Lincoln, Nebraska, November 5th / PRNewswire / -- Nelnet (New York Stock Exchange ticker: NNI) announced today that its net profit for the third quarter of 2026 was $76.2 million, equivalent to $2.13 per share; compared to the same period last year, it was $106.7 million, equivalent to $2.94 per share.

After excluding the adjustment for the market value of derivatives, the net profit for the third quarter of 2026 was 67.9 million US dollars, equivalent to $1.89 per share; in the same period of 2025, it was 107.3 million US dollars, equivalent to $2.95 per share.

Nelnet CEO Jeff Noordhoek stated: "This quarter, we have delivered strong operational performance and continued to make progress in diversifying our product and customer base. We have increased dividends and continued to repurchase shares, while still focusing on investment activities to create long-term value."

He added that in October, the company announced the launch of FACTS Compass, which will help scholarship-granting organizations support students at public and private schools through new federal scholarship tax credits. BenefitEd provides employers with the option to deduct costs related to this program from employees' salaries. The company also announced the acquisition of Indian school management technology provider Entab to expand its international education technology business.

Nelnet is operated through three departments: Nelnet Financial Services (NFS), Loan Servicing, and, Systems (referred to as Nelnet Diversified Services and NDS in the text), as well as Education Technology Services, Payments (referred to as Nelnet Business Services and NBS in the text). NFS includes the company's two reportable business segments, Asset Generation, and, Management (AGM), and Nelnet Bank, which primarily generate interest income through loans and investments. NDS and NBS mainly generate fee income through loan services, educational technology, and payment services. Business not included in the aforementioned departments is consolidated under Corporate Activities.

Nelnet Financial Services

AGM

As of September 30, 2026, the total loan portfolio of AGM amounted to $7.63 billion, which was mainly composed of federally guaranteed loans issued under the Federal Family Education Loan Program ("FFEL Program" or FFELP). In the three months ending September 30, 2026, AGM acquired $3.23 billion in consumer loans, including $3.06 billion in short-term "buy now, pay later" receivables; the company began purchasing such assets in August 2025. In contrast, the amount of consumer loans acquired during the same period in 2025 was $1.52 billion. As of September 30, 2026, the company's consumer loan portfolio had grown to $1.30 billion, compared to $840.7 million as of September 30, 2025.

The operating division AGM recorded net interest income from loans and investments of $65.2 million in the three months ending September 30, 2026, compared to $44.7 million in the same period of 2025. The growth was mainly driven by higher loan spreads and an expansion of the consumer loan portfolio, but it was partially offset by the continued reduction of the traditional FFELP portfolio. The average balance of FFELP loans under AGM decreased to $6.46 billion in the three months ending September 30, 2026, from $8.25 billion in the same period of 2025. In the first nine months of 2026, AGM transferred several student loan trusts to Nelnet Bank, including $780.7 million in FFEL Program loans.

AGM provided for loan losses of $34.5 million (after tax, $26.2 million) within the three months ending September 30, 2026, whereas in the same period of 2025, it reversed a provision of $7.4 million (after tax, $5.6 million). Both provisions were significantly affected by the initial provisions for newly acquired loans during that period, to reflect the lifetime expected credit losses under the CECL methodology. In the third quarter of 2025, the company also reduced its provisions by $28.9 million (after tax, $22.0 million) due to the sale of consumer loans and recognized a corresponding negative provision expense.

AGM holds equity in joint ventures involved in the acquisition, holding, and management of loan portfolios. Within the three months ending September 30, 2026, AGM confirmed earnings of $12.4 million (net of taxes, $9.4 million) from these joint ventures.

AGM confirmed earnings of $4.8 million ($3.6 million after taxes) in the third quarter of 2026, which came from changes in the fair value of derivative instruments that did not meet the conditions for hedge accounting.

AGM reported a net profit after tax of $33.9 million for the three months ending September 30, 2026, compared to $27.8 million for the same period in 2025.

