Voya Financial Q2 Earnings Call Highlights

Voya Financial NYSE: VOYA reported second-quarter adjusted operating earnings of $140 million, or $1.51 per diluted share, as lower-than-expected alternative investment performance and severance costs weighed on results.

The company said underlying trends in its Retirement, Investment Management and Employee Benefits businesses remained positive and supported expectations for higher earnings and cash generation in the second half of 2026.

Chief Executive Officer Heather Lavallee said Voya generated about $150 million of excess capital during the quarter and returned roughly $200 million to shareholders through repurchases and dividends.

For the first half of the year, the company returned more than $380 million to shareholders.

Chief Financial Officer Mike Katz said quarterly earnings included an approximately $0.90-per-share effect from weaker alternative investment performance and severance actions.

Alternative investment results were primarily affected by macroeconomic conditions in Voya's private-equity portfolio, whose results are reported with a one-quarter lag.

Katz said year-to-date alternative investment returns remained positive and that the company expects improvement in the third quarter.

The severance actions are intended to reduce the company's expense base, with expected savings fully offsetting upfront costs by year-end, Katz said.

Voya views the measures as a reset of its expense baseline heading into 2027 and said it remains focused on operating leverage and self-funding growth investments.

Voya's Retirement segment generated adjusted operating earnings of $190 million in the quarter.

Results were affected by lower spread income tied to alternative investment performance, although core spread income remained resilient due to reinvestment at higher rates, according to Katz.

Fee-based revenue in Retirement rose 10% from a year earlier and accounted for more than 60% of segment revenue, while margins were 38%.

Defined-contribution net inflows totaled $8.1 billion, supported by client retention and large plan implementations in government and corporate markets.

Lavallee said the company added more than $30 billion in assets and approximately 1 million participants through organic growth in government markets over the past 18 months.

Voya's Retirement platform now serves more than 10 million participant accounts.

Jay Kaduson, CEO of Workplace Solutions, said request-for-proposal volumes increased by roughly 6% to 7% in emerging markets and rose by double digits in the mid-market segment.

Volumes in large and mega plans were growing at a low-single-digit pace but remained healthy, he said.

Voya completed the final phase of its OneAmerica integration during the quarter.

Management said the transaction added capabilities, distribution opportuni...