WU - Earnings call transcript Q1 2018 | The Western Union Company

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Operator

Good afternoon and welcome to the Western Union First Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mike Salop, Senior Vice President of Investor Relations. sir. ahead, go Please

Michael Alan Salop

webcast On available quarter we will results slides tab call questions. Laura. under at company's Investor the the take discuss call. XXXX The Relations and this accompany first and will that be today's you, found will westernunion.com remain call, and the your can after Thank then we

cautionary and Commission, our Additional in statements. language refer call is forward-looking Today's that our press operational differ XX-K statistics release. release Please earnings have the statements. information been Union's recorded, in and Western to filings with the factors provided including for comments and Securities the concerning in to could forward-looking Exchange results from the supplemental Form cause tables actual the XXXX with include materially additional being

some we items do call, principles. accepted not generally the will conform accounting that to During discuss

replay items call. on comparable westernunion.com, statements We the subject officers Union under have are Union to the Company copyright Investor and than Western like turn measures website, made for Relations or the to noted reconciled Ersek. any the of section. over replay our of Western Union press All the now has disclaims the not recording property Other protection. this distribution transcription on to Western our of those most call Hikmet by any responsibility I release, would authorized this and in call to GAAP

Hikmet Ersek

Mike, you, Thank good everyone. afternoon, and

money and company for the pleased or profitability. overall generated healthy momentum growth, the of continued X% also the and the delivered currency our business, that quarter both in year very We we first we constant X% We solid XXXX. are into from transfer last of consumer end revenue

currency. X% from Latin money from year. representing outbound and transfer impressive of revenue growth, quarter, in westernunion.com the the and a run business, at increase or expectations money And strong three delivered part turnaround to continued posted an continue our quarter, XX% due business Overall, Among transfer of U.S. X% is XX% good America constant payments X% with revenue digital. also trends in revenue compared Business double-digit X% and reported an to transfer in years bill improvement again digital Argentina the grew westernunion.com from increased growth money payments nicely bill but revenues payments fourth business up principal ago. the revenue of with just XX% Solutions Our below declined our quarter, from to an in in businesses, in still our end the important U.S. accelerated led Facil becoming quarter the the strong Pago impressive in Regionally, increasingly or retail cross-border currency terms, for continued growth quarter actions. its growth. execution outbound strong our our implement total long-term our we Europe last electronic constant solid Speedpay as

just margins overall, profit with money we first quarter from margin XX% growth, cash our also, pleased our operating year quarter cross-border line are our in especially and and we flows revenue were over flow the strong affirming top transfer. results in margins on So, outlooks cash with $XXX provided operations are full and very expectations Based million. But February. we our forward, first going of and solid,

transfer some last from XXXX. in quarter for years, have The growth has pricing the the first a money consumer is We although in U.S. domestic start Middle stable the East a nice increases year environment softness been we had in few and net still and perspective, had there slight transfer. globally with price to the money

we if continue competition the U.S. recent do corridors, Walmart. like one significant in We not competitive to will adjust but expect globally in time. and from this our As pricing at the actions in actions, the always, we monitor pricing changes certain needed

leader being our of long-term cross-currency we our in on to turning focused vision remain strategy, Now money cross-border, movement. the

additional goal expansion cross-border Our priority serve we customer is on our segments focus is with by leveraging multiple a mobile. strong expect a westernunion.com Digital on platform. this to accelerate growth our to and new capabilities to revenue open year countries

with better just and in continue efforts that in begun a such providing to Stage management, next-generation We Jamaica. and our geographies Panama payments-based mobile have initiatives transfer, including retail relationship and we platforms. our on BXB, retail clients services region, retention digital expanding Latin new digital app and as Pay America a to new capabilities solutions Caribbean on migrating and to enhancing services focused transactional businesses, introduce & website in In With payments in new money to to customer expansion through experience elements adding work transactions. and digital

committed also with productivity our and our further efficiencies fuel We improvements in remain to to create improvement continued growth initiatives. in driving operations, plans investments to

first to give WU results. on to good and continuing execute spots, the I good to have some turn There progress look we our our are about mindset you we detail updating improvement quarter Way world soft the to in but to quarter. the now summarize, of the feel to you key momentum long-term So, driving strategies, call a throughout right business. including forward more Raj and programs. are but efficiencies I a year, we And very on parts over our confident continuous with delivered first the want operating

