WU - Earnings call transcript Q2 2022 | The Western Union Company

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Operator

Good day and welcome to the Western Union Second Quarter 2022 Results Conference Call. [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

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

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

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

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

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Devin McGranahan

had but and important point of from the sale or value our drive and six am second across Good Brad. you CEO channels, into joining bringing to all I discuss afternoon, product not business of across lead Western excited, our and customer results, reenergize revenues growing tenure to partners. counts, an am a model enough It one This broader move customer today and of relationship to to and this the geographic and on us markets. price our that This broad year privileged and like XXXX across channels, geographies XXX better to organization. new you, a the by I digital and of experience experience expansion, across together and to seat to on retail wider growing optimization new financial Union, our range next Each fully and everyone. take old and able transformation XX update. XX only time I have great months months providing for likely scope focused our of basis quarter my products, required platforms part the system, based to a through growth. Over Thank in on us requires and now will channels, leading market as Thank transformation the focuses every integrated to day, be independently means changes people experiences partners our a digital services. geographies, our

recognition, our competitive of focused on global have customers culture the company's I I our believe sources indicated, true driven advantage business purpose of a form foundation and to inclusion, the to and build financial As through previously that large broader continue brand our upon. reach improving strong digital lives

lifetime many to we value. to across granular customer enhance and using strategy, revenue we digital capabilities this the of further will not customer with be model, a a pricing and products, product believe changes all our marketing and both already end-to-end in largely corridor expectations move based longer in experiences maximize more model we managing across offerings of platform are towards These business this operating are moving over reported, it term. to and regionally better line while with using and to the development experiences is The our accelerating distributed As But new should the growth drive customer growth business. doable, time is level line and this underway. take where our in will be cases I large and company retail

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Raj Agrawal

will and Devin discuss XXXX our our Thank everyone. outlook. second good you, financial Today revised and results afternoon I quarter

basis revenues by impacted revenues X.X%. the which Solutions. impact $XX hedges revenue X% revenues the operations billion by by reduced our million operations in prior quarter occurred XX% segment suspension currency first currency contributions X% decreased reported X% the or net on in suspension was late second period. quarter The Russia by compared XX%. X% from declined a and transaction basis on the transactions constant revenue and Belarus of of Currency approximately For and Russia the impacted the CXC from Belarus, second to translation of quarter, constant down Business reported and or $X.X excluding to of year The in X%. In a

of X%. transfer currency by suspension digital by the the X%, transactions principle money cross X%. revenues largely X%, Suspension Belarus in channels. Digital across were by Belarus, a label down in our operations border Russia cross which due softness of impacted border down basis CXC X% compared our on operations which CXC impacted reported XX% basis year constant revenue, currency due Russia Excluding or period white across branded includes and principle and Total constant Russia digital or driven and softness Belarus, partnerships, channels. to to declined product to a our and prior was on reported

Moving on basis and constant quarter, second North both the currency transaction a on declines in X% results, decreased X%. to America regional revenue of reported

due currency processor. revenue lower Russia X%, XX%. in in white or the much declines XX%, to suspension quarter, our substantially of label constant XX%. U.S. growth be role in money on The results, by reported partnership, a and our the operations quarter, Russia consumer representing revenue positive to outbound and digital was Walmart reported transfer while a the Softness XX% revenues Russia business offset and or a on domestic continues down reducing and U.S. by including and Revenue partially ramp partnership currency, a X% reduced business. the transactions was per average by The impacted note, Europe had with our our of retail results in by constant nicely. On white basis transactions to revenue region digital X%. as a in to transaction business continued X% digital revenues Belarus in label revenue of on The by corporate drag CIS

