NELNET INC (NNI)

CIK: 0001258602. SIC: 6141 Personal Credit Institutions. Latest 10-K as of: 2026-02-26.

SIC breadcrumb: Finance, Insurance, And Real Estate > SIC Major Group 61 > SIC 6141 Personal Credit Institutions

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1258602. Latest filing source: 0001258602-26-000014.

Selected Fundamentals

Metric	Value	Unit	FY	Filed
Revenue	851,459,000	USD	2025	2026-02-26
Net income	428,474,000	USD	2025	2026-02-26
Assets	14,063,783,000	USD	2025	2026-02-26

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001258602.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric	2010	2011	2012	2013	2014	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Revenue						760,746,000	770,426,000	924,266,000	948,677,000	619,656,000	523,835,000	742,806,000	1,109,800,000	973,399,000	851,459,000
Net income						256,751,000	173,166,000	227,913,000	141,803,000	352,443,000	393,286,000	406,899,000	89,826,000	184,045,000	428,474,000
Diluted EPS	3.81	4.23	3.74						3.54	9.02	10.20	10.82	2.40	5.02	11.79
Operating cash flow						300,188,000	322,267,000	270,892,000	298,915,000	349,100,000	480,328,000	683,060,000	432,027,000	662,890,000	422,985,000
Capital expenditures						67,602,000	156,005,000	125,023,000	92,499,000	113,312,000	58,952,000	59,421,000	74,052,000	20,903,000	26,238,000
Dividends paid							24,097,000	26,839,000	29,485,000	31,778,000	34,457,000	36,608,000	39,419,000	40,836,000	42,993,000
Share buybacks						69,091,000	68,896,000	45,331,000	40,411,000	73,358,000	58,111,000	97,685,000	28,028,000	83,290,000	69,346,000
Assets						27,193,095,000	23,964,435,000	25,220,968,000	23,708,970,000	22,646,160,000	21,678,041,000	19,355,256,000	16,712,384,000	13,777,753,000	14,063,783,000
Liabilities					28,372,465,000		21,799,048,000	22,906,189,000	21,317,876,000	20,017,811,000	18,725,203,000	16,174,142,000	13,512,277,000	10,478,636,000	10,486,554,000
Stockholders' equity				1,443,662,000	1,725,448,000			2,304,464,000	2,386,712,000	2,632,042,000	2,951,206,000	3,198,959,000	3,253,751,000	3,349,762,000	3,685,792,000
Cash and cash equivalents						69,654,000	66,752,000	121,347,000	133,906,000	121,249,000	125,563,000	118,146,000	168,112,000	194,518,000	295,983,000
Free cash flow						232,586,000	166,262,000	145,869,000	206,416,000	235,788,000	421,376,000	623,639,000	357,975,000	641,987,000	396,747,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric	2014	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Net margin		33.75%	22.48%	24.66%	14.95%	56.88%	75.08%	54.78%	8.09%	18.91%	50.32%
Return on equity				9.89%	5.94%	13.39%	13.33%	12.72%	2.76%	5.49%	11.63%
Return on assets		0.94%	0.72%	0.90%	0.60%	1.56%	1.81%	2.10%	0.54%	1.34%	3.05%
Liabilities / equity	16.44			9.94	8.93	7.61	6.34	5.06	4.15	3.13	2.85

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001258602.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarter	End Date	Revenue	Net Income	Diluted EPS	Method
2022-Q2	2022-06-30			2.26	reported discrete quarter
2022-Q3	2022-09-30			2.80	reported discrete quarter
2023-Q1	2023-03-31			0.71	reported discrete quarter
2023-Q2	2023-06-30	284,027,000	28,267,000	0.75	reported discrete quarter
2023-Q3	2023-09-30	284,551,000	45,332,000	1.21	reported discrete quarter
2023-Q4	2023-12-31	275,253,000	-8,554,000		derived Q4 = FY annual - nine-month YTD
2024-Q1	2024-03-31	268,802,000	73,210,000	1.97	reported discrete quarter
2024-Q2	2024-06-30	242,866,000	45,091,000	1.23	reported discrete quarter
2024-Q3	2024-09-30	240,483,000	2,388,000	0.07	reported discrete quarter
2024-Q4	2024-12-31	221,249,000	63,159,000		derived Q4 = FY annual - nine-month YTD
2025-Q1	2025-03-31	207,828,000	82,560,000	2.26	reported discrete quarter
2025-Q2	2025-06-30	212,289,000	181,459,000	4.97	reported discrete quarter
2025-Q3	2025-09-30	205,958,000	106,684,000	2.94	reported discrete quarter
2025-Q4	2025-12-31	225,384,000	57,771,000		derived Q4 = FY annual - nine-month YTD
2026-Q1	2026-03-31	211,226,000	71,126,000	1.97	reported discrete quarter

Quarterly Charts

Macro Cross-References

CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
UNRATE - Unemployment Rate
FEDFUNDS - Federal Funds Effective Rate
CES0500000003 - Average Hourly Earnings of All Employees, Total Private
DFEDTARU - Federal Funds Target Range - Upper Limit
DFEDTARL - Federal Funds Target Range - Lower Limit
DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
PCEPI - Personal Consumption Expenditures: Chain-type Price Index
PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
PPIACO - Producer Price Index by Commodity: All Commodities
T10YIE - 10-Year Breakeven Inflation Rate
U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
PAYEMS - All Employees, Total Nonfarm
CIVPART - Labor Force Participation Rate
EMRATIO - Employment-Population Ratio
UNEMPLOY - Unemployed
CE16OV - Employment Level
ICSA - Initial Claims
JTSJOL - Job Openings: Total Nonfarm
JTSQUR - Quits: Total Nonfarm
GDPC1 - Real Gross Domestic Product
A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
INDPRO - Industrial Production: Total Index
TCU - Capacity Utilization: Total Index
HOUST - New Privately-Owned Housing Units Started: Total Units
PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
RSAFS - Advance Retail Sales: Retail Trade
PCE - Personal Consumption Expenditures
DSPIC96 - Real Disposable Personal Income
PSAVERT - Personal Saving Rate
M2SL - M2
BOPGSTB - U.S. International Trade in Goods and Services: Balance
MSPUS - Median Sales Price of Houses Sold for the United States
HSN1F - New One Family Houses Sold: United States
RHORUSQ156N - Homeownership Rate in the United States
TTLCONS - Total Construction Spending: Total Construction in the United States
RRVRUSQ156N - Rental Vacancy Rate in the United States
TOTALSL - Total Consumer Credit Owned and Securitized
REVOLSL - Revolving Consumer Credit Owned and Securitized
DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
GDP - Gross Domestic Product
GPDI - Gross Private Domestic Investment
GCE - Government Consumption Expenditures and Gross Investment
PCEC - Personal Consumption Expenditures
NETEXP - Net Exports of Goods and Services
GFDEBTN - Federal Debt: Total Public Debt
GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
FYFSD - Federal Surplus or Deficit
FGRECPT - Federal Government Current Receipts
FGEXPND - Federal Government: Current Expenditures
MANEMP - All Employees, Manufacturing
USCONS - All Employees, Construction
USTRADE - All Employees, Retail Trade
USFIRE - All Employees, Financial Activities
USGOVT - All Employees, Government
AWHAETP - Average Weekly Hours of All Employees, Total Private
DGORDER - Manufacturers' New Orders: Durable Goods
NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
BUSINV - Total Business Inventories
EXPGS - Exports of Goods and Services
IMPGS - Imports of Goods and Services
IR - Import Price Index (End Use): All Commodities
PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001258602-26-000033.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Management’s Discussion and Analysis of Financial Condition and Results of Operations is for the three months ended March 31, 2026 and 2025. All dollars are in thousands, except per share amounts, unless otherwise noted.)

The following discussion and analysis provides information that the Company’s management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of the Company. The discussion and analysis should be read in conjunction with the Company’s consolidated financial statements included in the 2025 Annual Report.

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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,” "focus," “forecast,” “future,” “intend,” “may,” "objective," “plan,” “potential,” “predict,” "pursue," “scheduled,” “should,” "strategy," “will,” “would,” and similar expressions, as well as statements in future tense, are intended to identify forward-looking statements.

The forward-looking statements are based on assumptions and analyses made by management in light of management's experience and its perception of historical trends, current conditions, expected future developments, and other factors that management believes are appropriate under the circumstances. These statements are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results and performance to be materially different from any future results or performance expressed or implied by such forward-looking statements. These factors include, among others, the risks and uncertainties set forth in the “Risk Factors” section of the 2025 Annual Report and include such risks and uncertainties as:

•risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the Company under existing and future servicing contracts with the 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, Canada Student Loan Program, FFEL Program, private education, and consumer loans;

•loan portfolio risks such as credit risk, prepayment risk, interest rate basis and repricing risk, risks related to the use of derivatives to manage exposure to interest rate fluctuations, uncertainties regarding the expected benefits from purchased securitized and unsecuritized FFELP, private education, consumer, and other loans, or residual interests therein, and initiatives to purchase additional FFELP, private education, consumer, and other loans;

•financing and liquidity risks, including risks of changes in the interest rate environment;

•risks from changes in the terms of education loans and in the educational credit and services markets resulting from changes in applicable laws, regulations, and government programs and budgets;

•risks related to a breach of or failure in the Company's operational or information systems or infrastructure, or those of third-party vendors, including disclosure of confidential or personal information and/or damage to reputation resulting from cyber breaches;

•risks related to use of artificial intelligence;

•uncertainties inherent in forecasting future cash flows from student loan assets, including residual interests therein, and related asset-backed securitizations;

•risks related to the ability of Nelnet Bank to achieve its business objectives and effectively deploy loan and deposit strategies and achieve expected market penetration;

•risks related to the Company's solar tax equity partnerships, including risks of not being able to realize tax credits which remain subject to recapture by taxing authorities and risks from the impact of the enactment of the One Big Beautiful Bill that accelerates the expiration and phase out of solar energy credits;

•risks and uncertainties related to other initiatives (and anticipated income therefrom) including venture capital, real estate, reinsurance, acquisitions, and other activities, including activities that are intended to diversify the Company both within and outside of its historical core education-related businesses;

•risks and uncertainties associated with climate change; 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.

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.

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OVERVIEW

The Company is an operating holding company with primary businesses in consumer lending, loan servicing, payments, and technology-enabled services, many of which are focused on serving customers in the education sector. The Company conducts these activities both directly and through its wholly owned and majority-owned subsidiaries, and actively manages and operates its businesses on an integrated basis. Nelnet’s largest operating and technology platforms support loan servicing and education-related technology and payment solutions. A significant portion of the Company’s revenue is derived from net interest income earned on a portfolio of federally insured student loans, a substantial portion of which is serviced by the Company.

The Company has also broadened its operating business mix both within and beyond its historical education-focused activities. These businesses include banking and other financial services conducted through the Company’s bank and other subsidiaries, asset management and related customer-facing servicing, real estate development and management, reinsurance operations, renewable energy development, and selected strategic interests in early-stage, emerging growth, and other operating enterprises. The Company actively manages such businesses and holds interests in them for strategic and operational purposes.

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

The Company prepares its financial statements and presents its financial results in accordance with GAAP. However, it also provides additional non-GAAP financial information related to specific items management believes to be important in the evaluation of its operating results and performance. A reconciliation of the Company's GAAP net income to Non-GAAP net income excluding derivative market value adjustments, and a discussion of why the Company believes providing this additional information is useful to investors, are provided below.

Three months ended March 31,

2026

2025

GAAP net income attributable to Nelnet, Inc.

$

71,126 

82,560 

Realized and unrealized derivative market value adjustments (a)

(1,587)

6,324 

Tax effect (b)

381 

(1,519)

Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments

$

69,920 

87,365 

Earnings per share:

GAAP net income attributable to Nelnet, Inc.

$

1.97 

2.26 

Realized and unrealized derivative market value adjustments (a)

(0.04)

0.17 

Tax effect (b)

0.01 

(0.04)

Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments

$

1.94 

2.39 

(a) "Derivative market value adjustments" includes both the realized portion of gains and losses (corresponding to variation margin received or paid on derivative instruments that are settled daily at a central clearinghouse) and the unrealized portion of gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP. "Derivative market value adjustments" does not include "derivative settlements" that represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the Company's derivative instruments based on their contractual terms.

The accounting for derivatives requires that changes in the fair value of derivative instruments be recognized currently in earnings, with no fair value adjustment of the hedged item, unless specific hedge accounting criteria are met. Management has structured all of the Company’s derivative transactions with the intent that each is economically effective; however, the majority of the Company’s derivative instruments do not qualify for hedge accounting in the consolidated financial statements. As a result, the change in fair value for the derivative instruments that do not qualify for hedge accounting is reported in current period earnings with no consideration for the corresponding change in fair value of the hedged item. Under GAAP, the cumulative net realized and unrealized gain or loss caused by changes in fair values of derivatives in which the Company plans to hold to maturity will generally equal zero over the life of the contract. However, the net realized and unrealized gain or loss during any given reporting period fluctuates significantly from period to period.

