WU - Earnings call transcript Q3 2021 | The Western Union Company

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Western Union Third Quarter 2021 Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Brad Windbigler, Head of Treasury and Investor Relations. ahead. go Please

Brad Windbigler

accompany today's tab, quarter On and will the the under slides discuss we be webcast Thank at call. will found results, call, remain our third westernunion.com that The questions. XXXX take Investor XXXX, call Financial Company's and will to Relations you. the your we this and Outlook then after for available

our statistics been provided press with release. have tables operational Additional supplemental in

Today's cautionary Agarwal. is Our statements. and and the with is our and Commissions, filings and call comments being earnings the Union our Ersek, our Exchange Raj today including recorded Hikmet Please CEO, CFO, refer language release call XXXX, include forward-looking the XX-K. Securities Western to The the in form

concerning differ that results factors forward-looking statements. actual cause materially the information to could For from additional

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

website, We on the Investor have the GAAP comparable section. reconciled items those our under westernunion.com, most measures to Relations

Company call recording, Hikmet any transcription now turn property Western for will Union release, distribution our press subject over adjusted expenses Union types can are authorized that The of on to to to Company certain disclaims maybe the this this expect the to CEO, noted certain or to discuss specific statements Union in responsibility also previously by All of incurred the our similar made has metrics. future. initiatives. in the I are of and incur has Western have will of been extensive Western of from copyright the replay metrics Ersek. call. protection. The Other replay, reasonably and We But adjusted excluded The and that any not call the officers

Hikmet Ersek

and good afternoon, progress joining We the third Thank of results quarter us today you, you're business. our to discuss our Brad. appreciate And everyone.

cash delivering well COVID-XX flow growth Our strong profitability the and of double-digit operating as solutions to and as quarter. pandemic, business revamp from business the effects digital during the revenue continues in

Additionally, platform continuing make progress to on evolution initiatives, good and our enhancements. are key pricing we including our

take we achieved revenue constant at XX% reported a third which on in Now, quarter business quarter and a closer growth the and in XX% let's growth look by driven digital growth was the X% of currency Solutions. in results. basis, Overall,

While retail by these workers nicely, two slower grew the markets, particular, was where recovery. the employment affected recovery businesses In remains the levels. business below labor migrant of XXXX Economic in

are their levels a principal we period increased With per result, that, quarter. growth market terms principal reported As believe that constant increased CTC ones down cross-border cross-border World currency customers basis, transaction our X% transaction X% a with and of XX%, approximately during Bank based on the latest principal the forecasts, Both X%. reflecting provide was our we in uneven revenue to our the flat or down Economic loved support the elevated recovery. of on share. during growing Year-to-date,

to exceed strong the we Our million, in well grew year. growth.WU.com Revenue and on revenue record growth second $X westernunion.com, this to monthly $XXX revenue and continues XX% with at users is average was in our active billion Most that quarter, putting quarter the principle XX% pace quarter during high level digital business pace business digital increased third healthy the quarter. which in of X% a the the achieved generated generate maintaining in us growth.

business. growing which of is healthy product, as outcome the from a compare portion good marketing, experience. we moderating in and larger we We to growth [Indiscernible] remain anticipate levels, our as base prior-year's invest against the the as grow by encouraged were to seeing expected, we and in growth our is much Although growth results customer accelerated particularly results are fastest continue we business,

as as Bank, business digital is STC component in a previously launch this was launching STC in other with the of partners new in first acquisition Arabia. our partners. existing digital business our formerly recently leading as relationships The announced We a in of now Momentum completed stake we partnerships. expand process Pay, building one and minority digital provider digital which of the banks of known and Saudi wallet is service is

a we new addition, planning number In are partners upcoming to months. launch in of

Our leading our suited needs progress digital to banks we providers. also have serve and the direct is well confirm digital that of serve built the capabilities to branded wallet business

compliance on built of technology. Our solution strong a emphasizes and flexibility and choice, foundation

We offer to incorporate can who solution. capabilities feature partners our we cross-border as our or brand that a partners white-labeled to are want branded offer payments, able leading solution in

available Our to as real-time prefer We for direct network. countries while participant, real-time our Europe. a capabilities that Western International agent our transfer Union also joined payment Scheme enhancing announced Transfer solutions, capabilities incumbent on payout recently improve choice has SEPA currently consumers to Bank direct who XXX account Instant in a over in Credit further providing

to than be to Key cross-border we evolving broader on incorporate is of more future in payouts use consumers to of extensive over in -- Thus, our customers success, XXX,XXX platform offering through direct countries our or digital network retail integrated branded systems approximately to our to also and historically, partner cards, territories extended omnichannel serving cases Wallets and have payment but bank billions our focused serving enabled of include traditional needs to our of have use Millions capabilities, past, XXX whether partners global our locations. currencies and with can capabilities the Our XXX remittances as are currencies. the accounts. our which cases. related of

and capabilities payment invest and customers with across options borders, in to and currencies. We our continue platforms, convenience our partners additional devices, to provide expanding

adjusted $X.XX investments, partially was Turning XX% as our platform. operating performance for as solutions basis, continue strong to an basis. $X.XX global was with result marketing solid increasing to reported invest planned lower growth, in per on we which approximately in were Share the and offset a Earnings business margin quarter. omni-channel Profit technology to quarter our on and the Profitability a and of revenue

