Core Insights - Navient (NAVI) reported $131 million in revenue for the quarter ended June 2025, reflecting a year-over-year decline of 3.7% and an EPS of $0.21 compared to $0.48 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $141.8 million, resulting in a surprise of -7.62%, while the EPS also missed the consensus estimate of $0.27 by -22.22% [1] Financial Performance Metrics - Net interest margin for the Consumer Lending segment was 2.3%, below the estimated 2.8% [4] - Net interest margin for the Federal Education Loan segment was 0.7%, slightly above the average estimate of 0.6% [4] - Total Non-Interest Income (Core) was $33 million, exceeding the estimated $25.12 million [4] - Other income reached $19 million, surpassing the average estimate of $13.44 million [4] - Servicing revenue was reported at $14 million, compared to the average estimate of $9.97 million [4] - Net Interest Income (Core) was $131 million, below the average estimate of $144.35 million [4] - Total core other income for Consumer Lending was $3 million, slightly below the estimated $3.06 million [4] - Net interest income (loss) for Federal Education Loans (Core) was $49 million, slightly above the average estimate of $48.59 million [4] - Total core other income for Federal Education Loans was $10 million, significantly above the average estimate of $4.38 million [4] - Net interest income (loss) for Other (Core) was reported at -$18 million, worse than the average estimate of -$14.87 million [4] - Net interest income (loss) for Consumer Lending (Core) was $113 million, slightly above the average estimate of $111.47 million [4] - Total core other income for Other was $20 million, exceeding the estimated $13.88 million [4] Stock Performance - Shares of Navient have returned -5.5% over the past month, contrasting with the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Company Performance - Navient reported quarterly earnings of $0.21 per share, missing the Zacks Consensus Estimate of $0.27 per share, and down from $0.48 per share a year ago, representing an earnings surprise of -22.22% [1] - The company posted revenues of $131 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 7.62%, and down from $136 million year-over-year [2] - Over the last four quarters, Navient has surpassed consensus EPS estimates three times and topped consensus revenue estimates only once [2] Future Outlook - The sustainability of Navient's stock price movement will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.23 on revenues of $141.81 million, and for the current fiscal year, it is $1.05 on revenues of $569.55 million [7] - The estimate revisions trend for Navient was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Financial - Consumer Loans industry, to which Navient belongs, is currently in the bottom 24% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

Core Viewpoint - Navient has released its financial results for the second quarter of 2025, indicating ongoing efforts to manage the cost of higher education for students and families [1]. Financial Results - Complete financial results for the second quarter of 2025 are available on Navient's investor website [1]. - Supplemental financial information and presentation slides will be accessible before the start of the live audio webcast [3]. Webcast Information - A live audio webcast is scheduled for July 30, 2025, at 8 a.m. ET, hosted by the CEO and CFO of Navient [1]. - Analysts and investors must pre-register for the Q&A session, while others can join in listen-only mode without pre-registration [2]. Company Overview - Navient focuses on helping students and families manage higher education costs through responsible lending and flexible refinancing [4]. - The company emphasizes creating long-term value for customers and investors through trusted servicing and portfolio management expertise [4].

