What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 341 added, 182 removed, 615 unchanged (46% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Management’s Discussion and Analysis of Financial Condition and Results of Operations is for the three months ended March 31, 2026 and 2025.

(Management’s Discussion and Analysis of Financial Condition and Results of Operations is for the three and six months ended June 30, 2026 and 2025.

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

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These factors include, among others, the risks and uncertainties set forth in the “Risk Factors” section of the 2025 Annual Report and include such risks and uncertainties as:

• risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the Company under existing and future servicing contracts with the Department, risks related to unfavorable contract modifications or interpretations, risks related to consistently meeting service requirements to avoid the assessment of performance penalties, and risks related to the Company's ability to comply with agreements with third-party customers for the servicing of Federal Direct Loan Program, Canada Student Loan Program, FFEL Program, private education, and consumer loans;

• risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the Company under existing and future servicing contracts with the Department, risks related to unfavorable contract modifications or interpretations, risks related to consistently meeting service requirements to avoid the assessment of performance penalties, and risks related to the Company's ability to comply with agreements with third-party customers for the servicing of Federal Direct Loan Program, Canadian, FFEL Program, private education, and consumer loans;

• loan portfolio risks such as credit risk, prepayment risk, interest rate basis and repricing risk, risks related to the use of derivatives to manage exposure to interest rate fluctuations, uncertainties regarding the expected benefits from purchased securitized and unsecuritized FFELP, private education, consumer, and other loans, or residual interests therein, and initiatives to purchase additional FFELP, private education, consumer, and other loans;

22 unchanged sentences

A reconciliation of the Company's GAAP net income to Non-GAAP net income excluding derivative market value adjustments, and a discussion of why the Company believes providing this additional information is useful to investors, are provided below.

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

GAAP net income attributable to Nelnet, Inc.

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GAAP net income attributable to Nelnet, Inc.

$ 1.85 4.97 3.82 7.24

Realized and unrealized derivative market value adjustments (a) (0.10) 0.11 (0.15) 0.28

31 unchanged sentences

• 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)

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

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• Other product and service offerings that are not considered reportable operating segments

The information below presents the operating results (net income (loss) before taxes) for each of the Company's reportable and certain other operating segments reconciled to the consolidated financial statements.

See "Results of Operations" for additional detail regarding each reportable operating segment, the NFS operating segments, and Corporate and Other Activities under this Item 2.

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

NDS $ 14,822 19,959 34,624 38,471

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Solar tax equity (21,642) (1,892) (43,966) (686)

Nelnet Renewable Energy - solar construction (390) (17,601) (2,571) (24,175)

Other corporate operating segments 1,973 188,258 6,631 201,935

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Impact of Transactions on 2026 Operating Results

Operating results for the three months ended March 31, 2026 were influenced by several transactions that significantly affected certain components of income.

Operating results for the three and six months ended June 30, 2026 compared to the same periods in 2025 were influenced by several transactions that significantly affected certain components of income.

The impacts of these items are summarized below to provide additional context for the Company’s financial performance during the period.

AGM Operating Segment

Growth in Pay Later receivable volumes contributed to higher loan interest income during the quarter, along with increased provision for loan losses and borrower late fee income.

AGM began acquiring Pay Later receivables during the third quarter of 2025;

these receivables are generally purchased at a discount and have short expected durations.

As of March 31, 2026, the balance of Pay Later receivables was $766.2 million.

In addition, AGM holds interests in certain joint ventures engaged in the acquisition and management of loan portfolios.

During the three months ended March 31, 2026, AGM recognized $15.4 million of income from these joint ventures.

Equity Investments

During the three months ended March 31, 2026, the Company recognized $10.8 million of losses related to marketable equity securities with readily determinable fair values.

These losses were primarily unrealized and resulted from changes in market values during the period.

The majority of these losses are included in “NFS other operating segments” in the table above.

In its initial years, Nelnet Bank incurred operating losses as it invested in the personnel and infrastructure needed to support future growth.

As the bank has matured, operating expenses have stabilized while loan and deposit balances have continued to expand.

This operating leverage has contributed to increased net interest income and net income for the three and six months ended June 30, 2026, compared with the corresponding periods in 2025.

During 2026, the Company’s AGM operating segment contributed certain student loan trusts to Nelnet Bank, including $716.3 million of federally insured loans.

Following these contributions, Nelnet Bank repaid the related securitization debt and funded the loans with deposits.

These transactions were a significant contributor to the increase in Nelnet Bank's loan balance during 2026.

NFS Other Operating Segments

During the three and six months ended June 30, 2026, the Company recognized an unrealized gain of $8.6 million and an unrealized loss of $1.1 million, respectively, from changes in the fair value of certain marketable equity securities.

These fair value adjustments were a significant driver of the increase in income before income taxes for the NFS other operating segments in the second quarter of 2026 compared with the prior-year period;

however, they had only a limited impact on the year-to-date comparison.

Operating results may continue to fluctuate and be impacted in future periods by fair value adjustments of marketable equity securities.

Solar Tax Equity

During the three months ended March 31, 2026, the Company recognized $22.5 million of losses related to its solar tax equity partnerships.

These losses reflect the accounting treatment required under the hypothetical liquidation at book value (“HLBV”) method and were influenced by contributions made to these partnerships in recent periods.

Losses attributable to noncontrolling interest partners totaled $13.4 million for the quarter and are included in “net loss attributable to noncontrolling interests.”

The Company consolidates its solar tax equity partnerships because it holds management and control rights, with third‑party investor interests reflected as noncontrolling interests.

During the three and six months ended June 30, 2026, the Company recognized $22.5 million and $45.0 million of losses related to its solar tax equity partnerships, respectively.

These losses reflect the accounting treatment required under the HLBV method and were influenced by contributions made to these partnerships in recent periods.

The HLBV method commonly results in the recognition of accelerated losses in the early years of a partnership.

The Company consolidates its solar tax equity partnerships because it holds management and control rights, with third‑party investor interests reflected as noncontrolling interests.

Losses attributable to noncontrolling interest partners totaled $19.5 million and $32.9 million for the three and six

months ended June 30, 2026, and are included in “net loss attributable to noncontrolling interests” in the table above.

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

Nelnet Renewable Energy (NRE)

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

Following its acquisition, NRE experienced low and, in certain cases, negative project margins.

In addition, changes in legislation reducing clean energy tax incentives, tariff uncertainty, and rising construction costs adversely affected NRE's revenue and operating results.

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

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.

ALLO Investment

During the three months ended June 30, 2025, the Company recognized a $175.0 million gain on a partial redemption of the Company's voting membership interests in ALLO.

In addition, ALLO redeemed all of the Company's preferred membership interests in ALLO that were outstanding at that time.

Included in the Company's operating results for the three and six months ended June 30, 2025 was $6.0 million and $14.4 million of ALLO preferred return, respectively.

The operating results from the Company's investment in ALLO is included in "other corporate operating segments" in the table above.

CONSOLIDATED RESULTS OF OPERATIONS

An analysis of the Company's consolidated operating results for the three months ended March 31, 2026 compared with the same period in 2025 is provided below.

