Earnings call transcript: Voya Financial Q3 2025 beats estimates, stock dips

Voya Financial Inc. reported robust earnings for the third quarter of 2025, with earnings per share (EPS) of $2.45 surpassing the forecasted $2.23, marking a 9.87% positive surprise. Revenue also exceeded expectations, reaching $2.13 billion against a forecast of $1.99 billion. Despite these strong results, the company's stock experienced a slight decline, falling 1.49% to $73.61 in premarket trading, reflecting a cautious investor sentiment.

Key Takeaways

• Voya Financial reported a 9.87% EPS surprise, with actual EPS at $2.45.
• Revenue topped expectations, coming in at $2.13 billion.
• Stock price dipped 1.49% in premarket trading despite strong financial performance.
• Strategic investments in technology and new products are underway.
• The company is on track to exceed its capital generation target for the year.

Company Performance

Voya Financial demonstrated strong performance in Q3 2025, with adjusted operating EPS increasing nearly 30% year-over-year. The company generated over $200 million in excess capital during the quarter and approximately $600 million year-to-date. Its return on equity improved to 18%, reflecting an efficient capital management strategy.

Financial Highlights

• Revenue: $2.13 billion, up from the forecast of $1.99 billion.
• Earnings per share: $2.45, exceeding the expected $2.23.
• Return on equity improved to 18%.

Earnings vs. Forecast

Voya Financial's Q3 2025 results significantly outperformed forecasts, with a 9.87% EPS surprise and a 7.04% revenue surprise. This performance highlights the company's effective execution of strategic initiatives and capital management.

Market Reaction

Despite the earnings beat, Voya Financial's stock fell 1.49% to $73.61 in premarket trading. This decline suggests investor caution, possibly due to anticipated margin impacts from ongoing investments. The stock remains within its 52-week range, with a high of $84.3 and a low of $52.43.

Outlook & Guidance

Looking ahead, Voya Financial is targeting a $75 million investment in wealth management for 2026 and expects quarterly capital returns of $100-$150 million. The company continues to explore retirement market opportunities and focus on organic growth and strategic investments.

Executive Commentary

"We are making key investments that strengthen our core offerings and create value across the Voya enterprise," said Heather Lavallee, CEO. CFO Mike Katz added, "We see a clear strategic advantage to expand our capabilities." Jay Katuson, CEO of Workplace Solutions, noted, "The demand right now for financial planning advice in the workplace is outpacing supply."

Risks and Challenges

• Potential margin impacts from strategic investments.
• Market volatility affecting investor sentiment.
• Competition in the wealth management and retirement markets.
• Economic uncertainties impacting capital generation targets.
• Regulatory changes in the financial services sector.

Q&A

During the earnings call, analysts inquired about Voya's wealth management strategy and advisor recruitment, stop loss claims experience, and the Blue Owl partnership. The company provided clarity on these topics, highlighting its focus on strategic growth and integration opportunities.

Full transcript - Voya Financial Inc (VOYA) Q3 2025:

Conference Operator: Good morning. Welcome to Voya Financial's third quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star two. Participants are limited to one question and one follow-up. Please note this event is being recorded. I would now like to turn the call over to Mei Ni Chu, Head of Investor Relations. Please go ahead.

Mei Ni Chu, Head of Investor Relations, Voya Financial: Good morning, and thank you for joining us this morning for Voya Financial's third quarter 2025 earnings conference call. As a reminder, materials for today's call are available on our website at investors.voya.com. We will begin with prepared remarks by Heather Lavallee, our Chief Executive Officer, and Mike Katz, our Chief Financial Officer. Following their remarks, we will take your questions. I am also joined on this call by the heads of our businesses, specifically Jay Katuson, CEO of Workplace Solutions, and Matt Toms, CEO of Investment Management. Turning to our earnings presentation materials that are available on our website. On slide two, some of the comments during today's discussion may contain forward-looking statements and refer to certain non-GAAP financial measures within the meaning of federal securities law. GAAP reconciliations are available in our press release and financial supplement found on our investor relations website.

I will turn the call over to Heather.

Heather Lavallee, Chief Executive Officer, Voya Financial: Thank you, Mei Ni. Good morning, and thank you for joining us today. Let's turn to slide four. We're pleased to report strong third quarter results that reflect meaningful progress in delivering on our investor value proposition. Our results build on the success we've seen year to date, with adjusted operating EPS in the quarter up nearly 30%. This performance is a clear reflection of our focus on profitable growth across our diverse and complementary businesses. Equally important, we generated robust free cash flow in the quarter and remain on track to exceed our $700 million full year target. We've continued to take a balanced approach to capital deployment across the enterprise, and Mike will share more on that in a few moments.

We'll also talk about how we're deploying capital in support of our enterprise strategy, growing our core markets, expanding into adjacencies such as wealth management, and strengthening the connections across our businesses. While we continue to invest in our businesses, we remain committed to returning excess capital to shareholders. As planned, we resumed our share repurchases during the quarter. Turning to page five, let's look at how we executed on our near-term priorities this quarter. In retirement, we delivered strong earnings and revenue growth, with full year results trending above expectations. This performance was driven by $30 billion in year-to-date organic defined contribution net flows, putting us on track for our strongest DC net flow year since 2020 and further strengthening our market-leading retirement franchise. Investment management continues to show strong commercial momentum.

