nni-20250227

Nelnet Reports Fourth Quarter 2024 Results

LINCOLN, Neb., February 27, 2025 - Nelnet (NYSE: NNI) today reported GAAP net income of $63.2 million, or $1.73 per share, for the fourth quarter of 2024, compared with a GAAP net loss of $7.9 million, or $0.21 per share, for the same period a year ago.

Net income, excluding derivative market value adjustments1, was $52.7 million, or $1.44 per share, for the fourth quarter of 2024, compared with a net loss of $0.7 million, or $0.02 per share, for the same period in 2023.

"We are pleased with the results in the fourth quarter of 2024 and optimistic about the opportunities ahead in 2025,” said Jeff Noordhoek, chief executive officer of Nelnet. "This past year was a record-breaking one for Nelnet Business Services, one of our three core businesses. For Nelnet Diversified Services, 2024 was a year of strategic reinvestment as we transitioned to the new federal servicing contract and expanded our private loan servicing portfolio. Nelnet Financial Services focused on consolidation and alignment as part of our strategy to diversify assets and offset earnings from our legacy student loan portfolio. Our results reflect a balanced mix of success across different segments - exactly what we expect from a diversified company."

Nelnet has four reportable operating segments, earning interest income on loans in its Asset Generation and Management (AGM) and Nelnet Bank segments, both part of the company's Nelnet Financial Services (NFS) division, and fee-based revenue in its Loan Servicing and Systems (referred to as Nelnet Diversified Services (NDS)) and Education Technology Services and Payments (referred to as Nelnet Business Services (NBS)) segments. Other business activities and operating segments that are not reportable and not part of the NFS division are combined and included in Corporate Activities.

Asset Generation and Management

The AGM operating segment reported loan and investment net interest income of $48.3 million during the fourth quarter of 2024, compared with $35.6 million for the same period a year ago. The increase in 2024 was due an increase in loan spread2, offset by the anticipated runoff of the legacy Federal Family Education Loan Program loan portfolio. The average balance of loans outstanding decreased from $12.5 billion for the fourth quarter of 2023 to $9.4 billion for the same period in 2024.

AGM recognized a provision for loan losses in the fourth quarter of 2024 of $13.5 million ($10.3 million after tax), compared with $0.4 million ($0.3 million after tax) in the fourth quarter of 2023. Provision for loan losses was primarily impacted by establishing an initial allowance for consumer loans acquired during the fourth quarter of 2024. AGM also recognized a non-cash provision expense of $4.6 million ($3.5 million after tax) during the fourth quarter of 2024 related to the company's ownership of beneficial interest in loan securitizations.

In addition, AGM recognized income of $8.3 million ($6.3 million after tax) related to changes in the fair value of derivative instruments that do not qualify for hedge accounting, compared with a loss of $4.9 million ($3.7 million after tax) for the same period in 2023. AGM recognized net income after tax of $25.5 million during the fourth quarter of 2024, compared with $17.2 million for the same period in 2023.

Nelnet Bank

As of December 31, 2024, Nelnet Bank had a $644.6 million and $757.0 million loan and investment portfolio, respectively, and total deposits, including intercompany deposits, of $1.25 billion. Nelnet Bank reported loan and investment net interest income of $12.9 million during the fourth quarter of 2024, compared with $6.9 million for the same period a year ago. The increase in 2024 was due to an increase in the loan and investment portfolio and net interest margin.

Nelnet Bank recognized provision for loan losses in the fourth quarter of 2024 of $8.6 million ($6.5 million after tax), compared with $2.6 million ($2.0 million after tax) in the fourth quarter of 2023. 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 addition, 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, compared with a loss of $4.6 million ($3.5 million after tax) for the same period in 2023.

Nelnet Bank recognized net income after tax for the quarter ended December 31, 2024 of $4.2 million, compared with a net loss of $3.3 million for the same period in 2023.

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.

Loan Servicing and Systems

Revenue from the Loan Servicing and Systems segment was $138.0 million for the fourth quarter of 2024, compared with $128.8 million for the same period in 2023. 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.

In July 2024, Discover Financial Services announced the sale of an approximately $10 billion private education student loan portfolio, representing approximately 400,000 borrowers, to partnerships managed by two global investment firms, with the company assuming responsibility for servicing the portfolio upon the sale. The conversion of these loans to the company's platform began in September 2024 with the majority of loan conversions completed in the fourth quarter of 2024. The company recognized $4.0 million in non-recurring conversion revenue in the fourth quarter of 2024.

As of December 31, 2024, the company was servicing $532.4 billion in government-owned, FFELP, private education, and consumer loans for 15.8 million borrowers, compared with $532.6 billion in servicing volume for 16.1 million borrowers as of December 31, 2023.

The Loan Servicing and Systems segment reported net income after tax of $20.4 million for the three months ended December 31, 2024, compared with $8.4 million for the same period in 2023.

Education Technology Services and Payments

For the fourth quarter of 2024, revenue from the Education Technology Services and Payments operating segment was $108.3 million, an increase from $106.1 million for the same period in 2023. Revenue less direct costs to provide services for the fourth quarter of 2024 was $69.7 million, compared with $66.7 million for the same period in 2023.

Net income after tax for the Education Technology Services and Payments segment was $13.6 million for the three months ended December 31, 2024, compared with $10.1 million for the same period in 2023.

Corporate Activities

Included in Corporate Activities are the operating results of the company's solar construction business. During the fourth quarter of 2024, the company reported a loss of $17.0 million ($13.0 million after tax) in its solar construction business. Since the acquisition of this business, the company has incurred low and, in some cases, negative margins on certain legacy projects. The 2024 loss includes the estimated losses on legacy construction projects. The company has a handful of remaining legacy construction contracts to complete, down from over 30 at the beginning of 2024.

Year-End Results

GAAP net income for the year ended December 31, 2024 was $184.0 million, or $5.02 per share, compared with GAAP net income of $89.8 million, or $2.40 per share, for 2023. Net income in 2024, excluding derivative market value adjustments1, was $176.4 million, or $4.81 per share, compared with $121.6 million, or $3.25 per share, for 2023.

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,” “forecast,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” "scheduled," “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 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, 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 investment 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 investment 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 expected benefits to the company from its continuing investment in ALLO and Hudl, and risks related to solar tax equity investments, including risks of not being able to realize tax credits which remain subject to recapture by taxing authorities; risks and uncertainties related to other initiatives to pursue additional strategic investments (and anticipated income therefrom) including venture capital and real estate investments, reinsurance, acquisitions, solar construction, and other activities (including risks associated with errors that occasionally occur in converting loan servicing portfolios to a new servicing platform), 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 and maintaining compliance with the extensive regulatory requirements applicable to the company's businesses, including changes to the regulatory environment from the change in presidential administration, 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, is provided in the "Non-GAAP Disclosures" section below.

Consolidated Statements of Operations

(Dollars in thousands, except share data)

(unaudited)


	Three months ended					Year ended
	December 31, 2024		September 30, 2024	December 31, 2023	(1)	December 31, 2024	December 31, 2023	(1)
Interest income:
Loan interest	$	178,434	190,211	227,234		787,498	931,945
Investment interest	42,815		50,272	48,019		185,901	177,855
Total interest income	221,249		240,483	275,253		973,399	1,109,800
Interest expense on bonds and notes payable and bank deposits	141,170		168,328	205,335		680,537	845,091
Net interest income	80,079		72,155	69,918		292,862	264,709
Less provision for loan losses	22,057		18,111	3,050		54,607	8,115
Net interest income after provision for loan losses	58,022		54,044	66,868		238,255	256,594
Other income (expense):
Loan servicing and systems revenue	137,981		108,175	128,816		482,408	517,954
Education technology services and payments revenue	108,335		118,179	106,052		486,962	463,311
Reinsurance premiums earned	18,673		16,619	9,428		62,923	20,067
Solar construction revenue	13,828		19,321	11,982		56,569	31,669
Other, net	27,794		15,706	(36,390)		61,602	(74,327)
Gain (loss) on sale of loans, net	42		(107)	(886)		(1,643)	(17,662)
Derivative market value adjustments and derivative settlements, net	14,879		(11,525)	(8,654)		16,258	(16,701)
Total other income (expense), net	321,532		266,368	210,348		1,165,079	924,311
Cost of services and expenses:
Costs incurred to provide loan servicing	1,497		196	—		1,889	—
Cost to provide education technology services and payments	38,658		45,273	39,379		172,763	171,183
Cost to provide solar construction services	28,558		26,815	23,371		77,673	48,576
Total cost of services	68,713		72,284	62,750		252,325	219,759
Salaries and benefits	147,229		146,192	152,917		576,931	591,537
Depreciation and amortization	12,544		13,661	22,004		58,116	79,118
Reinsurance losses and underwriting expenses	16,180		16,761	7,084		55,246	16,781
Other expenses	50,681		44,685	44,613		189,503	173,070
Total operating expenses	226,634		221,299	226,618		879,796	860,506
Impairment expense and provision for beneficial interests	5,764		29,052	26,951		42,629	31,925
Total expenses	301,111		322,635	316,319		1,174,750	1,112,190
Income (loss) before income taxes	78,443		(2,223)	(39,103)		228,584	68,715
Income tax (expense) benefit	(15,016)		282	9,399		(52,669)	(19,385)
Net income (loss)	63,427		(1,941)	(29,704)		175,915	49,330
Net (income) loss attributable to noncontrolling interests	(268)		4,329	21,791		8,130	40,496
Net income (loss) attributable to Nelnet, Inc.	$	63,159	2,388	(7,913)		184,045	89,826
Earnings per common share:
Net income (loss) attributable to Nelnet, Inc. shareholders - basic and diluted	$	1.73	0.07	(0.21)		5.02	2.40
Weighted average common shares outstanding - basic and diluted	36,461,513		36,430,485	37,354,406		36,642,533	37,416,621

(1) During the second quarter of 2024, the company identified certain immaterial errors in the previously issued consolidated financial statements that have been corrected to conform to the December 31, 2024 presentation. Refer to the company's annual report on Form 10-K for the year ended December 31, 2024 that was filed with the Securities and Exchange Commission on February 27, 2025 for additional information.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(unaudited)


	As of		As of	As of
	December 31, 2024		September 30, 2024	December 31, 2023	(1)
Assets:
Loans and accrued interest receivable, net	$	9,992,744	10,572,881	13,108,204
Cash, cash equivalents, and investments	2,395,214		2,173,000	2,032,788
Restricted cash	736,502		679,334	857,379
Goodwill and intangible assets, net	194,357		196,400	202,848
Other assets	458,936		462,513	511,165
Total assets	$	13,777,753	14,084,128	16,712,384
Liabilities:
Bonds and notes payable	$	8,309,797	8,938,446	11,828,393
Bank deposits	1,186,131		1,070,758	743,599
Other liabilities	982,708		864,786	940,285
Total liabilities	10,478,636		10,873,990	13,512,277
Equity:
Total Nelnet, Inc. shareholders' equity	3,349,762		3,290,652	3,253,751
Noncontrolling interests	(50,645)		(80,514)	(53,644)
Total equity	3,299,117		3,210,138	3,200,107
Total liabilities and equity	$	13,777,753	14,084,128	16,712,384

Contacts:

Media, Ben Kiser, 402.458.3024, or Investors, Phil Morgan, 402.458.3038, both of Nelnet, Inc.

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 December 31,			Year ended December 31,
	2024		2023	2024	2023
GAAP net income (loss) attributable to Nelnet, Inc.	$	63,159	(7,913)	184,045	89,826
Realized and unrealized derivative market value adjustments (a)	(13,792)		9,507	(10,124)	41,773
Tax effect (b)	3,310		(2,282)	2,430	(10,026)
Non-GAAP net income (loss) attributable to Nelnet, Inc., excluding derivative market value adjustments	$	52,677	(688)	176,351	121,573
Earnings per share:
GAAP net income (loss) attributable to Nelnet, Inc.	$	1.73	(0.21)	5.02	2.40
Realized and unrealized derivative market value adjustments (a)	(0.38)		0.25	(0.28)	1.12
Tax effect (b)	0.09		(0.06)	0.07	(0.27)
Non-GAAP net income (loss) attributable to Nelnet, Inc., excluding derivative market value adjustments	$	1.44	(0.02)	4.81	3.25

(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 current 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 is met. Management has structured all of the company’s derivative transactions with the intent that each is economically effective; however, the company’s derivative instruments do not qualify for hedge accounting in the consolidated financial statements. As a result, the change in fair value of derivative instruments 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 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.

(b) The tax effects are calculated by multiplying the realized and unrealized derivative market value adjustments by the applicable statutory income tax rate.

For Release: February 27, 2025

Investor Contact: Phil Morgan, 402.458.3038

Nelnet, Inc. supplemental financial information for the fourth quarter 2024

(All dollars are in thousands, except per share amounts, unless otherwise noted)

The following information should be read in connection with Nelnet, Inc.'s (the “Company's”) press release for fourth quarter 2024 earnings, dated February 27, 2025, and the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Forward-looking and cautionary statements

This report contains forward-looking statements and information that are based on management's current expectations as of the date of this document. Statements that are not historical facts, including statements about the Company's plans and expectations for future financial condition, results of operations or economic performance, or that address management's plans and objectives for future operations, and statements that assume or are dependent upon future events, are forward-looking statements. The words “anticipate,” “assume,” “believe,” “continue,” “could,” “ensure,” “estimate,” “expect,” “forecast,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” “scheduled,” “should,” “will,” “would,” and similar expressions, as well as statements in future tense, are intended to identify forward-looking statements.

