WU - Earnings call transcript Q4 2021 | The Western Union Company

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Operator

Good day, and welcome to the Western Union Fourth Quarter and Full Year 2021 Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Brad Windbigler, Head of Treasury and Investor Relations. Brad, please go ahead.

Brad Windbigler

you. Thank questions. we results, Company’s XXXX, our we take call, full quarter and discuss will XXXX year financial your will today’s fourth the and then On outlook for webcast The can the slides Relations will the and available tab, this that call Investor be at westernunion.com accompany found under after call. remain and

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we items not to that Accepted discuss the conform will Accounting do Principles. During Generally call, some

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

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

Devin McGranahan

afternoon, us Thank financial joining you Good results. to you, our Brad. quarter everyone. discuss appreciate XXXX fourth We today

As my and the earnings talk my to have is opportunity happy this Union with days you all inaugural very initial I’m here to you call. into to be XX of thoughts, the job. know, about Western

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while generated results strong quarter, digital what growth, business in were our our our XXXX. has the declined we third For negatively fourth due to saw impacting business economic retail of quarter uneven to the recovery The similar customers.

have business. remain been while participation, in below trend. driver of there important an And retail is we participation pre-pandemic labor force labor know, improvements you small As our force

in continue hospitality factors key its to economic many adverse of In resilience is $XXX $XXX and although these which to in of operating of of year-over-year our service, broadly, repurchases. consisting we to face strong In during us COVID industries million customers. some improvement the the continued of business by like effects occurring addition, see cash shareholders employ our and generating million to show XXXX, in dividends, over return over flows which share $XXX million enabled lingering

As you aspects reviewing in we would our are of imagine, the business. of many midst

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regulatory risk move countries over in that territories. We XXX and assets reliably compliance and management have money strong to enable us

us. We to financial have customers, grew business, dollar a the billion trust fourth quarter, transactions Westernunion.com over which cross-border who including plus X in double-digits digital million their

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leverage opportunities have We beyond expand to cross-border to remittance. brand our

efforts. right moving take launch a We the make to With begin the that need direction. for and wallet to of the demand believe and our acquisition prioritize beyond then will the ramps, In pace retail footprint engine. of accelerate movement. world, can believe network including can at we capabilities our advantage KYC the capabilities our crypto digital a our rigorously that we and and and and and digital and off an execution We our drive performance. core growth digital of our integration our assets commercial compliance our must and accelerate in Germany increasingly core enabled on difference opportunities must bank, potentially omnichannel, multicurrency and Romania in grow now customers of and rollout we We and distribution. for are strength our money We and customer

large seen partners the for platform with the leveraging certain our money parts trajectory by and must two demand pick we’ve digital Over past institutions. that world. fit of in market our movement financial We years, our brand accelerate

I improve our operations. see opportunities Thirdly, core to

focus can for on that further Our and will create be results, delivering performance investment. also near-term improve improvements capacity both

percentage in that end-to-end more at non-exclusive sale, our digital Western competitive increasing on customers the include, growing high believe this the all point about and might few and hearing base value in I return the be our year-over-year. position of channels. to particularly Union situations, of future. highlights of experience But, customer customers, Improving You’ll innovating of omnichannel a across significantly our

allocation Finally, this continue But even change is we to Union are this the a answer I’m capital. have growing question. to be you is tenure in Solutions, opportunities question strategy. to will relevant. will many deploy capital in too asking to there sale of prudently Western pending It able of obviously early more sure be my fully if Business

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value will understand capital allocation. Our creating find and be the the a focus it your best obligation capital and of our shareholder highest is returns. disciplined as and the through opportunities adjusted on stewards resource resource to always with I finite capital risk is is sustainable

trusted detailed returning to updates able evaluate that to We our done speed must digital needs, partners. have and broader do, you capital through capital work it We more and and with that our focus. will you we shareholders under you, those the our will and I the established lens directly or either to via am helping with relationships roadmaps, a be management. have assess be will we to enable and growth services with clearly progress opportunities customers on their the combined of performance our with customers confident provide our milestones, the that payments the strong our for financial of become foundation strategic to payments brand, us address platform,

then and to like to our our in more recent talk results, it I’d I to turn about important business highlight Raj over in for outlook some will our XXXX. detail developments and Now,

year, to digital pleased I announce our As have that Russia, we am largest begin today Sber our with of renewed partnership partners. one in the we

as are Japan, for is the as been important partner in of in its This relationship and few Western I Seven over one region. XXXX. that core platforms development APAC who their we is company a innovate to and has our capabilities. valued Japan the technology addition, partner the Bank rely Bank largest company highlights invest remittance from decade. announce happy is of generation In Seven on renewal next too companies, markets continue of and to our and our the with have with in all to an and Union long-term a in we region a need technology an exciting customers. others These ours at serve technology as partners view to A

core migrated. We Many have significant to and cloud. our data our the most technology migration are processes a of making been of

