Voya Financial, Inc. (NYSE: VOYA), announced today its
first-quarter 2024 financial results:
- First-quarter 2024 net income available to common shareholders
of $234 million, or $2.24 per diluted share, and after-tax adjusted
operating earnings1 of $185 million, or $1.77 per diluted
share.
- Results reflect strong fee-based revenue growth across all
businesses and continued expense management.
- Continued strength in excess capital generation and focus on
returning capital to shareholders:
- Generated and returned approximately $0.2 billion of capital in
first-quarter 2024, including $172 million in share repurchases and
$41 million in common stock dividends.
- Board of directors authorizes repurchase of an additional $500
million of common stock.
“In the first quarter of 2024, adjusted operating EPS grew 23%
compared with the prior-year period, reflecting the strength of our
diversified revenues and expense discipline,” said Heather
Lavallee, chief executive officer, Voya Financial. “We executed on
our strategic priorities, delivered record sales in Health
Solutions, drove sequential improvement in Wealth Solutions
full-service net flows and returned Investment Management to
positive flows. Diligent expense management reduced our
administrative expenses compared with the prior-year period, while
we continued to invest in the future growth of our businesses. Our
high free-cash flow businesses generated approximately $200 million
of excess capital in the quarter, and we returned more than that
amount to our shareholders in the form of dividends and share
repurchases.
“Voya's purpose and vision continue to define the principles by
which Voya's more than 9,000 employees carry out our business every
day. With a relentless focus on our customers, we continue to build
on our leading market positions in retirement, group benefits and
investment management; the scale and breadth of our distribution
across markets, channels and geographies; and our culture of
service to clients and communities,” added Lavallee.
_________________
1 This press release includes certain
non-GAAP financial measures, including adjusted operating earnings.
More information on notable items in the company’s financial
results, non-GAAP measures, and reconciliations to the most
comparable U.S. GAAP measures can be found in the "Use of Non-GAAP
Financial Measures" and reconciliation tables at the end of this
press release, and in the “Non-GAAP Financial Measures” section of
the company’s Quarterly Investor Supplement, which is available at
investors.voya.com.
First-Quarter 2024 Consolidated Results
First-quarter 2024 net income available to common shareholders
was $234 million, or $2.24 per diluted share, compared with $69
million, or $0.63 per diluted share, in first-quarter 2023. The
increase was primarily due to investment gains, lower acquisition
and integration costs, a tax benefit associated with an exited
business, and higher after-tax adjusted operating earnings.
First-quarter 2024 after-tax adjusted operating earnings were
$185 million, or $1.77 per diluted share, compared with $158
million, or $1.44 per diluted share, in first-quarter 2023. The
increase was largely due to higher fee-based revenues and expense
management.
Business Segment Results
Wealth Solutions
Wealth Solutions first-quarter 2024 pre-tax adjusted operating
earnings were $186 million, up from $132 million in the prior-year
period. The increase was primarily due to favorable equity market
impacts to fee-based revenues, higher alternative investment income
and lower administrative expenses, partially offset by lower
spread-based revenues.
Total client assets as of March 31, 2024, were $574 billion, up
15% compared with March 31, 2023, due to higher equity market
levels and growth in the business year over year.
Net revenues for the trailing twelve months (TTM) ended March
31, 2024, grew 5.8% compared with the prior-year period due to an
increase in fee-based revenues and higher alternative investment
income, partially offset by lower spread-based revenues. Adjusted
operating margin for the TTM ended March 31, 2024, was 35.7%
compared with 33.1% in the prior-year period. The improvement
reflects net revenue growth and expense management, partially
offset by reinvestments into the business. Excluding alternative
investment income and prepayment fees below our long-term
expectations, net revenue growth for the TTM was 1.8% and Adjusted
operating margin for the TTM was 38.6%.
Health Solutions
Health Solutions first-quarter 2024 pre-tax adjusted operating
earnings were $59 million, down from $94 million in the prior-year
period. The decline was largely attributable to Stop Loss net
underwriting gains normalizing after favorable results in the
prior-year period.
Health Solutions first-quarter 2024 annualized in-force premiums
and fees grew 17% to $3.9 billion compared with the prior-year
period. The increase reflects growth across all product lines due
to strong sales and favorable retention.
