Financial services company Voya Financial (NYSE: VOYA) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 4% year on year to $1.94 billion. Its non-GAAP profit of $2.45 per share was 8.9% above analysts’ consensus estimates.
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Voya Financial (VOYA) Q3 CY2025 Highlights:
- Revenue: $1.94 billion vs analyst estimates of $1.72 billion (4% year-on-year growth, 13% beat)
- Adjusted EPS: $2.45 vs analyst estimates of $2.25 (8.9% beat)
- Adjusted Operating Income: $290 million vs analyst estimates of $316 million (14.9% margin, 8.2% miss)
- Operating Margin: 15.8%, up from 6.2% in the same quarter last year
- Market Capitalization: $7.00 billion
StockStory’s Take
Voya Financial’s third quarter results were met with a negative market reaction, despite revenue and non-GAAP earnings per share coming in above Wall Street expectations. Management attributed the quarter’s performance to strong Retirement segment results, robust net flows in Investment Management, and disciplined execution in Employee Benefits. CEO Heather Lavallee highlighted the impact of organic net flows and the integration of OneAmerica, noting, “Our results build on the success we’ve seen year-to-date, with adjusted operating EPS in the quarter up nearly 30%.” However, management acknowledged higher corporate expenses tied to performance-related compensation as a headwind.
Looking forward, the company’s guidance is shaped by increased investment in scaling its Wealth Management business, continued focus on integrating recent acquisitions, and ongoing margin discipline in Employee Benefits. CFO Michael Katz outlined plans to deploy up to $75 million of excess capital in 2026 to expand digital and adviser capabilities in Wealth Management, expecting initial revenue growth to materialize in subsequent years. Management emphasized, “We believe now is the time to scale this business and accelerate growth,” while also cautioning that additional investments could pressure margins in the near term.
Key Insights from Management’s Remarks
Management attributed the quarter’s results to organic growth in Retirement, strong flows in Investment Management, and ongoing investments in Wealth Management and technology upgrades.
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Retirement segment momentum: The Retirement business delivered earnings and revenue growth, driven by $30 billion in organic defined contribution net flows year-to-date and the ongoing integration of OneAmerica. Management reported that the integration is ahead of plan, contributing to higher-than-expected revenue and earnings and expanding the customer base for cross-selling opportunities.
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Investment Management positive flows: Investment Management recorded nearly $4 billion in net flows for the quarter, with notable strength in institutional mandates, especially among insurance clients. CEO Matt Toms highlighted 74% of public assets outperforming benchmarks over five years, supporting organic growth well above the company’s long-term target.
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Wealth Management expansion: Voya launched its WealthPath platform to support nearly 500 advisers and plans to add over 100 more by year-end. The company is investing in technology and adviser recruitment to address demand for financial planning and advice, aiming to scale this segment further in 2026 and beyond.
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Employee Benefits pricing discipline: In the Employee Benefits segment, management continued to prioritize margin improvement over premium growth in Stop Loss, with favorable group life claims and prudent reserve management supporting results. The rollout of an integrated claims system for leave management is expected to strengthen bundled offerings.
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Capital deployment strategy: Voya resumed share repurchases and raised its dividend, reflecting ongoing excess capital generation. Management stated that investments in Wealth Management and technology upgrades would remain a top priority, balanced with measured capital returns and selective M&A, particularly in Retirement roll-ups.
Drivers of Future Performance
Management’s outlook centers on scaling Wealth Management, integrating recent acquisitions, and maintaining margin discipline amid ongoing investments and industry headwinds.
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Increased Wealth Management investment: Management plans to deploy up to $75 million of excess capital in 2026 to expand adviser capacity and technology, including digital self-service tools. While these investments are expected to compress margins next year by around 200 basis points, they are intended to drive long-term revenue growth as adviser hiring and platform enhancements mature.
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Integration and retention from acquisitions: The OneAmerica integration remains a near-term focus, with management expecting anticipated lapses to normalize by mid-2026. Successful integration is seen as critical for maintaining high retention rates in Retirement and expanding the base for Wealth Management cross-sell.
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Margin management in Employee Benefits: In Employee Benefits, the company continues to prioritize margin over premium growth, actively adjusting pricing and risk selection to respond to evolving healthcare cost trends and claims experience, particularly in Stop Loss. Management signaled that fourth-quarter claims will be closely monitored to inform future pricing and reserve strategies.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) execution of Wealth Management adviser hiring and technology rollouts, (2) successful integration milestones and retention rates related to the OneAmerica acquisition, and (3) margin dynamics in Employee Benefits, particularly as claims data for Stop Loss is updated. Developments in the regulatory environment and the effectiveness of bundled product offerings will also be key markers for progress.
Voya Financial currently trades at $71.13, down from $73.62 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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