of our diversified strategy across consumer lending , servicing , payments , and technology , with a continued focus on education , ” said Jeff Noordhoek , chief executive officer of Nelnet . “ This quarter included the first full quarter of contributions from our Canada servicing acquisition , and we continued to diversify our consumer lending business through additional portfolio purchases . We also continued to invest in artificial intelligence and product development across the organization . We remain focused on investing in our core businesses , pursuing opportunities for growth , and creating long - term value . " Nelnet operates through three divisions : Nelnet Financial Services ( NFS ) , Loan Servicing and Systems [ referred to as Nelnet Diversified Services ( NDS ) ] , and Education Technology Services and Payments [ referred to as Nelnet Business Services ( NBS ) ] . NFS includes the company's Asset Generation and Management ( AGM ) and Nelnet Bank reportable operating segments , which earn interest income on loans and investments . NDS and NBS generate primarily fee - based revenue through loan servicing , education technology , and payment services . Business activities not included in these divisions are combined and reported within Corporate Activities . Nelnet Financial Services AGM As of June 30 , 2026 , AGM's loan portfolio totaled $ 7.83 billion , consisting primarily of federally insured loans originated under the Federal Family Education Loan Program ( " FFEL Program " or FFELP ) . During the three months ended June 30 , 2026 , AGM acquired $ 3.07 billion of consumer loans , which includes $ 2.86 billion of short - duration Pay Later receivables that the company began to purchase during the third quarter of 2025 and $ 205.5 million of other consumer loans , compared with $ 142.5 million during the same period in 2025. The company's consumer loan portfolio has grown to $ 1.21 billion as of June 30 , 2026 , from $ 411.5 million as of June 30 , 2025 . The AGM operating segment reported loan and investment net interest income of $ 63.2 million for the three months ended June 30 , 2026 , compared with $ 49.9 million for the same period in 2025. The increase was primarily driven by higher loan spreads² and growth in the company's consumer loan portfolio , partially offset by the anticipated runoff of the legacy FFELP portfolio . The average balance of FFELP loans outstanding declined from $ 8.7 billion for the three months ended June 30 , 2025 to $ 6.7 billion for the same period in 2026. During the first six months of 2026 , AGM contributed certain student loan trusts to Nelnet Bank that included $ 716.3 million of FFEL Program loans . AGM recorded a provision for loan losses of $ 41.3 million ( $ 31.4 million after tax ) for the three months ended June 30 , 2026 , compared with $ 11.1 million ( $ 8.4 million after tax ) for the same period in 2025. The primary item impacting provision for loan losses was the establishment of an initial allowance recorded on loans acquired during the periods to reflect lifetime expected credit losses at acquisition under the current expected credit loss ( CECL ) methodology . The higher provision in 2026 as compared with 2025 reflects the increase in consumer loan acquisitions and related portfolio growth rather than deterioration in underlying credit performance . Credit quality metrics , including delinquency rates and charge - offs , remained generally consistent with management's expectations . AGM holds interests in joint ventures engaged in the acquisition , ownership , and management of loan portfolios . During the three months ended June 30 , 2026 , AGM recognized income from these joint ventures of $ 8.6 million ( $ 6.5 million after tax ) . AGM reported net income after tax of $ 22.2 million for the three months ended June 30 , 2026 , compared with $ 20.8 million for the same period in 2025 . 1 Net income , excluding derivative market value adjustments , is a non - GAAP measure . See " Non - GAAP Performance Measures " at the end of this press release and the " Non - GAAP Disclosures " section below for explanatory information and reconciliations of GAAP to non - GAAP financial information . 2 Loan spread represents the spread between the yield earned on loan assets and the costs of the liabilities used to fund the assets .