Nelnet Bank

As of September 30, 2026, the loan portfolio of Nelnet Bank amounted to $1.7 billion, the investment portfolio to $1.64 billion, and total deposits (including internal deposits) to $2.81 billion. Due to the growth in loans and the investment portfolio, despite a decline in the net interest margin, the net interest income from loans and investments in the third quarter still increased to $20.4 million, compared to $15.4 million in the same period of the previous year.

Nelnet Bank provided for loan losses of $4.8 million (after tax $3.6 million) in the third quarter of 2026, compared to $3.8 million (after tax $2.9 million) during the same period in 2025.

Nelnet Bank confirmed earnings of $6.2 million (after tax, $4.7 million) in the third quarter of 2026, which came from changes in the fair value of derivative instruments that did not meet the conditions for hedge accounting.

For the quarter ending September 30, 2026, Nelnet Bank reported a net profit after taxes of $12 million, compared to $4.6 million in the same period of 2025.

Loan Servicing and Systems

The revenue of the department in the third quarter was 139.8 million US dollars, which is lower than the 151.1 million US dollars in the same period of 2025. In the third quarters of 2026 and 2025, the company recognized revenues of 5.3 million US dollars and 32.9 million US dollars respectively, from modifications to contracts with the US Department of Education for which services had previously been provided. Excluding this portion of revenue, the department's revenue increased year-over-year, mainly due to the acquisition of NDS Canada in the first quarter of 2026, which contributed 16.5 million US dollars to revenue in the third quarter. As of September 30, 2026, the company provides services to the Department of Education, FFELP, private education, and consumer loans, covering 523.6 billion US dollars in loans for 154 million borrowers.

The department's net profit after tax for the three months ending September 30, 2026, was 12.5 million US dollars, compared to 35.2 million US dollars for the same period in 2025. Loan Servicing and Systems

Education Technology Services and Payments

In the third quarter of 2026, the revenues of the Education Technology Services, and, and Payments operating divisions totaled 132.9 million US dollars, an increase from 129.3 million US dollars in the same period of 2025. After deducting direct service costs, the revenue for this division in the third quarter was 83.4 million US dollars, compared to 79 million US dollars in the same period of 2025.

For the three months ending September 30, 2026, the after-tax net profit of this division was $19.4 million, compared to $19 million for the same period in 2025.

Corporate and Other Activities

For the three months ending September 30, 2026, the company recognized an unrealized loss of $9.3 million (after tax, $7.1 million) due to changes in the fair value of certain tradable equity securities.

In the 2025 financial results, there was a gain related to venture capital investment amounting to $30.2 million ($23 million after taxes), with the equity financing for this investment being completed in the third quarter.

Stock Repurchase

In the first nine months of 2026, the company repurchased 731,932 Class A common shares for $93.7 million, at an average price of $128.04 per share; of this, 415,332 Class A common shares were repurchased in the third quarter for $53.1 million, at an average price of $127.81 per share. From September 30, 2026, to November 5, 2026, the company repurchased another 295,990 Class A common shares for $37 million, at an average price of $125.04 per share.

The board of directors announces dividends for the fourth quarter

Nelnet The board of directors announced the distribution of a fourth-quarter cash dividend of $0.36 per share for the company's issued Class A common stock and Class B common stock. The dividend will be paid on December 15, 2026, with the record date being at the close of business on December 1, 2026.

Forward-looking and Cautionary Statements

This press release contains forward-looking statements in the meaning of the Federal Securities Laws. The use of words such as "expect", "assume", "believe", "continue", "may", "ensure", "estimate", "forecast", "focus", "predict", "future", "intend", "perhaps", "goal", "plan", "potential", "predict", "advance", "arrange", "should", "strategy", "will", "shall", and expressions in the future tense are intended to identify these 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. Actual results and performance may differ significantly from the future results or performance expressed or implied by the forward-looking statements.