The forward-looking statements are based on assumptions and analyses made by management in light of management's experience and its perception of historical trends, current conditions, expected future developments, and other factors that management believes are appropriate under the circumstances. These statements 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. These factors include, among others, the risks and uncertainties set forth in the “Risk Factors” section of the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report"), and include such risks and uncertainties as:

•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 U.S. Department of Education (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, Federal Family Education Loan Program (the "FFEL Program" or FFELP), 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 investment 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 investment 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 expected benefits to the Company from its continuing investment in ALLO Holdings, LLC (referred to collectively with its subsidiary ALLO Communications LLC as "ALLO"), and risks related to solar tax equity investments, including risks of not being able to realize tax credits which remain subject to recapture by taxing authorities;

•risks and uncertainties related to other initiatives to pursue additional strategic investments (and anticipated income therefrom) including venture capital and real estate investments, reinsurance, acquisitions, solar construction, and other activities (including risks associated with errors that occasionally occur in converting loan servicing portfolios to a new servicing platform), 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; and

•risks and uncertainties associated with litigation matters and maintaining compliance with the extensive regulatory requirements applicable to the Company's businesses, including changes to the regulatory environment from the change in presidential administration, 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.

All forward-looking statements contained in this report are qualified by these cautionary statements and are made only as of the date of this document. Although the Company may from time to time voluntarily update or revise its prior forward-looking statements to reflect actual results or changes in the Company's expectations, the Company disclaims any commitment to do so except as required by law.

Consolidated Statements of Operations

(Dollars in thousands, except share data)

(unaudited)


	Three months ended					Year ended
	December 31, 2024		September 30, 2024	December 31, 2023	(1)	December 31, 2024	December 31, 2023	(1)
Interest income:
Loan interest	$	178,434	190,211	227,234		787,498	931,945
Investment interest	42,815		50,272	48,019		185,901	177,855
Total interest income	221,249		240,483	275,253		973,399	1,109,800
Interest expense on bonds and notes payable and bank deposits	141,170		168,328	205,335		680,537	845,091
Net interest income	80,079		72,155	69,918		292,862	264,709
Less provision for loan losses	22,057		18,111	3,050		54,607	8,115
Net interest income after provision for loan losses	58,022		54,044	66,868		238,255	256,594
Other income (expense):
Loan servicing and systems revenue	137,981		108,175	128,816		482,408	517,954
Education technology services and payments revenue	108,335		118,179	106,052		486,962	463,311
Reinsurance premiums earned	18,673		16,619	9,428		62,923	20,067
Solar construction revenue	13,828		19,321	11,982		56,569	31,669
Other, net	27,794		15,706	(36,390)		61,602	(74,327)
Gain (loss) on sale of loans, net	42		(107)	(886)		(1,643)	(17,662)
Derivative settlements, net	1,087		1,640	853		6,134	25,072
Derivative market value adjustments, net	13,792		(13,165)	(9,507)		10,124	(41,773)
Total other income (expense), net	321,532		266,368	210,348		1,165,079	924,311
Cost of services and expenses:
Costs incurred to provide loan servicing	1,497		196	—		1,889	—
Cost to provide education technology services and payments	38,658		45,273	39,379		172,763	171,183
Cost to provide solar construction services	28,558		26,815	23,371		77,673	48,576
Total cost of services	68,713		72,284	62,750		252,325	219,759
Salaries and benefits	147,229		146,192	152,917		576,931	591,537
Depreciation and amortization	12,544		13,661	22,004		58,116	79,118
Reinsurance losses and underwriting expenses	16,180		16,761	7,084		55,246	16,781
Other expenses	50,681		44,685	44,613		189,503	173,070
Total operating expenses	226,634		221,299	226,618		879,796	860,506
Impairment expense and provision for beneficial interests	5,764		29,052	26,951		42,629	31,925
Total expenses	301,111		322,635	316,319		1,174,750	1,112,190
Income (loss) before income taxes	78,443		(2,223)	(39,103)		228,584	68,715
Income tax (expense) benefit	(15,016)		282	9,399		(52,669)	(19,385)
Net income (loss)	63,427		(1,941)	(29,704)		175,915	49,330
Net (income) loss attributable to noncontrolling interests	(268)		4,329	21,791		8,130	40,496
Net income (loss) attributable to Nelnet, Inc.	$	63,159	2,388	(7,913)		184,045	89,826
Earnings per common share:
Net income (loss) attributable to Nelnet, Inc. shareholders - basic and diluted	$	1.73	0.07	(0.21)		5.02	2.40
Weighted average common shares outstanding - basic and diluted	36,461,513		36,430,485	37,354,406		36,642,533	37,416,621

(1) During the second quarter of 2024, the Company identified certain immaterial errors in the previously issued consolidated financial statements that have been corrected to conform to the December 31, 2024 presentation. Refer to the Company's 2024 10-K Annual Report that was filed with the Securities and Exchange Commission on February 27, 2025 for additional information.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(unaudited)


	As of		As of	As of
	December 31, 2024		September 30, 2024	December 31, 2023	(1)
Assets:
Loans and accrued interest receivable, net	$	9,992,744	10,572,881	13,108,204
Cash, cash equivalents, and investments	2,395,214		2,173,000	2,032,788
Restricted cash	736,502		679,334	857,379
Goodwill and intangible assets, net	194,357		196,400	202,848
Other assets	458,936		462,513	511,165
Total assets	$	13,777,753	14,084,128	16,712,384
Liabilities:
Bonds and notes payable	$	8,309,797	8,938,446	11,828,393
Bank deposits	1,186,131		1,070,758	743,599
Other liabilities	982,708		864,786	940,285
Total liabilities	10,478,636		10,873,990	13,512,277
Equity:
Total Nelnet, Inc. shareholders' equity	3,349,762		3,290,652	3,253,751
Noncontrolling interests	(50,645)		(80,514)	(53,644)
Total equity	3,299,117		3,210,138	3,200,107
Total liabilities and equity	$	13,777,753	14,084,128	16,712,384

Overview

The Company is a diversified hybrid holding company with primary businesses being consumer lending, loan servicing, payments, and technology – with many of these businesses serving customers in the education space. The largest operating businesses engage in loan servicing and education technology services and payments. A significant portion of the Company's revenue is net interest income earned on a portfolio of federally insured student loans. The Company also makes and manages investments to further diversify both within and outside of its historical core education-related businesses including, but not limited to, investments in a fiber communications company (ALLO), early-stage and emerging growth companies (venture capital investments), real estate, reinsurance, and renewable energy (solar).

The Company was formed as a Nebraska corporation in 1978 to service federal student loans for two local banks. The Company built on this initial foundation as a servicer to become a leading originator, holder, and servicer of federal student loans, principally consisting of loans originated under the FFEL Program.

The Health Care and Education Reconciliation Act of 2010 discontinued new loan originations under the FFEL Program, effective July 1, 2010, and requires all new federal student loan originations be made directly by the Department through the Federal Direct Loan Program. This law does not alter or affect the terms and conditions of existing FFELP loans. Subsequent to the Reconciliation Act of 2010, the Company no longer originates FFELP loans. However, a significant portion of the Company's income continues to be derived from its existing FFELP student loan portfolio. Interest income on the Company's existing FFELP loan portfolio will decline over time as the portfolio is paid down. To reduce its reliance on interest income from FFELP loans, the Company has expanded its services and products. This expansion has been accomplished through internal growth and innovation as well as business and certain investment acquisitions. The Company is also actively expanding its private education, consumer, and other loan portfolios, or investment interests therein, and as part of this strategy launched Nelnet Bank in 2020. In addition, the Company has been servicing federally owned student loans for the Department since 2009.

Reclassifications and Immaterial Error Corrections

During the second quarter of 2024, the Company identified certain immaterial errors in the previously issued consolidated financial statements that have been corrected to conform to the December 31, 2024 presentation. Refer to the Company's 2024 10-K Annual Report that was filed with the Securities and Exchange Commission on February 27, 2025 for additional information.

GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments

The Company prepares its financial statements and presents its financial results in accordance with 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. A reconciliation of the Company's GAAP net income to Non-GAAP net income excluding derivative market value adjustments, and a discussion of why the Company believes providing this additional information is useful to investors, are provided below.


	Three months ended				Year ended
	December 31, 2024		September 30, 2024	December 31, 2023	December 31, 2024	December 31, 2023
GAAP net income (loss) attributable to Nelnet, Inc.	$	63,159	2,388	(7,913)	184,045	89,826
Realized and unrealized derivative market value adjustments (a)	(13,792)		13,165	9,507	(10,124)	41,773
Tax effect (b)	3,310		(3,160)	(2,282)	2,430	(10,026)
Non-GAAP net income (loss) attributable to Nelnet, Inc., excluding derivative market value adjustments	$	52,677	12,393	(688)	176,351	121,573
Earnings per share:
GAAP net income (loss) attributable to Nelnet, Inc.	$	1.73	0.07	(0.21)	5.02	2.40
Realized and unrealized derivative market value adjustments (a)	(0.38)		0.36	0.25	(0.28)	1.12
Tax effect (b)	0.09		(0.09)	(0.06)	0.07	(0.27)
Non-GAAP net income (loss) attributable to Nelnet, Inc., excluding derivative market value adjustments	$	1.44	0.34	(0.02)	4.81	3.25

(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 Company’s derivative instruments do not qualify for hedge accounting in the consolidated financial statements. As a result, the change in fair value of derivative instruments 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 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.

Operating Segments

A description of the Company's reportable operating segments is included in note 1 of the notes to consolidated financial statements included in the Company's 2024 Annual Report. The Company's reportable operating segments include:

•Loan Servicing and Systems (LSS) - referred to as Nelnet Diversified Services (NDS)

•Education Technology Services and Payments (ETSP) - referred to as Nelnet Business Services (NBS)

•Asset Generation and Management (AGM), part of the Nelnet Financial Services (NFS) division

•Nelnet Bank, part of the NFS division

The Company earns fee-based revenue through its NDS and NBS reportable operating segments. The Company earns net interest income on its loan portfolio, consisting primarily of FFELP loans, through its AGM reportable operating segment. This segment is expected to generate significant amounts of cash as the FFELP portfolio amortizes. The Company actively works to maximize the amount and timing of cash flows generated from its FFELP portfolio and seeks to acquire additional loan assets to leverage its servicing scale and expertise to generate incremental earnings and cash flow. Nelnet Bank operates as an internet industrial bank franchise focused on the private education and unsecured consumer loan markets, with a home office in Salt Lake City, Utah.

The NFS division was formed to focus on the Company’s key objective to maximize the amount and timing of cash flows generated from its FFELP portfolio and reposition itself for the post-FFELP environment by expanding its private education, consumer, and other loan portfolios. In addition to AGM and Nelnet Bank being part of the NFS division, NFS’s other operating segments that are not reportable include:

•The operating results of Whitetail Rock Capital Management, LLC (WRCM), the Company's U.S. Securities and Exchange Commission (SEC)-registered investment advisor subsidiary

•The operating results of Nelnet Insurance Services, which primarily includes multiple reinsurance treaties on property and casualty policies

•The operating results of the Company’s investment activities in real estate

•The operating results of the Company’s investment debt securities (primarily student loan and other asset-backed securities) and interest expense incurred on debt used to finance such investments

Other business activities and operating segments that are not reportable and not part of the NFS division are combined and included in Corporate and Other Activities ("Corporate"). Corporate includes the following items:

•Shared service activities related to internal audit, human resources, accounting, legal, enterprise risk management, information technology, occupancy, and marketing. These costs are allocated to each operating segment based on estimated use of such activities and services

•Corporate costs and overhead functions not allocated to operating segments, including executive management, investments in innovation, and other holding company organizational costs

•The operating results of solar tax equity investments made by the Company and administrative and management services provided by the Company on solar tax equity investments made by third parties

•The operating results of Nelnet Renewable Energy, the Company’s solar engineering, procurement, and construction business

•The operating results of certain of the Company’s investment activities, including its investment in ALLO and early-stage and emerging growth companies (venture capital investments)

•Interest income earned on cash balances held at the corporate level and interest expense incurred on unsecured corporate related debt transactions

•Other product and service offerings that are not considered reportable operating segments

The following table presents the operating results (net income (loss) before taxes) for each of the Company’s reportable and certain other operating segments reconciled to the consolidated financial statements.