At trends. U.K. weaker Germany experienced the impact country a the and from Belarus, experience level, and softness revenue region France, channels. Russia across Excluding the

their will and go a agents, region start discontinuing relationship currency, year. customers for discuss offering, our the which I this fourth Middle South impact in key region will and outlook X%. constant the we will their the X% of East are Revenue retail as basis transactions decreased the to in while kiosk our two Africa and digital generated X%, impact these XXXX. in agents through Additionally, revised expected revenue reported moving or declined on detail retail some which from more of quarter in Asia the

to growth up branded our X% started growth currency Softness and partially and return while were the COVID-XX. growth constant to offset Nicaragua, growth region Caribbean in X% the transactions was a or and X% digital Venezuela. in XX%. the X%. constant and strength more was basis profile, America on XX% on Revenue Revenue retail currency, transaction has region post label Revenue normalized APAC white the in region declined business. digital growth reported or Latin by Colombia, a region declined driven as in in of by

related COVID between Softness region in the driven spread largely to in declines like send was and revenue business. key Japan the impacts and domestic by due transaction The Australia. largely markets Philippines were

we the of $XXX million. than closing previously first Business proceeds full announced, sale more completed the Solution the As receiving

prior company of our in The expected United revenue to represented be revenues business. European retail revenues, Argentina at recognized expected completed total retail increase driven and business primarily transferring States in of to compared second second X% the XX% consumer in gain Fácil from the closing to of closing. our Other payments The payments in higher reported which year increased the Pago the The related to is a the orders regulatory be to subject payments money and quarter also fourth fourth period. approvals. was bill bill is consists the the basis the by quarter to and business business on and U.S.

in acquisition margin Belarus Solutions to the profitability. Turning the exit compared was lower prior and changes adjusted operating margin Business GAAP prior current margin operating The period. to in quarter, compared compensation margin Consolidated costs XX.X% year XX.X% Russia primarily and XX points and in Business XX.X% quarter related in and foreign costs increase the year mix. in in XX.X% contributions Adjusted year. and related product period operating impacted periods prior Solutions. basis to excludes both by currency, in to which margins the was divestiture The was from was due negatively and the The expenses from to in

due operations quarter in prior EPS changes The $X.XX XX.X% on in in acquisition compared CXC was earnings while XX.X% sale prior prior period. year and in $X.XX compared effects of year decrease to mix. after increase was Business in to reimbursement the of in compensation expenses by effective to rules. year an and the in due Solutions. foreign in The tax revenue, rate Moving $X.XX associated GAAP and the was investment in suspend decreasing to Other sale XX% tax decision period, the due of primarily Russia reflects the taxed EPS the period, year the rate proportion provided to the operating the GAAP quarter to to $X.XX expenses rate a compared the of the in The margin was the in XX.X% Belarus. tax channel adjusted in lower higher year to GAAP period. in prior currency, to U.S. adjusted The in services increase margin Solutions gain of of to increase quarter first adjusted was the XX.X% while margins, effective primarily the related XX.X%, closing prior divestiture quarter prior the the and was and in EPS rate and in Business segment year was increase period. the our recognized effective operating sale compared effective transition was to period. increased year primarily compared XX.X% driven changes The the compared tax gap XX.X% prior with the was in costs in tax the period, the

prior Operations margin primarily increase to While lower is by Belarus profit period. year in the count, partially approximately EPS share in higher $X.XX tax operating offset rate. by effective contributed in Russia the driven and EPS adjusted higher and

generated of payment cash sheet, operating and tax a Turning million transition to in paid we the balance flow includes flow of million which quarter. year-to-date, second cash $XXX $XX our

record tax previously the XXXX. and from stop As $XXX share through shareholders these payments over after we Tax and of expenditures the resulted disclosed, repurchases were our continuing capital we cash cash and quarter, of of year-to-date. Act strong $X.X of a had dividends track equivalents $X.X Year-to-date, approximately end $XX million returned to Capital transition return. the million combination debt XXXX and of billion. At U.S. billion

to provided financial updated our and fourth we Moving CIS effect changes outlook. and to a exchange the chosen GAAP a XXXX was full the take that of change in year reflecting transition leave in the category. quarter, trends Two current back of an and Europe outlook key Today, relationship in the in the in our business, agent revenue the will The adjusted reflect assumptions have Europe the key in agents outlook rates. CIS retail investment also to half year. in retail