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Nelnet Bank As of June 30, 2026 , Nelnet Bank had a loan portfolio of $1.64 billion and an investment portfolio of $1.29 billion, and total deposits, including intercompany deposits, of $2.51 billion. Loan and investment net interest income increased to $19.3 million during the second quarter of 2026, compared with $14.1 million for the same period a year ago, due to an increase in the loan and investment portfolio, partially offset by a decrease in net interest margin. Nelnet Bank recorded a negative provision for loan losses of $0.2 million in the second quarter of 2026, compared with a provision for loan losses of $6.8 million ($5.2 million after tax) for the same period in 2025. Nelnet Bank recognized net income after tax of $10.5 million for the quarter ended June 30, 2026, compared with a loss of $0.4 million for the same period in 2025. Loan Servicing and Systems Revenue from the Loan Servicing and Systems segment was $132.2 million for the second quarter of 2026, compared with $120.7 million for the same period in 2025. The increase was due to the company's acquisition of NDS Canada during the first quarter of 2026 and growth in consumer servicing. These increases were partially offset by a decrease in borrowers serviced for the Department of Education (Department). As of June 30, 2026 , the company was servicing $519.2 billion in Department, Canada student loan servicing, FFELP, private education, and consumer loans for 15.2 million borrowers. Operating margin decreased in the second quarter of 2026 compared with the same period in 2025 due to the decrease in revenue from the Department servicing contract and amortization of intangible assets from the NDS Canada acquisition. The Loan Servicing and Systems segment reported net income after tax of $11.3 million for the three months ended June 30, 2026, compared with $15.2 million for the same period in 2025. Education Technology Services and Payments For the second quarter of 2026, revenue from the Education Technology Services and Payments operating segment was $118.9 million, compared with $118.2 million for the same period in 2025. Revenue less direct costs to provide services for the second quarter of 2026 was $79.7 million, compared with $78.3 million for the same period in 2025. Operating margin decreased in the second quarter of 2026 compared with the same period in 2025 due to an increase in operating expenses to support continued growth in the customer base and investments in the development of new technologies. Net income after tax for the Education Technology Services and Payments segment was $14.7 million for the three months ended June 30, 2026, compared with $17.9 million for the same period in 2025. Corporate and Other Activities During the three months ended June 30, 2026 , the company recognized an unrealized gain of $8.6 million ($6.5 million after tax) from changes in the fair value of certain marketable equity securities. Share Repurchases During the first six months of 2026, the company has repurchased 316,600 Class A common shares for $40.6 million (average price of $128.34 per share), including a total of 190,281 Class A common shares for $24.4 million (average price of $127.99 per share) during the quarter. Board of Directors Declares Third Quarter Dividend The Nelnet Board of Directors declared a third-quarter cash dividend on the company's outstanding shares of Class A common stock and Class B common stock of $0.33 per share. The dividend will be paid on September 15, 2026 , to shareholders of record at the close of business on September 1, 2026. Forward-Looking and Cautionary Statements This press release contains forward-looking statements within the meaning of federal securities laws. The words “anticipate,” “assume," "believe,” “continue,” “could,” "ensure," “estimate,” “expect,” "focus," “forecast,” “future,” “intend,” “may,” "objective," “plan,” “potential,” “predict,” "pursue," "scheduled,” “should,” "strategy," “will,” “would,” and similar expressions, as well as statements in future tense, are intended to identify forward-looking statements. These statements are based on management's current expectations as of the date of this release and are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results and performance to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties
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include, but are not limited to: risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the company under existing and future servicing contracts with the Department, risks related to unfavorable contract modifications or interpretations, risks related to consistently meeting service requirements to avoid the assessment of performance penalties, and risks related to the company's ability to comply with agreements with third-party customers for the servicing of Federal Direct Loan Program, Canadian, FFEL Program, private education, and consumer loans; loan portfolio risks such as credit risk, prepayment risk, interest rate basis and repricing risk, risks related to the use of derivatives to manage exposure to interest rate fluctuations, uncertainties regarding the expected benefits from purchased securitized and unsecuritized FFELP, private education, consumer, and other loans, or residual interests therein, and initiatives to purchase additional FFELP, private education, consumer, and other loans; financing and liquidity risks, including risks of changes in the interest rate environment; risks from changes in the terms of education loans and in the educational credit and services markets resulting from changes in applicable laws, regulations, and