	Three months ended				Year ended
	December 31, 2024		September 30, 2024	December 31, 2023	December 31, 2024	December 31, 2023
NDS	$	26,810	(4,549)	10,999	40,497	77,714
NBS	17,851		26,813	13,297	117,896	91,101
Nelnet Financial Services division:
AGM	33,490		(16,346)	22,591	75,202	80,636
Nelnet Bank	5,387		(4,758)	(4,319)	(1,942)	(368)
NFS other operating segments:
WRCM	1,357		1,276	1,733	5,391	6,203
Nelnet Insurance Services	3,408		944	2,770	11,332	4,115
Real estate investments	(1,107)		1,865	(316)	(3,333)	(8)
Investment securities	7,736		9,953	15,365	42,328	40,562
Corporate:
Unallocated corporate costs	(16,805)		(10,287)	(15,238)	(46,194)	(63,223)
Nelnet Renewable Energy - solar construction	(17,046)		(10,125)	(38,522)	(35,972)	(54,691)
Solar tax equity investments	6,585		(8,509)	(36,744)	(2,179)	(60,982)
ALLO investment	6,133		6,606	(13,444)	8,087	(57,972)
Venture capital investments	2,063		2,136	(2,845)	6,912	(6,008)
Other corporate activities	2,504		2,756	5,567	10,481	11,635
Eliminations/reclassifications	77		—	—	77	—
Net income (loss) before taxes	78,443		(2,223)	(39,103)	228,584	68,715
Income tax (expense) benefit	(15,016)		282	9,399	(52,669)	(19,385)
Net (income) loss attributable to noncontrolling interests (a)	(268)		4,329	21,791	8,130	40,496
Net income (loss)	$	63,159	2,388	(7,913)	184,045	89,826

(a) For the periods presented, the majority of noncontrolling interests represents income and losses attributed to noncontrolling membership interests in the Company’s Nelnet Renewable Energy and solar tax equity investments operating segments.

2024 Operating and Liquidity Highlights

See below for a summary of (i) certain highlights of the Company’s 2024 operating results; (ii) a description of significant and/or unusual events and transactions in 2024 that impacted and may potentially impact the Company’s operating results; and (iii) a summary of the Company’s current liquidity, including certain items that will impact the Company’s liquidity in future periods.

Loan Servicing and Systems

In April 2023, the Company and four other third-party servicers were awarded servicing contracts to provide continued servicing for the Department under a new Unified Servicing and Data Solutions (USDS) contract which replaced the Company’s legacy servicing contract with the Department.

The USDS contract became effective in April 2023 and has a five-year base period, with 5 years of possible extensions. Servicing under the USDS contract went live on April 1, 2024 and the Company recognized revenue in accordance with this new contract beginning in the second quarter of 2024. The Company recognized less revenue from the Department in 2024 under the USDS contract due to a decrease in the number of borrowers serviced and lower revenue earned on a per borrower blended basis under the new contract versus the legacy contract. The new USDS servicing contract has multiple revenue components with tiered pricing based on borrower volume, while revenue earned under the legacy servicing contract was primarily based on borrower status.

Education Technology Services and Payments

Education technology services and payments revenue grew to $487.0 million in 2024. The growth was from existing and new customers. Operating margin increased from recent historical periods as a result of increases in tuition payment plan services and payment processing revenue, while maintaining a consistent cost structure for services.

Asset Generation and Management

Net interest income decreased in 2024 compared to 2023 after removing the impacts to interest expense for the write-off of the remaining unamortized debt discount associated with the redemption of certain asset-backed debt securities in 2024 and 2023 discussed below. Net interest income was negatively impacted in 2024 due to the expected continued amortization of the Company’s FFELP student loan portfolio and a decrease in core loan spread. The average balance of student loans decreased $3.0 billion from $13.3 billion in 2023 to $10.3 billion in 2024. Beginning in late 2021, the Company has experienced accelerated run-off of its FFELP portfolio due to initiatives offered by the Department for FFELP borrowers to consolidate their loans to qualify for loan forgiveness, income-driven repayment plans, and other programs. However, the Company has observed a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024 that has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates.

In 2024 and 2023, the Company redeemed certain asset-backed debt securities prior to their maturity resulting in the recognition of $6.3 million and $25.9 million, respectively, in interest expense from the write-off of the remaining unamortized debt discount associated with these bonds at the time of redemption.

The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations, which are accounted for as held-to-maturity beneficial interest investments. An increase in cumulative loss expectations in 2024 on certain securitizations and loan vintages caused a change in estimate of future cash flows related to certain of the Company's beneficial interest securitization investments. As a result, during 2024, the Company recorded a $39.5 million allowance for credit losses (and related provision expense) related to these investments.

Nelnet Renewable Energy (NRE)

NRE is the Company’s solar construction company that provides full-service engineering, procurement, and construction (EPC) services to residential homes and commercial entities. In April 2024, the Company announced a change in its solar EPC operations to focus exclusively on the commercial solar market and consequently discontinued its residential solar operations in 2024. As a result, residential revenue will continue to decline from recent historical amounts as existing customer contracts are completed. Residential solar construction revenue was $3.3 million and $10.7 million for the year ended December 31, 2024 and 2023, respectively.

The Company entered the EPC business with its July 2022 acquisition of GRNE Solar. Since the acquisition, NRE has incurred low and, in some cases, negative margins on certain legacy projects. During 2023 and 2024, NRE recognized a net loss before taxes of $54.7 million and $36.0 million, respectively. These losses in 2023 and 2024 include impairment charges on goodwill, intangible assets, and other assets of $20.6 million and $1.9 million, respectively. The Company has a handful of remaining legacy construction contracts to complete, down from over 30 at the beginning of 2024. As new projects are completed and the legacy contracts are substantially complete, the Company believes operating results will improve from prior historical periods.

Solar Tax Equity Investments

As of December 31, 2024, the Company has invested a total of $314.8 million and its third-party investors have invested $271.4 million in tax equity investments that remain outstanding in renewable energy solar partnerships that support the development and operations of solar projects throughout the country. Due to the management and control of each of these investment partnerships, such partnerships that invest in tax equity investments are consolidated on the Company’s consolidated financial statements, with the co-investor’s portion being presented as noncontrolling interests. Included in the Company’s operating results is the Company's share of income or loss from solar investments accounted for under the Hypothetical Liquidation at Book Value (HLBV) method of accounting. For the majority of the Company's solar investments, the HLBV method of accounting results in accelerated losses in the initial years of investment. The Company recognized pre-tax losses on its tax equity investments of $6.5 million in 2024, which includes $4.6 million attributable to noncontrolling interests. The pre-tax losses were partially offset by recognizing gains of $15.3 million, which includes $1.8 million attributable to noncontrolling interests, related to investments that were sold during 2024.

In periods in which the Company makes significant investments in solar tax equity investments, operating results are negatively impacted due to the accelerated losses recognized in the initial years of investment. However, given the timing and amount of cash flows expected to be generated over the life of these investments, the Company considers these investments a good use of capital. Through December 31, 2024, the Company has recognized cumulative pre-tax losses (excluding noncontrolling interests) of approximately $70 million on its tax equity investments currently outstanding. The Company expects its current investments (assuming no additional investments are made subsequent to December 31, 2024) to generate approximately $93 million of pre-tax earnings (excluding noncontrolling interests) over the life of the investments. Accordingly, the Company expects to recognize approximately $163 million in pre-tax income (excluding noncontrolling interests) between January 1, 2025 and December 31, 2030 (the remaining years of its current investments).

Investments - ALLO and Hudl

The Company has a 45% voting membership interests in ALLO. The Company accounts for its ALLO voting membership interests investment under the HLBV method of accounting that resulted in the recognition of a net loss of $10.7 million during 2024. Absent additional equity contributions with respect to ALLO's voting membership interests, the Company will not recognize additional losses for its voting membership interests in ALLO. The Company also owns preferred membership interests in ALLO that earn a preferred return. As of December 31, 2024, the outstanding preferred membership interests of ALLO held by the Company was $225.6 million. The Company recognized income on its ALLO preferred membership interests of $17.5 million in 2024. Nelnet continues to work with ALLO and SDC, a third-party global digital infrastructure investor that holds a significant investment in ALLO, to explore various funding and capital options to support ALLO’s growth.

The Company has an approximately 22% preferred ownership investment in Agile Sports Technologies, Inc. (doing business as “Hudl.”) During the fourth quarter of 2024 and first quarter of 2023, the Company acquired additional ownership interests in Hudl for $3.3 million and $31.5 million, respectively, from existing Hudl investors. These transactions were not considered observable market transactions (not orderly) because they were not subject to customary marketing activities. Accordingly, the Company did not adjust its carrying value of its Hudl investment to the transaction values. As of December 31, 2024, the carrying amount of the Company's investment in Hudl is $168.7 million.

Certain investments, including solar tax equity, ALLO, and Hudl, may be recorded at a carrying value that is less than its market value due to HLBV (solar investments and ALLO) and the measurement alternative (Hudl) method of accounting. Future operating results of solar and ALLO, an observable transaction of Hudl, or a liquidation event of ALLO or Hudl could impact the valuation on our financial statements or our investments in them and may result in significant fluctuations of the Company’s earnings.

Liquidity

As of December 31, 2024, the Company had $717.1 million of unencumbered cash and investments. In addition, the Company has a $495.0 million unsecured line of credit that matures in September 2026. No amounts were outstanding on the line of credit as of December 31, 2024 and $495.0 million was available for future use. Further, as of December 31, 2024, the Company expects to generate future undiscounted cash flows from its AGM loan portfolio of approximately $1.07 billion (including approximately $675.0 million in the next five years); and from its beneficial interest investments of approximately $323.4 million (the majority of which is expected to be received over the next five years).

The Company intends to use its current and future liquidity position to capitalize on market opportunities, including FFELP, private education, consumer, and other loan acquisitions (or investment interests therein); strategic acquisitions and investments; and capital management initiatives, including stock repurchases, debt repurchases, and dividend distributions. The timing and size of these opportunities will vary and will have a direct impact on the Company's cash and investment balances.

Segment Reporting

The following tables present the results of each of the Company's reportable operating segments reconciled to the consolidated financial statements.


	Three months ended December 31, 2024
	Reportable Segments						Reconciling Items
	Loan Servicing and Systems		Education Technology Services and Payments	Asset Generation and Management	Nelnet Bank	Total Reportable Segments	NFS Other Operating Segments	Corporate and Other Activities	Eliminations/ Reclassifications	Total
Interest income:
Loan interest	$	—	—	165,210	13,224	178,434	—	—	—	178,434
Investment interest	831		6,576	13,789	12,691	33,887	10,447	2,207	(3,726)	42,815
Total interest income	831		6,576	178,999	25,915	212,321	10,447	2,207	(3,726)	221,249
Interest expense	—		—	130,668	12,987	143,655	1,568	(327)	(3,726)	141,170
Net interest income	831		6,576	48,331	12,928	68,666	8,879	2,534	—	80,079
Less provision (negative provision) for loan losses	—		—	13,493	8,564	22,057	—	—	—	22,057
Net interest income after provision for loan losses	831		6,576	34,838	4,364	46,609	8,879	2,534	—	58,022
Other income (expense):
LSS revenue	137,981		—	—	—	137,981	—	—	—	137,981
Intersegment revenue	6,073		55	—	—	6,128	—	—	(6,128)	—
ETSP revenue	—		108,335	—	—	108,335	—	—	—	108,335
Reinsurance premiums earned	—		—	—	—	—	18,673	—	—	18,673
Solar construction revenue	—		—	—	—	—	—	13,828	—	13,828
Other, net	684		—	4,640	960	6,284	1,549	19,884	77	27,794
Gain (loss) on sale of loans, net	—		—	42	—	42	—	—	—	42
Derivative settlements, net	—		—	860	227	1,087	—	—	—	1,087
Derivative market value adjustments, net	—		—	8,297	5,495	13,792	—	—	—	13,792
Total other income (expense), net	144,738		108,390	13,839	6,682	273,649	20,222	33,712	(6,051)	321,532
Cost of services and expenses:



Total cost of services	1,497		38,658	—	—	40,155	—	28,558	—	68,713
Salaries and benefits	76,194		42,760	1,255	2,631	122,840	457	23,989	(57)	147,229
Depreciation and amortization	4,171		2,519	—	338	7,028	—	5,516	—	12,544
Reinsurance losses and underwriting expenses	—		—	—	—	—	16,180	—	—	16,180
Postage expense	8,470					8,470			(8,470)	—
Servicing fees				7,087	662	7,749			(7,749)	—
Other expenses	12,163		8,509	936	1,396	23,004	882	16,220	10,575	50,681
Intersegment expenses, net	15,528		4,669	1,281	632	22,110	188	(21,871)	(427)	—
Total operating expenses	116,526		58,457	10,559	5,659	191,201	17,707	23,854	(6,128)	226,634
Impairment expense and provision for beneficial interests	736		—	4,628	—	5,364	—	400	—	5,764
Total expenses	118,759		97,115	15,187	5,659	236,720	17,707	52,812	(6,128)	301,111
Income (loss) before income taxes	26,810		17,851	33,490	5,387	83,538	11,394	(16,566)	77	78,443
Income tax (expense) benefit	(6,434)		(4,298)	(8,038)	(1,222)	(19,992)	(2,711)	7,688	—	(15,016)
Net income (loss)	20,376		13,553	25,452	4,165	63,546	8,683	(8,878)	77	63,427
Net loss (income) attributable to noncontrolling interests	—		57	—	—	57	(97)	(151)	(77)	(268)
Net income (loss) attributable to Nelnet, Inc.	$	20,376	13,610	25,452	4,165	63,603	8,586	(9,029)	—	63,159