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multi previously production been quarter now concluded technology. in our and are real-time, our banking Germany Romania, announced fourth for the generation, markets in currency, started and pilot platform next wallet digital those in and we has that successfully live digital Finally, with

with passion work the forward done, many technology I always that In set this results that I that and the initiatives am long-term platform expect have pleased In is forward. working your the going and closing, making of with meeting will commercialize and progress to look the our value we as our can bring to will in-period there of we owners. hearing of increase and on you you discipline prioritize to I the identify, perspectives to While company are be business. will driving of while meantime, a

to call the quarter over will turn at our to Day this later in call, now to more detail. hear results expect earnings our I can Investor next more Raj and fourth our certainly on You discuss year.

Raj Agarwal

basis. on declined in a compared everyone. Today prior impact on revenues was on will or on period fourth year. quarter X% and transactions increased year prior by fourth same revenue currency afternoon $XX good flat the to financial be Fourth focus quarter. comments currency XXXX and reduced reported my slightly a also and hedges segment I revenue will outlook. the financial billion X% Thank release from I basis in were the a the net constant information full year. compared CXC fourth In quarter negative discuss The to basis. Devin a similar reported constant of you, Currency of $X.X X% quarter found and translation, our our the press results primarily on million basis can the approximately schedules. for CXC attached the the

changes Total CXC by up and on digital revenues, increased driven which on principal money While and with growth growth transfer. offset in XX% money CXC include strong consumer or constant reported reported or which XX% by transfer XX% in due accelerated constant decline money digital PPT the transaction and behavior. currency transaction cross-border the to currency. fourth Digital partnerships, was basis constant and money Total in both transfer X% transfer. on principal quarter a retail currency X% primarily basis, in a digital trend wu.com to basis was continued a per mix growth reported

was achieved Wu.com a transactions quarterly in reported transaction up X% grew revenue quarter. digital growth XX% transfer constant currency Wu.com X%. business money high of a on the Our principal. and basis revenue revenue and cross-border again in on

by X% our and currency Moving limiting trends of a Revenue In X%. to both Cuba on regional solid due ability offset continue declines increased US basis North supported fourth by transfer. US results. was softness to revenue growth America reported quarter see services in domestic constant to transaction outbound partially US we and provide the money to on regulations

X% and growth expect we basis we’re XXXX X%. declined performance CIS the Europe main business transaction very to currency and Asia transaction and of meaningful X% by digital was digital which between this period. currency, at as a solid both Caribbean has primarily revenue and constant and the grew COVID-XX XX% momentum tough Digital strong offset the partnership revenue The US The region X%. transactions. given on the show to well. the while Revenue contributor a a reported prior digital year in to X% quarter X%, softness the the Africa continued to transactions revenue partnership growth results. been America impacts. the partnership offset of in basis in currency comparison or with increased we grew was drive South as region in pleased spread the region rebound reported growth and business the strong the in solid business on We’re by up Middle Latin and Walmart seeing spread the on be softness region related and offerings and performing constant to Revenue on in Revenue constant business currency region of retail. grew the region a growth to and The to over continued the transaction growth East, more between retail saw contributor was constant transaction the in X% continue generate in over

Solutions a resulted spread from business driver from transactions in in growth currency to revenue resulting was as the and transactions relatively declined the in the constant a in revenues period. in low reported softness growth coming region verticals. segment trade, activity constant increased a revenue Revenue benefited was see company both education the Columbia driven XX% Intra-Philippines of per revenue transaction the in factors growth continue on revenue driven as well level Business XX% constant represented business. financial in prior by impact flat the basis, improvements business. the and lower and quarter on Chile. increased impact in is on and APAC The currency while year and by over on growing revenue. larger We reported and institution both mixed solid basis. and Revenue our currency depressed Mexico, X% of by a The transaction retail This between international

planned the track divestiture In Solutions. with addition, we remain on timing of Business of the

of to a to will reminder, expected financials the in in to close closing closing anticipated and As transaction occur the the in parts, in the first two our impacts outlook occur to with is the I the expected XXXX the section. first later year. second quarter discuss

payments consist represented on retail to revenues bill the orders compared US. increased US in company year total prior of retail of and other the Other X% basis and The reported revenues Argentina revenues primarily X% period. in and the a money