strategic over like update an Raj discuss it to quarter on our Financial our a initiatives. the Divestiture are of Quarter proceeds planned performance key few The the to on entire the remains with more of financial business business provide XXXX. turning majority And transfer track. Fourth in Solutions, detail. to to Before expected and in Outlook, our updated XXXX for the I'd Starting

today, As ecosystem we are strategy. expanding announced our earlier we

offering, relationship We are a Western our Union to transfer branded products launch bank digital Western in on by money which Union and pilot customers quarter, our on International them of is an integrated offering part strategy, in Bank. the important additional track solution relevant banking customers services. banking to fourth and our Romania ecosystem digital The digital offering bordering focused plus WU and deepening our with is and Germany

resilient U.S., that, quarter are Raj as the to uneven business over including the countries, a shopping pandemic, other are in we launch families cashback enables our to third solid component live receiving on and we I'll and to that internationally Another year-end. target from rewards Several in discuss to is an the year. program finish proved gifts footing online cashback WU our Germany is directly Austria. ecosystem of friends by Overall, purchases. results shop to effects our send more more and and With and economic in the Shop, the over at countries turn their and now customers strategy continuing stores, their XX,XXX Shop while WU recovery now on detail. it despite

Raj Agarwal

Thank financial And and discuss Today, you, XXXX Hikmet. everyone. good results will third our I afternoon, quarter full-year outlook.

or from and the cross-border prior Third BS X% the offset CXC transfer, impact to growth translation $X money currency North declined was the principal increased basis, XX% transaction benefited to Regionally, growth hedges CXC percentage constant money and flat Digital behavior. the Total the currency.wu.com CXC transaction transactions X% continued spread continued increased of currency X%. on reported Europe point constant flat PPT money on revenue and as America revenues net Currency currency and revenue, quarter across was on a changes quarter basis, In per or between a digital or constant slow and basis X% The basis, growth a growth partially transfer. grew quarter. of by revenue impacted in CXC in currency. include transfer from X% up CIS. revenues XX% COVID-XX or or by currency transactions growth partnerships X% revenue grow on X% revenue solid transfer. a year. Digital or the recovery X XX% mix by quarter reported $X.X on currency on basis. in XX% money quarter. segment, constant show in growth and principal consumer was by a reported digital up approximately Total compared billion by was Transaction constant WU.com on led and was constant the constant cross-border basis. revenue X% XX% increased digital partnerships transaction revenue Wu.com wu.com driven and to and a for reported third XX% on Principal reported decreased driven million which retail of

X%. currency, our growth including X% X% that results, X%. ability and basis, declines U.S. the provide was in Cuba, U.S. money on and declined decreased services revenue reported outbound, domestic concerning of then limit to on both a CIS North regional impacted the constant-currency to regulations U.S. basis America constant in on there, continued Moving region declines reported Revenue transaction and X% by Europe a Constant transaction transfer. of or revenue currency on

on trends revenue due APAC mix. XX% reported driven was growth education basis and business year of by basis, in revenue the the broad-based to prior-year to Our Revenue between the currency to over was be X% benefited basis, currency in increased COVID-XX. the on X% The Mexico, remained revenue and Africa, revenue a business increased to main positive on in recovery services quarter of the reported money contributor driven Argentina, was growth a while generate with the and to spread declined of led the the transaction from growth Constant a Business continues cross-border COVID-XX region currency. to were continuing was both by the the by the and The Company transactions in or of growth and revenues digital X%. impacted XX% was by in business region in increased constant by business payments XX% Revenue by U.S. period. quarter. retail currency while the lower quarter business. and currency currency grew the transactions in while Caribbean revenue growth growth, quarter. Revenue transactions continues declined Other revenue total revenues XX%. partnership transactions course and X% Asia and strong the spread the digital with and digital transaction dislocation the in increased in in in softness constant in currency retail offset constant constant was Constant retail growing a declined America and a on on XX%. revenues performance, of trade. and and in bill in region reported The generate due basis primarily X% Currency represented growth between spread. currency Russia up X% declines solutions the Middle segment as payment constant transaction recovers business. region Ecuador. U.S. activity Chile, continued a revenue revenues East, region X% strong revenue consist generally vertical, growth and Driver the regional South Other Revenue Company partnership represented or driving and retail orders the Latin XX% prior contributor the constant primary to economic

compared margin year's primarily revenue to M&A costs. XX.X%, year The in The in GAAP in excludes to XX.X% and and and the Turning lower expenses period, last and prior-year technology driven expenses. margin investments, GAAP higher from were quarter restructuring margin and the current offset increases profitability was the was XX.X% Adjusted planned the GAAP benefited margin the adjusted the operating quarter, period, prior to adjusted both in margins operating while in partially by operating prior-year restructuring investment. that consolidated prior-year growth consolidated compared operating period. by marketing also margin XX.X%

margins in margin operating year spending by period to Moving charges. current in year period. was technology compared operating year's margin in primarily slightly our invest both in period. higher to prior XX.X% lower offset prior segment in due and revenue. note operating year increase operating An margins, operating margin continue XX.X% margin increased to BTC was as that XX.X% partially exclude plant expenses the Business to prior margin investments. to was the compared we restructuring Solutions due the last platform, was in XX.X% other quarter segment M&A to lower the The are included and margins for

