Executive Summary

Q3 2025 delivered a substantial beat vs S&P Global consensus as non-GAAP EPS was $2.95 vs $1.52 consensus and revenue was $427.4M vs $372.0M consensus, aided by non-recurring revenue, a venture investment gain, and a negative provision from a loan sale; GAAP EPS was $2.94 . EPS (non-GAAP): 2.95 vs 1.52; Revenue: $427.4M vs $372.0M. Values retrieved from S&P Global.
Drivers: $32.9M one-time servicing revenue, $30.2M venture gain, and $28.9M allowance reversal on a loan sale (combined ~$1.92/share boost), partially offset by ~~$20.1M expense items (debt discount write-off, solar EPC losses, solar impairment) (~~$0.42/share headwind) .
Core businesses steady: Loan Servicing & Systems revenue rose to $151.1M (benefiting from the non-recurring USDS item and private loan portfolio conversions); NBS revenue grew to $129.3M but with lower margin due to growth investments .
Capital allocation and updates: Dividend raised to $0.33 (Q4) from $0.30 (Q3) and new $93M agreement to acquire Finastra’s Canadian student loan servicing business (close expected Q1’26), potential catalysts alongside continued buybacks .

What Went Well and What Went Wrong

What Went Well
- “Strong results this quarter were driven by ongoing strength across our core businesses in loan servicing, consumer lending, payments, and technology along with some one-time transactions that had a positive impact,” said CEO Jeff Noordhoek .
- Loan Servicing & Systems revenue increased to $151.1M, boosted by a $32.9M non-recurring USDS contract modification and expanded private loan servicing (Discover, SoFi conversions) .
- Non-recurring positives added material EPS: $32.9M servicing revenue (~~$0.69/share), $30.2M venture gain (~~$0.63), and $28.9M negative provision from loan sale (~$0.60) .
What Went Wrong
- Solar construction continued to post losses: -$6.0M in Q3 and a non-cash impairment of $5.8M on a solar development project; legacy projects still carry loss reserves .
- $8.3M non-cash debt discount write-off from repurchasing $377.6M of company debt, reducing EPS by ~$0.23 (pre-tax) .
- NBS margin diluted versus 2024 due to ongoing investments to support customer growth and new technologies despite revenue growth .

Financial Results

Overall P&L (USD Millions except per-share). Columns oldest→newest.

Metric	Q3 2024	Q2 2025	Q3 2025
Net Interest Income	$72.155	$79.435	$85.250
Total Other Income (Expense), Net	$266.368	$461.177	$342.507
Total Expenses	$322.635	$285.318	$294.872
Income Before Taxes	$(2.223)	$237.364	$136.448
Net Income Attributable to Nelnet, Inc.	$2.388	$181.459	$106.684
EPS (GAAP)	$0.07	$4.97	$2.94
EPS (Non-GAAP, ex derivative MVA)	$0.34	$5.05	$2.95

Segment Revenues (USD Millions)

Segment Revenue	Q3 2024	Q2 2025	Q3 2025
Loan Servicing & Systems (NDS)	$108.175	$120.724	$151.052
Education Technology Services & Payments (NBS)	$118.179	$118.184	$129.321
Reinsurance Premiums Earned	$16.619	$26.112	$23.165
Solar Construction Revenue	$19.321	$1.259	$5.738

Segment Pretax Income (USD Millions)

Segment Pretax	Q3 2024	Q2 2025	Q3 2025
NDS (Loan Servicing & Systems)	$(4.549)	$19.959	$46.270
NBS (EdTech & Payments)	$26.813	$23.542	$24.957
AGM	$(16.346)	$27.393	$36.621
Nelnet Bank	$(4.758)	$(0.465)	$6.088

Key One-time/Non-recurring Items (Q3 2025)

Item	Amount ($M)	EPS Impact
One-time USDS contract revenue	$32.9	~$0.69/share
Venture investment gain	$30.2	~$0.63/share
Negative provision (allowance reversal on loan sale)	$28.9	~$0.60/share
Expense items (debt discount write-off; solar EPC loss; solar impairment)	$(20.1)	~$(0.42)/share

KPIs – Servicing Volumes and Borrowers

KPI	Sep 30, 2024	Jun 30, 2025	Sep 30, 2025
Servicing Volume – Government ($B)	$492.142	$465.689	$458.679
Servicing Volume – FFELP ($B)	$13.745	$12.386	$11.982
Servicing Volume – Private & Consumer ($B)	$20.666	$38.018	$38.060
Total Servicing Volume ($B)	$526.553	$516.093	$508.721
Total Borrowers (Millions)	15.541	14.523	14.195

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q4 2025	$0.30 (declared for Q3 2025)	$0.33 (declared for Q4 2025)	Raised
Foundation contribution expense	Q4 2025	Not previously specified	Up to $35M to be expensed in Q4 2025	New item
Financial outlook (revenue/margins/OpEx)	N/A	None provided	None provided in release	Maintained (no formal guidance)
Strategic: Canada student loan servicing acquisition	Close Q1 2026	N/A	$93M cash, expected close Q1 2026	Strategic update

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was available in our document set as of Nov 20, 2025; themes below reflect company Q1–Q3 press releases and the Q3 8-K.