Rajesh K. Agrawal

Hikmet. you, Thank

Consumer-to-Consumer a was prior-year growth revenue period, year. prior revenues revenues neutral X% cross-border increased the with Currency on the principal constant the net revenue constant $X.X to basis. prior-year and first from X% transactions X% a the X% X% increased was XX% transaction while between company also X% to period basis, compared increased spread hedges reported revenues X% on segment, or translation from CXC a which mix principal in to Pricing reported or currency. constant X% increased currency basis impact quarter. of the compared and quarter while quarter Total million or In quarter, in a the impact impact or represented of currency. of billion grew CXC constant of quarter currency transaction X%. X% by First a the again currency positive $XX compared benefited the positive per X%, on X% in The had approximately

represented CXC XX% a region grew revenue strong or constant or of were as down flat U.S. a revenue basis, in the and constant quarter. constant X%, region Argentina will grew negatively growth currency, oil-producing reported regions In quarter. offset the in Business again, payments regional the in which revenue reported in particularly growth softer while a North revenues, Caribbean XX% basis, North first a of Other declined increased grew be in to on although the the flat discuss East, driven increased UK, results, business grew and Speedpay basis, X%. a movements and driven region, was APAC delivered by to or X% of strong growth countries. X% the electronic Mexico In revenues. currency Europe, was were revenue while America. impacted the again and growth revenues education the Asia U.S. strength in in Latin basis, by and the currency continued India, primarily Brazil. in contributions. bill the XX% X% in transactions in or The currency constant a CIS payments the in while of transaction in X% Middle Transactions on softness which to increased the XX%. revenues to X%. vertical consist and Turning currency X%. in revenue basis currency, region, bill Revenue X% bright driven the South driven in slightly represented Africa deliver revenue in by offset quarter company BXB, constant and our total American performance on Argentina I delivering the constant America region on a to the the Transactions quarter. and company XX% businesses, currency increased quarter Solutions X% continued with was be to Westernunion.com The by currency country Pago referring XX% by in increase increased the or X% increased were transactions Africa in basis declines were as on Trends once region in an XX%. Turkey I both Growth business Revenues transactions Spain. currency good by fourth on of quarter, XX% the constant the first primarily reported Westernunion.com XX% domestic total France, or X% walk-in quarter. XX% the Latin constant the America constant and similar was declined again outbound of or in individual Other and spot partially to represented businesses. Europe partially Facil Caribbean, and U.S. and by U.S. revenue

margins growth. to period, profitability, Turning an was the to marketing operating by basis. adjusted The to from first the spending XX.X% last compared rate was and XX.X% margin offset in primarily consolidated negative year and prior-year exchange, decrease operating quarter, or of prior and higher compared commission revenue on in impact average to year's lower XX.X% margin the leverage in adjusted due the foreign the partially

was to in compared on approximately XX.X% quarter initiatives in prior-year margin compared rate adjusted the Overall, $X hedges an are year-ago tax currency impact $XX period, benefit million period. first quarter the prior-year tax impacted firmly quarter to of the EBITDA incremental in the XX.X% of achieved from profit XX.X% GAAP period, to the adjusted savings X.X% of $X in approximately to The period. so in to the negative basis. in in exchange was Way rate in the on million minimal the million XX.X% basis, prior-year million XX.X% compared We savings generate in quarter the or by the $XX the compared a $X year. compared had period. to to the prior-year Foreign prior-year WU track quarter we a approximately On operating an effective compared negatively XX.X% quarter. this million of savings was in

XXXX the to primarily both high rate the and, rate Due XXXX. decrease the prior-year year. to in providing our first to GAAP As likely and U.S. in Tax of tax this share million and of in the per additional Act the for of changes, effects adjusted estimated tax this our Act are Tax a in complexities provisionally first we benefits December quarter would was the accounting changes interpretations to tax aspects previously a the to of related year, unusually for some quarter, stated, resulted were impacts Tax $X discrete benefit recorded to Act due enacted lesser last the being provisional GAAP the uncertain calculations The In estimates adjusted we earnings be due certain many and year's now rate expense. quarter. and extent, in

an in first the due period. compare which international recall, to margin. the year-over-year rate was was for in the quarter $X.XX revenues our and the unit's of As impacted to in $X.XX, was Operating period. margin which quarter while compare prior-year operating adjusted $X.XX current was lower was outstanding. margin you bank changes compare and factors U.S. businesses adjusted XX.X% prior-year decline XX.X% current margin the the $X.XX the may other was the per prior-year X.X% to per Earnings the revenue which both XX.X% to X.X% margin the increase impacting negatively in business, electronic period. which in higher share prior-year prior-year margin the due was period. by the partially This EBITDA in On quarter tax to internal ownership due the fewer effective quarter per the primarily share in period, margin period. structure our fees in XXXX, offset by company's was primarily of in in in certain Solutions the to year compare shares earnings of in quarter, subsidiaries. CXC to XX.X%, rate, basis, The growth. The share earnings XX.X% the was total in decrease Business prior-year the included the compared revenue growth, The to same adjusted was company in