prior adjusted quarter prior year lower operating margin and in margin the resulted GAAP to increased compared lower XX.X% The the exchange XX.X%, profitability margins business XX.X% XX.X% to while compared quarter from adjusted Turning period, in increases in operating was GAAP losses the The foreign was and profitability. to consolidated margin in planned segment, year. agent the marketing solution impact. and our primarily in expense, favorable the consolidated

prior margin the restructuring operating to also investment year operating last full prior with GAAP and a for the quarter-by-quarter expenses. and year marketing improved expenses the margin both period. the was excludes prior however, basis. The year in the on restructuring differed period, current M&A year timing Adjusted year’s in costs Our consistent due

operating was Solutions by costs margins, restructuring in period, In XX.X% variable margins charges. and operating other driven increase note The lower primarily margin and prior favorability period. closure a the year Business The losses, the of to including and the was due in quarter year compared increase facility exclude M&A mix increased XX.X% prior was operating margin both XX.X% and margin marketing quarter XXXX, revenue lower to X.X% and as CXC costs year’s in that the segment the expense. other compared expenses period. to planned margin Moving segment operating the last incurred fourth operating to current was negative included year are for commission in XXXX. prior in margin in in well agent as

including was non-cash reflects benefits operating in adjusted termination, compared increased the in compared charge to same prior in $X.XX rate year discrete by increased or with plan pension adjusted of while Solutions offset in the of termination the margin and quarter period, tax EPS the allocations prior compared million the in costs. segment due for operating termination. XXXX, decrease XXXX compared was primarily $XXX delivered to in prior due quarter The effective XX% effective approximately XX.X% Business During XX.X% million period. factors EPS operating in GAAP earnings prior in XX.X% tax $X.XX adjusted and rate adjusted the acquisition year share was profit plan expense EBITDA $XXX divestiture GAAP and contributed due to was the to quarter year company’s the segment the in Business Business EPS X.X% to $XXX prior generated the while Other to marketing higher period, compared to period. rate corporate Solutions while GAAP revenue. tax revenue adjusted was $X.XX year to decrease of and million total the In the year EPS. the the XX.X% the pension to excluding the and for pension quarter effective in period, GAAP $X.XX the per profit. The associated partially certain lower plan items in EPS Solutions $X.XX was The

some the we annuities, purchase previously position. transitioned in a obligations have pension charge, surplus our We announced will of on non-cash color completing our process plan through termination the offer

Turning sheet. and to our cash flow balance

$XXX new had a of were March During of Directors cash as business a announced cash Capital approved billion. we the of the on equivalents almost quarter that combination our repurchase and over XXXX, repurchases. end which and of was operating three-year shareholders quarter, $X end has million XX% dividend expenditures $X billion the dividends generated At shares share returned and payable we share count XX, today billion approximately and XXXX. our of year in authorization and Board cash debt quarterly The of our $XX.X billion, $X of $X.X million. at share flows, a was to XXX outstanding

Moving our provided a year business we outlook trends Today, to reflecting recent outlook. financial conditions. full for and XXXX macroeconomic

assumes to and material change GAAP of outlook capital Our regulatory estimated acquisition Solutions year contractual $XXX partial conditions. closings, figures associated payments and the profits working Business between of divestiture ownership, macroeconomic and an no of buyer, subject representing an gain million pre-tax approximately second first reflect costs the adjustments. and expected including to

in close As phases divestiture pre-tax closing the expected expected to time first the time timing two the six be precise note in remainder the recognized second closing. closings XX% of after of expected to first approximately that recognized the is the the of gain approximately the from of Please at is at first the months estimates. the our current with closing quarter may differ

revenue contributions we divestiture expect from operating XXXX, to incur in Business growth and margin We Solutions. Solutions. also separate exclude costs as Adjusted incremental Business

EPS on costs, M&A In costs. approximately year will EPS and adjusted $X.XX The results. associated partial margin gain operating effective Business rate from Solutions expected sale and excludes the but adjusted addition, exclude and tax of divestiture acquisition include

our the expect single-digit growth from XXXX and currency for approximately inflation included million Embedded the due both in Solutions divestiture revenue revenue and revenue currency. $XXX to excluding impact low Business excluding full of We expected of outlook, have to of constant Solutions revenue decline flat mid single-digits year. GAAP to increase we the primarily Solutions GAAP XXXX. be is and Argentina results the Business Business Adjusted to in

