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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-27 · 413 added, 487 removed, 638 unchanged (59% of the section changed)

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(Management’s Discussion and Analysis of Financial Condition and Results of Operations is for the years ended December 31, 2025 and 2024.

All dollars are in thousands, except share data, unless otherwise noted.)

All dollars are in thousands, except share amounts, unless otherwise noted.)

The following discussion and analysis provides information that the Company’s management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of the Company.

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"Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2024 Annual Report on Form 10-K, which was filed with the United States Securities and Exchange Commission on February 27, 2025.

The Company is a diversified hybrid holding company with primary businesses being consumer lending, loan servicing, payments, and technology – with many of these businesses serving customers in the education space.

The largest operating businesses engage in loan servicing and education technology services and payments.

A significant portion of the Company's revenue is net interest income earned on a portfolio of federally insured student loans.

The Company also makes and manages investments to further diversify both within and outside of its historical core education-related businesses including, but not limited to, investments in a fiber communications company (ALLO), early-stage and emerging growth companies (venture capital investments), real estate, reinsurance, and renewable energy (solar).

The Company is an operating holding company with primary businesses in consumer lending, loan servicing, payments, and technology-enabled services, many of which are focused on serving customers in the education sector.

The Company conducts these activities both directly and through its wholly owned and majority-owned subsidiaries, and actively manages and operates its businesses on an integrated basis.

Nelnet’s largest operating and technology platforms support loan servicing and education-related technology and payment solutions.

A significant portion of the Company’s revenue is derived from net interest income earned on a portfolio of federally insured student loans, a substantial portion of which is serviced by the Company.

The Company has also broadened its operating business mix both within and beyond its historical education-focused activities.

These businesses include banking and other financial services conducted through the Company’s bank and other subsidiaries, asset management and related customer-facing servicing, real estate development and management, reinsurance operations, renewable energy development, and selected strategic interests in early-stage, emerging growth, and other operating enterprises.

The Company actively manages such businesses and holds interests in them for strategic and operational purposes.

The Company was formed as a Nebraska corporation in 1978 to service federal student loans for two local banks.

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To reduce its reliance on interest income from FFELP loans, the Company has expanded its services and products.

This expansion has been accomplished through internal growth and innovation as well as business and certain investment acquisitions.

The Company is also actively expanding its private education, consumer, and other loan portfolios, or investment interests therein, and as part of this strategy launched Nelnet Bank in 2020.

This expansion has been accomplished through internal growth and innovation as well as acquisitions.

The Company is also actively expanding its private education, consumer, and other loan portfolios, or residual

interests therein, and as part of this strategy launched Nelnet Bank in 2020.

In addition, the Company has been servicing federally owned student loans for the Department since 2009.

Reclassifications and Immaterial Error Corrections

The accompanying Management's Discussion and Analysis of Financial Condition and Results of Operations gives effect to the immaterial error corrections made to the previously reported consolidated financial statements for the year ended December 31, 2023.

For additional information, see “Reclassification and Immaterial Error Corrections” within note 2 of the notes to consolidated financial statements included in this report.

GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments

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Management has structured all of the Company’s derivative transactions with the intent that each is economically effective;

however, the Company’s derivative instruments do not qualify for hedge accounting in the consolidated financial statements.

As a result, the change in fair value of derivative instruments is reported in current period earnings with no consideration for the corresponding change in fair value of the hedged item.

Under GAAP, the cumulative net realized and unrealized gain or loss caused by changes in fair values of derivatives in which the Company plans to hold to maturity will equal zero over the life of the contract.

however, the majority of the Company’s derivative instruments do not qualify for hedge accounting in the consolidated financial statements.

As a result, the change in fair value for the derivative instruments that do not qualify for hedge accounting is reported in current period earnings with no consideration for the corresponding change in fair value of the hedged item.

Under GAAP, the cumulative net realized and unrealized gain or loss caused by changes in fair values of derivatives in which the Company plans to hold to maturity will generally equal zero over the life of the contract.

However, the net realized and unrealized gain or loss during any given reporting period fluctuates significantly from period to period.

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The Company earns net interest income on its loan portfolio, consisting primarily of FFELP loans, through its AGM reportable operating segment.

This segment is expected to generate significant amounts of cash as the FFELP portfolio amortizes.

segment is expected to generate significant amounts of cash as the FFELP portfolio amortizes.

The Company actively works to maximize the amount and timing of cash flows generated from its FFELP portfolio and seeks to acquire additional loan assets to leverage its servicing scale and expertise to generate incremental earnings and cash flow.

Nelnet Bank operates as an internet

industrial bank franchise focused on the private education and unsecured consumer loan markets, with a home office in Salt Lake City, Utah.

Nelnet Bank operates as an internet industrial bank franchise focused on the private education and unsecured consumer loan markets, with a home office in Salt Lake City, Utah.

The NFS division was formed to focus on the Company’s key objective to maximize the amount and timing of cash flows generated from its FFELP portfolio and reposition itself for the post-FFELP environment by expanding its private education, consumer, and other loan portfolios.

In addition to AGM and Nelnet Bank being part of the NFS division, NFS’s other operating segments that are not reportable include:

• The operating results of Whitetail Rock Capital Management, LLC (WRCM), the Company's U.S.

In addition to AGM and Nelnet Bank being part of the NFS division, NFS’s other operating segments that are not reportable include the operating results of:

• Nelnet Insurance Services, which primarily includes multiple reinsurance treaties on property and casualty policies

• Whitetail Rock Capital Management, LLC (WRCM), the Company's U.S.

Securities and Exchange Commission (SEC)-registered investment advisor subsidiary

• The operating results of Nelnet Insurance Services, which primarily includes multiple reinsurance treaties on property and casualty policies

• The operating results of the Company’s investment activities in real estate

• The operating results of the Company’s investment debt securities (primarily student loan and other asset-backed securities) and interest expense incurred on debt used to finance such investments

• The Company’s ownership and activities in real estate

• The Company’s ownership and management of its bond portfolio (primarily student loan and other asset-backed securities)

Other business activities and operating segments that are not reportable and not part of the NFS division are combined and included in Corporate and Other Activities ("Corporate").

Corporate includes the following items:

• Shared service activities related to internal audit, human resources, accounting, legal, enterprise risk management, information technology, occupancy, and marketing.

• Shared service activities related to human resources, accounting, legal, enterprise risk management, information technology, occupancy, and marketing.

These costs are allocated to each operating segment based on estimated use of such activities and services

• Corporate costs and overhead functions not allocated to operating segments, including executive management, investments in innovation, and other holding company organizational costs

• The operating results of solar tax equity investments made by the Company and administrative and management services provided by the Company on solar tax equity investments made by third parties

• Corporate costs and overhead functions not allocated to operating segments, including executive management, innovation initiatives, and other holding company organizational costs

• The operating results of the Company’s participation in renewable energy solar developments through tax equity structures and administrative and management services provided by the Company on solar tax equity investments made by third parties

• The operating results of Nelnet Renewable Energy, the Company’s solar engineering, procurement, and construction business.

• The operating results of certain of the Company’s investment activities, including its investment in ALLO and early-stage and emerging growth companies (venture capital investments)

The Company sold its ownership interest in Nelnet Renewable Energy during the fourth quarter of 2025.

• The operating results of certain of the Company’s investment activities, including its ownership in ALLO and early-stage and emerging growth companies (venture capital)

• Interest income earned on cash balances held at the corporate level and interest expense incurred on unsecured corporate related debt transactions

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Nelnet Bank 14,613 (1,942)

NFS other operating segments 55,718 50,872

Unallocated corporate costs (46,194) (63,223)

Nelnet Insurance Services 15,209 11,332

WRCM 5,972 5,391

Real estate (6,152) (3,333)

Bond portfolio 39,441 42,328

Unallocated shared services and corporate costs (41,893) (46,194)

Renewable energy solar developments (23,770) (2,179)

Nelnet Renewable Energy - solar construction (57,540) (35,972)

Solar tax equity investments (2,179) (60,982)

ALLO investment 8,087 (57,972)

Venture capital investments 6,912 (6,008)

ALLO 194,936 8,087

Venture capital 38,874 6,912

Other corporate activities 10,418 10,481

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Income tax expense (127,986) (52,669)

Net loss attributable to noncontrolling interests (a) 8,130 40,496

Net loss attributable to noncontrolling interests 30,128 8,130

Net income $ 428,474 184,045

(a) For the periods presented, the majority of noncontrolling interests represents losses attributed to noncontrolling membership interests in the Company’s Nelnet Renewable Energy and solar tax equity investments operating segments, which were $8.5 million and $41.0 million, in 2024 and 2023, respectively.

2024 Operating and Liquidity Highlights

See below for a summary of (i) certain highlights of the Company’s 2024 operating results;

(ii) a description of significant and/or unusual events and transactions in 2024 that impacted and may potentially impact the Company’s operating results;

and (iii) a summary of the Company’s current liquidity, including certain items that will impact the Company’s liquidity in future periods.

See “Results of Operations” for each reportable operating segment, the NFS division, and Corporate and Other Activities and “Liquidity and Capital Resources” under this Item 7 for additional detail.

Loan Servicing and Systems

In April 2023, the Company and four other third-party servicers were awarded servicing contracts to provide continued servicing for the Department under a new Unified Servicing and Data Solutions (USDS) contract which replaced the Company’s legacy servicing contract with the Department.

The USDS contract became effective in April 2023 and has a five-year base period, with 5 years of possible extensions.

Servicing under the USDS contract went live on April 1, 2024 and the Company recognized revenue in accordance with this new contract beginning in the second quarter of 2024.

The Company recognized less revenue from the Department in 2024 under the USDS contract due to a decrease in the number of borrowers serviced and lower revenue earned on a per borrower blended basis under the new contract versus the legacy contract.

The new USDS servicing contract has multiple revenue components with tiered pricing based on borrower volume, while revenue earned under the legacy servicing contract was primarily based on borrower status.

Education Technology Services and Payments

Education technology services and payments revenue grew to $487.0 million in 2024.

The growth was from existing and new customers.

Operating margin increased from recent historical periods as a result of increases in tuition payment plan services and payment processing revenue, while maintaining a consistent cost structure for services.

Asset Generation and Management

Net interest income decreased in 2024 compared to 2023 after removing the impacts to interest expense for the write-off of the remaining unamortized debt discount associated with the redemption of certain asset-backed debt securities in 2024 and 2023 discussed below.

Net interest income was negatively impacted in 2024 due to the expected continued amortization of the Company’s FFELP student loan portfolio and a decrease in core loan spread.

The average balance of student loans decreased $3.0 billion from $13.3 billion in 2023 to $10.3 billion in 2024.

Beginning in late 2021, the Company has experienced accelerated run-off of its FFELP portfolio due to initiatives offered by the Department for FFELP borrowers to consolidate their loans to qualify for loan forgiveness, income-driven repayment plans, and other programs.

However, the Company has observed a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024 that has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates.

In 2024 and 2023, the Company redeemed certain asset-backed debt securities prior to their maturity, resulting in the recognition of $6.3 million and $25.9 million, respectively, in interest expense from the write-off of the remaining unamortized debt discount associated with these bonds at the time of redemption.

The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations, which are accounted for as held-to-maturity beneficial interest investments.

An increase in cumulative loss expectations in 2024 on certain securitizations and loan vintages caused a change in estimate of future cash flows related to certain of the Company's beneficial interest securitization investments.

As a result, during 2024, the Company recorded a $39.5 million allowance for credit losses (and related provision expense) related to these investments.

Impact of Significant Transactions on 2025 Operating Results

Operating results for fiscal year 2025 were materially affected by certain transactions.

Management believes that discussion of these items is necessary to understand the Company’s financial performance for the period.

These transactions are summarized below.

Partial Redemption of ALLO Membership Interests

ALLO, a fiber communication services provider, was a former majority-owned subsidiary, until a recapitalization of ALLO in 2020 resulted in a deconsolidation of ALLO from the Company’s consolidated financial statements.

In June 2025, ALLO redeemed certain of its membership interests from members, including Nelnet.

As part of the transaction, ALLO redeemed more than 50% of Nelnet’s voting membership interest in ALLO and all its outstanding preferred membership interest.

At the closing of the transaction, Nelnet received cash proceeds of $410.9 million from ALLO related to these redemptions and recognized a pre-tax gain of $175.0 million, attributable to the redemption of the voting membership interest.

This gain is included in “ALLO” in the above table.

Following the transaction, Nelnet maintains a significant voting equity interest in ALLO.

Nelnet’s ownership of voting membership interest in ALLO decreased from 45% to 27%.

Government Servicing Contract

Upon reaching a final agreement with the Department of Education, the Company's Loan Servicing and Systems operating segment (NDS) recognized $32.9 million of non-recurring revenue in the third quarter 2025 on a contract modification for services previously performed.

This revenue is included in the operating results of “NDS” in the above table.

Venture Capital

The Company has an interest in CompanyCam, Inc.

(“CompanyCam”), a technology company that provides a photo-based, cloud managed application designed for contractors and field service professionals to document projects in real-time.

In August 2025, CompanyCam completed an additional equity raise and accepted tender offers to redeem existing equity holders with a portion of the proceeds.

The Company redeemed a portion of its interest and received cash proceeds of $10.1 million and

recognized a pre-tax gain of $7.8 million.

The Company accounts for its interest in CompanyCam using the measurement alternative method, which requires it to adjust its carrying value for changes resulting from observable market transactions.

As a result of CompanyCam’s equity raise, the Company recognized a pre-tax gain of $22.4 million during the third quarter of 2025 to adjust its carrying value of its remaining interest in CompanyCam to reflect the August 2025 transaction value.

These gains are included in “Venture capital” in the above table.

After the completion of this transaction, the carrying amount of the Company’s remaining interest in CompanyCam is $31.7 million.

Reversal of Provision for Loan Losses for Loans Sold

In July 2025, the Company sold $203.3 million of consumer loans to an unrelated third party who securitized such loans.

As partial consideration received for the loans sold, the Company received a residual interest in the loan securitization that is included in “other investments and notes receivable, net” on the Company's consolidated balance sheet.

Once a loan is classified as held for sale, any allowance for loan losses that existed immediately prior to the reclassification to held for sale is reversed.

The Company reduced its allowance (and recognized negative provision expense) of $28.9 million (that increased income) related to this loan sale.

The reversal of the allowance related to this loan sale is included in the operating results of “AGM” in the above table.

Nelnet Renewable Energy (NRE)

NRE is the Company’s solar construction company that provides full-service engineering, procurement, and construction (EPC) services to residential homes and commercial entities.

In April 2024, the Company announced a change in its solar EPC operations to focus exclusively on the commercial solar market and consequently discontinued its residential solar operations in 2024.

As a result, residential revenue will continue to decline from recent historical amounts as existing customer contracts are completed.

Residential solar construction revenue was $3.3 million and $10.7 million for the year ended December 31, 2024 and 2023, respectively.

The Company entered the EPC business with its July 2022 acquisition of GRNE Solar.

Since the acquisition, NRE has incurred low and, in some cases, negative margins on certain legacy projects.

