nni-20251106
0001258602false00012586022025-11-062025-11-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 6, 2025
Nelnet_Logo_color.jpg
NELNET, INC.
(Exact name of registrant as specified in its charter)
Nebraska001-3192484-0748903
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
121 South 13th Street, Suite 100
Lincoln,Nebraska68508
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code (402) 458-2370
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A Common Stock, Par Value $0.01 per ShareNNINew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company    ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                        ☐


Item 2.02 Results of Operations and Financial Condition.
On November 6, 2025, Nelnet, Inc. (the “Company”) issued a press release with respect to its financial results for the quarter ended September 30, 2025. A copy of the press release is furnished as Exhibit 99.1 to this report. In addition, a copy of the supplemental financial information for the quarter ended September 30, 2025, which was made available on the Company's website at www.nelnetinvestors.com on November 6, 2025 in connection with the press release, is furnished as Exhibit 99.2 to this report.
The above information and Exhibits 99.1 and 99.2 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), nor shall such information and Exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. In addition, information on the Company's website is not incorporated by reference into this report and should not be considered part of this report.
Certain statements contained in the exhibits furnished with this report may be considered forward looking in nature and are subject to various risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company's actual results may vary materially from those anticipated, estimated, or expected. Among the key risks and uncertainties that may have a direct bearing on the Company's future operating results, performance, or financial condition expressed or implied by the forward-looking statements are the matters discussed in the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 27, 2025 and the Company's Quarterly Report on Form 10-Q for the three months ended September 30, 2025 filed with the SEC on November 6, 2025. Although the Company may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
Item 9.01 Financial Statements and Exhibits.
(d)    Exhibits. The following exhibits are furnished as part of this report:
Exhibit
No.
Description
99.1
99.2
104Cover Page Interactive Data File (formatted as Inline XBRL and included as Exhibit 101).





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 6, 2025
NELNET, INC.
By:    /s/ JAMES D. KRUGER
Name:    James D. Kruger
Title:    Chief Financial Officer




Nelnet Reports Third Quarter 2025 Results
LINCOLN, Neb., November 6, 2025 - Nelnet (NYSE: NNI) today reported GAAP net income of $106.7 million, or $2.94 per share, for the third quarter of 2025, compared with GAAP net income of $2.4 million, or $0.07 per share, for the same period a year ago.
Net income, excluding derivative market value adjustments1, was $107.3 million, or $2.95 per share, for the third quarter of 2025, compared with $12.4 million, or $0.34 per share, for the same period in 2024.
The third quarter 2025 operating results included the following items:
•Non-recurring revenue of $32.9 million ($25.0 million after tax or $0.69 per share) from the company's government servicing contract. Upon reaching a final agreement with the Department of Education, the company recognized revenue on a contract modification for services previously performed.
•A gain of $30.2 million ($23.0 million after tax or $0.63 per share) related to a partial redemption and increase in the remaining carrying value on a venture capital investment.
•The recognition of $28.9 million ($22.0 million after tax or $0.60 per share) of negative provision (that increased income) related to the reversal of allowance for loan losses on a portfolio of loans sold.
•Certain expense items of $20.1 million ($15.3 million after tax or $0.42 per share) related to a non-cash charge to write-off debt discount costs related to the repurchase of the company's own debt ($8.3 million); continued losses in the company's solar construction business ($6.0 million); and a non-cash impairment charge on a solar development project ($5.8 million).
“Strong results this quarter were driven by ongoing strength across our core businesses in loan servicing, consumer lending, payments, and technology along with some one-time transactions that had a positive impact,” said Jeff Noordhoek, chief executive officer of Nelnet. “We remain focused on long-term value creation and see meaningful opportunities to invest in and grow these businesses. During the quarter, we repurchased shares at an attractive price and increased our dividend. We also plan to make a significant contribution to our foundation before the end of the year. Additionally, we were excited to announce our agreement to acquire Finastra’s Canadian student loan servicing business, which builds on our legacy of serving student loan borrowers and government partners in both the U.S. and Canada. We look forward to continuing their success.”
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 $44.7 million during the third quarter of 2025, compared with $38.4 million for the same period a year ago. The increase in 2025 was due to an increase in loan spread2, which was partially offset by the expected runoff of the Federal Family Education Loan Program (FFELP) loan portfolio. The average balance of loans outstanding decreased from $9.8 billion for the third quarter of 2024 to $8.8 billion for the same period in 2025.
AGM recognized a negative provision for loan losses in the third quarter of 2025 of $7.4 million ($5.6 million after tax) compared with provision expense of $12.0 million ($9.1 million after tax) for the same period in 2024. As discussed above, during the third quarter of 2025, the company sold $203.3 million of consumer loans and reduced its allowance (and recognized negative provision expense) of $28.9 million related to this loan sale.
In addition, during the third quarter of 2025, AGM recognized a loss of $8.3 million ($6.3 million after tax) from repurchasing $377.6 million of its own debt in the secondary market. As of September 30, 2025, the company holds $499.5 million (par value) of its own FFELP asset-backed securities. For accounting purposes, these notes are eliminated in consolidation and are not included in the company's consolidated financial statements. However, these securities remain legally outstanding at the trust level and may be sold to third parties or redeemed at par as the trust generates cash.
1 Net income, excluding derivative market value adjustments, is a non-GAAP measure. See "Non-GAAP Performance Measures" at the end of this press release and the "Non-GAAP Disclosures" section below for explanatory information and reconciliations of GAAP to non-GAAP financial information.

2 Loan spread represents the spread between the yield earned on loan assets and the costs of the liabilities used to fund the assets.