government programs and budgets; risks related to a breach of or failure in the company's operational or information systems or infrastructure, or those of third-party vendors, including disclosure of confidential or personal information and/or damage to reputation resulting from cyber breaches; risks related to use of artificial intelligence; uncertainties inherent in forecasting future cash flows from student loan assets, including residual interests therein, and related asset-backed securitizations; risks related to the ability of Nelnet Bank to achieve its business objectives and effectively deploy loan and deposit strategies and achieve expected market penetration; risks related to the company's solar tax equity partnerships, including risks of not being able to realize tax credits which remain subject to recapture by taxing authorities and risks from the impact of the enactment of the One Big Beautiful Bill that accelerates the expiration and phase out of solar energy credits; risks and uncertainties related to other initiatives (and anticipated income therefrom) including venture capital, real estate, reinsurance, acquisitions, and other activities, including activities that are intended to diversify the company both within and outside of its historical core education-related businesses; risks and uncertainties associated with climate change; risks from changes in economic conditions and consumer behavior; risks related to the company's ability to adapt to technological change; risks related to the exclusive forum provisions in the company's articles of incorporation; risks related to the company's executive chairman's ability to control matters related to the company through voting rights; risks related to related party transactions; risks related to natural disasters, terrorist activities, or international hostilities; and risks and uncertainties associated with litigation matters, maintaining compliance with the extensive regulatory requirements applicable to the company's businesses, and uncertainties inherent in the estimates and assumptions about future events that management is required to make in the preparation of the company's consolidated financial statements. For more information, see the "Risk Factors" sections and other cautionary discussions of risks and uncertainties included in documents filed or furnished by the company with the Securities and Exchange Commission. All forward-looking statements in this release are as of the date of this release. Although the company may voluntarily update or revise its forward-looking statements from time to time to reflect actual results or changes in the company's expectations, the company disclaims any commitment to do so except as required by law. Non-GAAP Performance Measures The company prepares its financial statements and presents its financial results in accordance with U.S. GAAP. However, it also provides additional non-GAAP financial information related to specific items management believes to be important in the evaluation of its operating results and performance. Reconciliations of GAAP to non-GAAP financial information, and a discussion of why the company believes providing this additional information is useful to investors, are provided in the "Non- GAAP Disclosures" section below.
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Consolidated Statements of Income (Dollars in thousands, except share data) (unaudited) Three months ended Six months ended June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Interest income: Loan interest $ 164,598 171,024 172,104 335,622 338,543 Investment interest 40,315 40,202 40,185 80,517 81,574 Total interest income 204,913 211,226 212,289 416,139 420,117 Interest expense on bonds and notes payable and bank deposits 108,902 109,583 132,854 218,485 257,968 Net interest income 96,011 101,643 79,435 197,654 162,149 Less provision for loan losses 41,077 53,244 17,930 94,321 33,267 Less provision for beneficial interests 2,441 4,130 4,977 6,571 6,487 Net interest income after provision 52,493 44,269 56,528 96,762 122,395 Other income (expense): Loan servicing and systems revenue 132,244 127,842 120,724 260,086 241,465 Education technology services and payments revenue 118,884 154,436 118,184 273,319 265,515 Reinsurance premiums earned 40,625 22,536 26,112 63,161 50,799 Solar construction revenue — — 1,259 — 5,254 Other, net 18,399 10,437 22,976 28,836 47,579 Gain on partial redemption of ALLO investment — — 175,044 — 175,044 Derivative market value adjustments and derivative settlements, net 3,852 2,167 (3,122) 6,019 (8,701) Total other income (expense), net 314,004 317,418 461,177 631,421 776,955 Cost of services and expenses: Loan servicing contract fulfillment and acquisition costs 2,087 2,087 1,845 4,174 3,478 Cost to provide education technology services and payments 39,183 49,953 39,844 89,136 87,891 Cost to provide solar construction services — — 14,050 — 21,878 Total cost of services 41,270 52,040 55,739 93,310 113,247 Salaries and benefits 152,664 139,371 134,699 292,035 272,922 Depreciation and amortization 10,142 9,170 7,624 19,312 16,879 Reinsurance losses and underwriting expenses 32,809 23,605 25,662 56,414 47,874 Other expenses 64,199 61,840 56,617 126,038 104,924 Total operating expenses 259,814 233,986 224,602 493,799 442,599 Income before income taxes 65,413 75,661 237,364 141,074 343,504 Income tax expense (19,942) (20,061) (59,510) (40,003) (84,521) Net income 45,471 55,600 177,854 101,071 258,983 Net loss attributable to noncontrolling interests 21,191 15,526 3,605 36,717 5,035 Net income attributable to Nelnet, Inc. $ 66,662 71,126 181,459 137,788 264,018 Earnings per common share: Net income attributable to Nelnet, Inc. shareholders - basic and diluted $ 1.85 1.97 4.97 3.82 7.24 Weighted-average common shares outstanding - basic and diluted 36,037,509 36,076,912 36,485,605 36,057,102 36,482,035