Solutions and was increase lower months due partially EPS XX to Other last in $X.XX planned EBITDA. operating the technology sale deferred by higher divestiture M&A the effective segment in During tax was due Tax while to includes rate period period, in growth in this prior-year offset sale quarter prior-year of million of EPS rate quarter the in investment, recorded XX.X% $X.XX of share margin a prior-year quarter in was revenue Business GAAP to related prior-year to of the quarter, the in in million marketing EPS EPS tax the tax The to of effective the of $X.XX a generated $XX reflects the related The Rate was tax in and on Business increase GAAP period, recorded the costs the to $X.XX pending compared higher compared $XXX XX% XX.X% investment. on revenue to XX.X% the Solutions. compared Business rate was period. to Solutions. the prior-year Solutions. The adjusted higher or the XX.X% taxes period. while to XX.X% pending the the the the deferred compared in in per was taxes Business the earnings adjusted compared year GAAP and in benefit $X.XX effective GAAP

repurchase the of million in million. consisting to approximately and under from shareholders Turning million. had and quarter expires count repurchases. was million XXX cash returned $XX debt expenditures had year-to-date remaining million of quarter-end the end our $XX Flow Flow outstanding the at $XXX At we $XXX The to was quarter, dividends our end million $XXX were which and billion. of Sheet, activities in in and quarter, we of Capital third $X.X Cash authorization, shares $X share Balance $XX at in million Cash billion operating We the year. the share this share of

we updated XXXX. Today, Moving financial for macroeconomic outlook business provided to recent and reflecting our an trends conditions. outlook

a earlier, from has As the COVID-XX recovery of pace environment. mentioned fluid Hikmet created

recovered. months, downwards recent and For were have expectations example, revised markets GDP in fully labor not

a expect basis revenue be will outlook Our revenue environment will improvement. similar third macroeconomic in XXXX while We moderate GAAP that quarter, assumes be higher outlook in we experienced what now the growth. to the previous full-year currency assumed XXX points growth our constant approximately

previous excluding calls our Constant-currency Our revenue increase. mid-to-high for GAAP expected inflation, a mid-single-digit Argentina X%, calls and for previous X% outlook is grow increase. single-digit revenue, the impact while outlook between of a to

payments. like operating to Business from to margin seasonal with the the adjusted Compared third expected expected full-year benefited Solutions from and the are to as while fourth incremental we approximately closer in changed, margins has tuition quarter, from to fourth quarter GAAP the factors revenues not full-year which outlook lower is expected quarter be to anticipated approximately XX%, average the investment be margin Our be operating margin XX.X%. operating

Solutions. anticipate related rate the be for range will GAAP expected in tax a mid-teens to previous our the $X.XX $X.XX tax a to sale Business range of to EPS reflecting GAAP pending effective basis. a impact $X.XX $X.XX, of a on and continue to of to in adjusted compared year the the be the We to outlook a is

make of take continue outlook. now we're the bottom-end compares EPS our Operator, with And questions. to our Thank summarize, for today. strategic raising for we're we new also you toward our achieving call which to are range $X.XX We with $X.XX pleased ready long-term the to of adjusted a in joining To range the progress to $X.XX, objectives. previous

Operator

will time, begin question-and-answer assemble At We session. we pause Instructions]. [Operator roster. our will this to the momentarily now

Tien-Tsin The first question from JPMorgan. comes ahead. Huang with Please go

Tien Tsin Huang

from COVID competitive outs [Indiscernible] you. And or some to Migration. you sounds with broad-based -- it connect that, asking it about Cuba, a you impact was Okay, is as want do a that you call national think well? good with on [Indiscernible] it’s regional any How thank standpoint take labor like perspective? off the our with very from I all. talked related more retail with it to and

Hikmet Ersek

on Yeah, right. micro became thought, that has in as position. be million labor the give not let start -- not supportive We our as and -- widely U.S. customers as impacted normalized is economy still fact, retail market in our employed has the the available, one obviously, better, migrant we will environment especially And that vaccination sits hope that example thought. I much business; me have as can Europe after been the in better much in U.S. X.X at the not hoped, U.S. we and you people. foreign-born the normalized employment been That we

U.S. is XXXX. it was employment X.X the So like is it -- is people, born foreign today, million which

retail So has business. this been environment impacting our

performance have However, on we side, the other on business. good seen very our digital

performing has business and extremely And to the platform. within accounts performing business CXC our the people that been business, been money growth. [Indiscernible] use good our drives, digital has well. Our definitely, digital using very And and their

dollars, a billion I very said great that So growing that with and over an remarks, report who and has good has I'm to on base, But I as factor digital-wise, in has good opening that say then U.S. optimistic. don't impact our would an strong. revenue competitor a to growth. that. billion business. And regional, and strong that see we growing any a very -- retail going continue, Europe, dollar my that's hitting And are a And I all on been the definitely has

