For Release: February 27, 2025 Investor Contact: Phil Morgan, 402.458.3038 Nelnet, Inc. supplemental financial information for the fourth quarter 2024 (All dollars are in thousands, except per share amounts, unless otherwise noted) The following information should be read in connection with Nelnet, Inc.'s (the "Company's") press release for fourth quarter 2024 earnings, dated February 27, 2025, and the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Forward-looking and cautionary ...

Core Insights - Nelnet reported a significant turnaround in its financial performance for the fourth quarter of 2024, achieving a GAAP net income of $63.2 million, or $1.73 per share, compared to a net loss of $7.9 million, or $0.21 per share, in the same period of 2023 [1][16][25] - The company expressed optimism for 2025, highlighting record-breaking results in its Nelnet Business Services segment and strategic reinvestments in Nelnet Diversified Services [2] Financial Performance - The AGM segment reported a net interest income of $48.3 million for Q4 2024, up from $35.6 million in Q4 2023, driven by an increase in loan spread despite a decrease in the average balance of loans outstanding from $12.5 billion to $9.4 billion [3] - AGM recognized a provision for loan losses of $13.5 million in Q4 2024, significantly higher than the $0.4 million in Q4 2023, primarily due to new consumer loans acquired [4] - Nelnet Bank's loan and investment net interest income rose to $12.9 million in Q4 2024 from $6.9 million in Q4 2023, attributed to an increase in the loan and investment portfolio [7] - The Loan Servicing and Systems segment generated revenue of $138.0 million in Q4 2024, an increase from $128.8 million in Q4 2023, with the new USDS contract contributing to this growth [10] - The Education Technology Services and Payments segment reported revenue of $108.3 million for Q4 2024, up from $106.1 million in Q4 2023, with net income after tax increasing to $13.6 million from $10.1 million [13][14] Segment Analysis - Nelnet operates through four reportable segments: AGM, Nelnet Bank, Nelnet Diversified Services, and Nelnet Business Services, each contributing to the overall financial performance [2] - The AGM segment's net income after tax for Q4 2024 was $25.5 million, compared to $17.2 million in Q4 2023, reflecting improved performance [5] - Nelnet Bank recognized a net income after tax of $4.2 million for Q4 2024, a recovery from a net loss of $3.3 million in Q4 2023 [9] - The Loan Servicing and Systems segment's net income after tax increased to $20.4 million in Q4 2024 from $8.4 million in Q4 2023, indicating strong operational performance [12] Year-End Results - For the year ended December 31, 2024, Nelnet reported a GAAP net income of $184.0 million, or $5.02 per share, compared to $89.8 million, or $2.40 per share, in 2023 [16] - The company's net income, excluding derivative market value adjustments, was $176.4 million for 2024, up from $121.6 million in 2023 [16][25]

Group 1 - Nelnet, Inc. declared a first quarter cash dividend of $0.28 per share on its Class A and Class B common stock [1] - The dividend payment date is set for March 14, 2025, for shareholders of record as of February 28, 2025 [1] Group 2 - The company will release its earnings for the fourth quarter and the year ended December 31, 2024, after the close of the New York Stock Exchange on February 27, 2025 [2] - Additional earnings information will be available on the company's investor relations website [2]

Financial Performance - GAAP net income attributable to the company for Q3 2024 was $2,388,000, a decrease from $44,354,000 in Q3 2023[128] - Non-GAAP net income attributable to the company, excluding derivative market value adjustments, was $12,393,000 for Q3 2024, compared to $41,968,000 in Q3 2023[128] - The company reported earnings per share of $0.07 for Q3 2024, down from $1.18 in Q3 2023[128] - The net income attributable to the Company was $2,388 million in Q3 2024, down from $44,354 million in Q3 2023, highlighting a significant decline in profitability[135] - The net loss for the three months ended September 30, 2024, was $(3,457) million, compared to a net income of $18,597 million in the same period of 2023[153] - The company reported a net loss of $(12,423) for the three months ended September 30, 2024, compared to a net income of $30,827 in the same period of 2023[182] - Net (loss) income for the three months ended September 30, 2024, was $(3,615) million, compared to a profit of $1,747 million in the same period of 2023[203] - The net loss for the three months ended September 30, 2024, was $9,116 million, compared to a net loss of $30,521 million in the same period of 2023, indicating an improvement of 70%[212] Revenue and Income Sources - Total revenue for the three months