Nelnet Q2 2020 Earnings Report
Key Takeaways
Nelnet reported GAAP net income of $86.5 million, or $2.21 per share, for the second quarter of 2020, compared to $24.6 million, or $0.61 per share, for the same period a year ago. The increase was primarily due to a $51.0 million gain from adjusting the carrying value of its investment in Hudl. Excluding derivative market value adjustments, net income was $89.5 million, or $2.28 per share.
GAAP net income was $2.21 per share, or $2.28 per share excluding adjustments.
The company repurchased 1.5 million shares for $67.3 million.
A $51 million gain was recognized on the Hudl investment.
The company was servicing $476.5 billion in loans as of June 30, 2020.
Nelnet
Nelnet
Nelnet Revenue by Segment
Forward Guidance
Nelnet intends to use its strong liquidity position to invest in market opportunities
Positive Outlook
- federally insured, private education, and consumer loan acquisitions
- strategic acquisitions and investments, including anticipated capital commitments to Nelnet Bank
- expansion of ALLO's communications network
- capital management initiatives, including stock repurchases
- debt repurchases, and dividend distributions.
Challenges Ahead
- risks and uncertainties related to the severity, magnitude, and duration of the COVID-19 pandemic
- risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the company under existing and any future servicing contracts with the Department
- risks to the company related to the Department's initiatives to procure new contracts for federal student loan servicing and awards of contracts to other parties
- risks related to the company's loan portfolio, such as interest rate basis and repricing risk and changes in levels of loan repayment or default rates
- financing and liquidity risks, including risks of changes in the securitization and other financing markets for loans
Revenue & Expenses
Visualization of income flow from segment revenue to net income