So very good. that's

to add something? want You

Raj Agarwal

a noted. shut And that you last Cuba the our Tien-Tsin to North consumer late to America relate factors Huang, down primarily macro to we to year. related is U.S. as lot retail Yeah. because impacts

to was brighter year digital America U.S. Latin little relative soon. annualized getting because from the to America continues last has So be continue to probably TMT then recover a decline. spot that And that's bit one less Latin

Brad Windbigler

so hit are the year more because harder of impacting world, nuances lot but was that And consumer. factor. rest this throughout of other More retail anything and growth last is of else. and a there Business than then it's recovering year generally our the it

Tien Tsin Huang

just expand for to here. quickly two [Indiscernible] countries you the countries see, the What quarter other well? the trials from what Thanks in two pilots these in how learn digital follow-up countries in then banking can Maybe second even that. in and some you are looking all as my you sharing and on this [Indiscernible]

Hikmet Ersek

Great question.

As digital our ecosystem. based you know, on our -- expanding banking is our

We have take one -- customers of globally big relationships. unit. westernunion.com. wires We It's called on millions direct

are customers banking and license, our brand, We Bank our us assets, digital which existing our global building earlier, service us. in are that do are on also launching bank Germany, we our use platform, banking to And but allows internet also customers we International on mentioned our our -- we're to as and told with And morning. this launched, we I launched that services Romania.

the and with the -- probably, You launch gifts very also will want and and and buying And more send excited success more Germany to in have will about press WU online cross-border. you not for in money the are expanding many customers send to more airline very loved also activities gifts, us services. is and I'll you companies U.S. Shop. were allows to shopping are of ones asking also banking unique and saw I'm that and customer, quarter we Austria digital release. I but our the once online that customers the their shop customer, give excited a for migraine our maybe And really WU and is that at, the we very these figures asking I'm which customers. is really are Shop about capabilities globally. future, products have us and unique that. soon -- also additional launched give in this definitely that It's within ticket data we

Tien Tsin Huang

it. Excited Still it. appreciate to more about learn Thanks. Okay.

Operator

ahead. question comes Please Jason go next of The of Bank from America. Kupferberg

Jason Kupferberg

Thanks, guys.

by start on to wanted Just question. building tangents

turn that migrant when employment What do you to think not dynamic. do turn you around? starts digital it your around. why business. that I think to regarding it's takes And think for the Just affecting worker you mean,

retail. the Just

Hikmet Ersek

digital customers As we in you is know that digital segment. migrant that are -- was also And business that could customers different customer digital repeating I over years, new bank say cannibalizing incremental retail to our and retail globally. not send or our money has nature business. told by credit a has customer card brand, and it's a -- account We to that

and picked the cash. up parts is On shows This our the by receive capabilities But in payout. growing of is great, one most omnichannel side, question, that of that transactions are retail or your impacted, and omnichannel comp faster impact, environment. to customers. probably the the Jason, transactions. been cash why retail, customers The of want go They the as to most cash the have do

from global as the the you X% in obviously, ago months from In around U.S. growth. down facts to broke last X%. to the know, few X% Some GDP, X% even, was

-- So environment. these first and are big probably economic definitely behavior, feel have first impact of income, Union account, customers. and money solid impacting to support on has indicator customers. and continuing the customers have digital that's our retail a their always are a been our And on a customers more And Western they the has customer’s that's

mean a down, very are retail, resilient that, but to everything, I'm that that quarter, it loved as The optimistic. support one. seeing down. the know, still, business. It's doesn't very be it this their Now, doing business, very will you was customers solid

our are crossed We we XXX,XXX announced retail expanding approximately business. locations. We, today, that

more gaining and more and agents. expanding are We

Jason Kupferberg

Okay.

to if looking the just potential QX, year. So at we're performance trying business last on in the digital in hone of I'm

growth could I seasonal a around there would how probably QX think year? in are up quarter-over-quarter. assume come tailwinds this it proxy Is I holidays. some was around decent for the digital that X%

Raj Agarwal

just again. -- that I say Jason,

to year's it comparing QX? last You're

Jason Kupferberg

saying X%. was QX 'XX up versus around QX'XX I'm

So if we take that.

Raj Agarwal

for and That's what business low growth sequential from and then double-digits there this for last the compare WU.com. the hard -- necessarily the so because Yes. mid-teens quarter total year. not last with much rates We do and growth was year impacts digital, will future. to the you at overall growth in It's when happening look

of that distribution the and the on functionality, depends just marketing The lot pipeline. we around doing, activities. it have and think platform have I all in a we that we're features that the upgrades world, then the the

goes. an And have on in business. for overall we the standpoint. all to opportunities our of assumed this business see of impact those growth relatively significant QX an to QX where year. in revenue to So, longer-term, are continue was the terms digital have for outlook, from going something flat too for But ultimately we good not

Jason Kupferberg

Okay.

last one Just and real though you share little even count? is quick. a The bit, and midpoint revenue bumped of maintain that of housekeeping up thing, lowered you buybacks the and just tax, your guidance a EPS margins function just

Raj Agarwal

No.

into each for come of unison. ranges they the and only line don't always moves have in these year, all We items

we or have can We're obviously saving year level expenses that revenue this of of impact with some So the factors number a or money management. investments. expense

through original being levels. that's seeing. while of have as course And we're revenues us the not those So Jason, what will hit bottom-line typically helping EPS we move the overall tighten ranges goals on based -- achieve margin and and Even the objectives. we the year,

really nothing that. it's more So than

Hikmet Ersek

comfortable feel we And our with investments.

to invest technology and in We innovation. continue heavily

really are that. expanding on We

not comfortable with really So comfortable we on talked the we the and EPS on about that guidance guidance. margin and feel will our Raj

Jason Kupferberg

Okay. Thanks, folks.