During 2023 and 2024, NRE recognized a net loss before taxes of $54.7 million and $36.0 million, respectively.

These losses in 2023 and 2024 include impairment charges on goodwill, intangible assets, and other assets of $20.6 million and $1.9 million, respectively.

The Company has a handful of remaining legacy construction contracts to complete, down from over 30 at the beginning of 2024.

As new projects are completed and the legacy contracts are substantially complete, the Company believes operating results will improve from prior historical periods.

Solar Tax Equity Investments

As of December 31, 2024, the Company has invested a total of $314.8 million and its third-party investors have invested $271.4 million in tax equity investments that remain outstanding in renewable energy solar partnerships that support the development and operations of solar projects throughout the country.

Due to the management and control of each of these investment partnerships, such partnerships that invest in tax equity investments are consolidated on the Company’s consolidated financial statements, with the co-investor’s portion being presented as noncontrolling interests.

Included in the Company’s operating results is the Company's share of income or loss from solar investments accounted for under the Hypothetical Liquidation at Book Value (HLBV) method of accounting.

For the majority of the Company's solar investments, the HLBV method of accounting results in accelerated losses in the initial years of investment.

The Company recognized pre-tax losses on its tax equity investments of $6.5 million in 2024, which includes $4.6 million attributable to noncontrolling interests.

The pre-tax losses were partially offset by recognizing gains of $15.3 million, which includes $1.8 million attributable to noncontrolling interests, related to investments that were sold during 2024.

In periods in which the Company makes significant investments in solar tax equity investments, operating results are negatively impacted due to the accelerated losses recognized in the initial years of investment.

However, given the timing and amount of cash flows expected to be generated over the life of these investments, the Company considers these investments a good use of capital.

Through December 31, 2024, the Company has recognized cumulative pre-tax losses (excluding noncontrolling interests) of approximately $70 million on its tax equity investments currently outstanding.

The Company expects its current investments (assuming no additional investments are made subsequent to December 31, 2024) to generate approximately $93 million of pre-tax earnings (excluding noncontrolling interests) over the life of the investments.

Accordingly, the Company

expects to recognize approximately $163 million in pre-tax income (excluding noncontrolling interests) between January 1, 2025 and December 31, 2030 (the remaining years of its current investments).

Investments - ALLO and Hudl

The Company has a 45% voting membership interests in ALLO.

The Company accounts for its ALLO voting membership interests investment under the HLBV method of accounting that resulted in the recognition of a net loss of $10.7 million during 2024.

Absent additional equity contributions with respect to ALLO's voting membership interests, the Company will not recognize additional losses for its voting membership interests in ALLO.

The Company also owns preferred membership interests in ALLO that earn a preferred return.

As of December 31, 2024, the outstanding preferred membership interests of ALLO held by the Company was $225.6 million.

The Company recognized income on its ALLO preferred membership interests of $17.5 million in 2024.

Nelnet continues to work with ALLO and SDC, a third-party global digital infrastructure investor that holds a significant investment in ALLO, to explore various funding and capital options to support ALLO’s growth.

The Company has an approximately 22% preferred ownership investment in Agile Sports Technologies, Inc.

(doing business as “Hudl.”) During the fourth quarter of 2024 and first quarter of 2023, the Company acquired additional ownership interests in Hudl for $3.3 million and $31.5 million, respectively, from existing Hudl investors.

These transactions were not considered observable market transactions (not orderly) because they were not subject to customary marketing activities.

Accordingly, the Company did not adjust its carrying value of its Hudl investment to the transaction values.

As of December 31, 2024, the carrying amount of the Company's investment in Hudl is $168.7 million.

Certain investments, including solar tax equity, ALLO, and Hudl, may be recorded at a carrying value that is less than its market value due to HLBV (solar investments and ALLO) and the measurement alternative (Hudl) method of accounting.

Future operating results of solar and ALLO, an observable transaction of Hudl, or a liquidation event of ALLO or Hudl could impact the valuation on our financial statements or our investments in them and may result in significant fluctuations of the Company’s earnings.

As of December 31, 2024, the Company had $717.1 million of unencumbered cash and investments.

In addition, the Company has a $495.0 million unsecured line of credit that matures in September 2026.

No amounts were outstanding on the line of credit as of December 31, 2024 and $495.0 million was available for future use.

Further, as of December 31, 2024, the Company expects to generate future undiscounted cash flows from its AGM loan portfolio of approximately $1.07 billion (including approximately $675.0 million in the next five years);

and from its beneficial interest investments of approximately $323.4 million (the majority of which is expected to be received over the next five years).

The Company intends to use its current and future liquidity position to capitalize on market opportunities, including FFELP, private education, consumer, and other loan acquisitions (or investment interests therein);

strategic acquisitions and investments;

and capital management initiatives, including stock repurchases, debt repurchases, and dividend distributions.

The timing and size of these opportunities will vary and will have a direct impact on the Company's cash and investment balances.

NRE was the Company’s solar construction subsidiary, providing full‑service engineering, procurement, and construction (EPC) services.

The Company entered the EPC business through its acquisition of GRNE Solar in July 2022.

Following the acquisition, NRE experienced low and, in certain cases, negative margins on projects.

In addition, changes in legislation reducing clean energy tax incentives, tariff uncertainty, and rising construction costs adversely affected revenue and net income.

As a result of these factors, the Company sold NRE in November 2025.

For the year ended December 31, 2025, NRE generated a net loss before taxes of $57.5 million, as reflected in the table above.

Although the Company retained a limited number of construction contracts to complete following the sale, the Company does not expect the operating results from such contracts to be significant in future periods.

Recent Development

On February 2, 2026, the Company acquired a Canadian student loan servicing business for CAD $130.5 million (USD $95.7 million).

The acquired business (“NDS Canada”) delivers technology-enabled student loan servicing for governments and financial institutions, managing 2.7 million borrowers on proprietary platforms.

Beginning on the acquisition date, the operating results of NDS Canada will be included in the Loan Servicing and Systems reportable operating segment.

CONSOLIDATED RESULTS OF OPERATIONS

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2025 2024 Additional information

Loan interest $ 787,498 931,945 Decrease due to decreases in the average balance of loans in the AGM operating segment partially offset by an increase in the gross yield earned on loans.

Investment interest 185,901 177,855 Includes income from unrestricted interest-earning deposits and investments, and restricted cash in asset-backed securitizations.

Increase due to an increase in the average balances and interest rates.

Loan interest $ 686,085 787,498 Decrease was due to a decrease in the average balance of loans and gross yield earned on loans.

Investment interest 165,374 185,901 Includes income from operating cash, investments, and restricted cash in asset-backed securitizations.

Decrease was due to a decrease in interest rates and interest earned on restricted cash in asset-backed securitizations due to lower balances.

These decreases were partially offset by an increase in the average balance of investments.

Total interest income 851,459 973,399

Interest expense 680,537 845,091 Decrease due to a decrease in the average balance of debt outstanding partially offset by an increase in cost of funds and deposits at Nelnet Bank.

In addition, the Company recognized a $6.3 million and $25.9 million non-cash expense during 2024 and 2023, respectively, as the result of writing off the remaining unamortized debt discount related to the redemption of certain asset-backed debt securities prior to their maturity.

Interest expense 496,950 680,537 Decrease was due to a decrease in the average balance of debt outstanding and decrease in cost of funds.

These decreases were partially offset by an increase in interest expense on a larger deposit balance at Nelnet Bank.

Net interest income 354,509 292,862

Less provision for loan losses 67,851 54,607 Represents the current period provision to reflect the lifetime expected credit losses related to the Company’s loan portfolio.

The Company reduced its allowance (and recognized negative provision expense) of $28.9 million and $13.5 million in 2025 and 2024, respectively, related to consumer loan sales.

See note 4 of the notes to consolidated financial statements in this report for the factors impacting provision for loan losses for the periods presented.

Net interest income after provision for loan losses 238,255 256,594

Less provision for beneficial interests 11,311 39,491 Represents the current period provision expense related to the Company’s beneficial interest in certain loan securitizations.

See note 7 of the notes to consolidated financial statements in this report for additional information.

Net interest income after provision 275,347 198,764

Other income (expense):

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507,150 486,962 See ETSP operating segment - results of operations.

Reinsurance premiums earned 62,923 20,067 Represents premiums earned, net of ceded portion, from reinsurance treaties on property and casualty policies.

Increase due to a higher number of policies the Company reinsures.

Solar construction revenue 56,569 31,669 Represents revenue earned from NRE providing solar construction services, including design and installations of residential and commercial solar systems.

In April 2024, the Company announced a change in its solar EPC operations to focus exclusively on the commercial solar market and will discontinue its residential solar operations.

As a result, residential revenue will continue to decline in future periods as existing customer contracts are completed.

Reinsurance premiums earned 107,502 62,923 Represents premiums earned, net of ceded portion, from reinsurance treaties on primarily property and casualty policies.

Increase was due to an increase in overall property volume and new business.

Solar construction revenue 14,371 56,569 Represents revenue earned from NRE providing solar construction services.

The Company sold NRE in November 2025.

Other, net 97,587 59,959 See table below for components of “other, net.”

Loss on sale of loans, net (1,643) (17,662) The AGM operating segment recognized losses from selling portfolios of loans.

See note 3 of the notes to consolidated financial statements in this report for additional information.

Gain on partial redemption of ALLO investment 175,044 — Represents a gain recognized from the partial redemption of ALLO.

See note 3 of the notes to consolidated financial statements included in this report for additional information.

Derivative settlements, net 2,700 6,134 The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility.

Derivative settlements for each applicable period should be evaluated with the Company's net interest income.

The majority of derivative settlements received by the Company during the periods presented was from the Company’s derivatives used to hedge loans earning fixed rate floor income.

To minimize the Company’s exposure to market volatility and increase liquidity, the Company terminated this derivative portfolio in March 2023.

Subsequent to terminating these derivatives, during the second and fourth quarters of 2023, the Company entered into a total of $400 million notional amount of derivatives to hedge loans earning fixed rate floor income and other loans and investments in which the Company receives a fixed rate.

See AGM operating segment - results of operations for additional information.

See NFS division - results of operations - AGM and Nelnet Bank operating segments - for additional information.

Derivative market value adjustments, net (9,098) 10,124 Includes the realized and unrealized gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP.

The majority of the derivative market value adjustments during the periods presented related to the changes in fair value of the Company's floor income interest rate swaps.

Such changes reflect that a decrease in the forward yield curve during a reporting period results in a decrease in the fair value of the Company's floor income interest rate swaps, and an increase in the forward yield curve during a reporting period results in an increase in the fair value of such swaps.

To minimize the Company's exposure to market volatility and increase liquidity, the Company terminated this derivative portfolio ($2.8 billion notional amount) in March 2023.

Subsequent to terminating these derivatives, during the second and fourth quarters of 2023, the Company entered into a total of $400.0 million notional amount of derivatives to hedge loans earning fixed rate floor income and other loans and investments in which the Company receives a fixed rate.

The Company expects the derivative market value adjustments in future periods will be less substantial.

The majority of the derivative market value adjustments during the periods presented related to the changes in fair value of AGM’s floor income and Nelnet Bank’s interest rate swaps.

Such changes reflect that a decrease in the forward yield curve during a reporting period results in a decrease in the fair value of the interest rate swaps, and an increase in the forward yield curve during a reporting period results in an increase in the fair value of such swaps.

Total other income (expense), net 1,404,345 1,165,079

Cost of services and expenses:

Costs incurred to provide loan servicing 1,889 — Represents primarily the amortization of previously capitalized contract fulfillment costs.

Loan servicing contract fulfillment and acquisition costs 7,555 1,889 Represents primarily the amortization of previously capitalized contract fulfillment costs.

The costs were pre-contract costs incurred to enhance the resources of the Company to satisfy future performance obligations and are expected to be recovered.

Cost to provide education technology services and payments 176,907 172,763 Represents direct costs to provide payment processing and instructional services in ETSP.

Increase primarily due to additional instructional services costs.

See ETSP operating segment - results of operations.

Cost to provide solar construction services 41,810 77,673 Represents direct costs related to NRE providing solar construction services.

Since the acquisition of GRNE Solar in 2022, it has incurred low and, in some cases, negative margins on certain projects.

During 2024, the Company recorded an expense of $24.6 million related to estimated losses on legacy construction projects.

The Company has a handful of remaining legacy construction contracts to complete, down from over 30 at the beginning of 2024.

As new projects are completed and the legacy contracts are now substantially complete, the Company believes operating results will improve from prior historical periods.

Total cost of services 226,272 252,325

Salaries and benefits 576,931 591,537 Decrease primarily due to staff reductions in the first half of 2023 in LSS to manage expenses due to lower pricing and reduced servicing volume for LSS's Department servicing contract, partially offset by an increase in ETSP due to annual merit pay increases and an increase in headcount to support the growth of the customer base and the investment in the development of new technologies.

Salaries and benefits 558,786 576,931 Decrease was primarily due to staff reductions announced in June 2024 in the LSS operating segment after the completion of required servicing platform enhancements for the new government servicing contract and the transfer of direct loan servicing volume to one platform.

These staff reductions took place during the second half of 2024.

These reductions were partially offset by an increase in headcount at the ETSP operating segment to support the growth of its customer base and the investment in the development of new technologies.

Depreciation and amortization 33,571 58,116 Includes depreciation of property and equipment and the amortization of intangibles from prior business acquisitions.

Decrease primarily due to reduction in depreciation due to prior year non-cash impairment charges recognized for lease, buildings, and associated improvements as the Company continues to evaluate the use of office space as it modifies its hybrid work model for associates.

See note 11 of the notes to the consolidated financial statements in this report for additional information.

Reinsurance losses and underwriting expenses 55,246 16,781 Represents case reserve, estimated loss reserve, and amortization of acquisition costs, which consist primarily of commissions and brokerage expenses, net of ceded portion, from reinsurance treaties on property and casualty policies.

Increase due to a higher number of policies the Company reinsures.

Other expenses 189,503 173,070 Includes expenses such as postage and distribution, consulting and professional fees, occupancy, communications, and certain information technology-related costs.

Increase due to an increase in LSS due to additional postage costs as a result of borrowers returning to repayment on September 1, 2023.

Total operating expenses 879,796 860,506

Impairment expense and provision for beneficial interests 42,629 31,925 Represents impairment charges recognized by the Company and the establishment of an allowance for credit losses (and related provision expense) related to the Company’s beneficial interest in certain loan securitizations.

Decrease was primarily due to (i) reduction in depreciation as a result of prior year non-cash impairment charges recognized for lease, buildings, and associated improvements as the Company consolidated office space;

and (ii) certain information technology activities moved to cloud computing and such expenses classified as other expenses.

Reinsurance losses and underwriting expenses 93,551 55,246 Represents case reserve, estimated loss reserve, and amortization of acquisition costs, which consist primarily of commissions and brokerage expenses, net of ceded portion, from reinsurance treaties on primarily property and casualty policies.

Increase was primarily due to an increase in overall property volume and new business.

Impairment expense 29,612 3,138 Represents impairment charges recognized by the Company.

See note 11 of the notes to consolidated financial statements in this report for additional information.

