Nelnet Reports Fourth Quarter 2025 Results
Rhea-AI Summary
Nelnet (NYSE: NNI) reported Q4 2025 GAAP net income of $57.8 million ($1.60 per share), down from $63.2 million a year earlier. Full-year GAAP net income rose to $428.5 million ($11.79 per share) versus $184.0 million in 2024. Revenue mix strengthened across consumer lending, servicing, payments, and technology, while the company completed the sale of its solar construction business.
Notable items: growth in AGM net interest income, a $744.2 million balance of Pay Later receivables, higher loan loss provisions related to acquired consumer loans, lower Loan Servicing revenue versus 2024, and $16.1 million in share repurchases in Q4.
Positive
- Full-year GAAP net income rose to $428.5 million (2025)
- Net income ex-derivative adjustments was $435.4 million for 2025
- AGM net interest income increased to $63.5 million in Q4
- Pay Later receivables balance of $744.2 million as of Dec 31, 2025
- Q4 share repurchases of $16.1 million (126,680 shares)
Negative
- Loan Servicing revenue declined to $116.6 million in Q4 2025 from $138.0 million
- Servicing volume fell to $486.2 billion from $532.4 billion year-over-year
- Provision for loan losses increased to $32.5 million in Q4 2025 (AGM)
- Solar construction business loss of $27.3 million in Q4 and subsequent sale
Key Figures
Market Reality Check
Peers on Argus
NNI is up 1.61% while key peers are mostly down (e.g., CACC -1.51%, QFIN -1.95%, UPST -1.22%), with only SLM up 2.31%, suggesting a stock-specific reaction to earnings.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Nov 06 | Q3 2025 earnings | Positive | +2.2% | Sharp profit jump driven by one-time gains and stronger core operations. |
| Aug 06 | Q2 2025 earnings | Positive | -0.2% | Earnings boosted by large ALLO divestiture gain and segment growth. |
| May 08 | Q1 2025 earnings | Positive | +5.9% | Higher GAAP net income with broad-based segment strength and capital actions. |
| Feb 27 | Q4 2024 earnings | Positive | +9.3% | Return to solid profitability with improved results across major segments. |
| Nov 07 | Q3 2024 earnings | Negative | -8.3% | GAAP earnings pressured by provisions, debt costs, and solar-related losses. |
Earnings releases have typically produced positive stock reactions, with 4 aligned moves and 1 divergence and an average move of 1.78% on earnings-related news.
Over the past year, Nelnet’s earnings reports have highlighted improving profitability and scale. Q1–Q3 2025 showed rising GAAP net income, aided by gains from reducing the ALLO stake and strong segment contributions in servicing, banking, and education technology. Earlier quarters also flagged volatility from solar-related activities. Today’s Q4 and full-year 2025 results, featuring record GAAP net income of $428.5M, extend that trajectory while also marking the sale of the loss-making solar construction business, reinforcing a pivot toward core, fee-based and interest-earning operations.
Historical Comparison
Nelnet’s last five earnings releases saw an average move of 1.78%, mostly positive. Today’s earnings-driven gain of 1.61% fits this established pattern of constructive reactions.
Earnings updates over 2024–2025 show a shift from solar-related drag in 2024 toward higher profitability in 2025, supported by ALLO monetization, growth in servicing and banking, and now record full-year results alongside exiting the solar construction business.
Market Pulse Summary
This announcement details Q4 2025 and full-year 2025 results, highlighting record GAAP net income of $428.5 million alongside growth in net interest income at AGM and Nelnet Bank. It also notes weaker loan servicing revenue, higher credit loss provisions, and a sizable $27.3 million loss from the solar construction business that was sold in November 2025. Investors may watch segment trends, credit performance, and post-divestiture earnings mix in upcoming quarters.
Key Terms
gaap financial
non-gaap financial
loan spread financial
provision for loan losses financial
net interest income financial
net interest margin financial
derivative instruments financial
ffel program regulatory
AI-generated analysis. Not financial advice.
Net income, excluding derivative market value adjustments1, was
"Nelnet's teams knocked the ball out of the park in 2025, delivering record earnings and strengthening our foundation for long-term success," said Jeff Noordhoek, chief executive officer of Nelnet. "Over time, we've meaningfully diversified our revenue, with each of our core businesses - consumer lending, loan servicing, payments, and technology - reporting solid performance and building real momentum. With our continued investments in technology and in both new and existing products and services, we see opportunities ahead in 2026."