The business delivered strong earnings in the third quarter with positive net flows and continued organic growth, putting us on track to exceed our organic long-term growth target of 2%. Voya's performance remains a key differentiator, with 74% of our public assets outperforming peers and benchmarks over five years and 84% over 10 years. Later this year, we'll launch our first actively managed ETFs, further expanding our product lineup and building on our multi-sector fixed income expertise. This launch supports modernizing our intermediary platform with high-growth vehicles and expanding distribution, creating new opportunities that connect wealth management and investment management. Within employee benefits, we continue to execute our disciplined pricing strategy and stop loss, with a focus on margin over growth as we head into 2026. In October, we launched our integrated claims system to support leave management.

A key milestone as we prepare for a full rollout of our end-to-end solution on January 1. This will strengthen our bundled offering across group and voluntary, allowing us to deliver greater flexibility and value to our clients. Taken together, these results reflect strong execution across the enterprise and position us to carry meaningful momentum into 2026. Turning to slide six, I'd like to spend a moment discussing our strategic approach to growing wealth management. Where we're making key investments that strengthen our core offerings and create value across the Voya enterprise. Today's customers are looking for support with a wide range of financial decisions, and employers increasingly see financial guidance as a way to strengthen employees' financial readiness. Voya is uniquely positioned to meet those needs, building on an already solid foundation with solutions that address the growing demand for advice and planning.

This is already a significant business for us, with 20% year-over-year sales growth in 2025, and total client assets reaching approximately $35 billion through the third quarter. We believe now is the time to scale this business and accelerate growth. For example, our field and phone-based advisor network includes nearly 500 advisors, and we're on track to add more than 100 by year-end at our new Boston wealth management hub. We launched WealthPath, our integrated technology platform that will enable advisors to deliver comprehensive guidance and solutions at scale. We're investing in enhanced digital self-service capabilities, which will give clients more flexibility and control. As we expand our advisor base, we will continue to partner with independent advisors to complement our in-house distribution team.

In summary, we're well positioned to serve our nearly 20 million workplace customers both to and through retirement in a fast-growing market that plays to our enterprise strengths. Our performance and momentum this quarter and throughout the year reinforce our confidence in delivering on our full year targets and advancing our long-term strategy. With that, I'll turn it over to Mike to walk through the financials in more detail. Mike.

Mike Katz, Chief Financial Officer, Voya Financial: Thank you, Heather. We delivered another quarter of strong results, building on our successes throughout this year. We generated adjusted operating earnings of $2.45 per share, a nearly 30% increase year-over-year. This was driven by earnings growth across all business segments and highlights the continued progress we are making on our near-term strategic priorities. Earnings growth also drove excess capital generation of over $200 million in the quarter. Items reducing net income were primarily non-cash and largely related to business exited. Turning to retirement. We generated $261 million in adjusted operating earnings. This is a 24% increase year-over-year and a 20% increase on a trailing 12-month basis. Notably, we are ahead of the expected revenue and earnings contribution from OneAmerica. Margins remain above our long-term targets given continued commercial momentum driving higher fee income. Strong spread income supported by active management of our general account.

Prudent management of our spend. Turning to net flows. In addition to the $60 billion of assets acquired from OneAmerica, we have generated approximately $30 billion of organic defined contribution net inflows year-to-date. Third quarter outflows primarily reflected one large record-keeping plan, which we signaled last quarter. Full service outflows were impacted by the anticipated lapses from OneAmerica and the effect of strong equity markets. Importantly, surrender rates were in line with our expectations and are consistent with prior year. Looking ahead to 2026, we expect margins to return to the midpoint of our 35%-39% target range. This is intentional as we increase our strategic investments in wealth management, which we expect will power long-term profitable growth. As Heather mentioned, our targeted investments in wealth management have supported a 20% increase in sales year-over-year.

Investments next year will help further scale the business by adding talented advisors, expanding our product line, and enhancing our technology capabilities. Turning to investment management. We continue to deliver strong investment performance and drive robust flows across an increasingly diversified platform. We generated $62 million in adjusted operating earnings in the quarter. This is a 13% increase year-over-year and a 15% increase on a trailing 12-month basis. Organic growth at attractive margins and disciplined expense management drove the result. We generated nearly $4 billion in net flows, bringing year-to-date net flows to over $13 billion. This represents organic growth of over 4%, well above our long-term target of 2%. Our successes are broad-based, with positive retail and institutional flows both in the U.S. and internationally. Within institutional, several large insurance mandates drove positive flows in the quarter.

We now serve over 80 insurance clients and manage approximately $100 billion in assets in the insurance channel. Our capabilities in core fixed income, multi-sector, and investment-grade credit remain in high demand. Within retail, we generated $300 million of positive flows, resulting in year-to-date net inflows of over $3 billion. Looking ahead, we remain laser-focused on delivering long-term value for our clients through excellent investment performance. Turning to employee benefits, we generated $47 million in adjusted operating earnings in the quarter. This was primarily driven by favorable group life claims and prudent management of spend. Stop loss, a reinsurance recoverable, drove the favorable result as we maintain reserve levels across all cohorts. As a reminder, the fourth quarter will bring significant credibility to our claims experience. We expect the credibility of our January 2025 cohort to double in fourth quarter from approximately one-third complete to two-thirds complete.

