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Voya reported second-quarter revenue of $1.9 billion, down from $2.0 billion a year earlier. Revenue as counted by the consensus was $269.0 million, below the $282.0 million estimate. Adjusted earnings per share of $1.51 also missed the consensus estimate of $1.88.
The filing shows that lower investment income and a swing to a loss in income related to consolidated investment entities contributed to the revenue decline, partly offset by higher fee income. Benefits and expenses rose, with the filing citing less favorable stop-loss and voluntary benefits developments than a year earlier.
Voya reported diluted earnings per share of $0.97, down from $1.66 a year earlier. Its operating margin fell to 1.79% from 9.49%, while free cash flow declined to $503.0 million from $742.0 million.
On the call, CFO Mike Katz said investment management adjusted operating earnings rose to $57 million, helped by higher advisory fees. Employee benefits adjusted operating earnings were $22 million, and Katz said the company released $8 million of stop-loss reserves while keeping reserves at the high end of its best-estimate range.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $1.9 billion | $2.0 billion | −4.29% |
| Diluted EPS | $0.97 | $1.66 | −41.6% |
| Gross margin | 56.5% | 59.6% | −3.1 percentage points |
| Operating margin | 1.79% | 9.49% | −7.7 percentage points |
| Free cash flow | $503.0 million | $742.0 million | −32.2% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $1.51 | $1.88 | Missed by 19.7% |
| Revenue | $269.0 million | $282.0 million | Missed by 4.61% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
CEO Heather Lavallee said lower alternative investment performance and severance costs affected the quarter. CFO Mike Katz said those items had an approximate 90 cents per share impact, with private equity performance reflecting market conditions on a one-quarter reporting lag. Katz said the company expects the expense savings from the severance actions to offset their upfront costs by year-end.
In retirement, Katz said defined contribution net flows were $8.1 billion in the quarter, supported by client retention and large plan implementations. Lavallee said Voya had completed the final phase of its One America integration. Asked about the second half, she said the company had visibility into large plan implementations and expected positive flows.
Katz said investment management recorded $1.2 billion of net inflows in the quarter. Investment Management CEO Matt Toms said institutional demand included fixed income and private credit, while overseas redemptions dampened retail results. He said some of that redemption activity could moderate in the second half. Katz said the wind-down of a legacy relationship would offset some momentum in actively distributed products, but its revenue impact would be immaterial in 2026.
Analysts also pressed executives on stop-loss claims and pricing. Lavallee said early experience on the 2026 book showed fewer high-severity claims and lower claim frequency than the 2024 and 2025 books. Katz said Voya obtained a 24% rate increase entering 2026 and was getting more rate in current pricing. Workplace Solutions CEO Jay Kaduson said market demand for stop-loss coverage was outpacing supply, and Voya was pricing business to return to its target loss ratios.
Asked about voluntary benefits, Katz said billing true-ups had affected the quarter and described the year-to-date loss ratio as a starting point for the second half. Lavallee also said BenefitFocus had taken longer than expected to reach its anticipated economics, although revenues had been stable and client retention and satisfaction had improved.
Guidance
Katz said Voya expects 2026 cash generation to exceed 2025 levels and to increase again in 2027. He also expects severance-related savings to fully offset upfront costs by the end of 2026. For the third quarter, Voya expects to deploy at least $100 million toward share repurchases.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Net margin, Stop Loss | FY2027 | Voya plans to bring stop-loss margins back within its target range in FY2027. | — | — |
| Cash, Excess Capital Generation | FY2027 | Voya expects cash generation to increase again in FY2027. | — | — |
| Share repurchases | Q3 FY2026 | $100.0 million | Q2 FY2026: $150.0 million | Cut |
| Cash, Excess Capital Generation | FY2026 | Voya expects cash generation in FY2026 to exceed FY2025 levels. | — | — |
| Operating income, non-GAAP | FY2026 | Voya expects meaningfully higher earnings in the second half of FY2026. | — | — |
| Operating expenses, Severance | FY2026 | Voya expects severance-related expense savings to fully offset upfront costs by the end of FY2026. | — | — |
| Operating margin, Stop Loss | FY2026 | Voya expects continued Stop Loss margin improvement in FY2026. | — | — |
| Gross margin, Stop Loss Loss Ratio | FY2026 | 84.0% | — | New |
| Gross margin, Group Life Loss Ratio | FY2026 | 77.0%–80.0% | — | New |
| Bookings growth, Investment Management Organic Growth | FY2026 | 2.00% | — | New |
| Bookings, Retirement Defined Contribution Net Flows | FY2026 | Voya expects positive organic defined-contribution net flows in FY2026. | — | — |