Nelnet operates through three divisions: Nelnet Financial Services (NFS), Loan Servicing and Systems [referred to as Nelnet Diversified Services (NDS)], and Education Technology Services and Payments [referred to as Nelnet Business Services (NBS)]. NFS includes the company's Asset Generation and Management (AGM) and Nelnet Bank reportable operating segments, which earn interest income on loans and investments. NDS and NBS generate primarily fee‑based revenue through loan servicing, education technology, and payment services. Business activities not included in these divisions are combined and reported within Corporate Activities.
Nelnet Financial Services
AGM
The AGM operating segment reported loan and investment net interest income of
AGM recognized a provision for loan losses in the fourth quarter of 2025 of
AGM recognized net income after tax of
1 Net income, excluding derivative market value adjustments, is a non-GAAP measure. See "Non-GAAP Performance Measures" at the end of this press release and the "Non-GAAP Disclosures" section below for explanatory information and reconciliations of GAAP to non-GAAP financial information. |
2 Loan spread represents the spread between the yield earned on loan assets and the costs of the liabilities and derivative instruments used to fund the assets. |
Nelnet Bank
As of December 31, 2025, Nelnet Bank had a
Nelnet Bank recognized provision for loan losses in the fourth quarter of 2025 of
Nelnet Bank recognized net income after tax for the quarter ended December 31, 2025 of
Loan Servicing and Systems
Revenue from the Loan Servicing and Systems segment was
As of December 31, 2025, the company was servicing
The Loan Servicing and Systems segment reported net income after tax of
Education Technology Services and Payments
For the fourth quarter of 2025, revenue from the Education Technology Services and Payments operating segment was
Net income after tax for the Education Technology Services and Payments segment was
Corporate Activities
Included in Corporate Activities are the operating results of the company's solar construction business. During the fourth quarter of 2025, the company reported a loss of
Share Repurchases
During the fourth quarter of 2025, the company repurchased 126,680 Class A common shares for
Year-End Results
GAAP net income for the year ended December 31, 2025 was
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," "see," "should," "will," "would," and similar expressions, as well as statements in future tense, are intended to identify forward-looking statements. These statements are based on management's current expectations as of the date of this release and are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results and performance to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the company under existing and future servicing contracts with the Department, risks related to unfavorable contract modifications or interpretations, risks related to consistently meeting service requirements to avoid the assessment of performance penalties, and risks related to the company's ability to comply with agreements with third-party customers for the servicing of Federal Direct Loan Program, FFEL Program, private education, and consumer loans; loan portfolio risks such as credit risk, prepayment risk, interest rate basis and repricing risk, risks related to the use of derivatives to manage exposure to interest rate fluctuations, uncertainties regarding the expected benefits from purchased securitized and unsecuritized FFELP, private education, consumer, and other loans, or residual interests therein, and initiatives to purchase additional FFELP, private education, consumer, and other loans; financing and liquidity risks, including risks of changes in the interest rate environment; risks from changes in the terms of education loans and in the educational credit and services markets resulting from changes in applicable laws, regulations, and government programs and budgets; risks related to a breach of or failure in the company's operational or information systems or infrastructure, or those of third-party vendors, including disclosure of confidential or personal information and/or damage to reputation resulting from cyber breaches; risks related to use of artificial intelligence; uncertainties inherent in forecasting future cash flows from student loan assets, including residual interests therein, and related asset-backed securitizations; risks related to the ability of Nelnet Bank to achieve its business objectives and effectively deploy loan and deposit strategies and achieve expected market penetration; risks related to the company's solar tax equity partnerships, including risks of not being able to realize tax credits which remain subject to recapture by taxing authorities and risks from the impact of the enactment of the One Big Beautiful Bill that accelerates the expiration and phase out of solar energy credits; risks and uncertainties related to other initiatives (and anticipated income therefrom) including venture capital, real estate, reinsurance, acquisitions, and other activities, including activities that are intended to diversify the company both within and outside of its historical core education-related businesses; risks and uncertainties associated with climate change; risks from changes in economic conditions and consumer behavior; risks related to the company's ability to adapt to technological change; risks related to the exclusive forum provisions in the company's articles of incorporation; risks related to the company's executive chairman's ability to control matters related to the company through voting rights; risks related to related party transactions; risks related to natural disasters, terrorist activities, or international hostilities; and risks and uncertainties associated with litigation matters, maintaining compliance with the extensive regulatory requirements applicable to the company's businesses, and uncertainties inherent in the estimates and assumptions about future events that management is required to make in the preparation of the company's consolidated financial statements.
For more information, see the "Risk Factors" sections and other cautionary discussions of risks and uncertainties included in documents filed or furnished by the company with the Securities and Exchange Commission. All forward-looking statements in this release are as of the date of this release. Although the company may voluntarily update or revise its forward-looking statements from time to time to reflect actual results or changes in the company's expectations, the company disclaims any commitment to do so except as required by law.