ended September 30, 2024, was $8,529 million, a decrease from $10,057 million in the same period of 2023, representing a decline of approximately 15.2%[142] - Total interest income decreased to $240,483 in Q3 2024 from $284,551 in Q3 2023, reflecting a decrease in the average balance of debt outstanding[138] - Interest income for the three months ended September 30, 2024, was $894 million, down from $1,098 million in the same period of 2023, reflecting a decrease of approximately 18.6%[152] - Loan servicing revenue for the three months ended September 30, 2024, was $108.175 million, a decrease from $127.892 million in the same period of 2023, representing a decline of about 15.4%[152] - Education technology services and payments revenue increased to $118.179 million in Q3 2024 from $113.796 million in Q3 2023, reflecting a growth of approximately 3.3%[161] - Solar construction revenue increased significantly to $19,321 in Q3 2024 from $6,301 in Q3 2023, as the company shifts focus to the commercial solar market[138] - The company recognized $2.4 million in revenue from EANS programs in Q3 2024, down from $8.1 million in Q3 2023, indicating a decrease of approximately 70.4%[161] - The company reported net premiums of $16,619 million for the three months ended September 30, 2024, compared to $6,287 million in 2023, representing a year-over-year increase of 164%[209] Expenses and Losses - Total operating expenses rose to $221,495 in Q3 2024 from $214,409 in Q3 2023, driven by restructuring charges and increased costs in various segments[140] - The company recognized a provision for loan losses of $6.1 million in the NFS other operating segment for Q3 2024, compared to $1.9 million in the same period of 2023, indicating increased risk in loan performance[134] - The company incurred a charge of $7.1 million related to staff reductions, with $2.1 million and $4.1 million recognized in the second and third quarters of 2024, respectively[152] - The cost to provide solar construction services for the three months ended September 30, 2024, was $26,815 million, up from $7,783 million in the same period of 2023, reflecting increased operational expenses[212] - Total operating expenses for the three months ended September 30, 2024, were $6,645 million, compared to $4,198 million in 2023, reflecting a growth of 58.5%[203] - The company recognized a loss on the sale of loans amounting to $(1,685) million for the nine months ended September 30, 2024, compared to $(16,776) million for the same period in 2023, reflecting improved loan sale performance[179] Loan Portfolio and Acquisitions - The company is actively expanding its private education, consumer, and other loan portfolios, and launched Nelnet Bank in November 2020[127] - The company’s loan portfolio primarily consists of federally insured student loans, generating significant net interest income[127] - The company is focused on maximizing cash flows from its FFELP loan portfolio and acquiring additional loan assets[129] - The AGM operating segment's loan portfolio stood at $9.5 billion as of September 30, 2024, down from $12.735 billion in the previous year[162] - Total loan acquisitions in Q3 2024 were $234.116 million, significantly higher than $109.658 million in Q3 2023, marking an increase of approximately 113%[163] - Total loan acquisitions and originations amounted to $205,205 million for the nine months ended September 30, 2024, compared to $97,107 million for the same period in 2023, indicating a substantial increase in loan activity[190] Investment Activities - The company has made investments in various sectors, including fiber communications, venture capital, real estate, reinsurance, and renewable energy[127] - The company has invested a total of $543.7 million in solar tax equity investments as of September 30, 2024, with $241.4 million syndicated to third-party investors, highlighting ongoing investment in renewable energy[214] - The company recognized net gains from real estate investments of $2.1 million for the three months ended September 30, 2024, compared to $0.1 million in 2023[209] - The company has partial ownership in securitizations correlating to approximately $1.99 billion of loans, with an investment balance of $218.7 million as of September 30, 2024[254][255] Future Outlook and Risks - The company anticipates improvements in the NDS segment's operating results in future periods as cost-saving measures take effect and new servicing opportunities are realized[133] - The company expects fluctuations in future earnings due to investment purchases, sales, and valuation adjustments[141] - The company anticipates limited impact on its capital or liquidity profile from interest rate movements due to its derivative portfolio as of September 30, 2024[272] - The company has experienced