Navient Corporation · NASDAQ:NAVI
Navient — Q1 2025 Earnings Presentation
24 slides from Navient's earnings presentation, Apr 30, 2025
Slide 1: 1Q 2025 Earnings Call Presentation
1Q 2025 Earnings Call Presentation Confidential and proprietary information © 2025 Navient Solutions, LLC. All rights reserved. 1
Slide 2: Delivering Value to Shareholders
Delivering Value to Shareholders • Invest in capabilities to grow high-quality • Manage credit and interest rate risk and private education loan originations that help borrowers manage loans generate targeted returns, and explore Maximize the cash Enhance the value opportunities to deepen relationsh
Slide 3: Strategic Actions Update
Strategic Actions Update In January 2024 Navient announced strategic actions to simplify the company, reduce its expense base and enhance flexibility. Below is a 1Q25 update. Phase 1 Focusing on cost reductions and capital allocation 1. Created a variable expense model for loan servicing • Outsource
Slide 4: Phase 1 Cost Reductions
Phase 1 Cost Reductions Navient focused on reducing the expense base supporting its loan portfolios and non-growth businesses. Phase 1 decisions set Navient on a path where this expense base can be reduced by approximately $400 million*. The expenses related to Earnest, our consumer lending business
Slide 5: 1Q 2025 Results
1Q 2025 Results “We delivered strong performance during the first quarter. Our results demonstrate our capacity to double refi GAAP Core Earnings 1 loan origination volume, generate strong revenue and cash flows from our legacy assets, and reduce operating Revenue (Before Provision) $156 million $19
Slide 6: Federal Education Loans – 1Q 2025 Core Earnings Results
Federal Education Loans – 1Q 2025 Core Earnings Results • Net income was $24 million compared to $40 million • Net interest income decreased 1Q25 1Q24 $4 million primarily due to: - the impact of decreasing interest Revenue (Before Provision) $59 million $70 million rates for the segment’s assets an
Slide 7: Consumer Lending – 1Q 2025 Core Earnings Results
Consumer Lending – • Originated $508 million of Private 1Q 2025 Core Earnings Results Education Loans compared to $259 million, a 96% increase - Refinance Loan originations were $470 million compared to $228 million 1Q25 1Q24 - In-school Loan originations were $38 million compared to $31 million Rev
Slide 8: 1Q 2025 Allowance for Loan Losses
1Q 2025 Allowance for Loan Losses ($ in millions) $22 $800 $8 $300 $753 $252 $(78) • Our total provision expense was $30 million in 1Q25 • This consists of: - $8 million for our FFELP portfolio - $22 million of provision related to the Private Education portfolio, related to origination of new loans
Slide 9: Business Processing – 1Q 2025 Core Earnings Results
Business Processing – 1Q 2025 Core Earnings Results • Fee revenue was $23 million, $54 million lower due to the sale of 1Q25 1Q24 our government services business during the quarter and of our healthcare services business in 3q24 Total Fee Revenue $23 million $77 million • Net income was $2 million
Slide 10: Total Expense – 1Q 2025 Core Earnings Results
Total Expense1 – • We are focused on becoming more efficient across all segments 1Q 2025 Core Earnings Results • Operating expenses for the quarter ($ in millions) were $127 million compared to $200 $184 $183 million a year ago $1 $180 $13 • Operating expenses include $1 million of regulatory expens
Slide 11: 1Q 2025 Capital Allocation
1Q 2025 Capital Allocation 11% 10.0% 9.9% 10% 0.1% 0.0% 0.0% -0.1% -0.2% 9% • Adjusted Tangible Equity 1 ratio of 9.9% 8% • We distributed $51 million in 1Q25 to shareholders through dividends and 7% share repurchases • We ended the quarter with 81% of our 6% Total Education Loan Portfolio funded to
Slide 12: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures The following information is current as of December 31, 2024 (unless otherwise noted) and should be read in connection with Navient Corporation’s “Navient” Annual Report on 2024 Form 10-K for the year ended December 31, 2024 (the “2024 Form
Slide 13: Differences Between GAAP and Core Earnings
Differences Between GAAP and Core Earnings Quarters Ended Core Earnings adjustments to GAAP: Mar. 31, Mar. 31, (Dollars in Millions) 2025 2024 GAAP net income (loss) $(2) $73 Net impact of derivative accounting 39 (21) Net impact of goodwill and acquired intangible assets 1 3 Net income tax effect (
Slide 14: 1Q 2025 GAAP to Core Earnings
1Q 2025 GAAP to Core Earnings ($ in millions) $40 • We evaluate our business segments $1 $39 on a basis that differs from GAAP $35 • We refer to this different basis as Core Earnings 1 $30 • The two items we remove to result in $26 Core Earnings are: $25 ($12) - mark-to-market gains/losses from $20
Slide 15: Appendix
Appendix Confidential and proprietary information © 2025 Navient Solutions, LLC. All rights reserved. 15
Slide 16: FFELP Prepayments Influence Revenue and Cash Flow
FFELP Prepayments Influence Revenue • A period of lower-than-anticipated and Cash Flow FFELP Loan Prepayments extends There is a short term lag between when loan prepayments occur and when the cash received is the expected life of the portfolio and applied to Asset Backed Securitization debt paydown
Slide 17: Loan Portfolio Cash Flows Greater than Debt Outstanding
Loan Portfolio Cash Flows Greater than Debt Outstanding • Projected loan portfolio cash flows as of March 31, 2025 - Principally securitization trust distributions • Net interest income • Total projected loan portfolio • Servicing fees undiscounted cash flows after • Return of initial equity repayme
Slide 18: Federal Education Loans – Overview
Federal Education Loans – Overview ($ in millions) • FFELP portfolio of $30 billion $600 - no newly originated FFELP loans 5-Year Projected Annual FFELP Cash Flows 2 since 2010 - 97-100% of principal and interest guaranteed by U.S. government • Holding 50 basis points of equity capital $400 against
Slide 19: Consumer Lending – Overview
Consumer Lending – Overview • Private Education Loan portfolio of $16 billion - Refinance education loan ($ in millions) originations since 2017 $1,000 5-Year Projected Annual Private Education Cash Flows 2 - In-school loan originations starting in 2019 and the seasoned loan portfolio • Holding equi
Slide 20: Total Education Loan Portfolio – Projected Cash Flows
Total Education Loan Portfolio – • Total Education Loan portfolio of $46 billion, undiscounted projected Projected Cash Flows cash flows are: ($ in millions) - $5.7 billion through end of 2029 $1,500 5-Year Projected Annual Education Portfolio Cash Flows 2 - $11.8 billion generated over 20 years • W
Slide 21: Responsibility to Our Customers and Communities
Responsibility to Our Customers Team engagement, and Communities development and inclusion We are committed to creating a Supporting education and economic opportunity workplace where employees are Our education finance solutions help people pursue higher education and successfully welcomed and supp
Slide 22: For More Information
For More Information www.navient.com/investors www.navient.com/abs • Environmental Social Governance (ESG) information - Navient Corporate Social Responsibility report • Student loan asset-backed security (ABS) trust data - Static pool information – detailed portfolio stratifications by trust as of
Slide 23: Footnotes
Footnotes 1. Item is a Non-GAAP Financial Measure. In addition to financial results reported on a GAAP basis, Navient also provides certain performance measures which are non-GAAP financial measures. Definitions for the non-GAAP financial measures and reconciliations are provided below and in the bo
Slide 24: Confidential and proprietary information © 2025 Navient Solutions, LLC. All rights reserved.
Confidential and proprietary information © 2025 Navient Solutions, LLC. All rights reserved. 24