10-Q: Voya Financial Q3 2025 Earnings Rise on OneAmerica Boost

Voya Financial reports a significant increase in Q3 2025 net income and total revenues, driven by the OneAmerica acquisition and favorable market impacts.

Summary

• Net income available to common shareholders increased by $78 million to $176 million for Q3 2025 compared to $98 million for Q3 2024.
• Total revenues for Q3 2025 rose by $172 million to $2,128 million from $1,956 million in Q3 2024.
• Net investment income increased by $77 million to $583 million in Q3 2025, driven by onboarded OneAmerica assets, favorable limited partnership valuations, and active portfolio management.
• Fee income grew by $76 million to $616 million in Q3 2025, attributed to the OneAmerica acquisition, higher average equity markets, and strong commercial momentum.
• Premiums decreased by $77 million to $719 million in Q3 2025, primarily due to actions to improve the Stop Loss business in Employee Benefits.
• Income related to consolidated investment entities increased by $106 million to $131 million in Q3 2025.
• Total benefits and expenses decreased by $19 million to $1,821 million in Q3 2025, despite an increase in operating expenses.
• Adjusted operating earnings before income taxes for Q3 2025 increased across all segments: Retirement ($261 million, up $50 million), Investment Management ($80 million, up $8 million), and Employee Benefits ($47 million, up $24 million).
• Total Assets Under Management and Advisement (AUM and AUA) grew by $199,005 million to $1,088,624 million as of September 30, 2025, from $889,619 million as of September 30, 2024.
• The acquisition of OneAmerica Financial's full-service retirement plan business was completed on January 2, 2025, for approximately $50 million in cash and contingent consideration of up to $160 million.

Sentiment

Score: 8

Explanation: The Q3 2025 results demonstrate strong operational performance, with a significant increase in net income and total revenues, largely propelled by a strategic acquisition and favorable market conditions. All key segments reported growth in adjusted operating earnings, reflecting effective integration and market momentum. The substantial growth in AUM and AUA, coupled with an improved financial leverage ratio and a robust RBC ratio, underscores the company's solid financial health and disciplined capital management. While YTD net income saw a decline, the recent quarter's momentum and strategic initiatives position the company for continued growth. The ongoing share repurchase program further signals management's confidence and commitment to shareholder value. The identified risks appear manageable within the context of the company's strong financial position and proactive risk management framework.

Positives

• Net income available to common shareholders increased by $78 million to $176 million for Q3 2025 compared to Q3 2024.
• Total revenues increased by $172 million to $2,128 million for Q3 2025, driven by higher net investment income, fee income, and income from consolidated investment entities.
• Net investment income increased by $77 million to $583 million in Q3 2025, attributed to onboarded OneAmerica assets, favorable market impacts to limited partnership valuations, and active portfolio management.
• Fee income rose by $76 million to $616 million in Q3 2025, due to the OneAmerica acquisition, higher average equity markets, and strong commercial momentum in Retirement and Investment Management.
• Income related to consolidated investment entities significantly increased by $106 million to $131 million in Q3 2025, primarily from market impacts to limited partnership valuations and a prior period deconsolidation.
• Total Assets Under Management and Advisement (AUM and AUA) grew by $199,005 million to $1,088,624 million as of September 30, 2025, compared to September 30, 2024.
• All three operating segments (Retirement, Investment Management, Employee Benefits) reported increased Adjusted operating earnings before income taxes for Q3 2025 compared to Q3 2024.
• Retirement segment's Adjusted operating earnings increased by $50 million to $261 million in Q3 2025, benefiting from the OneAmerica acquisition, favorable market impacts, and disciplined spend management.
• Investment Management segment's Adjusted operating earnings increased by $8 million to $80 million in Q3 2025, driven by higher investment capital returns, fee-based revenues, and disciplined spend management.
• Employee Benefits segment's Adjusted operating earnings increased by $24 million to $47 million in Q3 2025, due to favorable Stop Loss claim development, lower premium-driven expenses, and higher alternative investment income.
• The Financial Leverage Ratio, excluding AOCI, decreased from 30.3% at December 31, 2024, to 26.7% at September 30, 2025, indicating improved financial position.
• The estimated combined RBC ratio was 407% as of September 30, 2025, above the 375% RBC target, demonstrating strong capital adequacy.

