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Sep 30, 2023
Nelnet Q3 2023 Earnings Report
Nelnet reported mixed results due to the anticipated runoff of its legacy student loan portfolio, while core fee-based businesses showed growth opportunities.
Key Takeaways
Nelnet's Q3 2023 GAAP net income was $45.3 million, or $1.21 per share, down from $104.8 million, or $2.80 per share, in the same period last year. Excluding derivative market value adjustments, net income was $42.9 million, or $1.15 per share, compared to $64.5 million, or $1.73 per share in 2022. The company is focusing on growth opportunities in its core fee-based businesses amidst the student loan portfolio runoff.
GAAP net income decreased to $45.3 million, or $1.21 per share, compared to $104.8 million, or $2.80 per share, year-over-year.
Net income, excluding derivative market value adjustments, was $42.9 million, or $1.15 per share, compared to $64.5 million, or $1.73 per share, in the same period last year.
Loan Servicing and Systems segment reported revenue of $127.9 million, with net income after tax of $18.6 million.
Education Technology, Services, and Payment Processing segment revenue increased to $113.8 million, with net income after tax of $16.8 million.
Revenue by Segment
Forward Guidance
This press release contains forward-looking statements within the meaning of federal securities laws. These statements are based on management's current expectations as of the date of this release and are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results and performance to be materially different from any future results or performance expressed or implied by such forward-looking statements.
Positive Outlook
- Ability to successfully maintain and increase allocated volumes of student loans serviced by the company under existing and future servicing contracts with the Department
- Expected benefits from the November 2020 launch of Nelnet Bank operations, including the ability to successfully conduct banking operations and achieve expected market penetration
- Continuing investment in ALLO
- Initiatives to pursue additional strategic investments (and anticipated income therefrom), acquisitions, and other activities, including activities that are intended to diversify the company both within and outside of its historical core education-related businesses
- Ability to adapt to technological change
Challenges Ahead
- Risks related to the ability to comply with agreements with third-party customers for the servicing of Federal Direct Loan Program, FFEL Program, private education, and consumer loans
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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