Total expenses 1,174,750 1,112,190

Other expenses 211,568 189,503 Includes expenses such as postage and distribution, consulting and professional fees, servicing fees, marketing, travel, communications, and certain information technology-related costs.

Increase was primarily due to expenses related to certain information technology activities moved to cloud computing.

See corresponding decrease to depreciation and amortization above.

Total operating expenses 927,088 882,934

Income before income taxes 526,332 228,584

Income tax expense (127,986) (52,669) The effective tax rate was 23.00% and 22.25% for 2025 and 2024, respectively.

The increase in the effective tax rate in 2024 was due to an increase in state income taxes and a reduction of state tax incentives.

The Company expects its future effective tax rate will range between 22% and 24%.

The increase in the effective tax rate in 2025 was due to an increase in state income taxes.

The Company expects its 2026 effective tax rate will range between 22.5% and 24.5%.

Net income 398,346 175,915

Net loss attributable to noncontrolling interests 8,130 40,496 Represents the net loss attributable to the holders of noncontrolling membership interests.

The majority is attributed to noncontrolling membership interests in the Company’s solar construction and tax equity investments operating segments.

Net loss attributable to noncontrolling interests 30,128 8,130 Represents the net loss attributable to the holders of noncontrolling membership interests, the majority of which are related to renewable energy solar developments.

Net income attributable to Nelnet, Inc.

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Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments $ 435,388 176,351

The following table summarizes the components of "other, net" in "other income (expense)."

The following table summarizes the components of "other, net" in "other income (expense)" on the consolidated statements of income:

Year ended December 31,

2025 2024 Additional information

ALLO preferred return $ 17,486 9,120 See Corporate - results of operations.

Investment activity, net (a) $ 61,072 12,438 See note (b) below for additional information.

ALLO preferred return 14,548 17,486 See Corporate - results of operations and note 7 of the notes to consolidated financial statements included in this report.

Solar consulting fee income 13,127 6,134 See Corporate - results of operations.

Borrower late fee income 11,664 8,828 See NFS division - results of operations - AGM operating segment.

Investment advisory services (WRCM) 5,934 6,760 See NFS division - results of operations - NFS other operating segments.

Administration/sponsor fee income 6,400 5,823 See NFS division - results of operations - AGM operating segment.

Management fee revenue 2,769 2,587 See LSS operating segment - results of operations.

Loss from ALLO voting membership interest investment (a) (10,693) (65,277) See Corporate - results of operations.

Loss from solar investments, net (a) (6,477) (59,645) See Corporate - results of operations.

Investment advisory services (WRCM) 6,366 5,934 See NFS division - results of operations - NFS other operating segments.

Loss from ALLO voting membership interest — (10,693) See Corporate - results of operations and note 7 of the notes to consolidated financial statements included in this report.

Loss from solar investments, net (29,029) (6,477) See Corporate - results of operations and note 7 of the notes to consolidated financial statements included in this report.

(Loss) gain on debt repurchases (4,849) 54 See NFS division - results of operations - AGM operating segment and note 5 of the notes to consolidated financial statements included in this report.

Loss on sale of loans, net (1,720) (1,643) See NFS division - results of operations - AGM operating segment.

Other 20,008 22,075

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(a) The Company anticipates fluctuations in future periodic earnings resulting from investment purchases, sales, and valuation adjustments.

(b) Investment activity by operating segment and investment type follows:

(b) Investment activity by operating segment and investment type is summarized below.

Included under Venture Capital and Funds for 2025 is a gain of $30.2 million recognized by the Company (in Corporate) related to its interests in CompanyCam.

See note 7 of the notes to consolidated financial statements included in this report for additional information.

Real Estate Venture Capital and Funds Equity / Bonds Total

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Total $ 486,161 508,721 516,093 542,340 532,363 526,553 523,750 532,207 532,646

Number of servicing

Number of servicing borrowers:

Government 11,426,789 12,387,665 12,694,386 13,453,127 14,049,550 14,114,468 14,096,152 14,328,013 14,503,057

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Loan servicing and systems revenue 509,089 482,408 See table below for additional information.

Intersegment servicing revenue 24,493 28,911 Represents revenue earned by LSS from servicing loans for AGM and Nelnet Bank.

Decrease due to the continued amortization of AGM's FFELP portfolio.

Intersegment servicing revenue will continue to decrease as AGM's FFELP portfolio pays off.

Other income 2,769 2,587 Represents revenue earned from providing administrative support services.

Intersegment servicing revenue 22,158 24,493 Represents revenue earned by LSS from servicing loans for AGM and Nelnet Bank, which will continue to decrease as AGM's FFELP portfolio pays off.

Other income 459 2,769 The 2025 activity represents revenue earned from leasing available owned office space to third parties.

In 2024 the activity also included administrative support services that are no longer provided.

Total other income 531,706 509,670

Cost of services 1,889 — Represents primarily the amortization of previously capitalized contract fulfillment costs.

Contract fulfillment and acquisition costs 7,555 1,889 Represents primarily the amortization of previously capitalized contract fulfillment costs.

The costs were pre-contract costs incurred to enhance the resources of the Company to satisfy future performance obligations and are expected to be recovered.

Salaries and benefits 300,366 317,885 Decrease due to the Company being fully staffed at the beginning of 2023 with contact center operations and support associates as the Company prepared for expiration of the federal student loan payment pause under the CARES Act.

In the first half of 2023, the Company reduced staff to manage expenses due to lower pricing and reduced servicing volume for LSS's Department servicing contract.

In June 2024, the Company announced an additional reduction in headcount after the completion of required servicing platform enhancements for the new government servicing contract and the transfer of direct loan servicing volume to one platform.

These staff reductions took place during the second half of 2024.

Depreciation 19,475 19,257

Postage expense 36,820 21,194 Increase due to borrowers returning to repayment on September 1, 2023 after the expiration of the federal student loan payment pause under the CARES Act, requiring an increase in outreach.

Other expenses 43,282 39,323 The total of other expenses and intercompany expenses decreased due to moving to one platform in 2024 and continued focus on expense reductions.

Salaries and benefits 271,806 300,366 Represents wages and salaries, payroll taxes, incentive and share-based compensation, and costs associated with employee benefit programs.

Depreciation 8,969 19,475 Represents the depreciation of the cost of primarily computer equipment and software and building and building improvements over their estimated useful lives.

Decrease primarily due to certain information technology activities moved to cloud computing, which is incurred at the corporate level and is classified as other expenses and intercompany expenses rather than depreciation expense.

Postage expense 35,344 36,820 Represents primarily mailing costs for borrower communication, including required notices related to servicing.

Impairment expense — 736

Other expenses 46,273 43,282 Represents various expenses such as communications, professional fees, software, including software subscriptions.

Intersegment expenses 67,811 71,482 Represents costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.

Intersegment expenses 71,482 78,628

Total operating expenses 430,203 472,161

Impairment expense 736 296 The Company recorded an impairment charge in the fourth quarter of 2024 and third quarter of 2023, respectively, related to owned office space and certain facilities as a result of the Company's on-going evaluation of the use of office space and adapting to a hybrid work model.

Total expenses 474,050 476,583

Income before income taxes

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Net income $ 73,255 30,778

Before tax operating margin 8.0 % 14.1 % Before tax operating margin is a measure of before tax operating profitability as a percentage of revenue, and for LSS is calculated as income before income taxes divided by the total of loan servicing and systems revenue (less cost of services), intersegment servicing revenue, and other income.

GAAP before tax operating margin 18.4 % 8.0 % Before tax operating margin is a measure of before tax operating profitability as a percentage of revenue, and for LSS is calculated as income before income taxes divided by the total of loan servicing and systems revenue (less contract fulfillment and acquisition costs), intersegment servicing revenue, and other income.

The Company uses this metric to monitor and assess the segment’s performance, manage operating costs, identify and evaluate business trends affecting the segment, and make strategic decisions, and believes that it provides additional information to facilitate an understanding of the operating performance of the segment and provides a meaningful comparison of the results of operations between periods.

Before tax operating margin decreased due primarily to a decrease in loan servicing and systems revenue as described in the table below, while total expenses have remained relatively consistent period over period.

Expenses have remained consistent despite a decrease in revenue due to costs incurred for the completion of the transfer of direct loan servicing volume to one platform, making platform enhancements for the new student loan servicing contract with the Department, preparation of the conversion of the Discover portfolio, and an increase in postage and communication costs due to borrowers returning to repayment on September 1, 2023.

The Company expects before tax operating margin to continue to be lower than historical prior year results until the full impact of its cost-saving measures take effect and revenue is generated from servicing the entire Discover and Sofi portfolios after their full conversion to the Company's platform.

Non-recurring government loan servicing revenue (5.5) —

Non-GAAP before tax operating margin, excluding non-recurring government loan servicing revenue 12.9 % 8.0 %

Operating Results Highlights

• LSS has remained focused on reducing operating expenses.

In June 2024, following the completion of required servicing platform enhancements for the new government servicing contract and the consolidation of direct loan servicing onto a single platform, the Company announced workforce reductions.

Approximately 220 associates were impacted during the second half of 2024.

Operating costs also declined as a result of migrating to one government servicing platform in 2024 and the continued execution of cost-saving initiatives, including process optimization, technology enhancements, and the expanded use of AI.

• Before-tax operating margin, excluding $32.9 million of non-recurring government loan servicing revenue recognized in 2025, improved due to higher private education and consumer loan servicing volumes and lower operating expenses.

These benefits were partially offset by lower blended revenue per borrower under the new government servicing contract as compared to the legacy contract.

Loan servicing and systems revenue

The following table presents disaggregated revenue by service offering for the LSS operating segment.

Year ended December 31,

2025 2024 Additional information

Government loan servicing $ 380,921 412,478 Represents revenue from the Company's servicing contracts with the Department.

The Company recognized revenue under the new government servicing USDS contract beginning April 1, 2024.

Decrease due to (i) a decrease in the number of borrowers serviced (due primarily from the Department transferring one million of the Company's existing borrowers to another third-party servicer during the second and third quarters of 2023);

(ii) lower revenue earned on a per borrower blended basis under the new contract, and (iii) the legacy servicing contract reduction of the monthly fee earned per borrower on certain borrower statuses by $0.19 effective April 1, 2023.

These decreases were partially offset by an increase in the average revenue earned on a per borrower blended basis as a result of borrowers moving to a repayment status on September 1, 2023 and the recognition of $10.9 million of revenue in the fourth quarter of 2024 to reflect a settlement related to certain provisions included in the legacy contract concerning inflation adjustments.

Private education and consumer loan servicing 63,453 48,984 On July 17, 2024, Discover Financial Services (Discover) announced the sale of its approximately $10 billion private education student loan portfolio, representing approximately 400,000 borrowers, to partnerships managed by two global investment firms, with Firstmark Services, a division of the Company, assuming responsibility for servicing the portfolio upon the sale.

The conversion of these loans to the Company’s platform began in September 2024 with the majority of loan conversions completed in the fourth quarter of 2024.

Increase due to (i) an increase in backup servicing volume and loan servicing volume from the Discover portfolio;

(ii) $4.0 million of non-recurring revenue recognized in 2024 associated with conversions and deconversions;

and (iii) rate increases based on contractual consumer price index changes.

During 2024, Sofi Technologies, Inc.

(Sofi) selected the Company as a sub-servicer for its school and refinance loan programs.

Transfer of new and existing Sofi loans began in the fourth quarter of 2024, with the anticipated completion of all existing loans to be complete by the second quarter of 2025.

The addition of the Sofi servicing borrowers did not have a significant impact to revenue in 2024 but will have a positive impact to revenue in future periods.

Government loan servicing $ 363,970 380,921 Represents revenue from the Company’s servicing contract with the Department.

The decrease was primarily attributable to (i) a reduction in the number of borrowers serviced, (ii) lower blended revenue per borrower under the new government servicing contract, under which the Company began recognizing revenue on April 1, 2024, as compared to the legacy contract, and (iii) the recognition of $10.9 million of revenue in 2024 to reflect a settlement related to certain provisions included in the legacy contract concerning inflation adjustments.

Borrower volume declined through 2025 as servicing volume was transferred, at the Department’s direction, from the Company to its remote-hosted servicing customer to support the stand‑up of a new servicer.

In addition, borrower volume declined beginning in the fourth quarter of 2025 as certain borrowers exiting the CARES Act forbearance period failed to resume payment activity and were transferred to the Department’s Debt Management and Collections System for management of defaulted federal student loans.

The decrease in revenue was partially offset by the recognition of $32.9 million of non‑recurring revenue in 2025 upon reaching a final agreement with the Department on a contract modification for services previously performed.

Private education and consumer loan servicing 94,472 63,453 Increase was due to an increase in loan servicing volume from the conversion of Discover Financial Services and SoFi Lending Corp.

loan portfolios during the fourth quarter of 2024 and first quarter of 2025.

Over time, revenue earned on the Discover Financial Services portfolio will decrease as borrowers pay off their loans.

FFELP loan servicing 8,878 12,212 Represents revenue from servicing third-party customers' FFELP portfolios.

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Software services 38,416 21,032 Represents revenue from providing remote hosted servicing software to certain Department and other servicers and providing diversified technology services.

Decrease primarily due to (i) the transfer of all Department remote hosted borrowers to other third-party servicers throughout 2023 under the Department's legacy servicing contracts and (ii) the recognition of $4.8 million of revenue in the third quarter of 2023 associated with deconversion of remote hosted borrowers from a customer leaving the Company's platform.

This decrease was partially offset by the Company beginning in the second quarter of 2024 to recognize revenue from a new remote hosted servicing customer awarded a USDS contract.

Increase was primarily due to the Company's recognition of revenue beginning in the second quarter of 2024 from a new remote hosted servicing customer awarded a USDS contract.

The Company continued to transfer volume through the end of 2025 to this new remote hosted servicing customer at the Department's direction to stand-up and establish the new servicer.

The Company does not expect to transfer additional volume to this new servicer in 2026.

Outsourced services 3,353 4,790 Represents revenue from providing contact center and back office operational outsourcing services.

Decrease was due to the contracts for support provided to certain Department servicers expiring in July 2023.

Loan servicing and systems revenue $ 509,089 482,408

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Interest income $ 26,476 29,891 Represents interest income on tuition funds held in custody for schools.

Increase due to higher balances and interest rates.

Education technology services and payments revenue

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Cost of services 176,907 172,763 See table below for additional information.

Salaries and benefits 164,716 155,296 Increase due to annual merit pay increases, an increase in headcount to support the growth of the customer base, and the investment in the development of new technologies.

Salaries and benefits 169,424 164,716 Represents wages and salaries, payroll taxes, incentive and share-based compensation, and costs associated with employee benefit programs.

Depreciation and amortization 10,884 10,531 Represents primarily amortization of intangible assets from prior business acquisitions and depreciation of capitalized software development costs.

Other expenses 32,281 34,133 Decrease due to a decrease in consulting and professional services resulting from reduced outsourced work and an improvement in allowance for doubtful accounts period over period.

Decrease was partially offset by an increase in technology services.