The Company believes these point-in-time estimates of asset and liability values related to its derivative instruments that are subject to interest rate fluctuations are subject to volatility mostly due to timing and market factors beyond the control of management, and affect the period-to-period comparability of the results of operations. Accordingly, the Company’s management utilizes operating results excluding these items for comparability purposes when making decisions regarding the Company’s performance and in presentations with credit rating agencies, lenders, and investors. Consequently, the Company reports this non-GAAP information because the Company believes that it provides additional information regarding operational and performance indicators that are closely assessed by management and represents what earnings would have been had these derivatives qualified for hedge accounting. There is no comprehensive, authoritative guidance for the presentation of such non-GAAP information, which is only meant to supplement GAAP results by providing additional information that management utilizes to assess performance.

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

32

Operating Segments

The Company's reportable operating segments are described in note 1 of the notes to consolidated financial statements included in the 2025 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) divisi

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-26. Report date: 2025-12-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Management’s Discussion and Analysis of Financial Condition and Results of Operations is for the years ended December 31, 2025 and 2024. All dollars are in thousands, except share amounts, unless otherwise noted.)

The following discussion and analysis provides information that the Company’s management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of the Company. The discussion and analysis should be read in conjunction with the Company’s consolidated financial statements and related notes included in this report. This discussion and analysis contains forward-looking statements subject to various risks and uncertainties and should be read in conjunction with the disclosures and information contained in "Forward-Looking and Cautionary Statements" and Item 1A "Risk Factors" included in this report.

A discussion related to the results of operations and changes in financial condition for the year ended December 31, 2025 compared with the year ended December 31, 2024 is presented below. A discussion related to the results of operations and changes in financial condition for the year ended December 31, 2024 compared with the year ended December 31, 2023 can be found in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2024 Annual Report on Form 10-K, which was filed with the United States Securities and Exchange Commission on February 27, 2025.

OVERVIEW

The Company is an operating holding company with primary businesses in consumer lending, loan servicing, payments, and technology-enabled services, many of which are focused on serving customers in the education sector. The Company conducts these activities both directly and through its wholly owned and majority-owned subsidiaries, and actively manages and operates its businesses on an integrated basis. Nelnet’s largest operating and technology platforms support loan servicing and education-related technology and payment solutions. A significant portion of the Company’s revenue is derived from net interest income earned on a portfolio of federally insured student loans, a substantial portion of which is serviced by the Company.

The Company has also broadened its operating business mix both within and beyond its historical education-focused activities. These businesses include banking and other financial services conducted through the Company’s bank and other subsidiaries, asset management and related customer-facing servicing, real estate development and management, reinsurance operations, renewable energy development, and selected strategic interests in early-stage, emerging growth, and other operating enterprises. The Company actively manages such businesses and holds interests in them for strategic and operational purposes.

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

The Reconciliation Act of 2010 discontinued new loan originations under the FFEL Program, effective July 1, 2010, and requires all new federal student loan originations be made directly by the Department through the Federal Direct Loan Program. This law does not alter or affect the terms and conditions of existing FFELP loans. Subsequent to the Reconciliation Act of 2010, the Company no longer originates FFELP loans. However, a significant portion of the Company's income continues to be derived from its existing FFELP student loan portfolio. Interest income on the Company's existing FFELP loan portfolio will decline over time as the portfolio is paid down. To reduce its reliance on interest income from FFELP loans, the Company has expanded its services and products. This expansion has been accomplished through internal growth and innovation as well as acquisitions. The Company is also actively expanding its private education, consumer, and other loan portfolios, or residual

33

interests therein, and as part of this strategy launched Nelnet Bank in 2020. In addition, the Company has been servicing federally owned student loans for the Department since 2009.

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.

Year ended December 31,

2025

2024

GAAP net income attributable to Nelnet, Inc.

$

428,474 

184,045 

Realized and unrealized derivative market value adjustments (a)

9,098 

(10,124)

Tax effect (b)

(2,184)

2,430 

Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments

$

435,388 

176,351 

Earnings per share:

GAAP net income attributable to Nelnet, Inc.

$

11.79 

5.02 

Realized and unrealized derivative market value adjustments (a)

0.25 

(0.28)

Tax effect (b)

(0.06)

0.07 

Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments

$

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.

Operating Segments

The Company's reportable operating segments are described in note 1 of the notes to consolidated financial statements included in this 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

34

segment is expected to generate significant amounts of cash as the FFELP portfolio amortizes. The Company actively works to maximize the amount and timing of cash flows generated from its FFELP portfolio and seeks to acquire additional loan assets to leverage its servicing scale and expertise to generate incremental earnings and cash flow. Nelnet Bank operates as an internet industrial bank franchise focused on the private education and unsecured consumer loan markets, with a home office in Salt Lake City, Utah.

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

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

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

•The Company’s ownership and activities in real estate

•The Company’s ownership and management of its bond portfolio (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 includes the following items:

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

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

•The operating results of the Company’s participation in renewable energy solar developments through tax equity structures and administrative and management services provided by the Company on solar tax equity investments made by third parties

•The operating results of Nelnet Renewable Energy, the Company’s solar engineering, procurement, and construction business. The Company sold its ownership interest in Nelnet Renewable Energy during the fourth quarter of 2025.

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

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

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

35

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

Year ended December 31,

2025

2024

NDS

$

96,389 

40,497 

NBS

112,957 

117,896 

Nelnet Financial Services division:

AGM

126,480 

75,202 

Nelnet Bank

14,613 

(1,942)

Nelnet Insurance Services

15,209 

11,332 

WRCM

5,972 

5,391 

Real estate

(6,152)

(3,333)

Bond portfolio

39,441 

42,328 

Corporate:

Unallocated shared services and corporate costs

(41,893)

(46,194)

Renewable energy solar developments

(23,770)

(2,179)

Nelnet Renewable Energy - solar construction

(57,540)

(35,972)

ALLO

194,936 

8,087 

Venture capital

38,874 

6,912 

Other corporate activities

10,418 

10,481 

Eliminations/reclassifications

398 

77 

Net income before taxes

526,332 

228,584 

Income tax expense

(127,986)

(52,669)

Net loss attributable to noncontrolling interests

30,128 

8,130 

Net income

$

428,474 

184,045 

Impact of Significant Transactions on 2025 Operating Results

Operating results for fiscal year 2025 were materially affected by certain transactions. Management believes that discussion of these items is necessary to understand the Company’s financial performance for the period. These transactions are summarized below.

Partial Redemption of ALLO Membership Interests

ALLO, a fiber communication services provider, was a former majority-owned subsidiary, until a recapitalization of ALLO in 2020 resulted in a deconsolidation of ALLO from the Company’s consolidated financial statements. In June 2025, ALLO redeemed certain of its membership interests from members, including Nelnet. As part of the transaction, ALLO redeemed more than 50% of Nelnet’s voting membership interest in ALLO and all its outstanding preferred membership interest. At the closing of the transaction, Nelnet received cash proceeds of $410.9 million from ALLO related to these redemptions and recognized a pre-tax gain of $175.0 million, attributable to the redemption of the voting membership interest. This gain is included in “ALLO” in the above table. Following the transaction, Nelnet maintains a significant voting equity interest in ALLO. Nelnet’s ownership of voting membership interest in ALLO decreased from 45% to 27%.

Government Servicing Contract

Upon reaching a final agreement with the Department of Education, 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. This revenue is included in the operating results of “NDS” in the above table.

Venture Capital

The Company has an interest in CompanyCam, Inc. (“CompanyCam”), a technology company that provides a photo-based, cloud managed application designed for contractors and field service professionals to document projects in real-time. In August 2025, CompanyCam 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 interest and received cash proceeds of $10.1 million and

36

recognized a pre-tax gain of $7.8 million. The Company accounts for its interest in CompanyCam using the measurement alternative method, which requires it to adjust its carrying value for changes resulting from observable market transactions. As a result of CompanyCam’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 interest in CompanyCam to reflect the August 2025 transaction value. These gains are included in “Venture capital” in the above table. After the completion of this transaction, the carrying amount of the Company’s remaining interest in CompanyCam is $31.7 million.

Reversal of Provision for Loan Losses for Loans Sold

In July 2025, the Company 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. The Company reduced its allowance (and recognized negative provision expense) of $28.9 million (that increased income) related to this loan sale. The reversal of the allowance related to this loan sale is included in the operating results of “AGM” in the above table.

Nelnet Renewable Energy (NRE)

NRE was the Company’s solar construction subsidiary, providing full‑service engineering, procurement, and construction (EPC) services. The Company entered the EPC business through its acquisition of GRNE Solar in July 2022. Following the acquisition, NRE experienced low and, in certain cases, negative margins on projects. In addition, changes in legislation reducing clean energy tax incentives, tariff uncertainty, and rising construction costs adversely affected revenue and net income. As a result of these factors, the Company sold NRE in November 2025.

For the year ended December 31, 2025, NRE generated a net loss before taxes of $57.5 million, as reflected in the table above. Although the Company retained a limited number of construction contracts to complete following the sale, the Company does not expect the operating results from such contracts to be significant in future periods.

Recent Development

On February 2, 2026, the Company acquired a Canadian student loan servicing business for CAD $130.5 million (USD $95.7 million). The acquired business (“NDS Canada”) delivers technology-enabled student loan servicing for governments and financial institutions, managing 2.7 million borrowers on proprietary platforms. Beginning on the acquisition date, the operating results of NDS Canada will be included in the Loan Servicing and Systems reportable operating segment.

CONSOLIDATED RESULTS OF OPERATIONS

An analysis of the Company's consolidated operating results for the year ended December 31, 2025 compared with 2024 is provided below.

The Company’s operating results are primarily driven by the performance of its existing loan portfolio and the revenues generated by its fee-based businesses and the costs to provide such services. The performance of the Company’s portfolio is driven by net interest income (which includes financing costs) and losses related to credit quality of the assets, along with the cost to administer and service the assets and related debt.

The Company operates as distinct reportable operating segments as described above. For a reconciliation of the reportable segment operating results to the consolidated results of operations, see note 16 of the notes to consolidated financial statements included in this report. Since the Company monitors and assesses its operations and results based on these segments, the discussion following the consolidated results of operations is presented on a reportable segment basis.

Year ended December 31,

2025

2024

Additional information

Loan interest

$

686,085 

787,498 

Decrease was due to a decrease in the average balance of loans and gross yield earned on loans.

Investment interest

165,374 

185,901 

Includes income from operating cash, investments, and restricted cash in asset-backed securitizations. Decrease was due to a decrease in interest rates and interest earned on restricted cash in asset-backed securitizations due to lower balances. These decreases were partially offset by an increase in the average balance of investments.

Total interest income

851,459 

973,399 

Interest expense

496,950 

680,537 

Decrease was due to a decrease in the average balance of debt outstanding and decrease in cost of funds. These decreases were partially offset by an increase in interest expense on a larger deposit balance at Nelnet Bank.

Net interest income

354,509 

292,862 

37

Less provision for loan losses

67,851 

54,607 

Represents the current period provision to reflect the lifetime expected credit losses related to the Company’s loan portfolio. The Company reduced its allowance (and recognized negative provision expense) of $28.9 million and $13.5 million in 2025 and 2024, respectively, related to consumer loan sales. See note 4 of the notes to consolidated financial statements in this report for the factors impacting provision for loan losses for the periods presented.

Less provision for beneficial interests

11,311 

39,491 

Represents the current period provision expense related to the Company’s beneficial interest in certain loan securitizations. See note 7 of the notes to consolidated financial statements in this report for additional information.

Net interest income after provision

275,347 

198,764 

Other income (expense):

LSS revenue

509,089 

482,408 

See LSS operating segment - results of operations.

ETSP revenue

507,150 

486,962 

See ETSP operating segment - results of operations.

Reinsurance premiums earned

107,502 

62,923 

Represents premiums earned, net of ceded portion, from reinsurance treaties on primarily property and casualty policies. Increase was due to an increase in overall property volume and new business.

Solar construction revenue

14,371 

56,569 

Represents revenue earned from NRE providing solar construction services. The Company sold NRE in November 2025. Although the Company retained a limited number of construction contracts to complete following the sale, the Company does not expect the operating results from such contracts to be significant in future periods.

Other, net

97,587 

59,959 

See table below for components of “other, net.”

Gain on partial redemption of ALLO investment

175,044 

— 

Represents a gain recognized from the partial redemption of ALLO. See note 3 of the notes to consolidated financial statements included in this report for additional information.

Derivative settlements, net

2,700 

6,134 

The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility. Derivative settlements for each applicable period should be evaluated with the Company's net interest income. See NFS division - results of operations - AGM and Nelnet Bank operating segments - for additional information.

Derivative market value adjustments, net

(9,098)

10,124 

Includes the realized and unrealized gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP. The majority of the derivative market value adjustments during the periods presented related to the changes in fair value of AGM’s floor income and Nelnet Bank’s interest rate swaps. Such changes reflect that a decrease in the forward yield curve during a reporting period results in a decrease in the fair value of the interest rate swaps, and an increase in the forward yield curve during a reporting period results in an increase in the fair value of such swaps.

Total other income (expense), net

1,404,345 

1,165,079 

Cost of services and expenses:

Loan servicing contract fulfillment and acquisition costs

7,555 

1,889 

Represents primarily the amortization of previously capitalized contract fulfillment costs. The costs were pre-contract costs incurred to enhance the resources of the Company to satisfy future performance obligations and are expected to be recovered.

Cost to provide education technology services and payments

176,907 

172,763 

Represents direct costs to provide payment processing and instructional services in ETSP. See ETSP operating segment - results of operations.

Cost to provide solar construction services

41,810 

77,673 

Represents direct costs related to NRE providing solar construction services.

