US Market News
1月前
Nelnet Reports First Quarter 2026 ResultsMay 7, 2026 4:15 PM
PR Newswire (US) LINCOLN, Neb., May 7, 2026 /PRNewswire/ -- Nelnet (NYSE: NNI) today reported GAAP net income of $71.1 million, or $1.97 per share, for the first quarter of 2026, compared with GAAP net income of $82.6 million, or $2.26 per share, for the same period a year ago.Net income, excluding derivative market value adjustments[1], was $69.9 million, or $1.94 per share, for the first quarter of 2026, compared with $87.4 million, or $2.39 per share, for the same period in 2025."We're off to a strong start in 2026, with every business segment performing at a high level," said Jeff Noordhoek, chief executive officer of Nelnet. "We completed our Canadian acquisition in February, and integration is proceeding well, expanding our loan servicing reach and supporting our long-term diversification strategy focused on core strengths. This year, our focus is simple: Go. Technology is accelerating, innovation cycles are compressing, and the pace of change continues to increase. Our job is to move with speed—to be decisive and to keep pushing forward for our customers."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 ServicesAGMThe AGM operating segment reported loan and investment net interest income of $67.5 million during the first quarter of 2026, compared with $52.9 million for the same period a year ago. The increase in 2026 was due to an increase in loan spread[2] and growth in the company's consumer financing receivables. In the third quarter of 2025, the company began to purchase Pay Later receivables. As of March 31, 2026, the balance of Pay Later receivables was $766.2 million. The increase in net interest income was partially offset by the anticipated runoff of the legacy Federal Family Education Loan Program (the "FFEL Program" or FFELP) loan portfolio. The average balance of FFELP loans outstanding decreased from $8.6 billion for the first quarter of 2025 to $7.2 billion for the same period in 2026.AGM recorded a provision for loan losses of $48.5 million ($36.9 million after tax) in the first quarter of 2026, compared with $13.0 million ($9.9 million after tax) for the same period in 2025. The increase was primarily driven by the establishment of an initial allowance for loans acquired during the quarter. During the first quarter of 2026, AGM acquired $3.34 billion of loans, of which $2.85 billion were Pay Later receivables. The higher provision reflects portfolio growth rather than changes in underlying credit performance. Credit quality metrics, including delinquency rates and charge-offs, remained generally consistent with management's expectations. AGM holds interests in certain joint ventures engaged in the acquisition and management of loan portfolios. During the three months ended March 31, 2026, AGM recognized $15.4 million ($11.7 million after tax) of income from these joint ventures.AGM recognized net income after tax of $23.2 million for the three months ended March 31, 2026, compared with $22.7 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.Nelnet BankAs of March 31, 2026, Nelnet Bank had a $1.26 billion and $1.18 billion loan and investment portfolio, respectively, and total deposits, including intercompany deposits, of $1.96 billion. Nelnet Bank reported loan and investment net interest income of $17.8 million during the first quarter of 2026, compared with $12.4 million for the same period a year ago. The increase in 2026 was due to an increase in the loan and investment portfolio, partially offset by a decrease in net interest margin.Nelnet Bank recognized net income after tax for the quarter ended March 31, 2026 of $7.1 million, compared with $1.5 million for the same period in 2025.Loan Servicing and SystemsRevenue from the Loan Servicing and Systems segment was $127.8 million for the first quarter of 2026, compared with $120.7 million for the same period in 2025. The increase was primarily due to the company's acquisition of NDS Canada during the first quarter of 2026. As of March 31, 2026, the company was servicing $525.7 billion in Department of Education, Canada Student Loan Program, FFELP, private education, and consumer loans for 15.5 million borrowers.As previously disclosed, on February 2, 2026, the company acquired a Canadian student loan servicing business ("NDS Canada") that delivers technology-enabled student loan servicing for governments and financial institutions, managing 2.7 million borrowers on proprietary platforms. Beginning on the acquisition date, the operating results of NDS Canada are included in