An analysis of the Company's consolidated operating results for the three and six months ended June 30, 2026 compared with the same periods in 2025 is provided below.

The Company operates as distinct reportable operating segments as described above.

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Since the Company monitors and assesses its operations and results based on these segments, the discussion following the consolidated results of operations is presented on a reportable segment basis.

Three months ended

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025 Additional information

Loan interest $ 171,024 166,439 Increase was due to an increase in the average balance of consumer and other loans held within the AGM and Nelnet Bank operating segments, partially offset by a decrease in the average balance of FFELP loans at AGM and gross yield earned on loans.

Loan interest $ 164,598 172,104 335,622 338,543 Decrease was due to a decrease in the average consolidated balance of FFELP loans and gross yield earned on loans, partially offset by an increase in loan discount accretion and the average balance of consumer and other loans held within the AGM and Nelnet Bank operating segments.

Investment interest 40,315 40,185 80,517 81,574 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.

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

Total interest income 204,913 212,289 416,139 420,117

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Less provision for loan losses 41,077 17,930 94,321 33,267 Represents the current period provision to reflect the lifetime expected credit losses related to the Company's loan portfolio.

The increase was driven by the significant increase in the volume of Pay Later receivables acquired since the third quarter of 2025.

See note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional factors impacting provision for loan losses for the periods presented.

The increase was driven by the establishment of an initial allowance for loans originated and acquired during the periods, including the significant increase in the volume of Pay Later receivables acquired since the third quarter of 2025.

See note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.

Less provision for beneficial interests 2,441 4,977 6,571 6,487 Represents the current period provision expense related to the Company’s beneficial interest in certain loan securitizations.

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

See note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.

Net interest income after provision 52,493 56,528 96,762 122,395

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Reinsurance premiums earned 40,625 26,112 63,161 50,799 Represents premiums earned, net of ceded portion, from reinsurance treaties on primarily property and casualty policies.

Decrease was primarily due to timing of premium recognition under certain reinsurance treaties.

Increase was primarily due to timing of premium recognition under certain reinsurance treaties.

Solar construction revenue — 1,259 — 5,254 Represents revenue earned from NRE providing solar construction services.

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Other, net 18,399 22,976 28,836 47,579 See table below for the components of "other, net."

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

Derivative settlements, net 166 744 746 1,489 The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility.

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Total cost of services 41,270 55,739 93,310 113,247

Salaries and benefits 139,371 138,223 Increase was primarily due to higher headcount at the ETSP operating segment to support the growth of its customer base and the investment in the development of new technologies, as well as increased headcount in the NFS division to support growth.

These increases were partially offset by lower headcount in the LSS operating segment, reflecting ongoing cost-efficiency initiatives.

Salaries and benefits 152,664 134,699 292,035 272,922 Increase was primarily due to the acquisition of NDS Canada during the first quarter of 2026 and higher 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 10,142 7,624 19,312 16,879 Includes depreciation of property and equipment and the amortization of intangibles from prior business acquisitions.

Decrease was primarily due to certain information technology activities moved to cloud computing and such expenses classified as other expenses.

These decreases were partially offset by an increase in amortization due to the acquisition of NDS Canada during the first quarter of 2026.

Increase was primarily driven by an increase in amortization due to the acquisition of NDS Canada during the first quarter of 2026.

Reinsurance losses and underwriting expenses 32,809 25,662 56,414 47,874 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.

Other expenses 61,840 48,307 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 higher legal and transition service costs related to closing the NDS Canada acquisition and subsequent integration activities, as well as increased expenses related to certain information technology activities moved to cloud computing.

Other expenses 64,199 56,617 126,038 104,924 Includes expenses such as postage and distribution, consulting and professional fees, servicing fees, marketing, travel, communications, certain information technology-related costs, and impairment charges.

Total operating expenses 259,814 224,602 493,799 442,599

Income before income taxes 65,413 237,364 141,074 343,504

Income tax expense (20,061) (25,010) The effective tax rate was 22.00% and 23.25% for the three months ended March 31, 2026 and 2025, respectively.

Income tax expense (19,942) (59,510) (40,003) (84,521) The effective tax rate was 23.03% and 24.70% for the three months ended June 30, 2026 and 2025, respectively and 22.50% and 24.25% for the six months ended June 30, 2026 and 2025, respectively.

The decrease in the effective tax rate in 2026 as compared with 2025 was impacted by the state effective tax rate.

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

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

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025 Additional information

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Investment advisory services (WRCM) 1,380 1,504 2,715 2,977 See NFS division - results of operations - NFS other operating segments.

ALLO preferred return 978 8,416 See Corporate - results of operations.

Loss from solar investments, net (22,497) (1,502) (45,028) (1,046) See Corporate - results of operations and note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

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Real Estate Venture Capital and Funds Equity Securities Bonds Total Real Estate Venture Capital and Funds Equity Securities Bonds Total

Three months ended March 31,

Three months ended June 30,

NFS - AGM $ — 8,649 — (20) 8,629 — 4,213 — — 4,213

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$ (1,034) 9,950 9,086 1,641 19,643 453 11,895 654 1,835 14,837

Six months ended June 30,

NFS - AGM $ — 24,011 — (20) 23,991 — 5,260 — — 5,260

NFS - Nelnet Bank — 1,053 — 803 1,856 — (127) — 435 308

NFS - Other Operating Segments 1,698 — (1,050) 2,872 3,520 (1,190) — 645 2,735 2,190

Corporate — 7,097 (670) — 6,427 — 20,654 — — 20,654

$ 1,698 32,161 (1,720) 3,655 35,794 (1,190) 25,787 645 3,170 28,412

LOAN SERVICING AND SYSTEMS OPERATING SEGMENT – RESULTS OF OPERATIONS

On February 2, 2026, the Company acquired a Canadian student loan servicing business for CAD $144.2 million (USD $105.8 million).

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

On February 2, 2026, the Company acquired a Canadian student loan servicing business.

NDS Canada delivers technology-enabled student loan servicing for governments and a financial institution, managing 2.7 million borrowers on proprietary platforms.

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

See note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.

Summary and Comparison of Operating Results

Three months ended March 31,

Interest income $ 591 721

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

Interest income, net $ 582 624 1,174 1,345

Loan servicing and systems revenue (see disaggregated revenue by service offering below)

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Non-GAAP before tax operating margin, excluding amortization expense (a) 13.1 % 16.0 % 14.8 % 15.4 %

(a) Before tax operating margin, excluding amortization expense, is a non-GAAP measure of before tax operating profitability as a percentage of revenue, and for the LSS segment is calculated as income before income taxes (less amortization expense related to the acquired intangibles from the NDS Canada acquisition that was $1.9 million for the three months ended March 31, 2026) divided by the total of loan servicing and systems revenue (less contract fulfillment and acquisition costs), intersegment servicing revenue, and other income.

(a) Before tax operating margin, excluding amortization expense, is a non-GAAP measure of before tax operating profitability as a percentage of revenue, and for the LSS segment is calculated as income before income taxes less amortization expense related to the acquired intangibles from the NDS Canada acquisition ($2.8 million and $4.7 million for the three and six months ended June 30, 2026, respectively), divided by the total of loan servicing and systems revenue (net of 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, excluding amortization expense, improved primarily due to lower salaries and benefits associated with headcount reductions, excluding the impact of employees added through the NDS Canada acquisition, reflecting ongoing cost-efficiency initiatives.