some but the our resume share quarter. in our full-year We expenditures the which cash prior-year first were dividends $XX XXX to in we under of due are share at shareholders payment and have had our buyback we our remaining the was to the buyback balance in expect At Capital previously the and timing for cash settlement and million to quarter. million a and quarter, approximately announced December quarter The $X.X flow of outlook and first outstanding Way on quarter expectations second quarter of $XXX million changed repurchases we end million in of million. We NYDFS margin to cash in $XX operating $XXX did million net in results spending of quarter. million the cash end and activities approximately not flow count factors, for shares $XXX affirming repurchase expenses. quarter, share sheet, million our debt which had operating revenue, $XX for billion authorization, any Turning XXXX. flow the first the $XX trends, recent was business is our and of in year. not from Based returned we WU have in expires

of the mid-single year operating profit currency including the XX%. per to the Tax to tax quarter outlook growth The expect to provisional approximately was earnings margins to in GAAP favorable range reported low be Act. of both approximately the related increased continue and We XX%. more on and to impact rate XXXX and rate We XX% a GAAP a constant be first this now in reflect be the digits tax our tax to for basis, to approximately expect rate, adjusted of share accounting adjustment revenue

of outlook adjusted $X.XX. in previous outlook GAAP is $X.XX Way million agreement Financial to XX%. range payment in approximately $XXX and the we related Our York of to earnings flow share $XXX from net settlement per a projected a the for expenses. full-year, between XXXX, the to approximately $X.XX a of with $X.XX range activities of from XX% per million State of the XXXX have Services to anticipated range XXXX, be operating which WU Cash related Consequently, the to to earnings in tax is of Department outflows still increased reflected New and combination payments IRS payments final share

full-year So, well we now solid year and ready take quarter. first growth our cash good and outlook to we to the modestly tax questions. earnings realized momentum the flow and have with started off Operator, the benefits adjusted profitability reflect in are have

Operator

from question-and-answer begin session. And come Keane We Deutsche will the first Bank. of our now question will Bryan

Bryan C. Keane

on the Hi, to figure then we adjusted operating you of expense on trying marketing timing negative about that guys. – out will specific – bit that even that Thanks. higher about. or the if FX had to a year is – just is and Wanted just break it there that impact operating to ask the should the maybe little numbers could need the and expense going out throughout know And be we margin the the marketing then out. in something margin,

Rajesh K. Agrawal

Hi, Bryan, Yeah. Raj. is this

because had to to year's sort in under the we marketing just On quarter and the quarter, of year. our our driven full-year the just of the to that negative marketing expense, were to largely expect negative the revenues, underspent FX quarter we were and last And that we first that. than average point is expense which XX impact closer it, X% for a the margins in last quarter, higher first some be, there hedges, of was we impact then basis was what first of piece offsets and the of by

actually to stay the reverse, then of they and the the of would expenses. first during of timing where the are course just we assuming expect impact the some other quarter FX year, in So, rates rest

quarter. So, in really what the the the margin in makeup first that's is

Bryan C. Keane

it second And or the a FX will negative will second? quarter – in so reverse starting have Okay. the impact, then, then still in we

Rajesh K. Agrawal

euro on other where and last the currencies you Well, was rate other a it about, think and year foreign really few factors. depends if

during in year. So, strengthened particularly the last half the the quite euro second of of a bit course the year year, the

So, than like had impact hedges, as some in we in quarter other the of you'll an three as maybe see of offsets peso have next less continues, less well have you the impact second some from you'll less then quarters impact devaluation the but an the Argentine impact in as quarter. half, And well. our first the second

Bryan C. Keane

talk Helpful. it money the And transfers you time. little to just any to landscape, Maybe getting or more entering not? environment the about you plans adjust obviously of just at at you'll Walmart news could competitive sounds see be with bit for you if a globally, thinking this what about Hikmet, need that in Okay. now like to adjustments price and means what there's make competitive Walmart pricing then, no looking to involved changes

Hikmet Ersek

the one look, competitors many, for many of is Yes, Walmart years.

XX,XXX times. corridors needed. We we question more for prices operate adjust several asked globally, if than that You which

Just has the U.S. XX,XXX have locations X,XXX we locations – Walmart in U.S., to in put the in

are XXX,XXX globally We locations the to sending from U.S.

We are many countries in and operating corridors. XXX

environment So, competitive has our been I that very believe good.

some definitely have locations, next look We street the the pricing. have at may band pricing, We pricing, corner competitive will – been pricing day that different pricing, prices. do doing to weekend but around that we actions

have doing continue we to many do years been that We for will and that.

the last big stable been see years. even We for increases increases, environment, don't On competition. pricing has It QX. had slight price the in price I

point don't think the I price so from of view, expect stable, today's changes has outlook. from been and don't I big our I that And environment –

Rajesh K. Agrawal

Mexico when pricing our our also we're Jamaica, very Philippines, look $X,XXX. outbound to U.S. U.S. $X corridor number competitive, up already is have Bryan, also is one you priced. to and at quite competitively the business. we

been with made us positions that that recently. have well the So, even changes

Bryan C. Keane

gentlemen. Okay. Thanks taking my for questions,

Hikmet Ersek

Thanks.