second will of The the in XXXX. of and effect second first take will quarter the retail in effect the agent fourth take XXXX quarter departure

these the MIDI will year other percentage total assumes continue with line the to forecasts. level year and We revised in closings, year-to-date, customers the point one conditions divestiture estimated and first gain Debt an soften for progresses the million as macroeconomic costs, costs year partial remainder profits and year outlook to expected expect impact which million a reflect second two channels. Business approximately $XXX points Solutions capital figures with and assuming representing payments pretax associated potential approximately economic of impact to adjustments. revenue ownership [ph] prevailing an migration quarter a subject of to of full in exit that revenues for between of The acquisition recognized a of contractual including buyers, fourth to reasonable of percentage XXXX, full around and has occur regulatory quarter to $XXX fourth the of been working

also remainder we contributions to Business and operating growth expect continue the Business Solutions. separate exclude margin Solutions. divestiture XXXX incur of from to Adjusted revenue costs during We as

certain revenue refer to In the margin, expect X% our U.S. press April in between to We and of to reflect reconciliation retail XX% to effective previously The for now excludes adjusted revenue a Solutions revenue EPS compared Embedded for XX XX% this range expected of now addition range GAAP year. expect tax updated adjusted $XXX in a decline operating roughly release the transition XX%, and approximately our Please full million to a approximately of in GAAP relationship, rate items. GAAP we metrics. generate continuation of in dollar macroeconomic a to changes and business trends, existing outlook, agent a Business outlook. the our assumptions. stronger metrics

For adjusted relationship digit of expectation single updated change currency previous we to macroeconomic transition a of decline. trends, compared now our decline continuation a expect low business digit mid-single constant their existing revenue, The agent assumptions. a reflects of and retail

in estimate the reduction previous paid to our to our year. approximately profit in foreign pace the and effective second be operating prudent of management tax and reflects primarily expected adjusted taxes Business rate GAAP increase are in previous approximately in GAAP The of XX% Our anticipated the margin be remainder now the of compared quarter with XX%. our outlook to outlook We now of expenses sale of our of to be a range investment Solutions. XX% to to due in the outlook of connection the from primarily for a expect down XX% of XX%

GAAP questions. to is previous to range previous you adjusted take to to of $X.XX to rate $X.XX continue range. The expected $X.XX $X.XX. range Adjusted our XXXX to now outlook range a unchanged be $X.XX we of $X.XX for in in is our from EPS outlook. joining are ready of EPS be a was effective call the from a to revised Thank for which today. operator, to expect And mid-teens tax We a

Operator

us Instructions] first Suchoski Ken ask Autonomous your Research. from [Operator Our question. comes to Please question from

Ken Suchoski

Thanks taking Hey, question. good afternoon, everyone. the for

the on the decision key do XX anything out company? the I elaborate just retail that can if differently forward, guess drove with their next call that partners moving to key a bit? months; the can rolling What, what You ensure And you two stay off over the what partners leave you to platform?

Devin McGranahan

its Devine, Ken, for thanks question. the

and know, away Union. relationship is you towards parts of particular, from Europe, a are of these Western in world in there with moving the secular cash. shift retaining their Both particular As in agents

retail distribution a cross are on-going that support in to if will digital border and basis oriented be on the have in We to not I, to partners kiosk on their going you a know with and Raj, decision anything. taken with and the Both as digital one business right I them of right This retail headwind. don't eliminate basis another. the an as said, Raj as and We focus remittances. case, cash I it getting oriented the agent indicated right part and on want believe we have add the locations. cash

Raj Agrawal

the I think main Devine. you've here hit points

Ken Suchoski

from And I up, created great. you capacity quicker. little some my then think mentioned a that bit follow I Alright, you just

that, I in better see or in expense and XXXX. of you the in And back the year, going guess year. we this on first half the like year looks line next back half of half some how about came much that you of the think into the ketchup in it expense just the SG&A reinvestment can side are to to the of talk expect accelerate I investment continues