Before‑tax operating margin, excluding amortization expense, decreased in 2026 compared with 2025 due to a decrease in Department loan servicing revenue, primarily driven by a decrease in the number of borrowers and further explained in the disaggregated revenue table below.

This was partially offset by lower salaries and benefits (excluding the impact of employees added through the NDS Canada acquisition) reflecting ongoing cost-efficiency initiatives and headcount reductions, as well as lower postage expense (which was also driven by a decrease in Department borrowers).

Loan Servicing Volumes

2026 March 31,

2026 December 31,

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Department of Education $ 423,605 431,049 434,479 458,679 465,689 482,786 489,877

Canada Student Loan Program 42,692 — — — — —

Canada student loans 42,942 42,692 — — — — —

FFELP 10,853 11,195 11,594 11,982 12,386 12,826 13,260

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Department of Education 10,679,141 11,048,314 11,426,789 12,387,665 12,694,386 13,453,127 14,049,550

Canada Student Loan Program 2,708,392 — — — — —

Canada student loans 2,681,563 2,708,392 — — — — —

FFELP 429,298 443,028 463,109 482,696 502,205 524,421 549,861

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The following table presents disaggregated revenue by service offering for each reporting period:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025 Additional information

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Borrower volume declined throughout 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.

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

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.

Canada Student Loan Program loan servicing 11,332 — Represents revenue from NDS Canada's student loan servicing contract with the Government of Canada, including direct agreements with three provinces and a program administered through a financial institution.

Canada student loans 17,685 — 29,016 — Represents revenue from NDS Canada's student loan servicing contract with the Government of Canada, including direct agreements with three provinces and a program administered through a financial institution.

NDS Canada earns a monthly servicing fee based on borrower volume.

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Canada loan servicing revenue was recognized by the Company beginning February 2, 2026, the date the Company acquired NDS Canada.

Private education and consumer loan servicing 25,661 22,696 Increase was due to an increase in loan servicing volume from the conversion of Discover Financial Services and SoFi Lending Corp.

Private education and consumer loan servicing 26,114 22,733 51,775 45,426 Increase was due to an increase in loan servicing volume from the continued conversion of Discover Financial Services and SoFi Lending Corp.

loan portfolios during the first quarter of 2025.

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Summary and Comparison of Operating Results

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

Interest income $ 4,732 5,417 10,851 12,356

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Intersegment revenue 74 65 145 129

Total other income 154,508 147,394

Other income 1,902 — 1,902 —

Total income 120,860 118,249 275,366 265,644

Cost of services (see disaggregated revenue by service offering below) 39,183 39,844 89,136 87,891

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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.

ETSP before tax operating margin decreased due to an increase in operating expenses to support the growth in the customer base and investments in the development of new technologies.

ETSP before tax operating margin decreased in 2026 compared with 2025 due to an increase in operating expenses to support the growth in the customer base and investments in the development of new technologies.

Education technology services and payments revenue

The following table presents disaggregated revenue by service offering for each reporting period:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025 Additional information

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Payment processing 39,409 37,515 95,297 89,051 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 56,114 55,695 Increase was primarily driven by growth in student information system revenue.

The increase was partially offset by a decline in FACTS education services revenue, reflecting the end of economic aid provided to private schools ("EANS program") in response to the COVID-19 pandemic.

Revenue recognized under the EANS program totaled $1.6 million for the first quarter of 2025, which was the last quarter for revenue related to that program.

Education technology services 42,312 44,481 98,426 100,177 Decrease during the three months ended June 30, 2026 compared with the same period in 2025 was primarily due to a decrease in professional development.

The timing and amount of revenue recognition for professional development depends on both the availability of government funding to schools and each school's decision regarding when and how to use those funds.

The decrease during the six months ended June 30, 2026 compared with the same period in 2025 was also driven by a decline in FACTS education services revenue, reflecting the end of economic aid provided to private schools ("EANS program") in response to the COVID-19 pandemic.

Revenue recognized under the EANS program totaled $1.7 million for the six months ended June 30, 2025.

The decrease was partially offset by growth in student information system revenue.

Other 158 175 737 202

Education technology services and payments revenue 118,884 118,184 273,319 265,515

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Loan Portfolio

As of March 31, 2026, the AGM operating segment had an $8.41 billion loan portfolio, consisting primarily of federally insured loans.

For a summary of the Company’s loan portfolio as of March 31, 2026 and December 31, 2025, see note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

As of June 30, 2026, the AGM operating segment had a $7.83 billion loan portfolio, consisting primarily of federally insured loans.

For a summary of the Company’s loan portfolio as of June 30, 2026 and December 31, 2025, see note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

Loan Activity

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FFELP Private Consumer loans and other financing receivables Total

Three months ended March 31, 2026

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

Three months ended June 30, 2026

Balance as of March 31, 2026 $ 7,065,363 130,217 1,213,599 8,409,179

Loan acquisitions (a) 115,737 — 3,067,022 3,182,759

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Loans contributed to Nelnet Bank (420,291) — — (420,291)

Balance as of June 30, 2026 $ 6,493,397 122,818 1,213,556 7,829,771

Three months ended June 30, 2025

Balance as of March 31, 2025 $ 8,670,284 208,507 381,215 9,260,006

Three months ended March 31, 2025

Loan acquisitions 626 — 142,503 143,129

Repayments, claims, capitalized interest, participations, and other, net (236,813) (8,920) (112,248) (357,981)

Loans lost to external parties (66,771) (800) — (67,571)

Loans sold (241) — — (241)

Loans contributed to Nelnet Bank — (42,173) — (42,173)

Balance as of June 30, 2025 $ 8,367,085 156,614 411,470 8,935,169

Six months ended June 30, 2026

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

Loan acquisitions (a) 415,286 — 6,102,945 6,518,231

Repayments, claims, capitalized interest, participations, and other, net (423,977) (15,359) (6,011,712) (6,451,048)

Loans lost to external parties (61,010) (1,032) — (62,042)

Loans sold (157,861) — (394) (158,255)

Loans contributed to Nelnet Bank (716,284) — — (716,284)

Balance as of June 30, 2026 $ 6,493,397 122,818 1,213,556 7,829,771

Six months ended June 30, 2025

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

Loan acquisitions 703,425 — 272,290 975,715

2 unchanged sentences

Loans sold (131,999) — (148) (132,147)

Balance as of March 31, 2025 $ 8,670,284 208,507 381,215 9,260,006

Loans contributed to Nelnet Bank — (42,173) — (42,173)

Balance as of June 30, 2025 $ 8,367,085 156,614 411,470 8,935,169

(a) The Company began to acquire Pay Later receivables during the third quarter of 2025.

Consumer loan acquisitions excluding Pay Later receivables was $182.1 million during the three months ended March 31, 2026.

Consumer loan acquisitions excluding Pay Later receivables was $205.5 million and $387.5 million during the three and six months ended June 30, 2026, respectively.