	Three months ended September 30, 2024
	Reportable Segments						Reconciling Items
	Loan Servicing and Systems		Education Technology Services and Payments	Asset Generation and Management	Nelnet Bank	Total Reportable Segments	NFS Other Operating Segments	Corporate and Other Activities	Eliminations/ Reclassifications	Total
Interest income:
Loan interest	$	—	—	180,571	9,640	190,211	—	—	—	190,211
Investment interest	894		9,734	18,970	12,521	42,119	12,415	3,105	(7,368)	50,272
Total interest income	894		9,734	199,541	22,161	232,330	12,415	3,105	(7,368)	240,483
Interest expense	—		—	161,142	11,606	172,748	2,245	704	(7,368)	168,328
Net interest income	894		9,734	38,399	10,555	59,582	10,170	2,401	—	72,155
Less provision (negative provision) for loan losses	—		—	11,968	6,143	18,111	—	—	—	18,111
Net interest income after provision for loan losses	894		9,734	26,431	4,412	41,471	10,170	2,401	—	54,044
Other income (expense):
LSS revenue	108,175		—	—	—	108,175	—	—	—	108,175
Intersegment revenue	5,428		60	—	—	5,488	—	—	(5,488)	—
ETSP revenue	—		118,179	—	—	118,179	—	—	—	118,179
Reinsurance premiums earned	—		—	—	—	—	16,619	—	—	16,619
Solar construction revenue	—		—	—	—	—	—	19,321	—	19,321
Other, net	690		—	4,918	841	6,449	5,751	3,506	—	15,706
Gain (loss) on sale of loans, net	—		—	(107)	—	(107)	—	—	—	(107)
Derivative settlements, net	—		—	1,359	281	1,640	—	—	—	1,640
Derivative market value adjustments, net	—		—	(9,518)	(3,647)	(13,165)	—	—	—	(13,165)
Total other income (expense), net	114,293		118,239	(3,348)	(2,525)	226,659	22,370	22,827	(5,488)	266,368
Cost of services and expenses:



Total cost of services	196		45,273	—	—	45,469	—	26,815	—	72,284
Salaries and benefits	76,820		41,053	1,220	2,973	122,066	398	23,852	(124)	146,192
Depreciation and amortization	4,854		2,616	—	343	7,813	—	5,848	—	13,661
Reinsurance losses and underwriting expenses	—		—	—	—	—	16,761	—	—	16,761
Postage expense	8,467					8,467			(8,467)	—
Servicing fees				7,011	285	7,296			(7,296)	—
Other expenses	11,000		7,614	970	2,463	22,047	1,143	11,116	10,379	44,685
Intersegment expenses, net	18,399		4,604	1,276	581	24,860	200	(25,080)	20	—
Total operating expenses	119,540		55,887	10,477	6,645	192,549	18,502	15,736	(5,488)	221,299
Impairment expense and provision for beneficial interests	—		—	28,952	—	28,952	—	100	—	29,052
Total expenses	119,736		101,160	39,429	6,645	266,970	18,502	42,651	(5,488)	322,635
Income (loss) before income taxes	(4,549)		26,813	(16,346)	(4,758)	1,160	14,038	(17,423)	—	(2,223)
Income tax (expense) benefit	1,092		(6,450)	3,923	1,143	(292)	(3,341)	3,915	—	282
Net income (loss)	(3,457)		20,363	(12,423)	(3,615)	868	10,697	(13,508)	—	(1,941)
Net loss (income) attributable to noncontrolling interests	—		54	—	—	54	(117)	4,392	—	4,329
Net income (loss) attributable to Nelnet, Inc.	$	(3,457)	20,417	(12,423)	(3,615)	922	10,580	(9,116)	—	2,388


	Three months ended December 31, 2023
	Reportable Segments						Reconciling Items
	Loan Servicing and Systems		Education Technology Services and Payments	Asset Generation and Management	Nelnet Bank	Total Reportable Segments	NFS Other Operating Segments	Corporate and Other Activities	Eliminations/ Reclassifications	Total
Interest income:
Loan interest	$	—	—	220,505	6,729	227,234	—	—	—	227,234
Investment interest	1,651		6,725	19,293	10,038	37,707	20,376	3,315	(13,379)	48,019
Total interest income	1,651		6,725	239,798	16,767	264,941	20,376	3,315	(13,379)	275,253
Interest expense	—		—	204,179	9,863	214,042	4,887	(216)	(13,379)	205,335
Net interest income	1,651		6,725	35,619	6,904	50,899	15,489	3,531	—	69,918
Less provision (negative provision) for loan losses	—		—	417	2,638	3,055	—	—	—	3,050
Net interest income after provision for loan losses	1,651		6,725	35,202	4,266	47,844	15,489	3,531	—	66,868
Other income (expense):
LSS revenue	128,816		—	—	—	128,816	—	—	—	128,816
Intersegment revenue	6,931		55	—	—	6,986	—	—	(6,986)	—
ETSP revenue	—		106,052	—	—	106,052	—	—	—	106,052
Reinsurance premiums earned	—		—	—	—	—	9,428	—	—	9,428
Solar construction revenue	—		—	—	—	—	—	11,982	—	11,982
Other, net	688		—	4,329	(298)	4,719	2,133	(43,242)	—	(36,390)
Gain (loss) on sale of loans, net	—		—	(882)	—	(882)	—	—	—	(886)
Derivative settlements, net	—		—	648	205	853	—	—	—	853
Derivative market value adjustments, net	—		—	(4,927)	(4,580)	(9,507)	—	—	—	(9,507)
Total other income (expense), net	136,435		106,107	(832)	(4,673)	237,037	11,561	(31,260)	(6,986)	210,348
Cost of services and expenses:



Total cost of services	—		39,379	—	—	39,379	—	23,371	—	62,750
Salaries and benefits	83,874		39,256	1,099	2,194	126,423	413	26,844	(763)	152,917
Depreciation and amortization	4,858		2,895	—	259	8,012	—	13,993	—	22,004
Reinsurance losses and underwriting expenses	—		—	—	—	—	7,084	—	—	7,084
Postage expense	10,302					10,302			(10,302)	—
Servicing fees				8,324	172	8,496			(8,496)	—
Other expenses	7,455		8,070	1,062	1,298	17,885	(135)	14,980	11,885	44,613
Intersegment expenses, net	20,598		5,625	1,294	(11)	27,506	136	(28,332)	690	—
Total operating expenses	127,087		55,846	11,779	3,912	198,624	7,498	27,485	(6,986)	226,618
Impairment expense and provision for beneficial interests	—		4,310	—	—	4,310	—	22,641	—	26,951
Total expenses	127,087		99,535	11,779	3,912	242,313	7,498	73,497	(6,986)	316,319
Income (loss) before income taxes	10,999		13,297	22,591	(4,319)	42,568	19,552	(101,226)	—	(39,103)
Income tax (expense) benefit	(2,640)		(3,190)	(5,422)	1,066	(10,186)	(4,656)	24,242	—	9,399
Net income (loss)	8,359		10,107	17,169	(3,253)	32,382	14,896	(76,984)	—	(29,704)
Net loss (income) attributable to noncontrolling interests	—		(4)	—	—	(4)	(151)	21,946	—	21,791
Net income (loss) attributable to Nelnet, Inc.	$	8,359	10,103	17,169	(3,253)	32,378	14,745	(55,038)	—	(7,913)


	Year ended December 31, 2024
	Reportable Segments						Reconciling Items
	Loan Servicing and Systems		Education Technology Services and Payments	Asset Generation and Management	Nelnet Bank	Total Reportable Segments	NFS Other Operating Segments	Corporate and Other Activities	Eliminations/ Reclassifications	Total
Interest income:
Loan interest	$	—	—	749,117	38,381	787,498	—	—	—	787,498
Investment interest	4,877		29,891	68,302	45,992	149,062	54,357	11,773	(29,291)	185,901
Total interest income	4,877		29,891	817,419	84,373	936,560	54,357	11,773	(29,291)	973,399
Interest expense	—		—	654,346	44,859	699,205	8,837	1,787	(29,291)	680,537
Net interest income	4,877		29,891	163,073	39,514	237,355	45,520	9,986	—	292,862
Less provision (negative provision) for loan losses	—		—	27,691	26,916	54,607	—	—	—	54,607
Net interest income after provision for loan losses	4,877		29,891	135,382	12,598	182,748	45,520	9,986	—	238,255
Other income (expense):
LSS revenue	482,408		—	—	—	482,408	—	—	—	482,408
Intersegment revenue	24,493		220	—	—	24,713	—	—	(24,713)	—
ETSP revenue	—		486,962	—	—	486,962	—	—	—	486,962
Reinsurance premiums earned	—		—	—	—	—	62,923	—	—	62,923
Solar construction revenue	—		—	—	—	—	—	56,569	—	56,569
Other, net	2,769		—	15,879	2,951	21,599	8,313	31,613	77	61,602
Gain (loss) on sale of loans, net	—		—	(1,643)	—	(1,643)	—	—	—	(1,643)
Derivative settlements, net	—		—	5,217	917	6,134	—	—	—	6,134
Derivative market value adjustments, net	—		—	5,422	4,702	10,124	—	—	—	10,124
Total other income (expense), net	509,670		487,182	24,875	8,570	1,030,297	71,236	88,182	(24,636)	1,165,079
Cost of services and expenses:



Total cost of services	1,889		172,763	—	—	174,652	—	77,673	—	252,325
Salaries and benefits	300,366		164,716	4,784	11,122	480,988	1,587	96,148	(1,792)	576,931
Depreciation and amortization	19,475		10,531	—	1,282	31,288	—	26,828	—	58,116
Reinsurance losses and underwriting expenses	—		—	—	—	—	55,246	—	—	55,246
Postage expense	36,820					36,820			(36,820)	—
Servicing fees				31,591	1,373	32,964			(32,964)	—
Other expenses	43,282		32,281	4,152	6,972	86,687	3,352	53,581	45,883	189,503
Intersegment expenses, net	71,482		18,886	5,037	2,361	97,766	853	(99,599)	980	—
Total operating expenses	471,425		226,414	45,564	23,110	766,513	61,038	76,958	(24,713)	879,796
Impairment expense and provision for beneficial interests	736		—	39,491	—	40,227	—	2,402	—	42,629
Total expenses	474,050		399,177	85,055	23,110	981,392	61,038	157,033	(24,713)	1,174,750
Income (loss) before income taxes	40,497		117,896	75,202	(1,942)	231,653	55,718	(58,865)	77	228,584
Income tax (expense) benefit	(9,719)		(28,333)	(18,048)	579	(55,521)	(13,261)	16,114	—	(52,669)
Net income (loss)	30,778		89,563	57,154	(1,363)	176,132	42,457	(42,751)	77	175,915
Net loss (income) attributable to noncontrolling interests	—		158	—	—	158	(463)	8,512	(77)	8,130
Net income (loss) attributable to Nelnet, Inc.	$	30,778	89,721	57,154	(1,363)	176,290	41,994	(34,239)	—	184,045


	Year ended December 31, 2023
	Reportable Segments						Reconciling Items
	Loan Servicing and Systems		Education Technology Services and Payments	Asset Generation and Management	Nelnet Bank	Total Reportable Segments	NFS Other Operating Segments	Corporate and Other Activities	Eliminations/ Reclassifications	Total
Interest income:
Loan interest	$	—	—	910,139	21,806	931,945	—	—	—	931,945
Investment interest	4,845		26,962	67,019	36,053	134,879	74,857	12,141	(44,021)	177,855
Total interest income	4,845		26,962	977,158	57,859	1,066,824	74,857	12,141	(44,021)	1,109,800
Interest expense	—		—	823,084	34,704	857,788	29,747	1,578	(44,021)	845,091
Net interest income	4,845		26,962	154,074	23,155	209,036	45,110	10,563	—	264,709
Less provision (negative provision) for loan losses	—		—	(360)	8,475	8,115	—	—	—	8,115
Net interest income after provision for loan losses	4,845		26,962	154,434	14,680	200,921	45,110	10,563	—	256,594
Other income (expense):
LSS revenue	517,954		—	—	—	517,954	—	—	—	517,954
Intersegment revenue	28,911		253	—	—	29,164	—	—	(29,164)	—
ETSP revenue	—		463,311	—	—	463,311	—	—	—	463,311
Reinsurance premiums earned	—		—	—	—	—	20,067	—	—	20,067
Solar construction revenue	—		—	—	—	—	—	31,669	—	31,669
Other, net	2,587		—	11,269	1,095	14,951	6,581	(95,859)	—	(74,327)
Gain (loss) on sale of loans, net	—		—	(17,662)	—	(17,662)	—	—	—	(17,662)
Derivative settlements, net	—		—	24,588	484	25,072	—	—	—	25,072
Derivative market value adjustments, net	—		—	(40,250)	(1,523)	(41,773)	—	—	—	(41,773)
Total other income (expense), net	549,452		463,564	(22,055)	56	991,017	26,648	(64,190)	(29,164)	924,311
Cost of services and expenses:



Total cost of services	—		171,183	—	—	171,183	—	48,576	—	219,759
Salaries and benefits	317,885		155,296	4,191	9,074	486,446	1,130	105,531	(1,571)	591,537
Depreciation and amortization	19,257		11,319	—	574	31,150	—	47,969	—	79,118
Reinsurance losses and underwriting expenses	—		—	—	—	—	16,781	—	—	16,781
Postage expense	21,194					21,194			(21,194)	—
Servicing fees				37,389	509	37,898			(37,898)	—
Other expenses	39,323		34,133	4,988	4,994	83,438	2,391	56,307	30,935	173,070
Intersegment expenses, net	78,628		23,184	5,175	(47)	106,940	584	(108,088)	564	—
Total operating expenses	476,287		223,932	51,743	15,104	767,066	20,886	101,719	(29,164)	860,506
Impairment expense and provision for beneficial interests	296		4,310	—	—	4,606	—	27,319	—	31,925
Total expenses	476,583		399,425	51,743	15,104	942,855	20,886	177,614	(29,164)	1,112,190
Income (loss) before income taxes	77,714		91,101	80,636	(368)	249,083	50,872	(231,241)	—	68,715
Income tax (expense) benefit	(18,651)		(21,891)	(19,353)	153	(59,742)	(12,073)	52,429	—	(19,385)
Net income (loss)	59,063		69,210	61,283	(215)	189,341	38,799	(178,812)	—	49,330
Net loss (income) attributable to noncontrolling interests	—		109	—	—	109	(568)	40,955	—	40,496
Net income (loss) attributable to Nelnet, Inc.	$	59,063	69,319	61,283	(215)	189,450	38,231	(137,857)	—	89,826

Loan Servicing and Systems Revenue

The following table presents disaggregated revenue by service offering for the Loan Servicing and Systems operating segment.