Operator

question Merrill comes of of next The Lynch. Bank from Jason America Kupferberg

Jason Kupferberg

currency year QX, the to of or terms I tougher year in you've revenue leaving got market spots just to you're afternoon, levels, the the is just of guidance this unchanged top remarks? being you soft a your at growth of a juncture to the just at comparison wanted year to low mid for that start believe Obviously, that here question. it the in some start constant good good with know a I QX. I are because a alluded in line fiscal early guys. X% bit you little Hey, here, prepared is, the cautious the in in the

Hikmet Ersek

start Well, you said, with Jason. we the pleased are generally as

start, had constant in X% we very good a X% think currency. I respective,

and doing transfer Latin very outbound I think good. money the been good. team nicely strong. been has Retail very U.S. very quarters, America good. has very executing outbound Europe been business, several is has

that So, look I a guidance to going to this But I to continue. how changing at too giving continue execute. the – to or that's it's we would early started think like the we're like we we going start, and year here. and say good

Jason Kupferberg

WU.com, on slip growth I a the just did constant And Okay. there of points, currency couple think.

XX% if mistaken, not here you you you think quarter, I'm I quarter. QX. a that think did were this last have tougher reaccelerate? to expect year-over-year Do meaningfully I comparison in XX%

get back XX% can So thinking the just into wondering year? the to or the kind is low-XXs mid-XXs, if or we you of are for low barometer

Hikmet Ersek

They using in expanding. often. we are are to So, are markets the And transactions, online rate, customers the the XX-plus like one is the And outbound also they to loyal two send thing experience. The in follow XXX countries. pleased obviously. growth we money in also do we the been customers. more And what customer U.S. where our strategies that we us do come is years. for several we our here other with thing We very service like really have

recently Jamaica countries. announced and... XX than We more are We

Rajesh K. Agrawal

Panama.

Hikmet Ersek

on people Most ...Panama. they going mobile. mobile online the apps, countries going The expand, new we're and loyal. in especially hear and very to stay you're announcements the to usage more soon, mobile. like is And opening

the it depends depends XX-plus XX%, about seasonality the the depends track record. do, on we I on XX%? been corridor. actions sorry, on seasonality – and confident our has quarter the So, promotions really that and pricing XX%, of It we Is am do,

So, to we're going continue execute to that.

Jason Kupferberg

mentioned Mexico, last one the ask know was there. competitive to on just pricing U.S. And the having you Okay. I wanted I to

some prepared potential that in little maybe or there. dive bit. the about softness ongoing something think a to wanted just you I remarks said I some into

the that have stabilized things worse in trends transaction we what last and corridor to gotten volume the of any compared like, couple we've kind quarters, seen just of or corridor? have or better in Just in

Hikmet Ersek

many one U.S. Yeah, to is I only outbound for Mexico corridor corridors. think

seeing the our We little a But softness been have of compared corridors X%... other corridors. of are none with than bigger bit

Rajesh K. Agrawal

countries bigger our of None are X%. than

Hikmet Ersek

of ...X% the revenue.

perspective, you more if So, a put seasonality. I it's maybe think of in

put we XX,XXX growth the And things in locations. Mexico, we about about the to Just And to perspective, and have to connecting good strong been we like we've generally a very Mexico dot-com good good in in has have XX,XXX run, plus that a to locations, definitely been the going has – it's growth. XX,XXX very locations out in pay right? has U.S., our been something We very been business. we're also it's but accounts, And U.S. it. going that a Raj, – focus, on outbound

Rajesh K. Agrawal

it's And, quarter. worse, we well Yeah. in as that at – worse. said, better fourth compared positioned have when around. at stage, Jason, And turns to get It quarter Mexico. U.S. first market this to bit Hikmet the competitively, not we're this getting little Mexico But seen it's got a not least not

Jason Kupferberg

Appreciate the guys. Okay. Thanks. comments,

Hikmet Ersek

Jason. Thanks,

Operator

(XX:XX) from And Faucette] question our Stanley. [James (sic) next of Morgan Jason Faucette comes

James E. Faucette

Yeah, question me. just a for quick

noticeable pressure look and we at and that prioritization look over that R&D, when while? change things be secondly, So, you there, haven't lot other Thank And investment of now, cetera, first you're think longer I your seen traffic, need where of how pricing a the you at of term dedicating seeing the any there understand development when right all? you pricing pressure you even has on about you. but like been et not if foot do to last

Hikmet Ersek

about Remember, ago, was to few we the on our revenue a was only it really think X% of years online. X% seeing growth. expansion, I Yeah, a digital are good

send XX XX is a of part channel to many countries, the it's from Now to than more already westernunion.com significant XX%. our to countries. countries countries It's XXX

going I expand. think that's to

our online to going many, countries. promote many We're there. business. globally there. going to We're to money spend apps promote to going our we're invest in So, going We're

was... part of question the On your second

Rajesh K. Agrawal

any in traffic... foot traffic, Foot change

Hikmet Ersek

are Not there the service started are and We – that customers result. see more that our customers – in in invested repeat we is see satisfied with side. really. also coming that we we makes and What the repeat especially and retail we more customer some also initiatives

Rajesh K. Agrawal

acceleration key of our I part in money mean retail our of an consumer was business. growth a transfer

revenue we X% retail, X% growth and in saw X%. constant currency, growth So, transaction was

So, we're good seeing retail well. business as

James E. Faucette

right. very much. Thank All you

Rajesh K. Agrawal

Sure.

