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]

Core Insights - Nelnet reported a significant increase in GAAP net income for Q2 2024, reaching $45.1 million or $1.23 per share, compared to $27.4 million or $0.73 per share in Q2 2023 [1][3][29] Financial Performance - The company's net income, excluding derivative market value adjustments, was $43.9 million or $1.20 per share for Q2 2024, up from $25.9 million or $0.69 per share in the same period last year [3][29] - Nelnet's total interest income for Q2 2024 was $242.9 million, a decrease from $284.0 million in Q2 2023 [24] - The Asset Generation and Management segment reported net interest income of $35.8 million in Q2 2024, compared to $21.5 million in Q2 2023, with a decrease in the average balance of loans outstanding from $13.6 billion to $10.5 billion [5][24] Segment Performance - Nelnet Bank reported a net loss after tax of $2.8 million for Q2 2024, down from a net income of $1.3 million in Q2 2023, with a provision for loan losses of $7.8 million [8][24] - The Loan Servicing and Systems segment generated revenue of $109.1 million in Q2 2024, down from $122.0 million in Q2 2023, attributed to lower revenue under the new Unified Servicing and Data Solution contract [9][13] - The Education Technology Services and Payments segment saw revenue increase to $116.9 million in Q2 2024 from $109.9 million in Q2 2023, with net income after tax rising to $19.5 million from $13.7 million [14][15] Corporate Activities - The company reported a loss of $4.8 million in its solar engineering, procurement, and construction business for Q2 2024, an improvement from a loss of $8.2 million in Q2 2023 [17] - Nelnet's Board of Directors declared a third-quarter cash dividend of $0.28 per share, payable on September 13, 2024 [19] Share Repurchases - In the first half of 2024, Nelnet repurchased 884,704 Class A common shares for $82.3 million, with 487,980 shares repurchased for $46.8 million in Q2 2024 [18]

Nelnet (NNI) could be a solid choice for investors given its recent upgrade to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change. The change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. The influence of institutional investors has a partial contribution to this relationshi ...

Core Insights - FACTS has consolidated multiple Nelnet brands into a single brand, enhancing its offerings in education technology and services [5] - The new website aims to serve as a hub for K–12 schools, businesses, and faith-based organizations to access a comprehensive suite of solutions [4][7] - FACTS serves over 12,000 organizations and more than 4 million learners globally, focusing on maximizing learning outcomes and financial stability for educational institutions [8] Company Overview - FACTS has over 35 years of experience supporting K–12 schools with education technology and services, now expanding into corporate and faith-based markets [2] - The brand unification allows FACTS to leverage its experience and enhance support for educators and learners across various industries [4][6] - The integration of CD2 Learning and other brands under FACTS creates opportunities for businesses to improve employee development through a learning management system and flexible courses [3][6] Product and Service Offerings - FACTS now offers a range of solutions including faith-centered learning courses, online giving solutions, and comprehensive website services tailored for faith-based organizations [6] - The FACTS Elevate Conference serves as a premier event for K–12 independent and faith-based schools, providing training sessions, discussions, and networking opportunities [9]

SOURCE Nelnet, Inc. Learn more about Nelnet at www.nelnetinc.com. LINCOLN, Neb., July 11, 2024 /PRNewswire/ -- Nelnet, Inc. (NYSE: NNI) today announced it will release earnings for the second quarter ended June 30, 2024, after the close of the New York Stock Exchange on Thursday, August 8, 2024. Upon release, additional earnings information will be available at www.nelnetinvestors.com. ...

Strong earnings remind investors the company's business plan is on track.Financial conglomerate Nelnet (NNI 10.80%) reported better-than-expected first-quarter results, and investors are taking notice. Nelnet shares traded up 10% in the final hour of trading Friday following the strong report.Strong showing in a challenging economyNelnet is a collection of assets including student and consumer lending, payment processing, banking, as well as an investment portfolio with exposure to a number of different sec ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-31924 NELNET, INC. (Exact name of registrant as specified in its charter) Nebraska 84-0748903 (State or other jurisdiction of ...