AGM recognized net income after tax of $27.8 million for the three months ended September 30, 2025, compared with a net loss of $12.4 million for the same period in 2024. In the third quarter of 2024, AGM recognized a loss of $9.5 million ($7.2 million after tax) related to changes in the fair value of derivative instruments that do not qualify for hedge accounting and a provision expense of $29.0 million ($22.0 million after tax) related to certain of the company's beneficial interest investments.
Nelnet Bank
As of September 30, 2025, Nelnet Bank had total assets of $2.00 billion that consisted of a $974.9 million and $1.01 billion loan and investment portfolio, respectively, and total deposits, including intercompany deposits, of $1.73 billion. Nelnet Bank reported loan and investment net interest income of $15.4 million during the third quarter of 2025, compared with $10.6 million for the same period a year ago. The increase in 2025 was due to an increase in the loan and investment portfolio, partially offset by a decrease in net interest margin.
Nelnet Bank recognized a provision for loan losses in the third quarter of 2025 of $3.8 million ($2.9 million after tax), compared with $6.1 million ($4.6 million after tax) in the third quarter of 2024.
Nelnet Bank recognized net income after tax for the quarter ended September 30, 2025 of $4.6 million, compared with a net loss of $3.6 million for the same period in 2024. In the third quarter of 2024, Nelnet Bank recognized a loss of $3.6 million ($2.7 million after tax) related to changes in the fair value of derivative instruments that do not qualify for hedge accounting
Loan Servicing and Systems
Revenue from the Loan Servicing and Systems segment was $151.1 million for the third quarter of 2025, compared with $108.2 million for the same period in 2024. The increase in revenue was due to the $32.9 million of non-recurring revenue from the government servicing contract as discussed above and an increase of private education loan servicing volume as a result of the conversion of Discover Financial Services and SoFi Lending Corp. loan portfolios during the fourth quarter of 2024 and first quarter of 2025. As of September 30, 2025, the company was servicing $508.7 billion in government-owned, FFELP, private education, and consumer loans for 14.2 million borrowers.
The Loan Servicing and Systems segment reported net income after tax of $35.2 million for the three months ended September 30, 2025, compared with a loss of $3.5 million for the same period in 2024. Net income in 2025 has been positively impacted in 2025 compared with 2024 due to an increase in revenue and a decrease in expenses obtained from strategic cost management activities including efficiencies achieved with technology and automation.
On October 23, 2025, the company announced that it entered into an agreement with DH Corporation, a wholly owned subsidiary of Finastra Holdings Limited (Finastra), to acquire Finastra’s Canadian student loan servicing business for approximately $93 million in cash. The transaction is expected to close in the first quarter of 2026, subject to customary closing conditions. Finastra’s Canadian student loan servicing business is the leading provider of student loan servicing solutions to governments and financial institutions in Canada providing technology enabled managed services across the loan lifecycle. The business currently services loans for 2.4 million borrowers on proprietary technology platforms.
Education Technology Services and Payments
For the third quarter of 2025, revenue from the Education Technology Services and Payments operating segment was $129.3 million, an increase from $118.2 million for the same period in 2024. Revenue less direct costs to provide services for the third quarter of 2025 was $79.0 million, compared with $72.9 million for the same period in 2024. Operating margin has decreased in 2025 compared with 2024 as the company continues to make investments to support the growth in the customer base and development of new technologies.
Net income after tax for the Education Technology Services and Payments segment was $19.0 million for the three months ended September 30, 2025, compared with $20.4 million for the same period in 2024.
Corporate Activities
The company has an investment in an unaffiliated third-party technology company. In August 2025, this technology company completed an equity raise and accepted tender offers to redeem existing equity holders with a portion of the proceeds. The company redeemed a portion of its investment and adjusted its carrying value of its remaining investment to reflect the August 2025 transaction value. As a result of this transaction, the company recognized a pre-tax gain of $30.2 million.
For the third quarter of 2025, the company reported a loss of $6.0 million ($4.6 million after tax) in its solar engineering, procurement, and construction (EPC) business. Since the acquisition of this business in 2022, it has incurred low and, in many


cases, negative margins on legacy projects. The company continues to recognize loss reserves that represent its estimate of costs it will incur to complete the remaining legacy contracts.
Share Repurchases
During the first nine months of 2025, the company has repurchased 439,895 Class A common shares for $53.1 million (average price of $120.69 per share), including a total of 217,850 Class A common shares for $27.3 million (average price of $125.19 per share) during the third quarter.
Board of Directors Declares Fourth Quarter Dividend
The Nelnet Board of Directors declared a fourth-quarter cash dividend on the company's outstanding shares of Class A common stock and Class B common stock of $0.33 per share. The dividend will be paid on December 15, 2025, to shareholders of record at the close of business on December 1, 2025.
The Nelnet Foundation was established to help us fulfill our core value of giving back to the communities where we live and work. Historically, Nelnet has contributed annually to the Foundation to support this mission. Due to recent tax law changes and strong operating performance in 2025, our Board of Directors has approved a contribution of up to $35 million to the Foundation. We expect this amount will cover our 2025 annual contribution as well as contributions for the foreseeable future. The full contribution will be expensed in the fourth quarter of 2025.
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 Hudl; risks related to the company's solar tax equity investments and solar construction business, including risks of not being able to realize tax credits which remain subject to recapture by taxing authorities and risks from the impact of the enactment of the One Big Beautiful Bill that accelerates the expiration and phase out of solar energy credits; risks and uncertainties related to other initiatives to pursue additional strategic investments (and anticipated income therefrom) including venture capital and real estate investments, reinsurance, acquisitions, 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 recent changes to the regulatory environment in the United States, 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 Income
(Dollars in thousands, except share data)
(unaudited)
Three months endedNine months ended
September 30, 2025June 30, 2025September 30, 2024September 30, 2025September 30, 2024
Interest income:
Loan interest$162,717 172,104 190,211 501,260 609,064 
Investment interest43,241 40,185 50,272 124,815 143,086 
Total interest income205,958 212,289 240,483 626,075 752,150 
Interest expense on bonds and notes payable and bank deposits120,708 132,854 168,328 378,677 539,367 
Net interest income85,250 79,435 72,155 247,398 212,783 
Less (negative provision) provision for loan losses(3,563)17,930 18,111 29,704 32,551 
Net interest income after provision for loan losses88,813 61,505 54,044 217,694 180,232 
Other income (expense):
Loan servicing and systems revenue151,052 120,724 108,175 392,517 344,428 
Education technology services and payments revenue129,321 118,184 118,179 394,836 378,627 
Reinsurance premiums earned23,165 26,112 16,619 73,964 44,250 
Solar construction revenue5,738 1,259 19,321 10,992 42,741 
Other, net35,730 22,976 15,706 82,401 33,807 
Loss on sale of loans, net(2,472)— (107)(1,562)(1,685)
Gain on partial redemption of ALLO investment— 175,044 — 175,044 — 
Derivative market value adjustments and derivative settlements, net(27)(3,122)(11,525)(8,728)1,378 
Total other income (expense), net342,507 461,177 266,368 1,119,464 843,546 
Cost of services and expenses:
Loan servicing contract fulfillment and acquisition costs2,021 1,845 196 5,500 392 
Cost to provide education technology services and payments50,363 39,844 45,273 138,254 134,106 
Cost to provide solar construction services7,607 14,050 26,815 29,485 49,115 
Total cost of services59,991 55,739 72,284 173,239 183,613 
Salaries and benefits144,778 134,699 146,192 417,700 429,701 
Depreciation and amortization7,327 7,624 13,661 24,206 45,572 
Reinsurance losses and underwriting expenses19,962 25,662 16,761 67,836 39,066 
Other expenses53,669 51,306 44,685 153,200 138,820 
Total operating expenses225,736 219,291 221,299 662,942 653,159 
Impairment expense and provision for beneficial interests9,145 10,288 29,052 21,024 36,865 
Total expenses294,872 285,318 322,635 857,205 873,637 
Income (loss) before income taxes136,448 237,364 (2,223)479,953 150,141 
Income tax (expense) benefit(35,773)(59,510)282 (120,294)(37,653)
Net income (loss)100,675 177,854 (1,941)359,659 112,488 
Net loss attributable to noncontrolling interests6,009 3,605 4,329 11,044 8,398 
Net income attributable to Nelnet, Inc.$106,684 181,459 2,388 370,703 120,886 
Earnings per common share:
Net income attributable to Nelnet, Inc. shareholders - basic and diluted$2.94 4.97 0.07 10.18 3.29 
Weighted average common shares outstanding - basic and diluted36,316,315 36,485,605 36,430,485 36,426,188 36,703,314 