Hikmet Ersek

Thank you.

Operator

will The come Tien-Tsin of next Huang JPMorgan. question from

Tien-Tsin Huang

thank Hi, you. and acceleration revenue in sent. principal Good

I any of So, wanted the principal are benefits acceleration both Way of FX activity maybe in you the WU opportunistic early revenue sent? seeing or ask, understand to moves, you to in some better transactions given trying and saw just

Rajesh K. Agrawal

in Yeah. I aspects I the Hikmet mean, is our and let we – do. after we acceleration this Raj, Consumer business. But of Tien-Tsin, – saw I'll speak many

driven Some lift about was business. was and in overall mentioned, was had many different driver; seems business. that was and to we one-point had constant obviously, our a transaction driver you quite of that a were parts growth Consumer acceleration. key parts key of related pricing The Principal U.S. currency, but market principal there. growth, Europe the X% growth We X% by it a as of of outbound healthy. also

And year plays out, for good rest and acceleration, of we'll good and good how the QX seeing see so us. we're was the quite but traffic

Hikmet Ersek

in have our our management And only actions really really new of how the can business, we WU And have Way, efficiencies, how dot-com a our the there. WU not company. initiative, can operating more growth also way we Also, the are to mindset look changed. has – on at initiatives, kind the only the new Way, countries you invest question Way customers we not WU working our we – open we and Way growth the at productivity Way on Obviously, – initiatives on marketing look operate can the management actions. accelerate a we use but actions, WU faster initiatives always company the with efficient initiatives, we how also how more lean repeat WU we asked within operate on that's can we how the lean

Tien-Tsin Huang

to Good Okay. know.

of Just there I Europe Western regulation dig new and the there regulation Union? into acceleration, not is you DCC proposed don't anything that? being for if on need some to I'm that, know just to if sure And directly, we but some consider was around that impacts driving

Hikmet Ersek

Really not, Tien-Tsin.

Tien-Tsin Huang

Okay.

Hikmet Ersek

I I regulatory anything has are think privacy really and part side. is Obviously, also we did in it's the hear environment new And a there. going that, here. we doing – that not much the are active we're things, alone that. besides working Europe. on well. That's That's area focus the that focused market changed dot-com we are but companies on execution not on the to usual And – but that. very many that

our have compliance programs. We

We have different nice a we acceleration through acceleration nice anti-money saw saw We programs. Turkey our And a corridors. laundering in France. in

And so has that driver. been the

nothing So, unusual.

Tien-Tsin Huang

Okay. Good to know.

have to quarter. Just mention any you on last wanted just one, clarify restrictions? Raj, the I may it, in I promise, missed just the repurchases share No did repurchases. that.

Rajesh K. Agrawal

anything mention specifically, didn't I Tien-Tsin.

Tien-Tsin Huang

Okay.

Rajesh K. Agrawal

have factors but we second we that back us buying, the we timing to the time the market be from in time where would we some in expect quarter. in back be had from of to the were prevent in timing things just QX. considerations but out We market and should market, And

Tien-Tsin Huang

you Thank good. Very so much.

Rajesh K. Agrawal

Sure.

Hikmet Ersek

Thanks, Tien-Tsin.

Operator

Jeffrey SunTrust. question of from next The comes Andrew

Jennifer Dugan

is this Jenny for Hi, on Andrew. Dugan

exclusivity As volumes strategy? pick branch down there up and breaks any be a your physical agent bit, going to change is growth to

Rajesh K. Agrawal

opportunity white a expansion parts the space No. the continued seen retail I for of we of see years that to various lot world. in couple of over you've last mean, continue and

and why some our get more agents, results we're to adding to we we speaking, of competitively continue that's – So, you're the that seeing new portfolio, you're seeing.

Hikmet Ersek

the doing don't on the see see I is market. big any I – think competitive very really the – issues the don't team our any is we're big market. the in I so success market, – on really well – in

Jennifer Dugan

the is cash Okay. there some any the last to of in usage so? or strategy over change India, year electronification your And just then and change in given

Hikmet Ersek

England Is think the to – corridors very has competitive India, and have been it India, size to Canada, that's India and that major good the Compared Germany, this a drives Middle these are East, also generally really our XXX,XXX pleased UAE, than – along active real strategy, is or it growth has from Saudi there or good from and there. India, have our from corridors. have other think the we I been well in we're been we very have India, a U.S., promotions Arabia, more think or we from India, it – I very Qatar to India we've all locations and Australia environment very putting I competitors, in with from we our with active actually we right. from in

Jennifer Dugan

Okay, Thank great. you.