That experience will better inform ultimate loss ratios. In addition to our prudent approach to setting reserves, we are actively pricing and underwriting January 2026 business. Our strategy for that business is unchanged. We are prioritizing margin improvement over enforced premium growth. In group life, experience was favorable, driven by better-than-expected frequency of claims. In voluntary, paid claims experience was as expected. The loss ratio includes IBNR in anticipation of higher seasonal claims in the fourth quarter, as planned. Finally, we are on plan and ready to deliver our end-to-end leave management capability on January 1. Looking ahead, we will continue to achieve margin improvement while delivering strong value to our customers. Turning to slide 12. Third quarter marked another quarter of consistent cash flow generation, where we generated over $200 million of excess capital, and our return on equity improved to 18%.

Year-to-date capital generation is now approximately $600 million, and we are well positioned to exceed our $700 million goal. We returned approximately $150 million of capital in the third quarter across share repurchases and dividends. This includes $100 million of share repurchases, and we expect to repurchase another $100 million in the fourth quarter. We ended the third quarter with a healthy balance sheet and approximately $350 million of excess capital. Notably, the fourth quarter will also include higher dividends as we raise dividends per share by over 4%. This builds on our track record of growing our dividend each year as we remain confident in the sustainability of our excess capital generation. Turning to slide 13. Year-to-date, our approach to capital allocation has been well balanced between investments in the business, returning capital to shareholders, and building up our excess capital position.

Our healthy balance sheet positions us well for capital deployment in 2026, where we will continue to prioritize as follows. First, we will continue investing in our business in order to drive long-term profitable growth. Wealth management stands out as another area where we see a clear strategic advantage to expand our capabilities. Second, we will be opportunistic with strategic M&A, such as retirement roll-ups. The bar is higher given how attractive share repurchases are at our current valuation. Finally, we are committed to measured and consistent capital return. We expect a return between $100 million and $150 million in quarterly dividends and share repurchases throughout 2026, subject to market conditions. Importantly, use of capital will be disciplined and evaluated relative to our weighted average cost of capital. Opportunities with longer break-even or more execution risk will be assessed with a higher bar.

Our 2025 results established a disciplined framework for how we deploy capital. We'll carry that same approach into 2026, focused on driving long-term value for our stakeholders. I'll now turn it back to Heather before taking your questions.

Heather Lavallee, Chief Executive Officer, Voya Financial: Thanks, Mike. Turning to slide 14. This quarter, we continue to make progress, delivering solid results across all of our business segments. Our near-term priorities remain consistent, driving strong profitable growth in retirement and investment management. Successfully integrating OneAmerica to drive higher earnings, and continuing to improve margins and employee benefits. Looking ahead, we have commercial momentum, financial strength, and strategic focus to drive long-term profitable growth. Thank you to the Voya team for your dedication and hard work in supporting our strategy and delivering for our customers. With that, I'll turn it over to the operator so we can take your questions.

Conference Operator: Thank you. We will now be conducting a question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star two. As a reminder, participants are limited to one question and one follow-up question. Our first question comes from Elyse Greenspan with Wells Fargo. Please proceed.

Elyse Greenspan, Analyst, Wells Fargo: Hi, thanks. Good morning. My first question, I was hoping just to get some color on the size of the wealth management investment that you're pegging for 2026.

Mike Katz, Chief Financial Officer, Voya Financial: Hi, Elise. It's Mike. As we look into next year, what we're expecting to use is up to $75 million of our excess capital on wealth management. I would think roughly two-thirds of that from a GAAP perspective. We are making some investments in technology, so we'll be capitalizing some of those investments, and those will amortize in over time. I would expect this to be a little more back half-weighted because a large part of those investments is in adding advisors, who we expect over time to drive additional revenue. What's important about that is that it really shortens up the break-even of these investments. We really like the return profile of wealth management, and not only from a return perspective, but also what it does for our customers. Finally, what I'd say, Elise, is we do this from a position of strength.

We're ahead of plan this year. We've been disciplined with our spend, and this really gives us an opportunity to lean into an area of strategic advantage for Voya.

Heather Lavallee, Chief Executive Officer, Voya Financial: Elise and Heather, maybe two other points I would add to it is to be very specific. Our wealth management strategy is organic. We're not looking to do any type of roll-ups in the wealth management space, just given the high cost of inorganic options. We think, as Mike mentioned, we've got a really clear path to be able to execute against that strategy.

Elyse Greenspan, Analyst, Wells Fargo: Thanks. My second question is just on stop loss. Going in right to, I guess, 2026, would you expect, just given pricing, et cetera, would you expect that cohort to be back at target margins?

Mike Katz, Chief Financial Officer, Voya Financial: Elise, let me just step back on stop loss, and I'll answer your question around just how we see 2026. First, I'll mention that the reserve levels are firming up for the 2024 cohorts. That's especially true for January 2024, which we view as very close to complete. Now, for the January 2025 cohort, we are now beginning to leverage claims experience to help inform reserve levels. This is different than the first and second quarter, when we were really fully relying on the pricing, the risk selection to inform that 87% pick. With respect to what we're seeing in the claims experience, very consistent themes to last year. With respect to higher frequency related to cancer and younger ages, we continue to see that. Higher severity with cell and gene therapy drugs. We continue to see those elements as key drivers of claims.