Hikmet Ersek

guidance. not new Thanks, the expanded revenue the revenue Jason. obviously guidance, on Also

Jason Kupferberg

Thank you.

Hikmet Ersek

question? Operator, can have we another

Operator

Yes. question Research. Peller with The comes Wolfe ahead. Please Darrin next from go

Darrin Peller

Thanks, guys.

Raj Agarwal

Hey, Darrin.

Darrin Peller

hey, largest sequential business. the become -- transfer it's on now just WU.com revenue up that have change, up mentioned, the on been bit. as digital Again, And money standpoint quarter I the progress think from pretty it you who follow you business, on X%. there's average made When flat While a and to consider obviously, you Raj, from the lot users of to a was set this last quarter. a

of So much do. haven't growth growth understand on And going in going ‘XX? tactics a was growth into we that think What can what us curious kind you normalized of WU.com an heard from help while. that million to of X expect base standpoint metric going to for over can are you It's kind a higher. execute And forward? a what forward. user taking kind to what can larger update you we just be now. off you obviously marketing It I'm dynamic But user

Raj Agarwal

which I the that end years. recall -- of history. I'm have mean, bit of couple XXXX Digital we the a the over if end little during last anticipated happened give At sure you you the I WU.com at the years that's a had lot at what so. X business, of -- of I the And last said following for think our grow primarily then, could growth. year fall range is Day back and XX% to or doubled at it the last Investor X we

continue almost We So good the on depend normal partnerships in line it was to going this to we be level of much those a digital we to will size what expected would growth at be in we're there various too. and the a larger it going now, traction a XX% year. that side. with revenue metrics. will do in in growth, year on probably it's be get believe base sitting have on And lot of a But customer over billion dollars

have. the customer a increases on upgrade a invest we retention to we'll levels to market position side fair be WU.com, And the going the customers in part continue acquisition. features of key And opportunity we ultimately is which really will amount and the growth there. to very from So continue spending continue the there. remittance strong The the digital functionality, then And a the that's to component. we're market, of come have also and technology marketing to for

the and feel we good digital continued business. So growth about traction the business and of the customer

Hikmet Ersek

-- I really digital actually. note. that with on pieces just very I'm happy Yeah the

has in That's and the over segments. heard well, from XX performing is pretty that, former trends been new conditions other customer really new in resilient also, XX think digital economic our it's industry it's about pretty getting extremely business and are XX countries pretty countries, westernunion.com but only and new, growing. Think launch, the base. maybe and of all While industries. you them not us, has been And calls I impacted, and only

the So, to there huge countries. connecting the go with is really XXX forward wait a westernunion.com

new Also and will do but it. think is are Saudi our there That's what by Bank, sticky more QX, been customer -- with strategy is strategy, acquisition also making continue banking basically we is has question, These which things slow little we their in impacted STC your Arabia. to are what So economic westernunion.com the ecosystem other our and customers. bit investment They optimistic, that we a also part of that and one the in customers down, here. lifetime on happened digital

Raj Agarwal

really grow over it's from Where year. last

and the Darrin, full for that will similar the will the growth revenue year, average number WU.com. annualized where high to monthly active for be So be users,

the but So and than we the customers that only had in X%, of base the that third year's was overall it quarter. higher much customer -- reflects much growth is level obviously. higher But quarterly last has just been,

Darrin Peller

I'm engagement to And that's -- these disclose, great higher helpful. then And are users on levels ever sure will retail. if be not obviously than hear. then notably you've it

you number what transactions you And that adding a on would can turn to really WU then initiative. users WU.com can you that WU sense curious the the around give little into that expect versus see If traditional. of you of more on that us initiative this your Shop and more initiative Shop hear just and around a what with timing strategy Plus WU had onto

Hikmet Ersek

to than that, have hint. And a customers, by WU.com you account. long loyalty, about be nature that disclose that's -- obviously customer more should of customer the a disclose location, especially westernunion.com, transaction. walk you customers, or we don't make have be customers can we this we -- And do of think all, are that. by give numbers how a more at nature an we to the than how have you By good when because long-term, digital At of they should we the yet, our first transactions a retail customer many institute retail That retail I long-time lifetime maybe ecosystem, the maybe different -- longer customers. transactions. customers, but keep to talk

that And first end what we time as we excited the a more in that something future is in the with discussed XXXX. Investors highlight our strategy, do Regarding Day earnings will releases. definitely in we of I'm ecosystem give

an executing also exciting satisfying what needs their besides home. of said migrant we back We the long-term in on the customers Western Union and the there. transfer; are loved money for putting ones opportunity that's And really really

Operator

Peller? Mr. follow-up, a there Was

Darrin Peller

in and really investment. you'd year about to from in there What Shop opportunity that around call It be about, terms the initiative? was expect let's of WU it a now,

Hikmet Ersek

Yeah.