Total cost of services

226,272 

252,325 

Salaries and benefits

558,786 

576,931 

Decrease was primarily due to staff reductions announced in June 2024 in the LSS operating segment after the completion of required servicing platform enhancements for the new government servicing contract and the transfer of direct loan servicing volume to one platform. These staff reductions took place during the second half of 2024. These reductions were partially offset by an increase in headcount at the ETSP operating segment to support the growth of its customer base and the investment in the development of new technologies.

Depreciation and amortization

33,571 

58,116 

Includes depreciation of property and equipment and the amortization of intangibles from prior business acquisitions. Decrease was primarily due to (i) reduction in depreciation as a result of prior year non-cash impairment charges recognized for lease, buildings, and associated improvements as the Company consolidated office space; and (ii) certain information technology activities moved to cloud computing and such expenses classified as other expenses.

Reinsurance losses and underwriting expenses

93,551 

55,246 

Represents case reserve, estimated loss reserve, and amortization of acquisition costs, which consist primarily of commissions and brokerage expenses, net of ceded portion, from reinsurance treaties on primarily property and casualty policies. Increase was primarily due to an increase in overall property volume and new business.

Impairment expense

29,612 

3,138 

Represents impairment charges recognized by the Company. See note 11 of the notes to consolidated financial statements in this report for additional information.

Other expenses

211,568 

189,503 

Includes expenses such as postage and distribution, consulting and professional fees, servicing fees, marketing, travel, communications, and certain information technology-related costs. Increase was primarily due to expenses related to certain information technology activities moved to cloud computing. See corresponding decrease to depreciation and amortization above.

Total operating expenses

927,088 

882,934 

Income before income taxes

526,332 

228,584 

Income tax expense

(127,986)

(52,669)

The effective tax rate was 23.00% and 22.25% for 2025 and 2024, respectively. The increase in the effective tax rate in 2025 was due to an increase in state income taxes. The Company expects its 2026 effective tax rate will range between 22.5% and 24.5%.

Net income

398,346 

175,915 

38

Net loss attributable to noncontrolling interests

30,128 

8,130 

Represents the net loss attributable to the holders of noncontrolling membership interests, the majority of which are related to renewable energy solar developments.

Net income attributable to Nelnet, Inc.

$

428,474 

184,045 

Additional information:

Net income attributable to Nelnet, Inc.

$

428,474 

184,045 

See "Overview - GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments" above for additional information about non-GAAP financial information.

Derivative market value adjustments, net

9,098 

(10,124)

Tax effect

(2,184)

2,430 

Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments

$

435,388 

176,351 

The following table summarizes the components of "other, net" in "other income (expense)" on the consolidated statements of income:

Year ended December 31,

2025

2024

Additional information

Investment activity, net (a)

$

61,072 

12,438 

See note (b) below for additional information.

ALLO preferred return

14,548 

17,486 

See Corporate - results of operations and note 7 of the notes to consolidated financial statements included in this report.

Solar consulting fee income

13,127 

6,134 

See Corporate - results of operations.

Borrower late fee income

11,664 

8,828 

See NFS division - results of operations - AGM operating segment.

Administration/sponsor fee income

6,400 

5,823 

See NFS division - results of operations - AGM operating segment.

Investment advisory services (WRCM)

6,366 

5,934 

See NFS division - results of operations - NFS other operating segments.

Loss from ALLO voting membership interest

— 

(10,693)

See Corporate - results of operations and note 7 of the notes to consolidated financial statements included in this report.

Loss from solar investments, net

(29,029)

(6,477)

See Corporate - results of operations and note 7 of the notes to consolidated financial statements included in this report.

(Loss) gain on debt repurchases

(4,849)

54 

See NFS division - results of operations - AGM operating segment and note 5 of the notes to consolidated financial statements included in this report.

Loss on sale of loans, net

(1,720)

(1,643)

See NFS division - results of operations - AGM operating segment.

Other

20,008 

22,075 

Other, net

$

97,587 

59,959 

(a)    The Company anticipates fluctuations in future periodic earnings resulting from investment purchases, sales, and valuation adjustments.

(b)    Investment activity by operating segment and investment type is summarized below. Included under Venture Capital and Funds for 2025 is a gain of $30.2 million recognized by the Company (in Corporate) related to its interests in CompanyCam. See note 7 of the notes to consolidated financial statements included in this report for additional information.

Real Estate

Venture Capital and Funds

Equity / Bonds

Total

Year ended December 31, 2025

NFS - AGM

$

— 

15,847 

— 

15,847 

NFS - Nelnet Bank

— 

818 

1,892 

2,710 

NFS - Other Operating Segments

(657)

— 

805 

148 

Corporate

— 

43,576 

(1,209)

42,367 

$

(657)

60,241 

1,488 

61,072 

Year ended December 31, 2024

NFS - AGM

$

— 

720 

— 

720 

NFS - Nelnet Bank

— 

(12)

2,926 

2,914 

NFS - Other Operating Segments

(2,297)

— 

2,598 

301 

Corporate

— 

8,503 

— 

8,503 

$

(2,297)

9,211 

5,524 

12,438 

39

LOAN SERVICING AND SYSTEMS OPERATING SEGMENT – RESULTS OF OPERATIONS

Loan Servicing Volumes

As of

December 31,

2025

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

$

434,479 

458,679 

465,689 

482,786 

489,877 

492,142 

489,298 

495,409 

494,691 

FFELP

11,594 

11,982 

12,386 

12,826 

13,260 

13,745 

14,576 

15,783 

17,462 

Private and consumer

40,088 

38,060 

38,018 

46,728 

29,226 

20,666 

19,876 

21,015 

20,493 

Total

$

486,161 

508,721 

516,093 

542,340 

532,363 

526,553 

523,750 

532,207 

532,646 

Number of servicing borrowers:

Government

11,426,789 

12,387,665 

12,694,386 

13,453,127 

14,049,550 

14,114,468 

14,096,152 

14,328,013 

14,503,057 

FFELP

463,109 

482,696 

502,205 

524,421 

549,861 

574,979 

610,745 

656,814 

725,866 

Private and consumer

1,349,414 

1,325,037 

1,326,451 

1,350,999 

1,168,293 

851,747 

829,072 

882,256 

894,703 

Total

13,239,312 

14,195,398 

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:

2,886,458 

2,839,493 

2,056,358 

1,427,800 

842,200 

662,075 

133,681 

65,295 

70,580 

Summary and Comparison of Operating Results

Year ended December 31,

2025

2024

Additional information

Interest income

$

2,441 

4,877 

Represents interest income on cash balances primarily collected from borrower remittances that are subsequently disbursed to servicing customers (lenders).

Loan servicing and systems revenue

509,089 

482,408 

See table below for additional information.

Intersegment servicing revenue

22,158 

24,493 

Represents revenue earned by LSS from servicing loans for AGM and Nelnet Bank, which will continue to decrease as AGM's FFELP portfolio pays off.

Other income

459 

2,769 

The 2025 activity represents revenue earned from leasing available owned office space to third parties. In 2024 the activity also included administrative support services that are no longer provided.

Total other income

531,706 

509,670 

Contract fulfillment and acquisition costs

7,555 

1,889 

Represents primarily the amortization of previously capitalized contract fulfillment costs. The costs were pre-contract costs incurred to enhance the resources of the Company to satisfy future performance obligations and are expected to be recovered.

Salaries and benefits

271,806 

300,366 

Represents wages and salaries, payroll taxes, incentive and share-based compensation, and costs associated with employee benefit programs.

Depreciation

8,969 

19,475 

Represents the depreciation of the cost of primarily computer equipment and software and building and building improvements over their estimated useful lives. Decrease primarily due to certain information technology activities moved to cloud computing, which is incurred at the corporate level and is classified as other expenses and intercompany expenses rather than depreciation expense.

Postage expense

35,344 

36,820 

Represents primarily mailing costs for borrower communication, including required notices related to servicing.

Impairment expense

— 

736 

Other expenses

46,273 

43,282 

Represents various expenses such as communications, professional fees, software, including software subscriptions.

Intersegment expenses

67,811 

71,482 

Represents costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.

Total operating expenses

430,203 

472,161 

Income before income taxes

96,389 

40,497 

Income tax expense

(23,134)

(9,719)

Represents income tax expense at an effective tax rate of 24%.

Net income

$

73,255 

30,778 

40

GAAP before tax operating margin

18.4 

%

8.0 

%

Before tax operating margin is a measure of before tax operating profitability as a percentage of revenue, and for LSS is calculated as income before income taxes divided by the total of loan servicing and systems revenue (less contract fulfillment and acquisition costs), intersegment servicing revenue, and other income. The Company uses this metric to monitor and assess the segment’s performance, manage operating costs, identify and evaluate business trends affecting the segment, and make strategic decisions, and believes that it provides additional information to facilitate an understanding of the operating performance of the segment and provides a meaningful comparison of the results of operations between periods.

Non-recurring government loan servicing revenue

(5.5)

— 

Non-GAAP before tax operating margin, excluding non-recurring government loan servicing revenue

12.9 

%

8.0 

%

Operating Results Highlights

•LSS has remained focused on reducing operating expenses. In June 2024, following the completion of required servicing platform enhancements for the new government servicing contract and the consolidation of direct loan servicing onto a single platform, the Company announced workforce reductions. Approximately 220 associates were impacted during the second half of 2024. Operating costs also declined as a result of migrating to one government servicing platform in 2024 and the continued execution of cost-saving initiatives, including process optimization, technology enhancements, and the expanded use of AI.

•Before-tax operating margin, excluding $32.9 million of non-recurring government loan servicing revenue recognized in 2025, improved due to higher private education and consumer loan servicing volumes and lower operating expenses. These benefits were partially offset by lower blended revenue per borrower under the new government servicing contract as compared to the legacy contract.

Loan servicing and systems revenue

The following table presents disaggregated revenue by service offering for the LSS operating segment.

Year ended December 31,

2025

2024

Additional information

Government loan servicing

$

363,970 

380,921 

Represents revenue from the Company’s servicing contract with the Department. The decrease was primarily attributable to (i) a reduction in the number of borrowers serviced, (ii) lower blended revenue per borrower under the new government servicing contract, under which the Company began recognizing revenue on April 1, 2024, as compared to the legacy contract, and (iii) the recognition of $10.9 million of revenue in 2024 to reflect a settlement related to certain provisions included in the legacy contract concerning inflation adjustments.

Borrower volume declined through 2025 as servicing volume was transferred, at the Department’s direction, from the Company to its remote-hosted servicing customer to support the stand‑up of a new servicer. In addition, borrower volume declined beginning in the fourth quarter of 2025 as certain borrowers exiting the CARES Act forbearance period failed to resume payment activity and were transferred to the Department’s Debt Management and Collections System for management of defaulted federal student loans.

The decrease in revenue was partially offset by the recognition of $32.9 million of non‑recurring revenue in 2025 upon reaching a final agreement with the Department on a contract modification for services previously performed.

Private education and consumer loan servicing

94,472 

63,453 

Increase was due to an increase in loan servicing volume from the conversion of Discover Financial Services and SoFi Lending Corp. loan portfolios during the fourth quarter of 2024 and first quarter of 2025. Over time, revenue earned on the Discover Financial Services portfolio will decrease as borrowers pay off their loans.

FFELP loan servicing

8,878 

12,212 

Represents revenue from servicing third-party customers' FFELP portfolios. Over time, FFELP servicing revenue will decrease as third-party customers' FFELP portfolios pay off.

41

Software services

38,416 

21,032 

Represents revenue from providing remote hosted servicing software to certain Department and other servicers and providing diversified technology services. Increase was primarily due to the Company's recognition of revenue beginning in the second quarter of 2024 from a new remote hosted servicing customer awarded a USDS contract. The Company continued to transfer volume through the end of 2025 to this new remote hosted servicing customer at the Department's direction to stand-up and establish the new servicer. The Company does not expect to transfer additional volume to this new servicer in 2026.

Outsourced services

3,353 

4,790 

Represents revenue from providing contact center and back office operational outsourcing services.

Loan servicing and systems revenue

$

509,089 

482,408 

EDUCATION TECHNOLOGY SERVICES AND PAYMENTS OPERATING SEGMENT – RESULTS OF OPERATIONS

This segment of the Company’s business is subject to seasonal fluctuations which correspond, or are related to, the traditional school year. Tuition management revenue is recognized over the course of the academic term, but the peak operational activities take place in summer and early fall. Higher amounts of revenue are typically recognized during the first quarter due to fees related to grant and aid applications as well as online applications and enrollment services. The Company’s operating expenses do not follow the seasonality of the revenues. This is primarily due to generally fixed year-round personnel costs and seasonal marketing costs. 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.

Summary and Comparison of Operating Results

Year ended December 31,

2025

2024

Additional information

Interest income

$

26,476 

29,891 

Represents interest income on tuition funds held in custody for schools.

Education technology services and payments revenue

507,150 

486,962 

See table below for additional information.

Intersegment revenue

265 

220 

Total other income

507,415 

487,182 

Cost of services

176,907 

172,763 

See table below for additional information.

Salaries and benefits

169,424 

164,716 

Represents wages and salaries, payroll taxes, incentive and share-based compensation, and costs associated with employee benefit programs.

Depreciation and amortization

10,884 

10,531 

Represents primarily amortization of intangible assets from prior business acquisitions and depreciation of capitalized software development costs.

