Nelnet Reports Fourth Quarter 2024 Results

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]