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Overall Results](index=1&type=section&id=Overall%20Results) Navient's Q2 2025 GAAP net income was $14 million, Core Earnings $21 million, impacted by higher loan loss provisions despite strong loan origination Q2 2025 Overall Results | Metric | Value | Diluted EPS | | :--- | :--- | :--- | | **GAAP Net Income** | $14 million | $0.13 | | **Core Earnings (Non-GAAP)** | $21 million | $0.20 | - GAAP and Core Earnings included a provision for loan losses of **$37 million**, a **$23 million** increase from Q2 2024, due to increased originations, a weakening macroeconomic forecast, higher delinquencies, and the extension of the FFELP portfolio[2](index=2&type=chunk) - CEO David Yowan noted strong loan origination growth, with over **$1 billion** in the first half of 2025, nearly double the same period last year, and the company is on track to meet its expense reduction targets[2](index=2&type=chunk) [Second-Quarter Highlights](index=1&type=section&id=Second-Quarter%20Highlights) Q2 2025 highlights include $30 million net income for Federal Education Loans, $500 million in private loan originations, and $24 million in share repurchases Q2 2025 Segment & Capital Highlights | Category | Highlight | Value | | :--- | :--- | :--- | | **Federal Education Loans** | Net Income | $30 million | | | Net Interest Margin | 0.70% | | **Consumer Lending** | Net Income | $26 million | | | Private Education Loan Originations | $500 million | | **Business Processing** | Status | No longer provides services after Feb 2025 sale | | **Capital & Funding** | Share Repurchases | $24 million | | | Common Stock Dividends Paid | $16 million | | | Unsecured Debt Issued | $500 million | | **Operating Expenses** | Total | $100 million | [Segment Performance](index=2&type=section&id=Segment%20Performance) [Federal Education Loans](index=2&type=section&id=Federal%20Education%20Loans) Federal Education Loans reported Q2 2025 net income of $30 million, driven by higher net interest income from reduced prepayments, despite increased loan loss provisions Federal Education Loans Financial Metrics (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $30 million | $28 million | | Net Interest Income | $55 million | $33 million | | Segment Net Interest Margin | 0.70% | 0.36% | | Provision for Loan Losses | $8 million | $(2) million | | >90-days Delinquency Rate | 10.1% | 7.0% | | Ending FFELP Loans, net | $29.6 billion | $32.9 billion | - Net interest income increased by **$22 million** YoY, mainly because of lower premium amortization as prepayments fell sharply from **$2.5 billion** to **$228 million**[6](index=6&type=chunk) - The provision for loan losses increased by **$10 million** YoY, primarily due to a rise in delinquency balances[6](index=6&type=chunk) [Consumer Lending](index=3&type=section&id=Consumer%20Lending) Consumer Lending net income declined to $26 million in Q2 2025 due to lower net interest income and higher loan loss provisions, despite strong loan origination growth Consumer Lending Financial Metrics (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $26 million | $60 million | | Private Education Loan Originations | $500 million | $278 million | | Net Interest Income | $95 million | $126 million | | Segment Net Interest Margin | 2.32% | 2.89% | | Provision for Loan Losses | $29 million | $16 million | | >90-days Delinquency Rate | 3.0% | 2.2% | - Net interest income fell by **$31 million** YoY, attributed to the paydown of the loan portfolio and increased reserves for accrued interest on delinquent loans[9](index=9&type=chunk) - The provision for loan losses increased by **$13 million** YoY, with the current quarter's provision including **$7 million** for new originations and **$22 million** for a general reserve build, prompted by higher delinquencies and a weaker macroeconomic forecast[9](index=9&type=chunk) [Business Processing](index=4&type=section&id=Business%20Processing) The Business Processing segment reported no Q2 2025 revenue or net income following strategic divestitures of its government and healthcare services businesses Business Processing Financial Metrics (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenue | $— | $81 million | | Net Income | $— | $15 million | | EBITDA | $— | $20 million | - Navient no longer provides business processing services following the sale of its government services business in February 2025[12](index=12&type=chunk) - Transition services for the sold healthcare business ended in May 2025, while those for the government services business are expected to be mostly finished by the end of 2025[12](index=12&type=chunk) [Financial Statements and Analysis](index=6&type=section&id=Financial%20Statements%20and%20Analysis) [Selected Historical Financial Information](index=6&type=section&id=Selected%20Historical%20Financial%20Information) Key financial data shows Q2 2025 GAAP net income at $14 million, a decline from Q2 2024, with the total education loan portfolio decreasing