Net revenues for the TTM ended March 31, 2024, grew 12.8%
compared with the prior-year period due to the positive impact of
diversifying into fee-based revenue through acquired benefits
administration capabilities and in-force premium growth, partially
offset by favorable loss ratios in the prior-year period, including
a favorable reserve adjustment related to our annual assumption
update. Adjusted operating margin for the TTM ended March 31, 2024,
was 23.9% compared with 36.2% in the prior-year period. The decline
reflects the integration of Benefitfocus, which has a lower margin
profile consistent with benefits administration peers, the
favorable reserve adjustment in the prior-year period, and higher
loss ratios primarily in Stop Loss. Excluding the favorable reserve
adjustment in the prior-year period, alternative investment income
and prepayment fees below our long-term expectations, and other
notable items, net revenue growth for the TTM was 20.0% and
Adjusted operating margin for the TTM was 25.4%.
Investment Management
Investment Management first-quarter 2024 pre-tax adjusted
operating earnings, excluding Allianz's noncontrolling interest,
were $42 million, up from $33 million in the prior-year period. The
increase was due to higher net revenue reflecting the benefit of
positive capital markets, strong sales in Retail and insurance as
well as lower administrative expenses.
Investment Management had net inflows of $0.6 billion (excluding
divested businesses) during the three months ended March 31, 2024,
driven by Retail flows and the insurance channel within
Institutional.
Net revenues for the TTM ended March 31, 2024, grew 14.1%
compared with the prior-year period due to an increase in fee-based
revenues and higher investment capital returns. Adjusted operating
margin for the TTM ended March 31, 2024, was 25.7% compared with
23.4% in the prior-year period. The improvement reflects the impact
of positive capital markets and expense management, partially
offset by reinvestments into the business. Excluding the investment
capital returns below our long-term expectations net of variable
compensation, net revenue growth for the TTM was 10.9% and Adjusted
operating margin for the TTM was 26.1%.
Corporate
Corporate first-quarter 2024 pre-tax adjusted operating losses,
excluding Allianz's noncontrolling interest, were $63 million,
improved from $68 million of losses in the prior-year period. The
improvement was largely due to lower interest expense due to debt
extinguishment.
Capital
For the first-quarter 2024, the company generated approximately
$0.2 billion of excess capital reflecting capital generation of
over 90% of after-tax adjusted operating earnings. The company also
deployed approximately $0.2 billion of excess capital in the first
quarter, including $172 million in share repurchases and $41
million in common stock dividends. As of March 31, 2024, Voya had
approximately $0.4 billion of excess capital.
The company announced today that its board of directors has
increased the company's authorization to repurchase common stock
under the company's share repurchase program by $500 million, which
is in addition to the remaining repurchase capacity of
approximately $225 million available as of March 31, 2024, pursuant
to the board's prior authorization.
Additional Financial Information and Earnings Call
More detailed financial information can be found in the
company’s quarterly investor supplement, which is available on
Voya’s investor relations website, investors.voya.com. In addition,
Voya will host a conference call on Wednesday, May 1, 2024, at 10
a.m. ET, to discuss the company’s first-quarter 2024 results. The
call and slide presentation can be accessed via the company’s
investor relations website at investors.voya.com. A replay of the
call will be available on the company’s investor relations website,
investors.voya.com, starting at 1 p.m. ET on May 1, 2024.
About Voya Financial
Voya Financial, Inc. (NYSE: VOYA), is a leading health, wealth
and investment company with approximately 9,000 employees who are
focused on achieving Voya’s aspirational vision: Clearing your path
to financial confidence and a more fulfilling life. Through
products, solutions and technologies, Voya helps its 15.2 million
individual, workplace and institutional clients become well
planned, well invested and well protected. Benefitfocus, a Voya
company and a leading benefits administration provider, extends the
reach of Voya’s workplace benefits and savings offerings by
engaging directly with over 12 million employees in the U.S.
Certified as a “Great Place to Work” by the Great Place to Work®
Institute, Voya is purpose-driven and committed to conducting
business in a way that is economically, ethically, socially and
environmentally responsible. Voya has earned recognition as: one of
the World’s Most Ethical Companies® by Ethisphere; a member of the
Bloomberg Gender-Equality Index; and a “Best Place to Work for
Disability Inclusion” on the Disability Equality Index. For more
information, visit voya.com. Follow Voya Financial on Facebook,
LinkedIn and Instagram.
Use of Non-GAAP Financial
Measures
We believe that Adjusted operating earnings before income taxes
is a meaningful measure used by management to evaluate our business
and segment performance. We use the same accounting policies and
procedures to measure segment Adjusted operating earnings before
income taxes as we do for the directly comparable U.S. GAAP measure
Income (loss) before income taxes. Adjusted operating earnings
before income taxes does not replace Income (loss) before income
taxes as a measure of our consolidated results of operations.