Devin McGranahan

that any our guidance plans with given investments. XXXX element our margin forward those about of like up. when comfortable We're of I've pleased point you timing day. of expenses, accelerate and going sale, we've experiences. to to XX the quarter. quarter-to-quarter you in digital our advantage we'll as businesses an from of types retail talked very in in margin the on we're we're our to take gone have Ken, bring updating reinvent important to this investor of extensively to been timing to able that our year is our And XX invest back of we And for have of look to some half the know, need

Raj Agrawal

Ken spending. that the our you the And vary and growth from level on revenue know quarter-to-quarter, margins depending of

case wouldn't with year. going I back again And read be anything year. so in that's the half to And respect to that, of this into the next

will of be level and we're level the of revenue what a year about Next other investment factors. growth, number of doing

even where to growth. of this the and though for speaks create a to that we're business spending in capacity just the power continued it think environment, our model I investments lower in business So, revenue to we're optimize our investment and drive able

Devin McGranahan

base, calls. in is And within reacted three had Ken thought, point sign. our a honing and to I dollar operating good expense room think previous than this on Raj noted quicker Talk I me billion organization heard I so the well about and two our probably very that. you comments And has finding and the model my

Ken Suchoski

Thanks, helpful. very It's Devin. you, Thank Raj.

Raj Agrawal

you Ken. Thank

Operator

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

Darrin Peller

touch pandemic, decelerating on just the rates the thanks, like of Can it ahead [Indiscernible] what in and digital transaction Hey, was you that the that you the Russia, and from payback terms growth we investments? growth think investing looks during it you see opportunities of said that business excluding guys. in Even X% obviously, revenue the it, Obviously, trend event. I really rent.

help able accelerate do just to digit the path you should we term. to on foresee back and be what really being to touch So story that think long double business now that forward a what for going

Devin McGranahan

Darrin, that. do want I to we think disaggregate

of when is you exit when you impact out significant as under covers, the our of Belarus. see fact a take you then well. said, I think the money And transfer domestic As business the Russia look from our also U.S. you drag and

business the largely the in from PXP domestic negative As we've with based away, advent going U.S. that of previously, DMT business. another about that U.S. two points get embedded the talked wallet you is is a

growth, heard and see base, opportunities certainly list. comments, marketing programs, the customer and prioritize new prepared So at North we We the accelerate acquisition re able in the we comments, marketing, return if will places strong America to heard my highest my new we're net return to redirect top with focused of is and you can and to working be believe off in that spend to that you customer which growth. business revenue targeted then

Raj Agrawal

the add and for to I'll Yes, just I'll that, do math you, Darrin.

of the a historically. has But that outcome business of that's to for you to do want we Devin that get it those some not about can some take of news where that back to growth levels digit it's commentary. us digital, things, be. to you talked If adjust two really for the to time get do believe We things had business the the going type mid-single

to And to the positioned part well driver continue feel the digital be that very we're So there. growth market, we for the space in. it's we're good about of going the very

Darrin Peller

then in not value or more think element Okay, channel and And about that's the that you helpful. is on timing Devin, retail, not would digital on quick talked past investments the to be get digital to channel expect I the customer up look your follow see some mean, way maybe at on combination. base, really just back omni us a acceleration the a predominant just but that help the do omni front. of to and trade to you'd of the some you just off there lens

So investment evidence guys, I'm can that and a of seeing from in What your for you invest you standpoint? curious mean you're growth as any that rate both if an business. further

Devin McGranahan

that we clearly scale We digital. customers idea a from can and they're digital you higher from see loyal revenue both value customers and but are at that unique retention value a in experience retail and also attract the more we heard have that standpoint. standpoint, the customers and both both retail

customer own customer invest of and try of Going base, is for digital more on redirecting to happened that base effective spend retail activate as customer omni channel part driver beginning just both our past. new escalator digital the products. can our own see that to in organically acquisition both We are and of from a to so than customers that to marketing cost in going we on new forward, create retail our those

the to those able and about be Union of be find so the that customer things Western do with recognition programs, are I customers being talked who to cross omni experience one loyalty inclined to As channel channel unparalleled.