to $45.1 billion Selected Historical Financial Data (in millions, except per share) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **GAAP Net Income** | $14 | $36 | $11 | $109 | | **GAAP Diluted EPS** | $0.13 | $0.32 | $0.11 | $0.97 | | **Core Earnings Net Income** | $21 | $33 | $47 | $86 | | **Core Earnings Diluted EPS** | $0.20 | $0.29 | $0.46 | $0.77 | | **Ending Total Education Loans, net** | $45,148 | $49,178 | $45,148 | $49,178 | [GAAP Financial Statements](index=7&type=section&id=GAAP%20Financial%20Statements) GAAP financial statements show total assets decreased to $50.2 billion and liabilities to $47.7 billion, with Q2 2025 net income at $14 million due to higher loan loss provisions and lower revenue [GAAP Income Statement](index=7&type=section&id=GAAP%20Income%20Statement) Q2 2025 GAAP net income decreased 61% to $14 million, primarily due to increased loan loss provisions and reduced asset recovery revenue, partially offset by lower expenses GAAP Income Statement Summary (in millions) | Line Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $128 | $130 | $258 | $282 | | Provisions for Loan Losses | $37 | $14 | $67 | $26 | | Total Other Income | $28 | $117 | $53 | $252 | | Total Expenses | $101 | $185 | $232 | $372 | | **Net Income** | **$14** | **$36** | **$11** | **$109** | [GAAP Balance Sheet](index=9&type=section&id=GAAP%20Balance%20Sheet) As of June 30, 2025, total assets decreased to **$50.2 billion** and total liabilities to **$47.7 billion**, primarily due to reductions in loan portfolios and long-term borrowings GAAP Balance Sheet Summary (in millions) | Line Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$50,222** | **$56,622** | | FFELP Loans, net | $29,618 | $32,940 | | Private Education Loans, net | $15,530 | $16,238 | | **Total Liabilities** | **$47,658** | **$53,874** | | Long-term borrowings | $42,345 | $47,545 | | **Total Equity** | **$2,564** | **$2,748** | [GAAP Comparison of Results](index=10&type=section&id=GAAP%20Comparison%20of%20Results) The year-over-year decline in GAAP net income for Q2 and H1 2025 was primarily due to higher loan loss provisions and reduced revenue from divested businesses, partially offset by lower expenses [Three Months Ended June 30, 2025 vs. 2024](index=10&type=section&id=Q2%202025%20vs.%20Q2%202024) Q2 2025 GAAP net income decreased to $14 million, driven by increased loan loss provisions and lower revenue from divested businesses, partially offset by reduced operating and restructuring expenses - Provisions for loan losses increased by **$23 million**, with a **$10 million** increase for FFELP Loans and a **$13 million** increase for Private Education Loans[28](index=28&type=chunk) - Asset recovery and business processing revenue decreased by **$81 million** due to the sale of the healthcare and government services businesses[28](index=28&type=chunk) - Operating expenses decreased by **$66 million**, largely due to the business sales, and restructuring expenses also decreased by **$16 million**[28](index=28&type=chunk) [Six Months Ended June 30, 2025 vs. 2024](index=11&type=section&id=H1%202025%20vs.%20H1%202024) H1 2025 net income sharply declined to $11 million, primarily due to increased loan loss provisions, reduced revenue from sold businesses, and lower derivative gains, partially offset by decreased operating expenses - Provisions for loan losses increased by **$41 million**, with a **$17 million** increase for FFELP Loans and a **$24 million** increase for Private Education Loans[31](index=31&type=chunk) - Asset recovery and business processing revenue decreased by **$135 million** due to business sales[31](index=31&type=chunk) - Net gains on derivative and hedging activities decreased by **$76 million** due to interest rate fluctuations[31](index=31&type=chunk) - Operating expenses decreased by **$123 million**, primarily from the business sales[31](index=31&type=chunk) [Credit Quality and Allowance for Loan Losses](index=12&type=section&id=Credit%20Quality%20and%20Allowance%20for%20Loan%20Losses) Private Education Loan delinquency rates increased, with over 90-day delinquencies at **3.0%**, while the total allowance for loan losses stood at **$530 million** with a **$37 million** provision for the quarter [Private Education Loan Portfolio Performance](index=12&type=section&id=Private%20Education%20Loan%20Portfolio%20Performance) Private Education Loan portfolio credit quality deteriorated, with total delinquencies over 30 days increasing to **6.4%** and over 90 days to **3.0%** of loans in repayment Private Education Loan Delinquency and Forbearance | Status | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Delinquencies as a % of Loans in Repayment** | | | | 31-90 days | 3.4% | 3.0% | | > 90 days | 3.0% | 2.2% | | **Total > 30 days** | **6.4%** | **5.2%** | | **Forbearance Rate** | 1.6% | 1.8% | [Allowance for Loan Losses](index=13&type=section&id=Allowance%20for%20Loan%20Losses) Q2 2025 total provision for loan losses was **$37 million**, with net