Financial Data and Key Metrics Changes - Adjusted operating earnings per share for Q4 2024 were reported at $1.40, contributing to a full-year result of $7.25 [23] - Full-year alternative income returns were approximately 7%, which was below long-term expectations by $0.53 [24] - Free cash flow conversion was approximately 90% in 2024, with expectations for continued performance in 2025 and 2026 [26][46] Business Line Data and Key Metrics Changes - Wealth Solutions earnings increased by 30% year-over-year, with revenue growth and adjusted operating margin exceeding full-year targets [10] - Voya Investment Management achieved a 20% year-over-year earnings growth, with an organic growth rate above 4% for the year [11] - Health Solutions reported adjusted operating earnings of $40 million for the year, impacted by unfavorable claims experience in Stop Loss [30] Market Data and Key Metrics Changes - Wealth Solutions generated $2 billion of defined contribution net flows in 2024, demonstrating strong commercial momentum [11] - Voya Investment Management recorded total net inflows of $12.5 billion for 2024, with a significant portion coming from institutional clients [38] - Defined contribution retention rate was 98.5%, up 60 basis points year-over-year [34] Company Strategy and Development Direction - The company aims to improve Stop Loss margins through increased pricing and improved risk selection actions [14] - Integration of the OneAmerica transaction is a strategic priority, expected to contribute $200 million in revenue and $75 million in incremental operating earnings in 2025 [16] - Focus on enhancing capabilities in leave management and disability administration to drive competitiveness in bundled Health Solutions [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the adequacy of reserves to cover future claims based on January experience [9] - The company anticipates significant improvement in Stop Loss margins and overall profitability in 2025 and 2026 [46] - Management highlighted the importance of maintaining a balanced approach to capital return and growth investments [45] Other Important Information - The company returned $800 million of excess capital to shareholders in 2024 through share repurchases and dividends [12] - The acquisition of Sconset Re is expected to yield attractive investment returns and strengthen Voya's position in the insurance asset management market [21] - The company plans to maintain a strategic approach to capital management, with expectations for increased excess capital generation in 2025 and 2026 [46] Q&A Session Summary Question: What are the factors affecting the ROE guidance for 2025? - Management acknowledged the impact of weaker Stop Loss results, investments in leave management, and lower prepayment income on the ROE guidance of 12% to 13% for 2025 [51][52] Question: Will the $50 million strategic spend on leave management recur in 2026? - Management indicated that the strategic spend is primarily expected to impact 2025, with a breakeven expectation for 2026 and positive earnings anticipated in 2027 [64][65] Question: What gives confidence in improved risk selection for Stop Loss? - Management emphasized a focus on known claims and improved pricing strategies, along with a commitment to margin over premium growth [66][70] Question: How will OneAmerica's acquisition impact wealth flows in 2025? - Management noted that while there may be volatility in flows due to OneAmerica, the fundamentals of the wealth business remain strong, with a solid pipeline of plans [78][79] Question: What actions are being taken to improve the voluntary business loss experience? - Management highlighted the importance of increasing utilization of voluntary products and improving administrative capabilities to drive higher participation rates [102][104]

Voya Financial Fourth Quarter 2024 Results and 2025 Outlook Call Information contained herein is proprietary, confidential and non-public and is not for public release. 1 Forward-Looking and Other Cautionary Statements 2 Key Themes & Strategic Priorities Information contained herein is proprietary, confidential and non-public and is not for public release. 3 Key Themes: Poised for Meaningful Growth in FY'25 | Health Solutions Positioned for | ❑ ❑ | | --- | --- | | Meaningful | ▪ | | Improvement in FY'25 | ▪ ...

Core Viewpoint - Voya Financial, Inc. reported strong fourth-quarter 2024 adjusted operating earnings of $1.50 per share, significantly exceeding expectations, despite a year-over-year decline of 23.8% due to higher loss ratios and lower spread-based assets [1][11]. Financial Performance - Adjusted operating revenues reached $1.9 billion, marking a 12.5% increase year over year [2]. - Net investment income slightly decreased by 0.2% year over year to $521 million [2]. - Fee income rose by 11% year over year to $543 million, while premiums increased by 17.4% to $790 million [2]. - Total benefits and expenses were $1.8 billion, up 10% from the previous year [2]. Segmental Update - Wealth Solutions reported adjusted operating earnings of $210 million, a 42.8% increase year over year, driven by growth in fee-based revenues and alternative investment income [4]. - Health Solutions experienced a pre-tax adjusted operating loss of $102 million, a decline from earnings of $44 million in the previous year, primarily due to higher loss ratios [5]. - Investment Management posted pre-tax adjusted operating earnings of $66 million, up 46.7% year over year, supported by higher fee-based revenues and net inflows of $3.4 billion [6]. - Corporate segment incurred pre-tax adjusted operating losses of $27 million, an improvement from a loss of $34 million in the prior year [7]. Financial Update - Voya Financial ended the quarter with cash and cash equivalents of $1.4 billion, a 49.3% increase year over year [8]. - Total investments amounted to $35 billion, down 4.3% year over year [8]. - Long-term debt was $2.1 billion, a slight increase of 0.2% from the end of 2023 [8]. - Book value per share (excluding AOCI) increased by 5.4% year over year to $61.31 [9]. Capital Deployment - The company returned $800 million of excess capital to shareholders in 2024, including $140 million in share repurchases and $43 million in dividends [10]. - As of December 31, 2024, Voya had a remaining share repurchase authorization of $761 million [10]. Full-Year Highlights - For the full year 2024, adjusted operating earnings per share were $7.79, a decrease of 3% year over year, but still beating the consensus estimate by 17.3% [11]. - Adjusted operating revenues for the full year increased by 9.7% to $7.5 billion [11].