Darrin Peller

Thanks guys.

Devin McGranahan

Darrin. Thanks,

Operator

Our next question. Suisse. question ask your Chiodo from to from comes Tim Please us Credit

Timothy Chiodo

that aspects thanks in softening that and with could might there second also in there of sort the half. the market remittance you that for about impacted not customer and of forecast, forecasts pockets of you of are resistance, also talking be are talking pockets your what customers less impacted, about more set recession macro the scenario. expand or might mentioned but more the historically, but the that be a will be your the economic the resilience just might were you called that maybe out of prevailing implying going upon recessionary various impacts, you the lot. When terms if underlying Great, were are by also But you a

Devin McGranahan

And are a a that on. one spending question. it's as a great team Tim, lot of management time we it's

receive. this impacted As the remittance between between been send phenomena and is globally business has new relatively in changes scale GDP and or by traditionally for changes employment a send most Inflation, at receive, growth rates us. in

different closely negative including We're America. geopolitical Europe, parts to studying world, at And as the so of But headwind Latin to strength many time, outbound helping And seeing the other indicated. effects. both U.S. effects. we're world, places you dollar macroeconomic it's of inflation, the different same in but and the U.S. from in the a is obviously the in

far. way closely. it look principle We much in change don't continue We of in so at the to see

we're It's over While we on. something eye keeping time up balances. drive an inflation would will principal expect

Timothy Chiodo

that. Right. Thank you for

Devin McGranahan

Tim. Thanks,

Operator

from question next Rayna us comes from question. your Our Please ask UBS. to Kumar

Rayna Kumar

my differential, for seed and the differential taking X%. component transaction and, better or is your growth revenue question. between Devin Raj, That's drop just of of seed a mix? thanks sorry, pricing I and, Hi, understand transaction and X% and want a XX% that to declined

Raj Agrawal

and largely the Russia Russia for on an then point number, their percentage segment. declines growth related we closure the transactions. that And impact It's point had Belarus. about revenue and eight closure it three of percentage CXC revenue the impact on the had Belarus showed to

impact, of what's some sort that always terms business. obviously, more than that's down. the and nothing then there, and to the to so that. impacts -- be get we're And pricing you then mixed of then, really always in through related are time. So we playing moving that going much up closer overall be And there's happens continuing in But all

is net those So and actions. there about generally, I'd from really that headline But may the kinds Russia be of some say impact Belarus.

Rayna Kumar

it. Got

was And a then you Devine, Okay. us Western And initiative. that out timing interesting experience a a concept, you. watch largely with America strategy. about thought I for just idea of in to XX, please and key very is stores. And that Thank that milestones give better Union spoke exclusive lot

Devin McGranahan

excited about excited very of very the of I'm idea Rayna, about brand. the an strength we're know, as our you

go-forward of part think strategy. So branded experience our centers I distribution will an be important

it kinds pilot parts impact, certain those it, kinds to of looking in and locations we of a that where can can we're in have to locations. network the understand with have Europe, partners an fact, the both build and So few at work in of launched

them that done our partners to be the the right will center, so Brazil, network. of locations to go-forward the and powerful. experience if on combination they branded the our role And well, my can evidenced right willing commentary in by create dictate put ability as they play, in the But

Operator

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

Ramsey El-Assal

concept I retail experience evening. my escalator I Hi, taking to tool was that follow that an sort that brand ask be you thanks a and to that and what you on able wanted mentioned the But that deploy might this you or concept about levers technology of more mentioned. migration? this elaborate that kind one question centers sell can for to cross strategies of to digital that Rayna’s of you up of escalator on accelerate know question was

