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Introduction & Market Context
Voya Financial Inc (NYSE:VOYA) presented its third quarter 2025 results on November 5, revealing strong performance across all business segments despite a cautious market reaction. The financial services company reported significant year-over-year earnings growth, driven by commercial momentum, favorable market conditions, and contributions from its OneAmerica acquisition.
Despite the strong financial results, Voya's stock dipped 1.49% to $73.61 in premarket trading, suggesting some investor concerns about ongoing investments and future margins. The stock has traded between $52.43 and $84.30 over the past 52 weeks.
Quarterly Performance Highlights
Voya reported adjusted operating earnings per share of $2.45 for Q3 2025, a 29% increase from $1.90 in the same period last year, exceeding analyst expectations of $2.23. Adjusted operating earnings rose to $239 million from $190 million in Q3 2024, while net income jumped 80% to $176 million from $98 million.
The company's financial results demonstrate strong performance across key metrics, with contributions from all business segments and effective expense management.
As shown in the following financial results summary:
Voya generated over $200 million in excess capital during the quarter, keeping the company on track to exceed its original guidance of $700 million for the year. Year-to-date excess capital generation has reached approximately $600 million, with a healthy free cash flow conversion rate of 90%.
The company's adjusted operating return on equity improved to 18% for the year-to-date period, reflecting efficient capital management and strong operational performance.
Segment Analysis
Retirement
The Retirement segment, which contributes approximately 66% of Voya's adjusted operating earnings, showed impressive growth with a 20% year-over-year increase in adjusted operating earnings to $261 million. This growth was driven by contributions from the OneAmerica acquisition, commercial momentum, and a supportive macro environment.
The following chart illustrates the segment's performance:
Defined Contribution net inflows reached $30 billion year-to-date, although the third quarter primarily reflected planned lapses from OneAmerica and a known large plan surrender in Recordkeeping. The company noted that OneAmerica continues to contribute revenue and earnings ahead of expectations.
Investment Management
Voya's Investment Management segment, representing about 17% of adjusted operating earnings, delivered a 13% year-over-year increase in adjusted operating earnings to $62 million. This growth was attributed to continued commercial momentum, favorable capital markets, and disciplined expense management.
The segment's performance is detailed in the following chart:
The segment reported $3.9 billion in net inflows for Q3 2025, contributing to year-to-date net inflows of over $13 billion and nearly $17 billion on a trailing twelve-month basis. Positive net inflows were seen across both Institutional and Retail channels, with year-to-date organic growth of 4.4%.
Investment performance has been strong, with a significant portion of assets under management outperforming benchmarks across various time periods:
Employee Benefits
The Employee Benefits segment showed significant improvement, with adjusted operating earnings more than doubling to $47 million in Q3 2025 from $23 million in Q3 2024. The improvement was largely due to better performance in the Stop Loss business.
The segment's financial results are illustrated below:
Voya maintained all reserve levels in Stop Loss, with January 2025 paid claims experience expected to be two-thirds complete in Q4 2025. The company noted that reinsurance recoverable provided favorability in the net loss ratio for Stop Loss in Q3 2025.
The following chart shows the Stop Loss loss ratios and actions taken to improve performance:
Strategic Initiatives and Capital Deployment
Voya is expanding its wealth management capabilities, targeting the growing opportunity in retirement readiness and advice for underserved customer segments. The company reported 20% year-over-year sales growth and approximately $35 billion in assets under advisement in this area.
Key investments include a planned 40% increase in overall advisor count, enhanced digital self-service capabilities, and expanded product offerings. During the earnings call, executives mentioned targeting a $75 million investment in wealth management for 2026.
The company maintains a balanced approach to capital deployment, as shown in the following chart:
Year-to-date capital allocation has been evenly distributed, with 36% directed to share repurchases and dividends, 36% to strategic investments, and 28% to excess capital. For 2026, Voya plans to continue this balanced approach while targeting $100-150 million per quarter in capital returns through share repurchases and dividends.
Forward-Looking Statements
Looking ahead to Q4 2025, Voya provided several modeling considerations, including expected Defined Contribution net outflows of $2-4 billion, net expenses in Employee Benefits between $245-255 million, and a Corporate operating loss between $90-100 million.
CEO Heather Lavallee emphasized the company's focus on making key investments to strengthen core offerings and create enterprise-wide value. CFO Mike Katz highlighted the strategic advantage of expanding capabilities, while Jay Katuson, CEO of Workplace Solutions, noted that demand for financial planning advice in the workplace is currently outpacing supply.
Voya's balance sheet remains strong, with an RBC ratio of 407% (above the target of 375%) and a financial leverage ratio of 26.7% (within the target range of 25-30%). This solid financial foundation positions the company well for continued investment in growth initiatives while maintaining consistent capital returns to shareholders.
Despite the positive outlook and strong performance, investors appear cautious about potential margin impacts from strategic investments and ongoing economic uncertainties, which may explain the slight decline in the stock price following the earnings announcement.
Full presentation:
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