the Loan Servicing and Systems operating segment.The Loan Servicing and Systems segment reported net income after tax of $15.0 million for the three months ended March 31, 2026, compared with $14.1 million for the same period in 2025.Education Technology Services and PaymentsFor the first quarter of 2026, revenue from the Education Technology Services and Payments operating segment was $154.4 million, an increase from $147.3 million for the same period in 2025. Revenue less direct costs to provide services for the first quarter of 2026 was $104.5 million, compared with $99.3 million for the same period in 2025.Net income after tax for the Education Technology Services and Payments segment was $36.3 million for the three months ended March 31, 2026, compared with $36.1 million for the same period in 2025.This segment is subject to seasonal fluctuations. Based on the timing of when revenue is recognized and when expenses are incurred, revenue and operating margin are higher in the first quarter compared with the remainder of the year.Corporate and Other ActivitiesDuring the three months ended March 31, 2026, the company recognized $10.8 million ($8.2 million after tax or $0.23 per share) of losses related to marketable equity securities with readily determinable fair values. These losses resulted from changes in market values during the period.Included in Corporate Activities are the company's equity interests held in partnerships that invest in solar tax equity projects. The company recognized $22.5 million ($6.9 million after tax and noncontrolling interests or $0.19 per share) of losses related to its solar tax equity partnerships during the three months ended March 31, 2026. Despite short-term losses, our tax equity investments are structured to deliver long-term value and cash flow.Board of Directors Declares Second Quarter DividendThe Nelnet Board of Directors declared a second-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 June 15, 2026, to shareholders of record at the close of business on June 1, 2026.Forward-Looking and Cautionary StatementsThis 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 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 of Education, 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, Canada Student Loan Program, 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 MeasuresThe 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, is provided in the "Non-GAAP Disclosures" section below.Consolidated Statements of Income(Dollars in thousands, except share data)(unaudited)
Three months ended
March 31,
2026
December 31,
2025
March 31,
2025Interest income:
Loan interest$ 171,024
184,825
166,439Investment interest40,202
40,559
41,389Total interest income211,226
225,384
207,828Interest expense on bonds and notes payable and bank deposits109,583
118,273
125,114Net interest income101,643
107,111
82,714Less provision for loan losses53,244
38,147
15,337Less provision for beneficial interests4,130
2,679
1,510Net interest income after provision44,269
66,285
65,867Other income (expense):
Loan servicing and systems revenue127,842
116,573
120,741Education technology services and payments revenue154,436
112,314
147,330Reinsurance premiums earned22,536
33,539
24,687Solar construction revenue—
3,379
3,995Other, net10,437
16,749
24,603Derivative market value adjustments and derivative settlements, net2,167
2,330
(5,578)Total other income (expense), net317,418
284,884
315,778Cost of services and expenses:
Loan servicing contract fulfillment and acquisition costs2,087
2,056
1,633Cost to provide education technology services and payments49,953
38,654
48,047Cost to provide solar construction services—
12,326
7,828Total cost of services52,040
53,036
57,508Salaries and benefits139,371
141,086
138,223Depreciation and amortization9,170
9,365
9,255Reinsurance losses and underwriting expenses23,605
25,715
22,212Other expenses61,840
75,589
48,307Total operating expenses233,986
251,755
217,997Income before income taxes75,661
46,378
106,140Income tax expense(20,061)
(7,691)
(25,010)Net income55,600
38,687
81,130Net loss attributable to noncontrolling interests15,526
19,084
1,430Net income attributable to Nelnet, Inc.$ 71,126
57,771
82,560Earnings per common share:
Net income attributable to Nelnet, Inc. shareholders - basic and diluted$ 1.97
1.60
2.26Weighted-average common shares outstanding - basic and diluted36,076,912
36,088,994
36,478,426 Condensed Consolidated Balance Sheets(Dollars in thousands)(unaudited)
As of
As of
As of
March 31, 2026
December 31, 2025
March 31, 2025Assets:
Loans and accrued interest receivable, net $ 10,009,471