Devin McGranahan

revenue on have we us customer as customers affectionately that or as part Ramsey the which of transact the generation and Certainly, talked development a strategy have has million pure nearly them those prior with we pure we two as uncovered across customer, digital a channels, customer. segment our either a to X.X profile times both hoppers, retail and about of as work, digital and retail call, team about referred have this

customers retail that capability grow our segment. to on So and of across we our as retail we strong accelerate our focus able both about ways have generate around develop as of a And And digital are breadth receivers, further business. as given us. more migrate this for are digitally the world our looking customers customer strategy, very to being for to becoming channels, and across idea unique we is talked intrinsic our part digital power account Many to looking of we inclined. are customers ways I to our for ability for our as

will go-forward talk of concept when our is we strategy. an more investor But we it day. So about get important to it

Ramsey El-Assal

much. so thanks Great,

Operator

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

David Togut

Thanks so much and good afternoon.

Devin McGranahan

Hi, David.

David Togut

mid-single thank revenue business? us solutions Yes, in digit your what's In guage revenue second for new for Could digital? half constant growth digital for other you. what currency are growth your words, the you expectations specifically embedded declined

Raj Agrawal

you this of haven't Yes, for think to going digital you're us Russia same digital, in down the given outlets I I kinds like of more if of all impacts see and the And include we David specific quarter. was think those things.

for nature. the you you we the into necessarily out of earlier had as of specific of quarter, saw in giving our you we business, of happen If business, sort And of mentioned, to in in the sort retail the take respect some it With as it digital in in outlook. within overall the the talked of forecast the not and take our competitive softness and mid-single European the markets. Belarus, out impact account is to And, we what of it digital we've related; about business, well year. some was macro But digits is the think is second going domestic as as some Russia, impact I'm rest call. a we taken

now But, things. really decline, mid-single what's business. with we're So that we're the those digit in there. the have, some prudent through reflected the see our that trends of with backdrop that's just working current we're, given we And just being macro and outlook we

David Togut

of that seeing to able And next structure, into should you're the inflationary to to expense, extent your, up, sustainable management, bridging what should we if wage control back question companies earlier wage pressure. of expense most cost In this, other is hold expense of this very appreciate in disciplined an we as that. assume model we're year, that on a environment XXXX? trying words, greater, are follow control? especially, adjusted Understood, actually EPS to to outlook some so assume kind upward level moves into the quick some out Or we're expense it just

Raj Agrawal

the we're we be a companies different to wages. think with do But in to the term. want that an term can is don't of But would we other say and about standpoint, for management lot business, right things I from to just I level short also what invest health in the long growth. Yes, respect from business of of and the getting to the expense going all it's

digital a a some not each of, half put gives run lot more year. that rate just necessarily a second You're into is marketing, for next But each different. see sense the in quarter, technology going That us might of bit little to a of this it year. in we platforms or you and it's year the business, money back talked or the whether in about be

we growth the And is do be how going what in about much are ultimately revenue have year, to business. Next we invest to getting. flexibility

to to things want you necessarily of the in do do term. investing taking expense we costs looked, keep model out. the our that to in keep sense term. that a goal just for But have we the had first management Our long business the keep short gives power in not we to we But the quarter, investing is

David Togut

Thank you very much.

Operator

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

Vasu Govil

growth the where is Hi, of in prepared be. thanks mentioned think you not Devin, company for your question. should you it taking my remarks, the

level I’ll precursor out? you're you today? guess level probably some that term think a Maybe right to -- laying a high you share is little dose but thoughts and that of initiatives bit long ask investor could So the it's I what the day, question do

Devin McGranahan

our departures months, Realistically, Vasu, of great going you day in medium agent to time heard spending it's outlook from drive ability at I we investor re net growth, which customers term focusing longer to on are in we the or figure we growth detail headwinds to numbers, the omni customer a I've are the for reenergizing on secular talked will And and our acquire focused how forward can. XX to customers our mitigate but near combating and Raj, the digital accelerate we through go best about question. growing channel need we're out to as And revenue franchise. and business. our term ultimately more new look acquiring count that the customers XX outlining to term, next some as new digital the that to And we the growth.