Now, I would note, and this affects kind of your question, that we are actively leveraging the experience this year to inform underwriting in 2026. It is still very early in the claim cycle. I mentioned that in my remarks. Claims experience is consistent with our reserve levels. Again, the fourth quarter is really important as our credibility doubles heading into next year. Like the industry is seeing, we are continuing to see healthcare costs change at a rapid pace. We also give you sensitivities to current reserve levels for the January 2025 cohort. A 1% change in loss ratio is approximately $12 million. Elise, as we get deeper into the year, fourth quarter, we will have a better sense of where we think things are for January 2026.

Importantly, while the healthcare backdrop is not different this year, perhaps even more challenged, what is different is the actions we have taken on pricing, the actions we have taken on risk selection, and how we are reserving for this product line throughout 2025. You should expect the same in the foreseeable future.

Conference Operator: Our next question is from Joel Hurwitz with D.A. Davidson & Co. Please proceed.

Hey, good morning. Wanted to follow up on stop loss there, Mike. Any way you could quantify how much reserves are left on the 2024 block? In terms of the January 2025 block, any way you could actually quantify the incurred claims experience through the first nine months relative to where the January 2024 block was running at the same period of time?

Mike Katz, Chief Financial Officer, Voya Financial: Hey, Joel. Yeah. Just like I was saying, we're pretty close to complete in January 2024. Possible, obviously, that claims can be reported late in the cycle. We will be patient around that. With respect to just how we're seeing experience in 2025 relative to 2024, we are seeing modestly better claims experience in January 2025 versus where we were in January 2024 through October. I would just be incredibly clear that we really need to see the fourth quarter. We've only got about a third of the experience coming in at this point. While we are encouraged by that, we really want to see the next third of that experience come in. Frankly, we will want to see the first quarter as well to get a sense of where this is ultimately going to land.

All right. Gotcha. That's helpful. Then back to wealth management, appreciate the color on the expected investment spend and the 2026 retirement margin outlook. I guess any more color you can provide on the expected revenue contributions from that business and how you're projecting that to emerge over time?

Heather Lavallee, Chief Executive Officer, Voya Financial: Yeah, Joel, it's Heather. Let me start, and then I'll toss it to Jay. We think that 2026 is going to be a bit more of a build as we're hiring the advisors and investing in technology. I would expect, think about the revenue emerging, growing in 2027 and beyond. Again, we're going to come back and get more specifics as we look into 2026. Let me turn it to Jay to talk a little bit more, give you a little more color about exactly what we're doing in wealth management.

Jay Katuson, CEO of Workplace Solutions, Voya Financial: It's great, Joel. Thanks for the question. Just as a step back, if you think about our wealth management business today, it's focused on the workplace, very much aligned to our workplace strategy, where we're serving close to 20 million customers today. We are scaling from a strong foundation, as you heard in some of the earlier comments. We currently have 500 advisors. Most of those advisors, Joel, are focused on the strong tax-exempt business we have, but we see an additional opportunity to serve our growing large corporate customers. The demand right now that we're seeing with financial planning advice in the workplace is outpacing supply. We see that our approach is very much complementary to the advice that our intermediaries are providing today. There is a gap in between the supply and the demand. The focus for us.

Remains on hiring additional field and phone-based advisors. We're currently enhancing our technology capabilities specifically to support our advisor platform. We are working on a customer digital self-service platform and the needs to support our growing segment of customers that are looking to self-direct. We're partnering with Matt's investment management business to deliver a comprehensive suite of retail products. Over the last nine months, you've seen I've recruited a really highly experienced leadership team. Right now, they're modernizing the operating environment to ensure that we're built for scale. Heather mentioned the wealth management hub in Boston. We're finding a lot of talent-rich wealth management resources in that area. We're recruiting advisors, specifically given our leading position as a workplace provider of retirement and employee benefit solutions. Heather mentioned in the opening remarks, we're already seeing 20% growth year over year in sales.

Our retail AUM numbers at $35 billion are up from $31 billion last year. We're going to remain focused on accelerating growth in this wealth management business. There is tight alignment with Amy's retirement business, Andrew's employee benefits business, and working with Matt and Voya Investment Management. More to come on where we're seeing growth in terms of specific numbers for next year, but really happy with the development so far.

Got it. Thank you.

Conference Operator: Our next question is from Ryan Kruger with KBW. Please proceed.

Hey, thanks. Good morning. Can you give some more color on the higher corporate expenses in both the third quarter and the fourth quarter? I know you cited performance-related compensation for the fourth quarter, but I was a bit surprised by the magnitude of that for the size of your company. I guess just related to that, is the prior run rate corporate loss that you had talked about still a good expectation beyond this year? Is this really more of a one-time impact?