Condensed Consolidated Balance Sheets
(Dollars in thousands)
(unaudited)
As ofAs ofAs of
September 30, 2025December 31, 2024September 30, 2024
Assets:
Loans and accrued interest receivable, net$10,227,261 9,992,744 10,572,881 
Cash, cash equivalents, and investments2,455,950 2,395,214 2,173,000 
Restricted cash550,371 736,502 679,334 
Goodwill and intangible assets, net189,783 194,357 196,400 
Other assets453,317 458,936 462,513 
Total assets$13,876,682 13,777,753 14,084,128 
Liabilities:
Bonds and notes payable$7,822,531 8,309,797 8,938,446 
Bank deposits1,476,765 1,186,131 1,070,758 
Other liabilities990,691 982,708 864,786 
Total liabilities10,289,987 10,478,636 10,873,990 
Equity:
Total Nelnet, Inc. shareholders' equity3,653,290 3,349,762 3,290,652 
Noncontrolling interests(66,595)(50,645)(80,514)
Total equity3,586,695 3,299,117 3,210,138 
Total liabilities and equity$13,876,682 13,777,753 14,084,128 

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 September 30,
20252024
GAAP net income attributable to Nelnet, Inc.$106,684 2,388 
Realized and unrealized derivative market value adjustments (a)788 13,165 
Tax effect (b)(189)(3,160)
Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments$107,283 12,393 
Earnings per share:
GAAP net income attributable to Nelnet, Inc.$2.94 0.07 
Realized and unrealized derivative market value adjustments (a)0.02 0.36 
Tax effect (b)(0.01)(0.09)
Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments$2.95 0.34 

(a)    "Derivative market value adjustments" includes both the realized portion of gains and losses (corresponding to variation margin received or paid on derivative instruments that are settled daily at a central clearinghouse) and the unrealized portion of gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP. "Derivative market value adjustments" does not include "derivative settlements" that represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the company's derivative instruments based on their contractual terms.
The accounting for derivatives requires that changes in the fair value of derivative instruments be recognized currently in earnings, with no fair value adjustment of the hedged item, unless specific hedge accounting criteria are met. Management has structured all of the company’s derivative transactions with the intent that each is economically effective; however, the majority of the company’s derivative instruments do not qualify for hedge accounting in the consolidated financial statements. As a result, the change in fair value for the derivative instruments that do not qualify for hedge accounting is reported in current period earnings with no consideration for the corresponding change in fair value of the hedged item. Under GAAP, the cumulative net realized and unrealized gain or loss caused by changes in fair values of derivatives in which the company plans to hold to maturity will generally equal zero over the life of the contract. However, the net realized and unrealized gain or loss during any given reporting period fluctuates significantly from period to period.
The company believes these point-in-time estimates of asset and liability values related to its derivative instruments that are subject to interest rate fluctuations are subject to volatility mostly due to timing and market factors beyond the control of management, and affect the period-to-period comparability of the results of operations. Accordingly, the company’s management utilizes operating results excluding these items for comparability purposes when making decisions regarding the company’s performance and in presentations with credit rating agencies, lenders, and investors
(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: November 6, 2025
Investor Contact: Phil Morgan, 402.458.3038
Nelnet, Inc. supplemental financial information for the third quarter 2025
(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 third quarter 2025 earnings, dated November 6, 2025, and the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (the "Q3 2025 10-Q Quarterly Report").
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” sections of the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report"), the Company's Q3 2025 10-Q Quarterly Report, and this 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 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, 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 Company's solar tax equity investments and solar construction business, including risks of not being able to realize tax credits which remain subject to recapture by taxing authorities and risks from the impact of the enactment of the One Big Beautiful Bill that accelerates the expiration and phase out of solar energy credits;
•risks and uncertainties related to other initiatives to pursue additional strategic investments (and anticipated income therefrom) including venture capital and real estate investments, reinsurance, acquisitions, 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 recent changes to the regulatory environment in the United States, 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.
1

Consolidated Statements of Income
(Dollars in thousands, except share data)
(unaudited)
Three months ended Nine months ended
September 30, 2025June 30, 2025September 30, 2024September 30, 2025September 30, 2024
Interest income:
Loan interest$162,717 172,104 190,211 501,260 609,064 
Investment interest43,241 40,185 50,272 124,815 143,086 
Total interest income205,958 212,289 240,483 626,075 752,150 
Interest expense on bonds and notes payable and bank deposits120,708 132,854 168,328 378,677 539,367 
Net interest income85,250 79,435 72,155 247,398 212,783 
Less (negative provision) provision for loan losses(3,563)17,930 18,111 29,704 32,551 
Net interest income after provision for loan losses88,813 61,505 54,044 217,694 180,232 
Other income (expense):
Loan servicing and systems revenue151,052 120,724 108,175 392,517 344,428 
Education technology services and payments revenue129,321 118,184 118,179 394,836 378,627 
Reinsurance premiums earned23,165 26,112 16,619 73,964 44,250 
Solar construction revenue5,738 1,259 19,321 10,992 42,741 
Other, net35,730 22,976 15,706 82,401 33,807 
Loss on sale of loans, net(2,472)— (107)(1,562)(1,685)
Gain on partial redemption of ALLO investment— 175,044 — 175,044 — 
Derivative settlements, net761 744 1,640 2,250 5,046 
Derivative market value adjustments, net(788)(3,866)(13,165)(10,978)(3,668)
Total other income (expense), net342,507 461,177 266,368 1,119,464 843,546 
Cost of services and expenses:
Loan servicing contract fulfillment and acquisition costs2,021 1,845 196 5,500 392 
Cost to provide education technology services and payments50,363 39,844 45,273 138,254 134,106 
Cost to provide solar construction services7,607 14,050 26,815 29,485 49,115 
Total cost of services59,991 55,739 72,284 173,239 183,613 
Salaries and benefits144,778 134,699 146,192 417,700 429,701 
Depreciation and amortization7,327 7,624 13,661 24,206 45,572 
Reinsurance losses and underwriting expenses19,962 25,662 16,761 67,836 39,066 
Other expenses53,669 51,306 44,685 153,200 138,820 
Total operating expenses225,736 219,291 221,299 662,942 653,159 
Impairment expense and provision for beneficial interests9,145 10,288 29,052 21,024 36,865 
Total expenses294,872 285,318 322,635 857,205 873,637 
Income (loss) before income taxes136,448 237,364 (2,223)479,953 150,141 
Income tax (expense) benefit(35,773)(59,510)282 (120,294)(37,653)
Net income (loss)100,675 177,854 (1,941)359,659 112,488 
Net loss attributable to noncontrolling interests6,009 3,605 4,329 11,044 8,398 
Net income attributable to Nelnet, Inc.$106,684 181,459 2,388 370,703 120,886 
Earnings per common share:
Net income attributable to Nelnet, Inc. shareholders - basic and diluted$2.94 4.97 0.07 10.18 3.29 
Weighted average common shares outstanding - basic and diluted
36,316,315 36,485,605 36,430,485 36,426,188 36,703,314 
2

Condensed Consolidated Balance Sheets
(Dollars in thousands)
(unaudited)
As ofAs ofAs of
September 30, 2025December 31, 2024September 30, 2024
Assets:
Loans and accrued interest receivable, net$10,227,261 9,992,744 10,572,881 
Cash, cash equivalents, and investments2,455,950 2,395,214 2,173,000 
Restricted cash550,371 736,502 679,334 
Goodwill and intangible assets, net189,783 194,357 196,400 
Other assets453,317 458,936 462,513 
Total assets$13,876,682 13,777,753 14,084,128 
Liabilities:
Bonds and notes payable$7,822,531 8,309,797 8,938,446 
Bank deposits1,476,765 1,186,131 1,070,758 
Other liabilities990,691 982,708 864,786 
Total liabilities10,289,987 10,478,636 10,873,990 
Equity:
Total Nelnet, Inc. shareholders' equity3,653,290 3,349,762 3,290,652 
Noncontrolling interests(66,595)(50,645)(80,514)
Total equity3,586,695 3,299,117 3,210,138 
Total liabilities and equity$13,876,682 13,777,753 14,084,128 