	Three months ended				Year ended
	December 31, 2024		September 30, 2024	December 31, 2023	December 31, 2024	December 31, 2023
Government loan servicing	$	103,217	85,215	107,709	380,921	412,478
Private education and consumer loan servicing	24,819		13,057	12,428	63,453	48,984
FFELP loan servicing	2,642		2,945	3,478	12,212	13,704
Software services	6,415		5,197	4,132	21,032	29,208
Outsourced services	888		1,761	1,069	4,790	13,580
Loan servicing and systems revenue	$	137,981	108,175	128,816	482,408	517,954

Loan Servicing Volumes


	As of
	December 31, 2024		September 30, 2024	June 30, 2024	March 31, 2024	December 31, 2023	September 30, 2023	June 30, 2023	March 31, 2023	December 31, 2022
Servicing volume (dollars in millions):
Government	$	489,877	492,142	489,298	495,409	494,691	500,554	519,308	537,291	545,373
FFELP	13,260		13,745	14,576	15,783	17,462	18,400	19,021	19,815	20,226
Private and consumer	29,226		20,666	19,876	21,015	20,493	20,394	20,805	21,484	21,866
Total	$	532,363	526,553	523,750	532,207	532,646	539,348	559,134	578,590	587,465

Number of servicing borrowers:
Government	14,049,550		14,114,468	14,096,152	14,328,013	14,503,057	14,543,382	14,898,901	15,518,751	15,777,328
FFELP	549,861		574,979	610,745	656,814	725,866	764,660	788,686	819,791	829,939
Private and consumer	1,168,293		851,747	829,072	882,256	894,703	896,613	899,095	925,861	951,866
Total	15,767,704		15,541,194	15,535,969	15,867,083	16,123,626	16,204,655	16,586,682	17,264,403	17,559,133

Number of remote hosted borrowers:	842,200		662,075	133,681	65,295	70,580	103,396	716,908	5,048,324	6,135,760

Education Technology Services and Payments Revenue

The following table presents disaggregated revenue by servicing offering for the Education Technology Services and Payments operating segment.


	Three months ended				Year ended
	December 31, 2024		September 30, 2024	December 31, 2023	December 31, 2024	December 31, 2023
Tuition payment plan services	$	31,149	31,659	30,091	135,851	125,326
Payment processing	41,117		55,813	37,143	179,043	163,859
Education technology services	35,759		30,080	37,957	169,065	170,754
Other	310		627	861	3,003	3,372
Education technology services and payments revenue	$	108,335	118,179	106,052	486,962	463,311

Solar Construction Revenue

The following table presents disaggregated revenue by customer type related to solar construction revenue.


	Three months ended				Year ended
	December 31, 2024		September 30, 2024	December 31, 2023	December 31, 2024	December 31, 2023




Commercial revenue	$	13,792	18,764	8,543	53,269	20,969
Residential revenue (a)	36		557	3,439	3,300	10,700

Solar construction revenue	$	13,828	19,321	11,982	56,569	31,669

(a) On April 2024, the Company announced a change in its solar engineering, procurement, and construction operations to focus exclusively on the commercial solar market and will discontinue its residential solar operations. As a result, residential revenue will continue to decline from historical amounts as existing customer contracts are completed.

Other Income (Expense)

The following table presents the components of "other, net" in "other income (expense)" on the consolidated statements of operations.


	Three months ended				Year ended
	December 31, 2024		September 30, 2024	December 31, 2023	December 31, 2024	December 31, 2023
ALLO preferred return	$	6,133	4,783	2,299	17,486	9,120
Investment activity, net	4,989		8,529	(419)	12,438	(8,586)
Borrower late fee income	1,369		1,741	2,363	8,828	8,997
Investment advisory services (WRCM)	1,508		1,394	1,876	5,934	6,760
Administration/sponsor fee income	1,375		1,420	1,613	5,823	6,793
Management fee revenue	684		690	688	2,769	2,587
Loss from ALLO voting membership interest investment	—		—	(15,601)	(10,693)	(65,277)
Loss from solar investments, net (a)	4,559		(11,238)	(40,160)	(6,477)	(59,645)

Other	7,177		8,387	10,951	25,494	24,924
Other, net	$	27,794	15,706	(36,390)	61,602	(74,327)

(a) The Company accounts for its solar investments using the Hypothetical Liquidation at Book Value (HLBV) method of accounting. For the majority of the Company’s solar investments, the HLBV method of accounting results in accelerated losses in the initial years of investment. The following table presents (i) the Company's recognized net losses, which include net losses attributable to third-party noncontrolling interest investors (syndication partners), included in “other, net” in "other income (expense)" on the consolidated statements of income, (ii) solar net losses attributed to noncontrolling interest investors included in “net loss attributable to noncontrolling interests” on the consolidated statements of income, and (iii) the Company's recognized net losses excluding net losses attributed to noncontrolling interest investors (such amount reflecting the before tax net income impact of such solar tax equity investments to the Company).


	Three months ended					Year ended
	December 31, 2024		September 30, 2024		December 31, 2023	December 31, 2024	December 31, 2023
Net gains (losses)	$	4,559	$	(11,238)	(40,160)	(6,477)	(59,645)
Less: net (gains) losses attributed to noncontrolling interest investors (syndication partners)	(970)		3,936		23,169	4,599	37,875
Net gains (losses), excluding activity attributed to noncontrolling interest investors	$	3,589	$	(7,302)	(16,991)	(1,878)	(21,770)

Impairment Expense and Provision for Beneficial Interests

The following table presents the impairment charges and provision for beneficial interests by asset and reportable operating segment recognized by the Company. These expense items are included in “impairment expense and provision for beneficial interests” in the consolidated statements of operations.


				Nelnet Financial Services
	Loan Servicing and Systems		Education Technology Services and Payments	Asset Generation and Management	Nelnet Bank	NFS Other Operating Segments	Corporate and Other Activities	Total
	Three months ended December 31, 2024
Investments - beneficial interest in loan securitizations (a)	$	—	—	4,628	—	—	—	4,628
Leases, buildings, and associated improvements (b)	736		—	—	—	—	—	736
Investments - venture capital and funds (c)	—		—	—	—	—	400	400


	$	736	—	4,628	—	—	400	5,764

	Three months ended September 30, 2024
Investments - beneficial interest in loan securitizations (a)	$	—	—	28,952	—	—	—	28,952
Investments - venture capital and funds (c)	—		—	—	—	—	100	100

	$	—	—	28,952	—	—	100	29,052
	Three months ended December 31, 2023
Investments - venture capital and funds (c)	$	—	—	—	—	—	2,060	2,060
Goodwill (d)	—		—	—	—	—	18,873	18,873
Property and equipment - internally developed software	—		4,310	—	—	—	—	4,310
Intangible assets (d)	—		—	—	—	—	1,708	1,708
	$	—	4,310	—	—	—	22,641	26,951
	Year ended December 31, 2024
Investments - beneficial interest in loan securitizations (a)	$	—	—	39,491	—	—	—	39,491
Property and equipment - solar facilities (e)	—		—	—	—	—	1,170	1,170
Leases, buildings, and associated improvements (b)	736		—	—	—	—	—	736
Other assets - solar inventory (e)	—		—	—	—	—	695	695
Investments - venture capital and funds (c)	—		—	—	—	—	537	537
	$	736	—	39,491	—	—	2,402	42,629

	Year ended December 31, 2023
Leases, buildings, and associated improvements (b)	$	296	—	—	—	—	4,678	4,974
Investments - venture capital and funds (c)	—		—	—	—	—	2,060	2,060
Goodwill (d)	—		—	—	—	—	18,873	18,873
Property and equipment - internally developed software			4,310	—	—	—	—	4,310
Intangible assets (d)	—		—	—	—	—	1,708	1,708
	$	296	4,310	—	—	—	27,319	31,925

(a) The Company recorded a non-cash allowance for credit losses (and related provision expense) related to the Company's beneficial interest in certain loan securitizations.

(b) The Company continues to evaluate the use of office space as it modifies its hybrid work model for associates. As a result, the Company recorded non-cash impairment charges related to operating lease assets and associated leasehold improvements and to building and building improvements. The Corporate and Other Activities amount for the year ended December 31, 2023 includes a $2.4 million lease termination fee paid to Union Bank, a related party.

(c) The Company recorded non-cash impairment charges related to several of its venture capital investments accounted for under the measurement alternative method.

(d) As part of the November 2023 annual goodwill impairment assessment completed in conjunction with the Company’s annual November budget process, the Company determined it was more likely than not that the estimated fair value of the GRNE operating segment was less than its carrying amount. As part of the quantitative assessment, the Company used the discounted cash flow method under the income approach to estimate the fair value of the reporting unit, which concluded that the estimated fair value was less than its carrying amount. As a result, the Company recorded a non-cash impairment charge in the fourth quarter of 2023. No remaining goodwill is attributable to the GRNE operating segment. The Company also recorded a non-cash impairment charge for GRNE operating segment’s remaining intangible assets.

(e) In April 2024, the Company announced a change in its solar engineering, procurement, and construction (EPC) operations to focus exclusively on the commercial solar market and will discontinue its residential solar operations. As a result, the Company recognized non-cash impairment charges on certain solar facilities and inventory related to the residential solar operations.

Derivative Settlements

The following table summarizes the components of "derivative settlements, net" included in the consolidated statements of operations.


	Three months ended				Year ended
	December 31, 2024		September 30, 2024	December 31, 2023	December 31, 2024	December 31, 2023
1:3 basis swaps	$	156	159	364	929	1,544
Interest rate swaps - floor income hedges	704		1,200	284	4,288	23,044
Interest rate swaps - Nelnet Bank	227		281	205	917	484
Total derivative settlements - income	$	1,087	1,640	853	6,134	25,072

Loans and Accrued Interest Receivable and Allowance for Loan Losses

Loans and accrued interest receivable and allowance for loan losses consisted of the following:


	As of		As of	As of
	December 31, 2024		September 30, 2024	December 31, 2023
Non-Nelnet Bank:
Federally insured loans:
Stafford and other	$	2,108,960	2,202,590	2,936,174
Consolidation	6,279,604		6,868,152	8,750,033
Total	8,388,564		9,070,742	11,686,207
Private education loans	221,744		234,295	277,320
Consumer and other loans	345,560		244,552	85,935
Non-Nelnet Bank loans	8,955,868		9,549,589	12,049,462
Nelnet Bank:




Private education loans	482,445		352,654	360,520
Consumer and other loans	162,152		207,218	72,352
Nelnet Bank loans	644,597		559,872	432,872
Accrued interest receivable	549,283		600,097	764,385
Loan discount and deferred lender fees, net of unamortized loan premiums and deferred origination costs	(42,114)		(34,535)	(33,872)
Allowance for loan losses:
Non-Nelnet Bank:
Federally insured loans	(49,091)		(50,834)	(68,453)
Private education loans	(11,130)		(11,744)	(15,750)
Consumer and other loans	(38,468)		(22,380)	(11,742)
Non-Nelnet Bank allowance for loan losses	(98,689)		(84,958)	(95,945)
Nelnet Bank:

Private education loans	(10,086)		(3,670)	(3,347)
Consumer and other loans	(6,115)		(13,514)	(5,351)
Nelnet Bank allowance for loan losses	(16,201)		(17,184)	(8,698)
	$	9,992,744	10,572,881	13,108,204

The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations that are accounted for as held-to-maturity beneficial interest investments and included in "other investments and notes receivable, net" in the Company's consolidated financial statements. As of the latest remittance reports filed by the various trusts prior to or as of December 31, 2024, the Company’s ownership correlates to approximately $1.97 billion of loans included in these securitizations. The loans held in these securitizations are not included in the above table. Investment interest income earned by the Company from the beneficial interest in loan securitizations is included in "investment interest" on the Company's consolidated statements of income and is not a component of the Company's loan interest income.

The following table summarizes the allowance for loan losses as a percentage of the ending loan balance for each of the Company's loan portfolios.


	As of		As of		As of
	December 31, 2024		September 30, 2024		December 31, 2023
Non-Nelnet Bank:
Federally insured loans (a)	0.59	%	0.56	%	0.59	%
Private education loans	5.02	%	5.01	%	5.68	%
Consumer and other loans	11.13	%	9.15	%	13.66	%
Nelnet Bank:

Private education loans	2.09	%	1.04	%	0.93	%
Consumer and other loans	3.77	%	6.52	%	7.40	%

(a) As of December 31, 2024, September 30, 2024, and December 31, 2023, the allowance for loan losses as a percent of the risk sharing component of federally insured loans not covered by the federal guaranty was 20.6%, 20.7%, and 21.8%, respectively.