Mike Katz, Chief Financial Officer, Voya Financial: Hey, Ryan, it's Mike. Maybe first, I would say that we are having a strong year. You can see that in the results in the first, second, and third quarter. Frankly, that is the key driver when you look at third to fourth quarter. We are expecting that incentive compensation accruals will be higher in the fourth quarter due to that strong performance. The only other pieces I would call out is that in the second half of this year, you're seeing a little bit more interest expense related to the PCAPs. I think, Ryan, you're pretty familiar with preferred stock dividends that go up and down each quarter. Beyond that, nothing different to call out from corporate. Obviously, next year, we'll reset targets, and we'll get back to a normal run rate on corporate, and we'll see how the performance plays out.

Okay. Thanks. Then on inorganic, are you mostly interested in things that would be similar in nature to the OneAmerica deal? Or I guess your interest is broader and would span across all of your businesses potentially?

Heather Lavallee, Chief Executive Officer, Voya Financial: Yeah. Ryan and Heather, thanks. I'll take your question. For inorganic, we're really targeting additional roll-up retirement opportunities. We think that OneAmerica has turned out very, very well, highly accretive for us. As you heard us talk about in our comments, exceeding the revenue and earnings expectations for the year. We are most attracted to additional retirement roll-ups that we can integrate. It also links very nicely to the wealth management opportunity that Jay talked about. As we continue to grow our participant base in AUM and retirement, it creates a larger base of customers from which we can expand wealth management. We are also looking for retirement books that potentially have a general account or more full-service profile that also allow us to leverage the complementary nature of our business.

Where if we can grow with general account assets, it allows us to leverage Matt's investment management capabilities. It just really takes advantage of the complementary nature of our businesses.

Conference Operator: Our next question is from Tom Gallagher with Evercore ISI. Please proceed.

Morning. A couple of questions on the wealth business. For the additional spend in 2026, is the hiring there—I heard that comment about hiring advisors—is that advisors to support your DC plans, more like customer service orientation? Or are we talking about hiring advisors to capture rollovers? Is this a servicing question, or is it capturing of rollovers? How should we think about that? That's my first question.

Jay Katuson, CEO of Workplace Solutions, Voya Financial: Sure, Tom. Thanks for the question. I think the way you should think about this is both our retirement and our employee benefits business, the plan sponsors and employers today, they see a gap in terms of the financial advice that their employees and participants are getting to be able to save for retirement, whether it be their financial or health-related needs. There is a gap right now. We have been in active conversations with those plan sponsors and those employers. You should think about this in two ways. One, we are going to bring field-based advisors to the workplace. We are going to provide financial advice, seminars. Those seminars are going to produce interest from our active participants and employees. From there, our segmentation strategy continues.

There's going to be a portion of our customer base who doesn't have a sophisticated financial plan that's going to result in a need to talk to a face-to-face advisor. Our sales desk is going to be there to support them, credentialed, licensed, team-based advisors. We're also building a digital self-service engine where there's a segment of our customer base that wants to self-direct, self-direct brokerage, move cash. You should think about this in terms of proactively covering our customer base and reactively covering the calls that are going to be generated from our continued advancement in our product suite and our distribution breadth. Again, very complementary to the intermediary relationships that are in market today providing that support. There's just a big gap. More to come as we build, but you should think about this very much in heavy recruiting.

We're not going out and buying teams of advisors. We're having and finding a lot of success organically recruiting advisors in the field. We're finding a tremendous amount of success in Boston in recruiting a sales desk.

Heather Lavallee, Chief Executive Officer, Voya Financial: Yeah. Tom, maybe just to explicitly answer your questions, we do see rollovers as an important opportunity for this strategy. We've talked about today within our tax-exempt business, where we have close to 500 advisors. We have a very successful rollover recapture rate in that business of between 15-20%. Really, this build-out is to be able to serve the broader clients across both retirement and employee benefits. We do see improvements in rollovers as a key metric.

Thanks for that. Just to follow up. The shock lapses from OneAmerica, I saw the guide for Q4. How do you think about that heading into 2026? Are we going to see some continued spillover, maybe somewhat higher surrender activity, or how do you see that trending?

Jay Katuson, CEO of Workplace Solutions, Voya Financial: Yeah, sure. Again, appreciate the question. OneAmerica right now, it's delivering a higher revenue and earnings, and it's contributing overall to our cash generation. The integration you think about for OneAmerica will be complete in the first half of 2026. To answer your direct question, OneAmerica today, our flows reflect anticipated lapses from the OneAmerica book, as well as we're seeing strong equity markets. That tends to lead to an increase in account values, which then leads to elevated surrenders. Importantly, if you think about the total DC book, full service and overall retention really sits into the 90s, high 90s for full service and in the 90s for the overall book. The activity remains constructive for the remainder of the year. Just getting back to OneAmerica, really reflecting in line what our anticipated lapses would be through the integration.

Conference Operator: Our next question is from Sinéad Kamath with Jefferies. Please proceed.

Great. Thanks. I wanted to start on the capital return and the $100-$150 million guide per quarter for 2026. Should we view that as sort of 2026 standalone, and then we kind of bump up in 2027 as you do not have the wealth management investment anymore, and then you do not have the OneAmerica $160 million payment? Or are you signaling that this is more of a run rate that we should expect going forward?