charge-offs of **$88 million**, resulting in an ending allowance of **$530 million** Allowance for Loan Losses Roll-Forward - Q2 2025 (in millions) | Description | FFELP Loans | Private Education Loans | Total | | :--- | :--- | :--- | :--- | | Allowance at beginning of period | $182 | $397 | $579 | | Total provision | $8 | $29 | $37 | | Net charge-offs | $(8) | $(80) | $(88) | | **Allowance at end of period (GAAP)** | **$182** | **$348** | **$530** | [Liquidity and Capital Resources](index=16&type=section&id=Liquidity%20and%20Capital%20Resources) Navient maintains liquidity through cash, operating flows, and capital markets, with primary liquidity at **$1.3 billion** and **$1.9 billion** in secured credit facilities, while repurchasing **$24 million** in shares - Ongoing liquidity needs include repaying **$0.5 billion** of short-term and **$4.8 billion** of long-term senior unsecured notes, funding loan originations, and share repurchases[41](index=41&type=chunk)[42](index=42&type=chunk) Sources of Liquidity (in millions) | Source | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Primary Liquidity** | | | | Unrestricted cash | $712 | $1,088 | | Unencumbered Loans | $561 | $486 | | **Total Primary Liquidity** | **$1,273** | **$1,574** | | **Additional Liquidity (Capacity)** | | | | Secured Credit Facilities | $1,944 | $2,504 | - The company repurchased **1.9 million** shares for **$24 million** in Q2 2025 and has **$52 million** of unused share repurchase authority remaining[42](index=42&type=chunk) [Non-GAAP Financial Measures](index=18&type=section&id=Non-GAAP%20Financial%20Measures) [Core Earnings](index=18&type=section&id=Core%20Earnings) Core Earnings, a non-GAAP measure, adjusts GAAP results for derivative volatility and goodwill, with Q2 2025 Core Earnings at **$21 million**, **$7 million** higher than GAAP net income - Core Earnings are used by management to evaluate performance by removing volatility from two main items: mark-to-market gains/losses on derivatives and the accounting for goodwill and acquired intangible assets[51](index=51&type=chunk) Reconciliation of GAAP Net Income to Core Earnings (in millions) | Description | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | **GAAP Net Income (Loss)** | **$14** | **$(2)** | **$36** | | Net impact of derivative accounting | $8 | $39 | $(8) | | Net impact of goodwill/intangibles | $1 | $1 | $3 | | Net tax effect | $(2) | $(12) | $2 | | **Total Core Earnings Adjustments** | **$7** | **$28** | **$(3)** | | **Core Earnings Net Income** | **$21** | **$26** | **$33** | [Tangible Equity and Adjusted Tangible Equity Ratio](index=27&type=section&id=Tangible%20Equity%20and%20Adjusted%20Tangible%20Equity%20Ratio) The Adjusted Tangible Equity Ratio, a non-GAAP metric, was **9.8%** as of June 30, 2025, indicating a stronger capital position relative to non-FFELP assets compared to the prior year Adjusted Tangible Equity Ratio Calculation | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | **Adjusted Tangible Equity** | **$1,980 M** | **$2,001 M** | **$1,893 M** | | **Adjusted Tangible Assets** | **$20,168 M** | **$20,269 M** | **$22,992 M** | | **Adjusted Tangible Equity Ratio** | **9.8%** | **9.9%** | **8.2%** | [EBITDA (Business Processing Segment)](index=27&type=section&id=EBITDA%20%28Business%20Processing%20Segment%29) The Business Processing segment reported no Q2 2025 revenue or EBITDA following divestitures, compared to **$20 million** EBITDA and **25%** margin in Q2 2024 Business Processing Segment EBITDA (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Core Earnings Pre-tax Income | $— | $19 | | Depreciation & Amortization | $— | $1 | | **EBITDA** | **$—** | **$20** | | **EBITDA Margin** | **—%** | **25%** | [Allowance for Loan Losses (Non-GAAP)](index=28&type=section&id=Allowance%20for%20Loan%20Losses%20%28Non-GAAP%29) Navient's non-GAAP Private Education Loan allowance, excluding future recoveries, was **$520 million** (3.3% coverage) as of June 30, 2025, compared to **$348 million** (2.2% coverage) on a GAAP basis - This non-GAAP measure excludes the **$172 million** of expected future recoveries on previously charged-off loans to better reflect the current expected credit losses on the existing **$15.9 billion** loan portfolio[79](index=79&type=chunk) Private Education Loan Allowance Metrics (Non-GAAP vs. GAAP) - Q2 2025 | Metric | GAAP | Non-GAAP | | :--- | :--- | :--- | | **Allowance at end of period** | **$348 M** | **$520 M** | | **Allowance as a % of total loans** | **2.2%** | **3.3%** | | **Allowance as a % of loans in repayment** | **2.3%** | **3.4%** |