3

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). In the Nelnet Financial Services division, which includes the Asset Generation and Management and Nelnet Bank reportable operating segments, the Company is also actively expanding its private education, consumer, and other loan portfolios.
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 endedNine months ended
September 30, 2025June 30, 2025September 30, 2024September 30, 2025September 30, 2024
GAAP net income attributable to Nelnet, Inc.$106,684 181,459 2,388 370,703 120,886 
Realized and unrealized derivative market value adjustments (a)788 3,866 13,165 10,978 3,668 
Tax effect (b)(189)(928)(3,160)(2,635)(880)
Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments$107,283 184,397 12,393 379,046 123,674 
Earnings per share:
GAAP net income attributable to Nelnet, Inc.$2.94 4.97 0.07 10.18 3.29 
Realized and unrealized derivative market value adjustments (a)0.02 0.11 0.36 0.30 0.10 
Tax effect (b)(0.01)(0.03)(0.09)(0.07)(0.02)
Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments$2.95 5.05 0.34 10.41 3.37 
(a) "Derivative market value adjustments" includes both the realized portion of gains and losses (corresponding to variation margin received or paid on derivative instruments that are settled daily at a central clearinghouse) and the unrealized portion of gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP. "Derivative market value adjustments" does not include "derivative settlements" that represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the Company's derivative instruments based on their contractual terms.
The accounting for derivatives requires that changes in the fair value of derivative instruments be recognized currently in earnings, with no fair value adjustment of the hedged item, unless specific hedge accounting criteria are met. Management has structured all of the Company’s derivative transactions with the intent that each is economically effective; however, the majority of the Company’s derivative instruments do not qualify for hedge accounting in the consolidated financial statements. As a result, the change in fair value for the derivative instruments that do not qualify for hedge accounting is reported in current period earnings with no consideration for the corresponding change in fair value of the hedged item. Under GAAP, the cumulative net realized and unrealized gain or loss caused by changes in fair values of derivatives in which the Company plans to hold to maturity will generally equal zero over the life of the contract. However, the net realized and unrealized gain or loss during any given reporting period fluctuates significantly from period to period.
The Company believes these point-in-time estimates of asset and liability values related to its derivative instruments that are subject to interest rate fluctuations are subject to volatility mostly due to timing and market factors beyond the control of management, and affect the period-to-period comparability of the results of operations. Accordingly, the Company’s management utilizes operating results excluding these items for comparability purposes when making decisions regarding the Company’s performance and in presentations with credit rating agencies, lenders, and investors. Consequently, the Company reports this non-GAAP information because the Company believes that it provides additional information regarding operational and performance indicators that are closely assessed by management and represents what earnings would have been had these derivatives qualified for hedge accounting. There is no comprehensive, authoritative guidance for the presentation of such non-GAAP information, which is only meant to supplement GAAP results by providing additional information that management utilizes to assess performance.
(b) The tax effects are calculated by multiplying the realized and unrealized derivative market value adjustments by the applicable statutory income tax rate.
4

Operating Segments
The Company's reportable operating segments are described in note 1 of the notes to consolidated financial statements included in the 2024 Annual Report. They 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. Other operating segments included in the NFS division include the Company's U.S. Securities and Exchange Commission (SEC)-registered investment advisor subsidiary (Whitetail Rock Capital Management LLC or "WRCM"), property and casualty reinsurance activities, investment activities in real estate, and investments in investment debt securities (primarily student loan and other asset-backed securities).
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 also includes interest income earned on cash balances held at the corporate level and interest expense incurred on unsecured corporate related debt transactions, certain investment activities including its investment in ALLO, early-stage and emerging growth companies (venture capital investments), solar tax equity investments, the operating results of the Company's solar engineering, procurement, and construction business, and certain shared service activities that are allocated to each operating segment based on estimated use of such activities and services. In addition, Corporate includes corporate costs and overhead functions not allocated to operating segments, including executive management, investments in innovation, and other holding company organizational costs.
The information below presents the operating results (net income (loss) before taxes) for each of the Company's reportable and certain other operating segments.
Three months endedNine months ended
September 30, 2025June 30, 2025September 30, 2024September 30, 2025September 30, 2024
NDS$46,270 19,959 (4,549)84,741 13,686 
NBS24,957 23,542 26,813 95,963 100,046 
Nelnet Financial Services division:
AGM36,621 27,393 (16,346)93,848 41,710 
Nelnet Bank6,088 (465)(4,758)7,573 (7,330)
WRCM1,933 1,413 1,276 4,726 4,033 
Nelnet Insurance Services4,061 (31)944 7,268 7,925 
Real estate investments1,513 108 1,865 (429)(2,223)
Investment securities12,936 8,601 9,953 29,031 34,590 
Corporate:
Unallocated corporate costs(9,909)(11,923)(10,287)(31,819)(29,389)
Solar tax equity investments(15,497)(1,892)(8,509)(16,184)(8,775)
Nelnet Renewable Energy - solar construction(6,025)(17,601)(10,125)(30,201)(18,913)
ALLO investment1,137 185,236 6,606 194,789 1,953 
Venture capital investments33,520 1,340 2,136 39,080 4,848 
Other corporate activities(1,268)1,586 2,756 1,263 7,981 
Eliminations/reclassifications112 96 — 304 — 
Net income before taxes136,448 237,364 (2,223)479,953 150,141 
Income tax (expense) benefit(35,773)(59,510)282 (120,294)(37,653)
Net loss attributable to noncontrolling interests6,009 3,605 4,329 11,044 8,398 
Net income$106,684 181,459 2,388 370,703 120,886 
5