Mike Katz, Chief Financial Officer, Voya Financial: Hey, Sinéad, it's Mike. No, we're not trying to signal that that's a run rate beyond 2026. This is really how we're thinking about 2026. And it's considering a handful of things. We come out of the third quarter with $350 million of excess capital. As a reminder, we do have an earn-out on OneAmerica. And we enter the fourth quarter well-positioned to handle that in the middle of next year. As Heather talked about. We have an opportunity now where we are with the integration with OneAmerica to kind of lift our heads up and say, "Hey, are there other roll-ups out there that meet our return thresholds?" But we have flexibility. We're guiding to consistent and measured share repurchases this year. We think that's the right outcome.

When we look at 2025, we see that as a great example of when we're using excess capital in a balanced way, it enhances shareholder returns. We see the same opportunity in 2026. We just talked about wealth management. You should expect us to be very disciplined in how we approach that. Investments must meet our return thresholds. And frankly, we have a higher bar based on where we're trading right now.

Heather Lavallee, Chief Executive Officer, Voya Financial: Yeah. Sinéad, maybe two points I would add to Mike's comments is we think we've got a very clear enterprise growth strategy that's going to allow us to drive profitable long-term growth across our businesses in the coming years, as well as ongoing growth and cash generation, which gives us flexibility in terms of how we think about deploying it. We do believe it's important to be able to provide consistency to shareholders in terms of what to expect for 2026.

Okay. Got it. My second question, I guess, is maybe more of an observation than a question. When I hear you talk about a wealth management strategy that's built around seminars at companies, it takes me back to one of your competitors a couple of years ago that talked about this from a financial wellness perspective and spent like half an investor day on it. They do not really talk about it anymore. It did not really turn into much of anything. I guess it is important that we get metrics at some point, and I am sure you will give them to us, but just wanted to highlight this, that kind of show the progress that you are making against this, especially if the spend is $75 million a year and potentially higher going forward. Just wanted to put that out there.

Yeah. Sinéad, thank you. We appreciate the feedback. That certainly is our intention, is we want to be able to provide clear progress on how we're measuring success. That's why we wanted to point to some of the revenue growth we're seeing year over year just in terms of the sales. We hear you loud and clear. I think maybe what's different for us is this is from an established base. When we talk about the $35 billion of assets under management today, it's contributing roughly 10% of our retirement revenues and growing. Again, hear you loud and clear, and you can certainly expect to see some proof points from us.

Okay. Thanks and good luck.

Conference Operator: Our next question is from Alex Scott with Barclays. Please proceed.

Heather Lavallee, Chief Executive Officer, Voya Financial: Hey. I wanted to follow up on some of the investments. I know you're talking about some of the wealth advisors you're bringing on, but I think you also mentioned that there's some investing in technology. I just wanted to understand. How we should think about the impact of those things on the operating margin in retirement business or elsewhere if it goes into other segments.

Yeah. Alex, I'll let Mike take the impact on operating margin, and Jay can talk a little more explicitly about the investments.

Jay Katuson, CEO of Workplace Solutions, Voya Financial: Yeah. Alex, we're given a sense right now, and I just would emphasize that we see this as an opportunity where we're doing that from a position of strength, given the results, not only just in retirement, but across the board at Voya. We did mention that we expect this to be approximately a 200 basis point implication on margins next year. However, we're right in the middle of our budget season, and we will be more precise with that as we get into next year. That is high-level thinking and very consistent with what I shared earlier in the Q&A with respect to how much we expect to deploy, both from a capital perspective but also from a GAAP perspective.

Got it. That's very helpful.

Sure, Alex. Maybe just as a follow-up on the strategic nature of where those investments are going. We've upgraded our advisor platform, our WealthPath, which we've rolled out in October. That's really to help our advisors, really help them from the perspective of account openings all the way through the financial planning tools that they're using. It's really helping to modernize that environment to connect to more customers and do it in a more automated basis. Secondly, reference the digital self-service. We've got a growing portion of our customer base that wants to self-direct. We're going to meet that growing need, particularly with where wealth transfer is going. There's a segment of our population, our customer base, that's going to inherit a tremendous amount of wealth over the next decade.

We want to be positioned to ensure that they can direct and have a financial planning environment that works for them. These tools are going to be helpful as we grow into that customer base as well, but very targeted.

Heather Lavallee, Chief Executive Officer, Voya Financial: Got it. Maybe if I could pivot over to employee benefits, could you talk about top-line implications from just the lead management rollout and maybe anything on Benefitfocus that I think just around open enrollment period would be interested if that's going to have any influence on top-line?

Jay Katuson, CEO of Workplace Solutions, Voya Financial: Sure. Maybe I'll start on leave for your first question. Appreciate the question. We're on plan right now to deliver the leave technology as well as a fit-for-purpose operating model supporting a January 2026 launch. What we're developing right now is a full-service leave product suite. It's going to help build a moat around our other employee benefits business. As you think about this today, this is a critically important capability in the market, and it's leading to a ton of growth. In last quarter 2023, over 50% of all of our RFPs that came in were requiring a leave management bundled solution. We're really encouraged with a commercial amendment. In fact, one of the key metrics that we look at is getting on the panels of our brokers.