Negatives

• Net income available to common shareholders for the nine months ended September 30, 2025, decreased by $56 million to $477 million compared to $533 million for the same period in 2024.
• Premiums decreased by $77 million to $719 million in Q3 2025, primarily due to actions to improve the Stop Loss business in Employee Benefits.
• Net gains (losses) for Q3 2025 were a loss of $21 million, compared to a loss of $14 million in Q3 2024, representing a further decline of $7 million.
• Net gains (losses) for the nine months ended September 30, 2025, changed by $121 million from a gain of $25 million in 2024 to a loss of $96 million in 2025, primarily due to unfavorable derivative valuations, mark-to-market adjustments, and higher credit allowances.
• Operating expenses increased by $54 million to $829 million in Q3 2025, partly due to higher incentive compensation expenses in Corporate and investments in Short-Term Disability and Leave Management in Employee Benefits.
• Corporate segment's Adjusted operating earnings before income taxes decreased by $21 million to a loss of $81 million in Q3 2025, mainly due to adjustments to incentive compensation.
• For the nine months ended September 30, 2025, operating expenses increased by $184 million to $2,510 million, partly due to higher severance costs and closing/integration costs for the OneAmerica transaction.
• Net cash provided by operating activities decreased significantly to $731 million for the nine months ended September 30, 2025, from $1,266 million in the prior year.
• Net cash used in investing activities was $997 million for the nine months ended September 30, 2025, compared to net cash provided of $504 million in the prior year.
• The total European exposure had an amortized cost of $2.6 billion and a fair value of $2.5 billion as of September 30, 2025, indicating an unrealized loss.

Risks

• Global market and geopolitical risks, including general economic conditions, impacts of a U.S. government shutdown, interest rates, inflation, and tariffs imposed or threatened by the U.S. or foreign governments.
• Liquidity and credit risks, including financial strength or credit ratings downgrades, requirements to post collateral, and availability of funds through dividends from subsidiaries or lending programs.
• Strategic and business risks, including the ability to maintain market share, achieve desired results from acquisitions and dispositions, or otherwise manage third-party relationships.
• Investment risks, including the ability to achieve desired returns and liquidate certain assets.
• Operational risks, including cybersecurity and privacy failures and dependence on third parties.
• Tax, regulatory, and legal risks, including limits on the ability to use deferred tax assets, changes in law, regulation or accounting standards, and the ability to comply with regulations.
• Potential adverse outcomes in certain litigation and regulatory matters, or liabilities associated with other loss contingencies, could have a material adverse effect upon results of operations or cash flows.
• Approximately $97 million of previously accrued carried interest would be subject to full or partial reversal in future periods if cumulative fund performance hurdles are not maintained throughout the remaining life of the affected funds.
• A downgrade or a potential downgrade in financial strength or credit ratings may result in a loss of business and adversely affect results of operations and financial condition.
• The consolidation/deconsolidation process of investment entities could have a material impact on Total shareholders' equity.
• The company is a defendant in a putative class action, Ravarino, et al. v. Voya Financial, Inc., et al., alleging breach of fiduciary duties and self-dealing in the administration of the Voya 401(k) Savings Plan, with claims for disgorgement of unjust profits and costs. The estimated aggregate range of reasonably possible losses, in excess of any amounts accrued, is up to approximately $25 million as of September 30, 2025.

Future Outlook

The company expects to earn 9% on alternative investments over the long term. It does not anticipate being subject to the Corporate Alternative Minimum Tax (CAMT) for 2025, but will continue to review proposed regulations. The One Big Beautiful Bill Act (OBBBA) is not expected to materially impact financial statements. Estimated VOBA amortization from the OneAmerica acquisition is projected to increase by $21 million to $29 million annually for years 2025 through 2029.

Management Comments

• We are focused on executing our mission to make a secure financial future possible—one person, one family and one institution at a time.
• Voya's scale, business mix, risk profile, and strong free cash flow generation are competitive differentiators, and we have a clear path to increasing free cash flow generation and Adjusted operating earnings growth via net revenue growth, margin expansion, and disciplined capital management.
• We continue to monitor the rapidly changing global financial, political and economic environment, while actively managing the Company's businesses, investment portfolios and liquidity needs in light of current trends and uncertainties.
• Although variability is inherent in these estimates, we believe that the amounts provided are appropriate based on the facts available upon preparation of the Condensed Consolidated Financial Statements.

Industry Context

The company operates in a rapidly changing and competitive financial services environment, facing global market and geopolitical risks, including general economic conditions, interest rates, inflation, and tariffs. Its strategy includes a higher allocation to BBB-rated fixed maturities, particularly private credit, compared to industry peers, which is intended to provide issuer diversification, a higher overall return profile, and stronger credit protections. The company is also adapting to ongoing regulatory changes and new accounting standards.