Core Insights - Voya Financial reported a revenue of $174 million for Q4 2024, marking a year-over-year decline of 26.3%, with an EPS of $1.50 compared to $1.97 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $130.16 million by 33.69%, while the EPS surprised by 111.27% against the consensus estimate of $0.71 [1] Financial Performance Metrics - Total Assets Under Management (AUM) and Assets Under Administration (AUA) in Wealth Solutions were $612.21 billion, below the average estimate of $627.13 billion [4] - Client Assets in Wealth Solutions - Full Service were $208.45 billion, compared to the average estimate of $215 billion [4] - Client Assets in Wealth Solutions - Recordkeeping were $340.25 billion, below the estimated $347.88 billion [4] - Client Assets in Wealth Solutions - Defined Contribution Investment-only SV were $34.56 billion, slightly below the average estimate of $35.07 billion [4] - Fee income revenue was $543 million, compared to the average estimate of $577.07 million, representing an 11% year-over-year change [4] - Net investment income revenue was $521 million, slightly below the average estimate of $486.74 million, with a year-over-year change of -0.2% [4] - Premiums revenue was $790 million, close to the estimated $791.24 million, reflecting a 17.4% year-over-year increase [4] - Adjusted Operating Revenues for Investment Management totaled $271 million, exceeding the average estimate of $242.07 million, with an 18.9% year-over-year change [4] - Adjusted Operating Revenues for Investment Management - Fee income was $237 million, slightly above the average estimate of $235.77 million, with a 6.8% year-over-year increase [4] - Adjusted Operating Revenues for Corporate - Net investment income and net gains were $8 million, surpassing the average estimate of $5.50 million, reflecting a 14.3% year-over-year increase [4] - Adjusted Operating Revenues for Corporate - Total was $8 million, compared to the average estimate of $6.63 million, indicating an 11.1% year-over-year decline [4] Stock Performance - Voya's shares returned +0.5% over the past month, while the Zacks S&P 500 composite increased by +1% [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Voya Financial reported quarterly earnings of $1.50 per share, significantly exceeding the Zacks Consensus Estimate of $0.71 per share, but down from $1.97 per share a year ago, indicating an earnings surprise of 111.27% [1][2] Financial Performance - The company achieved revenues of $174 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 33.69%, although this is a decrease from $236 million in the same quarter last year [2] - Over the last four quarters, Voya has consistently surpassed consensus EPS estimates [2] Stock Performance and Outlook - Voya shares have increased by approximately 0.1% since the beginning of the year, underperforming compared to the S&P 500's gain of 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $1.79 on revenues of $281.76 million, and for the current fiscal year, it is $9.01 on revenues of $1.27 billion [7] Industry Context - The Insurance - Life Insurance industry, to which Voya belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - The Baldwin Insurance Group, a peer in the same industry, is expected to report earnings of $0.25 per share, reflecting a year-over-year increase of 78.6% [9]