Impairment expense

1,145 

— 

Other expenses

37,962 

32,281 

Represents various expenses such as advertising, professional fees, analysis fees, software subscriptions, and travel.

Intersegment expenses, net

24,612 

18,886 

Represents costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.

Total operating expenses

244,027 

226,414 

Income before income taxes

112,957 

117,896 

Income tax expense

(27,120)

(28,333)

Represents income tax expense at an effective tax rate of 24%.

Net income

85,837 

89,563 

Net loss attributable to noncontrolling interests

45 

158 

Amounts for noncontrolling interests reflect the net loss attributable to the holders of minority membership interests in NextGen. In April 2025, the Company acquired the remaining 20.0% of NextGen for $3.9 million.

Net income

$

85,882 

89,721 

42

Education technology services and payments revenue

The following table presents disaggregated revenue by service offering for the ETSP operating segment.

Year ended December 31,

2025

2024

Additional information

Tuition payment plan services

$

141,246 

135,851 

Increase was due to a higher number of payment plans in the K-12 and higher education markets for both new and existing customers.

Payment processing

193,317 

179,043 

Increase was due to an increase in payment volumes for both the K-12 and higher education markets due to new customers and an increase in volume from existing customers.

Education technology services

171,481 

169,065 

The increase was primarily driven by higher revenue from professional development and instructional services funded by sources other than the Emergency Assistance to Non-Public Schools (EANS) program, as well as growth in financial aid management, student information system, and enrollment services. Revenue recognition for professional development and instructional services is dependent on both the availability of government funding to schools and individual school decisions regarding the timing and manner of fund utilization.

These increases were partially offset by a decline in FACTS education services revenue, reflecting the continued wind‑down of economic aid provided to private schools in response to the COVID‑19 pandemic. Instructional services provided to private schools have historically been funded through the EANS program. Funding under the EANS II program ended on September 30, 2024. Revenue recognized under the EANS program totaled $1.7 million and $23.1 million in 2025 and 2024, respectively.

Other

1,106 

3,003 

Education technology services and payments revenue

507,150 

486,962 

Cost of services

176,907 

172,763 

Represents direct costs to provide payment processing revenue and such costs decrease/increase in relationship to payment volumes. Costs to provide instructional services are also a component of this expense and decrease/increase in relationship to instructional services revenues.

Net revenue

$

330,243 

314,199 

GAAP before tax operating margin

34.2 

%

37.5 

%

Before tax operating margin, excluding net interest income, is a non-GAAP measure of before tax operating profitability as a percentage of revenue, and for the ETSP segment is calculated as income before income taxes less net interest income divided by net revenue. The Company uses this metric to monitor and assess the segment’s performance, manage operating costs, identify and evaluate business trends affecting the segment, and make strategic decisions, and believes that it facilitates an understanding of the operating performance of the segment and provides a meaningful comparison of the results of operations between periods.

Net interest income

(8.0)

(9.5)

Non-GAAP before tax operating margin, excluding net interest income

26.2 

%

28.0 

%

Operating Results Highlights

•ETSP net income and before tax operating margin decreased in 2025 compared with 2024 due to a decrease in contribution from FACTS education services following the expiration of the EANS program funding in 2024. In addition, operating expenses increased to support the growth in the customer base and investments in the development of new technologies. Net income was also impacted in 2025 by a decrease in interest income as a result of a decrease in interest rates partially offset by higher balance of tuition funds held in custody for schools.

43

NELNET FINANCIAL SERVICES DIVISION - RESULTS OF OPERATIONS

Asset Generation and Management Operating Segment

Loan Portfolio

As of December 31, 2025, the AGM operating segment had an $8.7 billion loan portfolio, consisting primarily of federally insured loans. For a summary of the Company's loan portfolio as of December 31, 2025 and 2024, see note 4 of the notes to consolidated financial statements included in this report.

Loan Activity

The following table sets forth the activity of loans in the AGM operating segment:

FFELP

Private

Consumer loans and other financing receivables

Total

Balance as of December 31, 2023

$

11,686,207 

277,320 

85,935 

12,049,462 

Loan acquisitions

106,916 

— 

599,543 

706,459 

Repayments, claims, capitalized interest, participations, and other, net

(1,209,242)

(51,262)

(191,931)

(1,452,435)

Loans lost to external parties

(1,616,724)

(4,314)

— 

(1,621,038)

Loans sold

(578,593)

— 

(147,987)

(726,580)

Balance as of December 31, 2024

8,388,564 

221,744 

345,560 

8,955,868 

Loan acquisitions (a)

1,253,819 

— 

5,143,849 

6,397,668 

Repayments, claims, capitalized interest, participations, and other, net

(916,038)

(37,359)

(4,163,008)

(5,116,405)

Loans lost to external parties

(190,694)

(3,003)

— 

(193,697)

Loans sold

(1,020,911)

— 

(203,684)

(1,224,595)

Loans contributed to Nelnet Bank

(77,497)

(42,173)

— 

(119,670)

Balance as of December 31, 2025

$

7,437,243 

139,209 

1,122,717 

8,699,169 

(a)    The Company began to acquire Pay Later receivables during 2025. Consumer loan acquisitions excluding Pay Later receivables was $629.7 million during the year ended December 31, 2025.

The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations that are accounted for as held-to-maturity beneficial interest investments and included in "other investments and notes receivable, net" in the Company's consolidated financial statements. As of the latest remittance reports filed by the various trusts prior to or as of December 31, 2025, the Company’s ownership correlates to approximately $1.83 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.

Beginning in late 2021, the Company experienced accelerated run-off of its FFELP portfolio due to FFELP borrowers consolidating their loans into Federal Direct Loan Program loans as a result of the CARES Act payment pause on Department- held loans and the initiatives offered by the Department for FFELP borrowers to consolidate their loans to qualify for loan forgiveness under various programs. However, the Company has experienced a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024, which has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates.

Allowance for Loan Losses, Loan Delinquencies, and Loan Charge-offs

For a summary of the allowance as a percentage of the ending balance, loan status, delinquency amounts, and other key credit quality indicators for each of AGM’s loan portfolios as of December 31, 2025 and 2024; and the activity in AGM’s allowance for loan losses and net charge-offs as a percentage of average loans in 2025 and 2024, see note 4 of the notes to consolidated financial statements included in this report.

44

Loan Spread Analysis

The following table analyzes the loan spread on AGM’s portfolio of loans, which represents the spread between the yield earned on loan assets and the costs of the liabilities and derivative instruments used to fund the assets. The spread amounts included in the following table are calculated by using the notional dollar values found in the table under the caption "Net loan interest income, including settlements on derivatives" below, divided by the average balance of loans or debt outstanding.

Year ended December 31,

2025

2024

Variable loan yield, gross

7.20 

%

8.03 

%

Consolidation rebate fees

(0.80)

(0.80)

Discount accretion, net of premium and deferred origination costs amortization

0.40 

0.02 

Variable loan yield, net

6.80 

7.25 

Loan cost of funds - interest expense (a)

(5.39)

(6.34)

Loan cost of funds - basis swap derivative settlements (b)

0.01 

0.01

Variable loan spread

1.42 

0.92 

Fixed-rate floor income, gross

0.04 

0.01 

Fixed-rate floor income - derivative settlements (b)

0.02 

0.04 

Fixed-rate floor income, net of settlements on derivatives

0.06 

0.05 

Core loan spread

1.48 

%

0.97 

%

Average balance of AGM’s loans

$

9,134,995 

10,310,430 

Average balance of AGM’s debt outstanding

8,145,206 

9,871,828 

(a)    The Company recognized $6.3 million in non-cash interest expense during 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. The impact of this non-cash expense was excluded 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 note 6 of the notes to consolidated financial statements included in this report for additional information on the Company's Non-Nelnet Bank derivative instruments, including the net settlement activity recognized by the Company for each period and for each type of derivative presented in the table under the caption "Consolidated Financial Statement Impact Related to Derivatives - Statements of Income” in note 6 and in this table.

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

Year ended December 31,

2025

2024

Core loan spread

1.48 

%

0.97 

%

Derivative settlements (basis swaps)

(0.01)

(0.01)

Derivative settlements (fixed-rate floor income)

(0.02)

(0.04)

Loan spread

1.45 

%

0.92 

%

Variable loan spread was higher during 2025 compared with 2024 due to an increase in consumer loans as a percentage of AGM’s overall loan portfolio. Consumer loans earn a higher yield than FFELP loans. Increase in variable loan spread was also due to an increase in loans funded by the Company with operating cash (versus funded with debt). As of December 31, 2025, AGM had $328.3 million (par value) of unencumbered federally insured, private education, consumer, and other loans, compared with $253.5 million and $77.0 million as of December 31, 2024 and December 31, 2023, respectively. The difference between variable loan spread and core loan spread is fixed-rate floor income earned on a portion of AGM's federally insured student loan portfolio. See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk - Interest Rate Risk - AGM Operating Segment,” which provides additional detail on AGM’s federally insured student loans earning fixed-rate floor income.

The relationship between the indices in which AGM earns interest on its loans and funds such loans has a significant impact on loan spread. See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk - Interest Rate Risk - AGM Operating Segment,” which provides additional detail on AGM’s FFELP student loan assets and related funding for those assets. In a

45

decreasing interest rate environment, student loan spread on FFELP loans decreases in the short term because of the timing of interest rate resets on the Company's assets occurring daily in contrast to the timing of the interest rate resets on the Company's debt occurring either monthly or quarterly. This also results in student loan spread increasing in the short term in an increasing interest rate environment.

Summary and Comparison of Operating Results

Year ended December 31,

2025

2024

Additional information

Interest income:

Loan interest

$

624,861 

749,117 

See table below for additional analysis.

Investment interest:

Residual interest

30,726 

36,363 

Represents residual interest earned on beneficial interest investments.

Other investment interest

18,500 

31,939 

Represents investment interest earned on restricted cash included in student loan securitizations and other secured borrowings. Decrease was due to a decrease in interest rates and lower balances.

Total investment interest

49,226 

68,302 

Total interest income

674,087 

817,419 

Loan interest expense

439,065 

632,742 

See table below for additional analysis.

Intercompany interest expense

24,037 

21,604 

Represents interest paid by AGM to Nelnet, Inc. (parent company) related to (i) internal borrowings to fund equity advances on certain AGM debt facilities; and (ii) AGM issued bonds held by Nelnet, Inc. Intercompany interest is eliminated for consolidated financial reporting purposes.

Total interest expense

463,102 

654,346 

Net interest income

210,985 

163,073 

Less provision for loan losses

49,261 

27,691 

See note 4 of the notes to consolidated financial statements in this report for factors impacting provision for loan losses for the periods presented.

Less provision for beneficial interests

11,311 

39,491 

During the periods presented, the Company recorded an allowance for credit losses (and related provision expense) related to the Company's beneficial interest in certain loan securitizations. See note 7 of the notes to consolidated financial statements included in this report for additional information.

Net interest income after provision

150,413 

95,891 

Other income, net

27,235 

14,236 

Represents primarily gain/loss on debt repurchases and loan sales, borrower late fees, income from providing administration activities for third parties, sponsor fee income, and income/losses from AGM's investment in joint ventures. See "Overview - Consolidated Results of Operations" for further detail included in other income.

Derivative settlements, net

2,094 

5,217 

The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility. Derivative settlements for each applicable period should be evaluated with the Company's net interest income as reflected in the table below.

Derivative market value adjustments, net

(6,196)

5,422 

Includes the realized and unrealized gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP. The majority of the derivative market value adjustments during the periods presented related to the changes in fair value of the Company's floor income interest rate swaps. Such changes reflect that a decrease in the forward yield curve during a reporting period results in a decrease in the fair value of the Company's floor income interest rate swaps, and an increase in the forward yield curve during a reporting period results in an increase in the fair value of such swaps.

Total other income, net

23,133 

24,875 

Salaries and benefits

6,363 

4,784 

Represents wages and salaries, payroll taxes, incentive and share-based compensation, and costs associated with employee benefit programs.

Servicing fees

29,266 

31,591 

Represents servicing fees paid to third parties and LSS for the servicing of AGM’s loans. The amounts paid to LSS exceed the actual cost of servicing the loans. Decrease was due to the amortization of the FFELP student loan portfolio, the majority of which is serviced by LSS. Intercompany servicing expense of $19.0 million and $22.9 million during 2025 and 2024, respectively, was eliminated for consolidated financial reporting purposes.

Other expenses

6,483 

4,152 

Represents various expenses such as trustee and professional fees.

Intersegment expenses

4,954 

5,037 

Includes costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.

46

Total operating expenses

47,066 

45,564 

Total operating expenses were 52 basis points and 44 basis points of the average balance of loans in 2025 and 2024, respectively. The increase in expenses compared to the average balance of loans was due to an increase in costs associated with the Company actively expanding into new asset classes and a decrease in the average balance of loans.

Income before income taxes

126,480 

75,202 

Income tax expense

(30,335)

(18,048)

Represents income tax expense at an effective tax rate of 24%.

Net income

96,145 

57,154 

Net income attributable to noncontrolling interests

(85)

— 

Net income

$

96,060 

57,154 

Additional information:

GAAP Net income

$

96,060 

57,154 

See "Overview - GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments" above for additional information about non-GAAP financial information.