accelerated run-off of its FFELP portfolio due to borrowers consolidating loans for federal loan forgiveness, impacting cash flows significantly[235] - If prepayment rates double, forecasted cash flow could reduce by $0.09 billion, while a tenfold increase could lead to a reduction of $0.43 billion[238] Tax and Regulatory Matters - The effective tax rate for the nine months ended September 30, 2024, was 23.75%, compared to 22.75% for the same period in 2023[140] - The income tax benefit for the three months ended September 30, 2024, was $3,915 million, compared to a tax benefit of $13,131 million for the same period in 2023, reflecting changes in tax strategies and operational performance[212] - The Department announced a broad-based student debt relief plan in August 2022, which was invalidated by the Supreme Court on June 30, 2023[165] - The SAVE income-driven repayment plan was finalized in 2023, aimed at lowering monthly payments and accelerating forgiveness for borrowers, effective July 1, 2024[166] Corporate Governance and Shareholder Returns - The Company repurchased a total of 889,963 shares of its Class A common stock during the first three quarters of 2024, at an average price of $93.14 per share[275] - The Company paid a cash dividend of $0.28 per share on September 13, 2024, and has declared a similar dividend for the fourth quarter of 2024[276][277] - The Company plans to continue regular quarterly dividend payments, subject to future earnings and financial conditions[277]

Financial Performance - Total interest income for Q3 2024 was $240,483,000, a decrease of 15.5% compared to $284,551,000 in Q3 2023[4] - Net interest income after provision for loan losses was $54,044,000, down 26.1% from $73,117,000 in the same quarter last year[4] - Net loss attributable to Nelnet, Inc. was $2,388,000, compared to a net income of $44,354,000 in Q3 2023[4] - The company reported a net income per share of $0.07 for Q3 2024, significantly lower than $1.18 in Q3 2023[4] - GAAP net income attributable to Nelnet, Inc. for Q3 2024 was $2.388 million, compared to $44.354 million in Q3 2023, reflecting a significant decrease[8] - Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments, was $12.393 million for Q3 2024, up from $41.968 million in Q3 2023[8] - The Company reported a net income of $2.4 million for the three months ended September 30, 2024, compared to a net income of $44.4 million for the same period in 2023[15] - The company reported a net loss attributable to noncontrolling interests of $8.40 million for the nine months ended September 30, 2024, compared to a net loss of $18.70 million in 2023, showing an improvement[20][22] Revenue and Expenses - Loan servicing and systems revenue reached $108,175,000, a decline of 15.4% from $127,892,000 in Q3 2023[4] - The company incurred total operating expenses of $221.5 million for the three months ended September 30, 2024[16] - The company incurred a total operating expense of $653.55 million for the nine months ended September 30, 2024, compared to $633.89 million in 2023, reflecting an increase of about 3.1%[20][22] - Total operating expenses for the three months ended June 30, 2024, were $214.568 million, slightly higher than $214.409 million in the previous quarter[18][19] Loan Loss Provisions - The provision for loan losses increased to $18,111,000, compared to $4,275,000 in Q3 2023, indicating a rise in credit risk[4] - The Company recognized a provision for loan losses of $6.1 million in Q3 2024, compared to $1.9 million in Q3 2023, indicating a rise in expected credit losses[12] - The provision for loan losses was $32.55 million for the nine months ended September 30, 2024, compared to $5.07 million in 2023, indicating a significant increase[20][22] Assets and Liabilities - Total assets decreased to $14,084,128,000 from $17,197,889,000 in Q3 2023, reflecting a decline of 18.2%[6] - Total liabilities reduced to $10,873,990,000, down 22.2% from $13,960,751,000 in the same period last year[6] - Cash, cash equivalents, and investments increased to $2,123,245,000 from $2,108,585,000 in Q3 2023, showing a slight growth of 0.7%[6] Segment Performance - The Loan Servicing and Systems (LSS) segment reported a net loss of $4.549 million in 2024, down from a profit of $24.469 million in 2023, due to decreased revenue and increased expenses[9] - The Education Technology Services and Payments (ETSP) segment generated $26.813 million in net income for Q3 2024, an increase from $22.123 million in Q3 2023, attributed to higher revenue[12] - The Asset Generation and Management (AGM) segment reported a net loss of $16.346 million in Q3 2024, compared to a profit of $40.562 million in Q3 2023, impacted by provisions for loan losses and derivative market value adjustments[12] - Nelnet Bank experienced a net