Vasu Govil

of to M&A for on I an And double In wanted border preference update past, doing offer to guess may like cross on I my of environment assets the Any scope buybacks, you. in. of at. focus us geographies more shown color building. which and guys the more if just shifting down on capital are you you've for given deals up, are the a the to macro follow size for What the can or looking sort on focused it's sort we're you Thank allocation. be ask you

Devin McGranahan

companies profitability. We the and to though market To environment look forward continued continuing attractive focus strategy, seven allocation historically we've here. been have point growth to has a like who and I've that months on both become more ours disciplined under for capital done as a your the lot

that either a remain looking And the acquisitions, capital capabilities we markets or evaluating very that tuck actively pretext we so will how and disciplined can in under our at acquire accelerate are could areas product do we allocator. help in growth,

Vasu Govil

much. very you Thank

Operator

Bank Kupferberg of Please next your Our Jason to from America. question. from us question comes ask

Jason Kupferberg

to back in pockets some on wanted European of Digital Business. just I you. Thank circle the weakness the of

Germany U.K. mentioned you France, think I and

second understand to do half the Thanks. in second you wanted sort regions those versus employed improve expect what to remediation there? quarter? efforts being So are of And the

Devin McGranahan

aforementioned as have just reduction factors There like a us. Jason. couple from particularly for Romania, the a are been Thanks, which well Europe, strong in environment, of as and inflationary mobility migrants, the happening places at in of very obviously, work macroeconomic

we possible specific important call countries our types dealing will is to pay on across given funnel of the rates second significant if I payment changed, from top And the those we European can competitors all Raj? what with existing us, and corridor funnel competition time into an that what have ensure conversion of particularly being to for bottom at of call The as improve realm regulations of have looking of input in best, in funnel a spending digital certain which options, or us with. digital Africa, metrics. some that able creates corridors for those I'll we're we're it, opportunity lot

Raj Agrawal

I you it, think answered Devin.

picture business. the of whether other expansion continue significant that our part again, growth of is our part broader drive the digital goal, business. to we to really And longer is that any it's objective and Our want or other in the Europe, any term,

said, Devin the longer or like that, were just second doing we focused term. it's very half whether on So in

Jason Kupferberg

you And or… like and Latam receiver to tapping accomplished about how planning are that and dollars, base regions with is mostly the go into marketing

Raj Agrawal

of strong a think bases I these, that combination use receiver are it's Latam us. many for let's in markets

We have from every a get who cash us population of people day.

dollars. bringing and So services to also it's capture a that to of it's products combination can marketing, but forward those inflow really

digital whether they prepaid remittance, much cards, virtual the be from partnerships whether use be the so the just proceeds the with in remittance. they be us that they So of allow whether to send wallets, others, participate not

in is thing The for every a business, started to and receiver sender out pretty remember, much country. our that's important for overall, other us

our And business well. receiver investing so strong brand preference will by help in markets as send our

Devin McGranahan

great banking Romania, I mean, digital right. we the launched, example is Germany, have one that

them heard, way of of what then a that's That's within lot of you do ecosystem. And are in and talking the let Germany, have things countries many a in customers, the we them we're as a get but in energizing them XX,XXX money, base lot different around the also but have, a Romania. of example receiver world, to our We great them about. are cycle

Jason Kupferberg

you. Thank

Operator

Morgan question James Stanley. Our your us from ask Please to Faucette comes question. next from

James Faucette

when balance to color. talked incremental you're if how afternoon. then, to you've And trying have us you I'm you in Thanks and landscape, versus you what obviously, return, good go you're on maybe for at OpEx are for I'm particularly up be wondering right where capital implications some particularly about of how Hi, control, the guess, But etcetera. of about of that shouldn't And when I expecting digital And at you're out? we look step the where just more at modeled assessing to going reinvestment. be, an least? then the we all to and start back quickly competitive demonstrating kind think now. want