We have been successful in getting on most of our broker panels, and it has led to sales that have already occurred for January 1, 2026. Today, if you think in terms of where we are in leave, happy with where the build is on the technology side, our operating model is in place, and we are getting commercial momentum in terms of our sales. Maybe on Benefitfocus, we like the strategic capability of Benefitfocus. I mean, it fits really well into the broader employee benefits business. Specifically, as we deliver on our capability roadmap, Andrew and team are driving efficiencies and are focusing on margin expansion while they do that. Two areas of growth you should think about for Benefitfocus. One is in ICRA. The health plan business side of Benefitfocus is going to benefit from some of the healthcare legislative environment that is changing, particularly around ICRA.

We've got a plan to go after that market. We're set up well. In 2026, we should be executing against that. We also see direct synergies with our benefits administration business. If you think about that tie to wealth management, we've got a growing customer demand for retail financial advice. This is going to be another area of synergy for our wealth management business. ICRA and wealth management on the top line with efficiencies that we've been building over the course of the last couple of years in Benefitfocus.

Conference Operator: Our next question is from Wes Carmichael with Autonomous Research. Please proceed.

Hey, good morning. Thank you. First question on investment management. Just looking at institutional, I think flows pretty strong in the quarter and maybe a little bit of elevation on the outflow side, but just hoping you could unpack what you saw in the quarter and maybe any help on the outlook for flows going forward would be helpful.

Jay Katuson, CEO of Workplace Solutions, Voya Financial: Yeah. Wes, this is Matt. Thanks for the question. Overarching, we like the breadth of flows we've seen across channels and products for the year. The year-to-date flows, as Mike referenced, $13.4 billion. Roughly 4% organic growth rate. Within institutional, $9.7 billion of that on the year. And that's driven by the insurance business, CLOs, public and private fixed income doing well, also private equity secondaries. We like the breadth within institutional. Year-to-date, $3.7 billion in retail. Again, incoming growth franchise and multi-asset in the U.S. We like the breadth. Within the quarter specifically, and more to your direct question, the $3.9 billion number in the third quarter, very happy with it. Another strong quarter. In institutional, the majority, that $3.6 billion, driven by a few large insurance wins.

It is a bit more concentrated in the quarter, but I think important to hear that within the construct of the broader year flows. You're right. It's a good call out. The higher level of activity in institutional you see in the supplement. Very happy with the $3.6 billion net. You've gotten more wins and you've had some more outflows. Some of those outflows are tied to natural maturities in our CLO business, bank loan mandates, as well as end-of-life in private funds. There is also some rotation in international equities out of one style into another. You do see that higher amount of in and out. Again, the net, very happy with the $3.6 billion on the quarter. Looking forward to the fourth quarter, we expect flows to be more muted than the strong third quarter after some strong realizations in the third quarter.

Longer term, we see no reason to pivot away from that 2% plus longer-term organic growth rate assumption. We like the commercial momentum we have in the business. I view it as a testament to the strong investment performance that we've called out, 74% outperformance for public strategies over five and a really strong 84% over ten. We're delivering for our clients, and growth is the outcome of that.

Conference Operator: Our next question is from Wilma Burgess with Raymond James. Please proceed.

Mike Katz, Chief Financial Officer, Voya Financial: Hey, good morning. Could you quantify Voya's floating rate exposure? I know that that's something that could impact earnings a little bit in Q4 with the rate cut. If you could just help us with that, thanks.

Jay Katuson, CEO of Workplace Solutions, Voya Financial: Hi, Wilma. It's Mike. So just when we think about floaters, a little less than $1.5 billion of floaters, that's embedded in the overall sensitivity that we share in the investor presentation. Maybe a modest impact we would expect from the effect of the short end coming down. When we do think about our sensitivities, I would call out that the net effect for Voya is smaller to a shock down in the yield curve as we have offsets in the investment management business related to fixed income asset levels. I'd also say this sensitivity went up a little bit this year. We talked about that in Q1 with the acquisition of OneAmerica. The team's doing a nice job of actively managing the general account.

I think that's helped us to kind of stabilize what is kind of the raw effect of what's happening with rates.

Mike Katz, Chief Financial Officer, Voya Financial: Okay. Thank you. Do you expect any additional reinsurance recoverables on stop loss to flow through over the coming quarters? Maybe just talk about the likelihood and timing of that. Thanks.

Jay Katuson, CEO of Workplace Solutions, Voya Financial: Hey, Wilma. It's Mike again. Yeah. This was a bit of an idiosyncratic quarter with respect to us calling that out. It's a natural part of the stop loss business. We've talked about the fact that from a deductible perspective, we usually kick in in the $200,000-$300,000 range. We'll cover our clients, and then we have excess loss reinsurance above $5 million. That's where we saw a kick-in from our reinsurer. It really was the only effect in the quarter. I wouldn't expect that if you're looking at necessarily forward-looking expectations on loss ratios. If there's something significant in a quarter, we're going to call it out. I wouldn't use that as anything that would be sustainable per se in the outlook for stop loss.

Conference Operator: Our next question is from Kenneth Lee with RBC Capital Markets. Please proceed.

Heather Lavallee, Chief Executive Officer, Voya Financial: Hey, good morning. Thanks for taking my question. Just one for me. Within the general account portfolio, wonder if you could just remind us again what's within the private credit allocations leave there. Thanks.