Loan Activity

The following table sets forth the activity of the Company's Non-Nelnet Bank loan portfolios:


	FFELP		Private	Consumer and other	Total
	Three months ended
Balance as of September 30, 2023	$	12,298,984	293,004	143,633	12,735,621
Loan acquisitions	57,753		36	138,575	196,364
Repayments, claims, capitalized interest, participations, and other, net	(265,228)		(13,648)	(7,607)	(286,483)
Loans lost to external parties	(347,818)		(2,072)	—	(349,890)
Loans sold	(57,484)		—	(188,666)	(246,150)
Balance as of December 31, 2023	$	11,686,207	277,320	85,935	12,049,462

Balance as of September 30, 2024	$	9,070,742	234,295	244,552	9,549,589
Loan acquisitions	2,000		—	194,333	196,333
Repayments, claims, capitalized interest, participations, and other, net	(248,071)		(11,005)	(80,677)	(339,753)
Loans lost to external parties	(57,208)		(1,546)	—	(58,754)
Loans sold	(378,899)		—	(12,648)	(391,547)
Balance as of December 31, 2024	$	8,388,564	221,744	345,560	8,955,868
	Year-ended
Balance as of December 31, 2022	$	13,566,473	252,383	350,915	14,169,771
Loan acquisitions	576,224		77,401	478,666	1,132,291
Repayments, claims, capitalized interest, participations, and other, net	(1,342,866)		(45,942)	(72,995)	(1,461,803)
Loans lost to external parties	(1,056,140)		(6,522)	—	(1,062,662)
Loans sold	(57,484)		—	(670,651)	(728,135)
Balance as of December 31, 2023	$	11,686,207	277,320	85,935	12,049,462

Balance as of December 31, 2023	$	11,686,207	277,320	85,935	12,049,462
Loan acquisitions	106,916		—	599,543	706,459
Repayments, claims, capitalized interest, participations, and other, net	(1,209,242)		(51,262)	(191,931)	(1,452,435)
Loans lost to external parties	(1,616,724)		(4,314)	—	(1,621,038)
Loans sold	(578,593)		—	(147,987)	(726,580)
Balance as of December 31, 2024	$	8,388,564	221,744	345,560	8,955,868

The following table sets forth the activity of Nelnet Bank's loan portfolios:


	FFELP		Private	Consumer and other	Total
	Three months ended
Balance as of September 20, 2023	$	59,261	359,941	49,611	468,813
Loan acquisitions and originations	—		11,944	30,202	42,146
Repayments	(1,777)		(11,280)	(7,461)	(20,518)
Loans sold to AGM	(57,484)		(85)	—	(57,569)
Balance as of December 31, 2023	$	—	360,520	72,352	432,872

Balance as of September 30, 2024	$	—	352,654	207,218	559,872
Loan acquisitions and originations	—		151,966	34,268	186,234
Repayments	—		(22,175)	(14,246)	(36,421)
Loans sold to AGM	—		—	(65,088)	(65,088)
Balance as of December 31, 2024	$	—	482,445	162,152	644,597


	Year ended
Balance as of December 31, 2022	$	65,913	353,882	—	419,795
Loan acquisitions and originations	—		53,286	85,967	139,253
Repayments	(8,429)		(46,431)	(13,615)	(68,475)
Loans sold to AGM	(57,484)		(217)	—	(57,701)
Balance as of December 31, 2023	$	—	360,520	72,352	432,872

Balance as of December 31, 2023	$	—	360,520	72,352	432,872
Loan acquisitions and originations	—		180,919	210,527	391,446
Repayments	—		(58,994)	(55,639)	(114,633)
Loans sold to AGM	—		—	(65,088)	(65,088)
Balance as of December 31, 2024	$	—	482,445	162,152	644,597

Loan Spread Analysis

The following table analyzes the loan spread on AGM’s portfolio of loans, which represents the spread between the yield earned on loan assets and the costs of the liabilities and derivative instruments used to fund the assets.


	Three months ended							Year ended
	December 31, 2024			September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Variable loan yield, gross	7.85		%	8.16	%	7.75	%	8.03	%	7.56	%
Consolidation rebate fees	(0.80)			(0.80)		(0.80)		(0.80)		(0.80)
Discount accretion, net of premium and deferred origination costs amortization	(0.08)			(0.02)		0.06		0.02		0.06
Variable loan yield, net	6.97			7.34		7.01		7.25		6.82
Loan cost of funds - interest expense (a)	(5.86)			(6.44)		(6.40)		(6.34)		(5.99)
Loan cost of funds - derivative settlements (b) (c)	0.01			0.01		0.01		0.01		0.01
Variable loan spread	1.12			0.91		0.62		0.92		0.84
Fixed rate floor income, gross	0.03			0.01		0.00		0.01		0.02
Fixed rate floor income - derivative settlements (b) (d)	0.03			0.05		0.01		0.04		0.18
Fixed rate floor income, net of settlements on derivatives	0.06			0.06		0.01		0.05		0.20
Core loan spread	1.18		%	0.97	%	0.63	%	0.97	%	1.04	%

Average balance of AGM's loans	$	9,403,661		9,792,095		12,500,817		10,310,430		13,316,525
Average balance of AGM's debt outstanding	8,654,618			9,296,236		11,993,699		9,871,828		12,720,097

(a) The Company recognized $0.7 million, $5.6 million, and $25.9 million in non-cash interest expense during the fourth quarter of 2024, third quarter of 2024, and 2nd quarter of 2023, respectively, as a result of writing off the remaining unamortized debt discount related to the redemption of certain asset-backed debt securities prior to their maturity. This non-cash expense was excluded from the respective periods in the table above.

(b) Derivative settlements 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. Derivative accounting requires that net settlements with respect to derivatives that do not qualify for "hedge treatment" under GAAP be recorded in a separate income statement line item below net interest income. The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility. As such, management believes derivative settlements for each applicable period should be evaluated with the Company’s net interest income (loan spread) as presented in this table. 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. See "Derivative Settlements" included in this supplement for the net settlement activity recognized by the Company for each type of derivative for the periods presented in the table.

A reconciliation of core loan spread, which includes the impact of derivative settlements on loan spread, to loan spread without derivative settlements follows.


	Three months ended						Year ended
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Core loan spread	1.18	%	0.97	%	0.63	%	0.97	%	1.04	%
Derivative settlements (1:3 basis swaps)	(0.01)		(0.01)		(0.01)		(0.01)		(0.01)
Derivative settlements (fixed rate floor income)	(0.03)		(0.05)		(0.01)		(0.04)		(0.18)
Loan spread	1.14	%	0.91	%	0.61	%	0.92	%	0.85	%

(d) Derivative settlements consist of net settlements received related to the Company’s floor income interest rate swaps.

2024 Letter to Shareholders | Page 1 Dear Shareholder, On New Year’s Eve 2024, I was snow skiing in Jackson Hole, Wyoming, with friends. For the last run of the year, we decided to take the aerial tram to the very top of the mountain and end the year in style. If you have ever skied at Jackson Hole Mountain Resort, and if you specifically have taken the tram known as “Big Red,” you know it is not for the faint of heart. They jam exactly 100 people elbow to elbow into a cable car and take you straight up 4,139 vertical feet to the highest peak, called Rendezvous Mountain, in approximately nine minutes. During that high-speed nine minutes, the tram is swaying, and they are cranking out extremely loud rock tunes to pump up your adrenaline—all the while warning passengers that the ski runs at the top are for experts only, there are only black diamond ski runs available and if you have any doubts, you should stay on the tram and ride it back down. When you step off Big Red, you can feel the temperature has dropped by 10 degrees from the bottom (from cold to freezing), the wind is howling at 30 miles per hour, the snow is blinding and you can’t see more than 20 feet down the mountain; you know it is pretty much a straight vertical drop, yet everyone is cheering and excited as they “drop in,” or start their descent. As I clamped my boots into my skis, lowered my goggles and turned up the U2 song playing in my ears while looking into the abyss, I started thinking about this letter to the shareholders. (I am 100 percent serious; and yes, I know I am a total nerd; and no, there is no such thing as work-life balance—there is only balance.) How would I describe 2024? A year filled with ups and downs but with the excitement of being at the pinnacle of something awesome yet accompanied by the mix of anxiety and enthusiasm for the future. One of my thrill-seeking friends leaned over to me and said, “There is only one way off this mountaintop now,” and screamed as she dropped in. That, in a nutshell, is business in today’s rapidly changing landscape. Massive political temperature shifts, a hard-to-determine rate environment, unbelievable pace of technology advancements with machine learning and artificial intelligence (AI) affecting many aspects of daily work life, a new White House administration, a new Congress, new rules, hopefully continued lower corporate taxes and less regulations. Taking all those changes into account, you rely upon your people—their skills, strengths and collective experience. You trust your team and strategically take risks when the odds are in your favor. At Nelnet, we believe we have positioned ourselves with all the right tools for future success: great products and services, a focus on the customer, incredibly talented people who run and operate our businesses, a healthy cash position to be opportunistic and to weather almost any brewing storm and a long-term view of the world. So, let’s point the skis downhill and drop in… 2024 was a record year for Nelnet Business Services (NBS), one of the three major businesses in Nelnet's portfolio. It was also a re-investment year for the future of Nelnet Diversified Services (NDS) and a consolidation and alignment year in Nelnet Financial Services (NFS). I would describe it as a mixed bag of various levels of success and truly what we would expect from a diversified portfolio of businesses. The result has been an impressive amount of cash generated from operating activities ($663 million in 2024 alone) as well as new products and services that we keep spinning out of our existing businesses. We made $184 million, or $5.02 per share, in GAAP earnings (Generally Accepted Accounting Principles), up from $90 million, or $2.40 per share in 2023. We believe our balance sheet has become even more resilient with $3.3 billion in equity, equating to a total equity-to-assets ratio of 23.9 percent and a total equity-to-tangible-assets ratio of 22.9 percent. If you follow Nelnet, you know we have maintained a very strong balance sheet for organic growth, opportunistic acquisitions and financial stability. February 27, 2025

2024 Letter to Shareholders | Page 2 Small actions can have significant long-term ripple effects. Similar to casting a stone into a pond, each of our businesses within Nelnet began with a single idea, a single product, a single client, and a risk taken. A problem was identified, and a business solution was created. Each idea is like a single stone cast in the combined form of vision, mission, purpose, capital, the right people, great products and services, proper motivators and hard work. From those cast stones, ripples began spreading the moment they touched the water. The first “stone” thrown was merely a pebble in the amount of equity invested to originate government guaranteed student loans and to fund them in the capital markets. The ripples from this first pebble have now grown into NFS. The net cash flow created by NFS life-to-date is more than $4 billion and has cascaded into an ever-expanding suite of new business products and services. It has been awesome to watch. We now own a bank, consumer loans, private student loans, government- guaranteed loans and commercial and multi-family real estate; underwrite reinsurance; and hold student loan asset-backed securities for ourselves and third parties (Whitetail Rock). One pebble, creating many ripples that continuously flow. The next stone cast was an investment in loan servicing. NDS was founded on a simple idea and a relatively small amount of capital, marking the beginning of our loan servicing business. We would service the loans we owned to mitigate the default risk in the loan portfolio. We are now the largest student loan servicer on the planet. We have diversified from strictly Federal Family Education Loan Program (FFELP) loans to Direct loans, private loans and consumer loans as well as business process outsourcing (BPO). We currently service $532 billion for 15.8 million consumers funded by banks, finance companies and government agencies. In 2024 and the beginning of this year, we brought on some of the biggest portfolios in the industry including Discover and SoFi. Since our loan servicing business was folded into Nelnet in 2000, we have generated $7.6 billion in revenue and $911 million in net income. One more stone, many more ripples. Nelnet’s Corporate Performance (Annual Percentage Change) Nelnet Per Share Book Value With Dividends Included Nelnet Per Share Market Value With Dividends Included S&P 500 With Dividends Included Net Income Reinvested1 (in millions) 2004 49.2% 20.2% 10.9% $149 2005 41.5% 51.1% 4.9% $181 2006 6.3% (32.7%) 15.8% $6 2007 (1.6%) (52.5%) 5.5% ($63) 2008 6.6% 13.3% (37.0%) $24 2009 21.0% 20.7% 26.5% $135 2010 23.7% 41.6% 15.1% $115 2011 22.6% 4.9% 2.1% $160 2012 16.7% 27.5% 16.0% $89 2013 26.1% 42.8% 32.4% $271 2014 21.1% 10.9% 13.7% $273 2015 16.0% (26.6%) 1.4% $153 2016 15.4% 52.7% 12.0% $166 2017 8.8% 9.1% 21.8% $80 2018 9.9% (3.2%) (4.4%) $156 2019 6.2% 12.7% 31.5% $72 2020 15.6% 23.7% 18.4% $247 2021 14.5% 38.4% 28.7% $295 2022 12.0% (6.1%) (18.1%) $273 2023 3.4% (1.6%) 26.3% $22 2024 6.4% 22.3% 25.0% $60 CAGR/Total 15.7% 9.0% 10.4% $2,864 1We believe well-managed companies do not distribute to the shareholders all their earnings. Instead, they retain a part of their earnings and reinvest the capital to grow the business. Since going public in late 2003, the company has recognized $4.3 billion in cumulative net income and, of that amount, has reinvested $2.9 billion – or 67 percent of our earnings over time – back into the business.

