Nelnet Inc (NYSE: NNI)

Nelnet 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 directly and through its wholly owned and majority owned subsidiaries and actively manages and operates its businesses on an integrated basis. Its largest operating and technology platforms support loan servicing and education related technology and payment solutions. A significant portion of 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 within and beyond its historical education focused activities including banking and other financial services conducted through its 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 generates revenue from net interest income on its federally insured student loan portfolio from loan servicing fees charged to the U. S. Department of Education and third party clients from education technology and payment services such as tuition payment plan services payment processing and education technology offerings from asset management fees on loan portfolios and residual interests from interest income and fees generated by Nelnet Bank and from other businesses including reinsurance premiums investment income and renewable energy consulting. Additional revenue streams include tuition payment plan fees payment processing charges education technology subscription fees asset based lending interest and other specialty finance income.

The company operates through the following segments: Loan Servicing and Systems, Education Technology Services and Payments, Asset Generation and Management, and Nelnet Bank.

• Loan Servicing and Systems: This segment focuses on student and consumer loan servicing loan servicing related technology solutions and outsourcing business services including brands such as Nelnet Diversified Solutions Nelnet Loan Servicing Nelnet Servicing Firstmark Services Sloan Servicing and Nelnet Government Services as of December 31, 2025 it serviced $486.2 billion of loans for 13.2 million borrowers providing services such as servicing federally owned student loans for the Department of Education servicing FFELP loans servicing private education and consumer loans providing backup servicing offering student loan servicing software and delivering outsourced services like contact center processing and administrative support.

• Education Technology Services and Payments: This segment provides education and payment technology and services for K12 schools higher education institutions and businesses in the United States and internationally through divisions such as FACTS Nelnet Campus Commerce Nelnet Payment Services and Nelnet International FACTS serves nearly 12,000 K12 schools offering financial management education technology and education services Nelnet Campus Commerce provides service for more than 1,200 colleges and universities and serves over 8 million students Nelnet Payment Services delivers secure payment processing solutions for credit card and ACH transactions Nelnet International offers its services and technology to more than 600 schools in almost 70 countries with concentrations in Australia New Zealand and the Asia Pacific region.

• Asset Generation and Management: This segment focuses on comprehensive asset management including strategic asset investing asset allocation risk management and performance monitoring within a diverse portfolio it acquires and manages student and other loan assets including residual interests therein as of December 31 2025 the loan portfolio was $8.7 billion of which 85.5% was federally insured the segment earns net interest income on its loan portfolio and generates revenue from loan administration services for third party owners it also purchases consumer and non FFELP loans and Pay Later receivables and holds beneficial interests in loan securitizations representing approximately $1.83 billion of underlying loans.

• Nelnet Bank: This segment is an internet Utah chartered industrial bank focused on private education and unsecured consumer loan markets it offers refinance and in school private education loan options and unsecured consumer loans such as home improvement loans and debt consolidation loans as of December 31 2025 the loan portfolio was $957.6 million the investment portfolio was $1.08 billion and deposits totaled $1.76 billion the bank extends credit to borrowers in all fifty states plus the District of Columbia.

In the loan servicing market Nelnet is one of the largest servicers of federally owned student loans and holds a competitive advantage due to its scalable servicing platforms low cost structure, specialized teams, and proprietary servicing software that many lenders and servicers use directly or indirectly. In the education technology and payments space the company is the largest provider of tuition management and financial needs assessment services to private faith based K12 schools competing with financial institutions, tuition management providers, accounting firms, and various software companies while differentiating itself through customer service technology integration capabilities, and strong relationships with educational institutions. In asset generation and management Nelnet competes with banks, investment funds, and other finance companies for loan portfolios leveraging its expertise in student loan assets, its ability to earn net interest spreads, and its experience in managing loan securitizations and residual interests. Nelnet Bank operates in the private education and consumer loan markets where it competes with other lenders by focusing on credit quality, cost efficient funding sources, and the ability to originate and purchase loan portfolios while maintaining regulatory compliance as an FDIC insured industrial bank.

The company's largest single customer is the U. S. Department of Education which accounted for 21% of total revenue and 68% of the Loan Servicing and Systems segment's revenue in 2025. Through its FACTS division it provides services to nearly 12,000 K12 schools across the United States. Nelnet Campus Commerce serves more than 1,200 colleges and universities reaching over 8 million students. Nelnet International offers its products to more than 600 schools in nearly 70 countries with significant presence in Australia, New Zealand, and the Asia Pacific region. In its loan servicing business the company works with 61 third party servicing customers for FFELP loans, 38 third party servicing customers for private education and consumer loans, and provides backup servicing arrangements to 14 entities covering more than 52 million borrowers. Additionally the company hosts student loan servicing software for 2.9 million borrowers on its remote hosting platform. Nelnet Bank extends credit to borrowers in all fifty states plus the District of Columbia.