2025 Operating Highlights
Certain transactions have impacted the Company's operating results in 2025. These transactions are summarized below.
Partial Redemption of ALLO Investment
Nelnet had both voting and preferred membership interest investments in ALLO. On June 4, 2025, Nelnet redeemed a portion of its voting membership interests in ALLO and all its outstanding preferred membership interests, including the preferred return accrued on such membership interests through June 3, 2025. The Company received cash proceeds of $410.9 million from ALLO and recognized a pre-tax gain of $175.0 million as a result of this transaction.
Government Servicing Contract
Upon reaching a final agreement with the Department, the Company's Loan Servicing and Systems operating segment (NDS) recognized $32.9 million of non-recurring revenue in the third quarter 2025 on a contract modification for services previously performed.
Sale of Consumer Loans - Reversal of Allowance
During the third quarter of 2025, the Company's AGM operating segment sold $203.3 million of consumer loans to an unrelated third party who securitized such loans. As partial consideration received for the loans sold, the Company received a residual interest in the loan securitization that is included in "other investments and notes receivable, net" on the Company's consolidated balance sheet. Once a loan is classified as held for sale, any allowance for loan losses that existed immediately prior to the reclassification to held for sale is reversed. During the third quarter of 2025, the Company reduced its allowance (and recognized negative provision expense) of $28.9 million (that increased income) related to this loan sale.
Venture Capital Investment
The Company has an investment in an unaffiliated third-party technology company (the “Investee”). On August 11, 2025, the Investee completed an additional equity raise and accepted tender offers to redeem existing equity holders with a portion of the proceeds. The Company redeemed a portion of its investment and received cash proceeds of $10.1 million and recognized a pre-tax gain of $7.8 million. The Company accounts for its investment in the Investee using the measurement alternative method, which requires it to adjust its carrying value of the investment for changes resulting from observable market transactions. As a result of the Investee’s equity raise, the Company recognized a pre-tax gain of $22.4 million during the third quarter of 2025 to adjust its carrying value of its remaining investment in the Investee to reflect the August 2025 transaction value.
Recent Developments
Canadian Student Loan Servicing Acquisition
On October 23, 2025, the Company announced that it entered into a definitive and binding purchase agreement with DH Corporation, a wholly owned subsidiary of Finastra Holdings Limited (“Finastra”), pursuant to which Nelnet Canada, Inc., a wholly owned subsidiary of the Company, will acquire Finastra’s Canadian student loan servicing business for a purchase price of approximately $93 million in cash. The transaction is expected to close in the first calendar quarter of 2026, subject to customary closing conditions.
Finastra’s Canadian student loan servicing business is the leading provider of student loan servicing solutions to governments and financial institutions in Canada providing technology enabled managed services across the loan lifecycle. The business currently services loans for 2.4 million borrowers on proprietary technology platforms. The operating results of this acquisition will be included in the Loan Servicing and Systems reportable operating segment following the closing of the transaction.
Nelnet Foundation
The Nelnet Foundation was established to help the Company fulfill its core value of giving back to the communities where we live and work. Historically, the Company has contributed annually to the Foundation to support this mission. Due to recent tax law changes and strong operating performance in 2025, the Company’s Board of Directors has approved a contribution of up to $35 million to the Foundation. The Company expects this amount will cover its 2025 annual contribution as well as contributions for the foreseeable future. The full contribution will be expensed in the fourth quarter of 2025.
6

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 September 30, 2025
Reportable SegmentsReconciling Items
Loan Servicing and Systems (LSS)Education Technology Services and Payments (ETSP)Asset
Generation and
Management		Nelnet BankTotal Reportable SegmentsNFS Other Operating SegmentsCorporate and Other ActivitiesEliminations/ ReclassificationsTotal
Interest income:
Loan interest$— — 145,984 16,733 162,717 — — — 162,717 
Investment interest531 8,564 12,051 14,849 35,995 14,985 3,134 (10,872)43,241 
Total interest income531 8,564 158,035 31,582 198,712 14,985 3,134 (10,872)205,958 
Interest expense— — 113,350 16,179 129,529 1,359 692 (10,872)120,708 
Net interest income531 8,564 44,685 15,403 69,183 13,626 2,442 — 85,250 
Less (negative provision) provision for loan losses— — (7,374)3,811 (3,563)— — — (3,563)
Net interest income after provision for loan losses531 8,564 52,059 11,592 72,746 13,626 2,442 — 88,813 
Other income (expense):
LSS revenue151,052 — — — 151,052 — — — 151,052 
ETSP revenue— 129,321 — — 129,321 — — — 129,321 
Intersegment revenue5,313 70 — — 5,383 — — (5,383)— 
Reinsurance premiums earned— — — — — 23,165 — — 23,165 
Solar construction revenue— — — — — — 5,738 — 5,738 
Other, net105 — 195 1,308 1,608 5,674 28,336 112 35,730 
Loss on sale of loans, net— — (2,472)— (2,472)— — — (2,472)
Gain on partial redemption of ALLO investment— — — — — — — — — 
Derivative settlements, net— — 594 167 761 — — — 761 
Derivative market value adjustments, net— — (461)(327)(788)— — — (788)
Total other income (expense), net156,470 129,391 (2,144)1,148 284,865 28,839 34,074 (5,271)342,507 
Cost of services and expenses:
Total cost of services2,021 50,363 — — 52,384 — 7,607 — 59,991 
Salaries and benefits70,126 43,029 1,971 2,817 117,943 668 26,193 (26)144,778 
Depreciation and amortization1,725 2,504 — 355 4,584 — 2,743 — 7,327 
Reinsurance losses and underwriting expenses— — — — — 19,962 — — 19,962 
Postage expense8,735 8,735 (8,735)— 
Servicing fees6,687 838 7,525 (7,525)— 
Other expenses10,862 9,537 1,243 1,916 23,558 1,103 17,901 11,107 53,669 
Intersegment expenses, net17,262 6,420 1,248 726 25,656 289 (25,741)(204)— 
Total operating expenses108,710 61,490 11,149 6,652 188,001 22,022 21,096 (5,383)225,736 
Impairment expense and provision for beneficial interests— 1,145 2,145 — 3,290 — 5,855 — 9,145 
Total expenses110,731 112,998 13,294 6,652 243,675 22,022 34,558 (5,383)294,872 
Income (loss) before income taxes46,270 24,957 36,621 6,088 113,936 20,443 1,958 112 136,448 
Income tax (expense) benefit(11,105)(5,990)(8,783)(1,483)(27,361)(4,866)(3,547)— (35,773)
Net income (loss)35,165 18,967 27,838 4,605 86,575 15,577 (1,589)112 100,675 
Net (income) loss attributable to noncontrolling interests— — (27)— (27)(169)6,317 (112)6,009 
Net income (loss) attributable to Nelnet, Inc.$35,165 18,967 27,811 4,605 86,548 15,408 4,728 — 106,684 



7

Three months ended June 30, 2025
Reportable SegmentsReconciling Items
Loan Servicing and Systems (LSS)Education Technology Services and Payments (ETSP)Asset
Generation and
Management		Nelnet BankTotal Reportable SegmentsNFS Other Operating SegmentsCorporate and Other ActivitiesEliminations/ ReclassificationsTotal
Interest income:
Loan interest$— — 157,300 14,804 172,104 — — — 172,104 
Investment interest624 5,417 12,641 13,934 32,616 8,870 2,661 (3,963)40,185 
Total interest income624 5,417 169,941 28,738 204,720 8,870 2,661 (3,963)212,289 
Interest expense— — 120,066 14,672 134,738 1,428 651 (3,963)132,854 
Net interest income624 5,417 49,875 14,066 69,982 7,442 2,010 — 79,435 
Less (negative provision) provision for loan losses— — 11,133 6,797 17,930 — — — 17,930 
Net interest income after provision for loan losses624 5,417 38,742 7,269 52,052 7,442 2,010 — 61,505 
Other income (expense):
LSS revenue120,724 — — — 120,724 — — — 120,724 
ETSP revenue— 118,184 — — 118,184 — — — 118,184 
Intersegment revenue5,603 65 — — 5,668 — — (5,668)— 
Reinsurance premiums earned— — — — — 26,112 — — 26,112 
Solar construction revenue— — — — — — 1,259 — 1,259 
Other, net113 — 7,507 392 8,012 5,265 9,603 96 22,976 
Loss on sale of loans, net— — — — — — — — — 
Gain on partial redemption of ALLO investment— — — — — — 175,044 — 175,044 
Derivative settlements, net— — 581 163 744 — — — 744 
Derivative market value adjustments, net— — (2,165)(1,701)(3,866)— — — (3,866)
Total other income (expense), net126,440 118,249 5,923 (1,146)249,466 31,377 185,906 (5,572)461,177 
Cost of services and expenses:
Total cost of services1,845 39,844 — — 41,689 — 14,050 — 55,739 
Salaries and benefits65,549 41,598 1,469 2,791 111,407 539 22,784 (30)134,699 
Depreciation and amortization1,821 2,505 — 352 4,678 — 2,946 — 7,624 
Reinsurance losses and underwriting expenses— — — — — 25,662 — — 25,662 
Postage expense9,551 9,551 (9,551)— 
Servicing fees7,102 824 7,926 (7,926)— 
Other expenses11,099 9,904 2,464 1,969 25,436 2,206 11,695 11,969 51,306 
Intersegment expenses, net17,240 6,273 1,260 652 25,425 321 (25,616)(130)— 
Total operating expenses105,260 60,280 12,295 6,588 184,423 28,728 11,809 (5,668)219,291 
Impairment expense and provision for beneficial interests— — 4,977 — 4,977 — 5,311 — 10,288 
Total expenses107,105 100,124 17,272 6,588 231,089 28,728 31,170 (5,668)285,318 
Income (loss) before income taxes19,959 23,542 27,393 (465)70,429 10,091 156,746 96 237,364 
Income tax (expense) benefit(4,790)(5,650)(6,569)101 (16,908)(2,395)(40,207)— (59,510)
Net income (loss)15,169 17,892 20,824 (364)53,521 7,696 116,539 96 177,854 
Net (income) loss attributable to noncontrolling interests— — (23)— (23)(114)3,838 (96)3,605 
Net income (loss) attributable to Nelnet, Inc.$15,169 17,892 20,801 (364)53,498 7,582 120,377 — 181,459 