Derivative market value adjustments, net

6,196 

(5,422)

Tax effect

(1,487)

1,301 

Non-GAAP net income, excluding derivative market value adjustments

$

100,769 

53,033 

Operating Results Highlights

•AGM’s net income, excluding derivative market value adjustments, increased primarily due to an increase in net loan interest income driven by an increase in core loan spread partially offset by the decrease in the average balance of loans outstanding.

Net loan interest income, including settlements on derivatives

The following table summarizes the components of "loan interest," "loan interest expense" and "derivative settlements, net:"

Year ended December 31,

2025

2024

Additional information

Variable interest income, gross

$

657,612 

829,024 

Decrease was due to a decrease in the average balance of loans and gross yield earned on loans.

Consolidation rebate fees

(73,374)

(82,872)

Decrease was due to a decrease in the average consolidation loan balance.

Discount accretion, net of premium and deferred origination costs amortization

36,314 

1,716 

Increase in net discount accretion was due to a forward flow agreement of Pay Later receivables purchased during 2025 at a discount that have a short estimated life.

Variable interest income, net

620,552 

747,868 

Interest on bonds and notes payable

(439,065)

(632,742)

Decrease was due to a decrease in the average balance of debt outstanding and cost of funds.

Derivative settlements, net (a)

619 

929 

Represents net derivative settlements received related to the Company’s basis swaps.

Variable loan interest margin, net of settlements on derivatives

182,106 

116,055 

Fixed-rate floor income, gross

4,309 

1,249 

Increase was due to lower interest rates.

Derivative settlements, net (a)

1,475 

4,288 

Represents net derivative settlements received related to the Company's floor income interest rate swaps.

Fixed-rate floor income, net of settlements on derivatives

5,784 

5,537 

Net loan interest income, including derivative settlements (core loan interest income) (a)

$

187,890 

121,592 

(a)    Net loan interest income, including derivative settlements (core loan interest income) is a non-GAAP financial measure. For an explanation of GAAP accounting for derivative settlements and the reasons why the Company reports these non-GAAP measures (and the limitations thereof), see footnote (b) to the table immediately under the caption “Loan Spread Analysis” above. See note 6 of the notes to consolidated financial statements included in this report for additional information on the Company's derivative instruments, including the net settlement activity recognized by the Company for each period and for each type of derivative referred to in the "Additional information" column of this table, which is presented in note 6 under the caption "Consolidated Financial Statement Impact Related to Derivatives - Statements of Income”.

47

Nelnet Bank Operating Segment

Loan Portfolio

As of December 31, 2025, Nelnet Bank had a $957.6 million loan portfolio, consisting of federally insured loans, private education loans, and consumer and other loans. For a summary of the Company’s loan portfolio as of December 31, 2025 and 2024, see note 4 of the notes to consolidated financial statements included in this report.

Loan Activity

The following table sets forth the activity in the Nelnet Bank operating segment:

FFELP

Private

Consumer and other

Total

Balance as of December 31, 2023

$

— 

360,520 

72,352 

432,872 

Loan acquisitions and originations

— 

180,919 

210,527 

391,446 

Repayments

— 

(58,994)

(55,639)

(114,633)

Loans sold to AGM

— 

— 

(65,088)

(65,088)

Balance as of December 31, 2024

— 

482,445 

162,152 

644,597 

Loan acquisitions and originations

111,040 

85,929 

142,207 

339,176 

Repayments

(16,217)

(91,913)

(37,751)

(145,881)

Loans contributed from AGM

77,497 

42,173 

— 

119,670 

Balance as of December 31, 2025

$

172,320 

518,634 

266,608 

957,562 

Allowance for Loan Losses, Loan Delinquencies, and Loan Charge-offs

For a summary of the allowance as a percentage of the ending balance, loan status, delinquency amounts, and other key credit quality indicators for each of Nelnet Bank’s loan portfolios as of December 31, 2025 and 2024; and the activity in Nelnet Bank’s allowance for loan losses and net charge-offs as a percentage of average loans in 2025 and 2024, see note 4 of the notes to consolidated financial statements included in this report.

Investments

As of December 31, 2025, Nelnet Bank had a $1.08 billion investment portfolio, consisting primarily of asset-backed securities. For a summary of Nelnet Bank's asset-backed securities investments as of December 31, 2025 and 2024, see note 7 of the notes to consolidated financial statements included in this report.

Deposits

As of December 31, 2025, Nelnet Bank had $1.76 billion of deposits, which included $93.8 million from Nelnet, Inc. (parent company) and its subsidiaries (intercompany), and thus have been eliminated for consolidated financial reporting purposes. For a summary of deposits as of December 31, 2025 and 2024, see note 12 of the notes to consolidated financial statements included in this report.

48

Average Balance Sheet

The following table reflects the rates earned on interest-earning assets and paid on interest-bearing liabilities:

Year ended December 31, (a)

2025

2024

Balance

Rate

Balance

Rate

Average assets

Federally insured student loans

$

116,745 

6.11 

%

$

— 

— 

%

Private education loans

512,860 

6.34 

390,195 

4.98 

Consumer and other loans

210,106 

10.27 

160,648 

11.79 

Cash and investments

930,816 

6.18 

642,102 

7.16 

Total interest-earning assets

1,770,527 

6.70 

%

1,192,945 

7.07 

%

Non-interest-earning assets

18,569 

16,653 

Total assets

$

1,789,096 

$

1,209,598 

Average liabilities and equity

Brokered deposits

$

271,826 

2.12 

%

$

234,423 

1.80 

%

Intercompany deposits

146,886 

3.90 

145,868 

4.64 

Retail and other deposits

1,122,848 

4.15 

666,392 

4.85 

Federal funds purchased and other borrowed money

12,182 

5.01 

6,167 

10.02 

Total interest-bearing liabilities

1,553,742 

3.78 

%

1,052,850 

4.17 

%

Non-interest-bearing liabilities

11,486 

7,928 

Equity

223,868 

148,820 

Total liabilities and equity

$

1,789,096 

$

1,209,598 

Net interest margin

3.39 

%

3.39 

%

(a) Calculated using average daily balances.

49

Summary and Comparison of Operating Results

Year ended December 31,

2025

2024

Additional information

Interest income:

Loan interest

$

61,224 

38,381 

Represents interest earned on loans. Increase was due to an increase in the balance and mix of loans.

Investment interest

57,478 

45,992 

Represents interest earned on cash and investments. Increase was due to an increase of these balances, partially offset by a decrease in interest rates.

Total interest income

118,702 

84,373 

Interest expense

59,284 

44,859 

Represents interest expense on deposits. Increase was due to an increase in the balance of deposits, partially offset by a decrease in interest rates.

Net interest income

59,418 

39,514 

Provision for loan losses

18,590 

26,916 

See note 4 of the notes to consolidated financial statements included in this report for factors impacting provision for loan losses for the periods presented.

Net interest income after provision for loan losses

40,828 

12,598 

Other income, net

3,324 

2,951 

Represents primarily net gains and income from investments.

Derivative settlements, net

606 

917 

Nelnet Bank's use of derivatives is to hedge its exposure related to variable-rate deposits to minimize volatility from future changes in interest rates. Nelnet Bank has designated its derivative instruments as cash flow hedges; however, because certain hedged items are intercompany deposits, the corresponding derivative instruments are not eligible for hedge accounting in the consolidated financial statements. Accordingly, changes in fair value of such derivatives are recorded through earnings and presented as "derivative market value adjustments, net" in the statements of operations. "Derivative settlements, net" 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 that do not qualify for hedge accounting based on their contractual terms. For additional information on Nelnet Bank's derivative portfolio, see note 6 of the notes to consolidated financial statements in this report.

Derivative market value adjustments, net

(3,809)

4,702 

Total other income, net

121 

8,570 

Salaries and benefits

11,446 

11,122 

Represents wages and salaries, payroll taxes, incentive and share-based compensation, and costs associated with employee benefit programs.

Depreciation

1,400 

1,282 

Servicing fees

3,191 

1,373 

Represents primarily fees paid to LSS for servicing certain of Nelnet Bank's loans. Intercompany servicing expense of $2.5 million and $1.0 million for 2025 and 2024, respectively, was eliminated for consolidated financial reporting purposes.

Other expenses

7,487 

6,972 

Represents various expenses such as marketing, consulting and professional fees, collection costs, software, FDIC insurance, and management fees.

Intersegment expenses

2,812 

2,361 

Includes costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.

Total operating expenses

26,336 

23,110 

Income (loss) before income taxes

14,613 

(1,942)

Income tax (expense) benefit

(3,562)

579 

Net income (loss)

$

11,051 

(1,363)

Additional information:

Net income (loss)

$

11,051 

(1,363)

See "Overview - GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments" above for additional details about non-GAAP financial information.

Derivative market value adjustments, net

3,809 

(4,702)

Tax effect

(914)

1,128 

Net income (loss), excluding derivative market value adjustments

$

13,946 

(4,937)

Operating Results Highlights

•Nelnet Bank’s growth was driven by higher loan and investment balances, funded primarily through increased deposit balances. In its early years, the Bank experienced operating losses as it invested in building the personnel and infrastructure necessary to support future growth. As the Bank has matured, operating expenses have stabilized while loans and deposits have continued to grow. This operating leverage has driven increased net interest income and resulted in net income in the current year compared to losses in prior periods.

50

NFS Other Operating Segments

The following table summarizes the operating results of other operating segments included in NFS that are not reportable. Income taxes are allocated based on 24% of income (loss) before taxes for each activity.

Summary and Comparison of Operating Results

Nelnet Insurance Services (a)

WRCM (b)

Real estate (c)

Bond portfolio (d)

Total

Year ended December 31, 2025

Investment interest

$

9,899 

15 

— 

39,442 

49,356 

Interest expense

(4,888)

— 

— 

(50)

(4,938)

Net interest income

5,011 

15 

— 

39,392 

44,418 

Reinsurance premiums earned

107,502 

— 

— 

— 

107,502 

Other income, net

3,074 

6,325 

(657)

186 

8,928 

Salaries and benefits

(1,468)

(129)

(976)

— 

(2,573)

Reinsurance losses and underwriting expenses

(93,551)

— 

— 

— 

(93,551)

Impairment expense

— 

— 

(4,001)

— 

(4,001)

Other expenses

(4,766)

(224)

(107)

(7)

(5,104)

Intersegment expenses, net

(593)

(15)

(411)

(130)

(1,149)

Income (loss) before income taxes

15,209 

5,972 

(6,152)

39,441 

54,470 

Income tax (expense) benefit

(3,650)

(1,290)

1,456 

(9,466)

(12,950)

Net (income) loss attributable to noncontrolling interests

— 

(598)

87 

— 

(511)

Net income (loss)

$

11,559 

4,084 

(4,609)

29,975 

41,009 

Year ended December 31, 2024

Investment interest

$

5,876 

14 

380 

48,087 

54,357 

Interest expense

(1,541)

— 

— 

(7,296)

(8,837)

Net interest income

4,335 

14 

380 

40,791 

45,520 

Reinsurance premiums earned

62,923 

— 

— 

— 

62,923 

Other income, net

3,060 

5,866 

(2,297)

1,684 

8,313 

Salaries and benefits

(591)

(196)

(800)

— 

(1,587)

Reinsurance losses and underwriting expenses

(55,246)

— 

— 

— 

(55,246)

Impairment expense

— 

— 

— 

— 

— 

Other expenses

(2,894)

(279)

(175)

(4)

(3,352)

Intersegment expenses, net

(255)

(14)

(441)

(143)

(853)

Income (loss) before income taxes

11,332 

5,391 

(3,333)

42,328 

55,718 

Income tax (expense) benefit

(2,720)

(1,164)

781 

(10,158)

(13,261)

Net (income) loss attributable to noncontrolling interests

— 

(539)

76 

— 

(463)

Net income (loss)

$

8,612 

3,688 

(2,476)

32,170 

41,994 

(a)Represents the operating results of the Company’s reinsurance treaties primarily on property and casualty policies and the Company’s Nebraska chartered life and health company, which is in run-off mode and reinsures a decreasing term life insurance product distributed to FACTS. The timing and magnitude of catastrophic losses can produce significant volatility in the Company’s periodic underwriting results. The Company’s reinsurance treaties include loss limits, which the Company believes reduces the magnitude of a potential catastrophic loss. There were no catastrophic events in 2025 and 2024. The Company had exposure to the January 2025 California wildfires; however, the impact was not material.

The increase in reinsurance premiums and associated reinsurance losses and underwriting expenses during 2025 compared with 2024 was primarily due to an increase in overall property volume and new business.

(b)The Company provides investment advisory services through Whitetail Rock Capital Management, LLC (WRCM), the Company's SEC-registered investment advisor subsidiary, under various arrangements. WRCM earns annual fees of 10 basis points to 25 basis points for asset-backed securities under management and a share of the gains from the sale of securities or securities being called prior to the full contractual maturity for which it provides advisory services. As of December 31, 2025, the outstanding balance of asset-backed securities under management subject to these arrangements was $2.4 billion, of which the majority of such securities were FFELP student loan asset-backed securities. In addition, WRCM earns annual management fees of five basis points for Nelnet stock under management (primarily shares of Nelnet Class B common stock held in various trust estates). Fees earned by WRCM are included in “other income, net” in the table above.