Raj Agrawal

me start that. with let Yes,

the think in investing messaging I year. of invest James to All right in it's I XX% half away we're clear, our to XX% got the We're a from it. we think get lot what outlook. not stepping business. second the we want really care, we're do to how that pretty more about think so you That's margin to

And of Our bought we our half is that this dividends last flow. we've created more capacity did out. With the of use significant the to year, year. half the respect year than we've first main of cash have already to a capacity first be back in a in continues first the capital return, year. deploy of half back fully in But then how the message that in second operating of to expect given quarters half played we the bunch the of

have to there. to all more a And continues So backseat say our there. more capital about investor to a be return at day taking is that look, lot components. not But really come we'll these

Devin McGranahan

think, we I XX been the to we've to be about transparent James, XX. and will so feel good And pretty continue

expense, Raj on perspective. manage to from where see a perspective, our income margin therefore be something this shareholders will forward, continue we growth operating said, able expectations So And go that also both but to model. our capital as from to is what in statement and terms being a desire can as about invest, expect transparent to return we the that rates, of we go we in

James Faucette

want done? strategic analysts Where And, you'd evaluation mean, little feel of and be work that, put it I for the to you've costs and the, a that How I for bit there Or though this it. you the and you what feeling, and about what etcetera like your still Got And are planning say, evaluative should understand, planning do the to later how perspective? a you are? is like I completely? wanting market? are I messaging, year, be later. to like to together got you more do from appreciate

Devin McGranahan

the process opportunities we And we growth. that to in that or month assess of will here I I are and what foundation As community. to so. capture next We're strategy basis in going to February what what company we're it have and for October that. capabilities is be re-evaluate work the to the the the markets commented, together in platform the in overall final required we talked phase up investment launched the and drive when And the to for then wrap about with

James Faucette

very thanks much. Great,

Looking forward to it.

Devin McGranahan

Thanks, James.

Operator

from question next your Please Mehta Kartik ask Our comes from question. us Northcoast. to

Raj Agrawal

Hey Kartik, you? how are

Kartik Mehta

I’m well are how Raj, you.

Raj Agrawal

Good.

Kartik Mehta

the are control have and and Union’s is business, Union on how is the in it in dynamics what how things they the much business, Western digital you at Just execute competition is Devin, could you much feel is to that not? grow I'm look the the maybe the business. wondering as it that though as just digital Or business, maybe has on changed? Western didn't

Devin McGranahan

that in there I believe lot a control. our is

refine continue marketing and our ability we both to have As growth. business approach, we product the will to the and return the experience

to from marketing funnel, competitors refining exceptionally drive on invest to growth believe revenue. and market, impact customers, drive that areas, growth experience, experiences, remain As will in some top our continue it's customer their our allocation disciplined dynamic continue uneconomic and transactions bottom make we in can and an cases in those expense which through in through acquisition. decisions funnel of to of to and We high of

Kartik Mehta

it's this flat dynamics changing even the all believe Devin digits the now it grow, that is business, retail As business low there's follow world more if can up, that that of are business because single you a in looking the a versus do a at happening?

Devin McGranahan

the to neighborhoods, Great I communities as there's some believe recently the we of you teams strategy on question. that achieve of markets some those were that same can Coast. And West on have certainly we other It's from it been in those migrant work with at presence serving also strong business, stable company. looking not But well the retail distribution when the a historic strength at in U.S. distribution. LACA. a look physical with very our

our us, can leverage corridors I specific out help stabilize of you more network And think heard you'll on migrant as see so get have, we specific you should focusing we in my than communities, and comments, retail which it.

Kartik Mehta

Thank you appreciate really it. very much. I

Brad Windbigler

And for Operator, joining. there. leave we'll Thank it everyone you

Operator

Thank have quarter XXXX day. call. you a We great you second hope for joining today’s earnings

The Western Union Company (WU) 4 Aug 222022 Q2 Earnings call transcript