rate to to expected high the sale be rate to range $X. be The which Our XX% tax to $X.XX GAAP on the between adjusted Solutions. in expected margin the is $X.XX, in Solutions. range The the be XXXX gain a for will tax sale the on reflecting GAAP and of gain and teens of in is GAAP EPS of Business $X.XX for range. is effective in of a on the to expected adjusted operating profit anticipated to tax range is Business mid-teens year be be the effective expected XX%. Adjusted includes EPS

with rates growth the half to Walmart, we of the digital exceed signings half agent continues rates our partnership in ramp. business the the XXXX, revenue growth in year of adjusted as year During anticipate first business second and new to our

higher adjusted due and XXXX, the year profit to and half second of similar adjusted also progression saw margin expect we XXXX seasonality EPS We timing investments. in of be to in the to the operating the

business we consistent quarter, in the revenue trends first the last rate. year’s continue For expect to performing macro exit recent with resulting consumer in

call the Thank our For Operator to we Business quarter related for million $XX questions. take revenue GAAP and to you includes outlook Solutions. today ready our first joining now are

Operator

comes Tien Instructions] Tsin Our JP question question. from Huang ask Morgan. [Operator from first your Please

Tien Tsin Huang

guess, thanks. to brand I the initial look off ask and appreciate Devin, welcome heard here your of consumer forward concept you, call. the the strong kick it Appreciate I platform. I and Devin Hi, tech learning to and know update. more. insights I’ll

and growth versus I if new bit I’m growth product. on you’ve expansion curious a did benchmarking customer and because about about ARPU So thoughts hear margins balancing thought little

those know if things. some don’t on if love I’d your big mind? of those you’ve don’t I you So picture to hear thoughts about thought

Devin McGranahan

on the call. Tien question. Tsin the great thanks for It’s be to call the or

going clearly through strategy are end-to-end review process. We a

our We’re looking business market and opportunities. at across across markets

been our over important how customer You acquisition is that built the we the engine of underway. to then, about expanding That idea, think our relative engine value potentially relationships heard acquisition that given is built. revenue you as we highlighted have the digital work And strong dollar ARPU quite our digital years. all those And is that which business couple the what and of is an do last this in billion of that which the call look power given has customers what you on and is forward we implications term I the do to might in and timeframe both how a I in October be do growth. the next and longer September, will basis. back forward to have brand, detail going about coming that, on product with trust opportunities and expand the comments, place relationship our that back they for with and believe, we that more our set customers, ARPU to have my we

Tien Tsin Huang

good. no Terrific,

it’s So to little preview of there. good bit a get sneak

So maybe of help ramping, digital my just thinking those two you the about follow between second traditional heard for retail, agent year outlook I share up traditional half. and versus the you should Raj, some can versus the Walmart the on Anything channels, and digital? that

Raj Agarwal

Yes, it’s nice Tien with speak you. Tsin, to

see both half, mentioned, better second the being a growth I As we should progression. in see the channels, we in

First may specifically likely ago recall, grew digital in quarter the you to the first as quarter year lowest of be is XXXX, XX% for we one range. in the mid

lower why of So And to growth. year. comp that’s we’re you’re a quarter see going in going the to first tougher this digital have

other agent early ramping have up then to going the the the case rates of this these digital expect and year, in range to that year, in then And be we given it’s negative, but going first had signings initiatives the other exit We year, we hold, the initiatives the other gain quarter. could part of that the was some Walmart, like again but last we like retail, which on. double-digit that be expect as be lower in

of the why of more course see So year. during the a up that’s ramp we

Tien Tsin Huang

Good. both. you Thank

Operator

Darrin Peller Wolfe ask to Research. from from comes question us next your Our Please question.

Darrin Peller

implications when terms have think can get forward look to nice of you understanding your on what of mix, really there and off potentially you of time have maybe just level we Devin, be side you on ecosystem it on just look the think consumers where guys. as great that the both another really thoughts? at think Guys, reach there’s the to some leveling way, I can looking call not do thanks, and of either set where percentage off, retail could to may start it and see the expect or growth you there’s cash over CXC the enough banked a digital or kind on model, we as that levels may retail more. a to where what just could connecting rely Hi, opportunity in I with for margins

Devin McGranahan

is see Devin, business it’s I’ve retail the business. there to this a our powerful between that correlation question. thanks for I’m the Darrin, our starting digital sitting and In time been in seat, short

As from previous high start end up you know, cash a transactions the our commentary, a of as in percentage somewhere digitally out world. that

network that So company do I digital it digitally we the with take fashion and and have do might customer we to can more potentially the our expansion as can look what physically in that picture, overall looking in past. to potentially, talked can the engine, and at at start we look a be our our of this then digital drive retail products acquisition business would and think company. And services of what I combo about we the both thinking through where integrated about a Raj? the of the is set and we’re delivered,