loss of $4.758 million in Q3 2024, compared to a profit of $14.038 million in Q3 2023, primarily due to increased provisions for loan losses[12] Strategic Initiatives - The company anticipates continued challenges in maintaining and increasing allocated volumes of student loans serviced under existing contracts[2] - The Company launched Nelnet Bank in November 2020, expanding its private education and consumer loan portfolios[7] - The Company is actively pursuing new third-party servicing opportunities to improve future segment performance[12] - The Company plans to focus exclusively on the commercial solar market and discontinue residential solar operations as of April 2024[14] Solar and Investment Activities - The Company recorded an expense of $8.8 million related to estimated losses on legacy solar construction projects during Q3 2024[14] - The company’s investment activity net income for the three months ended September 30, 2024, was $8,529 million, compared to a loss of $(1,003) million for the same period in 2023[31] - The Company recognized no loss from ALLO voting membership interest investment for the three months ended September 30, 2024, compared to a loss of $17.3 million for the same period in 2023[14] - Income from preferred membership interests in ALLO was $4.8 million for the three months ended September 30, 2024, up from $2.3 million in the same period in 2023[14] Loan Metrics - The company’s private education loans showed a delinquency rate of 5.01% as of September 30, 2024, down from 5.78% a year earlier[38] - Nelnet Bank's total loans reached $559.87 million as of September 30, 2024, an increase from $468.81 million a year prior[39] - The allowance for loan losses as a percentage of risk-sharing component for federally insured loans not covered by federal guaranty was 20.7% as of September 30, 2024[38] - Total loan servicing volume reached $526,553 million as of September 30, 2024, reflecting a slight increase from $523,750 million as of June 30, 2024[26]

Core Points - Nelnet reported a significant decline in GAAP net income for Q3 2024, with net income of $2.4 million ($0.07 per share), down from $44.4 million ($1.18 per share) in Q3 2023 [1][2] - Excluding derivative market value adjustments, net income was $12.4 million ($0.34 per share) for Q3 2024, compared to $42.0 million ($1.12 per share) in the same period last year [2][30] Financial Performance - The company incurred a non-cash provision expense of $29.0 million related to loan securitizations, reflecting changes in future cash flow estimates due to increased cumulative net loss rates [3][10] - A non-cash expense of $5.6 million was recorded for writing off unamortized debt discount costs from early redemption of higher-cost debt securities [4] - Losses of $11.2 million were reported from tax equity investments in solar projects, with the accounting method accelerating losses in initial years but not affecting long-term return expectations [5] - Estimated losses of $8.8 million were recognized on legacy solar construction projects, although the company is optimistic about repositioning its solar EPC business for future profitability [6] Operating Segments - The Asset Generation and Management (AGM) segment reported net interest income of $38.4 million, down from $51.5 million in Q3 2023, primarily due to the runoff of the Federal Family Education Loan Program (FFELP) portfolio [9][10] - Nelnet Bank reported a net loss after tax of $3.6 million for Q3 2024, compared to net income of $1.7 million in Q3 2023, with a provision for loan losses of $6.1 million [12] - The Loan Servicing and Systems segment generated revenue of $108.2 million, down from $127.9 million in the same period last year, attributed to the transition to a new servicing contract [13][16] - The Education Technology Services and Payments segment saw revenue increase to $118.2 million, up from $113.8 million in Q3 2023, with net income after tax rising to $20.4 million [17][18] Corporate Activities - The company declared a fourth-quarter cash dividend of $0.28 per share, payable on December 16, 2024, to shareholders of record as of December 2, 2024 [21] - The company recognized a loss of $10.1 million in its solar EPC business for Q3 2024, compared to a loss of $4.9 million in Q3 2023, reflecting ongoing challenges in legacy construction projects [20]

Core Viewpoint - Nelnet, Inc. is set to release its third-quarter earnings for the period ending September 30, 2024, on November 7, 2024, after the close of the New York Stock Exchange [1]. Company Information - Additional earnings information will be made available on the company's investor relations website at www.nelnetinvestors.com following the earnings release [1]. - The company operates under the ticker symbol NNI on the New York Stock Exchange [1].