Brad Windbigler

We'll as have we're and Shop, WU doing this launching just financial now, well. it services -- test quarter the we're

of have but the of So it We Darrin, after next -- way quarter so the to level we year. really a see more online. seamless is hopefully shop we're will need to just traction, or first feedback

Hikmet Ersek

are like there on a really is there for there, a And think longer which Shop cashback, can it's WU you send and can also a where quite I only send and home, digital is shopping money, link customers building sending not at cross-border. which way attractive gift but that. But of time bank, the to your from there ecosystem shops presentation goods retail get this longer about banking. a and look keeping XX,XXX and you go sending and

Darrin Peller

it. Thanks guys. Okay. Got

Hikmet Ersek

please? can have question Operator, next we on? no is later. until the There Operator? Operator Darrin, Thanks,

Operator

really moment. Just we're call; going this one with on with know bear [Indiscernible] what's us not I don't

Hikmet Ersek

us. with Bear

there some next to him with think we issues to I get Operator are are trying the reach question. the technical

Operator

it question-and-answer everyone. time. comes Evercore I go this I will And take This to from Please Togut David today ahead. do session me, at Pardon next question with ISI. apologize. over Operator our is the

David Togut

Good Thank you. afternoon.

Raj Agarwal

Hey, David.

David Togut

you? Hey, Raj. How are

Raj Agarwal

Good.

David Togut

some in the have CXC, with X%. you and mix through But walk down mix example, in down it revenue and price EU down just EU pricing had X% For GAAP in America you that Is price some region? transactions with like and both CIS CIS? then America, in mix or North positive North negative actual you of like either is looks transactions X%, up price X%. in mix change there within incurring Could looks revenue the it and wu.com

Raj Agarwal

well and as East white-label as different Asia, South the Yeah. Africa, revenue and in There Middle different business happening regions. in things causing CIS, Europe, most spread. of is digital transaction the are In

continues primarily principal So, business business. within Latin Latin we're has just regions, North region. high America U.S. optimization doing domestic it growth it, In lot and the transfer business we're in some of from those And main but that's a positive the two America then good that factor. money to in where in the mix price our America, recover, is getting

so and a And when be environment just basis, on overall, from macro global continues look recover between would -related continues I our impacts to APAC COVID pricing at quite the transactions just you spread stable. business the bigger that's then the year. causing And revenue. to some of from say, last And

as it in and know pricing for always add pressure. We -- corridors pairs, see up may when too David, seem within XX,XXX that and we're have way pricing don't our up those our you And then channels. you we moving corridors, of the at pricing in moving a to also level, much country macro down we're all and

And little so the of bit around gives on what's hopefully a you world. that color happening

David Togut

you just optimization your upon price in comments around Could Thanks. helpful. That's U.S. expand domestic?

Raj Agarwal

yeah. Well,

David Togut

you cut [Indiscernible] took? price

Raj Agarwal

It's price been Well, for US. don't cut competitive a going around business to you've it's we that's decline turn not years. we're and That's business with not where X% transfer a necessarily of be heard long-term. the expect several to revenues before. The Domestic money domestic has now us business. total say about going as in U.S.

there. there are one we seeing traction so give would in maximize we're good it domestic cash some relationship to our have trying the and that And flow caveat Walmart with opportunity we I the launched to business. is just The

more U.S., So that see really the that's plays the out. But of how what we'll was at. broadly I throughout just getting rest

Operator

The Please Bank. Keane comes next from ahead. go Deutsche Brian of question

Brian Keane

the impacted was revenues, had pieces questions with there. in quarter or is are a because below just clarifications. of also XX% there the or Is outlook. the I rate Raj, expectations growth that was of I line couple COVID, moving some by guess Digital guys. in Hi, XX% that the

Raj Agarwal

is we expected, I say Yes, generally Brian. what would

margin, And level by a digital of not of total in is exceed for the revenue which track quarter, Maybe million revenue. the $X the impacted year. on very high. much So still second that really we're but to billion of we're In a COVID. we same had, on $XXX we revenue record achieved the

much what and of we track line keeps on very this to $X billion revenue had with exceed in So year. expected it's us

Brian Keane

business? And about is think rate forward the XX% digital growth the to right going in

Raj Agarwal

Yes, hard going didn't this year. year And or for or years, to expect for of this be billion we year. expect because what to above next we're to tell be it's comfortably $X to in you future at level revenue -- this

factors. But are there lot to just exist. where we'll have of a again, So see we

the So, retention to functionality things include in we distribution. going and focus improving on invest been if WU.com, And have drive about customer have. also we we lastly, to which platforms quite our that a can think the marketing, we that's main the acquisition then vehicle on is levels better of our features drive customers. continuing very And heavy We're well.

funding, account account capabilities. more more So more payout, mobile

announced next help months those signed. business, for So the go it's more that will signing will yet, we more around our in that white-label digital WU.com haven't things to the then business. we partners have And drive world. about few we'll all have And digital the but live

given on all have good come growth. platform us so, but a And those future of with the into billion-dollar total base we for digital, play will

Hikmet Ersek

are all we competition, think, maybe pretty is also these also, are against you things. how will doing that your the well. question I -- Brian, say doing I

generally by business very the but by very look economic Digital environment, -- obviously, with has the market been well, industry has and also competing you If -- QX performing -- the impacted been well. has been competition our

some you because -- about amount, share is wealth we market general tells remittance give to our we're that principal the going gaining Bank the and X%, principle XX%. market World will by believe we're going Just grow

mainly So within that, business. Digital obviously driven by

business our say would that is Digital I So performing very well.