10,006,695
10,422,704Cash, cash equivalents, and investments2,717,368
2,643,954
2,523,067Restricted cash590,518
677,563
611,610Goodwill and intangible assets, net301,506
187,312
192,832Other assets559,054
548,259
441,745Total assets$ 14,177,917
14,063,783
14,191,958Liabilities:
Bonds and notes payable$ 7,699,400
7,780,927
8,656,157Bank deposits1,744,527
1,669,173
1,313,407Other liabilities1,127,978
1,036,454
859,385Total liabilities10,571,905
10,486,554
10,828,949Equity:
Total Nelnet, Inc. shareholders' equity3,731,291
3,685,792
3,419,523Noncontrolling interests(125,279)
(108,563)
(56,514)Total equity3,606,012
3,577,229
3,363,009Total liabilities and equity$ 14,177,917
14,063,783
14,191,958Non-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 March 31,
2026
2025GAAP net income attributable to Nelnet, Inc.$ 71,126
82,560Realized and unrealized derivative market value adjustments (a)(1,587)
6,324Tax effect (b)381
(1,519)Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments$ 69,920
87,365Earnings per share:
GAAP net income attributable to Nelnet, Inc.$ 1.97
2.26Realized and unrealized derivative market value adjustments (a)(0.04)
0.17Tax effect (b)0.01
(0.04)Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments$ 1.94
2.39(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. View original content:https://www.prnewswire.com/news-releases/nelnet-reports-first-quarter-2026-results-302766164.htmlSOURCE Nelnet, Inc. Original: Nelnet Reports First Quarter 2026 Results
US Market News
3月前
Nelnet Reports Fourth Quarter 2025 ResultsFebruary 26, 2026 4:15 PM
PR Newswire (US)
LINCOLN, Neb., Feb. 26, 2026 /PRNewswire/ -- Nelnet (NYSE: NNI) today reported GAAP net income of $57.8 million, or $1.60 per share, for the fourth quarter of 2025, compared with GAAP net income of $63.2 million, or $1.73 per share, for the same period a year ago.Net income, excluding derivative market value adjustments1, was $56.3 million, or $1.56 per share, for the fourth quarter of 2025, compared with $52.7 million, or $1.44 per share, for the same period in 2024."Nelnet's teams knocked the ball out of the park in 2025, delivering record earnings and strengthening our foundation for long-term success," said Jeff Noordhoek, chief executive officer of Nelnet. "Over time, we've meaningfully diversified our revenue, with each of our core businesses - consumer lending, loan servicing, payments, and technology - reporting solid performance and building real momentum. With our continued investments in technology and in both new and existing products and services, we see opportunities ahead in 2026."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 ServicesAGMThe AGM operating segment reported loan and investment net interest income of $63.5 million during the fourth quarter of 2025, compared with $48.3 million for the same period a year ago. The increase in 2025 was due to an increase in loan spread2 and growth in the company's consumer financing receivables. In the third quarter of 2025, the company began to purchase Pay Later receivables. As of December 31, 2025, the balance of Pay Later receivables was $744.2 million. The increase in net interest income was offset by the anticipated runoff of the legacy Federal Family Education Loan Program (the "FFEL Program" or FFELP) loan portfolio. The average balance of FFELP loans outstanding decreased from $8.9 billion for the fourth quarter of 2024 to $7.9 billion for the same period in 2025.AGM recognized a provision for loan losses in the fourth quarter of 2025 of $32.5 million ($24.7 million after tax), compared with $13.5 million ($10.3 million after tax) in the fourth quarter of 2024. Provision for loan losses was primarily impacted by establishing an initial allowance for consumer loans acquired during the fourth quarter of 2025.AGM recognized net income after tax of $24.8 million during the fourth quarter of 2025, compared with $25.5 million for the same period in 2024.1 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 and derivative instruments used to fund the assets.Nelnet BankAs of December 31, 2025, Nelnet Bank had a $957.6 million and $1.08 billion loan and investment portfolio, respectively, and total deposits, including intercompany deposits, of $1.76 billion. Nelnet Bank reported loan and investment net interest income of $17.6 million during the fourth quarter of 2025, compared with $12.9 million for the same period a year ago. The increase in 2025 was due to an increase in the loan and investment portfolio, partially offset by a decrease in net interest margin.Nelnet Bank