Therefore, we believe that it is useful to evaluate both measures
when reviewing our financial and operating performance. Each
segment’s Adjusted operating earnings before income taxes is
calculated by adjusting Income (loss) before income taxes for the
following items:
- Net investment gains (losses), which are significantly
influenced by economic and market conditions, including interest
rates and credit spreads, and are not indicative of normal
operations;
- Income (loss) related to businesses exited or to be exited
through reinsurance or divestment;
- Income (loss) attributable to noncontrolling interests to which
we are not economically entitled;
- Dividend payments made to preferred shareholders are included
as reductions to reflect the Adjusted operating earnings before
income taxes that are available to common shareholders;
- Other adjustments include items which are not indicative of
normal operations, performance of our segments, current Operating
expense fundamentals, or do not reflect cash-settled expenses.
These items vary widely in timing, scope and frequency between
periods as well as among companies to which we are compared.
Accordingly, we adjust for these items as we believe that these
items distort the ability to make a meaningful evaluation of the
current and future performance of our segments. These may include:
- Income (loss) related to early extinguishment of debt;
- Impairment of goodwill and intangible assets;
- Amortization of acquisition-related intangible assets as well
as contingent consideration fair value adjustments;
- Expected return on plan assets net of interest costs associated
with our qualified defined benefit pension plan and immediate
recognition of net actuarial gains (losses) related to all of our
pension and other postretirement benefit obligations and gains
(losses) from plan amendments and curtailments; and
- Other items such as capital or organizational restructurings,
acquisition / merger integration expenses, severance and other
third-party expenses associated with such activities, and expenses
attributable to vacant real estate.
Sources of Earnings
We analyze our segment performance based on the sources of
earnings. We believe that this supplemental information is useful
because we use it to analyze our business and it can help investors
understand the main drivers of Adjusted operating earnings before
income taxes. The sources of earnings are defined as such:
- Investment spread and other investment income.
- Fee-based margin.
- Net underwriting gain (loss).
- Administrative expenses.
- Net commissions.
- DAC/VOBA and other intangibles amortization.
Net Revenue and Adjusted Operating
Margin
- Adjusted operating margin is defined as Adjusted operating
earnings before income taxes divided by net revenue.
- Net revenue is the sum of investment spread and other
investment income, fee-based margin, and net underwriting gain
(loss).
- We also report net revenue and adjusted operating margin
excluding notable items, such as alternative investment income
above or below our long-term expectations.
- We report net revenue and adjusted operating margin excluding
notable items since they provide the main drivers for Adjusted
operating earnings before income taxes excluding the effects of
items that are not expected to recur at the same level.
Forward-Looking and Other Cautionary
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. The company does not assume any obligation to revise or
update these statements to reflect new information, subsequent
events or changes in strategy. Forward-looking statements include
statements relating to future developments in our business or
expectations for our future financial performance and any statement
not involving a historical fact. Forward-looking statements use
words such as “anticipate,” “believe,” “estimate,” “expect,”
“intend,” “plan,” and other words and terms of similar meaning in
connection with a discussion of future operating or financial
performance. Actual results, performance or events may differ
materially from those projected in any forward-looking statement
due to, among other things, (i) global market risks, including
general economic conditions, our ability to manage such risks, and
interest rates; (ii) liquidity and credit risks, including
financial strength or credit ratings downgrades, requirements to
post collateral, and availability of funds through dividends from
our subsidiaries or lending programs; (iii) strategic and business
risks, including our ability to maintain market share, achieve
desired results from our acquisitions and dispositions, or
otherwise manage our third-party relationships; (iv) investment
risks, including the ability to achieve desired returns or
liquidate certain assets; (v) operational risks, including
cybersecurity and privacy failures and our dependence on third
parties; and (vi) tax, regulatory and legal risks, including limits
on our ability to use deferred tax assets, changes in law,
regulation or accounting standards, and our ability to comply with
regulations. Factors that may cause actual results to differ from
those in any forward-looking statement also include those described
under “Risk Factors” and “Management’s Discussion and Analysis of
Results of Operations and Financial Condition (“MD&A”) – Trends
and Uncertainties” in our Annual Report on Form 10-K for the year
ended December 31, 2023, as filed with the SEC on February 23,
2024, and in our Quarterly Report on Form 10-Q for the three months
ended March 31, 2024, to be filed with the SEC on or before May 10,
2024.