Topic	Previous Mentions (Q1 2025 and Q2 2025)	Current Period (Q3 2025)	Trend
USDS/government servicing	Q1: USDS per-borrower revenue lower vs legacy; NDS revenue $120.7M; borrower volume 15.6M . Q2: NDS revenue $120.7M; Discover/SoFi conversions support growth .	$32.9M non-recurring USDS contract revenue; NDS revenue $151.1M; efficiency gains via tech/automation .	Stabilizing with one-time uplift; efficiency initiatives ongoing.
Private loan servicing scale	Q1: Conversions from Discover/SoFi lifted private servicing revenue . Q2: Continued tailwind cited .	Private & consumer volume $38.1B; servicing borrowers 1.325M .	Sustained scale from conversions.
Payments/EdTech (Project Horizon)	Q2: “Notify” launched to streamline campus communication .	Campus Commerce processed >$602M Title IV ACH refunds; Project Horizon momentum .	Product cadence and scale improving; continued investment impacts margins .
Capital allocation	Q2: $175M ALLO gain; buybacks; $0.30 dividend .	Buybacks continued; dividend raised to $0.33; venture gain $30.2M .	Returning capital while monetizing investments.
Solar EPC	Q1: Elevated costs; legacy contracts remain . Q2: $(13.4)M net loss; added $12.9M contract loss reserves .	$(6.0)M loss and $5.8M impairment; legacy losses persist .	Headwind continues but legacy backlog shrinking.
Nelnet Bank	Q1: NII $12.4M; net income $1.5M . Q2: NII $14.1M; near breakeven .	NII $15.4M; net income $4.6M; assets $2.0B; deposits $1.73B .	Scaling with improving profitability.

Management Commentary

“We remain focused on long-term value creation and see meaningful opportunities to invest in and grow these businesses... we were excited to announce our agreement to acquire Finastra’s Canadian student loan servicing business,” — Jeff Noordhoek, CEO .
On Canadian acquisition: “This acquisition builds on our legacy of serving student loan borrowers and government partners in both the U.S. and Canada... By leveraging our financial strength, loan servicing experience, and dedication to innovation, we are excited to support their mission and build upon their success in Canada.” — Jeff Noordhoek .
NDS profitability: 2025 improvement driven by higher revenue and lower expenses through technology and automation .

Q&A Highlights

No Q3 2025 earnings call transcript was available in our sources; therefore, Q&A themes and any guidance clarifications cannot be validated from a primary transcript as of this report date .

Estimates Context

Beat vs S&P Global consensus: EPS (non-GAAP “Primary EPS”) 2.95 vs 1.52; Revenue $427.4M vs $372.0M; 1 estimate for both metrics. These outperformance figures reflect significant non-recurring items this quarter.* Values retrieved from S&P Global.

Metric	Consensus (Q3 2025)	Actual (Q3 2025)	Surprise	# of Estimates
EPS (Primary)*	1.52*	2.95*	+1.43*	1*
Revenue ($M)*	372.0*	427.4*	+55.4*	1*

Values retrieved from S&P Global.

Implications: Street estimates likely need to normalize for one-offs ($32.9M USDS item, $30.2M venture gain, $28.9M negative provision) and ongoing solar EPC headwinds when recalibrating forward EPS and revenue run-rate .

Key Takeaways for Investors

Core operations healthy; NDS revenue strength and cost efficiencies plus NBS top-line growth underpin operating momentum, though NBS margins reflect reinvestment .
The quarter’s large beat was materially aided by one-time items; investors should adjust run-rate expectations accordingly and focus on recurring servicing, payments, and bank earnings power .
Dividend increased to $0.33 and continued buybacks signal confidence; portfolio monetization (venture gain, ALLO in Q2) provides capital flexibility .
Solar EPC remains a drag; legacy losses and impairment continue—monitor timeline to complete legacy projects and potential de-risking actions .
Nelnet Bank scaling with improving profitability and growing assets/deposits, adding a more durable earnings stream over time .
Strategic expansion via Finastra Canada acquisition broadens servicing footprint and may enhance NDS scale and capabilities after closing in Q1’26 .
Watch for Q4 impact from the up to $35M foundation contribution expense and any updates to USDS economics or volume allocations with the Department of Education .

Additional Detail and Cross-References

Q3 2025 consolidated results, segment detail, non-GAAP reconciliations, and balance sheet: 8-K and Exhibits 99.1/99.2 .
Q2 2025 earnings press release (ALLO gain, segment performance, and prior dividend): .
Q1 2025 earnings press release (USDS commentary, early-year segment trends): .
Q3 2025 press releases: Canadian servicing acquisition ; Project Horizon/Notify and refunds updates .
Dividend declaration (Q4 2025) and foundation contribution (Q4 expense): .

Appendix: Actual vs Consensus Detail (Definitions)

S&P Global “Revenue” for financials includes net interest income plus other income; “Primary EPS” aligns to reported non-GAAP EPS this quarter; GAAP EPS was $2.94 . One estimate coverage limits statistical confidence; results were nevertheless well above consensus levels.* Values retrieved from S&P Global.

NELNET INC (NNI)·Q3 2025 Earnings Summary