Non-GAAP Performance Measures
The company prepares its financial statements and presents its financial results in accordance with
Consolidated Statements of Income (Dollars in thousands, except share data) (unaudited)
| |||||||||
Three months ended | Year ended | ||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | |||||
Interest income: | |||||||||
Loan interest | $ 184,825 | 162,717 | 178,434 | 686,085 | 787,498 | ||||
Investment interest | 40,559 | 43,241 | 42,815 | 165,374 | 185,901 | ||||
Total interest income | 225,384 | 205,958 | 221,249 | 851,459 | 973,399 | ||||
Interest expense on bonds and notes payable and bank deposits | 118,273 | 120,708 | 141,170 | 496,950 | 680,537 | ||||
Net interest income | 107,111 | 85,250 | 80,079 | 354,509 | 292,862 | ||||
Less provision (negative provision) for loan losses | 38,147 | (3,563) | 22,057 | 67,851 | 54,607 | ||||
Less provision for beneficial interests | 2,679 | 2,145 | 4,628 | 11,311 | 39,491 | ||||
Net interest income after provision | 66,285 | 86,668 | 53,394 | 275,347 | 198,764 | ||||
Other income (expense): | |||||||||
Loan servicing and systems revenue | 116,573 | 151,052 | 137,981 | 509,089 | 482,408 | ||||
Education technology services and payments revenue | 112,314 | 129,321 | 108,335 | 507,150 | 486,962 | ||||
Reinsurance premiums earned | 33,539 | 23,165 | 18,673 | 107,502 | 62,923 | ||||
Solar construction revenue | 3,379 | 5,738 | 13,828 | 14,371 | 56,569 | ||||
Other, net | 16,749 | 33,258 | 27,836 | 97,587 | 59,959 | ||||
Gain on partial redemption of ALLO investment | — | — | — | 175,044 | — | ||||
Derivative market value adjustments and derivative settlements, net | 2,330 | (27) | 14,879 | (6,398) | 16,258 | ||||
Total other income (expense), net | 284,884 | 342,507 | 321,532 | 1,404,345 | 1,165,079 | ||||
Cost of services and expenses: | |||||||||
Loan servicing contract fulfillment and acquisition costs | 2,056 | 2,021 | 1,497 | 7,555 | 1,889 | ||||
Cost to provide education technology services and payments | 38,654 | 50,363 | 38,658 | 176,907 | 172,763 | ||||
Cost to provide solar construction services | 12,326 | 7,607 | 28,558 | 41,810 | 77,673 | ||||
Total cost of services | 53,036 | 59,991 | 68,713 | 226,272 | 252,325 | ||||
Salaries and benefits | 141,086 | 144,778 | 147,229 | 558,786 | 576,931 | ||||
Depreciation and amortization | 9,365 | 7,327 | 12,544 | 33,571 | 58,116 | ||||
Reinsurance losses and underwriting expenses | 25,715 | 19,962 | 16,180 | 93,551 | 55,246 | ||||
Impairment expense | 17,220 | 7,000 | 1,136 | 29,612 | 3,138 | ||||
Other expenses | 58,369 | 53,669 | 50,681 | 211,568 | 189,503 | ||||
Total operating expenses | 251,755 | 232,736 | 227,770 | 927,088 | 882,934 | ||||
Income before income taxes | 46,378 | 136,448 | 78,443 | 526,332 | 228,584 | ||||
Income tax expense | (7,691) | (35,773) | (15,016) | (127,986) | (52,669) | ||||
Net income | 38,687 | 100,675 | 63,427 | 398,346 | 175,915 | ||||
Net loss (income) attributable to noncontrolling interests | 19,084 | 6,009 | (268) | 30,128 | 8,130 | ||||
Net income attributable to Nelnet, Inc. | $ 57,771 | 106,684 | 63,159 | 428,474 | 184,045 | ||||
Earnings per common share: | |||||||||
Net income attributable to Nelnet, Inc. shareholders - basic and diluted | $ 1.60 | 2.94 | 1.73 | 11.79 | 5.02 | ||||
Weighted-average common shares outstanding - basic and diluted | 36,088,994 | 36,316,315 | 36,461,513 | 36,341,197 | 36,642,533 | ||||
Condensed Consolidated Balance Sheets (Dollars in thousands) (unaudited)
| |||||
As of | As of | As of | |||
December 31, 2025 | September 30, 2025 | December 31, 2024 | |||
Assets: | |||||
Loans and accrued interest receivable, net | $ 10,006,695 | 10,227,261 | 9,992,744 | ||
Cash, cash equivalents, and investments | 2,643,954 | 2,455,950 | 2,395,214 | ||
Restricted cash | 677,563 | 550,371 | 736,502 | ||
Goodwill and intangible assets, net | 187,312 | 189,783 | 194,357 | ||
Other assets | 548,259 | 453,317 | 458,936 | ||
Total assets | $ 14,063,783 | 13,876,682 | 13,777,753 | ||
Liabilities: | |||||
Bonds and notes payable | $ 7,780,927 | 7,822,531 | 8,309,797 | ||
Bank deposits | 1,669,173 | 1,476,765 | 1,186,131 | ||
Other liabilities | 1,036,454 | 990,691 | 982,708 | ||
Total liabilities | 10,486,554 | 10,289,987 | 10,478,636 | ||
Equity: | |||||
Total Nelnet, Inc. shareholders' equity | 3,685,792 | 3,653,290 | 3,349,762 | ||