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.

As of the latest remittance reports filed by the various trusts prior to or as of March 31, 2026, the Company’s ownership correlates to approximately $1.64 billion of loans included in these securitizations.

As of the latest remittance reports filed by the various trusts prior to or as of June 30, 2026, the Company’s ownership correlates to approximately $1.58 billion of loans included in these securitizations.

The loans held in these securitizations are not included in the above table.

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.

The Company also has ownership interests in certain entities whose primary business is to acquire, own, and manage loan assets which are accounted for as equity method investments and included in "other investments and notes receivable, net" in the Company's consolidated financial statements.

As of June 30, 2026, the Company's ownership in these entities correlates to approximately $1.20 billion of loans included in these entities.

The loans held in these entities are not included in the above table.

The ownership interests in these entities are recorded at cost and subsequently increased or decreased by the amount of the Company's proportionate share of the net earnings or losses of each entity.

During the three months ended June 30, 2026 and 2025 and six months ended June 30, 2026 and 2025, the Company recognized income of $8.6 million and $4.2 million, respectively, and $24.0 million and $5.3 million, respectively, related to these businesses that is included in "other, net" in "other income (expense)" on the consolidated statements of income and is not a component of the Company's loan interest income.

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

For a summary of the allowance as a percentage of the ending balance, loan status, delinquency amounts, and other key credit quality indicators for each of AGM’s loan portfolios as of March 31, 2026 and December 31, 2025;

and the activity in AGM's allowance for loan losses and net charge-offs as a percentage of average loans for the three months ended March 31, 2026 and 2025, see note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

and the activity in AGM's allowance for loan losses and net charge-offs as a percentage of average loans for the three and six months ended June 30, 2026 and 2025, see note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

Loan Spread Analysis

1 unchanged sentence

The spread amounts included in the following table are calculated by using the notional dollar values found in the table under the caption "Net loan interest income" below, divided by the average balance of loans or debt outstanding.

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

Variable loan yield, gross 6.58 % 7.77 % 6.68 % 7.59 %

8 unchanged sentences

Average balance of AGM's debt outstanding 7,375,706 8,439,800 7,585,788 8,445,716

Variable loan spread was higher during the three months ended March 31, 2026 compared with the same period in 2025 due to an increase in consumer loans as a percentage of AGM’s overall loan portfolio.

Variable loan spread was higher during the three and six months ended June 30, 2026 compared with the same periods in 2025 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.

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.

Variable loan spread was also impacted by the increase in discount accretion primarily from Pay Later receivables the Company began to purchase during the third quarter of 2025 at a discount that have a short estimated life.

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

See Item 3, “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.

2 unchanged sentences

Summary and Comparison of Operating Results

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025 Additional information

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Residual interest 6,215 7,741 12,659 16,407 Represents residual interest earned on beneficial interest investments.

Decrease is due to a decrease in the investment balance.

Other investment interest 4,112 4,900 8,328 9,004 Represents investment interest earned on restricted cash included in student loan securitizations and other secured borrowings.

8 unchanged sentences

Net interest income 63,166 49,875 130,622 102,810

Less provision for loan losses 48,466 13,012 The increase was driven by the significant increase in the volume of Pay Later receivables acquired since the third quarter of 2025.

See note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional factors impacting provision for loan losses for the periods presented.

Less provision for loan losses 41,326 11,133 89,792 24,144 The increase was driven by the establishment of an initial allowance for loans acquired during the periods, including the significant increase in the volume of Pay Later receivables acquired since the third quarter of 2025.

See note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.

Less provision for beneficial interests 2,441 4,977 6,571 6,487 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.

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Increase was due to an increase in volume of Pay Later receivables the Company began to purchase during the third quarter of 2025, partially offset by the amortization of the FFELP student loan portfolio, the majority of which is serviced by LSS.

Intercompany servicing expense of $4.3 million and $4.9 million during the three months ended March 31, 2026 and 2025, respectively, was eliminated for consolidated financial reporting purposes.

Intercompany servicing expense of $3.7 million and $4.8 million during the three months ended June 30, 2026 and 2025, respectively, and $7.9 million and $9.7 million during the six months ended June 30, 2026 and 2025, respectively, was eliminated for consolidated financial reporting purposes.

Other expenses 1,000 2,464 2,051 3,352

Intersegment expenses 1,396 1,260 2,748 2,510 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 12,183 10,270 Total operating expenses were 57 basis points and 43 basis points of the average balance of loans for the three months ended March 31, 2026 and 2025, respectively.

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.

Total operating expenses 12,031 12,295 24,214 22,565

Income before income taxes 29,194 27,393 59,716 57,226

10 unchanged sentences

The following table summarizes the components of "loan interest" and "loan interest expense" from the table above.

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025 Additional information

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These receivables are generally purchased at a discount and have a short expected duration.

As of March 31, 2026, the balance of Pay Later receivables was $766.2 million.

Growth in Pay Later receivable volumes contributed to increase in loan interest income, higher provision for loan losses, and increased borrower late fee income.

• AGM holds interests in certain joint ventures engaged in the acquisition and management of loan portfolios.

For the three months ended March 31, 2026, AGM recognized $15.4 million of income from these joint ventures, compared with $1.0 million in the comparable period of 2025.

Such amounts are included in “Other income, net” in the table above titled “Summary and Comparison of Operating Results.”

As of June 30, 2026, the balance of Pay Later receivables was $699.8 million.

Growth in Pay Later receivable volumes contributed to increased loan interest income, higher provision for loan losses, and increased borrower late fee income.

• AGM holds interests in certain joint ventures engaged in the acquisition, ownership, and management of loan portfolios.

During the three and six months ended June 30, 2026, AGM recognized $8.6 million and $24.0 million of income from these joint ventures, respectively, compared with $4.2 million and $5.3 million in the same periods of 2025, respectively.

Such amounts are included in “Other income, net” in the above table titled “Summary and Comparison of Operating Results.”

• During 2026, AGM contributed certain student loan trusts to Nelnet Bank that included $716.3 million of federally insured loans.

The contribution of these loans to Nelnet Bank has resulted in a decrease in loan interest income for the three and six months ended June 30, 2026 compared with the same periods in 2025.

Nelnet Bank Operating Segment

Loan Portfolio

As of March 31, 2026, Nelnet Bank had a $1.26 billion loan portfolio.

For a summary of Nelnet Bank’s loan portfolio as of March 31, 2026 and December 31, 2025, see note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

As of June 30, 2026, Nelnet Bank had a $1.64 billion loan portfolio.

