Executive Summary

Q3 2025 GAAP net loss was $86M (-$0.87 diluted EPS) and Core Earnings net loss was $83M (-$0.84 diluted EPS); results were driven by a $168M provision for loan losses and lower other income following business divestitures .
Management highlighted significant non-GAAP “significant items” and said adjusted Core EPS would have been $0.29, and guided Q4 EPS to $0.30–$0.35 while reaffirming FY EPS guidance of $1.00–$1.20 .
Earnest originations continued strong momentum: $788M private education loans in Q3 (+58% YoY), with refinance originations of $528M and in-school originations of $260M .
Capital actions: announced new $100M share repurchase authorization (with ~$26M prior authorization remaining) and maintained the quarterly dividend at $0.16 (Q4 payout approved Nov 12) .
Credit remained the key headwind: consumer lending provision of $155M and elevated delinquency balances, partially offset by a net $11M benefit to net interest income from lower prepayment assumptions; FFELP prepayments fell sharply to $268M vs $1.0B in Q3’24 .

What Went Well and What Went Wrong

What Went Well

“Our third quarter results emphatically demonstrate our ability to drive high-quality loan growth… We will exceed our ambitious multi-year expense reduction targets on an accelerated timeline” — CEO David Yowan (Ex-99.2 press release) .
Earnest originations doubled YoY for the third straight quarter; Q3 private education loan originations were $788M (+58% YoY), including $528M refinance and $260M in-school volumes .
Operating expenses declined materially YoY following business divestitures and servicing outsourcing; Q3 operating expenses were $105M, down from $184M in Q3’24 .

What Went Wrong

Consumer Lending segment posted a net loss of $76M due to a $155M provision (including $138M primarily from elevated delinquency balances and macro outlook) and higher net charge-offs ($95M vs $74M in Q3’24) .
Consolidated other income fell as business processing revenues and a prior-year $219M gain on sale of the healthcare business were absent, compressing total other income to $19M vs $276M in Q3’24 .
Delinquencies remained elevated: Private Education Loans >90 days delinquent were 2.8% (433M) vs 2.4% (377M) in Q3’24; FFELP >90-day delinquency rate rose to 10.5% vs 7.3% in Q3’24 .

Financial Results

Consolidated Results vs Prior Periods and Estimates

Metric	Q3 2024	Q2 2025	Q3 2025
Net Interest Income ($MM)	$120	$128	$142
Provision for Loan Losses ($MM)	$42	$37	$168
Total Other Income ($MM)	$276	$28	$19
Total Expenses ($MM)	$342	$101	$110
GAAP Net Income ($MM)	$(2)	$14	$(86)
GAAP Diluted EPS ($)	$(0.02)	$0.13	$(0.87)
Core Earnings Diluted EPS ($)	$1.45	$0.20	$(0.84)
EPS Consensus (Primary EPS) ($)	$—	$—	$0.18*
Revenue Consensus ($MM)	$—	$—	$140.0*

Values marked with * retrieved from S&P Global.

Q3 2025 actual EPS vs consensus: -$0.84 Core EPS vs $0.18 consensus (miss). Revenue actual vs consensus: reported “Revenue Consensus Mean” $140.0MM vs actual -$7MM (miss)*. Values marked with * retrieved from S&P Global.

Segment Breakdown (Core Earnings basis)

Segment Metric	Q3 2024	Q2 2025	Q3 2025
Federal Education Loans – Net Income ($MM)	$27	$30	$35
Federal Education Loans – NIM (%)	0.46%	0.70%	0.84%
FFELP Prepayments ($MM)	$1,000	$228	$268
Consumer Lending – Net Income (Loss) ($MM)	$27	$26	$(76)
Consumer Lending – NIM (%)	2.84%	2.32%	2.39%
Private Education Loan Originations ($MM)	$500	$500	$788

Key Credit and Portfolio KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Private Ed Loans >90d Delinquency Rate (%)	2.4%	3.0%	2.8%
Private Ed Loans Net Charge-offs ($MM)	$74	$79	$95
Private Ed Loans Forbearance ($MM)	$445	$250	$239
FFELP >90d Delinquency Rate (%)	7.3%	10.1%	10.5%
Adjusted Tangible Equity Ratio (%)	9.8%	9.8%	9.3%
Operating Expenses ($MM)	$184	$100	$105