Raj Agarwal

right. I that’s think

the of probably that our the business the banking in mid-teens multicurrency couple add initiative from ago. way, years Europe, live digital revenues, additional opportunities is opportunity to And last three digital banking Darrin, was digital platform wallet, last the gone payments long just where more us two think With direct the in are to the that are in for those the remittance now outside I space and consumer we’ve a year XX% or overall a our of that’s about company. for years of

try objective to years. quite the drive it’s that is fast. to couple next And of further So even our quite gone far, over

Darrin Peller

helpful. That’s

kick guys. having certainly and up the world. reset follow the the side in quick year off as the one valuations Just I private mean, across with of market we

give coming more sale, other. Your capital allocation on here? There in proceeds color buybacks on M&A thought going process us forward from you can from the your or

Raj Agarwal

this Yes, year, use a I to that pleased announced mean, the that’s which quarterly we you dividends. very saw from next with we’re the significant cash of the dividend, announcement going today, our be Darrin

also for We buyback a dollars. a three-year billion program announced

about excited very we’re So that.

the we’ve the flexibility on With proceeds go this you do want see look us opportunities proceeds historically. through with Devin our the take a to how want the this fresh can to now that for in that display business through in that months really strategy that on mentioned we’re several use we’re from sale pattern those We we’re impact outlook might we to continuing a and evaluation be to retain EPS. manner. That’s at provision process respect reflected of things going strategic sale is year the what So had, going there more to next those. the

objective. So you Devin if add our that’s to to that? want really

Devin McGranahan

I we would like strategic flow. have mid-year I look comments business to what to cash robust a anticipate go having of is and the this we pretty We its on like by review the a through as view process. good retain us Raj’s would flexibility that one attributes great of reiterate that ability launched that strong generate process. would

Union allocators appropriate. same Business fortunately with, if Solutions that continue So do and we capital that’s struggle with the we be to will continue Western this to to of But disciplined problem the a will, we proceeds. be promised

Darrin Peller

Thanks, guys.

Operator

Govil question from comes Vasu us Our your question. ask to KBW. next from Please

Devin McGranahan

hear can we Yes, you.

Vasu Govil

beyond And as digital of cases you Union? leveraging taking a know what again, I of Devin. you the a are But use nice cross-border I Thank or that Union bit it. you, maybe for some to talked Western remittance. see part brand talk my my you, first on for little Western matter of extension is banking about more question. for to And guess And can question obviously areas the you the strategy just a elaborate you

Devin McGranahan

down in the know funds. a cards be a the expanding the hold with world wallet we started stream We of become can and the those collect path arrival will the debit related that financially can capability. addition us deposit services for banking We’ve capability well. will in some revenue more and evidenced our as bank in as financial a and and the places to services the issuing launch client was the of you terms by products near-term, as question, in of the before Great Obviously, ecosystem company bring base. my

that looking the is the to be given the early types whether we our and of could marketplace of provide now, alternative we that core in solutions earned now those base, successfully. people access, things work understand confidence pay resonate like parts are later strategy products of at and certain even customer We with have customer base solutions, types our is the deliver that of waged well and ideas in That maybe to our opportunities payment capabilities into underway that world. platforms, which kinds offering ability fit buy or with

with will you XXXX. the ideas back in intend to but into we We XXXX importantly distinct year, clarity half pursue, to more be and latter that this and both of more

Vasu Govil

Stablecoins was in up my up, investors with just and money follow potential comes to and something discussions my our Cryptocurrency as around as a frequently question Great threat the that is that remittance disruption industry.

and forward? can that So you into strategy something thoughts going is maybe share can your you if incorporate your

Devin McGranahan

Great question.

importantly, both, also longer more but indeed as streams suggest is an work of but you potentially Cryptocurrency core our although around technology. have offers threat, One opportunity. It we about that, conversation Blockchain could a a around strategy

we and form in more potentially at offer we looking develop, that the be management transaction, across but strong things our offer I’ll very very the and KYC, call at becomes are could economy, ensuring and more platform and considering good leveraging of are who compliance ways participate can in management of risk importantly, we others of belief world of compliance leverage capabilities, ensuring to the capabilities. very any risk valuable accepted different regulatory the world have and kinds that regimes to a which So can an and we our evolves as crypto the crypto what

we back robust that obviously And explore. So a further to will continue later in be will year. again, we with area it’s ideas the

Operator

Our comes us Ashwin ask next question your Shirvaikar from to Please Citi. from question.