Comparison to Industry Standards

• The company's higher allocation to BBB-rated fixed maturities relative to industry peers is a function of its underweight to high yield debt and preference for private credit, which is primarily a BBB market.
• Private credit within the BBB space provides issuer diversification, offers a higher overall return profile, and includes stronger credit protections that come with better covenant structures.
• The estimated combined RBC ratio of 407% as of September 30, 2025, is above the 375% RBC target, indicating strong capital adequacy relative to regulatory benchmarks.

Corporate Governance

Legal Proceedings

• Ravarino, et al. v. Voya Financial, Inc., et al. (USDC District of Connecticut, No. 3:21-cv-01658), a putative class action filed December 14, 2021.
• Allegations include breach of fiduciary duties of prudence and loyalty in the administration of the Voya 401(k) Savings Plan, poor-performing investment options (including proprietary funds), excessive fees, and self-dealing through the Voya Stable Value Option.
• The complaint seeks disgorgement of unjust profits and costs.
• On June 13, 2023, the Court granted in part and denied in part Voya's motion to dismiss, largely dismissing fiduciary duty claims, with remaining claims concerning ERISA prohibited transactions and failure to monitor the Voya Small Cap Growth fund.
• The company denies allegations and intends to defend the case vigorously.
• The estimated aggregate range of reasonably possible losses, in excess of any amounts accrued, is up to approximately $25 million as of September 30, 2025.

Related Party Transactions

• Voya Financial, Inc. had $565 million in outstanding borrowings from subsidiaries and had loaned $406 million to its subsidiaries as of September 30, 2025, under revolving reciprocal loan agreements.
• Voya Financial, Inc. guarantees the obligations of Voya Holdings under the $13 million principal amount of the 8.42% Equitable of Iowa Companies Capital Trust II Notes, due 2027.
• Voya Financial, Inc. provides a back-to-back guarantee to ING Group in respect of its guarantee of $218 million combined principal amount of Aetna Notes.
• Voya Financial, Inc. and Voya Holdings provide a guarantee of payment of obligations to certain subsidiaries under certain surplus notes held by those subsidiaries.

Stakeholder Impact

• Shareholders: Positive impact from increased Q3 net income, continued common stock dividends ($0.45/share), and ongoing share repurchase program ($661 million remaining capacity). Negative impact from a decrease in YTD net income.
• Employees: Potential positive impact from higher incentive compensation expenses in Corporate and investments in Short-Term Disability and Leave Management in Employee Benefits. Negative impact from higher severance costs.
• Customers/Clients: Positive impact from the acquisition of OneAmerica's retirement plan business, adding scale and capabilities. Renaming segments to 'Retirement' and 'Employee Benefits' better aligns with services provided.
• Creditors: Positive impact from an improved financial leverage ratio and a strong RBC ratio, indicating enhanced creditworthiness. Repayment of $400 million senior notes at maturity.
• Regulatory Authorities: Ongoing participation in the IRS Compliance Assurance Process (CAP) program and review of new tax legislation (CAMT, OBBBA) indicate compliance and adaptation to the regulatory environment.

Next Steps

• Finalize disclosures for ASU 2023-09 (Income Tax Disclosures) for the Annual Report on Form 10-K for the year ending December 31, 2025.
• Determine disclosures for ASU 2024-03 (Disaggregation of Income Statement Expenses) for annual periods beginning after December 15, 2026.
• Determine the impact of adopting ASU 2025-06 (Targeted Improvements to the Accounting for Internal-Use Software) for annual reporting periods beginning after December 15, 2027.
• Continue to review proposed regulations for CAMT and evaluate its determination in light of future guidance.
• The share repurchase authorization was extended through December 31, 2026.
• The company intends to defend the Ravarino class action case vigorously.

Key Dates

Recommendation

The Q3 2025 results demonstrate strong operational performance, with a significant increase in net income and total revenues, largely propelled by the strategic acquisition of OneAmerica's retirement plan business. All key segments reported growth in adjusted operating earnings, reflecting effective integration and favorable market conditions. The substantial growth in AUM and AUA, coupled with an improved financial leverage ratio and a robust RBC ratio, underscores the company's solid financial health and disciplined capital management. While YTD net income saw a decline, the recent quarter's momentum and strategic initiatives position the company for continued growth. The ongoing share repurchase program further signals management's confidence and commitment to shareholder value. The identified risks appear manageable within the context of the company's strong financial position and proactive risk management framework.

Keywords

Retirement services, Investment management, Employee benefits, Financial services, Insurance, Asset management, Wealth solutions, Health solutions, 10-Q, Voya Financial, OneAmerica acquisition, AUM, AUA, Fixed maturities, Derivatives, Corporate governance, Risk management, SEC filing