Operator

And question of Sachs. from the Lara Fourman comes Goldman next

Lara Fourman

question. Good afternoon. my Thanks taking for

Rajesh K. Agrawal

Lara, how are you? Hi,

Lara Fourman

Good. Good.

that you also renew Just And of some negotiating of the is some more there's increases any they're of digital when or color some commission I have? mix color you merchants from there on you coming certain anything, from us you on and give corridors, power if commentary there. better where a positive then having size you any are any transaction can are if is actually in they terms the or – have on mentioned, of the more just more partners trends, you but the know pricing changing XX,XXX or

Hikmet Ersek

would I the the customer has the the westernunion.com you over XXX,XXX brands, in like years, customers compare have side, being competition, pricing you stable. they very the with use, to Obviously, our like XX% competitors. the as know, global like experience, environment pricing, premium higher we nothing pricing reach, XX%, Absolutely, if locations. special. the reach, – our on us Lara, like still than our there's XX% been And

increases, this the the been guess. do currency that on been are And The We to I Our a a programs, it there, generate a say been been business that anti-money it than really settlement has decrease some increase, we've customers our XXX laundering hubs. corridors job and more and slight increase. has I revenues, to We mix that's would be the some doing pretty not in premium market, well significant in corridors. multi-currency paying. And in has has side. some invest

you to something? On side, do want the Raj, say commission

Rajesh K. Agrawal

Yeah.

bringing of a trend this able been do commissions the our and in commission the different job year. years, continued getting On down several we're retail into side, has overall over last Lara. benefits that ways, several to We've good

mix debit mix are side a business either in business then bank down. out it or want because us. digitally to account, at our and is pays overall total also benefits of digital costs We look to from is is faster that a costs retail one card, location, really distribution growing the distribution bring initiated, at so We benefiting getting company, credit card, the but that goal

distributing the that's mix and more going So, to us time changes bank ways as funding payout we and business the well. product, of over where as help bank other have

as we're with well. overall the So, trends pleased commission

Lara Fourman

XXXX. give BEAT Got guidance talking me, just it. And about then time Do color one you any Any in rate tax more have the impact tax more for XXXX? gave have last know some XXXX. can you you more were more of the in for clarity on Raj, you I could on there? an

Rajesh K. Agrawal

erosion provisions, base portion the through profit. time, a not still provisions, double the Lara. BEAT tax at which effectively Yeah, of our We're this working

things the structure couple you angles change influence; or our hands our trying the to or base treasury, that a will. taxation, the we're take structure the try try and issue there. still which impact internally BEAT, push or legislative erosion – causes own to our from for One double there's potentially alleviate to other one to a is into change really is if or guidance to So, of to

of later come still for balance the to year you So, we're to on what can and to it's take working that imagine, year. view as into It's the really it. us next on means going complex, a us

Lara Fourman

Thank Okay. you.

Rajesh K. Agrawal

Sure.

Operator

question Shirvaikar of Ashwin come will from next Citi. our And

Ashwin Shirvaikar

Hikmet; Raj. Hi, hi,

Hikmet Ersek

Hi.

Rajesh K. Agrawal

Ashwin. Hi,

Hikmet Ersek

Hi, Ashwin.

Ashwin Shirvaikar

expenses. operating I already other start to question the clarify, guide that reversing just factors that And you make a to there have is investments than other maybe made the One FX are the related (XX:XX)? XX% margin, GDPR-specific is, to related with guess you question two-part all (XX:XX). need given then

Hikmet Ersek

hard Ashwin, know, to I it's don't I'm so understand but you, expert. no

Rajesh K. Agrawal

correctly. question shot, Let if understood a give it me try to Ashwin, your I

year. you I FX quarter. were the of the margins, will certainly in negative asking rest That the first about On think this impact reverse

will We then of overall will revenues be our some year, and from margin expect that And some leverage expenses part also just the our will of get would help timing latter higher lift. give to the us also that us. in

a company the of where in those invested changes process are to second depends your be investments. operational So, the in in help of bit that place made could a technology regulation things into around margins the We're in above, making the below, then question And that goes trend. That's now. different approximately get It GDPR. in on to that putting will little little us bit and upgrades I of XX%. And a various effect also we've believe was We've Europe process in of and lot this changes. right month.