8

Three months ended September 30, 2024
Reportable SegmentsReconciling Items
Loan Servicing and Systems (LSS)Education Technology Services and Payments (ETSP)Asset
Generation and
Management		Nelnet BankTotal Reportable SegmentsNFS Other Operating SegmentsCorporate and Other ActivitiesEliminations/ ReclassificationsTotal
Interest income:
Loan interest$— — 180,571 9,639 190,210 — — — 190,211 
Investment interest894 9,734 18,970 12,522 42,120 12,415 3,105 (7,368)50,272 
Total interest income894 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 income894 9,734 38,399 10,555 59,582 10,170 2,401 — 72,155 
Less (negative provision) provision for loan losses— — 11,968 6,143 18,111 — — — 18,111 
Net interest income after provision for loan losses894 9,734 26,431 4,412 41,471 10,170 2,401 — 54,044 
Other income (expense):
LSS revenue108,175 — — — 108,175 — — — 108,175 
ETSP revenue— 118,179 — — 118,179 — — — 118,179 
Intersegment revenue5,428 60 — — 5,488 — — (5,488)— 
Reinsurance premiums earned— — — — — 16,619 — — 16,619 
Solar construction revenue— — — — — — 19,321 — 19,321 
Other, net690 — 4,918 841 6,449 5,751 3,506 — 15,706 
Loss on sale of loans, net— — (107)— (107)— — — (107)
Gain on partial redemption of ALLO investment— — — — — — — — — 
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), net114,293 118,239 (3,348)(2,525)226,659 22,370 22,827 (5,488)266,368 
Cost of services and expenses:
Total cost of services196 45,273 — — 45,469 — 26,815 — 72,284 
Salaries and benefits76,820 41,053 1,220 2,973 122,066 398 23,852 (124)146,192 
Depreciation and amortization4,854 2,616 — 343 7,813 — 5,848 — 13,661 
Reinsurance losses and underwriting expenses— — — — — 16,761 — — 16,761 
Postage expense8,467 8,467 (8,467)— 
Servicing fees7,011 285 7,296 (7,296)— 
Other expenses11,000 7,614 970 2,463 22,047 1,143 11,116 10,379 44,685 
Intersegment expenses, net18,399 4,604 1,276 581 24,860 200 (25,080)20 — 
Total operating expenses119,540 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 expenses119,736 101,160 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) benefit1,092 (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 (income) loss 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 


9

Nine months ended September 30, 2025
Reportable SegmentsReconciling Items
Loan Servicing and Systems (LSS)Education Technology Services and Payments (ETSP)Asset
Generation and
Management		Nelnet BankTotal Reportable SegmentsNFS Other Operating SegmentsCorporate and Other ActivitiesEliminations/ ReclassificationsTotal
Interest income:
Loan interest$— — 457,752 43,508 501,260 — — — 501,260 
Investment interest1,875 20,921 37,462 41,278 101,536 32,676 8,107 (17,504)124,815 
Total interest income1,875 20,921 495,214 84,786 602,796 32,676 8,107 (17,504)626,075 
Interest expense— — 347,719 42,928 390,647 3,558 1,976 (17,504)378,677 
Net interest income1,875 20,921 147,495 41,858 212,149 29,118 6,131 — 247,398 
Less (negative provision) provision for loan losses— — 16,770 12,934 29,704 — — — 29,704 
Net interest income after provision for loan losses1,875 20,921 130,725 28,924 182,445 29,118 6,131 — 217,694 
Other income (expense):
LSS revenue392,517 — — — 392,517 — — — 392,517 
ETSP revenue— 394,836 — — 394,836 — — — 394,836 
Intersegment revenue16,600 198 — — 16,798 — — (16,798)— 
Reinsurance premiums earned— — — — — 73,964 — — 73,964 
Solar construction revenue— — — — — — 10,992 — 10,992 
Other, net331 — 11,697 1,842 13,870 12,050 56,176 304 82,401 
Loss on sale of loans, net— — (1,562)— (1,562)— — — (1,562)
Gain on partial redemption of ALLO investment— — — — — — 175,044 — 175,044 
Derivative settlements, net— — 1,756 494 2,250 — — — 2,250 
Derivative market value adjustments, net— — (6,422)(4,556)(10,978)— — — (10,978)
Total other income (expense), net409,448 395,034 5,469 (2,220)807,731 86,014 242,212 (16,494)1,119,464 
Cost of services and expenses:
Total cost of services5,500 138,254 — — 143,754 — 29,485 — 173,239 
Salaries and benefits205,249 126,368 4,661 8,424 344,702 1,685 71,472 (160)417,700 
Depreciation and amortization6,199 7,439 — 1,046 14,684 — 9,522 — 24,206 
Reinsurance losses and underwriting expenses— — — — — 67,836 — — 67,836 
Postage expense25,861 25,861 (25,861)— 
Servicing fees20,700 2,329 23,029 (23,029)— 
Other expenses32,793 28,489 4,595 5,243 71,120 4,080 45,183 32,817 153,200 
Intersegment expenses, net50,980 18,297 3,758 2,089 75,124 854 (75,413)(565)— 
Total operating expenses321,082 180,593 33,714 19,131 554,520 74,455 50,764 (16,798)662,942 
Impairment expense and provision for beneficial interests— 1,145 8,632 — 9,777 81 11,166 — 21,024 
Total expenses326,582 319,992 42,346 19,131 708,051 74,536 91,415 (16,798)857,205 
Income (loss) before income taxes84,741 95,963 93,848 7,573 282,125 40,596 156,928 304 479,953 
Income tax (expense) benefit(20,338)(23,042)(22,508)(1,816)(67,704)(9,645)(42,945)— (120,294)
Net income (loss)64,403 72,921 71,340 5,757 214,421 30,951 113,983 304 359,659 
Net (income) loss attributable to noncontrolling interests— 45 (67)— (22)(407)11,777 (304)11,044 
Net income (loss) attributable to Nelnet, Inc.$64,403 72,966 71,273 5,757 214,399 30,544 125,760 — 370,703 
10