Core Viewpoint - Navient Corporation (NAVI) is expected to report a rise in quarterly revenues but a decline in earnings year-over-year for Q2 2025 [1][8] Revenue Expectations - The consensus estimate for revenues is $142.8 million, indicating a 5% increase compared to the previous year [2] - Consumer loan demand remained stable due to a strong labor market, which is expected to positively impact the Consumer Lending segment [3] - However, elevated prepayment due to student loan forgiveness and subdued origination volume are likely to limit revenue growth in the Federal Education Loans segment [3] Earnings Expectations - The Zacks Consensus Estimate for earnings is 29 cents per share, reflecting a 39.6% decline from the year-ago figure [2] - NAVI's earnings surprise history shows an average surprise of 27.10%, with earnings exceeding estimates in four of the last five quarters [2] Net Interest Income (NII) - The consensus estimate for Core NII is $142.9 million, indicating a sequential decline of 0.8% [4] - NII for Federal Education loans is estimated at $48.6 million, suggesting a slight rise, while consumer lending NII is expected to decline by 1.4% to $111.5 million [4] Non-Interest Income - The consensus estimate for servicing revenues is $10 million, indicating a 23.3% fall from the prior quarter [5] - Total non-interest income is estimated at $25.1 million, reflecting a 50.7% sequential decline [5] Expense Management - Cost-control measures are anticipated to enhance operating efficiency and lower expenses in Q2 2025 [6] - Strategic actions taken last year are expected to contribute to a further decline in operating expenses [6] Earnings ESP and Zacks Rank - NAVI has an Earnings ESP of -7.66%, indicating a lower likelihood of an earnings beat [7] - The company currently holds a Zacks Rank of 3 (Hold) [9]

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Core Viewpoint - The market anticipates a year-over-year decline in Navient's earnings despite an increase in revenues when it reports its results for the quarter ended June 2025 [1] Company Summary - Navient is expected to report quarterly earnings of $0.29 per share, reflecting a year-over-year decrease of 39.6% [3] - Revenue projections stand at $142.8 million, which is a 5% increase from the same quarter last year [3] - The consensus EPS estimate has been revised down by 3.94% over the last 30 days, indicating a bearish sentiment among analysts [4] Earnings Surprise Prediction - The Most Accurate Estimate for Navient is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -17.22% [12] - The stock currently holds a Zacks Rank of 3, making it challenging to predict a beat on the consensus EPS estimate [12] - Historically, Navient has beaten consensus EPS estimates in the last four quarters, with a notable surprise of +47.37% in the last reported quarter [13][14] Industry Context - In comparison, Capital One is expected to post earnings of $3.83 per share for the same quarter, indicating a year-over-year increase of 22% [18] - Capital One's revenue is projected to be $12.22 billion, up 28.6% from the previous year, with a slight upward revision of 0.6% in the consensus EPS estimate over the last 30 days [19] - Capital One also has an Earnings ESP of -1.47% and a Zacks Rank of 3, complicating predictions for beating the consensus EPS estimate [20]

Core Viewpoint - Navient will host an audio webcast to discuss its second quarter 2025 financial results on July 30, 2025, at 8:00 a.m. Eastern Time, with results released earlier that day at 7:00 a.m. [1] Group 1 - The financial results will be available on the company's investor website and filed with the SEC on a Form 8-K [1][2] - Analysts and investors can pre-register for questions, while others can join in listen-only mode without pre-registration [2] - A replay of the webcast will be accessible approximately two hours after the event concludes [3] Group 2 - Navient focuses on helping students and families manage the cost of higher education through responsible lending and trusted servicing [4] - The company aims to create long-term value for customers and investors with its portfolio management expertise [4]

Core Insights - The "Big and Beautiful" Act signed by Trump is expected to create growth opportunities for private student loan institutions, potentially generating around $2.5 billion in benefits [1] Summary by Categories Market Impact - The act limits or eliminates federal government sources for certain graduate loans, shifting up to $14 billion of the student loan market to the private sector [1] - In contrast to the $1.2 billion in private loans issued to graduate students in 2024, this represents a significant growth opportunity for private lenders [1] Company Opportunities - Companies like SoFi, Sallie Mae, and Navient are anticipated to experience substantial increases in interest and fee income due to this market shift [1]

HERNDON, Va., June 05, 2025 (GLOBE NEWSWIRE) -- Navient (Nasdaq: NAVI) today held its 2025 Annual Meeting of Shareholders. Shareholders voted in accordance with the recommendations of the company’s board of directors to approve three proposals, including the election of seven nominees to the board. Linda Mills did not stand for reelection at the 2025 annual meeting. Ms. Mills joined the Navient board of directors in 2014 and served as chair since 2019. “Linda’s leadership and service on the board since Navi ...