Noncontrolling interests | (108,563) | (66,595) | (50,645) | ||
Total equity | 3,577,229 | 3,586,695 | 3,299,117 | ||
Total liabilities and equity | $ 14,063,783 | 13,876,682 | 13,777,753 | ||
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, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
GAAP net income attributable to Nelnet, Inc. | $ 57,771 | 63,159 | 428,474 | 184,045 | |||
Realized and unrealized derivative market value adjustments (a) | (1,879) | (13,792) | 9,098 | (10,124) | |||
Tax effect (b) | 451 | 3,310 | (2,184) | 2,430 | |||
Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments | $ 56,343 | 52,677 | 435,388 | 176,351 | |||
Earnings per share: | |||||||
GAAP net income attributable to Nelnet, Inc. | $ 1.60 | 1.73 | 11.79 | 5.02 | |||
Realized and unrealized derivative market value adjustments (a) | (0.05) | (0.38) | 0.25 | (0.28) | |||
Tax effect (b) | 0.01 | 0.09 | (0.06) | 0.07 | |||
Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments | $ 1.56 | 1.44 | 11.98 | 4.81 | |||
(a) | "Derivative market value adjustments" includes both the realized portion of gains and losses (corresponding to variation margin received or paid on derivative instruments that are settled daily at a central clearinghouse) and the unrealized portion of gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP. "Derivative market value adjustments" does not include "derivative settlements" that represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the company's derivative instruments based on their contractual terms. |
The accounting for derivatives requires that changes in the fair value of derivative instruments be recognized currently in earnings, with no fair value adjustment of the hedged item, unless specific hedge accounting criteria are met. Management has structured all of the company's derivative transactions with the intent that each is economically effective; however, the majority of the company's derivative instruments do not qualify for hedge accounting in the consolidated financial statements. As a result, the change in fair value for the derivative instruments that do not qualify for hedge accounting is reported in current period earnings with no consideration for the corresponding change in fair value of the hedged item. Under GAAP, the cumulative net realized and unrealized gain or loss caused by changes in fair values of derivatives in which the company plans to hold to maturity will generally equal zero over the life of the contract. However, the net realized and unrealized gain or loss during any given reporting period fluctuates significantly from period to period. | |
The company believes these point-in-time estimates of asset and liability values related to its derivative instruments that are subject to interest rate fluctuations are subject to volatility mostly due to timing and market factors beyond the control of management, and affect the period-to-period comparability of the results of operations. Accordingly, the company's management utilizes operating results excluding these items for comparability purposes when making decisions regarding the company's performance and in presentations with credit rating agencies, lenders, and investors. Consequently, the company reports this non-GAAP information because the company believes that it provides additional information regarding operational and performance indicators that are closely assessed by management and represents what earnings would have been had these derivatives qualified for hedge accounting. There is no comprehensive, authoritative guidance for the presentation of such non-GAAP information, which is only meant to supplement GAAP results by providing additional information that management utilizes to assess performance. | |
(b) | The tax effects are calculated by multiplying the realized and unrealized derivative market value adjustments by the applicable statutory income tax rate. |
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SOURCE Nelnet, Inc.
FAQ
What were Nelnet's Q4 2025 earnings per share (EPS) and GAAP net income (NNI)?
How did Nelnet's full-year 2025 net income compare to 2024 (NNI)?
Why did Nelnet's Loan Servicing revenue fall in Q4 2025 (NNI)?
What material one-off losses affected Nelnet in Q4 2025 (NNI)?
What balance and impact did Pay Later receivables have for Nelnet at year-end 2025 (NNI)?