51

(c)Represents the operating results of the Company’s real estate activities and the administrative costs to actively manage this portfolio. Included in “other income, net” in the table above are primarily the net gains/losses recognized related to the Company's proportionate share of certain real estate partnerships accounted for under the equity method, and realized gains from the sale of real estate partnerships. In 2025, the Company recorded non-cash impairment charges related to several of its real estate partnerships after identifying indicators of an other-than-temporary decline in value. These indicators included a series of sustained operating losses, deteriorating financial performance, and evidence that the Company may be unable to recover its accounting carrying values.

(d)Represents interest income earned on the Company’s bond portfolio (primarily student loan and other asset-backed securities, including Nelnet-owned asset-backed securities which it has repurchased and are eliminated in consolidation), interest income on certain notes receivable, unrealized gains/losses on marketable equity securities, realized gains/losses on marketable equity securities and bonds, and other costs to manage these investments. The activity also includes interest expense incurred on debt used to finance such investments. The decrease in investment interest income during 2025 compared with 2024 was due to a decrease in the average balance of investment securities and a decrease in interest rates earned on such investments, partially offset by non-cash interest income of $7.0 million from the acceleration of discount accretion on certain asset-backed debt securities that were called prior to their maturity. The decrease in interest expense during 2025 compared with 2024 was due to a decrease in outstanding debt. As of December 31, 2024, this debt had been repaid in full. See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk - Interest Rate and Market Risk - Investments,” which provides additional detail on NFS’s investment debt securities.

CORPORATE AND OTHER ACTIVITIES – RESULTS OF OPERATIONS

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.”). The following table summarizes the operating results of these activities.

Income taxes are allocated based on 24% of income (loss) before taxes for each activity. The difference between the Corporate income tax expense and the sum of taxes calculated for each activity is included in income taxes in “other” in the table below.

Summary and Comparison of Operating Results

Shared services (a)

Solar tax equity (b)

Nelnet Renewable Energy (c)

ALLO (d)

Venture capital (e)

Other

Total

Year ended December 31, 2025

Investment interest

$

— 

6 

— 

— 

— 

11,023 

11,029 

Interest expense

— 

— 

(6)

— 

— 

(252)

(258)

Net interest income (expense)

— 

6 

(6)

— 

— 

10,771 

10,771 

Solar construction revenue

— 

— 

14,371 

— 

— 

— 

14,371 

Other income, net

2,510 

(14,249)

— 

13,702 

43,576 

11,705 

57,244 

Gain on partial redemption of ALLO investment

— 

— 

— 

175,044 

— 

— 

175,044 

Derivative market value adjustments, net

— 

— 

— 

— 

— 

907 

907 

Cost to provide solar construction services

— 

— 

(41,810)

— 

— 

— 

(41,810)

Salaries and benefits

(79,653)

(1,598)

(8,695)

— 

(849)

(6,551)

(97,346)

Depreciation and amortization

(11,301)

— 

(864)

— 

(1)

(152)

(12,318)

Impairment expense

(3,269)

(5,761)

(11,860)

— 

(3,576)

— 

(24,466)

Other expenses

(54,404)

(1,900)

(7,132)

6,190 

(99)

(4,630)

(61,975)

Intersegment expenses, net

104,224 

(268)

(1,544)

— 

(177)

(1,632)

100,603 

(Loss) income before income taxes

(41,893)

(23,770)

(57,540)

194,936 

38,874 

10,418 

121,025 

Income tax benefit (expense)

10,054 

(1,778)

13,810 

(46,785)

(9,330)

3,144 

(30,885)

Net loss (income) attributable to noncontrolling interests

— 

31,178 

— 

— 

— 

(101)

31,077 

Net (loss) income

$

(31,839)

5,630 

(43,730)

148,151 

29,544 

13,461 

121,217 

52

Shared services (a)

Solar tax equity (b)

Nelnet Renewable Energy (c)

ALLO (d)

Venture capital (e)

Other

Total

Year ended December 31, 2024

Investment interest

$

— 

2 

32 

— 

— 

11,739 

11,773 

Interest expense

— 

— 

(833)

— 

— 

(954)

(1,787)

Net interest income (expense)

— 

2 

(801)

— 

— 

10,785 

9,986 

Solar construction revenue

— 

— 

56,569 

— 

— 

— 

56,569 

Other income, net

3,102 

285 

246 

6,593 

8,503 

12,884 

31,613 

Gain on partial redemption of ALLO investment

— 

— 

— 

— 

— 

— 

— 

Derivative market value adjustments, net

— 

— 

— 

— 

— 

— 

— 

Cost to provide solar construction services

— 

— 

(77,673)

— 

— 

— 

(77,673)

Salaries and benefits

(80,572)

(1,552)

(6,791)

— 

(849)

(6,384)

(96,148)

Depreciation and amortization

(25,299)

— 

(1,130)

— 

(29)

(370)

(26,828)

Impairment expense

— 

— 

(1,865)

— 

(537)

— 

(2,402)

Other expenses

(45,417)

(964)

(2,735)

1,498 

(79)

(5,884)

(53,581)

Intersegment expenses, net

101,992 

50 

(1,792)

(4)

(97)

(550)

99,599 

(Loss) income before income taxes

(46,194)

(2,179)

(35,972)

8,087 

6,912 

10,481 

(58,865)

Income tax benefit (expense)

11,087 

(1,123)

8,236 

(1,941)

(1,659)

1,514 

16,114 

Net loss (income) attributable to noncontrolling interests

— 

6,857 

1,655 

— 

— 

— 

8,512 

Net (loss) income

$

(35,107)

3,555 

(26,081)

6,146 

5,253 

11,995 

(34,239)

(a)    Includes corporate activities related to human resources, accounting, legal, enterprise risk management, information technology, occupancy, and marketing. These costs are allocated to each operating segment based on estimated use of such activities and services. The amount allocated to operating segments is reflected as “intersegment expenses, net” in the table above. Also includes corporate costs and overhead functions not allocated to operating segments, including executive management, innovation initiatives, and other holding company organizational costs.

(b)    Includes operating results of the Company's participation in renewable energy solar developments through tax equity structures. The Company accounts for its solar tax equity interests using the HLBV method of accounting, which commonly results in accelerated losses in the initial years of the partnerships and gains recognized at the end of the contractual agreement (typically five years). In the periods presented, the Company recognized HLBV losses greater than gains realized. Due to the recognition pattern (accelerated losses in initial years and gains upon sale at the end of the contractual agreement), these partnerships may create volatility in earnings. For additional information on the HLBV net losses recognized and gains realized related to these partnerships, see note 7 of the notes to consolidated financial statements included in this report.

The net losses recognized from the partnership interests are offset by revenue earned by the Company related to management, consulting, and performance fees provided on tax equity contributions from syndication partners. Management and performance fee income recognized by the Company was $4.7 million and $3.6 million during 2025 and 2024, respectively. The Company also recognized solar consulting fee income of $13.1 million and $6.1 million during 2025 and 2024, respectively, for due diligence services provided to developers of solar projects to support project qualification. Management, performance, and consulting fees are included in “other income, net” in the above table. Also included in the 2025 operating results is a non-cash impairment charge of $5.8 million related to the Company’s ownership in a solar development project.

(c)    The Company sold NRE in November 2025. Although the Company retained a limited number of construction contracts to complete following the sale, the Company does not expect the operating results from such contracts to be significant in future periods. During 2025, the Company recognized a non-cash impairment charge of $11.8 million related primarily to solar facilities which are operated under long-term power purchase agreements.

(d)    Represents primarily the Company's share of loss on its voting membership interest and income on its preferred membership interest in ALLO. For additional information on the results of these investments, see note 7 of the notes to consolidated financial statements included in this report.

In June 2025, the Company redeemed a portion of its voting membership interest in ALLO and all its outstanding preferred membership interest, including the preferred return accrued on such membership interests, and recognized a pre-tax gain of $175.0 million as a result of this transaction. See note 3 of the notes to consolidated financial statements included in this report for additional information.

(e)    Represents the operating results of the Company’s venture capital activities, including Hudl which the Company accounts for using the measurement alternative method, and the administrative costs to manage this portfolio. The ownership in these early-stage and emerging growth companies may create volatility in earnings from recognizing results of certain equity method investees, periodic adjustment of certain fund investments to their respective fair value, and, when applicable, observable price changes on certain measurement alternative methods. For instance, during 2025, the Company recognized a realized gain of $7.8 million as a result of redeeming a portion of its interest in CompanyCam, and an unrealized gain of $22.4 million to adjust its carrying value of its remaining ownership in CompanyCam to the transaction value. For additional information, see note 7 of the notes to consolidated financial statements included in this report.

53

LIQUIDITY AND CAPITAL RESOURCES

The Company’s Loan Servicing and Systems, and Education Technology Services and Payments operating segments are non-capital intensive and both produce positive operating cash flows. As such, a minimal amount of debt and equity capital is allocated to these segments and any liquidity or capital needs are satisfied using cash flow from operations.

Therefore, the Liquidity and Capital Resources discussion is concentrated on the Company’s liquidity and capital needs to meet existing debt obligations in the Nelnet Financial Services division, which includes the Asset Generation and Management and Nelnet Bank reportable operating segments, and the Company's other initiatives to pursue additional strategic investments.

The Company may issue equity and debt securities in the future in order to improve capital, increase liquidity, refinance upcoming maturities, or provide for general corporate purposes. Moreover, the Company may from time to time repurchase certain amounts of its outstanding secured debt securities, including debt securities which the Company may issue in the future, for cash and/or through exchanges for other securities. Such repurchases or exchanges may be made in open-market transactions, privately negotiated transactions, or otherwise. Any such repurchases or exchanges will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions, compliance with securities laws, and other factors. The amounts involved in any such transactions may be material.

The Company has historically utilized operating cash flow, secured financing transactions (which include warehouse facilities and asset-backed securitizations), operating lines of credit, and other borrowing arrangements to fund its Asset Generation and Management operations and loan acquisitions. In addition, the Company has used operating cash flow, borrowings on its unsecured line of credit, repurchase agreements, and unsecured debt offerings to fund corporate activities; business acquisitions; contributions into solar, real estate, and other partnerships; repurchases of common stock; and repurchases of its own debt. Nelnet Bank utilizes contributions from Nelnet, Inc. and third-party and intercompany deposits to fund its growth.

Sources of Liquidity

As of December 31, 2025, the Company's sources of liquidity included:

Cash and cash equivalents

$

295,983 

Less: Cash and cash equivalents held at Nelnet Bank (a)

(26,730)

Net cash and cash equivalents

269,253 

Available-for-sale (AFS) debt securities (investments) - at fair value

1,304,988 

Less: AFS debt securities held at Nelnet Bank - at fair value (a)

(846,989)

AFS private education and consumer loan debt securities - held as risk retention - at fair value (b)

(190,607)

Restricted investments - at fair value (c)

(175,800)

Unencumbered AFS debt securities (investments) - at fair value

91,592 

Unencumbered federally insured, private, consumer, and other loans (Non-Nelnet Bank) - at par

328,269 

Unencumbered repurchased Nelnet issued asset-backed debt securities - at par (not included on consolidated financial statements) (d)

292,177 

Unused capacity on unsecured line of credit (e)

495,000 

Sources of liquidity as of December 31, 2025

$

1,476,291 

(a)    Cash and investments held at Nelnet Bank are generally not available for Company activities outside of Nelnet Bank.

(b)    The Company is sponsor for certain private education and consumer loan securitizations and as sponsor, is required to provide a certain level of risk retention. To satisfy this requirement, the Company has purchased bonds issued in the securitizations. The majority of the purchased bonds reflected in the table above relate to private education loan securitizations. For these securitizations, the Company is required to retain these bonds until the latest of (i) the date the aggregate outstanding principal balance of the loans in the securitization is 33% or less of the initial loan balance, and (ii) the date the aggregate outstanding principal balance of the bonds is 33% or less of the aggregate initial outstanding principal balance of the bonds, at which time the Company can sell these bonds to a third party. The Company estimates these bonds will be restricted from trading until approximately the first half of 2027.

54

(c)    The Company is required to hold collateral in third-party trusts related to its reinsurance business.

(d)    The Company has repurchased certain of its own asset-backed securities (bonds and notes payable) in the secondary market. 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 the Company could sell these notes to third parties, redeem the notes at par as cash is generated by the trust estate, or pledge the securities as collateral on repurchase agreements. Upon a sale of these notes to third parties, the Company would obtain cash proceeds equal to the market value of the notes on the date of such sale.

(e)    The Company has a $495.0 million unsecured line of credit that matures on September 22, 2026. As of December 31, 2025, there was no amount outstanding on the unsecured line of credit and $495.0 million was available for future use.

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

Cash Flows

The Company has historically generated positive cash flow from operations. During the years ended December 31, 2025 and 2024, the Company generated $423.0 million and $662.9 million, respectively, in cash from operating activities. The decrease in 2025 compared with 2024 was due to:

•Adjustments to net income for certain non-cash items, including loan discount and deferred lender fees accretion, depreciation and amortization, provision for beneficial interests, and gain/loss on investments;

•The gain recognized on the partial redemption of ALLO; and

•The impact of changes to loan and investment accrued interest receivable and accounts receivable in 2025 compared with 2024.

These factors were partially offset by:

•An increase in net income;

•Adjustments to net income for certain non-cash items, including derivative market value adjustments, impairment expense, deferred taxes, and provision for loan losses; and

•The impact of changes to other liabilities and accrued interest payable in 2025 compared with 2024.