2024 Letter to Shareholders | Page 3 The third stone cast was the acquisition of our education technology services and payments division. NBS started out with an identified customer need: automating parent payments for a single Catholic school in Grand Island, Neb., and operating under the brand name “FACTS,” an acronym for Fast Automated Cash Transfer Service. If you follow the ripples from this stone today, at the risk of sounding repetitive in this letter like the classic movie “Groundhog Day,” once again NBS had a record year in 2024 with $517 million in gross revenue, $344 million in net revenue and $90 million in net income. Since being folded into Nelnet in 2005, NBS has created $2.7 billion in net revenue and $554 million in net income. In 2024 alone, we processed in excess of $50 billion in payments through our systems for nearly 1,000 colleges and universities and nearly 12,000 K–12 private schools in the United States and 675 schools in 69 countries internationally. One more stone, vast ripples ever-expanding. Our fourth stone cast was more recent in our investment in renewable energy, primarily through solar tax-equity financings and then in community and commercial solar construction. The tax-equity investments have created a series of ripples that we believe will generate attractive equity returns. However, it’s important to note that not all the stones we cast meet our expectations. The stone for our solar construction business, for example, hit the water without so much as a splash and quickly sank to the bottom of the pond—a notable swing and a miss as described in last year’s letter. At Nelnet, we’ve had a long- standing adage since our early days: “A dead fish does not smell better with age.” Staying true to our core value of open and honest communication, we will always provide updates on any mistakes we’ve made as well as the actions we’ve taken to quickly correct them. We have cast a couple more big stones in the form of strategic relationships with Hudl and ALLO. Both are doing extremely well, creating waves with all types of new products and services—reaching out into new markets. Both have created a significant amount of value, which we do not believe is truly represented in the market value of Nelnet. Below, I provide a detailed overview of the highs and lows for each of Nelnet’s business segments in 2024 and elaborate on the specific performance of our large Hudl and ALLO investments. Additionally, Executive Chairman of the Board Mike Dunlap offers his insight into Nelnet’s 2024 performance throughout the letter. Let’s make another turn of our skis down the mountain and head into my detailed review of the past year by business line. // Nelnet Financial Services We continue to mature and grow our financial services business outside of our legacy FFELP portfolio. 2024 saw dramatic volatility in prepayments on our FFELP portfolio; and although prepayments have slowed, there always remains political uncertainty in what we can expect going forward. Regardless, we continue to seek out and find strong holdings to be funded in and outside of our bank. In addition, we will continue to maximize the opportunity in FFELP as it reaches its end of life. Accordingly, we continue to strategically diversify our assets; although, you may have noticed this year that we recorded a significant allowance (and related provision expense) on our beneficial interest portfolio. Given the size of the provision expense recorded in 2024, I wanted to provide some color on the historical and forecasted returns of our non-student (consumer) loan beneficial interests. We made our first consumer loan purchases in 2017 via a partnership with private credit and have continued to grow our expertise ever since. In general, these loan purchases can be found in the beneficial interest portfolio on our balance sheet as we seek out term financing options for our loan purchases. Historically, term financing has occurred by contributing assets to the originator’s securitization shelf. We currently hold a stake in over 30 consumer deals representing almost $1.2 billion of loans. We have funded $363 million, received $264 million and currently forecast $198 million in future cash flows. Across the portfolio, we forecast an overall pre-tax internal rate of return (IRR) in the mid-teens. In addition, when we redeemed our FFELP GCO2 securitization prior to maturity, for book accounting purposes, we had a non-cash charge related to unamortized costs; however, we freed up approximately $50 million in trapped equity, allowing us to refinance the student loans stuck in the trust more efficiently. We plan on continuing the growth of our loan book via the replacement of our legacy FFELP portfolio on the Nelnet, Inc., balance sheet and the expansion of the bank.

2024 Letter to Shareholders | Page 4 Nelnet Bank continues to provide Nelnet with an opportunity to be a truly unique financial services company with our origination, payments, banking, servicing and acquisition capabilities. In 2024, we had a mix of success and tuition paid for lessons learned. Nelnet Bank absorbed all costs in 2024 compared to the three-year de novo period when Nelnet supplemented the operation. In addition, the consumer loan assumptions at Nelnet Bank were overly optimistic. We saw growth in our partnership with Buildertrend that officially launched in the home improvement space. On the other hand, we exited an origination relationship in consumer loans that did not meet performance targets. We successfully acquired multiple private student loan portfolios at attractive terms, growing our private student loan portfolio by around 30 percent inclusive of organic and inorganic originations. And lastly, we launched additional deposit programs that we believe will help us achieve our deposit goals that build upon our unique affiliate deposits in place today. We continue to see strong performance in our reinsurance strategy. Our team has done a nice job selecting strong partners and has entered treaties that we believe provide contractual protections against some of the larger concentrations of natural catastrophe risks we have seen over the past year. During 2024, our reinsurance portfolio was weighted to property, in which underwriting gains are realized in a relatively brief period compared to casualty risks. We continue to have confidence in our expectations for the casualty portion of our book but recognize the forward-looking uncertainty inherent to insurance. We will continue to opportunistically consider reinsurance prospects that provide what we think is an accretive risk and return profile. Our real estate team continues to find opportunities to grow our real estate portfolio. We have taken a majority limited partner position, which means we have influence and protective rights over items such as annual budget and buy/sell/refinance decisions. We partner with groups that have either asset or geographical expertise and allow them to run day-to-day operations. We are targeting net returns in the mid- to high-teens on an annual percentage basis and typically hold for three to seven years. However, we have no requirement to sell should a longer-term hold be more prudent. The current portfolio has approximately 45 separate developments with total equity of approximately $175 million. Whitetail Rock continues to provide a successful investment advisory service with total assets under management of over $3 billion. In addition, we have a significant bond portfolio, where we have some of our underinvested equity that we manage first for liquidity and second for excess yield where we have a competitive or strategic advantage. Below is a summary of NFS’s net income (in millions): 2024 2023 Portfolio (referred to as Asset Generation and Management) $57.2 $61.3 Nelnet Bank ($1.4) ($0.2) Nelnet Insurance Services $8.6 $3.1 Real Estate ($2.5) $0 Whitetail Rock Capital Management $3.7 $4.3 Bond Portfolio / Notes Receivable $32.2 $30.8 Total NFS $97.8 $99.3 M ik e's N o te s Executive Chairman of the Board The NFS team is doing a remarkable job diversifying the business and taking advantage of opportunistic situations.

2024 Letter to Shareholders | Page 5 // Nelnet Diversified Services There is never a dull moment in student loan servicing, especially as it relates to our contract with the federal government. This year was no exception. During the Biden administration’s final year, they threw every ounce of remaining caution to the wind and went full force to discharge as many categories of loans as possible using their interpretation of existing authorities including income contingent repayment authority, borrower defense to repayment and even another attempt at broad forgiveness. Unsurprisingly, Republican-led states challenged the legality of many of the administration’s forgiveness actions, with court rulings leading to repayment starts and stops that will likely continue into next year. We also endured the ending of the near-constant volatility of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) forbearance. The chaos and confusion sowed by the use of executive action, followed by legal challenges and court rulings, have left millions of borrowers and constituents confused, befuddled and angry. For example, the Biden administration’s Saving on a Valuable Education (SAVE) Plan was stalled, placing millions into forbearance, and remains in limbo until Congress or the new administration takes action to repeal it fully. And with Congress unable to pass a full-year funding bill for the fiscal year that would have started in October 2024, we await the fate of contract funding, which will likely require us to remain nimble. At the same time, our legacy servicing contract with the Department of Education came to an end and we went live under the new Unified Servicing and Data Solution (USDS) servicing contract in April. This contract came with a host of new requirements, technology advancements, service metrics and a decrease in revenue per borrower compared with the legacy contract. This required us to make some large technology investments and personnel restructuring, resulting in what I would describe as a retrench and retooling year to benefit the future. The decrease in revenue per borrower and the investments and restructuring changes (mainly as we retired old systems) dropped the earnings in the division down to $31 million from $59 million in 2023. It will take us some time to rebuild some of those earnings in the business. We plan to get there through growth in the consumer and private loan servicing portion of the business and through efficiencies gained through technology advancements driven by artificial intelligence. // Nelnet Business Services 2024 was a milestone year for Nelnet Business Services, marked by meaningful impacts and exceptional achievements. The financial performance in NBS in 2024 was nothing short of outstanding, achieving record milestones including processing over $50 billion in payments through our systems and generating over half a billion in gross revenue for the first time and $90 million in net income. At our core, we remained focused on our mission of “making educational dreams possible through service and technology.” Through spreading ripples with a robust offering of products and services—serving pre-kindergarten through graduate school—we empowered millions of students and staff. We helped millions of students afford an education that will change their lives. M ik e's N o te s The NDS leaders are the most resilient, toughest management team I have ever seen run our servicing business. They face whatever the world throws at them with a smile and can-do attitude. I get asked a lot why we like this highly erratic business. We have been in this business for 46 years and have been able to navigate through many different political ideologies, which makes us the most experienced and largest servicer of student loans in the world. We leverage our expertise in FFELP, government, private student loans and consumer loans to grow our servicing and financing of assets. There are thousands of new companies being started in artificial intelligence. We don’t have that competitive problem, but we do have the opportunity to apply AI to our business processes to provide a higher level of quality, convenience and efficiency, which we are doing aggressively.

2024 Letter to Shareholders | Page 6 We also further expanded the reach of our FACTS brand to elevate education opportunities in new industries, helping to facilitate continued learning and development for businesses and faith communities. Through our Nelnet Campus Commerce products, we continued to strengthen our commitment to higher education through the retention of key customers and the introduction of an online community to enhance connections with and among higher education professionals. Even in the midst of changes, our associates remained focused on delivering an outstanding experience for the institutions and organizations we serve. This customer focus, paired with our ongoing investment in the functionality and security of our technology solutions, has enabled us to consistently earn top- tier Net Promoter Scores, ranging from 75 to 84 across our core markets, while maintaining industry-leading client retention rates exceeding 97 percent. Like many technology companies, NBS is harnessing the power of AI to enhance our products and customer service. We believe AI will enhance personalized learning experiences for students and drive operational efficiencies that empower our customers to focus on what matters most—educating their students and staff. We are confident that our financial strength, tossing new rocks in the form of investment in our technologies and commitment to service will enable NBS to continue to create a ripple of impact by making educational dreams come true for people around the world. // ALLO Once again, ALLO saw record growth in customers and fiber passings (locations where fiber is available but not yet connected) in 2024. Almost 30,000 customers (25 percent growth) and 189,000 passings (43 percent growth) were added. With the rapid growth, ALLO's safety culture remained very strong as did the organization's core values—exceptional, local, hassle-free and honest. ALLO’s regional expansion (rippling out into almost 50 markets) with an owned-franchise model made 2024 the lowest controllable churn experienced across each of its revenue streams—business/governmental and consumer. We believe demand for high-quality internet complemented by a full product set of cyber, voice and entertainment services provided the engine to achieve 50 percent market share across our first 316,000 passings. In this cohort, our market share is still growing at 5 percent per year. As total passings are now more than 626,000, we expect the opportunity to increase revenues through market share and wallet share is meaningful. The cash flows from these mature markets have enabled ALLO to complete two asset-backed securitizations, making meaningful progress to a self-funded state. As the attractive non-fiber markets are decreasing rapidly, ALLO expects construction and capital expenditures will trend downward over the next few years. The operational scale and customer service excellence of ALLO will be even more valuable in the future as cash flows increase. Nelnet continues to work with ALLO and SDC, a digital infrastructure investor and ALLO member, to explore various funding and capital options to support ALLO’s growth. As we start 2025, our 10th year as an ALLO owner, we have accomplished most of our goals with ALLO including creating value, serving ALLO's communities with incredible products and services and providing an outstanding working environment for their team. In fact, run-rate revenue increased from $15 million in 2015 to more than $200 million at the end of 2024. The opportunities in the future are vast including acquisitions, some regional expansion and continuing to increase market share and cash flow across ALLO’s existing markets. Headwinds include the ever-changing video segment, expected competition from fixed wireless and the threat of cybersecurity issues to ALLO and its customers. While cyber protection is becoming a meaningful revenue source, the technology continues to evolve. M ik e's N o te s 2024 had a number of one-time earnings opportunities (Covid education money) and a lot of wind at our back that we do not anticipate will be there in 2025. However, you can see what a great business the NBS team has built over the last two decades since we acquired FACTS Management Co., with $20 million in revenue and $5 million in EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) in 2005.