What can't be digital reset. we or will guidance an from year now because do going digital in billion a are I business is XX% at -- billion excellent to we said, That's soon? we $X As year Is to billion? on -- $X business. go we're see. excellent where going And and an we had soon XX%. Let's another you having $X it tell Raj XX%, February. in the or give

Operator

The with Stanley. Fawcett Please next ahead. question James comes from Morgan go

James Fawcett

on given priorities proceeds want details appreciate and but you use the I sale. as turn you the priorities there, Thank I'm all capital expect, if of thinking Business about you to talk clean Solutions it's around contribution. I can allocations. how particularly you that you've progresses dynamics. quickly just your it plan with or the And business early, way finishes know very business the long as really much. about align wondering to that I as to

Hikmet Ersek

all strategic we're are also have as the approaches that but close all, We with Yeah, quarter I of end I and going we of a earlier, one. that when by our There's Divestiture. proceeds with proceeds. first will within think closing first the and first the mentioned the Solutions also, to be first we assume by impact second proceeds, the that transferred doesn't happy Business part

probably in part Europe. be the we will So regulatory the later given environment second

Business the quarter. been well this performing So very has Solution

all, of reason One that over. is the first the of grow

Secondly is And for of on border the and can biggest the universities, payment has after has tuition that the the the been Solutions study us. people so one university is been to opened that growth. Business across again. back good COVID, go can The impact probably

for Raj, allocation the James, take question to that? So, maybe you on want capital do

Raj Agarwal

as sure. operating I Flow, about Taxes. have it's more changed color our James, sometime to Cash specific we'll will transactions can. not proceeds $XXX have, from we which whether close Yes, priorities. ongoing the obviously, But that Flow, are first be said, Hikmet our which net capital still once or in the transaction million expected We Cash quarter. be

invest to business, to drive organic expansion. in is growth the and that So

to of and the proceeds that or changed, whether about the revenue from WU our opportunity operating it be some a that then almost be excess this it. year we think healthy to it's priority technology sort or think This that be very left ongoing the direct we by of would way strategy. could order a we're have Secondly, And that's something client Flow. sale about like ecosystem the will we then or a And will year. capability Cash back over how And third, focus extent have help stock. hasn't buy and it our the we we really might right $XXX pay That's cash acquisition. necessarily the time generating acquisition dividend. done with on doesn't million It to

James Fawcett

I we're to appreciate know some I wanted that it you. continuing mentioned, financial expected to continue of that. Europe. broader because haven't to make on to services then I trials around or Thank And progress suite ask in your but quickly heard of

update closely, what's timeline happening an Just and things start can on etc. more the should monitor get there we to we that

Hikmet Ersek

in XX you launch pleased I'm Sure. -- that very in a a years We've need short we X report one very have banks of we with then which product. digital -- term have short products very we know, as have been in launching part brands, everything. we're we platform, advantages the a to biggest our to bank bank because X have Europe the -- -- our such years the and a have regulators, to we probably license,

launching with service easy. financial products is -- As you finance know, not

Company I'm And transfer that's year And that. obviously relationship money customers so, you relationship, this talking transaction with is that the big moving our their their account traditional And close products the we're the and information to our to we multiproduct, advantage building Western going do give relationship, for account And all our that really for with card. the and we results. launching needs. first multi-currency consumer Union have bank an more prepaid fundamentals, and a companies. other allows to launch Really, and more very a for but to we product customers multiservice have Really, So compared relationships. their excited once with financial with we not service customers. to -- are card, financial really that's having needs

Operator

Citi. The from Please of ahead. Ashwin comes Shirvaikar next go question

Hikmet Ersek

Hi, Ashwin.

Ashwin Shirvaikar

Hi. How you? are

Hikmet Ersek

Good. you? How are

Ashwin Shirvaikar

year benefit this will that reopening solutions coming was from The question. first that actually it from [Indiscernible] much into education. very universities [Indiscernible] How of So the students

Raj Agarwal

a mind hear to can't closer I clearly. getting you maybe Ashwin, there. just do the jumbled bit microphone? Sorry, you You're little

Ashwin Shirvaikar

Yeah. Is this better?

Raj Agarwal

Yes.

Ashwin Shirvaikar

Okay. Cool.

share Another to year this how question quarter was kind the of reopening with Solutions this Business of growth, any versus rate of growth much is or gain? regards because revenue

Raj Agarwal

obviously, well. slightly revenue is XXXX from Well, that would answer absolute in I then I it it's way guess it's standpoint. And was better above as the sequentially an where it

there, think about So or education driver the some tuition revenue really payments. there's around is primary if seasonality I the but guess additional the I

little And right. and but bit levels, if a bit and that, I'm that's a then so, XXXX than correct higher in better sequentially, is little me wrong

Hikmet Ersek

that's Yeah, Yeah. right.

