Western Union CO Q1 FY2025 earnings call

• The company is implementing a strategy to return to sustainable profitable growth, focusing on being customer-centric and reversing past issues like overpricing and underinvestment.
• Regionally, Americas face headwinds, but Europe, Middle East, and APAC perform well; Europe's retail had double-digit transaction growth for the first time in at least a decade.
• Acquired Eurochange in the UK to expand FX services, with the acquisition expected to add growth and be accretive in 2025.
• Operational efficiency program saved $30 million in Q1, with total savings at $140 million, on pace to exceed $150 million target two years ahead of schedule.

Consumer Money Transfer (CMT): Transactions grew 3% in Q1. Branded digital business had 14% transaction growth and 8% adjusted revenue growth. Payout to account business grew over 35%. Retail Business: Europe saw 10% transaction growth, while Americas underperformed due to geopolitical issues and slowing migration. Consumer Services Segment: Accounted for 11% of quarterly revenue, adjusted revenue down 3% in Q1 due to softness in bill pay and media network contract delay.

• Reaffirmed adjusted revenue range of $4.115 billion to $4.215 billion, reflecting growth in branded digital, double-digit growth in consumer services, and stabilization in retail.
• Forecasted adjusted operating margins to be in the range of 19% to 21%.
• Forecasted adjusted EPS to be in the range of $1.75 to $1.85. Eurochange acquisition included in the guidance.

• Geopolitical issues impacting Americas, including slowing migration in Latin America and headwinds in North America due to geopolitical factors.
• Uncertainty in macroeconomic conditions and government rulings on ID requirements, though not yet materially impacting the business.
• Impact of FX volatility on customer behavior and business performance.

Q: Will Nance asks about pressure on North American retail side and channel remixing.

A: Devin McGranahan responds that there's been slowing in both digital and retail in North America, with little channel migration.

Q: Will Nance follows up on guide including Eurochange acquisition and macro impact.

A: Matt Cagwin states Eurochange is in the guide, macros and immigration changes are baked into the forecast, with some government rulings on ID requirements monitored but no material impact yet.

Q: Tien-Tsin Huang asks about April observations and pull forward.

A: Devin McGranahan mentions holiday timing affecting April numbers, and PPT per transaction acceleration indicating potential consumer behavior change.

Q: Darrin Peller asks about digital transaction growth, loyalty update, and competitive dynamics.

A: Matt Cagwin discusses loyalty program impact, APN business growth, and competitive consolidation trends.

Q: Ramsey El-Assal asks about applying Europe learnings to North America and Eurochange modeling.

A: Devin McGranahan explains the go-to-market strategy in North America is in earlier innings compared to Europe, and Eurochange acquisition will bolster retail in UK.

Q: Tim Chiodo asks about payout to account business percentage and tax rate.

A: Matt Cagwin provides APN business growth details and discusses tax rate durability due to geographic mix and structures.

Q: Jason Kupferberg asks about European corridors driving strength and Eurochange impact on revenue.

A: Devin McGranahan mentions Europe to South America, Africa, and Middle East corridors driving strength, and Eurochange included in revenue guide.

Q: Bryan Keane asks about tariffs and operating spend savings.

A: Devin McGranahan says tariffs likely won't significantly impact business, and Matt Cagwin explains more operating savings will go to bottom line this year.

Q: Andrew Schmidt asks about FX volatility.

A: Matt Cagwin explains FX hedging, impact on customer behavior, and accounting for gains/losses.

Q: Chris Kennedy asks about travel money competitive landscape and digital unit economics.

A: Devin McGranahan discusses travel money segments and Matt Cagwin talks about consistent digital unit economics and improvement in CAC LTV.