Financial Performance - Voya Financial reported Adjusted Operating Earnings Before Income Taxes, which is a key measure for evaluating business performance, focusing on core segments and excluding variable items [4]. - The company emphasized the importance of Adjusted Operating Revenues, which are calculated by adjusting total revenues for net investment gains and losses, among other factors [6]. - Net Revenue is defined as the sum of investment spread, fee-based margin, and net underwriting gain or loss, providing insight into revenue growth and margin expansion [9]. - The Adjusted Operating Margin is calculated as Adjusted Operating Earnings Before Income Taxes divided by Net Revenue, highlighting the efficiency of operations [9]. - Voya Financial's performance metrics are designed to help investors understand the underlying trends and operational efficiency of the business [4]. - Voya Financial reported a net income of $93 million for Q4 2024, a decrease of 5.1% from $98 million in Q3 2024, but an increase from $118 million in Q4 2023 [10]. - Adjusted operating earnings before income taxes for Q4 2024 were $147 million, down 36.1% from $230 million in Q3 2024, but up 27.2% from $202 million in Q4 2023 [14]. - Total revenues for Q4 2024 reached $2.01 billion, a 2.8% increase from $1.96 billion in Q3 2024 and a 10.5% increase from $1.82 billion in Q4 2023 [12]. - Total adjusted operating earnings for the three months ended December 31, 2024, were $147 million, with an EPS of $1.40, compared to $224 million and EPS of $1.88 in the same quarter of 2023 [61]. - Year-to-date adjusted operating revenues reached $7,487 million for the twelve months ended December 31, 2024, compared to $6,822 million in the previous year, indicating a 9.7% growth [64]. Revenue and Earnings Breakdown - The company aims to provide insights into the main drivers of Adjusted Operating Earnings, focusing on revenue growth and margin expansion [9]. - Adjusted operating revenues for Q4 2024 reached $1,897 million, up from $1,686 million in Q4 2023, representing a 12.5% increase [15]. - Wealth Solutions segment reported adjusted operating revenues of $731 million for the three months ended December 31, 2024, up from $686 million year-over-year, reflecting a 6.6% growth [66]. - Health Solutions segment achieved adjusted operating revenues of $888 million for the three months ended December 31, 2024, compared to $764 million in the prior year, marking a 16.3% increase [66]. - Investment Management segment's adjusted operating revenues rose to $271 million for the three months ended December 31, 2024, from $228 million a year earlier, representing an 18.9% growth [67]. - Total gross premiums and deposits for the twelve months ended December 31, 2024, reached $3,601 million, up from $3,054 million in 2023, indicating a growth of 17.9% [33]. Expenses and Margins - Administrative expenses are reported net of amounts capitalized as acquisition expenses, excluding commission expenses [9]. - The adjusted operating margin for the twelve months ended December 31, 2024, improved to 39.9%, up from 33.6% in the previous year, indicating enhanced operational efficiency [22]. - The adjusted operating margin for the twelve months ended December 31, 2024, was 4.1%, down from 26.6% in the same period last year [29]. - The adjusted operating margin for Wealth Solutions was 41.5% in Q4 2024, up from 37.2% in Q4 2023, showing a significant improvement [47]. Shareholder Returns and Equity - Total cash returned to common shareholders in 2024 was $803 million, significantly higher than $499 million in 2023, with $635 million in share repurchases [10]. - Book value per common share (excluding AOCI) increased to $61.31 as of December 31, 2024, compared to $58.12 a year earlier [10]. - Total Shareholders' Equity decreased to $5,788 million as of December 31, 2024, from $5,878 million a year prior, influenced by changes in accumulated other comprehensive income [19]. - The company reported a total of $68 million in alternative investment income below long-term expectations for the twelve months ended December 31, 2024 [62]. Assets and Liabilities - Total assets as of December 31, 2024, were $163,889 million, a decrease from $166,933 million as of September 30, 2024 [17]. - The total liabilities as of December 31, 2024, were $157,882 million, down from $160,351 million as of September 30, 2024 [17]. - Total Financial Debt as of December 31, 2024, is $2,502 million, an increase from $2,098 million in the previous year [19]. - The debt-to-capital ratio increased to 38.5% in Q4 2024 from 33.3% in Q4 2023, indicating a rise in leverage [10]. Market Performance and Flows - Institutional AUM net flows for Q4 2024 were $2.001 billion, compared to a net outflow of $5.390 billion in Q4 2023, indicating a significant turnaround in client retention [39]. - Retail AUM net flows for Q4 2024 were $1.353 billion, a recovery from a net outflow of $36 million in Q4 2023, showcasing improved market conditions [39]. - The total net flows for the company in Q4 2024 were $3.038 billion, a significant improvement from a net outflow of $5.962 billion in Q4 2023 [39]. - Client Assets reached $612,205 million as of December 31, 2024, a significant increase from $544,319 million a year earlier, driven by growth in fee-based assets [22]. Investment Performance - The company reported net investment income and net gains of $1,928 million for the twelve months ended December 31, 2024, compared to $1,932 million in 2023, indicating a slight decline [16]. - The total book value of invested assets was $36,350 million as of December 31, 2024, with a gross investment income of $489 million, resulting in an annualized earned rate of 5.4% [53]. - Public corporate investments accounted for 28.0% of the total book value, with a gross investment income of $140 million and an earned rate of 5.4% for the latest quarter [53].