Raj Agarwal

say And related the the both, I then I a of mostly -- so of think to the but business. it's grow-over it's would little bit impact education in seasonality

Ashwin Shirvaikar

concerned, is that is then bit Pay, as tanker mentioned, far STC like you of digital it we or strategy approach, catalog almost And should as better? country by looking components Understood. bank the be a a for broader, country more global

Hikmet Ersek

So it's -- Germany definitely and we're Romania. at starting

additional Romania obviously global migrants, to going opportunities, to -- other not one global countries for an receive And the the U.S. and announcement we're products. adapting see send You'll countries. global for in which countries, first globally. approach. and and on more testing really the soon And We few obviously, countries a Europe definitely needs, the in are It's on it's taking we're will to expand a the Europe, Germany look side understanding soon. other want with to But launch as to always a and and country, to countries, Company big that move obviously, we to part. X be

Operator

comes go Please The next question ahead. from Jenny with Friedman Susquehanna.

Jenny Friedman

on I for in if future could you're that so integrating you was mentioned currencies. sounded your elaborate digital use In prepared you had that. remarks, the wondering important That network

Hikmet Ersek

our is to allowing have that's Yes. unique. Sure. right? And Obviously, XX platform us currencies,

can programs, currencies. take any And that, currencies payouts. to digital any to fiat we make XXX translate biggest advantages also probably is of that compliance the XX under settling countries. the currency and the and one can Customer, transfer Your are -- currency currency Know to We in We the than

consumers. the looking bank; So word, the should the of biggest a Bitcoin. central and the question for [Indiscernible] or of are such sometimes that. it coin we on the It's big at cases is -- And volatility cryptocurrency it's digital a use or currency

our regulated, with mother us. as it's settling really currency We use for another several like involved Digital it's are discussions. good taking And on really currency, currency. a once and case, once it's

platform many can that comfortable They fiat very because currency comfortable to approaching do capabilities. are feel we consumers. digital something we that. start. that both closer our dealer used than Once currency cases, and can definitely know we That's will We very us we our they And exciting. understand do So also our feel companies currency.

Raj Agarwal

$XXX get goal their are of additional transparency. If at use is our with fast if efficiently, least primary our Jamie, business, time, as money that's or the or it amount their the the get get $XXX think there recipient a if it to and case possible, about sending primary there you use as in -- you don't But of a service time provide customers that were I case cryptocurrency thinking already right? way. additional And in customers do certainly or that most there our steps, if was conversions there need another with the of to digital or think today, we if are currency just

it's the have from move to transaction. add what consumers to money certainly If today about we an currencies we yield, to say ability let's do And a $X We really more, consumers. account can account a if an that's to But have you X% by XXX with that's $X our settle about. a not thinking business, in they're desire it. or

what looking consumers it of the comment. job it's there was the and very applications And to but recipient. efficient, that's other see So the are money main the of it's end what point very for fast, most for that we'll are gets

Jenny Friedman

No, answer. that in the going thank Thanks for but queue to color. that drop that exciting. I'm you sounds for back

Brad Windbigler

time have we more one for Operator, And question.

Operator

that will KBW. come with Govil Thank go Please from you. Vasu And ahead.

Vasu Govil

a Hi. same improvement, in have anything Thank quick guess you said just X. you're kind X trends. or the the your guys ones. guide. you I TQ trends assuming quarter seen. what on I here. of you you've first Have any for the had same. But squeezing seen me -- October know just I on fourth been in your continuing much type into of trends October, particularly pretty quick

Raj Agarwal

the that going outlook on to way expect turn that's comment I that today. we today, and giving the we're it's but outlook comfortable out. we're we that October won't gave why That's trends, with gave We Yeah. the

Vasu Govil

color can I I provide how know And might Raj. And to performing a quarter. guess in Walmart. Any quick had relative one channel of that expectations. I the you the earlier, if as out been Got don't it. just was next that is know called I much that how on have to any tailwind quantification on you

Hikmet Ersek

start me We you with happy X,XXX Well, locations can over too. let it finish quickly Walmart. enrolled Walmart, we in very are U.S. Well, the

performance with we and is As activities. And we recall, we in in and marketing already were the picking and active start Walmart Canada up. our Mexico, performance good

customers If that's see everywhere us been have customers to go a corridors. Western frontline associate to gaining to And start networks, a many Walmart are there. Walmart we great. has and to will trained time many so from I use you location, think Union you And to our

Raj Agarwal

we're and doing of it. a that year activities it's going and continue to of businesses The to the a think lot we've every other to traction we promotional bigger gain marketing awareness. launched next month contributor And be type create

so pleased And with we're it.

Hikmet Ersek

you. Thank

the we're are pleased are our February in. calling of we and call. Union. Thank and question for the and call. Thank with last think in forward day. Have call looking we joining for you of am looking business have proud we resilience I the -- to this dialing I forward for to very good a next -- this call last Raj, you Western

Raj Agarwal

everyone. you, Thank

Automated Voice

You to the have added waiting room.

Operator

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

now disconnect. You may

The Western Union Company (WU) 3 Nov 212021 Q3 Earnings call transcript