SLM Corp’s latest filing reveals a widening gap between its reported earnings and its actual cash generation. Revenue over the twelve months to Q3 2026 was $1.79 billion, which fell 6.7% on the year before.

Growth and profit

Profitability is holding up better than the top line, though both are contracting. The trailing net margin was 31.7%, indicating that a large portion of each revenue dollar is still retained as profit. However, net income over the twelve months was $567.4 million, which fell 9.0% on the year before.

Operating cash flow over the twelve months was −$381.6 million. Capital spending was modest at $16.9 million, or 0.9% of revenue, so the negative operating flow is the primary driver of the cash drain. Free cash flow, operating cash flow less capital spending, was −$398.5 million. This represents a free-cash-flow margin of −22.3% of revenue, down 4.3 percentage points from a year earlier. The share count is shrinking, with the average diluted share count falling 9.2% over the year, which concentrates the impact of the cash burn on a smaller base of equity holders.

In context

Current performance sits near the bottom of the company’s recent historical range. Today’s free-cash-flow margin of −22.3% is higher than 12% of the company’s own past quarterly readings, which have ranged from −60.2% to 6.1%. Similarly, today’s twelve-month revenue growth rate of −6.7% is higher than 21% of the company’s own past quarterly readings, which have ranged from −76.9% to 192.9%.

Guidance

The company has adjusted its outlook for earnings while maintaining its volume and expense targets. The company lowered its full year 2026 guidance for Diluted Earnings per Common Share to a range of $1.95 to $2.05. It kept its full year 2026 guidance for Private Education Loan Originations Growth for Private Education Loan at 12% to 14%. Additionally, the company kept its full year 2026 guidance for Non-interest Expenses at $750.0 million to $780.0 million.

What to watch

The next filing will show whether the negative operating cash flow continues to widen or begins to stabilize. It will also reveal if the decline in revenue growth moderates or accelerates relative to the current trajectory. Finally, the report will provide updated actuals for non-interest expenses to see if they remain within the guided range.