VOYA-IR VOYA-CF
Consolidated Statement of
Operations
Three Months Ended
(in millions USD, except per share)
3/31/2024
3/31/2023
Revenues
Net investment income
$
529
$
545
Fee income
513
464
Premiums
800
685
Net gains (losses)
43
(16
)
Other revenues
88
78
Income (loss) related to consolidated
investment entities
78
79
Total revenues
2,051
1,835
Benefits and expenses
Interest credited and other benefits to
contract owners/policyholders
(851
)
(751
)
Operating expenses
(799
)
(836
)
Net amortization of DAC/VOBA
(56
)
(59
)
Interest expense
(30
)
(32
)
Operating expenses related to consolidated
investment entities
(28
)
(16
)
Total benefits and expenses
(1,764
)
(1,694
)
Income (loss) before income
taxes
287
141
Income tax expense (benefit)
(1
)
12
Net income (loss)
288
129
Less: Net income (loss) attributable to
noncontrolling interest and redeemable noncontrolling interest
37
46
Net income (loss) available to Voya
Financial, Inc.
251
83
Less: Preferred stock dividends
17
14
Net income (loss) available to Voya
Financial, Inc.'s common shareholders
$
234
$
69
Net income (loss) available to Voya
Financial, Inc.'s common shareholders per common share:
Basic
$
2.29
$
0.70
Diluted
$
2.24
$
0.63
Reconciliation of Net Income
(Loss) to Adjusted Operating Earnings and Earnings Per Share
(Diluted)
Three Months Ended
(in millions USD, except per share)
3/31/2024
3/31/2023
After-tax (1)
Per share
After-tax (1)
Per share
Net Income (loss) available to Voya
Financial, Inc.'s common shareholders
$
234
$
2.24
$
69
$
0.63
Less:
Net investment gains (losses)
50
0.48
(7
)
(0.06
)
Income (loss) related to businesses exited
or to be exited through reinsurance or divestment (2)
13
0.12
(26
)
(0.23
)
Other adjustments (3)
(14
)
(0.13
)
(56
)
(0.51
)
Adjusted operating earnings
$
185
$
1.77
$
158
$
1.44
Less:
Alternative investment income and
prepayment fees above (below) long-term expectations net of
variable compensation
(12
)
(0.11
)
(27
)
(0.25
)
Adjusted operating earnings excluding
notable items
$
197
$
1.88
$
185
$
1.69
Note: Totals may not sum due to
rounding.
(1) For adjusted operating earnings, we
apply a 21% tax rate and adjust for the dividends received
deduction, tax credits, non-deductible compensation, and other tax
benefits and expenses that relate to adjusted operating earnings.
For net investment gains (losses), income (loss) related to
businesses exited, and other non-operating items, we apply a 21%
tax rate and adjust for related tax benefits and expenses,
including changes to tax valuation allowances and impacts related
to changes in tax law.
(2) Includes a tax benefit of $38 million
related to a divested business for the three months ended March 31,
2024.
(3) Primarily consists of acquisition and
integration costs associated with the Allianz Global Investors and
Benefitfocus transactions and amortization of acquisition-related
intangible assets.
Adjusted Operating Earnings
and Notable Items
Three Months Ended March 31,
2024
(in millions USD, except per share)
Amounts Including
Notable Items
Alternative investment income
and prepayment fees above (below) long- term expectations
(1)
Amounts Excluding
Notable Items
a
b
c = a - b
Adjusted operating earnings
Wealth Solutions
$
186
$
(14
)
$
200
Health Solutions
59
—
60
Investment Management
42
(1
)
42
Corporate
(63
)
—
(63
)
Adjusted operating earnings before
income taxes
224
(15
)
238
Income taxes (2)
38
(3
)
42
Adjusted operating earnings after
income taxes
$
185
$
(12
)
$
197
Adjusted operating earnings per
share
1.77
(0.11
)
1.88
Note: Totals may not sum due to
rounding.
(1) Amount by which Investment income from
alternative investments and prepayments exceeds or is less than our
long-term expectations, net of variable compensation. Long-term
expectation for alternative investments is a 9% annual return,
which for 2024 was approximately $45 million to $47 million per
quarter, pre-tax and before variable compensation. Long-term
expectation for prepayment fees is a 10 basis point annual
contribution to yield, which for 2024 was approximately $8 million
to $9 million per quarter, pre-tax and before variable
compensation.
(2) For adjusted operating earnings, we
apply a 21% tax rate and adjust for the dividends received
deduction, tax credits, non-deductible compensation, and other tax
benefits and expenses that relate to adjusted operating
earnings.