2024 Letter to Shareholders | Page 7 // Hudl As a reminder to our shareholders, we have preferred equity ownership interests of approximately 22 percent in Hudl, a vertical market software-as-a-service company that powers the most important workflows in sports. The company serves the entire sports ecosystem—coaches, administrators, analysts, athletes, recruiters, fans, parents and brands—at every level of play. Hudl is the industry-standard solution, like Procore is for construction management, AppFolio is for property management or Shopify is for e-commerce. Almost 19 years ago, Hudl threw its first rock into the sports technology pond—a video analysis platform developed by three recent University of Nebraska-Lincoln graduates. Their initial splash began with the Huskers college football team, but the ripples quickly expanded when former head coach Bill Callahan took the solution to the New York Jets the following season. What started as a collegiate and professional tool began making waves in the high school market. Hudl realized the impact it could have on these customers and launched an end-to-end solution for high school American football teams. As Hudl’s customer base in football grew to over 90 percent market share, they were able to drop other rocks in the pond—providing tools for new workflows and new sports. This rippled out to launching school-wide Athletic Department Packages and a solution focused on club sports. This success in high school also led to Hudl re-entering the college and professional sports market (or “Elite,” as Hudl terms it). In 2015, they dropped their biggest rock to date with the acquisition of Sportstec, a public company based in Australia. Additional acquisitions and research and development investments added more rocks that continued to ripple out into the Elite market, growing the business unit to match the size of Hudl’s high school and club sports business (or “Competitive,” as Hudl terms it). Looking ahead, Hudl is continuing to benefit from those ripple effects. In 2024, the company acquired Statsbomb, combining their advanced soccer and football analytics, visualizations and tracking data with Hudl and Wyscout’s databases of video. They were also able to expand their offerings to include high school content. Meanwhile, both the Hudl streaming service (Hudl TV) and ticketing solution continue to grow at impressive rates. More than 10,000 organizations streamed games or ticketed their events through Hudl last year. Hudl also launched new tools to help teams and clubs better manage communication and scheduling with parents and athletes. They plan to expand this to handle even more use cases over the next couple of years. As anyone who has children playing club sports can relate to, keeping track of games and practices, managing tickets, sharing locations and everything else that goes with being your child’s “agent” is a clunky process that involves a lot of different apps and a lot of confusion. Hudl sees a big opportunity to improve that workflow. The ripples that have spread from their video and data products grow bigger with the Hudl’s hardware ecosystem. Their network of connected cameras and wearables work together to make gathering the data and video that teams need frictionless. This will continue to ripple out and feed the Hudl’s library of content, automate the live streaming process for administrators and make sure that every athlete can get noticed. Hudl has now grown to serve more than 300,000 teams across more than 40 sports in 180 countries including serving content to more than 85 million parents and fans. We continue to be incredibly bullish on Hudl and the company’s ability to both grow within the markets it serves and to expand its total addressable market through new solutions, platform extensions and continued merger and acquisition activities. Hudl may very well be one of Nelnet’s most profound stones cast to date. The ripple effect of the ALLO brand continues to be very strong, and we expect ALLO to again achieve record customer growth and profitability metrics.

2024 Letter to Shareholders | Page 8 Capital Deployment by Year (in millions) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total FFELP loan/residual acquisitions, net of financing $140 - - $105 $71 $141 $39 $49 - - $545 Private and consumer loan/residual acquisitions, net of financing $173 $61 $75 $188 $61 $71 $143 $269 $501 $444 $1,986 Business acquisitions - - - $153 - $30 - $34 - - $217 ALLO acquisition, capital expenditures, and equity $47 $39 $115 $87 $45 $48 - $48 $8 $53 $490 Other capital expenditures (non-ALLO) $17 $29 $41 $38 $48 $65 $59 $59 $74 $21 $451 Nelnet Bank - - - - - $100 - $30 $5 $37 $172 Hudl $41 - $10 - - $26 $5 - $32 $3 $117 Other investments (including ABS/real estate/solar, net) $53 $22 $19 $67 $103 $396 $726 $667 ($171) $424 $2,306 Debt repurchases $42 $77 $181 $13 - $26 $407 $67 $5 $8 $826 Stock repurchases $96 $69 $69 $45 $40 $73 $58 $98 $28 $83 $659 Dividends $19 $21 $24 $27 $29 $32 $34 $37 $39 $41 $303 $628 $318 $534 $723 $397 $1,008 $1,471 $1,358 $521 $1,114 $8,072 // A Message from Executive Chairman of the Board, Mike Dunlap Our goal is for each Nelnet shareholder to record a gain or loss in market value proportional to the gain or loss in per-share fundamental (intrinsic) value recorded by the company. To achieve this goal, we strive to maintain a one-to-one relationship between the company’s fundamental value and market. As that implies, we would rather see Nelnet’s stock price at a fair level than at an artificial level. Our fair value approach may not be preferred by all investors, but we believe it aligns with Nelnet’s long-term approach to both our business model and market value. However, from time to time Mrs./Mr. Market can be irrational and will materially overvalue or undervalue the investments they currently love or hate. Short term Mrs./Mr. Market is a voting machine, long-term the market is a weighing machine. Nelnet Renewable Energy (NRE) If I were to rank my favorite pies, the order would be simple: apple, cherry and then pumpkin. One pie I could do without, however, is humble pie. Unfortunately, for the second year running, that’s exactly what I’m eating—humble pie that tastes like the overcooked Brussels sprouts and canned asparagus my mom served me as a child (long before chefs made Brussels sprouts delicious). NRE, our solar construction business, has once again drained resources. After $34 million in net losses (excluding losses attributed to our minority partners) which includes $21 million ($16 million after tax) in goodwill and intangible assets write-offs in 2023, I optimistically thought the worst was behind us. But 2024 presented continued challenges including shutting down the residential side of the business, inventory write-downs, construction issues, bad estimates and inflation, amounting to an additional $26 million in net losses. Venturing beyond your circle of competence rarely ends well. However, we’ve built a strong team, with a new chief financial officer, chief operating officer and chief executive officer, who now have 15 months of experience in those roles (compared to less than three months at this time last year). The team's focus on operational excellence and sound planning in 2024 is already starting to reap benefits as newer projects are being completed substantially on time and on budget with improved safety, quality and efficiency.

2024 Letter to Shareholders | Page 9 Jay Dunlap, Former President and Chief Executive Officer of Union Bank and Trust I was lucky to have the opportunity to work with my dad, Jay Dunlap, over the last 42 years; he died in January 2025 at the age of 94. I learned a lot of lessons on how to run a successful business, risk and return, the value of having a positive attitude, survival and some lessons on what not to do. (He was terrifying with a chainsaw and a car; we all learned how not to drive the way he drove.) He lived through the Great Depression, World War II, served in the Navy during the Korean War, witnessed a presidential resignation and experienced countless other calamities. Consequently, when it came to the state of the world and politics, he always remarked that people often believe the sky is falling; however, things are always better than people think they are, and the sun will come up tomorrow. Nelnet’s core values of customer first, create a great working environment for associates, diversify your income streams, open communication and give back to the community came straight from him. After working in banking for approximately 60 years, here is a list of his key insights on how to run a financial business: 1. Always put the customer first and keep in balance the needs of the customer, the associate, the community and the stockholder. 2. Remember in finance the risk lies in the lending portfolio. 3. Manage the bank like you are watching a pot that is boiling. If the pot boils over in some area, pay attention to that area. Otherwise, let the division heads run their division as they see fit. Manage division heads by their results. 4. Be a “servant leader.” You are here as much to serve as you are to lead. 5. Be willing to make the tough decision. Any decision is better than no decision. Even if you make a poor decision, you can correct your course of action; but indecision gets you nowhere. 6. We are a bottom-line-driven company; we are in business to make money, and we do not apologize for that fact. A healthy growing company that is profitable is the best way to protect the people that you work with. 7. Give back to the community because you want to and because it is the right thing to do, not because you feel obligated to give back. 8. If it isn’t ethical, don’t do it, no matter how many of your peers maybe doing it. 9. If you are making a deal, make it a win/win, not a win/lose. That will ensure that everyone will feel like they were treated fairly. 10. Listen to your gut instinct; it is usually correct. If something about a loan doesn’t smell right, then don’t approve the loan. 11. Integrity and trust must never be compromised; once lost, they are never regained. 12. Always look to the future and try to anticipate what is coming. 13. In times of adversity there is great opportunity; that opportunity must be seized quickly before the window of opportunity closes. 14. Show people you care. 15. Be open and show associates any financial information they want to see. 16. Diversify, diversify, diversify. The more diverse your revenue stream, the stronger your company will be. 17. He who holds the gold rules. The owner has the final say on any major decisions. 18. Never bet the bank. You can make a lot of wrong decisions as long as you do not make a decision that is so large it can bring your company down. Keep the size of your decision relative to the size of your organization. 19. The first loss is your least loss. In other words, when you have a problem loan, don’t hold on with the expectation you will collect more if you wait. Get on top of the loan, get it out of the bank, and take your loss. 20. Bad loans are made in good times. 21. Every decision is a people decision. Absolutely everything comes down to people. 22. Nobody is irreplaceable, including you. 23. Have fun at work. Don’t take everything too seriously; life is to be enjoyed. 24. Keep your priorities straight—God, family, friends and work—in that order. 25. It is never as good as you think in good times and never as bad as you think in bad times.

2024 Letter to Shareholders | Page 10 My brother-in-law and his brothers are farmers. After their crops got completely destroyed by hail one year, my dad told them, “All days are good, some are better than others.” He always had a positive outlook no matter the economic, political or personal environment. When he had chemo for colon cancer, he described it like going to the spa: they give you a warm blanket, you can listen to music or watch TV—very relaxing, no complaints. When I was 10, my sister Suzie died of cancer, and my dad said, "Yes, we will grieve, but life is for the living, and we all need to live a joy-filled life.” During the depths of the financial crisis, Jeff and I went to see my dad with our heads hanging low. He said, “Business is a game; lift your heads up, get back in there and compete.“ As the ripples Jeff describes continue into the future, we will work hard to create memories and have fun while focusing on our customers, creating an awesome work environment for our associates, diversifying, communicating openly and giving back to our communities while keeping in balance the customer, associate, community and shareholder to create long-term returns for all of our stakeholders. My dad will be missed. A large moat still exists around most of our core businesses, and I would argue that the moat is ever expanding as we stick to our core values and grow these businesses with a long-term horizon. We are sitting on a relatively large amount of liquid capital. Think of us holding a handful of different-sized stones and pebbles that we intend to throw into the business pond. We will be making small bets, medium-sized bets and potentially some bigger bets. We make those bets when we believe we have a great idea, product or service; a real competitive advantage; and the odds of success are in our favor. We anticipate the biggest bet for 2025 is our approach to consumer lending within NFS. Look to see us originating more assets and acquiring more assets in various consumer classes. This allows us to utilize the bank as the originator with a low cost of capital, along with Nelnet’s balance sheet and NDS as the servicer. My analogy: If we cast three stones into the pond at once and watch all of the ripples cross over each other, they will compound to the benefit of our shareholders. We acknowledge that some of these stone tosses will not work out, and when that happens, we will take quick action, appropriately manage any dead fish and correct our course of action. If our history is any indication, we have paid some expensive tuition, but we’ve made many more good decisions than bad. Our key objectives for 2025 are as follows: 1. Drive profitability and ensure effective capital deployment to meet long-term recurring revenue, defined net-income and return-on-equity (ROE) targets. 2. Strengthen our core businesses by enhancing customer satisfaction, expanding markets and diversifying product offerings. 3. Integrate NFS, Nelnet Bank and NDS corporate initiatives to drive asset growth. 4. Continue to build an engaged workforce by enhancing the work environment, benefits offerings and talent development. 5. Modernize and streamline our technology platforms to improve scalability, efficiency, resiliency and cybersecurity. We are very encouraged with our market position and the opportunities we have in front of us in 2025. Thank you for your continued trust and investment in Nelnet. Dream. Learn. Grow. // Closing | Jeffrey Noordhoek, Chief Executive Officer

2024 Letter to Shareholders | Page 11 Carine Strom Clark Matthew Dunlap Nelnet Board of Directors Michael Dunlap Preeta Bansal Kathleen Farrell David Graff Thomas Henning Kimberly Rath Nelnet Bank Board of Directors Michael Dunlap Timothy Tewes Connie Edmond Anthony Goins Crawford Cragun Jaime Pack Andrea Moss Adam Peterson Jona Van Deun

2024 Letter to Shareholders | Page 12 Forward-Looking and Cautionary Statements This letter to shareholders 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,” “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 letter 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 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 FFEL Program, private education, consumer, and other loans, or investment interests therein, and initiatives to purchase additional FFEL Program, 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; uncertainties inherent in forecasting future cash flows from student loan assets, including investment interests therein, and related asset-backed securitizations; risks related to use of artificial intelligence; 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 expected benefits to the company from its continuing investment in ALLO and Hudl, and risks related to solar tax equity investments, including risks of not being able to realize tax credits which remain subject to recapture by taxing authorities; risks and uncertainties related to other initiatives to pursue additional strategic investments (and anticipated income therefrom), including venture capital and real estate investments, reinsurance, acquisitions, solar construction, and other activities (including risks associated with errors that occasionally occur in converting loan servicing portfolios to a new servicing platform), 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 and maintaining compliance with the extensive regulatory requirements applicable to the company's businesses, including changes to the regulatory environment from the change in presidential administration, 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 SEC, including the most recent Form 10-K filed by the company with the SEC. All forward-looking statements in this letter are as of the date of this letter. 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.


121 South 13th Street, Suite 100
Lincoln,	Nebraska	68508
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, Par Value $0.01 per Share	NNI	New York Stock Exchange


Exhibit No.						Description

99.1						Press Release dated February 27, 2025 - "Nelnet Reports Fourth Quarter 2024 Results"

99.2						Supplemental Financial Information for the Quarter Ended December 31, 2024

99.3						2024 Letter to Shareholders from the Chief Executive Officer

104						Cover Page Interactive Data File (formatted as Inline XBRL and included as Exhibit 101).