Such risks and uncertainties include, but are not limited to: the company's ability to successfully maintain and increase the scale of student loan allocations under existing and future service contracts; adverse contract modifications or interpretations; the ongoing need to meet service requirements to avoid performance penalties; and the company's compliance with agreements signed with third-party clients regarding federal direct loan programs, Canadian loans, FFEL Program, private education loans, and consumer loan services; loan portfolio risks such as credit risk, prepayment risk, interest rate basis risk, and repricing risk; risks associated with using derivatives to manage interest rate volatility exposure; uncertainties regarding the expected returns on purchased securitized and unsecuritized FFELP, private education, consumer, and other loans, or their residual interests, as well as measures to further purchase FFELP, private education, consumer, and other loans; financing and liquidity risks, including those arising from changes in the interest rate environment; risks that educational loan terms and the education credit and service markets may change due to relevant laws, regulations, and changes in government projects and budgets; risks of failures or intrusions in the company's or third-party suppliers' operations or information systems/infrastructure, including cyberattacks that may lead to the leakage of confidential or personal information and/or damage to reputation; risks related to the use of artificial intelligence; inherent uncertainties in forecasts regarding the future cash flows (including residual interests) of student loan assets and related asset-backed securitizations; risks related to the company's ability to achieve business objectives, effectively deploy loan and deposit strategies, and reach expected market penetration rates; risks associated with the company's solar energy tax equity partnerships, including the possibility of not being able to realize tax credits that may still be subject to recovery by tax authorities, as well as the impact of the acceleration of the expiration and exit of One Big Beautiful Bill solar energy tax credits; and risks and uncertainties related to other initiatives (and their expected revenues).Including venture capital, real estate, reinsurance, acquisitions, and other activities aimed at diversifying the company within and beyond its traditional education-related core business; risks and uncertainties related to climate change; risks arising from changes in macroeconomic conditions and consumer behavior; risks associated with the company's ability to adapt to technological changes; risks related to the exclusive court clauses in the company's articles of association; risks related to the chairman's control over company matters through voting rights; risks associated with related-party transactions; risks related to natural disasters, terrorist activities, or international hostilities; as well as risks and uncertainties related to litigation matters and maintaining compliance with the extensive regulatory requirements applicable to the company's business, and the inherent uncertainties in the estimates and assumptions that management must make regarding future events when preparing consolidated financial statements.

For more information, please refer to the "Risk Factors" section in the documents submitted or provided by the company to the U.S. Securities and Exchange Commission, as well as other indicative discussions regarding risks and uncertainties. All forward-looking statements in this document are as of the date of issuance. Although the company may voluntarily update or revise forward-looking statements from time to time to reflect actual results or expected changes in the company, the company has no obligation to do so except as required by law.

Non-GAAP Performance Indicators

The company prepares financial statements in accordance with U.S. GAAP and discloses financial results. However, the company also provides additional non-GAAP financial information related to specific projects, which management believes is important for assessing operating results and performance. The adjustments between GAAP and non-GAAP financial information, as well as the reasons why the company deems it useful for investors to provide this supplementary information, are outlined in the "Non-GAAP Disclosures" section below.

Revealed by non-GAAP

(Unit: Thousand US Dollars, except for per-share data)

(Unaudited)

The non-GAAP financial indicators disclosed by management are intended to provide investors with additional information and insights into business trends, and in some cases, reflect the criteria used by rating agencies and other users of financial information. These indicators do not conform to GAAP, nor can they replace GAAP. Moreover, they may differ from or be inconsistent with the non-GAAP indicators used by other companies. The company discloses this non-GAAP information because it believes it can provide supplementary data on operational and performance indicators that management closely monitors. Currently, there are no comprehensive and authoritative guidelines for presenting such non-GAAP information; these details are merely used to complement GAAP performance and to provide additional information for management to assess results.