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS (Core, as adjusted)	Q4 2025	N/A	$0.30–$0.35	New
EPS (FY)	FY 2025	$1.00–$1.20	$1.00–$1.20	Maintained
Origination Volume (Earnest)	FY 2025	N/A	Raised to ~$2.4B	Raised
Share Repurchase Authorization	As of Q3 2025	~$26M remaining	New $100M authorization (adds to $26M)	Raised
Common Dividend per Share	Q4 2025	$0.16 (Q3)	$0.16 (declared Nov 12)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Expense reduction/Transformation	Expense base reduction underway; TSA-related costs recognized with offsetting transition revenues	Completed final TSA, accelerating removal of ~$14M TSA-related costs; on track to exceed $400M run-rate reduction by end-2025	Improving cost structure
Credit provisioning	Provisions rising on elevated delinquencies and macro (Q1: $30M; Q2: $37M)	Larger provisions ($168M total; $155M Consumer Lending) reflecting lower prepayments and elevated delinquencies	Deteriorated QoQ
Prepayment dynamics	FFELP prepayments fell sharply (Q1: $256M; Q2: $228M)	Further decline vs PY (Q3’25: $268M vs $1.0B in Q3’24), supporting NIM via lower premium amortization	Supportive to NIM
Origination growth (Earnest)	Q1/Q2 origination momentum (Q1: $508M; Q2: $500M)	Q3 originations $788M (+58% YoY); refi $528M; in-school $260M	Accelerating
Capital allocation	Ongoing ABS issuance, share repurchases, dividend maintained	New $100M buyback authorization; $543M ABS issued; dividend $0.16 maintained	Incrementally positive

Management Commentary

CEO: “We are winning new customers – primarily graduate students – by offering flexible products and a customer experience that meets their needs… We will exceed our ambitious multi-year expense reduction targets on an accelerated timeline” .
CFO: “In the third quarter, we reported core loss per share of $0.84. Adjusting for significant items, we earned $0.29 per share… first, provision of $168 million… second, an interest income benefit of $11 million… third, regulatory and restructuring expenses of $5 million” .

Q&A Highlights

Guidance clarification: Management guided Q4 EPS to $0.30–$0.35 and reaffirmed FY EPS $1.00–$1.20, framing Q3’s adjusted Core EPS at $0.29 after significant items .
Origination outlook: Earnest refi and in-school momentum expected to continue; credit quality described as “exceptionally high” for refi originations .
Cost trajectory: Completion of final TSA enables elimination of $14M of remaining TSA-support expenses and further footprint reductions in early 2026 .
Funding: Continued utilization of ABS securitizations to finance asset growth; ended Q3 with $5.3B unsecured debt outstanding and 81% of total education loans funded to term (per presentation) .

Estimates Context

EPS: Q3 2025 Primary EPS consensus $0.18 vs actual Core EPS -$0.84 (miss). Q4 2025 EPS consensus $0.31 aligns with guidance midpoint $0.325, suggesting limited near-term estimate risk if credit trends stabilize. Values retrieved from S&P Global.
Revenue: Q3 2025 consensus $140.0MM vs actual -$7MM (miss); for financials with significant provisions and non-interest income volatility, consensus “revenue” can diverge from reported components. Values retrieved from S&P Global.
Where estimates may adjust: Analysts likely to revisit credit cost assumptions (delinquency/charge-off trajectory) and prepayment speed sensitivities given outsized Q3 provision and lower premium amortization .

Key Takeaways for Investors

Credit costs are the primary swing factor: $155M consumer lending provision and elevated delinquencies drove the quarter; watch delinquency trend and net charge-off rates for normalization .
Structural cost improvements are material: completion of TSA obligations accelerates expense removal; OpEx down ~43% YoY in Q3, supporting medium-term margin resilience .
Origination flywheel is strengthening: Earnest volumes broaden with strong refi and record in-school peak-season volumes; management raised FY origination outlook to ~~$2.4B (supporting future NII) **[https://finance.yahoo.com/quote/NAVI/earnings/NAVI-Q3-2025-earnings_call-368719.html#:~~:text=Navient%20reported%20Q3%202025%20core]**.
Capital returns remain active: New $100M buyback and continued dividend ($0.16) provide support while maintaining ABS issuance and liquidity buffers .
EPS path: Adjusted Core EPS of $0.29 and Q4 guidance $0.30–$0.35 frame a near-term recovery trajectory; however, estimates hinge on credit normalization and prepayment dynamics .
Monitor FFELP prepayments: The sharp decline vs prior year is supportive to NIM via lower premium amortization; sustained low prepayments could continue to benefit NII .
Trading setup: Post-miss, improvement in forward EPS/guidance and capital return authorizations may act as catalysts; risk remains around consumer credit quality and macro sensitivity to rates (prepayments and derivatives) .

Notes: Values marked with * retrieved from S&P Global.

NAVIENT CORP (NAVI)·Q3 2025 Earnings Summary