Core Viewpoint - Voya Financial has demonstrated strong earnings growth and solid segmental performance, positioning itself favorably in the market despite recent stock price declines compared to industry peers [2][4][6]. Financial Performance - Voya Financial's earnings grew by 16.2% over the last five years, significantly outperforming the industry average of 4.6% [2]. - The company has a solid track record of beating earnings estimates, with an average surprise of 6.77% over the last four quarters [2]. - Despite a 4.4% decline in share price over the past six months, the industry has seen a growth of 13.6% [2]. Segment Performance - The Wealth Solutions segment is experiencing significant growth due to strong underlying business results, higher surplus income, and lower administrative expenses [5]. - The Investment Management segment is expected to benefit from improved fee revenues and higher investment capital returns [7]. - The Health Solutions segment is likely to see growth across all product lines, aided by favorable retention and the Benefitfocus acquisition [9]. Valuation Metrics - Voya Financial shares are trading at a forward price-to-book value of 1.05X, lower than the industry average of 1.96X and the Finance sector's 3.99X [6]. - The company has a Value Score of A, indicating attractive valuation compared to peers [6]. Strategic Initiatives - Voya Financial has entered a long-term strategic partnership with Allianz Global Investors to enhance its Investment Management segment [8]. - The company plans to return $800 million in excess capital to shareholders in 2024, with a recent increase in quarterly dividends by 12.5% [13]. Financial Strength - As of September 30, 2024, Voya Financial's estimated combined RBC ratio was 395%, indicating strong capital levels [12]. - The company reported cash and cash equivalents of $1.4 billion, a 75.7% increase year over year, providing financial flexibility [12]. Long-term Outlook - Favorable retention, effective capital deployment, and strong underlying business results are expected to support Voya Financial's growth in the long term [14].

Core Insights - Voya Financial reported Q3 2024 adjusted operating earnings of $2.12 per share, exceeding estimates by 4.8% and showing a year-over-year increase of 2.4% [2] - The company's adjusted operating revenues reached $1.97 billion, a 7.6% increase year-over-year, driven by higher fee income and premiums [3] Financial Performance - Net investment income decreased by 7.5% year-over-year to $506 million, while fee income rose by 10.4% to $489 million [3] - Premiums totaled $796 million, reflecting a 16.7% increase from the previous year [3] - Total benefits and expenses increased by 11.4% year-over-year to $1.8 billion [3] Segment Analysis - Wealth Solutions reported adjusted operating earnings of $211 million, up 17.8% year-over-year, primarily due to growth in fee-based revenues [4] - Health Solutions saw adjusted operating earnings decline by 56.6% year-over-year to $23 million, despite a 16% growth in annualized in-force premiums and fees [5] - Investment Management's adjusted operating earnings increased by 12.2% year-over-year to $55 million, supported by higher fee-based revenues and net inflows of $3.8 billion [6] - Corporate incurred pre-tax adjusted operating losses of $59 million, wider than the $52 million loss from the previous year [7] Financial Position - Voya Financial ended the quarter with cash and cash equivalents of $1.4 billion, a 75.7% increase year-over-year [8] - Total investments were $36 billion, down 0.4% year-over-year, while long-term debt rose by 0.2% to $2.1 billion [8] - The financial leverage ratio deteriorated by 280 basis points year-over-year to 30.6% [8] - Book value per share increased by 5.9% year-over-year to $60.96 [8] Capital Management - The company returned $0.2 billion of excess capital in Q3 2024 through $149 million in share repurchases and $44 million in common stock dividends [9] Market Outlook - Estimates for Voya Financial have trended downward recently, with a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [12] - The stock has a poor Growth Score of F, a Momentum Score of D, and a Value Score of B, resulting in an aggregate VGM Score of C [11] Industry Comparison - Voya Financial is part of the Zacks Insurance - Life Insurance industry, where Lincoln National (LNC) has gained 6.5% over the past month, reporting revenues of $4.6 billion, a year-over-year decline of 1.5% [13] - Lincoln National is expected to post earnings of $1.83 per share for the current quarter, reflecting a year-over-year increase of 26.2% [14]

Wilson Research seeks to provide investors with focused insights on predominantly exchange-traded funds, or ETFs, with a blend between growth potential and dividend yield. The analysis provided emphasizes fundamental analysis while including macro-level factors such as industry trends, economics, geopolitics, and a variety of other influential factors. Wilson Reseach includes an MBA graduate and independent financial coach who seek to provide actionable information for long-term investors who value diversif ...

Shares of Voya Financial, Inc. (VOYA) have gained 18.5% in the past three months compared with the industry’s growth of 16.5% and the Zacks S&P 500 composite’s return of 6.4%. Currently priced at $79.93, the stock is a little below its 52-week high of $84.30. This proximity underscores investor confidence. It has the ingredients for further price appreciation. VOYA Outperforms Industry & S&P in Three MonthsImage Source: Zacks Investment ResearchThe stock is trading above the 50-day and 200-day simple moving ...