recognized provision for loan losses in the fourth quarter of 2025 of $5.7 million ($4.3 million after tax), compared with $8.6 million ($6.5 million after tax) in the fourth quarter of 2024. Provision for loan losses at Nelnet Bank is due primarily from the establishment of an initial allowance for loans originated and acquired during the period. In 2024, Nelnet Bank recognized income of $5.5 million ($4.2 million after tax) related to changes in the fair value of derivative instruments that do not qualify for hedge accounting.Nelnet Bank recognized net income after tax for the quarter ended December 31, 2025 of $5.3 million, compared with $4.2 million for the same period in 2024.Loan Servicing and SystemsRevenue from the Loan Servicing and Systems segment was $116.6 million for the fourth quarter of 2025, compared with $138.0 million for the same period in 2024. On April 1, 2024, the company began to earn revenue under its new Unified Servicing and Data Solution (USDS) contract which replaced its legacy student loan servicing contract with the Department of Education (Department). Revenue earned under the USDS contract on a per borrower blended basis is lower than the legacy contract. During the fourth quarter of 2024, the company recognized $10.9 million in non-recurring revenue under its Department servicing contract related to certain inflation provisions from the prior legacy contract and $4.0 million of non-recurring revenue from the conversion of a private education student loan portfolio.As of December 31, 2025, the company was servicing $486.2 billion in government-owned, FFEL Program, private education, and consumer loans for 13.2 million borrowers, compared with $532.4 billion in servicing volume for 15.8 million borrowers as of December 31, 2024.The Loan Servicing and Systems segment reported net income after tax of $8.9 million for the quarter ended December 31, 2025, compared with $20.4 million for the same period in 2024.Education Technology Services and PaymentsFor the fourth quarter of 2025, revenue from the Education Technology Services and Payments operating segment was $112.3 million, an increase from $108.3 million for the same period in 2024. Revenue less direct costs to provide services for the fourth quarter of 2025 was $73.7 million, compared with $69.7 million for the same period in 2024. Operating expenses increased in 2025 compared with 2024, reflecting continued investment to expand the customer base and advance new product and technology development.Net income after tax for the Education Technology Services and Payments segment was $12.9 million for the quarter ended December 31, 2025, compared with $13.6 million for the same period in 2024.Corporate ActivitiesIncluded in Corporate Activities are the operating results of the company's solar construction business. During the fourth quarter of 2025, the company reported a loss of $27.3 million ($20.7 million after tax or $0.57 per share) in its solar construction business. Since the acquisition of this business, the company has experienced low and, in certain cases, negative margins on projects. In addition, changes in legislation reducing clean energy tax incentives, tariff uncertainty, and rising construction costs adversely affected revenue and net income. As a result of these factors, the company sold the solar construction business in November 2025. Although the company retained a limited number of construction contracts to complete following the sale, the company does not expect the operating results from such contracts to be significant in future periods.Share RepurchasesDuring the fourth quarter of 2025, the company repurchased 126,680 Class A common shares for $16.1 million (average price of $127.27 per share).Year-End ResultsGAAP net income for the year ended December 31, 2025 was $428.5 million, or $11.79 per share, compared with GAAP net income of $184.0 million, or $5.02 per share, for 2024. Net income in 2025, excluding derivative market value adjustments1, was $435.4 million, or $11.98 per share, compared with $176.4 million, or $4.81 per share, for 2024.Forward-Looking and Cautionary StatementsThis press release contains forward-looking statements within the meaning of federal securities laws. The words "anticipate," "assume," "believe," "continue," "could," "ensure," "estimate," "expect," "forecast," "future," "intend," "may," "plan," "potential," "predict," "scheduled," "see," "should," "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 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, 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 MeasuresThe 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, is provided in the "Non-GAAP Disclosures" section below.Consolidated Statements of Income(Dollars in thousands, except share data)(unaudited)