Impairment expense 1,145 —

Other expenses 37,962 32,281 Represents various expenses such as advertising, professional fees, analysis fees, software subscriptions, and travel.

Intersegment expenses, net 24,612 18,886 Represents costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.

Total operating expenses 244,027 226,414

Impairment expense — 4,310 In 2023, the Company recognized non-cash impairment charges related to previously acquired computer software.

Total expenses 399,177 399,425

Income before income taxes 112,957 117,896

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Net loss attributable to noncontrolling interests 45 158 Amounts for noncontrolling interests reflect the net loss attributable to the holders of minority membership interests in NextGen.

Net income $ 89,721 69,319 The Company expects net income to be impacted in 2025 as compared to 2024 due to a decrease in contribution from FACTS education services as a result of the end of the EANS program as described in the revenue table below and an expected increase in expenses.

In April 2025, the Company acquired the remaining 20.0% of NextGen for $3.9 million.

Net income $ 85,882 89,721

Education technology services and payments revenue

The following table presents disaggregated revenue by service offering and before tax operating margin for each reporting period.

The following table presents disaggregated revenue by service offering for the ETSP operating segment.

Year ended December 31,

2025 2024 Additional information

Tuition payment plan services $ 135,851 125,326 Increase due to a higher number of payment plans in the K-12 and higher education markets for both new and existing customers.

Payment processing 179,043 163,859 Increase due to increase in payment volumes for both the K-12 and higher education markets due to new customers and an increase in volume from existing customers.

Education technology services 169,065 170,754 Decrease due to a decrease in FACTS education services revenue which resulted from the wind down of economic aid provided to private schools in response to the COVID 19 pandemic.

Learning management instructional services revenue provided to private schools has been funded by the CARES Act and the Emergency Assistance to Non-Public Schools (EANS) programs.

The EANS I program funding ended on September 30, 2023 and EANS II program funding ended on September 30, 2024.

Future instructional services revenue will be adversely impacted compared to recent historical results as a result of the EANS programs ending.

Revenue earned under the EANS programs was $23.1 million and $46.9 million in 2024 and 2023, respectively.

This decrease was partially offset by an increase in revenue from the Company’s school information system software and application and enrollment services.

Tuition payment plan services $ 141,246 135,851 Increase was due to a higher number of payment plans in the K-12 and higher education markets for both new and existing customers.

Payment processing 193,317 179,043 Increase was due to an increase in payment volumes for both the K-12 and higher education markets due to new customers and an increase in volume from existing customers.

Education technology services 171,481 169,065 The increase was primarily driven by higher revenue from professional development and instructional services funded by sources other than the Emergency Assistance to Non-Public Schools (EANS) program, as well as growth in financial aid management, student information system, and enrollment services.

Revenue recognition for professional development and instructional services is dependent on both the availability of government funding to schools and individual school decisions regarding the timing and manner of fund utilization.

These increases were partially offset by a decline in FACTS education services revenue, reflecting the continued wind‑down of economic aid provided to private schools in response to the COVID‑19 pandemic.

Instructional services provided to private schools have historically been funded through the EANS program.

Funding under the EANS II program ended on September 30, 2024.

Revenue recognized under the EANS program totaled $1.7 million and $23.1 million in 2025 and 2024, respectively.

Other 1,106 3,003

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The Company uses this metric to monitor and assess the segment’s performance, manage operating costs, identify and evaluate business trends affecting the segment, and make strategic decisions, and believes that it facilitates an understanding of the operating performance of the segment and provides a meaningful comparison of the results of operations between periods.

Before tax operating margin, excluding net interest income, increased due to increased net revenue while maintaining a consistent cost structure.

The Company expects operating margin to decrease in 2025 compared to 2024 as a result of a decrease in FACTS education services revenue and an increase in operating expenses.

Net interest income (8.0) (9.5)

Non-GAAP before tax operating margin, excluding net interest income 26.2 % 28.0 %

Operating Results Highlights

• ETSP net income and before tax operating margin decreased in 2025 compared with 2024 due to a decrease in contribution from FACTS education services following the expiration of the EANS program funding in 2024.

In addition, operating expenses increased to support the growth in the customer base and investments in the development of new technologies.

Net income was also impacted in 2025 by a decrease in interest income as a result of a decrease in interest rates partially offset by higher balance of tuition funds held in custody for schools.

NELNET FINANCIAL SERVICES DIVISION - RESULTS OF OPERATIONS

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Loan Portfolio

As of December 31, 2024, the AGM operating segment had a $9.0 billion loan portfolio, consisting primarily of federally insured loans.

As of December 31, 2025, the AGM operating segment had an $8.7 billion loan portfolio, consisting primarily of federally insured loans.

For a summary of the Company's loan portfolio as of December 31, 2025 and 2024, see note 4 of the notes to consolidated financial statements included in this report.

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The following table sets forth the activity of loans in the AGM operating segment:

FFELP Private Consumer and other Total

FFELP Private Consumer loans and other financing receivables Total

Balance as of December 31, 2023 $ 11,686,207 277,320 85,935 12,049,462

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Balance as of December 31, 2024 8,388,564 221,744 345,560 8,955,868

Loan acquisitions 106,916 — 599,543 706,459

Loan acquisitions (a) 1,253,819 — 5,143,849 6,397,668

Repayments, claims, capitalized interest, participations, and other, net (916,038) (37,359) (4,163,008) (5,116,405)

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Loans sold (1,020,911) — (203,684) (1,224,595)

Loans contributed to Nelnet Bank (77,497) (42,173) — (119,670)

Balance as of December 31, 2025 $ 7,437,243 139,209 1,122,717 8,699,169

(a) The Company began to acquire Pay Later receivables during 2025.

Consumer loan acquisitions excluding Pay Later receivables was $629.7 million during the year ended December 31, 2025.

The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations that are accounted for as held-to-maturity beneficial interest investments and included in "other investments and notes receivable, net" in the Company's consolidated financial statements.

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Investment interest income earned by the Company from the beneficial interest in loan securitizations is included in "investment interest" on the Company's consolidated statements of income and is not a component of the Company's loan interest income.

Beginning in late 2021, the Company has experienced accelerated run-off of its FFELP portfolio due to FFELP borrowers consolidating their loans into Federal Direct Loan Program loans as a result of multiple extensions of the CARES Act payment pause on Department held loans and the initiatives offered by the Department for FFELP borrowers to consolidate their loans to qualify for loan forgiveness under the Public Service Loan Forgiveness and other programs.

After multiple extensions of the student loans payment pause under the CARES Act, the payment and interest accrual suspension ended August 31, 2023, and Federal Direct Loan Program borrowers returned to repayment on September 1, 2023.

While more unlikely now due to the change in presidential administration, if the federal government or the Department initiate additional loan forgiveness or cancellation, other repayment options or plans, or consolidation loan programs, such initiatives could further increase prepayments and reduce interest income.

Even if a broad debt cancellation program only applied to student loans held by the Department, such program could result in a significant increase in consolidations of FFELP loans to Federal Direct Loan Program loans and a corresponding increase in prepayments with respect to our FFELP loan portfolio.

See Part I, Item 1A, “Risk Factors - Loan Portfolio - Prepayment risk” included in this report for further information.

The Company has observed a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024 that has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates.

Beginning in late 2021, the Company experienced accelerated run-off of its FFELP portfolio due to FFELP borrowers consolidating their loans into Federal Direct Loan Program loans as a result of the CARES Act payment pause on Department- held loans and the initiatives offered by the Department for FFELP borrowers to consolidate their loans to qualify for loan forgiveness under various programs.

However, the Company has experienced a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024, which has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates.

Allowance for Loan Losses, Loan Delinquencies, and Loan Charge-offs

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Loan cost of funds - interest expense (a) (5.39) (6.34)

Loan cost of funds - derivative settlements (b) (c) 0.01 0.01

Loan cost of funds - basis swap derivative settlements (b) 0.01 0.01

Variable loan spread 1.42 0.92

Fixed-rate floor income, gross 0.04 0.01

Fixed rate floor income - derivative settlements (b) (d) 0.04 0.18

Fixed-rate floor income - derivative settlements (b) 0.02 0.04

Fixed-rate floor income, net of settlements on derivatives 0.06 0.05

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Average balance of AGM’s debt outstanding 8,145,206 9,871,828

(a) The Company recognized $6.3 million and $25.9 million in non-cash interest expense during 2024 and 2023, respectively, as a result of writing off the remaining unamortized debt discount related to the redemption of certain asset-backed debt securities prior to their maturity.

This non-cash expense was excluded from the respective periods in the table above.

(a) The Company recognized $6.3 million in non-cash interest expense during 2024 as a result of writing off the remaining unamortized debt discount related to the redemption of certain asset-backed debt securities prior to their maturity.

The impact of this non-cash expense was excluded in the table above.

(b) Derivative settlements represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the Company's derivative instruments based on their contractual terms.

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There is no comprehensive, authoritative guidance for the presentation of such non-GAAP information, which is only meant to supplement GAAP results by providing additional information that management utilizes to assess performance.

See note 5 of the notes to consolidated financial statements included in this report for additional information on the Company's Non-Nelnet Bank derivative instruments, including the net settlement activity recognized by the Company for each type of derivative for the 2024 and 2023 periods presented in the table under the caption "Consolidated Financial Statement Impact Related to Derivatives - Statements of Income” in note 5 and in this table.

See note 6 of the notes to consolidated financial statements included in this report for additional information on the Company's Non-Nelnet Bank derivative instruments, including the net settlement activity recognized by the Company for each period and for each type of derivative presented in the table under the caption " Consolidated Financial Statement Impact Related to Derivatives - Statements of Income” in note 6 and in this table.

A reconciliation of core loan spread, which includes the impact of derivative settlements on loan spread, to loan spread without derivative settlements follows:

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Loan spread 1.45 % 0.92 %

(d) Derivative settlements consist of net settlements received related to the Company’s floor income interest rate swaps.

Variable loan spread was higher during 2025 compared with 2024 due to an increase in consumer loans as a percentage of AGM’s overall loan portfolio.

Consumer loans earn a higher yield than FFELP loans.

Increase in variable loan spread was also due to an increase in loans funded by the Company with operating cash (versus funded with debt).

As of December 31, 2025, AGM had $328.3 million (par value) of unencumbered federally insured, private education, consumer, and other loans, compared with $253.5 million and $77.0 million as of December 31, 2024 and December 31, 2023, respectively.

The difference between variable loan spread and core loan spread is fixed-rate floor income earned on a portion of AGM's federally insured student loan portfolio.

See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk - Interest Rate Risk - AGM Operating Segment,” which provides additional detail on AGM’s federally insured student loans earning fixed-rate floor income.

The relationship between the indices in which AGM earns interest on its loans and funds such loans has a significant impact on loan spread.

See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk - Interest Rate Risk - AGM Operating Segment,” which provides additional detail on AGM’s FFELP student loan assets and related funding for those assets.

In an increasing interest rate environment, student loan spread on FFELP loans increases in the short term because of the timing of interest rate resets on the Company's assets occurring daily in contrast to the timing of the interest rate resets on the Company's debt occurring either monthly or quarterly.

This also results in student loan spread decreasing in the short term in a decreasing interest rate environment.

Variable loan spread was higher during 2024 compared with 2023 due to an increase in consumer loans funded by the Company with operating cash (versus funded with debt).

The difference between variable loan spread and core loan spread is fixed rate floor income earned on a portion of AGM's federally insured student loan portfolio.

A summary of fixed rate floor income and its contribution to core loan spread follows:

Year ended December 31,

Fixed rate floor income, gross $ 1,249 2,169

Derivative settlements (a) 4,288 23,044

Fixed rate floor income, net $ 5,537 25,213

Fixed rate floor income contribution to spread, net 0.05 % 0.20 %

(a) Derivative settlements consist of net settlements received related to the Company's derivatives used to hedge student loans earning fixed rate floor income.

Gross fixed rate floor income decreased in 2024 compared with 2023 due to higher interest rates.

The Company had a significant portfolio of derivative instruments in which the Company paid a fixed rate and received a floating rate to economically hedge loans earning fixed rate floor income.

On March 15, 2023, to minimize the Company's exposure to market volatility and increase liquidity, the Company terminated its derivative portfolio hedging loans earning fixed rate floor income ($2.8 billion in notional amount of derivatives).

Through March 15, 2023, the Company had received cash or had a receivable from its clearinghouse related to variation margin equal to the fair value of the $2.8 billion notional amount of fixed rate floor derivatives as of March 15, 2023 of $183.2 million, which included $19.1 million related to 2023 settlements.

The decrease in net derivative settlements received by the Company in 2024 compared with 2023 was due to a decrease in the notional amount of derivatives outstanding and less favorable terms on the $400.0 million of notional derivatives entered into in 2023 compared with the $2.8 billion notional derivatives that were terminated due to an increase in interest rates from when the terminated derivatives were initially executed.

See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk - Interest Rate Risk - AGM Operating Segment,” which provides additional detail on AGM’s portfolio earning fixed rate floor income and the derivatives used by the Company to hedge these loans.

decreasing interest rate environment, student loan spread on FFELP loans decreases in the short term because of the timing of interest rate resets on the Company's assets occurring daily in contrast to the timing of the interest rate resets on the Company's debt occurring either monthly or quarterly.

This also results in student loan spread increasing in the short term in an increasing interest rate environment.

Summary and Comparison of Operating Results

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Loan interest $ 624,861 749,117 See table below for additional analysis.

Investment interest 68,302 67,019 Represents primarily investment interest earned on beneficial interest investments and restricted cash included in student loan securitizations and other secured borrowings.

AGM earned $36.4 million and $35.7 million on beneficial interest investments during 2024 and 2023, respectively.

Investment interest:

Residual interest 30,726 36,363 Represents residual interest earned on beneficial interest investments.

Other investment interest 18,500 31,939 Represents investment interest earned on restricted cash included in student loan securitizations and other secured borrowings.

Decrease was due to a decrease in interest rates and lower balances.

Total investment interest 49,226 68,302

Total interest income 674,087 817,419

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and (ii) AGM issued bonds held by Nelnet, Inc.

Decrease due to a decrease in the weighted average balance of outstanding AGM issued bonds held by Nelnet, Inc.

Intercompany interest is eliminated for consolidated financial reporting purposes.

Total interest expense 463,102 654,346

Net interest income 210,985 163,073

Less provision (negative provision) for loan losses 27,691 (360) See note 3 of the notes to consolidated financial statements in this report for factors impacting provision (negative provision) for loan losses for the periods presented.

Net interest income after provision for loan losses 135,382 154,434

Other income, net 15,879 11,269 Represents primarily borrower late fees, income from providing administration activities for third parties, sponsor fee income, and income/losses from AGM's investment in joint ventures.

See "Overview - Consolidated Results of Operations" for further detail included in other income.

Loss on sale of loans, net (1,643) (17,662) The Company recognized losses from selling portfolios of loans.

Less provision for loan losses 49,261 27,691 See note 4 of the notes to consolidated financial statements in this report for factors impacting provision for loan losses for the periods presented.

Less provision for beneficial interests 11,311 39,491 During the periods presented, the Company recorded an allowance for credit losses (and related provision expense) related to the Company's beneficial interest in certain loan securitizations.