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Condensed Consolidated Balance Sheets (Dollars in thousands) (unaudited) As of As of As of June 30, 2026 December 31, 2025 June 30, 2025 Assets: Loans and accrued interest receivable, net $ 9,802,215 10,006,695 10,155,483 Cash, cash equivalents, and investments 2,841,174 2,643,954 2,330,692 Restricted cash 793,884 677,563 576,023 Goodwill and intangible assets, net 302,838 187,312 191,307 Other assets 534,953 548,259 457,583 Total assets $ 14,275,064 14,063,783 13,711,088 Liabilities: Bonds and notes payable $ 7,043,156 7,780,927 7,903,561 Bank deposits 2,219,249 1,669,173 1,382,042 Other liabilities 1,377,223 1,036,454 942,792 Total liabilities 10,639,628 10,486,554 10,228,395 Equity: Total Nelnet, Inc. shareholders' equity 3,770,539 3,685,792 3,574,983 Noncontrolling interests (135,103) (108,563) (92,290) Total equity 3,635,436 3,577,229 3,482,693 Total liabilities and equity $ 14,275,064 14,063,783 13,711,088 Contacts: Media, Ben Kiser, 402.458.3024, or Investors, Phil Morgan, 402.458.3038, both of Nelnet, Inc.
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Non-GAAP Disclosures (Dollars in thousands, except share data) (unaudited) Non-GAAP financial measures disclosed by management are meant to provide additional information and insight relative to business trends to investors and, in certain cases, to present financial information as measured by rating agencies and other users of financial information. These measures are not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies. The company reports this non-GAAP information because the company believes that it provides additional information regarding operational and performance indicators that are closely assessed by management. There is no comprehensive, authoritative guidance for the presentation of such non-GAAP information, which is only meant to supplement GAAP results by providing additional information that management utilizes to assess performance. Net income, excluding derivative market value adjustments Three months ended June 30, 2026 2025 GAAP net income attributable to Nelnet, Inc. $ 66,662 181,459 Realized and unrealized derivative market value adjustments (a) (3,686) 3,866 Tax effect (b) 885 (928) Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments $ 63,861 184,397 Earnings per share: GAAP net income attributable to Nelnet, Inc. $ 1.85 4.97 Realized and unrealized derivative market value adjustments (a) (0.10) 0.11 Tax effect (b) 0.02 (0.03) Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments $ 1.77 5.05 (a) "Derivative market value adjustments" includes both the realized portion of gains and losses (corresponding to variation margin received or paid on derivative instruments that are settled daily at a central clearinghouse) and the unrealized portion of gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP. "Derivative market value adjustments" does not include "derivative settlements" that represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the company's derivative instruments based on their contractual terms. The accounting for derivatives requires that changes in the fair value of derivative instruments be recognized currently in earnings, with no fair value adjustment of the hedged item, unless specific hedge accounting criteria are met. Management has structured all of the company’s derivative transactions with the intent that each is economically effective; however, the majority of the company’s derivative instruments do not qualify for hedge accounting in the consolidated financial statements. As a result, the change in fair value for the derivative instruments that do not qualify for hedge accounting is reported in current period earnings with no consideration for the corresponding change in fair value of the hedged item. Under GAAP, the cumulative net realized and unrealized gain or loss caused by changes in fair values of derivatives in which the company plans to hold to maturity will generally equal zero over the life of the contract. However, the net realized and unrealized gain or loss during any given reporting period fluctuates significantly from period to period. The company believes these point-in-time estimates of asset and liability values related to its derivative instruments that are subject to interest rate fluctuations are subject to volatility mostly due to timing and market factors beyond the control of management, and affect the period-to- period comparability of the results of operations. Accordingly, the company’s management utilizes operating results excluding these items for comparability purposes when making decisions regarding the company’s performance and in presentations with credit rating agencies, lenders, and investors. Consequently, the company reports this non-GAAP information because the company believes that it provides additional information regarding operational and performance indicators that are closely assessed by management and represents what earnings would have been had these derivatives qualified for hedge accounting. There is no comprehensive, authoritative guidance for the presentation of such non-GAAP information, which is only meant to supplement GAAP results by providing additional information that management utilizes to assess performance. (b) The tax effects are calculated by multiplying the realized and unrealized derivative market value adjustments by the applicable statutory income tax rate.