Hikmet Ersek

will Tsai, hired lots here us recently the reporting U.S. Caroline and a we Europe, talent good that in in Yeah, lot. help General also Counsel, to so of our

Ashwin Shirvaikar

it. kind countries just pricing, could given WU.com, WU.com to that you that wanted give of then between breakdown contributes of in transaction sales of the any same-store Got versus to growth down. And add, sort I to some quarter on you new any what understand break help

Rajesh K. Agrawal

really we but, like newer markets contribute takes is Yeah, will term. customers the time existing us and The model the growth term, more more be them here a adding the give things are current awareness the I short time. don't while keeps keep over business add will to the breakdown countries, And channels. Those over for to and develop the markets, going more long they mean, that to driving it contributor. biggest create for clearly,

Hikmet Ersek

and customers more customer all they current retail. than often they about the register, once online, use we is relationship, they use that customer management. our use And that apps, business our Yeah, the they know

on use a and we very helps start to some new country, time they that – us open once and new it well. that then grows also So, takes

So the and existing the investing existing customer opening customers, countries the relationship, model really is countries. in new

Ashwin Shirvaikar

it. Got Understood. Thanks.

Rajesh K. Agrawal

Sure.

Hikmet Ersek

Ashwin. Thanks,

Operator

And next, a question of from Susquehanna. we have Friedman James

James Eric Friedman

us It's for as have as it mentioned We Hikmet, in some wrong, but apologize and in I expense do a or prior we you of was Hi. these can growth of believe how I an there – share use Facebook, your think I see a maybe like driver. have got often comments, cases the WU you some we – think any if Susquehanna. Jamie wondering, cases seen Way Way we materialization? really WU apologize seen a with at use the cases had I of Thanks. initiative. I was WeChat the I marketplace?

Hikmet Ersek

Yeah, I think what we we Agile. that do have is

a next on that's a our do We is more faster more the that Way and agile, to in And in in a on way focused and are built new Way. countries going environment we The go-to-market the all WU and faster, opening way. optimize step market customer agile receivers we and end-to-end also transaction starts sending investing WU relationship really innovation. processes way, in better and look really how the how from And it. building

to journey, has long the first faster, an we awareness XX,XXX Just trained pay be to and to to where are processes, increase do of together, half it employees, have has our have can how with employees where they WU Way can Way on but they huddles. the customer to you our rate. And more a That's rates, the People have started results. we start what good And getting more training. it's give than indication, been about that of – WU how show work they analyze they start daily the it. satisfaction

James Eric Friedman

the expense Got just rate harder, year. just wrong, said, is wouldn't may $XX you have in it. the QX, the get there thought did run or Is million I for Raj, that then you million, another I comps because side, follow into if reason And could up why gotten longer the year? that on that $XX the

Rajesh K. Agrawal

is last will and run quarter. second achieved for quite half We year, benefit bit incremental year a year, not the so of rate that's what so full last yes, for achieve than which $XX much third be the we as year. the in over, million, Well, the grow there's $XX this in we'll when million more fourth

year. why that's to you'll the the see year the most so half And first last of in compared of increment

James Eric Friedman

Got it. Makes sense. context. Thanks for the

Rajesh K. Agrawal

Sure.

Hikmet Ersek

Thanks.

Operator

next comes Jefferies. our El-Assal question from And of Ramsey

Benjamin Budish

from Hey, Ben a for guys. just wanted to I follow-up Budish Ramsey. is This earlier. on question on

the quarter that or divergence transaction I'm is just sometimes that? and between the You activity. there's anything revenue currency or anything per or principal there mix this with drove mentioned the like in that WU.com growth promotional what of with was transaction sort constant curious growth

Hikmet Ersek

is mix. mix. It's Mix. the The answer

Rajesh K. Agrawal

Yeah, growth just mix came in where the the business. from of

Benjamin Budish

next the maybe of quarter-over-quarter, improvement drove the you but Can over term? just plan. you of then the segment, years one some quarters other mentioned me, long-term or in out couple on there then And earlier was what like for you Okay. kind that of what the the longer kind parse improvement, BXB and expect below

Hikmet Ersek

earlier, below is we said As I current business expectations. think our

here we we market We – We We the improvement business. acquire to have on how customers, new do really to are go-to-market, Way use go refocus customers. differently how also now. serve a the WU activities

good to definitely is below share but are gaining Today's growth around, our stronger. here objective expectations. market the good long-term turn year, Our and start growing rates

Benjamin Budish

Thanks great. questions. Okay, my taking for

Rajesh K. Agrawal

Sure.

Michael Alan Salop

the final understand we'll question. one queue, Laura, in take more the Hey, so I caller we have

Operator

Sure. And that question ISI. Kumar will come Rayna of Evercore from

Unknown Speaker

Rayna the your besides and if functionality (XX:XX) use just ask guys Nick office? is are wanted progressing on with you back other This Fremo to is Kumar. partnership how Good of for additional behalf evening. blockchain cases I any Ripple seeing

Hikmet Ersek

that is business things processes. is obviously Blockchain look, lot innovation a of definitely interested. different of our performance currently, and something the our looking way Yeah, one given on we at

We at are it. looking

We are testing Ripple. also with

test. Our test a is still

efficiency have We are And investments the can efficiency smaller understanding different use where Ripple, innovative with start-up also in different companies. blockchain. investments, companies, we we with different

continue to be in investing our We to model to continue going see big that's change yet, we will invest in but don't to business we So innovation. in – continue happen. a will

Unknown Speaker

you. Thank

Michael Alan Salop

people more two understand the I Laura, queue. joined Okay.