For a summary of Nelnet Bank’s loan portfolio as of June 30, 2026 and December 31, 2025, see note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

Loan Activity

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FFELP Private Consumer and other Total

Three months ended March 31, 2026

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

Three months ended June 30, 2026

Balance as of March 31, 2026 $ 458,571 539,381 263,498 1,261,450

Loan acquisitions and originations — 6,580 13,845 20,425

1 unchanged sentence

Loans contributed from AGM 420,291 — — 420,291

Balance as of June 30, 2026 $ 853,341 521,159 264,597 1,639,097

Three months ended June 30, 2025

Balance as of March 31, 2025 $ 110,187 489,451 161,995 761,633

Three months ended March 31, 2025

Loan acquisitions and originations 38 8,354 50,175 58,567

Repayments (3,670) (23,315) (7,747) (34,732)

Loans contributed from AGM — 42,173 — 42,173

Balance as of June 30, 2025 $ 106,555 516,663 204,423 827,641

Six months ended June 30, 2026

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

1 unchanged sentence

Repayments (35,263) (49,151) (27,522) (111,936)

Balance as of March 31, 2025 $ 110,187 489,451 161,995 761,633

Loans contributed from AGM 716,284 — — 716,284

Balance as of June 30, 2026 $ 853,341 521,159 264,597 1,639,097

Six months ended June 30, 2025

Balance as of December 31, 2024 $ — 482,445 162,152 644,597

Loan acquisitions and originations 111,040 37,396 54,730 203,166

Repayments (4,485) (45,351) (12,459) (62,295)

Loans contributed from AGM — 42,173 — 42,173

Balance as of June 30, 2025 $ 106,555 516,663 204,423 827,641

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

For a summary of the allowance as a percentage of the ending balance, loan status, delinquency amounts, and other key credit quality indicators for each of Nelnet Bank's loan portfolios as of March 31, 2026 and December 31, 2025;

and the activity in Nelnet Bank's allowance for loan losses and net charge-offs as a percentage of average loans for the three months ended March 31, 2026 and 2025, see note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

As of March 31, 2026, Nelnet Bank had a $1.18 billion investment portfolio, consisting primarily of asset-backed securities.

For a summary of Nelnet Bank's asset-backed securities investments as of March 31, 2026 and December 31, 2025, see note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

As of March 31, 2026, Nelnet Bank had $1.96 billion of deposits, which included $212.2 million from Nelnet, Inc.

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

For a summary of deposits as of March 31, 2026 and December 31, 2025, see note 9 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

and the activity in Nelnet Bank's allowance for loan losses and net charge-offs as a percentage of average loans for the three and six months ended June 30, 2026 and 2025, see note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

As of June 30, 2026, Nelnet Bank had a $1.29 billion investment portfolio, consisting primarily of asset-backed securities.

For a summary of Nelnet Bank's asset-backed securities investments as of June 30, 2026 and December 31, 2025, see note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

As of June 30, 2026, Nelnet Bank had $2.51 billion of deposits, which included $285.8 million of intercompany deposits from Nelnet, Inc.

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

For a summary of deposits as of June 30, 2026 and December 31, 2025, see note 9 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

Average Balance Sheet

The following table reflects the rates earned on interest-earning assets and paid on interest-bearing liabilities:

Three months ended March 31, (a)

Balance Rate Balance Rate

The following table reflects average daily balances and the annualized rates earned on interest-earning assets and paid on interest-bearing liabilities:

Three months ended June 30,

Six months ended June 30,

2026 2025 2026 2025

Balance Rate Balance Rate Balance Rate Balance Rate

Average assets

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Net interest margin 2.74 % 3.29 % 2.95 % 3.37 %

(a) Calculated using average daily balances.

Summary and Comparison of Operating Results

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

Interest income:

4 unchanged sentences

Net interest income 19,291 14,066 37,120 26,456

Provision for loan losses 4,778 2,325

(Negative provision) provision for loan losses (249) 6,797 4,529 9,123

Net interest income after provision for loan losses 19,540 7,269 32,591 17,333

9 unchanged sentences

Total operating expenses 8,067 6,588 14,496 12,478

Income before income taxes 9,219 1,952

Income tax expense (2,106) (434)

Net income $ 7,113 1,518

Income (loss) before income taxes 13,828 (465) 23,047 1,487

Income tax (expense) benefit (3,310) 101 (5,416) (333)

Net income (loss) $ 10,518 (364) 17,631 1,154

Additional information:

Net income $ 7,113 1,518

GAAP net income (loss) $ 10,518 (364) 17,631 1,154

Derivative market value adjustments, net (1,714) 1,701 (2,714) 4,229

Tax effect 411 (408) 651 (1,015)

Net income, excluding derivative market value adjustments $ 6,353 3,440

Non-GAAP net income, excluding derivative market value adjustments $ 9,215 929 15,568 4,368

Factors Affecting Operating Results

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

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

As Nelnet 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 net income for the three months ended March 31, 2026 as compared to the same period of 2025.

During 2026, the Company’s Asset Generation and Management operating segment contributed certain student loan trusts to Nelnet Bank that included $716.3 million of federally insured loans.

Following these contributions, Nelnet Bank repaid the related securitization debt and funded the loans with deposits.

These transactions were a significant contributor to the increase in loan balances during 2026.

In its initial years, Nelnet Bank incurred operating losses as it invested in the personnel and infrastructure needed to support future growth.

As the bank has matured, operating expenses have stabilized while loan and deposit balances have continued to expand.

This operating leverage has contributed to increased net interest income and net income for the three and six months ended June 30, 2026, compared with the corresponding periods in 2025.

NFS Other Operating Segments

2 unchanged sentences

Summary and Comparison of Operating Results

Nelnet Insurance Services WRCM Real estate Bond portfolio Total

Three months ended March 31, 2026

Nelnet Insurance Services WRCM Real estate Bond portfolio and marketable equity securities Total

Three months ended June 30, 2026

Investment interest $ 3,594 4 — 4,211 7,809

7 unchanged sentences

Intersegment expenses, net (197) (5) (252) (32) (486)

(Loss) income before income taxes (983) 1,210 1,506 (2,475) (742)

Income tax benefit (expense) 236 (290) (378) 594 162

Net (income) loss attributable to noncontrolling interests — — 69 — 69

Net (loss) income $ (747) 920 1,197 (1,881) (511)

Three months ended March 31, 2025

Income (loss) before income taxes 9,127 1,303 (2,418) 13,849 21,861

Income tax (expense) benefit (2,190) (313) 580 (3,324) (5,247)

Net loss (income) attributable to noncontrolling interests — — 3 — 3

Net income (loss) $ 6,937 990 (1,835) 10,525 16,617

Three months ended June 30, 2025

Investment interest $ 2,464 4 — 6,402 8,870

7 unchanged sentences

Intersegment expenses, net (182) (4) (103) (32) (321)

(Loss) income before income taxes 3,239 1,378 (2,051) 7,494 10,060

Income tax benefit (expense) (777) (298) 489 (1,799) (2,385)

Net (income) loss attributable to noncontrolling interests — (138) 14 — (124)

Net (loss) income $ 2,462 942 (1,548) 5,695 7,551

Income (loss) before income taxes (31) 1,413 108 8,601 10,091

Income tax (expense) benefit 8 (305) (33) (2,065) (2,395)

Net loss (income) attributable to noncontrolling interests — (141) 27 — (114)

Net income (loss) $ (23) 967 102 6,536 7,582

Nelnet Insurance Services WRCM Real estate Bond portfolio and marketable equity securities Total

Six months ended June 30, 2026

Investment interest $ 6,454 7 — 9,865 16,326

Interest expense (2,542) — — (2) (2,544)