Ashwin Shirvaikar

Can hear me? you

Devin McGranahan

Yes.

Ashwin Shirvaikar

primarily appreciate the too Hi, are but kick I major investment investments of guys and My adjustments? call I first this Devin. slug a start would bigger early call. might transformation? to for provide welcome you Raj. to Hi, a completely you question do Devin, go maybe you it’s situation Devin kind whether what a look of you going towards you’re regards at incremental a inherited have view How with that to to had you, to and require specifics, any preliminary and a what Is

Devin McGranahan

$X base. the Ashwin, create money. within real well that near-term cost have our to on prioritize see base, for we both as for thank billion as the I how question. spend a to opportunities you us effectiveness In and cost efficiency where and we

in about initiatives with we’ll this out we’ve box. we working that outside perspectives So the that the ideas us And and call. for there the talked require to be laid if broader ability at on is that back coming short-term, in least have of invest us

Ashwin Shirvaikar

little learnings maybe of next And digital update. that it. conclude It’s some ask maybe regards to or can a of good color Got steps? hear to the led with it that push provide that pilot, what parameters to successful, I successful you and further but bank are was some the

Devin McGranahan

have just having there’s on. and exceptionally continue pilot to But concepts a we launched will commercially. important it’s concluded encouraged couple Ashwin, early days, that of the us and push

wallet customer on allows is, to transaction us based bring account manage a call a up than the relationships allows in largely platform. earlier platform It and first view. platform, comments to an specific to platform. those customer differently to per services this customer products to is The ability converse our based which that move can and opens or our additional that it via digital And we us

ourselves this to the that moving. to and customer flexibility the encourages giving services and us be we’ll So products architecture, the technology is combination oriented new moving bring of direction

Ashwin Shirvaikar

to it. I hear. you Good Got all wish best. the

Operator

question. Autonomous. Our next your Please Ken us ask Suchoski question to from from comes

Ken Suchoski

to the the And Devin. want everyone. Thanks afternoon, I taking welcome for good echo questions. Hi, to

could start you to for we So maybe forward. question you. working a with look you, forward with going Devin,

cash quarter. get trying had faster came an sacrifice profitability take You on willing maybe growth? Could about obviously your things for around short-term some mentioned mean, very risks strong better new you margins business. you’re appetite I look more on investment your in thoughts where this flow the to at and out to you talk to that. to opportunity We’d love

Devin McGranahan

great it’s question. a Ken,

look at recognizable in us. business, initially the the relatively drive to As are we that ways we are think on how focused we I business, particularly can

terms and in like parameters bank. have of laid acquisition accelerate we in though, that digital our guidance, we to comfortable are like the we which So we our start your within on platform to will out to things digital wallet how that our can increase the our commentary do us our ability digital acquire rollout the customers achieve marketing feel allocating. I our likely increase things and of require dollars that to customer

from we margin go-forward As have we ideas bigger the go-forward rate, be well what as you from a on that look, broader to explore could that the look. capital will on as might implications growth go-forward a of back be requirement implications

Ken Suchoski

up quarter. maybe going my you. for kind transaction forward? it business digital the like of curious, the wu.com And Thank into driving the side, have follow looks Great. that about business the on and digital business talk growth just slowed just just I’m you guys the do you the growth And question, what’s visibility Can during that? what for of

Raj Agarwal

XXXX, previous know, growing one. last had the that me course from you Yes result the into of part tougher primarily Ken early We as It’s over comparisons during of year. year. strong the very growth, of and take just let a

one the key really And of so drivers. that’s

this very well. become. in characteristics But changed. quarter trajectory into our it confident mentioned, the term the very I high of the is mid range this of going the to have digital of and of business about standpoint, sort longer we’re during and digital to it As course have what can of underlying around a year, the to we’re grow not of in the going commentary, some that quarter had from first XX% see first year of other some revenue growth We my in XXXX impacts as

with in business this we’re double-digits So grow the to year. we I expect And still digital mentioned, as that. comfortable

Operator

next comes ask question. David from Our to Evercore. question Please your us from Togut

David Togut

and Devin, in you, meeting you sometime person Thank look forward congratulations, to soon.

increased You’ve to buying? repeat to Have business, encourage through you drive highlighted repeat rewards, example, on more focus started business. initiatives an repeat for sort of customer think anything to

Devin McGranahan

the we’ve to in I’ve short to accelerate that about couple talk days been that started here, rollout XX things of a the David, of. and

are we technology in our Union putting now refresh our In and based wallet forward addition a of to Western that right we of rollout doing platform. Romania, the Germany digital core are