– take more questions. couple we time have So, for still a we'll

Operator

Okay.

Bob a question have William Blair. Napoli We of from now

Robert Paul Napoli

you, Thank and good afternoon.

or at like to continue industry other faster right to point narrow that the in this premium it that Do at time? above The price does I growing over XX% there quarter the a are somewhat I that on think you players suggested Western competition. down the much level at – I your does it need But are Union's years. pace. Hikmet, Just you question pricing, is broadly seem over the still come think, about strategic pricing that's last mean, is on think

Hikmet Ersek

I first think, our confident am all, of price premium. with I

choosing being reach, We corridor our are even XXX people like prices. prices there our our earlier, Obviously, in As are I weekend like our brand, We by mentioned adjust our why customers many change constantly countries. several We global us, reasons. do the have corridor. brand, constantly. like prices services,

decreasing – for us shows the have our stable of feel we comfortable have services. our and that. that business on price our if been over We overall, competitive point that corridor but street I comfortable corridor with adapt different one It's been been we that. a from stronger, lot, stable pricing, are we different, And down today's XX%. competition with higher and has feeling still goes not our view, with corner intelligence prices, and intelligence, very we've XX% a to time, And prices, is will long to

prices, different where will destinations, we in fly But look do. at may prices. different That's We right, what different classes. you other like fly that. weekend, corridors, we an airliner, you increase It's pay you

customer bands. of I biggest one think to advantage our our and to be we use that's the do what do intelligence use countries. adapt XX,XXX corridors. behavior, that's XXX XX,XXX competitive do corridors, we in different We artificial And with within

Robert Paul Napoli

in Thank have and in you. the bit – the – it. on earnings? effect an volatility currency did volatility much up that Was there picked of – then first And foreign quarter's quarter. that from sorry, quite I currency missed part of a I'm Got was a and call the the benefit

Hikmet Ersek

our part Yeah, give principal and just mention also Raj. also One first I I grew. is our on this before grew impressive quarter X% to to thing the want transactions

are people services more. using more and the our So,

environment pricing has by our received think the customers. well I been

Sorry, Raj.

Rajesh K. Agrawal

saw volatility. I'm yeah, was volatility. a lot problem. of not we there of lot would a I so volatility, foreign no market And, Bob, say exchange that sure Yeah,

I not big for really was more a driver was the our that to think call business factor a don't BXB it us or broadly company. So, in in out.

Robert Paul Napoli

Raj. Thanks, it. Appreciate

Rajesh K. Agrawal

Sure.

Michael Alan Salop

Okay.

I one we final question. think have

Operator

do. will Autonomous we question that Research. of Yes, And from Matt O'Neill come

Craig Jared Maurer

be considering Curious for Yeah, strong and WalmartXWorld secondly, wasn't any Two worrying questions that concerning the should we end mute and the guidance just revenue year thoughts about Craig the could of And late. Matt. on Thanks. half why back Walmart the offering getting is the anything performance? hi. launched? apologize performance, of MoneyGram for that raised This pricing, on top in

Hikmet Ersek

thanks, joining Craig, Yeah, the call.

are place I our in that's And the continuing very start. a earlier we XXXX, I we're strong in with from are performance doing think outcome As that that we businesses the our with And well. put we pleased especially in QX. and mentioned really in that programs call, and have of quarter our CXC is

growing, Our business customer been with relationship in and our doing to customer our has and adding our dot-com well. additional way, and been customers well new really dot-com network has experience retail business customers, very doing our by the

we're I And from operate growth and a of we pleased I we business earlier. Look, countries are competitors. second if Walmart one XXX worldwide, do, a the question are and like competitors XX,XXX our in but with to especially Walmart the here, question that like it's too part you with corridors is guidance pleased do, was So, are, early – many answered It's there the perspective, outcome. many part, we of confident think believe early our give we to we are with new give that. too we

things put to in Just Walmart has in locations perspective, the U.S. X,XXX X,XXX locations,

worldwide sending X worldwide. and locations XX,XXX about in than have XXX,XXX We to to locations more U.S. bank accounts billion

Walmart do in It's daily, good competitive. market. If the is have That's we U.S. the the adjust. we outbound the do what corridors; one connection do adjust That's a what daily. we us compete job. team and build may promotions to to we I the So, from around think doing pricing that new for we is the of will It's prices, locations. we very nothing

Craig Jared Maurer

you. Okay, thank

Hikmet Ersek

Thank you.

Michael Alan Salop

for a good and Okay, thanks, we today, everyone, wish joining us you evening.

Operator

presentation. now you today's conference attending Thank has The for concluded.

You may now disconnect.

The Western Union Company (WU) 1 May 182018 Q1 Earnings call transcript