Nelnet (NNI) Q2 2025 earnings summary

Executive summary

• Net income attributable to shareholders rose to $181.5M for Q2 2025, up from $45.1M in Q2 2024, driven by a $175M gain from partial redemption of an investment in ALLO and improved loan servicing and investment results.

• Revenue for Q2 2025 was $461.2M, up from $266.3M in Q2 2024, reflecting higher loan servicing, education technology, and reinsurance revenues.

• Operating expenses increased slightly to $219.3M in Q2 2025, with cost-saving measures offset by higher costs in solar construction and technology investments.

• Non-GAAP net income excluding derivative market value adjustments was $184.4M for Q2 2025, or $5.05 per share.

• Results include a $175M pre-tax gain ($133M after tax, $3.65 per share) from partial redemption of ALLO Holdings investment.

Financial highlights

• Net interest income for Q2 2025 was $79.4M, up from $66.4M in Q2 2024, due to higher loan spreads and increased loans funded with operating cash.

• Earnings per share (EPS) for Q2 2025 was $4.97, compared to $1.23 in Q2 2024.

• Cash flow from operations was $172.9M for the first half of 2025, down from $345.3M in the prior year period, mainly due to non-cash adjustments and changes in working capital.

• Total assets as of June 30, 2025 were $13.7B, with $8.9B in loans and $1.3B in investments.

• Total operating expenses were $217.9M, nearly flat compared to $214.4M in Q2 2024.

Outlook and guidance

• The company expects continued pressure on government loan servicing revenue due to lower per-borrower rates under the new USDS contract and a declining number of borrowers.

• The One Big Beautiful Bill, enacted July 2025, is expected to boost private education loan opportunities but will reduce solar tax equity investment incentives and adversely impact solar construction revenue.

• Management anticipates a tax rate between 23% and 25% for the remainder of 2025.