See note 7 of the notes to consolidated financial statements included in this report for additional information.

Net interest income after provision 150,413 95,891

Other income, net 27,235 14,236 Represents primarily gain/loss on debt repurchases and loan sales, borrower late fees, income from providing administration activities for third parties, sponsor fee income, and income/losses from AGM's investment in joint ventures.

See "Overview - Consolidated Results of Operations" for further detail included in other income.

Derivative settlements, net 2,094 5,217 The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility.

Derivative settlements for each applicable period should be evaluated with the Company's net interest income as reflected in the table below.

The majority of derivative settlements received in the periods presented was from the Company's derivative portfolio used to hedge loans earning fixed rate floor income.

Decrease due to the termination of the floor income interest rate swaps ($2.8 billion notional amount) in March 2023.

See above under "Loan Spread Analysis" for further information.

Derivative market value adjustments, net (6,196) 5,422 Includes the realized and unrealized gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP.

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To minimize the Company's exposure to market volatility and increase liquidity, AGM terminated its portfolio of floor income interest rate swaps ($2.8 billion notional amount) in March 2023.

As such, the Company expects the derivative market value adjustments in future periods to be less substantial.

See above under "Loan Spread Analysis" for further information.

Total other income, net 23,133 24,875

Salaries and benefits 4,784 4,191 Increase due to additional headcount as the Company actively expands into new asset loan classes.

Servicing fees 31,591 37,389 Represents servicing fees paid to (i) third parties and (ii) LSS for the servicing of AGM’s loans.

Salaries and benefits 6,363 4,784 Represents wages and salaries, payroll taxes, incentive and share-based compensation, and costs associated with employee benefit programs.

Servicing fees 29,266 31,591 Represents servicing fees paid to third parties and LSS for the servicing of AGM’s loans.

The amounts paid to LSS exceed the actual cost of servicing the loans.

Decrease due to the amortization of the FFELP student loan portfolio, the majority of which is serviced by LSS.

Intercompany servicing is eliminated for consolidated financial reporting purposes.

Other expenses 4,152 4,988

Decrease was due to the amortization of the FFELP student loan portfolio, the majority of which is serviced by LSS.

Intercompany servicing expense of $19.0 million and $22.9 million during 2025 and 2024, respectively, was eliminated for consolidated financial reporting purposes.

Other expenses 6,483 4,152 Represents various expenses such as trustee and professional fees.

Intersegment expenses 4,954 5,037 Includes costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.

Total operating expenses 47,066 45,564 Total operating expenses were 52 basis points and 44 basis points of the average balance of loans in 2025 and 2024, respectively.

The increase in operating expenses as a percent of the average balance of loans was due to an increase in servicing fees and salaries and benefit costs as the Company actively expands into new asset classes.

Provision for beneficial interests 39,491 — During 2024, the Company recorded an allowance for credit losses (and related provision expense) related to the Company's beneficial interest in certain loan securitizations.

See note 6 of the notes to consolidated financial statements included in this report for additional information.

Total expenses 85,055 51,743

The increase in expenses compared to the average balance of loans was due to an increase in costs associated with the Company actively expanding into new asset classes and a decrease in the average balance of loans.

Income before income taxes 126,480 75,202

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Net income 96,145 57,154

Net income attributable to noncontrolling interests (85) —

Net income $ 96,060 57,154

Additional information:

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Non-GAAP net income, excluding derivative market value adjustments $ 100,769 53,033

Operating Results Highlights

• AGM’s net income, excluding derivative market value adjustments, increased primarily due to an increase in net loan interest income driven by an increase in core loan spread partially offset by the decrease in the average balance of loans outstanding.

Net loan interest income, including settlements on derivatives

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2025 2024 Additional information

Variable interest income, gross $ 829,024 1,007,424 Decrease due to a decrease in the average balance of loans partially offset by an increase in the gross yield earned on loans.

Consolidation rebate fees (82,872) (106,756) Decreases due to a decrease in the average consolidation loan balance.

Discount accretion, net of premium and deferred origination costs amortization 1,716 7,302 Net discount accretion due to the Company’s purchase of loans at a net discount over the last several years, partially offset in 2024 due to consumer loans purchased at a premium.

Variable interest income, gross $ 657,612 829,024 Decrease was due to a decrease in the average balance of loans and gross yield earned on loans.

Consolidation rebate fees (73,374) (82,872) Decrease was due to a decrease in the average consolidation loan balance.

Discount accretion, net of premium and deferred origination costs amortization 36,314 1,716 Increase in net discount accretion was due to a forward flow agreement of Pay Later receivables purchased during 2025 at a discount that have a short estimated life.

Variable interest income, net 620,552 747,868

Interest on bonds and notes payable (632,742) (788,251) Decrease due to a decrease in the average balance of debt outstanding, partially offset by an increase in cost of funds.

Interest on bonds and notes payable (439,065) (632,742) Decrease was due to a decrease in the average balance of debt outstanding and cost of funds.

Derivative settlements, net (a) 619 929 Represents net derivative settlements received related to the Company’s basis swaps.

Variable loan interest margin, net of settlements on derivatives 182,106 116,055

Fixed rate floor income, gross 1,249 2,169 Decrease due to higher interest rates.

Fixed-rate floor income, gross 4,309 1,249 Increase was due to lower interest rates.

Derivative settlements, net (a) 1,475 4,288 Represents net derivative settlements received related to the Company's floor income interest rate swaps.

Decrease due to the termination of the floor income interest rate swaps ($2.8 billion notional amount) in March 2023.

See above under "Loan Spread Analysis" for further information.

Fixed-rate floor income, net of settlements on derivatives 5,784 5,537

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For an explanation of GAAP accounting for derivative settlements and the reasons why the Company reports these non-GAAP measures (and the limitations thereof), see footnote (b) to the table immediately under the caption “Loan Spread Analysis” above.

See note 5 of the notes to consolidated financial statements included in this report for additional information on the Company's derivative instruments, including the net settlement activity recognized by the Company for each type of derivative referred to in the "Additional information" column of this table, for the 2024 and 2023 periods presented in the table under the caption "Consolidated Financial Statement Impact Related to Derivatives - Statements of Income" in note 5 and in this table.

See note 6 of the notes to consolidated financial statements included in this report for additional information on the Company's derivative instruments, including the net settlement activity recognized by the Company for each period and for each type of derivative referred to in the "Additional information" column of this table, which is presented in note 6 under the caption " Consolidated Financial Statement Impact Related to Derivatives - Statements of Income”.

Nelnet Bank Operating Segment

Loan Portfolio

As of December 31, 2024, Nelnet Bank had a $644.6 million loan portfolio, consisting of $482.4 million of private education loans and $162.2 million of consumer and other loans.

As of December 31, 2025, Nelnet Bank had a $957.6 million loan portfolio, consisting of federally insured loans, private education loans, and consumer and other loans.

For a summary of the Company’s loan portfolio as of December 31, 2025 and 2024, see note 4 of the notes to consolidated financial statements included in this report.

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Repayments (16,217) (91,913) (37,751) (145,881)

Loans sold to AGM — — (65,088) (65,088)

Loans contributed from AGM 77,497 42,173 — 119,670

Balance as of December 31, 2025 $ 172,320 518,634 266,608 957,562

In October 2024, Nelnet Bank purchased a residual trust that included $133 million of private education loans.

The trust is consolidated as part of the bank’s financial statements.

These loans are included in “loan acquisitions and originations” in the table above.

Allowance for Loan Losses, Loan Delinquencies, and Loan Charge-offs

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and the activity in Nelnet Bank’s allowance for loan losses and net charge-offs as a percentage of average loans in 2025 and 2024, see note 4 of the notes to consolidated financial statements included in this report.

As of December 31, 2024, Nelnet Bank had $1.25 billion of deposits.

All of Nelnet Bank’s deposits are interest-bearing and primarily consist of brokered certificates of deposit (CDs), retail and other savings deposits and CDs, and intercompany deposits.

Retail and other savings deposits include deposits from Educational 529 College Savings plans, Health Savings plans, retirement savings plans, Short Term Federal Investment Trust (STFIT), commercial and consumer savings, and FDIC sweep deposits.

Union Bank, a related party, is the program manager for the Educational 529 College Savings plans and trustee for the STFIT.

As of December 31, 2024, Nelnet Bank’s deposits included $68.5 million from Nelnet, Inc.

As of December 31, 2025, Nelnet Bank had a $1.08 billion investment portfolio, consisting primarily of asset-backed securities.

For a summary of Nelnet Bank's asset-backed securities investments as of December 31, 2025 and 2024, see note 7 of the notes to consolidated financial statements included in this report.

As of December 31, 2025, Nelnet Bank had $1.76 billion of deposits, which included $93.8 million from Nelnet, Inc.

(parent company) and its subsidiaries (intercompany), and thus have been eliminated for consolidated financial reporting purposes.

The intercompany deposits include a pledged deposit of $40.0 million from Nelnet, Inc.

as required under the Capital and Liquidity Maintenance Agreement with the FDIC, deposits required for intercompany transactions, operating deposits, and NBS custodial deposits consisting of tuition payments collected which are subsequently remitted to the appropriate school.

For a summary of deposits as of December 31, 2025 and 2024, see note 12 of the notes to consolidated financial statements included in this report.

Average Balance Sheet

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Loan interest $ 61,224 38,381 Represents interest earned on loans.

Increase due to an increase in the balance and mix of loans and interest rates.

Increase was due to an increase in the balance and mix of loans.

Investment interest 57,478 45,992 Represents interest earned on cash and investments.

Increase due to an increase of these balances and interest rates.

Increase was due to an increase of these balances, partially offset by a decrease in interest rates.

Total interest income 118,702 84,373

Interest expense 59,284 44,859 Represents interest expense on deposits.

Increase due to an increase in the balance of deposits and interest rates.

Increase was due to an increase in the balance of deposits, partially offset by a decrease in interest rates.

Net interest income 59,418 39,514

Provision for loan losses 26,916 8,475 Increase due to the mix of loans and an increase in the notional amount of loans acquired and originated in 2024 compared with 2023.

See note 3 of the notes to consolidated financial statements included in this report for additional information.

Provision for loan losses 18,590 26,916 See note 4 of the notes to consolidated financial statements included in this report for factors impacting provision for loan losses for the periods presented.

Net interest income after provision for loan losses 40,828 12,598

Other income, net 3,324 2,951 Represents primarily net gains and income from investments.

Derivative settlements, net 917 484 Nelnet Bank's use of derivatives is to hedge its exposure related to variable rate intercompany deposits to minimize volatility from future changes in interest rates.

Derivative settlements, net 606 917 Nelnet Bank's use of derivatives is to hedge its exposure related to variable-rate deposits to minimize volatility from future changes in interest rates.

Nelnet Bank has designated its derivative instruments as cash flow hedges;

however, because the hedged items are intercompany deposits, the derivative instruments are not eligible for hedge accounting in the consolidated financial statements.

Accordingly, all changes in fair value of such derivatives are recorded through earnings and presented as "derivative market value adjustments, net" in the statements of operations.

"Derivative settlements" represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the Company's derivative instruments based on their contractual terms.

however, because certain hedged items are intercompany deposits, the corresponding derivative instruments are not eligible for hedge accounting in the consolidated financial statements.

Accordingly, changes in fair value of such derivatives are recorded through earnings and presented as "derivative market value adjustments, net" in the statements of operations.

"Derivative settlements, net" represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the Company's derivative instruments that do not qualify for hedge accounting based on their contractual terms.

For additional information on Nelnet Bank's derivative portfolio, see note 6 of the notes to consolidated financial statements in this report.

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Total other income, net 121 8,570

Salaries and benefits 11,122 9,074 Represents salaries and benefits of Nelnet Bank associates and third-party contract labor.

Increase due to the overall growth of Nelnet Bank activities.

Salaries and benefits 11,446 11,122 Represents wages and salaries, payroll taxes, incentive and share-based compensation, and costs associated with employee benefit programs.

Depreciation 1,400 1,282

Servicing fees 3,191 1,373 Represents primarily fees paid to LSS for servicing certain of Nelnet Bank's loans.

Intercompany servicing is eliminated for consolidated financial reporting purposes.

Other expenses 6,972 4,994 Represents various expenses such as consulting and professional fees, Nelnet Bank director fees, occupancy, certain technology-related costs, insurance, and marketing.

Increase due to the overall growth of Nelnet Bank activities.

Intercompany servicing expense of $2.5 million and $1.0 million for 2025 and 2024, respectively, was eliminated for consolidated financial reporting purposes.

Other expenses 7,487 6,972 Represents various expenses such as marketing, consulting and professional fees, collection costs, software, FDIC insurance, and management fees.

Intersegment expenses 2,812 2,361 Includes costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.

The majority of shared service costs incurred by the Company to support Nelnet Bank were not allocated to Nelnet Bank through the bank’s de novo period which ended at the end of 2023.

The shared service and support costs incurred by the Company related to Nelnet Bank and not allocated to Nelnet Bank was $7.7 million in 2023.

Total operating expenses 26,336 23,110

Loss before income taxes (1,942) (368)

Income tax benefit 579 153

Net loss $ (1,363) (215)

Income (loss) before income taxes 14,613 (1,942)

Income tax (expense) benefit (3,562) 579

Net income (loss) $ 11,051 (1,363)

Additional information:

Net loss $ (1,363) (215)

See "Overview - GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments" above for additional details about non-GAAP financial information.

Net income (loss) $ 11,051 (1,363) See "Overview - GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments" above for additional details about non-GAAP financial information.

Derivative market value adjustments, net 3,809 (4,702)

Tax effect (914) 1,128

Net (loss) income, excluding derivative market value adjustments $ (4,937) 942

Net income (loss), excluding derivative market value adjustments $ 13,946 (4,937)

Operating Results Highlights

• Nelnet Bank’s growth was driven by higher loan and investment balances, funded primarily through increased deposit balances.

In its early years, the Bank experienced operating losses as it invested in building the personnel and infrastructure necessary to support future growth.

As the Bank has matured, operating expenses have stabilized while loans and deposits have continued to grow.

This operating leverage has driven increased net interest income and resulted in net income in the current year compared to losses in prior periods.

NFS Other Operating Segments

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Summary and Comparison of Operating Results

WRCM (a) Nelnet Insurance Services (b) Real estate investments (c) Investment securities (d) Total

Nelnet Insurance Services (a) WRCM (b) Real estate (c) Bond portfolio (d) Total

Year ended December 31, 2025

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Reinsurance losses and underwriting expenses (93,551) — — — (93,551)

Impairment expense — — (4,001) — (4,001)

Other expenses (4,766) (224) (107) (7) (5,104)

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Reinsurance losses and underwriting expenses (55,246) — — — (55,246)

Impairment expense — — — — —

Other expenses (2,894) (279) (175) (4) (3,352)

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Net income (loss) $ 8,612 3,688 (2,476) 32,170 41,994

(a) The Company provides investment advisory services through Whitetail Rock Capital Management, LLC (WRCM), the Company's SEC-registered investment advisor subsidiary, under various arrangements.