We piloting end will a we go-live of as quarter. that launching before and first hopefully speak with the the be

both help throughput, transaction also expect but to to customers. We loyalty us that increase and return

haven’t people And a our ability back technology and then again transaction who allow existing WesternUnion.com customer offers, program are platform. move in our are to that We as earlier, loyalty we’re back mentioned to customers and our CRM revising based will platform our to transacted a investing investing as while, to from entice retentive orientation, to we device. come potential go to specific which a a us customer in to to do in

down a there’s So of will couple going I bear and fruit avenues we’re can that think that time. over

David Togut

as Thanks just for up. a that, follow

a remain lead You’ve increase in reduction pricing industry? and price call to in you Have the competitive indicated review the volume? Western not financially still to or that an attractive hit by pandemic of hard you would your some from Union’s started customers hospitality standpoint pretty some whether and

Raj Agarwal

pricing as David, I on say, stable me a be at start basis one. we look let Yes, would environment with global that macro it. our that to continues

competitive. we’re obviously, quarters may we competitive corridors moving, we channels. have the to XX,XXX, price others, and to before different on in and/or but were and depending and pairs, macro and up be the to very need there as stability drive local that need always competitive pricing proactive the and we amount on global a some to seems do to not we’ve do of be in situation specific As mentioned we’re But be fair down, try going a transaction country basis, to of price and/or what most

environment, significant to So a anything quarter don’t need we at need but significant basis pricing the a nor we change to see dramatic. really on look quarter overall it by do in too

David Togut

you. Thank

Operator

Chan your us ask of Our comes to Please from from Cassie question. America. next question Bank

Cassie Chan

Hi, can me? hear you

Raj Agarwal

Yes.

Cassie Chan

my Hi, Kupferberg. Cassie Thanks Jason for taking this question. is on for

factors just guys, you just us based were on strong I of were year-over-year going they’re provided So I guys we Solutions to out, like, factors ask like for of down impacting out to that sounds XX% wanted kind I us, like the can help of? aware some guys other on know, help to taken with you XX% XQ, your is but remarks. the outlook margins. first upon guess, quarter? prepared very touched you next obviously outlook that it on like it you Business be your, in And be know this next any what But Thanks. year? I in bridge year. being looks for call like it should they

Devin McGranahan

mentioned. to Cassie, Yes, speak nice with is really I the that you. It factors

So higher and has a fourth again, growth, business, business cost base. we the the strong fixed BXB relatively had that very quarter, in in

the incremental revenue large to has dollar every contribution profit a line. So

the from also exchange, range of had, quarter, positive overall a expense XX management. impact points, foreign it We very impact positive in then XX the fourth to and was in basis just

year, quarter. is, But saw you what this this if is So one-off it aside Solutions business, XXXX things the just that’s Most year, quarter. in fourth as margins FX say look those gave higher you I you very go the similar from impacts these and into of of the the first go why XX% we outlook we’ve to the type to we and outlook the Business in year put of away for margins at . XX% particularly items to if given last would XXXX,

that So is had last range in same year. we what it’s

change big terms So, business can in achieve. the of a not what

Cassie Chan

Got it.

if question, And any that helpful. that’s specific ask we in just country want like should were second key just quarters. your then to aware I like there Okay, be any, of of dynamics

really baking know I your not with other in you could Cuba, us? you’re probably that dynamics but So just any share about have outlook, Thanks. guys talked anything you

Devin McGranahan

Right.

for in anything built not have We Cuba.

no be to specific can there’s else that point. that. call out. some turned nothing on at But really hopeful timing But We’re around

some around gave you the regions. think I color we different

So Cassie. to specific out nothing call

Cassie Chan

Alright, thanks, guys.

Operator

your Friedman Jenny Susquehanna. question. Our question ask us from Please to next comes from

Jenny Friedman

something a business. last that. which that’s meet pleasure remember But, eyes to I costs? XX we should losses. more the if time, agent much you say disposition questions answer couple sure and apologize. It’s I related to by Sec-X don’t you. had little great to any to stranded And, your and on the then Devin, in I’m mix you in set Raj, at commission margin said anyway, I not one Hi, a heard other out things about get bit financial, My impacted of anticipate But the you fresh thing question are that about the like a Raj, is, [ph] the called talking also assessed past. you those same million.

a So can you. elaborate Thank bit? just hopefully

Raj Agarwal

Yes.

losses Jenny. some me agent The one fourth the quarter losses Let with first, start lower the higher ago, had in we the quarter one-year agent second XXXX. compared were in fourth to of

a that was certainly year-over-year trending that from factor. standpoint a have was down. Commissions So been

were So variable previous compared year. lower the costs in to XXXX

and versus for in those So it I segment costs less of are you have potentially with or activities if we million eliminate costs business, place take working and said stranded true. some some those are And BXB respect look stranded those in at will the implies stranded $XX the out of costs. have costs to range some results will that of to we costs, some to we what so the try

try want we a that not but Jenny, is to address. it’s significant to So, something number, it

Operator

comes your from ask Barclays. question us Ramsey next Please from to Our El-Assal question.

