Nelnet Reports First Quarter 2025 Results

Core Insights - Nelnet reported a GAAP net income of $82.6 million, or $2.26 per share, for Q1 2025, an increase from $73.4 million, or $1.98 per share, in Q1 2024 [1] - The company achieved a net income of $87.4 million, or $2.39 per share, excluding derivative market value adjustments, compared to $67.4 million, or $1.81 per share, in the same period last year [1][27] Financial Performance - The AGM segment reported net interest income of $52.9 million in Q1 2025, up from $40.6 million in Q1 2024, driven by an increase in loan spread despite a decrease in the average balance of loans from $11.6 billion to $9.5 billion [3] - AGM recognized a provision for loan losses of $13.0 million in Q1 2025, compared to $6.5 million in Q1 2024, primarily due to an initial allowance for newly acquired loans [4] - Nelnet Bank's loan and investment portfolio totaled $761.6 million and $872.2 million, respectively, with total deposits of $1.38 billion as of March 31, 2025 [7] - Nelnet Bank reported net interest income of $12.4 million in Q1 2025, an increase from $7.6 million in Q1 2024 [7] Segment Performance - The Loan Servicing and Systems segment generated revenue of $120.7 million in Q1 2025, down from $127.2 million in Q1 2024, impacted by a new servicing contract with the Department of Education [10] - Revenue from the Education Technology Services and Payments segment increased to $147.3 million in Q1 2025 from $143.5 million in Q1 2024, with net income after tax of $36.1 million [13][14] Corporate Activities - Nelnet's Board declared a second-quarter cash dividend of $0.28 per share, payable on June 16, 2025 [17] - The Board also authorized a new stock repurchase program for up to five million shares of Class A common stock over the next three years [18] - Nelnet expects to receive approximately $410 million from ALLO for the redemption of certain membership interests, recognizing a pre-tax gain of about $175 million [16]