The primary items included in the statement of cash flows for investing activities are the purchase, origination, repayment, and sale of loans, the purchase and sale of available-for-sale securities, and the purchase and sale of other investments. In 2025, the Company received cash proceeds of $410.9 million from the redemption of its membership interests in ALLO. The proceeds from the ALLO redemption are included in investing activities on the statement of cash flows. The primary items included in financing activities are the payments on and proceeds from bonds and notes payable, the change in deposits at Nelnet Bank used to fund loans and investment activity, issuance of noncontrolling interests, payment of dividends, and repurchases of the Company’s common stock. Cash provided by investing activities and used in financing activities for the year ended December 31, 2025 was $356.4 million and $737.1 million, respectively. Cash provided by investing activities and used in financing activities for the year ended December 31, 2024 was $2.41 billion and $3.17 billion, respectively. Investing and financing activities are further addressed in the discussion that follows.

Sources and Needs of Liquidity - AGM Operating Segment

Subsequent to the Reconciliation Act of 2010, the Company no longer originates FFELP loans but continues to acquire FFELP loan portfolios from third parties and believes additional loan purchase opportunities exist, including opportunities to purchase private education, consumer, and other loans (or residual interests therein).

The Company plans to fund additional loan acquisitions through a combination of current cash; cash generated from operating activities and expected future cash flows from loan securitizations; proceeds from the sale of certain investments; borrowings under its unsecured line of credit, Union Bank student loan participation agreement, and Union Bank student loan asset-backed securities participation agreement, or similar secured and unsecured borrowing facilities; utilization of existing warehouse facilities; expansion of capacity under existing and/or establishment of new warehouse facilities; and continued access to the asset-backed securities market.

55

Sources of Liquidity

Asset-backed Securities Transactions

The Company, through its subsidiaries, has historically funded loans by completing asset-backed securitizations. The majority of AGM’s portfolio of student loans is funded in asset-backed securitizations that are structured to substantially match the maturity of the funded assets, thereby minimizing liquidity risk.

Depending on market conditions, the Company anticipates continuing to access the asset-backed securitization market. Such asset-backed securitization transactions would be used to refinance loans included in its warehouse facilities and existing asset-backed securitizations and/or finance loans purchased from third parties and loans that are currently unencumbered.

During 2025, the Company completed one FFELP asset-backed securitization totaling $707.9 million (par value). The proceeds from this transaction were used primarily to refinance student loans included in other secured financings. See note 5 of the notes to consolidated financial statements included in this report for additional information on this securitization.

There were no asset-backed securitization transactions completed during the year ended December 31, 2024.

Warehouse Facilities

Warehousing allows the Company to buy and manage loans prior to transferring them into more permanent financing arrangements. See note 5 of the notes to consolidated financial statements included in this report for a discussion of the Company's warehouse facilities outstanding as of December 31, 2025.

Union Bank Participation Agreement

The Company maintains an agreement with Union Bank, a related party, as trustee for various grantor trusts, under which Union Bank has agreed to purchase from the Company participation interests in student loans. As of December 31, 2025, $872.9 million of loans were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement. The agreement automatically renews annually and is terminable by either party upon five business days' notice. This agreement provides beneficiaries of Union Bank’s grantor trusts with access to investments in interests in student loans, while providing liquidity to the Company. The Company can sell participation interests in loans to Union Bank to the extent of availability under the grantor trusts, up to $900.0 million or an amount in excess of $900.0 million if mutually agreed to by both parties. Loans participated under this agreement have been accounted for by the Company as loan sales. Accordingly, the participation interests sold are not included on the Company’s consolidated balance sheets.

Liquidity Impact Related to Debt Obligations Secured by Loan Assets and Related Collateral

The following table shows AGM’s debt obligations outstanding that are secured by loan assets and related collateral:

As of December 31, 2025

Carrying amount

Final maturity

Bonds and notes issued in asset-backed securitizations

$

6,838,314 

3/22/32 - 11/27/90

FFELP and consumer loan warehouse and other facilities

981,933 

1/29/27 - 2/29/28

$

7,820,247 

Warehouse Facilities

Upon termination or expiration of the warehouse and other secured facilities, the Company would expect to access the securitization market, obtain replacement facilities, use operating cash, consider the sale of assets, or transfer collateral to satisfy any remaining obligations.

Bonds and Notes Issued in Asset-backed Securitizations

Cash generated from student loans funded in asset-backed securitizations provides the sources of liquidity to satisfy all obligations related to the outstanding bonds and notes issued in such securitizations. In addition, due to (i) the difference between the yield AGM receives on the loans and cost of financing within these transactions, and (ii) the servicing and administration fees AGM earns from these transactions, AGM has created a portfolio that the Company expects to generate earnings and significant cash flow over the life of these transactions. As of December 31, 2025, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, AGM expects future undiscounted cash flows from its portfolio funded in asset-backed securitizations to be

56

approximately $1.09 billion as detailed below. The actual timing of cash flows released from the securitizations could be impacted based on when and if the Company terminates a securitization by exercising clean-up calls on the underlying securities when the assets in such securitization get to a certain threshold.

The forecasted cash flow presented below includes loans funded in asset-backed securitizations as of December 31, 2025, the majority of which are federally insured student loans. As of December 31, 2025, AGM had $7.3 billion of loans included in asset-backed securitizations, which represented 84.3% of its total loan portfolio. The forecasted cash flow does not include cash flows that the Company expects to receive in relation to loans funded in its warehouse facilities, unencumbered federally insured, private education, consumer, and other loans funded with operating cash, its ownership of beneficial interest in loan securitizations (such beneficial interest investments are classified as "other investments and notes receivable, net" on the Company's consolidated balance sheets), loans acquired subsequent to December 31, 2025, and loans owned by Nelnet Bank.

Asset-backed Securitization Cash Flow Forecast

$1.09 billion

(dollars in millions)

The forecasted future undiscounted cash flows of approximately $1.09 billion include approximately $0.77 billion (as of December 31, 2025) of overcollateralization included in the asset-backed securitizations. These excess net asset positions are included in the consolidated balance sheets in the balances of "loans and accrued interest receivable, net" and "restricted cash." The difference between the total estimated future undiscounted cash flows and the overcollateralization of approximately $0.32 billion, or approximately $0.24 billion after income taxes based on the estimated effective tax rate, represents estimated future net interest income (earnings) from the portfolio and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the December 31, 2025 balance.

The Company uses various assumptions, including prepayments and future interest rates, when preparing its cash flow forecast. These assumptions are further discussed below.

Prepayments: The primary variables in establishing a life of loan estimate are the level and timing of prepayments. Prepayment rates equal the amount of loans that prepay annually as a percentage of the beginning-of-period balance, net of scheduled principal payments. A number of factors can affect estimated prepayment rates, including the level of consolidation activity, borrower default rates, and utilization of debt management options such as income-based repayment, deferments, and forbearance. Should any of these factors change, management may revise its assumptions, which in turn would impact the projected future cash flow. The Company’s cash flow forecast above assumes prepayment rates of 6% for both federally insured consolidation and Stafford loans. Prepayment rates for private education loans range from 11% to 20%.

57

Beginning in late 2021, the Company experienced accelerated run-off (prepayments) of its FFELP portfolio due to FFELP borrowers consolidating their loans into Federal Direct Loan Program loans to qualify for loan forgiveness under various initiatives and programs offered by the federal government and the Department. However, the Company has experienced a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024, which has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates. See Item 1A, "Risk Factors - Loan Portfolio - Prepayment risk" for additional information related to risks associated with loan prepayments.

The following table summarizes the estimated impact to the above forecasted cash flows if prepayments were greater than the prepayment rate assumptions used to calculate the forecasted cash flows:

Increase in prepayment rate

Reduction in forecasted cash flow from table above

Forecasted cash flow using increased prepayment rate

2x

$0.07 billion

$1.02 billion

4x

$0.20 billion

$0.89 billion

If the entire AGM student loan portfolio was prepaid, the Company would receive the full amount of overcollateralization included in the asset-backed securitizations of approximately $0.77 billion (as of December 31, 2025); however, the Company would not receive the $0.32 billion ($0.24 billion after tax) of estimated future earnings from the portfolio.

Interest rates: The Company funds a portion of its student loans with variable rate securities that are indexed to 90-day SOFR. Meanwhile, the interest earned on the Company’s student loan assets is indexed primarily to the 30-day average SOFR in effect for each day in a calendar quarter. The different interest rate characteristics of the Company’s loan assets and liabilities funding these assets result in basis risk. The Company’s cash flow forecast assumes, for the life of the portfolio, a relationship between the various SOFR indices that is implied by the current forward SOFR curves. If the forecast is computed assuming a spread of an additional 12 basis points between 3-month Term SOFR and 30-day average SOFR for the life of the portfolio, the cash flow forecast would be reduced by approximately $5 million to $15 million.

The Company uses the current forward interest rate yield curve to forecast cash flows. A change in the forward interest rate curve would impact the future cash flows generated from the portfolio. See Item 7A, "Quantitative and Qualitative Disclosures About Market Risk — Interest Rate Risk — AGM Operating Segment" for additional information about various interest rate risks which may impact future cash flows from AGM's loan assets.

Liquidity Impact Related to Beneficial Interest in Loan Securitizations

The Company has partial ownership in consumer, private education, and federally insured student loan third-party securitizations that are classified as "beneficial interest in loan securitizations" and included in "other investments and notes receivable, net" on the Company's consolidated balance sheets. These residual interests were acquired by the Company or have been received by the Company as consideration from selling portfolios of loans to unrelated third parties who securitized such loans. As of the latest remittance reports filed by the various trusts prior to or as of December 31, 2025, the Company's ownership correlates to approximately $1.83 billion of loans included in these securitizations. 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.

As of December 31, 2025, the investment balance on the Company's consolidated balance sheet of its beneficial interest in loan securitizations was $194.8 million. For a summary of this investment balance, see note 7 of the notes to consolidated financial statements included in this report.

The Company's partial ownership percentage in each loan securitization grants the Company the right to receive the corresponding percentage of cash flows generated by the securitization. As of December 31, 2025, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, the Company currently expects future undiscounted cash flows from its partial ownership in these securitizations to be approximately $286.1 million. The vast majority of these cash flows are expected to be received over the next 5 years.

The difference between the total estimated future undiscounted cash flows from these residual interests ($286.1 million) and the investment carrying value ($194.8 million) of $91.3 million, or $69.4 million after income taxes based on the estimated effective tax rate, represents estimated future investment interest income (earnings) from these investments and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the December 31, 2025 balance.

The undiscounted future cash flows from the consumer and private education loan securitizations are highly subject to credit risk (defaults). If defaults are higher than management's current estimate, the forecasted cash flows and estimated future investment interest income (earnings) from these securitizations would be adversely impacted.

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Sources and Needs of Liquidity - Nelnet Bank

The growth of Nelnet Bank is primarily driven by its ability to achieve loan growth goals through originations and acquisitions while sustaining credit quality and maintaining cost-efficient funding sources to support its loan growth.

Sources of Liquidity

Nelnet Bank launched operations in November 2020. Nelnet Bank was funded by the Company with an initial capital contribution of $100 million and the Company made a pledged deposit of $40.0 million with Nelnet Bank, as required under an agreement with the FDIC as discussed below. The Company has contributed an additional $178 million to Nelnet Bank since its inception (which includes cash, investments, loans, and equity in a student loan trust). Based on Nelnet Bank's business plan for growth and current financial condition, the Company believes it will make additional capital contributions to the bank in future periods. Nelnet Bank also has unsecured Federal Funds lines of credit with correspondent banks and has established accounts at the Federal Reserve Bank and the Federal Home Loan Bank.

Deposits

Nelnet Bank utilizes brokered, retail, and other deposits to meet its funding needs and enhance its liquidity position. The deposits can be term or liquid deposits. The term deposits have terms from three months to ten years. Retail, commercial, and institutional deposits are sourced through a direct banking platform and a deposit marketplace and provide diversified funding sources. Brokered deposits are sourced through a network of brokers and provide a stable source of funding. In addition, Nelnet Bank accepts certain deposits considered non-brokered that are held in large accounts structured to allow FDIC insurance to flow through to underlying individual depositors. The deposits are diversified with deposits from Educational 529 College Savings and Health Savings plans, STFIT, and FDIC sweep deposits.

Regulatory Capital

Prior to Nelnet Bank’s launch of operations, Nelnet Bank, Nelnet, Inc. (the parent), and Michael S. Dunlap (Nelnet, Inc.’s controlling shareholder) entered into a Capital and Liquidity Maintenance Agreement and a Parent Company Agreement with the FDIC in connection with Nelnet, Inc.’s role as a source of financial strength for Nelnet Bank. As part of the Capital and Liquidity Maintenance Agreement, Nelnet, Inc. is obligated to (i) contribute capital to Nelnet Bank for it to maintain capital levels that meet FDIC requirements for a “well capitalized” bank, including a leverage ratio of capital to total assets of at least 12%; (ii) provide and maintain an irrevocable asset liquidity takeout commitment for the benefit of Nelnet Bank in an amount equal to the greater of either 10% of Nelnet Bank’s total assets or such additional amount as agreed to by Nelnet Bank and Nelnet, Inc.; (iii) provide additional liquidity to Nelnet Bank in such amount and duration as may be necessary for Nelnet Bank to meet its ongoing liquidity obligations; and (iv) establish and maintain a pledged deposit of $40.0 million with Nelnet Bank.

