NYSE$NNI
Nelnet Inc · Q3 2020 earnings
Q3 2020 earnings · · Investor relations
Briefing
Reported GAAP net income with strong interest income generated by loan portfolio, and recent launch of Nelnet Bank.
Nelnet reported a GAAP net income of $71.5 million, or $1.86 per share, for the third quarter of 2020, compared to $33.2 million, or $0.83 per share, for the same period last year. The increase was primarily due to an increase in loan spread, a gain from the sale of consumer loans, and a gain related to changes in the fair values of derivative instruments. The operating results for the quarter were highlighted by the strong interest income generated by their loan portfolio and the recent launch of Nelnet Bank.
- GAAP net income increased due to loan spread, gain from sale of consumer loans, and gain in derivative instruments.
- Net interest income in Asset Generation and Management (AGM) segment increased to $80.2 million.
- Loan Servicing and Systems revenue was $113.8 million.
- ALLO's revenue increased to $20.2 million with EBITDA of $6.6 million.
Headline financials
Revenue & EPS history
Nelnet · Revenue · Quarterly
$307M
Revenue by segment
Nelnet · $188M total across 2 segments · Q3 2020
- Loan Servicing & Systems$114M+0.4%60.6%
- EdTech & Payments$74.1M-0.3%39.4%
Forward guidance
This press release contains forward-looking statements within the meaning of federal securities laws. These statements are based on management's current expectations as of the date of this release and are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results and performance to be materially different from any future results or performance expressed or implied by such forward-looking statements.
Tailwinds
- Ability to successfully maintain and increase allocated volumes of student loans serviced by the company under existing and any future servicing contracts with the Department
- Expected benefits from FFEL Program, private education, and consumer loan purchases and initiatives to purchase additional FFEL Program, private education, and consumer loans
- Ability of ALLO to successfully expand its fiber network and market share in existing service areas and additional communities and manage related construction risks
- Ability to satisfy regulatory and other conditions and complete all of the various transactions contemplated by the announced recapitalization and additional funding for ALLO in the expected time frame or at all
- Expected benefits from Nelnet Bank obtaining an industrial bank charter, including the ability to successfully conduct banking operations and achieve expected market penetration
Headwinds
- Risks and uncertainties related to the severity, magnitude, and duration of the COVID-19 pandemic
- Risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the company under existing and any future servicing contracts with the Department
- Risks that a non-binding notice of intent by the Department to extend the current servicing contracts from December 14, 2020 to approximately June 15, 2021, which notice does not commit the Department to extend the contracts, may not result in actual extensions of the contracts
- Risks to the company related to the Department's initiatives to procure new contracts for federal student loan servicing and awards of contracts to other parties
- Risks related to the company's loan portfolio, such as interest rate basis and repricing risk and changes in levels of loan repayment or default rates
Historical earnings impact
How earnings announcements have historically affected this stock's price.
Avg. return before/after earnings
Based on 20 quarterly earnings reports · overlaid with Q3 2020
+0.9%
Avg return
Earnings day
+0.4%
Avg return
5 days after
+0.9%
Avg return
30 days after
55%
36 / 65 earnings
Positive
+16.6%
Q3 2016
Best reaction
-11.3%
Q4 2016
Worst reaction
| Quarter | Report date | Reaction (Day 0) | +5 days | +30 days |
|---|---|---|---|---|
| Q1 2026 | +0.5% | -13.6% | -8.2% | |
| Q4 2025 | -1.7% | +3.5% | -3.6% | |
| Q3 2025 | +2.2% | +0.1% | +0.5% | |
| Q1 2025 | +5.9% | +10.6% | +7.7% | |
| Q4 2024 | +9.3% | +6.7% | -0.3% | |
| Q3 2024 | -9.9% | -12.5% | -13.1% | |
| Q2 2024 | +1.1% | +2.6% | +4.5% | |
| Q1 2024 | +12.9% | +13.9% | +4.1% | |
| Q4 2023 | -3.7% | -3.1% | +7.3% | |
| Q3 2023 | -0.8% | -3.1% | -3.9% | |
| Q2 2023 | -2.1% | -4.1% | -7.9% | |
| Q1 2023 | -1.1% | -0.9% | +6.8% | |
| Q4 2022 | -3.0% | -2.5% | -3.3% | |
| Q3 2022 | +1.4% | +8.2% | +6.9% | |
| Q2 2022 | -0.2% | -2.3% | -11.3% | |
| Q1 2022 | -1.7% | -0.8% | +3.9% | |
| Q4 2021 | +0.0% | +1.6% | +5.6% | |
| Q3 2021 | -0.6% | +1.8% | +9.7% | |
| Q2 2021 | +2.8% | +2.5% | +8.3% | |
| Q1 2021 | -1.0% | +2.9% | -0.1% | |
| Q4 2020 | +1.0% | +2.7% | +3.6% | |
| Q3 2020 | +3.2% | +13.8% | +9.1% | |
| Q2 2020 | +2.2% | +1.8% | +5.2% | |
| Q1 2020 | -1.6% | -2.8% | +15.2% | |
| Q4 2019 | -5.5% | -10.1% | -24.6% | |
| Q3 2019 | -3.1% | -1.9% | -3.0% | |
| Q2 2019 | +7.8% | +6.8% | +5.7% | |
| Q1 2019 | +8.9% | +6.0% | +2.1% | |
| Q4 2018 | +1.5% | +1.2% | +2.0% | |
| Q3 2018 | -8.2% | -3.9% | -6.6% | |
| Q2 2018 | -2.9% | -3.1% | -4.5% | |
| Q1 2018 | +8.4% | +8.9% | +16.0% | |
| Q4 2017 | +6.9% | +6.7% | +1.2% | |
| Q3 2017 | -10.4% | -10.9% | -5.9% | |
| Q2 2017 | -0.6% | -5.3% | -0.5% | |
| Q1 2017 | -5.0% | -9.1% | -6.9% | |
| Q4 2016 | -11.3% | -8.9% | -15.0% | |
| Q3 2016 | +16.6% | +23.7% | +36.2% | |
| Q2 2016 | -11.1% | -11.7% | -9.5% | |
| Q1 2016 | -5.9% | — | — | |
| Q4 2015 | +2.4% | — | — | |
| Q3 2015 | -4.6% | — | — | |
| Q2 2015 | +5.0% | — | — | |
| Q1 2015 | -4.3% | — | — | |
| Q4 2014 | -0.6% | — | — | |
| Q3 2014 | -0.9% | — | — | |
| Q2 2014 | +6.6% | — | — | |
| Q1 2014 | -3.1% | — | — | |
| Q4 2013 | +11.8% | — | — | |
| Q3 2012 | +4.9% | — | — | |
| Q3 2013 | +4.9% | — | — | |
| Q2 2013 | +5.5% | — | — | |
| Q1 2013 | +0.9% | — | — | |
| Q4 2012 | +3.9% | — | — | |
| Q2 2012 | +3.9% | — | — | |
| Q1 2012 | -1.7% | — | — | |
| Q1 2011 | -1.7% | — | — | |
| Q4 2009 | +1.9% | — | — | |
| Q4 2011 | +1.9% | — | — | |
| Q2 2011 | +1.9% | — | — | |
| Q3 2011 | +1.6% | — | — | |
| Q3 2010 | +1.6% | — | — | |
| Q2 2010 | +4.0% | — | — | |
| Q4 2010 | +4.0% | — | — | |
| Q1 2010 | +9.1% | — | — |
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