Unidentified Analyst

Good. this gentlemen, evening, is Ramsey. Appreciate for Damien the on question.

you if a you cash-to-account broader your see I’m the can account-to-account overtime? important businesses. an and into being digital does the So How And piece on hoping update give that more business of fit strategy? that

Devin McGranahan

growth. payments here, Raj. capability company and invested somewhere network. our an a plays Devin account-to-account I and account partners, to strategic for and able aspiration us we verify to being on a see Clearly payments that which customers endpoints. I’ll the The billion platform gives behalf role. our to turn that broader digital comment, payout important believe an me over facilitator are around it in has provider Raj let significantly us leverage and can for our a of Hi, in then its ecosystem, X I be growing just and

that gets fiat particularly corridors country digital delivered comments, should a out diminish the earlier to world, transaction As to, in a different paces world. of benefits we to is parts originate cash in parts the of the a the the not then in is I strengths continue actually our digitization. at someplace to that transactions and kinds of certain currency move of my and certain mentioned And be enabled for send though, those ability of payment different in as ecosystem towards Raj? as one world enable

Raj Agarwal

annually, growing and $XXX running the had we Yes, of our to million business that account, one last account-to-account, it parts any are consumer at purely paid is is initiated business. includes an fastest transactions digitally out of quarter, mentioned, the that that’s as around

So driving lot do there that about that. But excited can that a very to we space. there’s in more we’re activity keep

Unidentified Analyst

we here its guys. early about that geopolitical here. And your on business? implications I current I’ll to follow helpful risk in geography, up it. the one on Very Is something so have days mindful Thanks. material just up pick that Eastern of potential political, of should dig ask the implications in Europe? Appreciate want on Cassie’s be this and that questions might a I’ll impact

Devin McGranahan

very on we’re focused Look, that.

Sber outbound have what business We we’re that to certainly inbound that in renewed and an relationship going might certainly with an not We’re in Russia our control. under happy business and aware Russia of as and mean. issues a we’ve relationship. great very you It’s that’s mostly it’s with the heard, both our there

top But our situation the give without not and And we’re than Russia the markets, the market, but to side through situation. sense, obviously it’s just us, XX, situation. of So hopeful get top that’s this the on it’s us. impact, X% significant our that revenues that it’s important is US to very any you XX monitoring, a there’s important can of monitoring you outside smaller and but no certainly in tell can to certainly monitoring very that we’re scale. our more we’re we’re single we I not

Unidentified Analyst

so much, Thanks gentlemen.

Operator

comes us Truist. from ask Jeffrey Please your question from question. Andrew next to Our

Unidentified Analyst

Great.

Sorry can you hear me okay?

Devin McGranahan

can. Yes, we

Unidentified Analyst

color customers, for just for quantifying kind going in that one provide was Joel to forward? Hi, to digital LTV, we Andrew expectations just little going But you think some for acquisition if question. terms a and be customer helpful. Jeffrey. this related of have how that could XXXX. of on I new mentioned you’re spend should I yes. acceleration any in I half is bit of Alright, back CAC you additional just would had just about the know marketing towards wondering

Devin McGranahan

the question. for thanks Yes,

One cost to of there reasons continue to-date, is manner. do surprised I our is pleasantly the acquire ability I of effectively that and our digital our in on And the that clients, things was of be engine. acquisition us it believe marketing to able creating for acquisition one value to a strength is efforts to the expand room so to

So about prospect. I’m the excited

something going to drive our Raj? to we an it’s that think are towards digital be help looking growth. I area as

Raj Agarwal

to Yes that’s you covered investing think it an us opportunity it’s key for and opportunity area I keep in. Devin of a and

Unidentified Analyst

a Thanks lot.

Brad Windbigler

Operator, do we questions? have any other

Operator

questions this time. are There additional no at

Brad Windbigler

Thank Great. joining. you everyone for

Operator

full fourth earnings great you call. Thank quarter Have for a today’s and XXXX day. joining year

The Western Union Company (WU) 11 Feb 222021 Q4 Earnings call transcript