Navient (NAVI) investor relations material

Executive summary

• GAAP net income for Q2 2026 rose to $25 million ($0.26 per share), and Core Earnings net income increased to $27 million ($0.29 per share), both up significantly year-over-year.

• Private Education Loan originations surged 63% to $815 million, with total originations for the first half of 2026 up 62% year-over-year.

• Strategic transformation included outsourcing loan servicing, divesting the Business Processing segment, reclassifying $528 million of legacy private loans as held for sale, and adopting fair value accounting for new in-school loans.

• Operating expenses declined 18% year-over-year, reflecting cost reduction initiatives and improved efficiency.

• A cybersecurity incident involving a third-party law firm was deemed material but did not disrupt operations or materially impact financials.

Financial highlights

• Q2 2026 GAAP net income: $25 million vs. $14 million in Q2 2025; diluted EPS: $0.26 vs. $0.13; Core Earnings net income: $27 million vs. $21 million; Core EPS: $0.29 vs. $0.20.

• Net interest income for Q2 2026 was $122 million, down year-over-year due to FFELP portfolio paydown and a shift toward lower-margin refinance loans.

• Operating expenses fell by $18 million year-over-year, driven by cost reductions and the end of transition services.

• Provision for loan losses declined to $26 million from $37 million, reflecting improved credit performance and the reclassification of $528 million in loans as held for sale.

• Realized a $12 million investment gain, offset by $3 million loss from calling a trust and $4 million in regulatory/restructuring expenses.

Outlook and guidance

• Year-to-date originations exceed $1.5 billion, on pace with 2026 volume outlook; graduate market expected to triple in 2026, with continued acceleration in origination growth rates.

• Full-year operating expense outlook remains at $350 million or lower.

• The elimination of the federal GradPLUS program in July 2026 is expected to boost demand for private graduate loans.

• Management continues to focus on maximizing cash flows, enhancing growth businesses, and maintaining a strong balance sheet.

• Ongoing evaluation of strategic opportunities, including potential divestitures, acquisitions, and restructurings.