Under the regulatory framework for prompt corrective action, Nelnet Bank is subject to various regulatory capital requirements administered by the FDIC and the UDFI and must meet specific capital standards. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on Nelnet Bank’s business, results of operations, or financial condition. On January 1, 2020, the Community Bank Leverage Ratio (CBLR) framework, as issued jointly by the Office of the Comptroller of the Currency, the Federal Reserve Board, and the FDIC, became effective. Any banking organization with total consolidated assets of less than $10 billion, limited amounts of certain types of assets and off-balance sheet exposures, and a community bank leverage ratio greater than 9% may opt into the CBLR framework quarterly. The CBLR framework allows banks to satisfy capital standards and be considered "well capitalized" under the prompt corrective action framework if their leverage ratio is greater than 9%, unless the banking organization's federal banking agency determines that the banking organization's risk profile warrants a more stringent leverage ratio. The FDIC has ordered Nelnet Bank to maintain at least a 12% leverage ratio. Nelnet Bank has opted into the CBLR framework for the quarter ended December 31, 2025 with a leverage ratio of 14.5%. Nelnet Bank intends to maintain at all times regulatory capital levels that meet both the minimum level necessary to be considered “well capitalized” under the FDIC’s prompt corrective action framework and the minimum level required by the FDIC.

Liquidity Impact Related to Renewable Energy Solar Developments

The Company makes contributions in tax equity to renewable energy solar partnerships that support the development and operations of solar projects throughout the country. As of December 31, 2025, the Company has contributed a total of $355.6 million in solar partnerships which remain outstanding for itself and $416.0 million on behalf of its syndication partners, for a total of $771.6 million. These contributions provide a federal income tax credit under the Internal Revenue Code, currently equaling 30% to 70% of the eligible project cost, with the tax credit available when the project is placed in service. The Company is then allowed to reduce its tax estimates paid to the U.S. Treasury based on the credits earned. In addition to the

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credits, the Company structures the partnership to receive quarterly distributions of cash from the operating earnings of the solar project for a period of at least five years after the project is placed in service. After that period, the contractual agreements typically provide for the Company’s entire interest in the projects to be sold at the fair market value of the discounted forecasted future cash flows allocable to the Company. Based on the timing of when the Company contributes to a project and decreases its tax estimate to the U.S. Treasury due to earning of the tax credit, the net amount of capital funded to renewable energy solar developments at any point in time is not significant and has a minimal impact on the Company’s liquidity. As of December 31, 2025, the Company is committed to contribute an additional $53.6 million directly in renewable energy solar developments and $59.1 million will be contributed by its syndication partners, for a total commitment of $112.7 million.

In periods in which the Company makes significant contributions in renewable energy solar partnerships, operating results are negatively impacted due to the accelerated losses recognized in the initial years of contribution. However, given the timing and amount of cash flows expected to be generated over the life of these partnerships, the Company considers these contributions a good use of capital. Through December 31, 2025, the Company has recognized cumulative pre-tax losses (excluding noncontrolling interests) of approximately $75 million on its solar partnerships currently outstanding. The Company expects its current solar partnerships (assuming no additional contributions are made subsequent to December 31, 2025) to generate approximately $123 million of pre-tax earnings (excluding noncontrolling interests) over the life of the solar partnerships. Accordingly, the Company expects to recognize approximately $198 million in pre-tax income (excluding noncontrolling interests) on such solar partnerships between January 1, 2026 and June 30, 2031 (the remaining years of its current investments).

Liquidity Impact Related to Hedging Activities

The Company utilizes derivative instruments to manage interest rate sensitivity. By using derivative instruments, the Company is exposed to market risk which could impact its liquidity.

All Non-Nelnet Bank over-the-counter derivative contracts executed by the Company are cleared post-execution at a regulated clearinghouse. Clearing is a process by which a third party, the clearinghouse, steps in between the original counterparties and guarantees the performance of both, by requiring that each post liquid collateral on an initial (initial margin) and mark-to-market (variation margin) basis to cover the clearinghouse’s potential future exposure in the event of default. The Company’s non-centrally cleared derivative contracts have protection against counterparty risk provided by International Swaps and Derivatives Association, Inc. agreements. The agreements require collateral to be exchanged based on the net fair value of derivatives with each counterparty. The Company’s exposure related to the non-centrally cleared derivatives is limited to the value of the derivative contracts in a gain position, less any collateral held by us.

Based on the derivative portfolio outstanding as of December 31, 2025, the Company does not anticipate any movement in interest rates having a material impact on its capital or liquidity profile, nor does the Company expect that any movement in interest rates would have a material impact on its ability to make variation margin payments to its third-party clearinghouse and/or payments to its counterparties for its non-centrally cleared derivatives. However, if interest rates move materially and negatively impact the fair value of the Company's derivative portfolio or if the Company enters into additional derivatives for which the fair value becomes negative, the Company could be required to make variation margin payments to its third-party clearinghouse and/or collateral payments to its non-centrally cleared counterparties. The variation margin and collateral payments, if significant, could negatively impact the Company's liquidity and capital resources. In addition, clearing rules require the Company to post amounts of liquid collateral when executing new derivative instruments, which could prevent or limit the Company from utilizing additional derivative instruments to manage interest rate sensitivity and risks. See note 6 of the notes to consolidated financial statements included in this report for additional information on the Company's derivative portfolio.

Other Sources of Liquidity

Unsecured Line of Credit

As discussed above, the Company has a $495.0 million unsecured line of credit with a maturity date of September 22, 2026. As of December 31, 2025, the unsecured line of credit had no amount outstanding and $495.0 million was available for future use. Upon the maturity date of this facility, there can be no assurance that the Company will be able to maintain this line of credit, increase or maintain the amount outstanding under the line, or find alternative funding if necessary.

Union Bank Participation Agreement

The Company has an agreement with Union Bank under which Union Bank has agreed to purchase from the Company participation interests in FFELP loan asset-backed securities (bond investments). The agreement automatically renews annually and is terminable by either party upon five business days' notice. The Company can participate FFELP loan asset-backed

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securities (investments) to Union Bank to the extent of availability under the grantor trusts, up to $400.0 million or an amount in excess of $400.0 million if mutually agreed to by both parties. The Company maintains legal ownership of the FFELP loan asset-backed securities and, in its discretion, approves and accomplishes any sale, assignment, transfer, encumbrance, or other disposition of the securities. As such, the FFELP loan asset-backed securities subject to this agreement are included on the Company's consolidated balance sheets as "investments at fair value" and the participation interests outstanding have been accounted for by the Company as a secured borrowing. As of December 31, 2025, $0.1 million (par value) of FFELP loan asset-backed securities were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.

Stock Repurchases

The Board of Directors has authorized a stock repurchase program to repurchase up to a total of five million shares of the Company's Class A common stock during the three-year period ending May 8, 2028. As of December 31, 2025, 4,488,349 shares remained authorized for repurchase under the Company's stock repurchase program. Shares may be repurchased from time to time on the open market, in private transactions (including with related parties), or otherwise, depending on various factors, including share prices and other potential uses of liquidity.

Shares repurchased by the Company during 2025 and 2024 are shown below, and include shares repurchased under the Company's stock repurchase program and shares owned and tendered by employees to satisfy tax withholding obligations upon the vesting of restricted shares. Certain of these repurchases were made pursuant to trading plans adopted by the Company in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934.

Total shares repurchased

Purchase price (in thousands)

Average price of shares repurchased (per share) (a)

Year ended December 31, 2025

566,575 

$

69,346 

$

122.40 

Year ended December 31, 2024

894,108 

83,290 

93.15 

(a)     The average price of shares repurchased includes excise taxes.

On August 25, 2025, the Company repurchased, in a privately negotiated transaction under the Company’s existing stock repurchase program, a total of 41,929 shares of the Company’s Class A common stock from a certain significant shareholder. The shares were repurchased at a discount to the closing market price of the Company’s Class A common stock as of August 21, 2025, and the transaction was separately approved by the Company’s Board of Directors and its Nominating and Corporate Governance Committee.

Dividends

Dividends of $0.28 per share on the Company’s Class A and Class B common stock were paid on March 14, 2025 and June 16, 2025, respectively; a dividend of $0.30 per share was paid on September 16, 2025, and a dividend of $0.33 was paid on December 15, 2025.

The Company's Board of Directors has declared a first quarter 2026 cash dividend on the Company's outstanding shares of Class A and Class B common stock of $0.33 per share. The first quarter cash dividend will be paid on March 13, 2026, to shareholders of record at the close of business on February 27, 2026.

The Company plans to continue making regular quarterly dividend payments, subject to future earnings, capital requirements, financial condition, and other factors.

CRITICAL ACCOUNTING ESTIMATES

This Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of income and expenses during the reporting periods. The Company bases its estimates and judgments on historical experience and on various other factors that the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under varying assumptions or conditions. Note 2 of the notes to consolidated financial statements included in this report includes a summary of the significant accounting policies and methods used in the preparation of the consolidated financial statements.

On an on-going basis, management evaluates its estimates and judgments, particularly as they relate to accounting policies that management believes are most “critical” — that is, they are most important to the portrayal of the Company’s financial condition and results of operations and they require management’s most difficult, subjective, or complex judgments, often as a

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result of the need to make estimates about the effect of matters that are inherently uncertain. Management has identified the allowance for loan losses as a critical accounting policy and estimate.

Allowance for Loan Losses

The allowance for loan losses represents the Company’s estimate of the expected lifetime credit losses inherent in loan receivables as of the balance sheet date. The adequacy of the allowance for loan losses is assessed quarterly and the assumptions and models used in establishing the allowance are evaluated regularly. Because credit losses can vary substantially over time, estimating credit losses requires a number of assumptions about matters that are uncertain. Such assumptions are discussed below, and such uncertainty is due in part to the fact that the weighted-average maturity of the Company’s loan portfolio is approximately 11 years, and actual credit losses will be affected by, among other things, future economic conditions and future personal financial situations for borrowers, over that extended time frame. Changes in the Company’s assumptions affect “provision for loan losses” on the Company’s consolidated statements of income and the “allowance for loan losses” contained within “loans and accrued interest receivable, net” on the Company’s consolidated balance sheets. For additional information regarding the Company’s allowance for loan losses, see notes 2 and 4 of the notes to consolidated financial statements included in this report.

The Company estimates the allowance for loan losses for receivables that share similar risk characteristics based on a collective assessment using a combination of measurement models and management judgment. The models consider factors such as historical trends in credit losses, recent portfolio performance, and forward-looking macroeconomic conditions. The models vary by portfolio type including FFELP, private education, and consumer and other loans. If management does not believe the models reflect lifetime expected credit losses for the portfolio, an adjustment is made to reflect management judgment regarding qualitative factors including economic uncertainty, observable changes in portfolio performance, and other relevant factors.

The Company’s allowance for loan losses is based on various assumptions including: probability of default; loss given default; exposure at default; net loss rates for its consumer portfolio; contractual terms, including prepayments; forecast period; reversion method; reversion period; and macroeconomic factors, including unemployment rates, gross domestic product, and the consumer price index.

The allowance for loan losses is made at a specific point in time and based on relevant information as discussed above. The allowance for loan losses is maintained at a level management believes is appropriate to provide for expected lifetime credit losses inherent in loan receivables as of the balance sheet date. This evaluation is inherently subjective because it requires numerous estimates made by management. These estimates are subjective in nature and involve uncertainties and matters of significant judgment. Changes in estimates could significantly affect the Company's recorded balance for the allowance for loan losses. For additional information regarding changes in the Company’s allowance for loan losses for the years ended December 31, 2025, 2024, and 2023, see the caption “Activity in the Allowance for Loan Losses” in note 4 of the notes to consolidated financial statements included in this report.

The Company considers a range of economic scenarios in its determination of the allowance for loan losses. These scenarios are constructed with interrelated projections of multiple economic variables, and loss estimates are produced that consider the historical correlation of those economic variables with credit losses, and also the expectation that conditions will eventually normalize over the longer run. Under the range of economic scenarios considered, the allowance for loan losses would have been lower by $15 million (11%) or higher by $16 million (12%). This range reflects the sensitivity of the allowance for loan losses specifically related to the scenarios and weights considered as of December 31, 2025, and does not consider other potential adjustments that could increase or decrease loss estimates calculated using alternative economic scenarios.

Because several quantitative and qualitative factors are considered in determining the allowance for loan losses, these sensitivity analyses do not necessarily reflect the nature and extent of future changes in the allowance for loan losses. They are intended to provide insights into the impact of adverse changes in the economy on the Company’s modeled loss estimates for the loan portfolio and do not imply any expectation of future deterioration in loss rates. Given current processes employed by the Company, management believes the loss model estimates currently assigned are appropriate. It is possible that others, given the same information, may at any point in time reach different reasonable conclusions that could be significant to the Company’s financial statements.

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RECENT ACCOUNTING PRONOUNCEMENTS

In November 2024, the FASB issued accounting guidance to increase disclosure requirements primarily through enhanced disclosures about types of expenses (including employee compensation, depreciation, and amortization) in commonly presented expense captions. This guidance will be effective for the Company for fiscal years beginning after December 15, 2026. The guidance is required to be applied prospectively with the option for retrospective application. Management is currently evaluating the impact this guidance will have on the disclosures included in the notes to the consolidated financial statements.

There are no other recently issued, but not yet adopted, accounting pronouncements which are expected to have a material impact on the Company’s consolidated financial statements and related disclosures.