Net interest income 3,912 7 — 9,863 13,782

Reinsurance premiums earned 63,161 — — — 63,161

Other income, net 1,502 2,754 1,698 1,582 7,536

Salaries and benefits (1,133) (68) (1,880) — (3,081)

Reinsurance losses and underwriting expenses (56,414) — — — (56,414)

Other expenses (2,543) (171) (205) (4) (2,923)

Intersegment expenses, net (343) (11) (527) (62) (943)

Income (loss) before income taxes 8,142 2,511 (914) 11,379 21,118

Income tax (expense) benefit (1,954) (603) 202 (2,731) (5,086)

Net loss (income) attributable to noncontrolling interests — — 72 — 72

Net income (loss) $ 6,188 1,908 (640) 8,648 16,104

Six months ended June 30, 2025

Investment interest $ 4,457 7 — 13,226 17,690

Interest expense (2,196) — — (2) (2,198)

Net interest income 2,261 7 — 13,224 15,492

Reinsurance premiums earned 50,799 — — — 50,799

Other income, net 1,647 2,980 (1,190) 2,939 6,376

Salaries and benefits (546) (62) (409) — (1,017)

Reinsurance losses and underwriting expenses (47,874) — — — (47,874)

Other expenses (2,790) (125) (141) (3) (3,059)

Intersegment expenses, net (291) (7) (202) (65) (565)

Income (loss) before income taxes 3,206 2,793 (1,942) 16,095 20,152

Income tax (expense) benefit (770) (603) 456 (3,862) (4,779)

Net loss (income) attributable to noncontrolling interests — (279) 41 — (238)

Net income (loss) $ 2,436 1,911 (1,445) 12,233 15,135

Factors Affecting Operating Results

• During the three months ended March 31, 2026 , the Company recognized an unrealized loss on certain marketable equity securities of $9.7 million that is included under "Bond portfolio" in "other income, net" in the table above.

These losses resulted from changes in market values during the period.

• Nelnet Insurance Services :

The increase in reinsurance premiums earned in the three and six months ended June 30, 2026 compared with the same periods in 2025 was primarily due to timing of premium recognition under certain reinsurance treaties.

Net income was positively impacted in 2026 as compared to 2025 due to an increase in interest income from the float earned on cash premiums and improved underwriting margins.

• Bond portfolio and marketable equity securities :

During the three and six months ended June 30, 2026 , the Company recognized an unrealized gain of $8.6 million and an unrealized loss of $1.1 million, respectively, resulting from changes in the fair value of certain marketable equity securities.

These amounts are included in "other income, net" in the table above.

Operating results may continue to fluctuate and be impacted in future periods by fair value adjustments of marketable equity securities.

CORPORATE AND OTHER ACTIVITIES – RESULTS OF OPERATIONS

2 unchanged sentences

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

The difference between the Corporate income tax expense and the sum of taxes calculated for each activity is included in income taxes in “other” in the table below.

The difference between the Corporate income tax expense and the sum of taxes calculated for each activity is included in income taxes under “Other” in the table below.

Summary and Comparison of Operating Results

Shared services Solar tax equity Nelnet Renewable Energy (NRE) ALLO Venture capital Other Total

Three months ended March 31, 2026

Shared services Solar tax equity Nelnet Renewable Energy (NRE) Venture capital Other Total

Three months ended June 30, 2026

Investment interest $ — — — — 2,165 2,165

3 unchanged sentences

Other income, net 482 (20,106) (140) 137 4,714 (14,913)

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

Derivative settlements — — — — — —

9 unchanged sentences

Net (loss) income $ (10,333) (326) (296) (123) 2,445 (8,633)

Three months ended March 31, 2025

Three months ended June 30, 2025

Investment interest $ — 1 — — 2,660 2,661

3 unchanged sentences

Other income, net 598 (1,228) — 1,762 8,471 9,603

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

Derivative settlements — — — — — —

9 unchanged sentences

Net (loss) income $ (9,061) 1,479 (13,377) 1,019 140,317 120,377

Shared services Solar tax equity Nelnet Renewable Energy (NRE) Venture capital Other Total

Six months ended June 30, 2026

Investment interest $ — 300 — — 5,000 5,300

Interest expense — (3) — — (1,192) (1,195)

Net interest income (expense) — 297 — — 3,808 4,105

Solar construction revenue — — — — — —

Other income, net 993 (41,903) 263 4,940 7,214 (28,493)

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

Derivative settlements — — — — 437 437

Derivative market value adjustments — — — — (907) (907)

Cost to provide solar construction services — — — — — —

Salaries and benefits (42,468) (1,196) (284) (447) (3,730) (48,125)

Depreciation and amortization (4,007) (23) (4) — (736) (4,770)

Other expenses (31,509) (955) (2,519) (54) (3,019) (38,056)

Intersegment expenses, net 52,288 (186) (27) (110) (789) 51,176

(Loss) income before income taxes (24,703) (43,966) (2,571) 4,329 2,278 (64,633)

Income tax benefit (expense) 5,929 1,745 617 (1,039) 2,004 9,256

Net loss attributable to noncontrolling interests — 36,696 — — — 36,696

Net (loss) income $ (18,774) (5,525) (1,954) 3,290 4,282 (18,681)

Six months ended June 30, 2025

Investment interest $ — 6 — — 4,967 4,973

Interest expense — — (3) — (1,281) (1,284)

Net interest income (expense) — 6 (3) — 3,686 3,689

Solar construction revenue — — 5,254 — — 5,254

Other income, net 1,217 502 — 6,254 19,867 27,840

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

Derivative settlements — — — — — —

Derivative market value adjustments — — — — — —

Cost to provide solar construction services — — (21,878) — — (21,878)

Salaries and benefits (37,320) (761) (3,494) (436) (3,268) (45,279)

Depreciation and amortization (6,185) — (517) (1) (75) (6,778)

Other expenses (30,855) (302) (2,730) (171) 1,466 (32,592)

Intersegment expenses, net 51,232 (131) (807) (86) (538) 49,670

(Loss) income before income taxes (21,911) (686) (24,175) 5,560 196,182 154,970

Income tax benefit (expense) 5,259 (1,146) 5,802 (1,334) (47,979) (39,398)

Net loss attributable to noncontrolling interests — 5,461 — — — 5,461

Net (loss) income $ (16,652) 3,629 (18,373) 4,226 148,203 121,033

Factors Affecting Operating Results

2 unchanged sentences

Because the Company has management and control over these partnerships, they are consolidated in the Company’s consolidated financial statements, with third-party interests presented as noncontrolling interests.

The Company accounts for its solar tax equity interests using the hypothetical liquidation at book value (“HLBV”) method, which commonly results in the recognition of accelerated losses in the early years of a

Based on contributions made to these partnerships in recent periods, the Company recognized losses of $22.5 million related to its solar tax equity partnerships during the three months ended March 31, 2026, compared to a gain of $0.5 million for the same period in 2025.

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

Losses attributable to noncontrolling interest partners were $13.4 million and $1.0 million for the three months ended March 31, 2026 and 2025, respectively, and are included in “net loss attributable to noncontrolling interests” in the table above.