Group 1 - The management team of Nelnet (NYSE: NNI) has demonstrated a strong historical track record of smart capital allocation, resulting in a book value growth at a 10% CAGR over the last 10 years [1] - The focus is on undercovered companies, with a watchlist of over 50 companies across technology, software, electronics, and energy transition sectors [1] - The analysis aims to identify asymmetric investment opportunities to achieve market-beating returns, particularly in small to mid-cap companies that are less researched [1] Group 2 - The author has a beneficial long position in the shares of NNI, indicating confidence in the company's future performance [2] - The article expresses personal opinions and is not influenced by compensation from any company mentioned [2]

Financial Performance - GAAP net income attributable to the company for the three months ended June 30, 2024, was $45,091,000, compared to $27,426,000 for the same period in 2023, representing a 64% increase [118]. - Non-GAAP net income attributable to the company, excluding derivative market value adjustments, for the six months ended June 30, 2024, was $111,280,000, up from $80,294,000 in 2023, reflecting a 38.6% growth [118]. - Earnings per share (EPS) for the three months ended June 30, 2024, was $1.23, compared to $0.73 in 2023, indicating a 68.5% increase [118]. - The company reported a net income of $45,091 for Q2 2024, compared to $27,426 in Q2 2023, reflecting improved profitability [123]. - Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments, was $43.926 million in Q2 2024, compared to $25.902 million in Q2 2023, a 69.7% increase [127]. - The company reported a net income of $18.475 million for the three months ended June 30, 2024, compared to $13.455 million in the same period of 2023, reflecting a year-over-year increase [166]. - The company reported a net loss of $4,227 million for the three months ended June 30, 2024, compared to a net loss of $26,779 million for the same period in 2023, indicating a significant reduction in losses [196]. Revenue and Income Sources - The company reported a significant portion of its revenue as net interest income earned on a portfolio of federally insured student loans [117]. - Net interest income for the second quarter of 2024 was $66,407, a 30.5% increase from $50,879 in the same period of 2023 [124]. - Total interest income decreased to $242,866 in Q2 2024 from $284,027 in Q2 2023, reflecting a decline in the average balance of debt outstanding [124]. - Loan interest income decreased to $202,129 in Q2 2024 from $243,045 in Q2 2023, attributed to a decrease in the average balance of loans [124]. - Revenue from reinsurance premiums for the second quarter of 2024 was $14.851 million, significantly up from $3.816 million in the same quarter of 2023 [130]. - Total interest income for the six months ended June 30, 2024, was $36.297 million, compared to $25.920 million for the same period in 2023, reflecting a 40.0% increase [180]. - Interest income for the six months ended June 30, 2024, was $31,495 million, a decrease from $41,460 million in the same period of 2023, representing a decline of 24.0% [191]. Operating Expenses and Costs - Total operating expenses for the second quarter of 2024 were $214.568 million, slightly up from $209.355 million in the second quarter of 2023 [127]. - Total cost of services decreased slightly to $48,294 in Q2 2024 from $49,529 in Q2 2023 [125]. - The company recognized a provision for loan losses of $7.8 million for Q2 2024, compared to $1.5 million for Q2 2023 [123]. - Total operating expenses decreased to $12.065 million for the three months ended June 30, 2024, from $13.356 million in the same period of 2023 [165]. - The company recognized a charge of $7.1 million related to staff reductions, with $2.1 million recognized in Q2 2024 [140]. - Salaries and benefits increased to $2,798 million in the second quarter of 2024 from $2,297 million in the same quarter of 2023, indicating a growth of 21.9% [187]. Loan Portfolio and Servicing - The company