Nine months ended September 30, 2024
Reportable SegmentsReconciling Items
Loan Servicing and Systems (LSS)Education Technology Services and Payments (ETSP)Asset
Generation and
Management		Nelnet BankTotal Reportable SegmentsNFS Other Operating SegmentsCorporate and Other ActivitiesEliminations/ ReclassificationsTotal
Interest income:
Loan interest$— — 583,907 25,157 609,064 — — — 609,064 
Investment interest4,046 23,315 54,513 33,301 115,175 43,910 9,566 (25,565)143,086 
Total interest income4,046 23,315 638,420 58,458 724,239 43,910 9,566 (25,565)752,150 
Interest expense— — 523,678 31,872 555,550 7,268 2,114 (25,565)539,367 
Net interest income4,046 23,315 114,742 26,586 168,689 36,642 7,452 — 212,783 
Less (negative provision) provision for loan losses— — 14,199 18,352 32,551 — — — 32,551 
Net interest income after provision for loan losses4,046 23,315 100,543 8,234 136,138 36,642 7,452 — 180,232 
Other income (expense):
LSS revenue344,428 — — — 344,428 — — — 344,428 
ETSP revenue— 378,627 — — 378,627 — — — 378,627 
Intersegment revenue18,419 166 — — 18,585 — — (18,585)— 
Reinsurance premiums earned— — — — — 44,250 — — 44,250 
Solar construction revenue— — — — — — 42,741 — 42,741 
Other, net2,085 — 11,239 1,991 15,315 6,763 11,730 — 33,807 
Loss on sale of loans, net— — (1,685)— (1,685)— — — (1,685)
Gain on partial redemption of ALLO investment— — — — — — — — — 
Derivative settlements, net— — 4,356 690 5,046 — — — 5,046 
Derivative market value adjustments, net— — (2,875)(793)(3,668)— — — (3,668)
Total other income (expense), net364,932 378,793 11,035 1,888 756,648 51,013 54,471 (18,585)843,546 
Cost of services and expenses:
Total cost of services392 134,106 — — 134,498 — 49,115 — 183,613 
Salaries and benefits224,172 121,956 3,529 8,491 358,148 1,129 72,159 (1,735)429,701 
Depreciation and amortization15,304 8,012 — 944 24,260 — 21,312 — 45,572 
Reinsurance losses and underwriting expenses— — — — — 39,066 — — 39,066 
Postage expense28,350 28,350 (28,350)— 
Servicing fees24,503 711 25,214 (25,214)— 
Other expenses31,119 23,772 3,217 5,577 63,685 2,470 37,359 35,306 138,820 
Intersegment expenses, net55,955 14,216 3,756 1,729 75,656 665 (77,729)1,408 — 
Total operating expenses354,900 167,956 35,005 17,452 575,313 43,330 53,101 (18,585)653,159 
Impairment expense and provision for beneficial interests— — 34,863 — 34,863 — 2,002 — 36,865 
Total expenses355,292 302,062 69,868 17,452 744,674 43,330 104,218 (18,585)873,637 
Income (loss) before income taxes13,686 100,046 41,710 (7,330)148,112 44,325 (42,295)— 150,141 
Income tax (expense) benefit(3,284)(24,035)(10,010)1,800 (35,529)(10,550)8,426 — (37,653)
Net income (loss)10,402 76,011 31,700 (5,530)112,583 33,775 (33,869)— 112,488 
Net (income) loss attributable to noncontrolling interests— 101 — — 101 (366)8,663 — 8,398 
Net income (loss) attributable to Nelnet, Inc.$10,402 76,112 31,700 (5,530)112,684 33,409 (25,206)— 120,886 
11

Loan Servicing and Systems Revenue
The following table presents disaggregated revenue by service offering for the Loan Servicing and Systems operating segment:
Three months endedNine months ended
September 30, 2025June 30, 2025September 30, 2024September 30, 2025September 30, 2024
Government loan servicing (a)$112,798 85,737 85,215 285,896 277,705 
Private education and consumer loan servicing24,293 22,733 13,057 69,721 38,634 
FFELP loan servicing2,035 2,241 2,945 6,909 9,570 
Software services10,584 9,452 5,197 27,027 14,617 
Outsourced services1,342 561 1,761 2,964 3,902 
Loan servicing and systems revenue$151,052 120,724 108,175 392,517 344,428 
(a)    Upon reaching a final agreement with the Department, the Company recognized $32.9 million of non-recurring revenue during the third quarter of 2025 on a contract modification for services previously performed.
Loan Servicing Volumes
As of
September 30,
2025		June 30,
2025		March 31,
2025		December 31,
2024		September 30,
2024		June 30,
2024		March 31,
2024		December 31,
2023
Servicing volume (dollars in millions):
Government$458,679 465,689 482,786 489,877 492,142 489,298 495,409 494,691 
FFELP11,982 12,386 12,826 13,260 13,745 14,576 15,783 17,462 
Private and consumer38,060 38,018 46,728 29,226 20,666 19,876 21,015 20,493 
Total$508,721 516,093 542,340 532,363 526,553 523,750 532,207 532,646 
Number of servicing borrowers:
Government12,387,665 12,694,386 13,453,127 14,049,550 14,114,468 14,096,152 14,328,013 14,503,057 
FFELP482,696 502,205 524,421 549,861 574,979 610,745 656,814 725,866 
Private and consumer1,325,037 1,326,451 1,350,999 1,168,293 851,747 829,072 882,256 894,703 
Total14,195,398 14,523,042 15,328,547 15,767,704 15,541,194 15,535,969 15,867,083 16,123,626 
Number of remote hosted borrowers:2,839,493 2,056,358 1,427,800 842,200 662,075 133,681 65,295 70,580 
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 endedNine months ended
September 30, 2025June 30, 2025September 30, 2024September 30, 2025September 30, 2024
Tuition payment plan services$32,971 36,013 31,659 109,057 104,702 
Payment processing59,484 37,515 55,813 148,535 137,926 
Education technology services36,323 44,481 30,080 136,499 133,306 
Other543 175 627 745 2,693 
Education technology services and payments revenue$129,321 118,184 118,179 394,836 378,627 
This segment of the Company’s business is subject to seasonal fluctuations which correspond, or are related to, the traditional school year. Based on the timing of revenue recognition and when expenses are incurred, revenue and before tax operating margin are higher in the first quarter compared with the remainder of the year.
12