The Company accounts for its solar tax equity interests using the HLBV method, which commonly results in the recognition of accelerated losses in the early years of a partnership.

Based on contributions made to these partnerships in recent periods, the Company recognized losses of $22.5 million and $45.0 million related to its solar tax equity partnerships during the three and six months ended June 30, 2026, respectively, compared with $1.5 million and $1.0 million for the same periods in 2025.

These amounts are included in “other income, net” in the tables above.

Losses attributable to noncontrolling interest partners were $19.5 million and $32.9 million for the three

and six months ended June 30, 2026, respectively, compared with $3.2 million and $4.2 million for the same periods in 2025.

These amounts are included in “net loss attributable to noncontrolling interests” in the tables above.

See note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

4 unchanged sentences

In June 2025, ALLO redeemed all of the Company's preferred membership interests that were outstanding at that time.

Included in the Company's operating results for the three months ended March 31, 2025 was $8.4 million of ALLO preferred return.

In the fourth quarter of 2025 and first quarter of 2026, the Company contributed a total of $23.5 million of additional capital in return for preferred membership interest in ALLO that earns a 20% preferred return.

During the first quarter of 2026, the Company recognized $1.0 million of ALLO preferred return related to this new capital.

• Equity securities:

During the three months ended March 31, 2026, the Company recognized realized and unrealized losses on a certain marketable equity security of $1.1 million that is included under "Other" in "other income, net" in the table above.

These losses resulted from changes in market values during the period.

• Gain from partial redemption of ALLO investment :

The operating results from the Company's investment in ALLO is included under "Other" in the tables above.

In June 2025, the Company recognized a $175.0 million gain on a partial redemption of the Company's voting membership interests in ALLO.

In addition, ALLO redeemed all of the Company's preferred membership interests in ALLO that were outstanding at that time.

Included in the Company's operating results for the three and six months ended June 30, 2025 was $6.0 million and $14.4 million of ALLO preferred return, respectively.

The preferred return is included in "other income, net" in the tables above.

LIQUIDITY AND CAPITAL RESOURCES

3 unchanged sentences

Sources of Liquidity

As of March 31, 2026, the Company's sources of liquidity included:

As of June 30, 2026, the Company's sources of liquidity included:

Cash and cash equivalents $ 172,430

9 unchanged sentences

Unused capacity on unsecured line of credit (e) 435,000

Sources of liquidity as of March 31, 2026

Sources of liquidity as of June 30, 2026

(a) Cash and investments held at Nelnet Bank are generally not available for Company activities outside of Nelnet Bank.

9 unchanged sentences

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.

(e) On March 31, 2026, the Company entered into a $435.0 million unsecured line of credit that matures on March 31, 2031.

See note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

As of March 31, 2026, there was no amount outstanding on the unsecured line of credit and $435.0 million was available for future use.

(e) The Company has a $435.0 million unsecured line of credit that matures on March 31, 2031.

As of June 30, 2026, there was no amount outstanding on the unsecured line of credit and $435.0 million was available for future use.

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 residual interests therein);

3 unchanged sentences

The Company has historically generated positive cash flow from operations.

During the three months ended March 31, 2026 and 2025, the Company generated $73.1 million and $91.2 million, respectively, in cash from operating activities.

During the six months ended June 30, 2026 and 2025, the Company generated $151.0 million and $172.9 million, respectively, in cash from operating activities.

The decrease in 2026 compared with 2025 was due to:

• A decrease in net income;

• Adjustments to net income for certain non-cash items, including loan discount and deferred lender fees accretion and deferred income taxes;

• The impact of changes to accrued interest receivable, accounts receivable, and other assets during the three months ended March 31, 2026 compared with the same period in 2025.

• Adjustments to net income for certain non-cash items, including loan discount and deferred lender fees accretion, derivative market value adjustments, and depreciation and amortization;

• The impact of changes to other assets, other liabilities, and accrued interest receivable during the six months ended June 30, 2026 compared with the same period in 2025.

These factors were partially offset by:

• Adjustments to net income for certain non-cash items, including provision for loan losses and loss on investments;

• The impact of changes to other liabilities during the three months ended March 31, 2026 compared with the same period in 2025.

• Adjustments to net income for certain non-cash items, including the gain on the partial redemption of the Company's ALLO investment, deferred income tax benefit, provision for loan losses, and loss on investments;

• The impact of changes to accounts receivable during the six months ended June 30, 2026 compared with the same period in 2025.

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, the purchase and sale of other investments, and business acquisitions.

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

Cash provided by investing activities and used in financing activities for the three months ended March 31, 2026 was $31.1 million and $244.2 million, respectively.

Cash provided by investing activities and used in financing activities for the three months ended March 31, 2025 was $136.4 million and $326.4 million, respectively.

Cash used in investing activities and used in financing activities for the six months ended June 30, 2026 was $34.9 million and $109.7 million, respectively.

Cash provided by investing activities and used in financing activities for the six months ended June 30, 2025 was $709.8 million and $1.01 billion, respectively.

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

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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.

There were no asset-backed securitization transactions completed during the three months ended March 31, 2026.

There were no asset-backed securitization transactions completed during the six months ended June 30, 2026.

Warehouse Facilities

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

See note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report for a discussion of the Company's warehouse facilities outstanding as of March 31, 2026.

See note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report for a discussion of the Company's warehouse facilities outstanding as of June 30, 2026.

Union Bank Participation Agreement

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

As of March 31, 2026, $659.0 million of

loans were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.

As of June 30, 2026, $574.4 million of loans

were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.

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.

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

As of March 31, 2026

As of June 30, 2026

Carrying amount

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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 March 31, 2026, 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 $1.00 billion as detailed below.

As of June 30, 2026, 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 $0.82 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 reach a certain threshold.

The forecasted cash flow presented below includes loans funded in asset-backed securitizations as of March 31, 2026, the majority of which are federally insured student loans.

As of March 31, 2026, AGM had $6.7 billion of loans included in asset-backed securitizations, which represented 79.6% 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 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 March 31, 2026, and loans owned by Nelnet Bank.

The forecasted cash flow presented below includes loans funded in asset-backed securitizations as of June 30, 2026, the majority of which are federally insured student loans.

As of June 30, 2026, AGM had $6.1 billion of loans included in asset-backed securitizations, which represented 78.3% of its total loan portfolio.

During 2026, the Company’s AGM operating segment contributed certain asset-backed securitization trusts to Nelnet Bank, including $716.3 million of federally insured loans that included $108.9 million of overcollateralization.

Following these contributions, Nelnet Bank repaid the related securitization debt and funded the loans with deposits.

These transactions were a significant contributor to the decrease in forecasted future cash flows as disclosed in the prior quarter.

Asset-backed Securitization Cash Flow Forecast

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(dollars in millions)

The forecasted future undiscounted cash flows of approximately $1.00 billion include approximately $0.73 billion (as of March 31, 2026) of overcollateralization included in the asset-backed securitizations.

These excess net asset positions are included in the consolidated balance sheets in the balances of "loans and accrued interest receivable, net" and "restricted cash." The difference between the total estimated future undiscounted cash flows and the overcollateralization of approximately $0.27 billion, or approximately $0.20 billion after income taxes based on the estimated effective tax rate, represents estimated future net interest income (earnings) from the portfolio and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the March 31, 2026 balance.