is actively expanding its private education, consumer, and other loan portfolios, with a focus on maximizing cash flows from its FFELP loan portfolio [117]. - Servicing volume for government loans was $489.298 million as of June 30, 2024, down from $519.308 million a year earlier, reflecting a decrease of 5.8% [133]. - The number of servicing borrowers decreased to 15,535,969 as of June 30, 2024, from 16,586,682 a year prior, a decline of 6.3% [133]. - The loan portfolio of the AGM operating segment was $9.9 billion as of June 30, 2024, primarily consisting of federally insured loans [150]. - The ending balance of loans in the AGM segment decreased to $9.911 billion in Q2 2024 from $13.239 billion in Q2 2023, a decline of 25.5% [151]. - The company plans to focus exclusively on the commercial solar market, discontinuing residential solar operations, which will impact future revenue [123]. Market and Investment Strategies - The company is investing in diversification strategies, including investments in fiber communications, venture capital, real estate, reinsurance, and renewable energy [117]. - The company launched Nelnet Bank in November 2020, focusing on private education and unsecured consumer loan markets [117]. - The company anticipates fluctuations in future earnings due to investment sales and valuation adjustments, indicating potential volatility in revenue [130]. - The company executed an agreement in July 2024 to purchase a residual trust with approximately $140 million of private education loans, expected to close in Q3 2024 [170]. - The company plans to continue acquiring FFELP loan portfolios and other loan types, utilizing various funding sources including cash from operations and asset-backed securities market access [225]. Tax and Regulatory Considerations - The effective tax rate decreased to 24.7% in Q2 2024 from 27.1% in Q2 2023 [127]. - The effective tax rate for the second quarter of 2024 was 24.6%, compared to 22.7% for the same period in 2023 [184]. Cash Flow and Liquidity - As of June 30, 2024, the Company had $1.39 billion in total liquidity sources, including $132.7 million in net cash and cash equivalents [205]. - Cash generated from operating activities was $345.3 million for the first half of 2024, compared to $198.4 million for the same period in 2023 [206]. - The Company expects future undiscounted cash flows from its portfolio to be approximately $1.25 billion as of June 30, 2024 [211]. - The Company has $8.7 billion of loans included in asset-backed securitizations, representing 88.1% of its total loan portfolio [212]. - The company has a $495 million unsecured line of credit available for future use as of June 30, 2024 [205]. Derivative and Investment Activities - The company terminated its derivative portfolio hedging loans earning fixed rate floor income, amounting to $2.8 billion in notional value, on March 15, 2023, to reduce market volatility exposure [163]. - The increase in net derivative settlements received during the three months ended June 30, 2024, was due to an increase in the notional amount of derivatives outstanding [164]. - The company recognized management fee income of $0.9 million for the three months ended June 30, 2024, compared to $0.3 million for the same period in 2023, reflecting a 200% increase [199]. Solar and Renewable Energy Operations - The company plans to focus its solar EPC operations exclusively on the commercial market, discontinuing residential solar operations [199]. - Solar construction revenue for the three months ended June 30, 2024, was $9.694 million, up from $4.735 million in the same period of 2023, reflecting a year-over-year increase of 104.1% [196]. - The cost to provide solar construction services for the six months ended June 30, 2024, was $22.300 million, compared to $17.422 million for the same period in 2023, representing a 27.5% increase [198]. - The company invested a total of $502.8 million in solar tax equity investments as of June 30, 2024, with $219.8 million syndicated to third-party investors [198].