Jay Katuson, CEO of Workplace Solutions, Voya Financial: Again, yeah, it's Matt. Let me unpack that a little bit for you. Overall, the portfolio continues to be very high quality. We continue to include a slide in the deck. It's page 27, breaking down the quality of the portfolio. Importantly, 96% of the general account is investment grade. Private credit has 23% of that. Of course, it has a heavy bias towards investment grade as well. That's 94%. We provided a footnote on that page to give you some further detail there. NAIC 1s and 2s, 94% of the portfolio. Think about those as driving that 50-100 basis point yield advantage versus public over a long period of time with roughly double recoveries, driven by stronger covenants should there be any credit issues. Overall, I think the credit markets are performing quite well. As you can see, credit markets are near all-time tights.

The term private credit has gotten a lot of attention, as you referenced. That covers a broad array. Our portfolio is heavily focused on the investment grade lending area. This area is, of course, not new to the insurance industry, not new to us, and one that has generated very attractive yields with less downside risk over multiple decades. It is very different than some of the headline news you will see around bank lending, syndicated loans, or middle market lending. It is a different market segment. We feel very well positioned with how the portfolio is performing.

Heather Lavallee, Chief Executive Officer, Voya Financial: Great. That's all I had. Thank you very much.

Conference Operator: Our final question is from John Barnidge with Piper Sandler. Please proceed.

Good morning. Thank you for the opportunity. My first question, could you talk about the Edward Jones partnership that was mentioned earlier this year, success so far, and plans for ahead? Thank you.

Yeah, we'll have Jay take that. It continues to be one of the other important attributes of OneAmerica, which, as we've talked about, John, has been just a great integration and opportunity for us to generate value. Jay?

Jay Katuson, CEO of Workplace Solutions, Voya Financial: Great. Appreciate the question, John. If you think about that OneAmerica acquisition, as Heather said, it is not only producing strong earnings and revenue, but the distribution relationships that came along with that business. It really is a key value-creating lever for our team. Edward Jones is an example of that. Right now, we remain on track for the Edward Jones relationship as we head into 2026. Specifically, we are working with Edward Jones right now on the migration of the OneAmerica book of business. Our distribution agreement was executed earlier this year, and we are finalizing key technology connections in order to support the full integration. Our teams, from a distribution perspective, are actively engaging with each other on market opportunities. Edward Jones sent a press release out on the partnership a few weeks ago.

Their advisors are going to be able to offer our full suite of retirement plan tools and services to their clients starting in early fiscal year 2026. If you think about where we are, we're on plan with that. Again, one of the positives we see in these opportunities in retirement roll-ups is not just the earnings and revenue associated to the existing book, but the new distribution opportunities that we acquire as part of that relationship. This is a great example of that.

Thanks for the answers. My next question, can you talk about the Blue Owl partnership, plans for product launch, and if there are additional alternative asset managers with which you could partner? Thank you.

Conference Operator: Yeah, John, maybe just a quick frame before I toss it to both Jay and Matt. We think this Blue Owl partnership is just one of the many examples of where we can really unlock the synergistic opportunities that exist across our businesses, specifically when we think about retirement, wealth management, and investment management. Jay?

Jay Katuson, CEO of Workplace Solutions, Voya Financial: Sure. Again, thanks for the question, John. Maybe just to continue with what Heather was saying, Matt and I, we're going to be leveraging partnerships going forward as we think about our growth strategy. This Blue Owl partnership is going to be a key contributor to that growth. Specifically, our teams are trying to access private investments and innovative solutions to drive retirement outcomes. That is going to be in the DC space. That is the focus right now on the private investments and innovative solutions. Specifically, we're going to be in market with private credit, alternative credit, and non-traded REIT CITs by the end of this year. We're going to start with our AMA business. We're seeing a ton of interest right now from our RIA firms in different pockets. Specifically, many of them are waiting for where the DOL rulemaking is happening.

If you know, John, the two areas, the two gates we have to get through right now, one is on the DOL side on their rulemaking, and the second is the safe harbor protections that are going to help accelerate the adoption by plan sponsors as the fiduciary. I am going to turn it over to Matt to give a little bit more color on how his investment management business is partnering with Blue Owl. Right now, the partnership is on plan for end-of-year rollout. Yeah, John, thanks for the question. Just to build on that a bit, we continue within investment management to work on target date products built from our leading multi-asset team with long and strong track records that have been driving our model portfolio growth that we have seen over recent years.

We believe our capabilities pair very nicely with Blue Owl's capabilities and their broad array of complementary private strategies. Importantly, as we build these target date products, the focus is on risk-adjusted returns for our clients, as well as attractive returns net of fees. We build that product out in partnership with Blue Owl. Look for the second quarter of 2026 timeframe for those to come to market. Still looking for some clarity on the regulatory side. We do think this is an attractive path forward. Just to expand a bit, you mentioned other private components. We are working with Blue Owl. There will be other providers within this structure as well to round out the complete need. We are very excited about Voya and Blue Owl's capabilities. We will supplement that as needed, as we always do in multi-manager products with other partners.

Beyond the DC space, we're very excited about how this ties to our insurance business, where we bring our own capabilities, as well as those of partners like Blue Owl's to our broad institutional customer base. That is a way to think about the growth as well.

Conference Operator: Thank you. We have reached the end of our question and answer session. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

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