Three months ended
Year ended
December 31,
2025
September 30,
2025
December 31,
2024
December 31,
2025
December 31,
2024Interest income:
Loan interest$ 184,825
162,717
178,434
686,085
787,498Investment interest40,559
43,241
42,815
165,374
185,901Total interest income225,384
205,958
221,249
851,459
973,399Interest expense on bonds and notes payable and bank deposits118,273
120,708
141,170
496,950
680,537Net interest income107,111
85,250
80,079
354,509
292,862Less provision (negative provision) for loan losses38,147
(3,563)
22,057
67,851
54,607Less provision for beneficial interests2,679
2,145
4,628
11,311
39,491Net interest income after provision66,285
86,668
53,394
275,347
198,764Other income (expense):
Loan servicing and systems revenue116,573
151,052
137,981
509,089
482,408Education technology services and payments revenue112,314
129,321
108,335
507,150
486,962Reinsurance premiums earned33,539
23,165
18,673
107,502
62,923Solar construction revenue3,379
5,738
13,828
14,371
56,569Other, net16,749
33,258
27,836
97,587
59,959Gain on partial redemption of ALLO investment—
—
—
175,044
—Derivative market value adjustments and derivative settlements, net2,330
(27)
14,879
(6,398)
16,258Total other income (expense), net284,884
342,507
321,532
1,404,345
1,165,079Cost of services and expenses:
Loan servicing contract fulfillment and acquisition costs2,056
2,021
1,497
7,555
1,889Cost to provide education technology services and payments38,654
50,363
38,658
176,907
172,763Cost to provide solar construction services12,326
7,607
28,558
41,810
77,673Total cost of services53,036
59,991
68,713
226,272
252,325Salaries and benefits141,086
144,778
147,229
558,786
576,931Depreciation and amortization9,365
7,327
12,544
33,571
58,116Reinsurance losses and underwriting expenses25,715
19,962
16,180
93,551
55,246Impairment expense17,220
7,000
1,136
29,612
3,138Other expenses58,369
53,669
50,681
211,568
189,503Total operating expenses251,755
232,736
227,770
927,088
882,934Income before income taxes46,378
136,448
78,443
526,332
228,584Income tax expense(7,691)
(35,773)
(15,016)
(127,986)
(52,669)Net income38,687
100,675
63,427
398,346
175,915Net loss (income) attributable to noncontrolling interests19,084
6,009
(268)
30,128
8,130Net income attributable to Nelnet, Inc.$ 57,771
106,684
63,159
428,474
184,045Earnings per common share:
Net income attributable to Nelnet, Inc. shareholders - basic and diluted$ 1.60
2.94
1.73
11.79
5.02Weighted-average common shares outstanding - basic and diluted36,088,994
36,316,315
36,461,513
36,341,197
36,642,533 Condensed Consolidated Balance Sheets(Dollars in thousands)(unaudited)
As of
As of
As of
December 31, 2025
September 30, 2025
December 31, 2024Assets:
Loans and accrued interest receivable, net$ 10,006,695
10,227,261
9,992,744Cash, cash equivalents, and investments2,643,954
2,455,950
2,395,214Restricted cash677,563
550,371
736,502Goodwill and intangible assets, net187,312
189,783
194,357Other assets548,259
453,317
458,936Total assets$ 14,063,783
13,876,682
13,777,753Liabilities:
Bonds and notes payable$ 7,780,927
7,822,531
8,309,797Bank deposits1,669,173
1,476,765
1,186,131Other liabilities1,036,454
990,691
982,708Total liabilities10,486,554
10,289,987
10,478,636Equity:
Total Nelnet, Inc. shareholders' equity3,685,792
3,653,290
3,349,762Noncontrolling interests(108,563)
(66,595)
(50,645)Total equity3,577,229
3,586,695
3,299,117Total liabilities and equity$ 14,063,783
13,876,682
13,777,753Non-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 December 31,
Year ended December 31,
2025
2024
2025
2024GAAP net income attributable to Nelnet, Inc.$ 57,771
63,159
428,474
184,045Realized and unrealized derivative market value adjustments (a)(1,879)
(13,792)
9,098
(10,124)Tax effect (b)451
3,310
(2,184)
2,430Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments$ 56,343
52,677
435,388
176,351Earnings per share:
GAAP net income attributable to Nelnet, Inc.$ 1.60
1.73
11.79
5.02Realized and unrealized derivative market value adjustments (a)(0.05)
(0.38)
0.25
(0.28)Tax effect (b)0.01
0.09
(0.06)
0.07Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments$ 1.56
1.44
11.98
4.81
(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.
View original content:https://www.prnewswire.com/news-releases/nelnet-reports-fourth-quarter-2025-results-302698991.htmlSOURCE Nelnet, Inc.
Original: Nelnet Reports Fourth Quarter 2025 Results