The forecasted future undiscounted cash flows of approximately $0.82 billion include approximately $0.62 billion (as of June 30, 2026) of overcollateralization included in the asset-backed securitizations.

These excess net asset positions are included in the consolidated balance sheets in the balances of "loans and accrued interest receivable, net" and "restricted cash." The difference between the total estimated future undiscounted cash flows and the overcollateralization of approximately $0.20 billion, or approximately $0.15 billion after income taxes based on the estimated effective tax rate, represents estimated future net interest income (earnings) from the portfolio and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the June 30, 2026 balance.

The Company uses various assumptions, including prepayments and future interest rates, when preparing its cash flow forecast.

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$0.68 billion

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 $0.73 billion (as of March 31, 2026);

however, the Company would not receive the $0.20 billion ($0.15 billion after tax) of estimated future earnings from the portfolio.

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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.

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.

The different interest rate characteristics of the Company’s loan assets and liabilities funding these assets result in basis risk.

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These residual interests were acquired by the Company or have been received by the Company as consideration from selling portfolios of loans to unrelated third parties who securitized such loans.

As of the latest remittance reports filed by the various trusts prior to or as of March 31, 2026, the Company's ownership correlates to approximately $1.64 billion of loans included in these securitizations.

As of the latest remittance reports filed by the various trusts prior to or as of June 30, 2026, the Company's ownership correlates to approximately $1.58 billion of loans included in these securitizations.

As of March 31, 2026, the investment balance on the Company's consolidated balance sheet of its beneficial interest in loan securitizations was $197.8 million.

As of June 30, 2026, the investment balance on the Company's consolidated balance sheet of its beneficial interest in loan securitizations was $188.9 million.

For a summary of this investment balance, see note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

The Company's partial ownership percentage in each loan securitization grants the Company the right to receive the corresponding percentage of cash flows generated by the securitization.

As of March 31, 2026, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, the Company currently expects future undiscounted cash flows from its partial ownership in these securitizations to be approximately $276.8 million.

As of June 30, 2026, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, the Company currently expects future undiscounted cash flows from its partial ownership in these securitizations to be approximately $266.0 million.

The vast majority of these cash flows are expected to be received over the next 5 years.

The difference between the total estimated future undiscounted cash flows from these residual interests ($276.8 million) and the investment carrying value ($197.8 million) of $79.0 million, or $60.0 million after income taxes based on the estimated effective tax rate, represents estimated future investment interest income (earnings) from these investments and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the March 31, 2026 balance.

The difference between the total estimated future undiscounted cash flows from these residual interests ($266.0 million) and the investment carrying value ($188.9 million) of $77.1 million, or $58.6 million after income taxes based on the estimated effective tax rate, represents estimated future investment interest income (earnings) from these investments and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the June 30, 2026 balance.

The undiscounted future cash flows from the consumer and private education loan securitizations are highly subject to credit risk (defaults).

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has provided capital contributions to support Nelnet Bank’s growth since inception and expects to continue to provide equity capital as necessary to support balance sheet growth and to meet regulatory capital requirements.

During the first quarter of 2026, Nelnet, Inc.

contributed two student loan securitization trusts that included $44.6 million of net assets.

Through March 31, 2026, the Company has contributed $322.6 million of initial and ongoing capital to Nelnet Bank (such capital contributions have included cash, investments, loans, and equity in student loan trusts).

Through June 30, 2026, the Company has contributed $431.3 million of initial and ongoing capital to Nelnet Bank.

Such capital contributions have included cash, investments, loans, and equity in student loan trusts.

During the six months ended June 30, 2026, Nelnet, Inc.

contributed seven student loan securitization trusts that included $153.4 million of net assets.

Nelnet Bank funds the majority of its assets through a diversified deposit base, including retail, commercial, institutional, and brokered deposits sourced through direct banking platforms and deposit marketplaces.

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There was no outstanding balance on the $495.0 million line of credit on the date of termination.

As of March 31, 2026, the new unsecured line of credit had no amount outstanding and $435.0 million was available for future use.

As of June 30, 2026, the new unsecured line of credit had no amount outstanding and $435.0 million was available for future use.

Upon the maturity date of the new 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.

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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 March 31, 2026, $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.

As of June 30, 2026, $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

The Board of Directors authorized a stock repurchase program to repurchase up to a total of five million shares of the Company's Class A common stock during the three-year period ended May 8, 2028.

As of March 31, 2026, 4,398,221 shares remained authorized for repurchase under the Company's stock repurchase program.

The Board of Directors authorized a stock repurchase program to repurchase up to a total of five million shares of the Company's Class A common stock during the three-year period ending May 8, 2028.

As of June 30, 2026, 4,219,239 shares remained authorized for repurchase under the Company's stock repurchase program.

Shares may be repurchased from time to time on the open market, in private transactions (including with related parties), or otherwise, depending on various factors, including share prices and other potential uses of liquidity.

Shares repurchased by the Company during the three months ended March 13, 2026 are shown below.

For additional information on stock repurchases during the first quarter of 2026, see "Stock Repurchases" under Part II, Item 2 of this report.

Total shares repurchased Purchase price (in thousands) Average price of shares repurchased (per share)

Shares repurchased by the Company during the first half of 2026 are shown below.

For additional information on stock repurchases during the second quarter of 2026, see "Stock Repurchases" under Part II, Item 2 of this report.

Total shares repurchased Purchase price (in thousands) Average price of shares repurchased (per share) (a)

Quarter ended March 31, 2026 126,319 $ 16,280 128.88

On March 13, 2026, the Company paid a first quarter 2026 cash dividend on the Company's Class A and Class B common stock of $0.33 per share.

In addition, the Company's Board of Directors has declared a second quarter 2026 cash dividend on the Company's outstanding shares of Class A and Class B common stock of $0.33 per share.

The second quarter cash dividend will be paid on June 15, 2026 to shareholders of record at the close of business on June 1, 2026.

Quarter ended June 30, 2026 190,281 24,353 127.99

Total 316,600 $ 40,633 128.34

(a) The average price of shares repurchased for the quarter ended June 30, 2026 includes excise taxes.

On June 15, 2026, the Company paid a second quarter 2026 cash dividend on the Company's Class A and Class B common stock of $0.33 per share.

In addition, the Company's Board of Directors has declared a third quarter 2026 cash dividend on the Company's outstanding shares of Class A and Class B common stock of $0.33 per share.

The third quarter cash dividend will be paid on September 15, 2026 to shareholders of record at the close of business on September 1, 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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The guidance is required to be applied prospectively with the option for retrospective application.

Management is currently evaluating the impact this guidance will have on the disclosures included in the notes to the consolidated financial statements.

Management is currently evaluating the impact this guidance will have on disclosures included in the notes to the consolidated financial statements.

The Company does not expect the standard to impact the Company's financial condition or results of operations.

There are no other recently issued, but not yet adopted, accounting pronouncements which are expected to have a material impact on the Company's consolidated financial statements and related disclosures.

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-Q

Item 2. Management’s Discussion and Analysis