Financial Performance - Total interest income for Q2 2024 was $242,866,000, a decrease of 14.4% from $284,027,000 in Q2 2023[4] - Net interest income after provision for loan losses was $62,796,000, compared to $62,259,000 in Q2 2023, reflecting a slight increase of 0.9%[4] - Other income, net, totaled $258,494,000, up from $224,055,000 in Q2 2023, representing an increase of 15.3%[4] - Net income attributable to Nelnet, Inc. was $45,091,000, compared to $27,426,000 in Q2 2023, an increase of 64.2%[4] - Earnings per share for Q2 2024 were $1.23, up from $0.73 in Q2 2023, reflecting an increase of 68.5%[4] - GAAP net income attributable to Nelnet, Inc. for the six months ended June 30, 2024, was $118.498 million, compared to $53.385 million for the same period in 2023, representing a 121.5% increase[11] - Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments, was $111.280 million for the six months ended June 30, 2024, compared to $80.294 million for the same period in 2023, reflecting a 38.6% increase[11] Assets and Liabilities - Total assets decreased to $14,501,193,000 as of June 30, 2024, down from $17,785,690,000 a year earlier, a decline of 18.9%[6] - Total liabilities were $11,281,171,000, down from $14,557,564,000 in Q2 2023, a decrease of 22.5%[6] Loan Performance - Nelnet Bank recognized a provision for loan losses of $7.8 million for the three months ended June 30, 2024, compared to $1.5 million for the same period in 2023[16] - The provision for loan losses for the six months ended June 30, 2024, was $14,440, reflecting a proactive approach to risk management[21] - The allowance for loan losses for private education loans was 5.28% as of June 30, 2024, down from 5.68% as of December 31, 2023[42] - The total allowance for loan losses as of June 30, 2024, was $10,939,519 million, down from $13,108,204 million as of December 31, 2023[41] Segment Performance - The Loan Servicing and Systems (LSS) segment reported a before-tax operating margin decrease due to a revenue decline, while operating expenses remained consistent[16] - The Education Technology Services and Payments (ETSP) segment saw an increase in before-tax operating margin due to higher revenue while maintaining a consistent cost structure[16] - Education Technology Services and Payments segment generated revenue of $116.909 million for the three months ended June 30, 2024[17] - Loan Servicing and Systems segment reported revenue of $109.052 million for the three months ended June 30, 2024[17] - Education technology services and payments revenue reached $109,858 for the three months ended June 30, 2023, showcasing the segment's growth potential[20] - Loan servicing and systems revenue for the six months ended June 30, 2023, was $261,247, showing a decrease from $236,252 in the same period last year[26] - Education technology services and payments revenue for the six months ended June 30, 2023, reached $260,449, up from $243,462 year-over-year[28] Operational Insights - The company is actively expanding its private education, consumer, and other loan portfolios, alongside investments in renewable energy and technology[8] - Nelnet Bank was launched in November 2020, contributing to the company's diversification strategy[8] - The company identified and corrected immaterial errors in previously issued financial statements during Q2 2024[9] - The company expects the before-tax operating margin to remain lower than historical prior year results for the remainder of 2024[16] Expenses and Taxation - The company reported an income tax expense of $14.753 million for the three months ended June 30, 2024, compared to $10.187 million for the same period in 2023[16] - Total operating expenses for the three months ended June 30, 2024, were $214.568 million, compared to $217.489 million in the previous quarter[17][19] - The total operating expenses for the six months ended June 30, 2023, amounted to $419,476, compared to $405,000 in the same period last year[23] Market and Strategic Changes - The company plans to focus exclusively on the commercial solar market, discontinuing residential solar operations, which will impact future revenue streams[31] - The company incurred a restructure charge of $1.6 million related to staff reductions in its solar operations, which included a reduction of approximately 40 associates[36] - The company recognized non-cash impairment charges totaling $7,776 million during the three months ended June 30, 2024, primarily related to solar facilities and inventory[35] Derivative and Investment Performance - A net gain of $6.6 million related to changes in the fair values of derivative instruments was recognized in the first half of 2024, compared to a net loss of $36.5 million for the same period in 2023[16] - The total derivative settlements income for the six months ended June 30, 2024, was $3,406 million, compared to $23,402 million for the same period last year[40] - The company recognized a net gain of $1,649 million from derivative settlements for the three months ended June 30, 2024[40] - The net derivative settlements received increased during the three months ended June 30, 2024, compared to the same period in 2023, due to an increase in the notional amount of derivatives outstanding[50]