(a) Represents the operating results of the Company’s reinsurance treaties primarily on property and casualty policies and the Company’s Nebraska chartered life and health company, which is in run-off mode and reinsures a decreasing term life insurance product distributed to FACTS.

The timing and magnitude of catastrophic losses can produce significant volatility in the Company’s periodic underwriting results.

The Company’s reinsurance treaties include loss limits, which the Company believes reduces the magnitude of a potential catastrophic loss.

There were no catastrophic events in 2025 and 2024.

The Company had exposure to the January 2025 California wildfires;

however, the impact was not material.

The increase in reinsurance premiums and associated reinsurance losses and underwriting expenses during 2025 compared with 2024 was primarily due to an increase in overall property volume and new business.

(b) The Company provides investment advisory services through Whitetail Rock Capital Management, LLC (WRCM), the Company's SEC-registered investment advisor subsidiary, under various arrangements.

WRCM earns annual fees of 10 basis points to 25 basis points for asset-backed securities under management and a share of the gains from the sale of securities or securities being called prior to the full contractual maturity for which it provides advisory services.

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In addition, WRCM earns annual management fees of five basis points for Nelnet stock under management (primarily shares of Nelnet Class B common stock held in various trust estates).

During 2024 and 2023, WRCM earned $5.6 million and $6.2 million, respectively, in management fees.

During 2024 and 2023, WRCM earned $0.3 million and $0.6 million in performance fees, respectively.

Fees earned by WRCM are included in “other income, net” in the table above.

(b) Represents the operating results of the Company’s reinsurance treaties on property and casualty policies and the Company’s Nebraska chartered life and health company, which is in run-off mode and reinsures a decreasing term life insurance product distributed to FACTS.

The timing and magnitude of catastrophic losses can produce significant volatility in the Company’s periodic underwriting results.

The Company’s reinsurance treaties include loss limits, which the Company believes reduces the magnitude of a potential catastrophic loss.

There were no material catastrophic events in 2024.

The Company has exposure to the January 2025 California wildfires;

however, the impact is not expected to be material.

(c) Represents the operating results of the Company’s real estate investments and the administrative costs to manage this portfolio.

During 2024 and 2023, the Company recognized net losses of $2.3 million and net gains of $0.4 million, respectively, from its real estate investments, which are included in “other income, net” in the table above.

The net results recognized relates primarily to the

Company's proportionate share of certain real estate investments accounted for under the equity method.

The net loss for 2024 was partially offset by a $2.9 million gain from the sale of a real estate investment.

(d) Represents interest income earned on investment debt securities (primarily student loan and other asset-backed securities, including Nelnet-owned asset-backed securities which it has repurchased and are eliminated in consolidation), interest income on certain notes receivable, unrealized gains/losses on marketable equity securities, realized gains/losses on marketable equity securities and investment debt securities, and other costs to manage these investments.

Also includes interest expense incurred on debt used to finance such investments.

(c) Represents the operating results of the Company’s real estate activities and the administrative costs to actively manage this portfolio.

Included in “other income, net” in the table above are primarily the net gains/losses recognized related to the Company's proportionate share of certain real estate partnerships accounted for under the equity method, and realized gains from the sale of real estate partnerships.

In 2025, the Company recorded non-cash impairment charges related to several of its real estate partnerships after identifying indicators of an other-than-temporary decline in value.

These indicators included a series of sustained operating losses, deteriorating financial performance, and evidence that the Company may be unable to recover its accounting carrying values.

(d) Represents interest income earned on the Company’s bond portfolio (primarily student loan and other asset-backed securities, including Nelnet-owned asset-backed securities which it has repurchased and are eliminated in consolidation), interest income on certain notes receivable, unrealized gains/losses on marketable equity securities, realized gains/losses on marketable equity securities and bonds, and other costs to manage these investments.

The activity also includes interest expense incurred on debt used to finance such investments.

The decrease in investment interest income during 2025 compared with 2024 was due to a decrease in the average balance of investment securities and a decrease in interest rates earned on such investments, partially offset by non-cash interest income of $7.0 million from the acceleration of discount accretion on certain asset-backed debt securities that were called prior to their maturity.

The decrease in interest expense during 2025 compared with 2024 was due to a decrease in outstanding debt.

As of December 31, 2024, this debt had been repaid in full.

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CORPORATE AND OTHER ACTIVITIES – RESULTS OF OPERATIONS

Other business activities and operating segments that are not reportable and not part of the NFS division are combined and included in Corporate and Other Activities (“Corporate.”) The following table summarizes the operating results of these activities.

Other business activities and operating segments that are not reportable and not part of the NFS division are combined and included in Corporate and Other Activities (“Corporate.”).

The following table summarizes the operating results of these activities.

Income taxes are allocated based on 24% of income (loss) before taxes for each activity.

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Summary and Comparison of Operating Results

Shared services (a) Solar tax equity investments (b) Nelnet Renewable Energy (c) ALLO investment (d) Venture capital investments (e) Other Total

Shared services (a) Solar tax equity (b) Nelnet Renewable Energy (c) ALLO (d) Venture capital (e) Other Total

Year ended December 31, 2025

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Other income, net 2,510 (14,249) — 13,702 43,576 11,705 57,244

Gain on partial redemption of ALLO investment — — — 175,044 — — 175,044

Derivative market value adjustments, net — — — — — 907 907

Cost to provide solar construction services — — (41,810) — — — (41,810)

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Depreciation and amortization (11,301) — (864) — (1) (152) (12,318)

Impairment expense (3,269) (5,761) (11,860) — (3,576) — (24,466)

Other expenses (54,404) (1,900) (7,132) 6,190 (99) (4,630) (61,975)

Intersegment expenses, net 104,224 (268) (1,544) — (177) (1,632) 100,603

Impairment expense — — (1,865) — (537) — (2,402)

(Loss) income before income taxes (41,893) (23,770) (57,540) 194,936 38,874 10,418 121,025

Income tax benefit (expense) 10,054 (1,778) 13,810 (46,785) (9,330) 3,144 (30,885)

Net loss attributable to noncontrolling interests — 6,857 1,655 — — — 8,512

Net loss (income) attributable to noncontrolling interests — 31,178 — — — (101) 31,077

Net (loss) income $ (31,839) 5,630 (43,730) 148,151 29,544 13,461 121,217

Shared services (a) Solar tax equity (b) Nelnet Renewable Energy (c) ALLO (d) Venture capital (e) Other Total

Year ended December 31, 2024

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Other income, net 3,102 285 246 6,593 8,503 12,884 31,613

Gain on partial redemption of ALLO investment — — — — — — —

Derivative market value adjustments, net — — — — — — —

Cost to provide solar construction services — — (77,673) — — — (77,673)

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Depreciation and amortization (25,299) — (1,130) — (29) (370) (26,828)

Impairment expense — — (1,865) — (537) — (2,402)

Other expenses (45,417) (964) (2,735) 1,498 (79) (5,884) (53,581)

Intersegment expenses, net 101,992 50 (1,792) (4) (97) (550) 99,599

Impairment expense (4,678) — (20,581) — (2,060) — (27,319)

(Loss) income before income taxes (46,194) (2,179) (35,972) 8,087 6,912 10,481 (58,865)

Income tax benefit (expense) 11,087 (1,123) 8,236 (1,941) (1,659) 1,514 16,114

Net loss attributable to noncontrolling interests — 31,293 9,662 — — — 40,955

Net loss (income) attributable to noncontrolling interests — 6,857 1,655 — — — 8,512

Net (loss) income $ (35,107) 3,555 (26,081) 6,146 5,253 11,995 (34,239)

(a) Includes corporate activities related to internal audit, human resources, accounting, legal, enterprise risk management, information technology, occupancy, and marketing.

(a) Includes corporate activities related to human resources, accounting, legal, enterprise risk management, information technology, occupancy, and marketing.

These costs are allocated to each operating segment based on estimated use of such activities and services.

The amount allocated to operating segments is reflected as “intersegment expenses, net” in the table above.

Also includes corporate costs and overhead functions not allocated to operating segments, including executive management, investments in innovation, and other holding company organizational costs.

(b) Includes solar tax equity investments made by the Company and administrative and management services provided by the Company on tax equity investments made by third parties.

Included in tax equity investments in the table above is the Company's share of income or loss from solar investments accounted for under the Hypothetical Liquidation at Book Value (HLBV) method of accounting.

For the majority of the Company's solar investments, the HLBV method of accounting results in accelerated losses in the initial years of investment.

The Company recognized net losses on its solar tax equity investments of $6.5 million and $59.6 million during 2024 and 2023, respectively.

The net losses in 2024 were partially offset by recognizing gains of $15.3 million related to investments that were sold during 2024.

These income statement amounts, which include amounts attributable to third-party noncontrolling interest investors, are included in “other income, net” in the table above.

The amount of net losses attributable to third-party noncontrolling interest investors was $4.6 million and $37.9 million during 2024 and 2023, respectively, and are reflected in “net loss attributable to noncontrolling interests” in the table above.

The Company syndicates solar tax equity investments to third parties and earns management and performance fees.

Management fee income recognized by the Company was $3.6 million and $1.8 million during 2024 and 2023, respectively, which is included in “other income, net” in the table above.

During 2024, the Company also recognized solar consulting revenue of $6.1 million.

(c) Nelnet Renewable Energy (NRE) is the Company’s solar construction business that provides full-service engineering, procurement, and construction services to residential homes and commercial entities.

The Company entered this business from its acquisition of 80% of GRNE Solar in June 2022.

Since the acquisition of GRNE Solar, it has incurred low and, in some cases, negative margins on certain projects.

In addition, higher interest rates reduced residential demand and made community solar projects more costly.

On April 12, 2024, the Company announced a change in its solar EPC operations to focus exclusively on the commercial solar market and discontinued its residential solar operations.

As a result, residential revenue will continue to decline from recent historical amounts as existing customer contracts are completed.

Residential solar construction revenue was $3.3 million and $10.7 million during 2024 and 2023, respectively.

During 2023 and 2024, NRE recognized impairment charges on goodwill, intangible assets, and other assets of $20.6 million and $1.9 million, respectively.

See note 11 of the notes to consolidated financial statements included in this report for additional information on such impairment charges.

The Company has a handful of remaining legacy construction contracts to complete, down from over 30 at the beginning of 2024.

As new projects are completed and the legacy contracts are now substantially complete, the Company believes operating results will improve from prior historical periods.

On June 30, 2024, the Company acquired the remaining 20% of the ownership interest of GRNE Solar for $0.3 million.

(d) Represents primarily the Company's share of loss on its voting membership interests and income on its preferred membership interests in ALLO.

The Company accounts for its approximately 45% voting membership interests in ALLO under the HLBV method of accounting.

Under the HLBV method of accounting on its ALLO voting membership interests investment, the Company recognized losses of $10.7 million and $65.3 million in 2024 and 2023, respectively.

These amounts are reflected in “other income, net” in the table above.

Absent additional equity contributions with respect to ALLO's voting membership interests, the Company will not recognize additional losses for its voting membership interests in ALLO.

As of December 31, 2024, the outstanding preferred membership interests of ALLO held by the Company was $225.6 million.

Accrued and unpaid preferred return capitalizes to preferred membership interests annually on each December 31.

The Company historically earned a preferred annual return of 6.25% that increased to 10.00% on April 1, 2024 for $155.0 million of preferred membership interests of ALLO held by the Company.

On December 31, 2024, $14.1 million of accrued preferred return was capitalized to preferred membership interests.

The preferred annual return on the updated balance of $169.1 million preferred membership interests increased to 13.5% on January 1, 2025.

During 2024, the Company purchased an additional $53.1 million of preferred membership interests of ALLO, which earn a preferred annual return of 20.0%.

Including the accrued preferred return of $3.4 million that was capitalized on December 31, 2024, the updated balance of preferred membership interests that earns at 20.0% was $56.5 million as of December 31, 2024.

The Company recognized income on its ALLO preferred membership interests of $17.5 million and $9.1 million during December 31, 2024 and 2023, respectively.

These amounts are reflected in “other income, net” in the table above.

As part of the ALLO recapitalization transaction completed in 2020, the Company and SDC (a third-party global digital infrastructure investor and member of ALLO) entered into an agreement in which the Company has a contingent obligation to pay SDC an amount up to $35.0 million in the event the Company disposes of its voting membership interests of ALLO that it holds, and realizes from such disposition certain targeted return levels.

The Company adjusts the balance of this contingent liability each reporting period.

For the year ended December 31, 2024, the Company reduced the obligation resulting in an expense reduction of $1.5 million, and for the year ended December 31, 2023, recognized expense of $2.2 million, which is included in “other expenses” in the table above.

(e) Represents the operating results of the Company’s venture capital investments, including Hudl which the Company accounts for using the measurement alternative method, and the administrative costs to manage this portfolio.

Also includes corporate costs and overhead functions not allocated to operating segments, including executive management, innovation initiatives, and other holding company organizational costs.

(b) Includes operating results of the Company's participation in renewable energy solar developments through tax equity structures.

The Company accounts for its solar tax equity interests using the HLBV method of accounting, which commonly results in accelerated losses in the initial years of the partnerships and gains recognized at the end of the contractual agreement (typically five years).

In the periods presented, the Company recognized HLBV losses greater than gains realized.

Due to the recognition pattern (accelerated losses in initial years and gains upon sale at the end of the contractual agreement), these partnerships may create volatility in earnings.

For additional information on the HLBV net losses recognized and gains realized related to these partnerships, see note 7 of the notes to consolidated financial statements included in this report.

The net losses recognized from the partnership interests are offset by revenue earned by the Company related to management, consulting, and performance fees provided on tax equity contributions from syndication partners.

Management and performance fee income recognized by the Company was $4.7 million and $3.6 million during 2025 and 2024, respectively.

The Company also recognized solar consulting fee income of $13.1 million and $6.1 million during 2025 and 2024, respectively, for due diligence services provided to developers of solar projects to support project qualification.

Management, performance, and consulting fees are included in “other income, net” in the above table.

Also included in the 2025 operating results is a non-cash impairment charge of $5.8 million related to the Company’s ownership in a solar development project.

During 2025, the Company recognized a non-cash impairment charge of $11.8 million related primarily to solar facilities which are operated under long-term power purchase agreements.

(d) Represents primarily the Company's share of loss on its voting membership interest and income on its preferred membership interest in ALLO.

For additional information on the results of these investments, see note 7 of the notes to consolidated financial statements included in this report.

In June 2025, the Company redeemed a portion of its voting membership interest in ALLO and all its outstanding preferred membership interest, including the preferred return accrued on such membership interests, and recognized a pre-tax gain of $175.0 million as a result of this transaction.

See note 3 of the notes to consolidated financial statements included in this report for additional information.

(e) Represents the operating results of the Company’s venture capital activities, including Hudl which the Company accounts for using the measurement alternative method, and the administrative costs to manage this portfolio.

The ownership in these early-stage and emerging growth companies may create volatility in earnings from recognizing results of certain equity method investees, periodic adjustment of certain fund investments to their respective fair value, and, when applicable, observable price changes on certain measurement alternative methods.