Adjusted Operating Earnings
and Notable Items
Three Months Ended March 31,
2023
(in millions USD, except per share)
Amounts Including
Notable Items
Alternative investment income
and prepayment fees above (below) long- term expectations
(1)
Amounts Excluding
Notable Items
a
b
c = a - b
Adjusted operating earnings
Wealth Solutions
$
132
$
(33
)
$
166
Health Solutions
94
(2
)
97
Investment Management
33
2
31
Corporate
(68
)
—
(68
)
Adjusted operating earnings before
income taxes
192
(34
)
226
Income taxes (2)
34
(7
)
42
Adjusted operating earnings after
income taxes
$
158
$
(27
)
$
185
Adjusted operating earnings per
share
1.44
(0.25
)
1.69
Note: Totals may not sum due to
rounding.
(1) Amount by which Investment income from
alternative investments and prepayments exceeds or is less than our
long-term expectations, net of variable compensation. Long-term
expectation for alternative investments is a 9% annual return,
which for 2023 was approximately $47 million to $48 million per
quarter, pre-tax and before variable compensation. Long-term
expectation for prepayment fees is a 10 basis point annual
contribution to yield, which for 2023 was approximately $9 million
to $10 million per quarter, pre-tax and before variable
compensation.
(2) For adjusted operating earnings, we
apply a 21% tax rate and adjust for the dividends received
deduction, tax credits, non-deductible compensation, and other tax
benefits and expenses that relate to adjusted operating
earnings.
Net Revenue, Adjusted
Operating Margin, and Notable Items
Twelve Months Ended March 31,
2024
(in millions USD)
Amounts Including Notable
Items
Alternative investment income
and prepayment fees above (below) long- term expectations
(1)
Other (2)
Amounts Excluding Notable
Items
a
b
c
d = a - b - c
Net revenue
Wealth Solutions
$
1,922
$
(91
)
$
—
$
2,013
Health Solutions
1,172
(8
)
(16
)
1,196
Investment Management
921
(5
)
—
927
Total net revenue
$
4,015
$
(104
)
$
(16
)
$
4,136
Adjusted operating margin
Wealth Solutions
35.7
%
(2.9
)%
—
38.6
%
Health Solutions
23.9
%
(0.5
)%
(1.0
)%
25.4
%
Investment Management
25.7
%
(0.4
)%
—
26.1
%
Adjusted operating margin, excluding
Corporate
29.9
%
(1.8
)%
(0.3
)%
32.0
%
Note: Totals may not sum due to
rounding.
(1) Amount by which Investment income from
alternative investments and prepayments exceeds or is less than our
long-term expectations, net of variable compensation. Long-term
expectation for alternative investments is a 9% annual return,
which for 2024 and 2023 was approximately $45 million to $48
million per quarter, pre-tax and before variable compensation.
Long-term expectation for prepayment fees is a 10 basis point
annual contribution to yield, which for 2024 and 2023 was
approximately $8 million to $10 million per quarter, pre-tax and
before variable compensation.
(2) Includes changes in certain legal and
other reserves not expected to recur at the same level.
Net Revenue, Adjusted
Operating Margin, and Notable Items
Twelve Months Ended March 31,
2023
(in millions USD)
Amounts Including Notable
Items
Alternative investment income
and prepayment fees above (below) long- term expectations
(1)
Other (2)
Amounts Excluding Notable
Items
a
b
c
d = a - b - c
Net revenue
Wealth Solutions
$
1,817
$
(161
)
$
—
$
1,978
Health Solutions
1,039
(15
)
57
997
Investment Management
807
(30
)
—
836
Total net revenue
$
3,663
$
(206
)
$
57
$
3,811
Adjusted operating margin
Wealth Solutions
33.1
%
(5.4
)%
—
%
38.6
%
Health Solutions
36.2
%
(0.9
)%
3.6
%
33.5
%
Investment Management
23.4
%
(2.0
)%
—
25.4
%
Adjusted operating margin, excluding
Corporate
31.9
%
(3.5
)%
1.0
%
34.4
%
Note: Totals may not sum due to
rounding.
(1) Amount by which Investment income from
alternative investments and prepayments exceeds or is less than our
long-term expectations, net of variable compensation. Long-term
expectation for alternative investments is a 9% annual return,
which for 2023 and 2022 was approximately $47 million to $48
million per quarter, pre-tax and before variable compensation.
Long-term expectation for prepayment fees is a 10 basis point
annual contribution to yield, which for 2023 and 2022 was
approximately $9 million to $10 million per quarter, pre-tax and
before variable compensation.
(2) Includes changes in certain other
reserves not expected to recur at the same level.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240430939844/en/
Media Contact: Donna Sullivan 860-580-2980
Donna.Sullivan@voya.com
Investor Contact: Michael Katz 212-309-8999
IR@voya.com
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