Other Income (Expense)
The following table presents the components of "other, net" in "other income (expense)" on the consolidated statements of income:
 Three months endedNine months ended
 September 30, 2025June 30, 2025September 30, 2024September 30, 2025September 30, 2024
Investment activity, net$42,317 8,852 8,529 56,216 7,447 
Administration/sponsor fee income2,267 1,293 1,420 4,978 4,448 
Investment advisory services (WRCM)2,010 1,504 1,394 4,987 4,427 
Borrower late fee income1,817 1,642 1,741 5,046 7,460 
ALLO preferred return— 5,985 4,783 14,400 11,353 
Loss from ALLO voting membership interest investment— — — — (10,693)
Loss from solar investments, net (a)(10,884)(1,502)(11,238)(11,930)(11,068)
(Loss) gain on debt repurchases (8,304)388 7 (7,865)(2)
Other6,507 4,814 9,070 16,569 20,435 
Other, net$35,730 22,976 15,706 82,401 33,807 
(a)    The Company accounts for its solar investments using the Hypothetical Liquidation at Book Value (HLBV) method of accounting. For the majority of the Company’s solar investments, the HLBV method of accounting results in accelerated losses in the initial years of investment and gains recognized at the end of the contractual agreement (typically five years). The following table presents (i) the Company's recognized HLBV losses and gains recognized from sales of certain investments, which include losses and gains attributable to third-party noncontrolling interest investors (syndication partners), included in “other, net” in "other income (expense)" on the consolidated statements of income, (ii) solar net losses and gains attributed to noncontrolling interest investors included in “net loss attributable to noncontrolling interests” on the consolidated statements of income, and (iii) the recognized pre-tax net loss or gain attributable to the Company:
Three months endedNine months ended
September 30, 2025June 30, 2025September 30, 2024September 30, 2025September 30, 2024
Losses from HLBV accounting (gross)$(10,884)(6,463)(11,238)(19,963)(15,276)
Gains from sales (gross)— 4,961 — 8,033 4,208 
Losses from solar investments, net(10,884)(1,502)(11,238)(11,930)(11,068)
Less: losses attributable to noncontrolling members, net(5,659)(3,159)(3,936)(9,863)(5,568)
Net (loss) gain attributable to the Company$(5,225)1,657 (7,302)(2,067)(5,500)
Derivative Settlements
The following table summarizes the components of "derivative settlements, net" included in the consolidated statements of income related to derivative instruments that do not qualify for hedge accounting:
 Three months endedNine months ended
 September 30, 2025June 30, 2025September 30, 2024September 30, 2025September 30, 2024
Basis swaps$156 154 159 463 773 
Interest rate swaps - floor income hedges438 427 1,200 1,293 3,583 
Interest rate swaps - intercompany deposits167 163 281 494 690 
Total derivative settlements - income$761 744 1,640 2,250 5,046 
13

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 ofAs ofAs of
 September 30, 2025December 31, 2024September 30, 2024
Non-Nelnet Bank:
Federally insured loans:
Stafford and other$1,889,476 2,108,960 2,202,590 
Consolidation5,970,781 6,279,604 6,868,152 
Total7,860,257 8,388,564 9,070,742 
Private education loans147,737 221,744 234,295 
Consumer loans and other financing receivables (a)840,739 345,560 244,552 
Non-Nelnet Bank loans8,848,733 8,955,868 9,549,589 
Nelnet Bank:
Federally insured loans:
Stafford and other24,745 — — 
Consolidation154,203 — — 
Total178,948 — — 
Private education loans529,396 482,445 352,654 
Consumer and other loans266,539 162,152 207,218 
Nelnet Bank loans974,883 644,597 559,872 
Accrued interest receivable558,912 549,283 600,097 
Loan discount and deferred lender fees, net of unamortized loan premiums and deferred origination costs(47,735)(42,114)(34,535)
Allowance for loan losses:
Non-Nelnet Bank:
Federally insured loans(43,535)(49,091)(50,834)
Private education loans(7,103)(11,130)(11,744)
Consumer loans and other financing receivables(33,147)(38,468)(22,380)
Non-Nelnet Bank allowance for loan losses(83,785)(98,689)(84,958)
Nelnet Bank:
Federally insured loans(707)— — 
Private education loans(11,732)(10,086)(3,670)
Consumer and other loans(11,308)(6,115)(13,514)
Nelnet Bank allowance for loan losses(23,747)(16,201)(17,184)
$10,227,261 9,992,744 10,572,881 
(a)    In the third quarter of 2025, the Company began to purchase Pay Later receivables via a forward flow agreement from an unrelated third party. As of September 30, 2025, the balance of Pay Later receivables was $548.3 million and these loans are included in the "consumer loans and other financing receivables" in the above table. Pay Later receivables enable consumers to purchase goods or services at the time of the transaction and split their purchase into installment payments. The Company purchases Pay Later receivables at a discount, and accretes the discount into interest income over the estimated life of the receivable.
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 September 30, 2025, the Company’s ownership correlates to approximately $1.75 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.
14

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 ofAs ofAs of
September 30, 2025December 31, 2024September 30, 2024
Non-Nelnet Bank:
Federally insured loans (a)0.55 %0.59 %0.56 %
Private education loans4.81 %5.02 %5.01 %
Consumer loans and other financing receivables (b)3.94 %11.13 %9.15 %
Nelnet Bank:
Federally insured loans (a)0.40 %— — 
Private education loans2.22 %2.09 %1.04 %
Consumer and other loans4.24 %3.77 %6.52 %
(a)    The allowance for loan losses as a percent of the risk sharing component of federally insured student loans not covered by the federal guaranty for Non-Nelnet Bank was 19.4%, 20.6%, and 20.7% as of September 30, 2025, December 31, 2024, and September 30, 2024, respectively, and for Nelnet Bank was 17.4% as of September 30, 2025.
(b)    In the third quarter of 2025, the Company began to purchase Pay Later receivables that have lower allowance rates.
Loan Spread Analysis - Non-Nelnet Bank
The following table analyzes the loan spread on AGM’s (Non-Nelnet Bank) 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 endedNine months ended
 September 30, 2025June 30, 2025September 30, 2024September 30, 2025September 30, 2024
Variable loan yield, gross6.89 %7.77 %8.16 %7.37 %8.10 %
Consolidation rebate fees(0.83)(0.82)(0.80)(0.82)(0.80)
Discount accretion, net of premium and deferred origination costs amortization0.50 (0.15)(0.02)0.07 0.04 
Variable loan yield, net6.56 6.80 7.34 6.62 7.34 
Loan cost of funds - interest expense (a)(5.34)(5.60)(6.44)(5.45)(6.48)
Loan cost of funds - derivative settlements (b) (c)0.01 0.01 0.01 0.010.01
Variable loan spread1.23 1.21 0.91 1.18 0.87 
Fixed-rate floor income, gross0.05 0.04 0.01 0.05 0.01 
Fixed-rate floor income - derivative settlements (b) (d)0.02 0.02 0.05 0.02 0.04 
Fixed-rate floor income, net of settlements on derivatives0.07 0.06 0.06 0.07 0.05 
Core loan spread1.30 %1.27 %0.97 %1.25 %0.92 %
Average balance of AGM's loans$8,774,9239,215,579 9,792,095 9,178,273 10,612,686 
Average balance of AGM's debt outstanding7,775,2698,439,800 9,296,236 8,219,778 10,280,527 
(a)    The Company recognized $5.6 million in non-cash interest expense during the third quarter of 2024 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.
15

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 endedNine months ended
September 30, 2025June 30, 2025September 30, 2024September 30, 2025September 30, 2024
Core loan spread1.30 %1.27 %0.97 %1.25 %0.92 %
Derivative settlements (basis swaps)(0.01)(0.01)(0.01)(0.01)(0.01)
Derivative settlements (fixed-rate floor income)(0.02)(0.02)(0.05)(0.02)(0.04)
Loan spread1.27 %1.24 %0.91 %1.22 %0.87 %

(c)    Derivative settlements consist of net settlements received related to the Company’s basis swaps.
(d)    Derivative settlements consist of net settlements received related to the Company’s floor income interest rate swaps.
16