For instance, during 2025, the Company recognized a realized gain of $7.8 million as a result of redeeming a portion of its interest in CompanyCam, and an unrealized gain of $22.4 million to adjust its carrying value of its remaining ownership in CompanyCam to the transaction value.

For additional information, see note 7 of the notes to consolidated financial statements included in this report.

LIQUIDITY AND CAPITAL RESOURCES

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business acquisitions;

solar, real estate, and other investments;

contributions into solar, real estate, and other partnerships;

repurchases of common stock;

and repurchases of its own debt.

Nelnet Bank utilizes contributions from Nelnet, Inc.

and third-party and intercompany deposits to fund its growth.

Sources of Liquidity

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AFS private education and consumer loan debt securities - held as risk retention - at fair value (b) (190,607)

Restricted investments (101,987)

Restricted investments - at fair value (c) (175,800)

Unencumbered AFS debt securities (investments) - at fair value 91,592

Unencumbered private, consumer, and other loans (Non-Nelnet Bank) - at par 253,484

Unencumbered repurchased Nelnet issued asset-backed debt securities - at par (not included on consolidated financial statements) (c) 97,482

Unused capacity on unsecured line of credit (d) 495,000

Unencumbered federally insured, private, consumer, and other loans (Non-Nelnet Bank) - at par 328,269

Unencumbered repurchased Nelnet issued asset-backed debt securities - at par (not included on consolidated financial statements) (d) 292,177

Unused capacity on unsecured line of credit (e) 495,000

Sources of liquidity as of December 31, 2025

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For these securitizations, the Company is required to retain these bonds until the latest of (i) the date the aggregate outstanding principal balance of the loans in the securitization is 33% or less of the initial loan balance, and (ii) the date the aggregate outstanding principal balance of the bonds is 33% or less of the aggregate initial outstanding principal balance of the bonds, at which time the Company can sell these bonds to a third party.

(c) The Company has repurchased certain of its own asset-backed securities (bonds and notes payable) in the secondary market.

For accounting purposes, these notes are eliminated in consolidation and are not included in the Company's consolidated financial

The Company estimates these bonds will be restricted from trading until approximately the first half of 2027.

(d) The Company has repurchased certain of its own asset-backed securities (bonds and notes payable) in the secondary market.

For accounting purposes, these notes are eliminated in consolidation and are not included in the Company's consolidated financial statements.

However, these securities remain legally outstanding at the trust level and the Company could sell these notes to third parties, redeem the notes at par as cash is generated by the trust estate, or pledge the securities as collateral on repurchase agreements.

Upon a sale of these notes to third parties, the Company would obtain cash proceeds equal to the market value of the notes on the date of such sale.

(d) The Company has a $495.0 million unsecured line of credit that matures on September 22, 2026.

(e) The Company has a $495.0 million unsecured line of credit that matures on September 22, 2026.

As of December 31, 2025, there was no amount outstanding on the unsecured line of credit and $495.0 million was available for future use.

The Company intends to use its liquidity position to capitalize on market opportunities, including FFELP, private education, consumer, and other loan acquisitions (or investment interests therein);

strategic acquisitions and investments;

strategic acquisitions;

and capital management initiatives, including stock repurchases, debt repurchases, and dividend distributions.

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During the years ended December 31, 2025 and 2024, the Company generated $423.0 million and $662.9 million, respectively, in cash from operating activities.

The increase in 2024 compared with 2023 was due to:

• An increase in net income;

• Proceeds received from the Company’s clearinghouse for margin payments on derivatives in 2024 compared with payments in 2023;

• Adjustments to net income for the impact of non-cash changes to deferred taxes, provision for loan losses, and impairment expense and provision for beneficial interests;

• The impact of changes to loan and investment accrued interest receivable, accounts receivable, and other assets in 2024 compared with 2023.

The decrease in 2025 compared with 2024 was due to:

• Adjustments to net income for certain non-cash items, including loan discount and deferred lender fees accretion, depreciation and amortization, provision for beneficial interests, and gain/loss on investments;

• The gain recognized on the partial redemption of ALLO;

• The impact of changes to loan and investment accrued interest receivable and accounts receivable in 2025 compared with 2024.

These factors were partially offset by:

• Adjustments to net income for the impact of depreciation and amortization, loan discount and deferred lender fees accretion, derivative market value adjustments, loss on sale of loans, and gain on investments;

• Proceeds from termination of derivative instruments in 2023 compared with none in 2024;

• The impact of changes to accrued interest payable and other liabilities in 2024 compared with 2023.

The primary items included in the statement of cash flows for investing activities are the purchase, origination, repayment, and sale of loans, the purchase and sale of available-for-sale securities, and the purchase of other investments (primarily solar investments).

The primary items included in financing activities are the proceeds from the issuance of and payments on bonds and notes payable, the change in deposits at Nelnet Bank used to fund loans and investment activity at Nelnet Bank, and repurchases of common stock.

Cash provided by investing activities and used in financing activities for the year ended December 31, 2024 was $2.41 billion and $3.17 billion, respectively.

• An increase in net income;

• Adjustments to net income for certain non-cash items, including derivative market value adjustments, impairment expense, deferred taxes, and provision for loan losses;

• The impact of changes to other liabilities and accrued interest payable in 2025 compared with 2024.

In 2025, the Company received cash proceeds of $410.9 million from the redemption of its membership interests in ALLO.

The proceeds from the ALLO redemption are included in investing activities on the statement of cash flows.

The primary items included in financing activities are the payments on and proceeds from bonds and notes payable, the change in deposits at Nelnet Bank used to fund loans and investment activity, issuance of noncontrolling interests, payment of dividends, and repurchases of the Company’s common stock.

Cash provided by investing activities and used in financing activities for the year ended December 31, 2025 was $356.4 million and $737.1 million, respectively.

Cash provided by investing activities and used in financing activities for the year ended December 31, 2024 was $2.41 billion and $3.17 billion, respectively.

Investing and financing activities are further addressed in the discussion that follows.

Liquidity Needs and Sources of Liquidity Available to Satisfy Debt Obligations Secured by Loan Assets and Related Collateral - AGM Operating Segment

Sources and Needs of Liquidity - AGM Operating Segment

Subsequent to the Reconciliation Act of 2010, the Company no longer originates FFELP loans but continues to acquire FFELP loan portfolios from third parties and believes additional loan purchase opportunities exist, including opportunities to purchase private education, consumer, and other loans (or residual interests therein).

The Company plans to fund additional loan acquisitions through a combination of current cash;

cash generated from operating activities and expected future cash flows from loan securitizations;

proceeds from the sale of certain investments;

borrowings under its unsecured line of credit, Union Bank student loan participation agreement, and Union Bank student loan asset-backed securities participation agreement, or similar secured and unsecured borrowing facilities;

utilization of existing warehouse facilities;

expansion of capacity under existing and/or establishment of new warehouse facilities;

and continued access to the asset-backed securities market.

Sources of Liquidity

Asset-backed Securities Transactions

The Company, through its subsidiaries, has historically funded loans by completing asset-backed securitizations.

The majority of AGM’s portfolio of student loans is funded in asset-backed securitizations that are structured to substantially match the maturity of the funded assets, thereby minimizing liquidity risk.

Depending on market conditions, the Company anticipates continuing to access the asset-backed securitization market.

Such asset-backed securitization transactions would be used to refinance loans included in its warehouse facilities and existing asset-backed securitizations and/or finance loans purchased from third parties and loans that are currently unencumbered.

During 2025, the Company completed one FFELP asset-backed securitization totaling $707.9 million (par value).

The proceeds from this transaction were used primarily to refinance student loans included in other secured financings.

See note 5 of the notes to consolidated financial statements included in this report for additional information on this securitization.

There were no asset-backed securitization transactions completed during the year ended December 31, 2024.

Warehouse Facilities

Warehousing allows the Company to buy and manage loans prior to transferring them into more permanent financing arrangements.

See note 5 of the notes to consolidated financial statements included in this report for a discussion of the Company's warehouse facilities outstanding as of December 31, 2025.

Union Bank Participation Agreement

The Company maintains an agreement with Union Bank, a related party, as trustee for various grantor trusts, under which Union Bank has agreed to purchase from the Company participation interests in student loans.

As of December 31, 2025, $872.9 million of loans were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.

The agreement automatically renews annually and is terminable by either party upon five business days' notice.

This agreement provides beneficiaries of Union Bank’s grantor trusts with access to investments in interests in student loans, while providing liquidity to the Company.

The Company can sell participation interests in loans to Union Bank to the extent of availability under the grantor trusts, up to $900.0 million or an amount in excess of $900.0 million if mutually agreed to by both parties.

Loans participated under this agreement have been accounted for by the Company as loan sales.

Accordingly, the participation interests sold are not included on the Company’s consolidated balance sheets.

Liquidity Impact Related to Debt Obligations Secured by Loan Assets and Related Collateral

The following table shows AGM’s debt obligations outstanding that are secured by loan assets and related collateral:

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Bonds and notes issued in asset-backed securitizations $ 6,838,314 3/22/32 - 11/27/90

FFELP and consumer loan warehouse facilities 943,165 1/31/26 - 11/13/27

FFELP and consumer loan warehouse and other facilities 981,933 1/29/27 - 2/29/28

Warehouse Facilities

Upon termination or expiration of the warehouse and other secured facilities, the Company would expect to access the securitization market, obtain replacement facilities, use operating cash, consider the sale of assets, or transfer collateral to satisfy any remaining obligations.

Bonds and Notes Issued in Asset-backed Securitizations

Cash generated from student loans funded in asset-backed securitizations provides the sources of liquidity to satisfy all obligations related to the outstanding bonds and notes issued in such securitizations.

In addition, due to (i) the difference between the yield AGM receives on the loans and cost of

financing within these transactions, and (ii) the servicing and administration fees AGM earns from these transactions, AGM has created a portfolio that will generate earnings and significant cash flow over the life of these transactions.

As of December 31, 2024, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, AGM expects future undiscounted cash flows from its portfolio to be approximately $1.07 billion as detailed below.

In addition, due to (i) the difference between the yield AGM receives on the loans and cost of financing within these transactions, and (ii) the servicing and administration fees AGM earns from these transactions, AGM has created a portfolio that the Company expects to generate earnings and significant cash flow over the life of these transactions.

As of December 31, 2025, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, AGM expects future undiscounted cash flows from its portfolio funded in asset-backed securitizations to be

approximately $1.09 billion as detailed below.

The actual timing of cash flows released from the securitizations could be impacted based on when and if the Company terminates a securitization by exercising clean-up calls on the underlying securities when the assets in such securitization get to a certain threshold.

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As of December 31, 2025, AGM had $7.3 billion of loans included in asset-backed securitizations, which represented 84.3% of its total loan portfolio.

The forecasted cash flow does not include cash flows that the Company expects to receive in relation to loans funded in its warehouse facilities, unencumbered private education, consumer, and other loans funded with operating cash, its ownership of beneficial interest in loan securitizations (such beneficial interest investments are classified as "other investments and notes receivable, net" on the Company's consolidated balance sheets), loans acquired subsequent to December 31, 2024, and loans owned by Nelnet Bank.

The forecasted cash flow does not include cash flows that the Company expects to receive in relation to loans funded in its warehouse facilities, unencumbered federally insured, private education, consumer, and other loans funded with operating cash, its ownership of beneficial interest in loan securitizations (such beneficial interest investments are classified as "other investments and notes receivable, net" on the Company's consolidated balance sheets), loans acquired subsequent to December 31, 2025, and loans owned by Nelnet Bank.

Asset-backed Securitization Cash Flow Forecast

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Prepayments :

The primary variable in establishing a life of loan estimate is the level and timing of prepayments.

The primary variables in establishing a life of loan estimate are the level and timing of prepayments.

Prepayment rates equal the amount of loans that prepay annually as a percentage of the beginning-of-period balance, net of scheduled principal payments.

A number of factors can affect estimated prepayment rates, including the level of consolidation activity, borrower default rates, and utilization of debt management options such as income-based repayment, deferments, and forbearance.

Should any of these factors change, management may revise its assumptions, which in turn would impact the

projected future cash flow.

Should any of these factors change, management may revise its assumptions, which in turn would impact the projected future cash flow.

The Company’s cash flow forecast above assumes prepayment rates of 6% for both federally insured consolidation and Stafford loans.

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Beginning in late 2021, the Company experienced accelerated run-off (prepayments) of its FFELP portfolio due to FFELP borrowers consolidating their loans into Federal Direct Loan Program loans to qualify for loan forgiveness under various initiatives and programs offered by the federal government and the Department.

See Item 1A, "Risk Factors - Loan Portfolio - Prepayment risk" for additional information related to risks associated with loan prepayments.

While more unlikely now due to the change in presidential administration, prepayments could increase if the federal government and the Department initiate additional loan forgiveness or cancellation, other repayment options or plans, or consolidation loan programs.

The following table summarizes the estimated impact to the above forecasted cash flows if prepayments were greater than the prepayment rate assumptions used to calculate the forecasted cash flows:

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$0.89 billion

If the entire AGM student loan portfolio prepaid, the Company would receive the full amount of overcollateralization included in the asset-backed securitizations of approximately $0.73 billion (as of December 31, 2024);

If the entire AGM student loan portfolio was prepaid, the Company would receive the full amount of overcollateralization included in the asset-backed securitizations of approximately $0.77 billion (as of December 31, 2025);

however, the Company would not receive the $0.32 billion ($0.24 billion after tax) of estimated future earnings from the portfolio.

Interest rates :

The Company funds a portion of its student loans with floating rate securities that are indexed to 90-day SOFR.

The Company funds a portion of its student loans with variable rate securities that are indexed to 90-day SOFR.

Meanwhile, the interest earned on the Company’s student loan assets is indexed primarily to the 30-day average SOFR in effect for each day in a calendar quarter.

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The Company’s cash flow forecast assumes, for the life of the portfolio, a relationship between the various SOFR indices that is implied by the current forward SOFR curves.

If the forecast is computed assuming a spread of an additional 12 basis points between Term SOFR and 30-day average SOFR for the life of the portfolio, the cash flow forecast would be reduced by approximately $5 million to $15 million.

If the forecast is computed assuming a spread of an additional 12 basis points between 3-month Term SOFR and 30-day average SOFR for the life of the portfolio, the cash flow forecast would be reduced by approximately $5 million to $15 million.

The Company uses the current forward interest rate yield curve to forecast cash flows.

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See Item 7A, "Quantitative and Qualitative Disclosures About Market Risk — Interest Rate Risk — AGM Operating Segment" for additional information about various interest rate risks which may impact future cash flows from AGM's loan assets.

Warehouse Facilities

Warehousing allows the Company to buy and manage loans prior to transferring them into more permanent financing arrangements.

See note 4 of the notes to consolidated financial statements included in this report for a discussion of the Company's warehouse facilities outstanding as of December 31, 2024.

The Company has been reducing its warehouse capacity based on its estimated future loan purchases and to save on unused facility costs.

Upon termination or expiration of the warehouse facilities, the Company would expect to access the securitization market, obtain replacement warehouse facilities, use operating cash, consider the sale of assets, or transfer collateral to satisfy any remaining obligations.

Asset-backed Securities Transactions

The Company, through its subsidiaries, has historically funded loans by completing asset-backed securitizations.

Depending on market conditions, the Company anticipates continuing to access the asset-backed securitization market.

There were no asset-backed securitization transactions completed during the year ended December 31, 2024.

Other Uses of Liquidity

The Company plans to fund additional loan acquisitions and related investments using current cash;

cash provided by operating activities;

proceeds from the sale of certain investments;

its unsecured line of credit, its Union Bank student loan participation agreement, and its Union Bank student loan asset-backed securities participation agreement (each as described below), and/or establishing similar secured and unsecured borrowing facilities;

using its existing warehouse facilities (as described above);

increasing the capacity under existing and/or establishing new warehouse facilities;

and continuing to access the asset-backed securities market.

Union Bank Participation Agreements

As of December 31, 2024, $687.1 million of loans were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.

The agreement automatically renews annually and is terminable by either party upon five business days' notice.

This agreement provides beneficiaries of Union Bank’s grantor trusts with access to investments in interests in student loans, while providing liquidity to the Company.

Loans participated under this agreement have been accounted for by the Company as loan sales.

Accordingly, the participation interests sold are not included on the Company’s consolidated balance sheets.

The Company also has an agreement with Union Bank under which Union Bank has agreed to purchase from the Company participation interests in FFELP loan asset-backed securities (bond investments).

The agreement automatically renews annually and is terminable by either party upon five business days' notice.

The Company can participate FFELP loan asset-backed securities to Union Bank to the extent of availability under the grantor trusts, up to $400.0 million or an amount in excess of $400.0 million if mutually agreed to by both parties.

The Company maintains legal ownership of the FFELP loan asset-backed securities and, in its discretion, approves and accomplishes any sale, assignment, transfer, encumbrance, or other disposition of the securities.

As such, the FFELP loan asset-backed securities subject to this agreement are included on the Company's consolidated balance sheets as "investments at fair value" and the participation interests outstanding have been accounted for by the Company as a secured borrowing.

As of December 31, 2024, $0.1 million (par value) of FFELP loan asset-backed securities were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.

Liquidity Impact Related to Beneficial Interest in Loan Securitizations

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If defaults are higher than management's current estimate, the forecasted cash flows and estimated future investment interest income (earnings) from these securitizations would be adversely impacted.

For example, the Company established an allowance of $39.5 million in 2024 related to certain of the Company's beneficial interest securitization investments.

The Company's change in estimate of future cash flows from the beneficial interest in certain loan securitizations was lower than previously anticipated due to actual and estimated loan defaults within such securitizations.

Sources and Needs of Liquidity - Nelnet Bank

The growth of Nelnet Bank is primarily driven by its ability to achieve loan growth goals through originations and acquisitions while sustaining credit quality and maintaining cost-efficient funding sources to support its loan growth.

Sources of Liquidity

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Nelnet Bank was funded by the Company with an initial capital contribution of $100 million and the Company made a pledged deposit of $40.0 million with Nelnet Bank, as required under an agreement with the FDIC as discussed below.

The Company has contributed an additional $72 million to Nelnet Bank since its inception.

The Company has contributed an additional $178 million to Nelnet Bank since its inception (which includes cash, investments, loans, and equity in a student loan trust).

Based on Nelnet Bank's business plan for growth and current financial condition, the Company believes it will make additional capital contributions to the bank in future periods.

The growth of Nelnet Bank is primarily driven by its ability to achieve loan growth goals while sustaining credit quality and maintaining cost-efficient funding sources to support its loan growth.

Nelnet Bank also has unsecured Federal Funds lines of credit with correspondent banks and has established accounts at the Federal Reserve Bank and the Federal Home Loan Bank.

Nelnet Bank utilizes brokered, retail, and other deposits to meet its funding needs and enhance its liquidity position.

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Nelnet Bank intends to maintain at all times regulatory capital levels that meet both the minimum level necessary to be considered “well capitalized” under the FDIC’s prompt corrective action framework and the minimum level required by the FDIC.

Liquidity Impact Related to Solar Tax Equity Investments

The Company makes solar tax equity investments in renewable energy solar partnerships that support the development and operations of solar projects throughout the county.

As of December 31, 2024, the Company has funded a total of $314.8 million in tax equity investments which remain outstanding for itself and $271.4 million on behalf of its syndication partners, for a funded total of $586.2 million.

These investments provide a federal income tax credit under the Internal Revenue Code, currently equaling 30% to 70% of the eligible project cost, with the tax credit available when the project is placed in service.

Liquidity Impact Related to Renewable Energy Solar Developments

The Company makes contributions in tax equity to renewable energy solar partnerships that support the development and operations of solar projects throughout the country.

As of December 31, 2025, the Company has contributed a total of $355.6 million in solar partnerships which remain outstanding for itself and $416.0 million on behalf of its syndication partners, for a total of $771.6 million.

These contributions provide a federal income tax credit under the Internal Revenue Code, currently equaling 30% to 70% of the eligible project cost, with the tax credit available when the project is placed in service.

The Company is then allowed to reduce its tax estimates paid to the U.S.

Treasury based on the credits earned.

In addition to the credits, the Company structures the investments to receive quarterly distributions of cash from the operating earnings of the solar project for a period of at least five years after the project is placed in service.

In addition to the

credits, the Company structures the partnership to receive quarterly distributions of cash from the operating earnings of the solar project for a period of at least five years after the project is placed in service.

After that period, the contractual agreements typically provide for the Company’s entire interest in the projects to be sold at the fair market value of the discounted forecasted future cash flows allocable to the Company.

Based on the timing of when the Company funds a project and decreases its tax estimate to the U.S.

Treasury due to earning of the tax credit, the net amount of capital funded to solar tax equity investments at any point in time is not significant and has a minimal impact on the Company’s liquidity.

As of December 31, 2024, the Company is committed to fund an additional $55.6 million directly in solar tax equity investments and $36.4 million will be funded by its syndication partners, for a total commitment of $92.0 million.

Liquidity Impact Related to ALLO

Upon the deconsolidation of ALLO on December 21, 2020, the Company recorded its 45% voting membership interests in ALLO at fair value, and accounts for such investment under the HLBV method of accounting.

In addition, the Company recorded its remaining non-voting preferred membership units of ALLO at fair value, and accounts for such investment as a separate equity investment.

As of December 31, 2024, the outstanding preferred membership interests of ALLO held by the Company were $225.6 million.

The accrued preferred return capitalizes to preferred membership interests annually on each December 31.

On January 1, 2025, the preferred annual return on $169.1 million of preferred membership interests of ALLO increased to 13.50%, commencing July 1, 2025, the return will increase to 15.00%, commencing January 1, 2026, the preferred return will increase to 17.50%, and beginning on January 1, 2027 and on each January 1 of each calendar year thereafter, the annual return will increase by an additional 2.50%.

During 2024, the Company purchased an additional $53.1 million of preferred membership interests in ALLO, which earn a preferred annual return of 20.00%.

Including the accrued preferred return of $3.4 million that was capitalized on December 31, 2024, the updated balance of preferred membership interests that earns at 20.00% was $56.5 million as of December 31, 2024.

If ALLO needs additional capital to support its growth in existing or new markets, the Company has the option to contribute additional capital to maintain its voting equity interest and/or may purchase additional preferred membership interests that include a preferred return.

In addition to equity contributions, ALLO has issued debt to fund its growth.

As of December 31, 2024, ALLO has $1.14 billion (par value) of debt outstanding.

As part of the ALLO recapitalization transaction in December 2020, the Company and SDC entered into an agreement in which the Company has a contingent obligation to pay SDC an amount up to $35.0 million in the event the Company disposes of its voting membership interests of ALLO that it holds, and realizes from such disposition certain targeted return levels.

As of December 31, 2024, the estimated fair value of the contingent payment is $8.3 million.

Based on the timing of when the Company contributes to a project and decreases its tax estimate to the U.S.

Treasury due to earning of the tax credit, the net amount of capital funded to renewable energy solar developments at any point in time is not significant and has a minimal impact on the Company’s liquidity.

As of December 31, 2025, the Company is committed to contribute an additional $53.6 million directly in renewable energy solar developments and $59.1 million will be contributed by its syndication partners, for a total commitment of $112.7 million.

In periods in which the Company makes significant contributions in renewable energy solar partnerships, operating results are negatively impacted due to the accelerated losses recognized in the initial years of contribution.

However, given the timing and amount of cash flows expected to be generated over the life of these partnerships, the Company considers these contributions a good use of capital.

Through December 31, 2025, the Company has recognized cumulative pre-tax losses (excluding noncontrolling interests) of approximately $75 million on its solar partnerships currently outstanding.

The Company expects its current solar partnerships (assuming no additional contributions are made subsequent to December 31, 2025) to generate approximately $123 million of pre-tax earnings (excluding noncontrolling interests) over the life of the solar partnerships.

Accordingly, the Company expects to recognize approximately $198 million in pre-tax income (excluding noncontrolling interests) on such solar partnerships between January 1, 2026 and June 30, 2031 (the remaining years of its current investments).

Liquidity Impact Related to Hedging Activities

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Clearing is a process by which a third party, the clearinghouse, steps in between the original counterparties and guarantees the performance of both, by requiring that each post liquid collateral on an initial (initial margin) and mark-to-market (variation margin) basis to cover the clearinghouse’s potential future exposure in the event of default.

Nelnet Bank derivative contracts have protection against counterparty risk provided by International Swaps and Derivatives Association, Inc.

The Company’s non-centrally cleared derivative contracts have protection against counterparty risk provided by International Swaps and Derivatives Association, Inc.

The agreements require collateral to be exchanged based on the net fair value of derivatives with each counterparty.

The Company’s exposure related to the Nelnet Bank derivatives is limited to the value of the derivative contracts in a gain position, less any collateral held by us.

Based on the derivative portfolio outstanding as of December 31, 2024, the Company does not anticipate any movement in interest rates having a material impact on its capital or liquidity profile, nor does the Company expect that any movement in

interest rates would have a material impact on its ability to make variation margin payments to its third-party clearinghouse and/or payments to its counterparties for its non-centrally cleared derivatives.

However, if interest rates move materially and negatively impact the fair value of the Company's derivative portfolio or if the Company enters into additional derivatives for which the fair value becomes negative, the Company could be required to make variation margin payments to its third-party clearinghouse and/or collateral payments to it non-centrally cleared counterparties.

The Company’s exposure related to the non-centrally cleared derivatives is limited to the value of the derivative contracts in a gain position, less any collateral held by us.

Based on the derivative portfolio outstanding as of December 31, 2025, the Company does not anticipate any movement in interest rates having a material impact on its capital or liquidity profile, nor does the Company expect that any movement in interest rates would have a material impact on its ability to make variation margin payments to its third-party clearinghouse and/or payments to its counterparties for its non-centrally cleared derivatives.

The variation margin and collateral payments, if significant, could negatively impact the Company's liquidity and capital resources.

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See note 6 of the notes to consolidated financial statements included in this report for additional information on the Company's derivative portfolio.

Other Sources of Liquidity

Unsecured Line of Credit

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Upon the maturity date of this facility, there can be no assurance that the Company will be able to maintain this line of credit, increase or maintain the amount outstanding under the line, or find alternative funding if necessary.

Union Bank Participation Agreement

The Company has an agreement with Union Bank under which Union Bank has agreed to purchase from the Company participation interests in FFELP loan asset-backed securities (bond investments).

The agreement automatically renews annually and is terminable by either party upon five business days' notice.

The Company can participate FFELP loan asset-backed

securities (investments) to Union Bank to the extent of availability under the grantor trusts, up to $400.0 million or an amount in excess of $400.0 million if mutually agreed to by both parties.

As of December 31, 2025, $0.1 million (par value) of FFELP loan asset-backed securities were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.

Stock Repurchases

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(a) The average price of shares repurchased includes excise taxes.

On November 13, 2023, the Company repurchased, in a privately negotiated transaction under the Company’s existing stock repurchase program, a total of 283,112 shares of the Company’s Class A common stock from certain family members of Mr.

The shares were repurchased at a discount to the closing market price of the Company’s Class A common stock as of November 10, 2023, and the transaction was separately approved by the Company’s Board of Directors and its Nominating and Corporate Governance Committee.

Dividends of $0.28 per share on the Company’s Class A and Class B common stock were paid on March 15, 2024, June 14, 2024, September 13, 2024, and December 16, 2024.

The Company's Board of Directors declared a first quarter 2025 cash dividend on the Company's Class A and Class B common stock of $0.28 per share.

The dividend will be paid on March 14, 2025, to shareholders of record at the close of business on February 28, 2025.

On August 25, 2025, the Company repurchased, in a privately negotiated transaction under the Company’s existing stock repurchase program, a total of 41,929 shares of the Company’s Class A common stock from a certain significant shareholder.

The shares were repurchased at a discount to the closing market price of the Company’s Class A common stock as of August 21, 2025, and the transaction was separately approved by the Company’s Board of Directors and its Nominating and Corporate Governance Committee.

Dividends of $0.28 per share on the Company’s Class A and Class B common stock were paid on March 14, 2025 and June 16, 2025, respectively;

a dividend of $0.30 per share was paid on September 16, 2025, and a dividend of $0.33 was paid on December 15, 2025.

The Company's Board of Directors has declared a first quarter 2026 cash dividend on the Company's outstanding shares of Class A and Class B common stock of $0.33 per share.

The first quarter cash dividend will be paid on March 13, 2026, to shareholders of record at the close of business on February 27, 2026.

The Company plans to continue making regular quarterly dividend payments, subject to future earnings, capital requirements, financial condition, and other factors.

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Note 2 of the notes to consolidated financial statements included in this report includes a summary of the significant accounting policies and methods used in the preparation of the consolidated financial statements.

On an on-going basis, management evaluates its estimates and judgments, particularly as they relate to accounting policies that management believes are most “critical” - that is, they are most important to the portrayal of the Company’s financial condition and results of operations and they require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Management has identified the allowance for loan losses as a critical accounting estimate.

On an on-going basis, management evaluates its estimates and judgments, particularly as they relate to accounting policies that management believes are most “critical” — that is, they are most important to the portrayal of the Company’s financial condition and results of operations and they require management’s most difficult, subjective, or complex judgments, often as a

result of the need to make estimates about the effect of matters that are inherently uncertain.

Management has identified the allowance for loan losses as a critical accounting policy and estimate.

Allowance for Loan Losses

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RECENT ACCOUNTING PRONOUNCEMENTS

In December 2023, the FASB issued accounting guidance to address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

This guidance will be effective for the Company for the year ending December 31, 2025 annual financial statements, with early adoption permitted.

The guidance will be applied on a prospective basis.

The Company intends to adopt the standard when it becomes effective for the year ending December 31, 2025.

Management is currently evaluating the impact this guidance will have on the disclosures included in the notes to the consolidated financial statements.

In November 2024, the FASB issued accounting guidance to increase disclosure requirements primarily through enhanced disclosures about types of expenses (including employee compensation, depreciation, and amortization) in commonly presented expense captions.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis