Earnings call transcript Q2 2023

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Operator

Good day, and welcome to the Western Union Second Quarter 2023 Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Tom Hadley, Head of Investor Relations. Tom, please go ahead.

Tom Hadley

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

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

and to Cagwin. for release in call include filings being is could the recorded, our comments concerning the earnings differ today Devin on Western in call our with me CEO, language and Today's McGranahan statements. the that the statements. Please to Securities Union's including Commission materially XXXX and refer forward-looking forward-looking from cause Joining factors the additional Exchange actual results is our Form the cautionary CFO, Matt XX-K and information

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

items under comparable release well We the westernunion.com, website, attached have Relations our measures earnings as Form to to reconciled X-K as section. the in our our those most Investor on GAAP

I Chief Executive over Officer, to will our McGranahan. call Devin turn now the

Devin McGranahan

Financial and XXXX Union's welcome Western Call. Conference Second to Quarter afternoon, Good Results

doing revenue We The making take we we deliver XXXX against Evolve reported with strategy. results effect. growth positive to is been and beginning are the our have sustainable, the are today pleased progress work we to

key digital transaction growth strategy X and returning In positive Recall, business both across trends low and business includes to of improvements drive retail stabilizing to double-digit we branded businesses. our the our our continued retail quarter, business of in the with our Evolve rates. our our trajectory digital pillars underlying XXXX

both we are objectives. continued was good making quarter evidence progress second on The

provide a with transaction the time a first we significant transaction quarters But improvement will that of initiatives second is quick the the more me X% excluding have company we working achieved transactions first, results. was growth positive The CXC This growing on Iraq, we on. X are for from I most XXXX. our provide financial negative year-over-year. quarter in of across some let double-digit total the saw trends details of summary

and Our currency same billion factors the growth basis $X.XX reached XXXX our last business, total the Solutions from the in in increase detail by was core strong update to share Matt of financial inflation. year. more in a quarter in a an excluding $X.XX. in our per financial at revenue Adjusted outlook. constant on driven contribution This benefit Iraq earnings and including Argentinian improving the further revenue in X% provide our from enhanced compared the discuss the period results increase on Business quarter when reflecting fundamentals will several came

we XXXX. to continue global and World in high is inflation, including the a in resilience the attention which slowing are came customer base. 'XX Last to. semi-annual principal calling migration and out growth Bank The Ukraine. growth development own to factors remittance noted headwinds are remittance in macro. Russia's World Bank the persistent our about to faster see macro both and we paying invasion for month, Nevertheless, brief, economy, all that single-digit recent spoken its rates themes These low in we with Shifting have quarters increased close interest in volumes, of

higher PPT remaining PPT, year-over-year. average the flat the With excluding from Iraq, relatively

allow opportunities market. even remittance slowing also of a there in business us successfully within execute face our are significant the We to strategy believe continue will our own to that that potentially

X%. focus been business is has a primary acceleration key quarter One recent our in is and of business the transaction growth of in we the transactions up with improvements trend of reported the This in a seen digital continued those significant to first which important XX% was in we momentum of opportunities quarter transaction growth driver acceleration has of the the which the globally, XXXX, have branded which show quarters.

up with second and digital X% quarter revenue year, reflects improved where to transactions of down XX%, last sequentially the of was the branded currency were quarter minus this also Constant improvement revenue up which X% business to health X%. in the transactions compared underlying

customers As by am on maybe follow. revenue last again, in even more to turn properties. stated, execution finally, that Day have track is and base, slightly successful business ahead which our are digital in out digital pleased lead our which we our go-to-market growing meaningfully I our customer of we trajectory improvements in growth out the in started would And branded growth at are strategy, driving the laid of fall. to on we attributable would to Investor focusing transactions. I These updated our

saw we which funnel customer second value customer conversion on process customer the and we focus underscores and the center required quarter, simplified overall historical by go-to-market of conversion. our and our limiting the as XX%, onboarding, well fields up front to our effectiveness improvements funnel new global as proposition experience. made help by of the In of in constant strategies acquisition quarter, number acquisition our optimization. improvements element updated the to A central marketing register and customer the moving is strategy ongoing registration In to our drive customer

XXX our of our improved the to XXXX. rates As in outbound a conversion result, relative points registration U.S. almost we basis web business quarter first have by

our In rates, rates business approval decisioning outbound our approving XXX by have in seen our in several also quarter, driven year-over-year improvements registration basis first we've second improvement to to the addition transaction increased roughly dramatic our approval U.S. In models. we transaction our points first conversion made rates.

our a our process, retail use which customers enhances omnichannel transaction now in new new digital significantly omnichannel our predictably outcomes. decision example, history previous approval customer's customers we for -- For

is we a data-driven conversion, As are branded are previously improve to customer has focused changes the go-to-market digital our which indeed we acquisition on by funnel durable. updated strategy our LTV audience to our improvement discussed, leveraging continue belief making to that in see optimizing sustained strengthened targeting costs, and CAC insights

extensive XXX,XXX active over of Moving now accessible agent locations, by to financial network transactions. is providing prefer who customers to our those powered retail business, services our which in-person

our scale take discussed have business, we expected, improvements more As retail performance of time. and given will dispersion and the

Our basis rate trends the and transaction to growth quarter, relative improvement in Iraq, with the Belarus. retail first business XXX point Russia quarter positive excluding in saw the

the our trends our Performance that to can business belief retail improve strategy continue as which XXXX stabilize year-to-date retail transaction to in our supports over fall. needed last laid time, out is Evolve

in X% in team has our in controlled top-notch, distribution improved truer to where been Nowhere make has The last on performance Africa. growth Europe, over and laser-focused that quarter, the saw on there we across progress revenue continue retail than retail concept this we business More driving we is our a in evolution management Africa. the now new launched strategy have since have In year. stores we region. been broadly, XX

During Belgium. the the in second experience, control This offer, to have we us of escalator corporate-owned the digital quarter, to allows number retail our increase we stores of X with deeper us and to distribution promote also the services products allows opened Western Union type exclusive branded customers. customer and engagement

agent improve with faster been and the experiences agent customer to significantly better experiences, our transactions Evolve and higher Our customer agent support. XXXX end-to-end quality retail and including in has focus

Quick process using XXx done quick was As function at over June, quick on in an they we this by be our were agent -- required Resend a may year. improvements over quick in grown that functionality believe this Resend all transactions last across has repeat small up we of a Vigo example, time increase the fraction and meaningful. discussed from functionality. Quick you isolation, can update executed to brand types that add can I completed base want where sound recent March of give just become the use of our In XX% These call. the on of and but send transactions to U.S. historically of The continues

in A and ultimately better our near also but experience retention are throughout and they growth driving can improve efficiency term, the organization. customer agent drive

For example, our a were call request. with XX% all to to associated XX% to centers refund roughly of calls

launched X a avoid our our to step called a process we process need and a to for the Refund created support refunds One As Step agents in self-service tool result, staff. which engage

month by meaningfully the of year refund percentage surpassed at processed One recent call early the support refunds center During XX% scale June, support calls. we mid-teens range of last processed without from before all in a the globally, up process. this saw agents reduction of weeks, we our were XX% refunds we more Refund In that Step

process Step The primarily Refund was customer One and improve agent satisfaction. designed to

our service personalized representatives simplifying fewer coming support. call on center our better, focusing we now refund issues with calls costs customer resolving run can into while more and thus rate complex reduce more by However, the process, have

growth for improvement year, to that while I Last margins. talked call, strong could enable our opportunities about the process on saw us invest quarter first the maintaining I earnings

has have support calls monthly While volume with topic seen XX% contact increasing lowest you coming total also decrease by Agent forward our to decreased in the at transaction this I driving in a over call recent in call rate on volumes level been years. year-over-year. we have least collectively, months, X center XX% and down sharing dropped quarters. volume, to more in look have

our pleased build-out launch to the and America. strategy debit of card continue of broader the new We North ecosystem announce in are our prepaid

flexibility. convenient card our friends greater with to reintroducing allowing additional have month, first will rollout and secure prepaid in on to to and we a aim the By customers. we our and our card completed family this their card customers with value This a offerings begun finances U.S. expand payment transaction Just a commercial them product solution and provide solution, prepaid the manage provide

our our We our in we are is our phase business wallet where testing on retail of business the in new a markets of basis. digital digital transaction the in is third family live and go to quarter. one Brazil few also than friends and the now final larger Brazil, expect

in are to expand we market. this such, to able digital important offering As excited our be

to are opportunity I wallet the have improvements review month, making digital processes focus progress visit we customer have far with Last so experiences. there. Europe the markets onboarding had continued our made the we to and migration and launched and We've X the the on to to

current on call, with and be further Union Improving important and former, customers. valuable experience last will be to to segments. Western wallet expand digital most these the the As customers continue our retail noted omnichannel

additions to Finally, team our and new to executive partnerships. some shifting

the track of us Head new management as Sam Banking. digital Vice a of XX Sam I years of record would and addition President brings ACI, Head Executive ecosystem. building. business Global to banking like as of served payments strong nearly joins the First, announce from has in where and our Sam to experience he of the team Jawad and

a is like was she of transformation. the West where leader new addition CHRO. will Officer. joins important Karen in in Whalen XXXX Corporation, brings human us resources to experience also Karen and XX role with from would People supporting of announce Evolve Karen as our high-impact years Chief our the I nearly that an play us ongoing

links cash we partnered provide with partnership purpose, help our to Lastly, have aims services. quick closely which our with people UNICEF prosper. to This

We in furthering economic weeks, including ongoing key of are ESG report the global which in also coming publishing the movement our ESG progress system. will with money our areas, highlight focus the annual prosperity promoting integrity

Looking ahead, positive are we progress and we remain optimistic making. our strategic direction the about

changing on The digitization, preferences Western these is increasing global positioned payments to landscape for continues Union more. aspirations our to capitalize well and evolve customers' rapidly, by driven customer trends.

services, digital to reliable world. flexible as us and with network, a retail position of combined the populations aspiring the provider of extensive trusted Our solutions financial our

our improving initiatives with transaction the improved our we investments by are and driven forward. conclusion, retail driving acceleration digital the businesses, and digital are In both customer-centric trajectory pleased trends our company across of in business,

about committed ecosystem opportunities and to while our the shareholders presents offering. North the card excited our in as and it of stakeholders remain launch other customers, to adapting dynamics. of evolving solution market prepaid new are the delivering for value We America rapidly We our part our

like call call the Thank now Matt turn financial the joining you over to more our would to detail. to for today. discuss results in I

Matt Cagwin

our and outlook financial afternoon, key over everyone. will of Devin, Thank of highlight I today to the our past delighted you, for I'm quarter year. also the to and the performance remainder our achievements. some good be outline discuss here

Argentinian expectations results. Western Let's the X% adjusted quarter, In Iraq well due representing second a by from to $X.XX as of financial from delivered a the X% internal benefit as revenue year-over-year, increase our billion increase which revenue our discussing start inflation. Union exceeded

to change XX% recall, policy may last a as that to revenue. in benefit serve we revenue benefit you in able a adjusted As That customers. drove X% adjusted were continued monetary Iraq benefit shared to a to adapt quarter QX, we quickly providing our

forward-looking significantly outlook lower few will we discuss in to be meaningful assumptions the While this expect financial our going in benefit when we Iraq forward. the to moments. a I volumes quarter, get

grew progress led the growing to continued first XXXX continue since Evolve our in XXXX, which momentum also branded strategy, the with time transactions CXC of our the digital XX% We for make by business, quarter.

earlier, As overall are strategy sequential branded funnel digital we the during Devin and conversion our go-to-market saw improvement highlighted optimizing quarter. in

trends Our retail was including excluding XX.X%, was compared last half transaction related the improving the variable hedging even related saw currency also costs due year. remainder to The our to spend XXXX Iraq. investments higher program. program. impacts, expense our business operating of by decrease strategy, lower was redeployment driven to Adjusted decrease Nearly to and partially XX.X% margin Evolve to related by our net savings offset in those marketing

allow has ability the lower Since outpace adjusted This will margins launching, EPS with invest. a operating us is recognized expense period total free save benefiting million X-year rate, share have of As $XXX program. lower year-to-date. million million was current lower flat continues impacted in up excited action progress. to than about more I'm offset Adjusted to profit. taken you savings ability tax October, may from was our we that our $XX our adjusted we to $XX positively year-over-year partially XXXX $X.XX with by over count, redeployment remember, last our and launched to

strong quarter-over-quarter. segment. LACA's X% All constant on flat LACA turning to sequential CXC grew except stayed Iraq led growth and the with of currency improvements Revenue for transaction basis Now drove by regions, X%. historically transaction growth a

growth down our go-to-market constant basis a launched currency was X% customer last updated XX%, and of growth digital on our For XX% transaction new on business, of Revenue driven had August. branded by strategy

this quarter see expect of fourth positive We to growth global the revenue in year.

the growth improved in had branded the the which second America results. continue our to business by North we in also basis in branded quarter. digital X%, retail while XX% quarter, business, expect points in to XXX and revenue grew moving transactions regional trends X%, Now American Transaction North business. accelerated In sequentially revenue In adjusted led quarter. digital America, growth North our the third the decreased our

declined XX% Europe a down and in currency Revenue while was basis, X%. constant just on CIS transactions

significant pressures, tough has a macro As the inflation last with by driven in agent Russian Ukraine, previously, the we've of a year. invasion region the along of discussed faced QX the stubbornly competitive high backdrop, of and continued loss

and by combination led basis strategy to enhancing our of which go-to-market quarter, the distribution value controlled early proposition in During earlier, the Devin stores, program, excluding marketplace. as began and We're new this agent in results we a concept pilot XXX a and Belarus. point improvement very leveraging our our which transactions, Russia to is discussed owned onboarding through encouraged a sequential of retail new

driving region a Africa Revenue basis and transaction X%. growing South Asia per accelerated currency growth. growth the revenue transaction on constant East, in region on led XX% of Iraq the Middle meaningfully, higher the principal with

up driven business, retail several and of points execution As of our Refund. on-the-ground of enhancements improvement This transactions. on as our Devin is in solid One Step retail by X% in marketing, adoption seeing and enhanced revenue partnerships sequential with mentioned, we new also wallet improvement African are such some good basis new XXX

rates to revenue revenue Constant in down mix, certain due led Latin transactions in in in up pressure sequential X%. impacts Caribbean growth was and higher exchange Venezuela. currency yield and were the which Ecuador This the in up we put trends ticket higher basis America our growth The experienced Argentina, has quarter was double-digit Japan on solid from by and strength performance last transactions revenue including Australia, APAC by constant its been significant countries. led driven improvement declines versus digital was branded a has currency have This the X% transaction down in led by And Korea. in that on year. with and transactions APAC X% finally, a business.

company as X% transaction which interest reported segment, other growth. retail States, retail consist Other order Argentina our as XX% the U.S. in to of bill business moving and retail a our solid represents United money basis, payment in from the total well Now grew rates year-over-year order primarily benefiting and on of and money higher revenue in

excited occurred Solutions We to X. are the also July on Business of completion the phase which disposition, of final announce

Year-to-date, second $XXX our payment includes generated million Now transition flow cash have $XXX a cash sheet. million to in we quarter. flow, of turning which tax and of operating balance the

payments continue these next reminder, a As end tax will over step to will the up years and in X XXXX.

expenditures $XX and quarter were year-to-date. million Capital million in the $XX

large quarter agent first payment a was last bonuses mentioned signing we quarter, to lower that committed include of second the expect during As half the XXXX. in

sheet cash debt maintain to with and continue of of We billion. billion strong $X.X cash $X.X and equivalents balance a

a ratios continue flexibility which M&A ratios given around provide leverage is potential on credit the were at maintaining payments while timing leverage basis, Our up These of X.Xx us net the holiday. and X.Xx with for investment-grade and gross rating. Eid to

to our and our outlook EPS raised due to revenues in XXXX moving Now higher outlook. Today, Iraq. we adjusted revenue

U.S. As expect Iraq going in the in regulatory significantly mentioned down number to which from is lower ourselves forward. due Iraq a changes by these This changes the government earlier, our potential or actions, to made we recent volumes region. Iraq, be shut in and/or U.S. agents policy of

only and through degree due our the of result, the remittance July. we end of from Iraq elevated outlook a As uncertainty, have included high volume the to

now expect by improvement X% an XXX This down Our material outlook adjusted to be range in in points. range conditions. changes basis also our is assumes X%. no up revenue macroeconomic from We the of previous to

increase $X.XX in lastly, in to is adjusted of operating now be have $X.XX range is And range. to to which our to XX% previous the continue be expected from $X.XX, EPS a We the to margins to adjusted XX%. expect range of

year. the prospects we ahead, remain our about remainder for the optimistic of Looking

XXXX agent strategy, in continue areas customer Evolve invest related to satisfaction. prioritizing to including growth and will our key We

the ready operator, questions. for call. joining Thank we're And to you now take

Operator

Our Instructions] from Goldman question from us Sachs. first comes [Operator Nance to Will

Will Nance

your mentioned Obviously, Evolve think the it aside XXXX great strategy. might you You you [indiscernible] expectations trending ahead that of of be of strategy. lot own a

You acquisition, of within [indiscernible]. guess, those initiatives of of that mentioned this growth, digital authorization a where I had one-off would particular improve customer back? to you doing kind secondarily, then point few transaction rates anywhere in sort And drove with you're kind you things that

in in XXXX You being that an some Evolve the strategy. investments quarter, offset accelerating on at mentioned the quarter least the

you're got incrementally together, that to place ahead put you've that do think So you strategy? it where accelerate the if all of investment best is and plan resources, we to more

Devin McGranahan

joining Well, thanks for the call.

We the about are turn both that with today at talked will had growing which as think and making growing what then as or demonstrated excited then expected, the sequential we're first progress Evolve digital we're and XXXX, in in revenue. trends, I than about transaction slightly better transactions, improvement, retail, into customers, we we in

experience Our through platform ongoing around to agent to continuing service or investments our One and the our and fall into we've investing our been those categories. is and our deliver to customer you update products seamlessly our customers product our heard today some and X where our and experience. And of ability in X places agents.

experiences. As to investing that we either can kinds find our experiences, of our the improve support in opportunities those or in continue investments output and we onboarding our technology. requires funnel that will times, capacity agent have Many indeed accelerate

and not customer bases. we reduces and grow but those more it As operating agents to customers driving improves self-service experiences in better our Evolve about costs, only our serve both talked ability and automated towards XXXX our

marketing our and The second invest our well as and retail our And look in both call the continuing to really on we you where strategy. is go-to-market. in our today, to heard targeting as footprint audience go-to-market place our

investments we ability, capacity make those. as So we'll continue again, in and have to

our and our The third on and resources is team in our place talent. human

that new today, as strategy. about X our is organization team entire trickling board team to to through members and bring You new on we the heard senior additions our drive help capabilities

I'll for of question. second the turn Matt it over your part to

Matt Cagwin

our the flowed Also, have Iraq, of majority walked the we modest guidance. to as think into vast just our a Will, this, We've just only you got amount Devin revised uplift part, investments, about we through taken second through. your from

been we've As we levels. investment able also save much faster than to highlighted,

Will Nance

that. be Iraq side, sanction other the at Got obviously, with on And to expect I release be to the post the mean policymakers, a having sanctions. are press the it. like guess is the clarification revenues I event, the will lower Appreciate on going pieces. maybe And just that side Iraq the a expense expense like complicated mentioned discussion then Or do level of then from on the same? moving investments this event? you there any you result subsidy? in it

Matt Cagwin

the Yes. Well, for thanks question.

arise. last robust reasons over one to the into first also turned Iraq But came that why were other the very our guidance that put coming investments compliance out new week our of where clients the things, the you XX% off profit hows in months. from got as from to of incremental going which your have got about revenue Fed, July since few for To program, number by decline a seen bit we we a the the money opportunity little these service we about take, put back the So rate the question a agents run more a we've we've compliance some reduction, into was and from U.S. market, space of able compliance marketplace. in ago, ability a out and about that part of when know, it's

Operator

David Our us next Evercore. from to Togut question comes from

David Togut

this Just the year for from comes how $X.XX in guidance clarify, to EPS much range of the increase Iraq?

Matt Cagwin

Matt. is it, Or all honest. to all this David, it. of be Virtually of

it. of All

where that we then driving uplift. guidance core after the on expected. we a are year, as last put Our our we business was for had We about range, our Iraq a out and well is and way -- talked we as operating

David Togut

beyond think could just structural to this much of do actually Union point, there is the some where maybe you be in Iraq how on staying Western then And change XXXX? benefit

Matt Cagwin

situation. very we why It's It's is the too early to out of a know, uncertain. evolving put there, one reason been it it being David. That's

help regular what's on. markets. going around have balance understand overall in both the macros the to We're to They're calls trying trying with world. We them regulators

it's what going So do. uncertain they're to

Devin McGranahan

David, only The last, months, is I we well relative by would in market are or the positioned call the alternatives. evidenced X to other thing add, it, X

Matt strong risk and we highlighted, As have compliance. very

and advantage might I of we Western at that the And advantageous our so evolves, that it prepared Iraq. know evolve as be anything to are the with Union for take situation customers and in ready and

Operator

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

Darrin Peller

I mean, But but quickly, points more ask it's on do the fundamental a want from follow-up very bit billion a just Iraq, again of I contribution another guess magnitude question. over I XX to surprising. $XXX Iraq, -- I guess,

You percent a in generally more than one any don't see few concentration given market.

as how it given is growth. you're revenue material? us XX-point to dynamics. understand the lift guys, So what that the help a Maybe -- To you just describing

we So pretty sustainable, of and across what fundamentally, wanted revenue is digital then transaction I high. some seems acceleration part that more that would definitely growth to some business of see. may be say, the be the followed And constructively to by

that retail math between on looking and growth and on the transaction side? a in just again. space. transaction at on better in a maybe retail digital digital Devin, so, total the acceleration growth comment revenue the did growth it the because what's that I And that time translates maybe Europe quick going get reacceleration revisit on the looks And to then how U.S., the like just mean little line next,

Devin McGranahan

significant. outflow time you a of was remittance particularly see March joining as Union from change entire for Western relationship, to take distribution Darrin, uniquely advantage which local ability systems the Central of shutdown positioned policy essence, that February, and and remember Iraq outbound the remittances agent call. the our in was remittances. in thanks in frame, what policy the was Iraq of to country. a with in With there do banks can for of given Bank change regard were values, the this, the banking early ongoing Iraq, relationship to enable strength back the In

in Iraq We would has not are that regulators both level. regulated working and at earlier, procedure as expectation well back central to banks banks evolves, Matt -- said the the find policy as highlighted remittances. of new would it new go in I continue the has we as U.S. said, That to more a well have into one this country we've country the continue consumers the the to players a export digital digital the and is been the to for there's as that prevailed be in positioned. with, wallets go any digitally induce the And the strong bank-oriented have market the and again, in as experience before may within which, back the that partnerships more noted oriented had of an services, and change. the experience which that of things we stay marketplace to this adoption not in of

So it's a rapidly evolving situation.

strong We continue ground. have the to presence on

the to work Central We continue and look along. to regulators and guys we the Banks, across goes forward keeping you updated it as

the digital and on with retail. pleased are trajectory, we Iraq, of both Outside

until lay positive the start quarter out XXXX, for in to really that brings revenue September. didn't the growth launched a to which is U.S., where in but the program For we us third continue plan it August of digital, we ramping

making frame where we acquisition. XX- we're talked goes the on comments XX-months I we order Investor drive time lap originally As we originally a will we to in that period, do order laid out customer had that were my which new that Day, of potentially to laid XX-month slightly investments in our we within to out anticipate about the to out.

And in important you countries to places the Australia. after Europe. started first we countries began We we rolling expanding America, recall, of in it And including that in to in world, as then important entire started we like the the quarter, North expect out success seeing rest business. the

North new the not America, the you in trends, repeated. results, as the so see performances in of just go-to-market growing rest And being into outcomes same as program and our transaction evolves the are our but world,

to we positive indicated, That this year growth quarter. expect, said, revenue of the in end global the fourth get to as Matt by

as so transaction the we on revenue revenue pace drive over ultimately course we are the transactions ahead plan year. we over made normalize And with growth customers Day, continue at the expect, of last transactions, Investor as and the our that will slightly laid investments drive we and grow we to out

about On of time and that making side, our there, excited now of quite even flat and changing the then now serving Europe customers, agent productivity retail growth the retail results the transaction the a of I the where we're network our progress approaching places highlighting one like struggled reasons the we're nearly period-over-period. the -- spent you you're and into forces bunch is with base better our a that changing basis. our starting we which seeing agent experience, on in to we're troubled quarter-over-quarter most macro have articulate saw in agent that in

Operator

next question comes Deutsche Bryan to Keane us Our from from Bank.

Bryan Keane

want to that growth follow several growth for quarters. significantly up on it's been I that negative improvement rates, Europe rates double-digit CIS Devin, on that's and

Just forward? almost forward going to in there, And CIS now. that region? flat what's turn the the Can it's Europe go going and understand outlook positive

Devin McGranahan

Look, have macro working the Europe but retail place the we in -- quite region. own been hard, the and both in of across are where our particularly we've the factors also the region, multiple is Europe, there on history side, across

a weaker mid- Italy, like growth. have France the to markets we single-digit still the was where ingoing and where So of better. with position negative program, pockets transaction where see and Germany, point we've Those agents our Spain, from in launched high you U.K. our when what seeing is are growth larger include and where made those we our customers we are investments starting

low we we positive our with places as as countries the and add we get we where some and bring last stated growth, to line of in fall in can other agents single-digit closer we distribution strategy growth. region more net the transaction believe we're transaction seeing So we have more add larger whole the

Bryan Keane

Got growth the Middle I it. the but that have know, the number, Matt, Iraq I guys was -- primarily and don't growth, what to in big that normalized that had this rate, if region -- gave the region? transaction ex in in And guess, you due East Africa, revenue would Iraq, been pop

Matt Cagwin

would We approaching did not have X. like around of provide regions a world the still that many number improvement been it the sequential --

Operator

us Our comes from next Huang question Tien-Tsin to from JPMorgan.

Tien-Tsin Huang

and the it for change you in the you there? just mind things branded guess, does my Any and thinking that. geo digital that's approval on wasn't that? changes expansion. to that, your to growth, with the acceleration improved improved that if is follow-up on things tied, -- nice the if I Just XX% made I'm rates of to I your transaction sure piece, activity on approval I see promotions is like don't And curious surprises were some or add those the related fraud on comments in broadening to rates. the

Devin McGranahan

to Thanks, the Tien-Tsin. call. have on you Great

talked We've can Our very and with in to LTV see ongoing about lot investments, it CAC. the disciplined numbers. being our a you

people things what we've dollars and more we're durable in terms of funnel, risk making our hard are so been to across convert both more working of funnel on registration, Tien-Tsin, the is which sustainable time. And and program top the in case one broadly of I that to talking and efficacy about from those was on marketing working, the funnel of first-time with bottom ensure over changes this our is improve conversion to to the every rates, we're acceptance of

we've lot I our into the customers now real that into transaction that transactions, you which North ensuring fact, so in have is confidence the about on the customers pricing and the turn And promotional aside real talked And a call fact, America. so right? from growth XX% in turn seeing overall and the you're growing in promotional globally is, program, in think pricing those we and as know, activities, benefits XX% outcomes driving

few anticipate question, way, don't But promotional we world of and any the on in we or a our So well are explore. to answer in lot requiring pricing might are any the rolling places, most pricing. of are a out promotional needing your more big we important There I places activities. more

Tien-Tsin Huang

Got it. that more as I And funnel. observations then piece, fraud? it Does in just you the on up the open fraud that bring the asked about Any we've always there? interesting in past, know

Matt Cagwin

not meaningful seen for we'll observations we're and we've fraud closely something our any change in opened the adapt. very Early Yes. Thanks -- monitoring it and question. we've as are It's losses. there up, no

focus, we're this looking that transactions we've the talked not team main transactions, runs and revenue. with for Our about just is profitable

we that monitor things going sweet adapt spot. So it's we're of those and one find to as

Devin McGranahan

ability gave our fraud actually But the We the grow things which would year-over-year, And working saw on our not worsened. again, use could So as optimization. that capability one we say of fraud to funnel to the have we, us results then Tien-Tsin, period-over-period, Matt specifics. how are improved, our improve have significantly, customers? results

Operator

Our next question comes to us from Rayna Kumar from UBS.

Rayna Kumar

operating be was the below outlook. on quarter wondering year the expected second to that full Just margin,

high your being up but guide, end the near was the ended it it of range. initial think I

just came expected better than curious what So there? in

Matt Cagwin

driver large when is not of Matt. that a of principal our extra having over delivery. that Iraq, guidance is revenue anticipated out The the represent this was put that we the there Rayna, portion

fact The is other still outrunning driving invest cost our we program. our to savings the ability are part with it that that's

Rayna Kumar

then know 'XX. mid-single-digit as guided follow-up, I you And last growth to a year, Understood. beyond EPS

that 'XX, So still Iraq? $X.XX excluding it growth from for mid-single-digit is on that say assumption that a benefit you're in track safe to

Matt Cagwin

'XX you've some So I probably but in assumptions. am looking forward about to good got talking February, -- directionally

Operator

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

next comes Our from Suchoski us question Ken from Autonomous. to

Ken Suchoski

I that of XQ Slide constant growth widened to versus versus FX expect slide And the trend branded bit between on next like XQ XQ. XQ the gap chart for X like that quarters? the you -- how it the has the lines business. transaction spread digital over a few and just in deck those curious growth the the shows revenue looks X I'm or

Matt Cagwin

we expansion. last part to about that quarter, widest expected talked we as this be quarter the of Ken,

out talked customer And give -- the call about the I about we and would to QX would expect we ago, narrow our the will think talked remainder as when this Devin about we've of that all over a few new converge moments expecting We're we growth. the X we throughout been numbers year. talking quarters. constantly in it future

Devin McGranahan

better And Ken, anticipated that driven customer on we the and by that's trends as bit wider GAAP a we success are is than well. little anticipated, ongoing slightly transaction probably than

base seeing the And than transacting of transaction higher to new so customer bit of is causing retention is the we outpace a little you're slightly slightly thought. trends better what we is what expected, which

Ken Suchoski

Great. then North on business because America It a composition maybe to obviously, is just of I'm like is an I just business the strong. composition And world? my those could some wanted seeing parts ask looks growth that curious you're detail the the growth Okay. improvement business? this if geographic maybe the the regions. that's follow-up, as digital rates in accelerating. of you of across provide And about What's other Europe and

Matt Cagwin

can the what told typically pretty is, given historically you at mix match but the information Ken, for the each have closely will around of overall we've CXC sense overall give you they the everybody not of world. our and region we that world, look region, size out, by the a around that dispersion

launched of So followed America North X -- Those are our as Devin first, we largest Europe. the represent vast about, talked in business. by the majority

could it of digital you represents therefore, assume the So majority our branded also digital -- business. vast

Operator

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

Jason Kupferberg

half have related for the year. revenue question of at just I'm adjusted looking the just the a outlook first the I growth to of the balance year. through

full the year X%, guide up the midpoint of X. that's think I is

second at the negative that helped quarter. X% you So in half. in I know guess looking I the by second XX Iraq points we're

plus X% have you would X%. been minus instead of So

And Iraq QX and X% piece are make QX I second in looking have to in minus and those sure kind then model. I'm trying of and between of number all X% to minus what we the minus looks the I pieces parts at in X% that kind what So just the guess the want adjusted half? just see like

Matt Cagwin

and follow not the the our for quarter up I'm for and it it try but taken guide with we've outlook team. expectation deeper can of But don't flowed your what it largely similar that we and back. I to period want. through July if play can take sure I'll from off-line originally and if of, is little gave but what Iraq we go to of know Tom X-month revenue back get done question when have I wrong, on it take the answered had And a Jason, if half through we you the completely we the year I guide. April is we this based offline our that

Jason Kupferberg

transaction it obviously, the as just follow-up quarter. my into well? And X% guess I that. exclude plus if we for do you on CXC growth, the the assuming We'll in that would and digital metric if Russia, versus deconstruct then are you second the in Okay. half? Belarus, What Iraq retail

Matt Cagwin

and parts around. we're that providing of making lot really not of we're flexing from level There's it outlook. may move Yes, a decisions moving our quarter-to-quarter business, in that

Operator

from comes Citi. Andrew us question next from to Our Schmidt

Andrew Schmidt

Devin, all I here. the appreciate commentary

the more customer help any or more we're comfortable new business the further as get do business, in that if of an with unit comments would correspondingly, acquisition budgets terms get strategy, there's what levels? opportunity On wondering digital Any strategy, be helpful. new promotional and the then payback marketing of economics the aggressive there post with are CAC cost. there And period digital in to the I'm terms now seeing you in of along you're

Devin McGranahan

thank you. Andrew,

disciplined spend marketing being reasons As you down period-over-period. is on in the is are, the fact, see results, to of in we can LTV one CAC, which

program, marketing is talking One why part those about be and conversion that our scale and of profitably investment continue is the of aspire to of order to. those parts able in to the to was we rates that important trajectory rates I growth acceptance

And more we so so will drive responsible deploy more are and but we doing going growth a ensure as are level. that would we marketing at can to dollars to we

Matt Cagwin

conversion we this that you've where this mindful talked very continuing here, reminder, CAC a spend last to came we XX%. right have ratio. it just Andrew, probably quarter last making we're didn't just quarter, be but our update call down Devin about, about and but We heard sure as that

Devin McGranahan

customer new While, we've been driving right? A growth, good XX% thing.

Andrew Schmidt

lot North curious just about in to we a if talked know, quick those you're any improvements commentary to hear And Devin, hear. you just about performance those then you business. making, of two versus I America, I box? and good know there's are across on about just channels? sequential the qualitative if clear. of independent a Very big a But lot channel could the in Great talk Understood. get Maybe retail that. the improvement follow-up. about questions

Devin McGranahan

big true both or what distribution. distribution, in advantage a where box independent about, we've That's concept also, us. America, branded exclusive Europe branded is in expanding for true our we're that but Andrew, believe, we stores it's as strategic and We North call talked

a and emphasis do actually grow lot agents experiences for on how we how channels? do we putting been customers those do we to How So create those of great serve we've that?

the agent independent you of basis know, As the agent on customers channel, agents compete the and exist commissions. and price basically the

just that's a in growth. less time, attractive over drive which so And channel to

as doing we're branded our We will it, you what channel smaller at think But exclusive big this and agent emphasizing is pops. which which time, box compete both be I over will by call independent, is our evidenced we well and is strategic, in point. and predominantly which Europe, independent mom

Operator

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

Tim Chiodo

Great.

more of retail of than on that of brief Maybe exclusive trend from color could locations, its at X put line upward. time, terms a versus those some up topic one percentage a little retail that seems earlier. just of terms exit but brief Iraq And regional driving underlying referenced maybe it time update in are from to you percentage this Jason core just Sorry about many know took areas excludes was it impact, towards of It positive. kind looking of how core a business rather could follow-up, year, on retail improving in does to I The at but then you of of on trend strength the terms could the of maybe of earlier, there. in a to a in the stab that more be comes be retail. it then the of is terms transactions, the working not? as partners core coming give but some way that that shows back impacts the of Slide where seem and for the bit slides year-over-year seeing

Matt Cagwin

of actually question it LACA, is the On flat other really the now in up prepared is The been number they've in of watermark regions on starting improvement. obviously your remarks regions. but where place all our high thanks a are that Whereas strength about to that's joining. from? for coming quarters Tim, We're quarter-over-quarter really seeing for make row. only been a

strong my seeing remarks largely they retail basis seen digital Devin XXX improvement in point at and sequential to a highlighted, I APAC, a about improvement as also Africa, on I retail added have well the really as our business. in it highlighted market.

most of this you on that our places of benefiting It's solutions really of a we're building on world. lot lot the and is things a see POS So service can all. around place. the platform the It's in regions, customer X not our if around not

Devin McGranahan

in negative right, retail transaction business is And just basis. other of scale what the negative negative change of that, add flat, X% given big driver X% to and a X%, growth, was getting it would a Tim, math the the Europe near to sheer from prepared and retail thing remarks, I to the is our European the from now business global

Operator

from us to Vasu comes Govil from question KBW. final Our

Vasu Govil

know I guess tracking but ones. two the a basis. ahead margin margin on I is the we're year-to-date quick guide. guide just unchanged on One

So can the the higher expect margin at Or here? is you from be on any that the expectation should we range? of of offer there cadence end color to

Matt Cagwin

in the the to way have other not we range. We intentionally EPS We're range it the to provided. wide want committed to or but left going one flexibility, are because guide we we

we've on opportunities based shareholders. commitments maintain the non-op of couple we our to within focus what all and you a investments made may taxes. there deliver then to range some and can our go flexibility for in happen and different you sensitivities the if model make So But sure think right it is where about and the happens

Vasu Govil

was I to know the a didn't whole initiative. particular of in Got of and one ask U.S. regions In bank it any revenues. thesis and for in I it the couple -- bring you And engagement sort new increase out even to Europe Brazil retention Devin. a it. there question wanted rolled if help now.

sort seeing? be any help on what front? you engagement demonstrate of metrics just might days, And increase seen that curious, but to so in it's that have And the you've you early seen that

Devin McGranahan

Vasu, thanks for asking.

first remain consistent, going forward We're the I here countries. call or and the the in before to think the second at We're the a family friends in shortly, the the launch year. now live anticipating we're Brazil call comments X quarter looking that we second in live end and had of into on quarter least in right? U.S.,

in engagement current Our valuable pretty digital terms digital basis. experience us well the end customers transactions on much is existing, well wallet more generated from as as wallet retail being per has customer per and using in digital the customers revenue product the of a retail validating, and as up i.e., value to month value product, an which been the says as significantly economic of standpoint, both customers of up number lapsed and surprisingly monthly digital on an

for onboarding terms So able base improving like grow new to customers we've we less franchise been are lot product and not customers in our digital in hard call are that population of on who people's the being digital and our services. the to which customer the or customers wallet attractive those traditional in working customers, banking wallet other economically of those using existing former a remittance customers look more what the versus experience than

Operator

Union Thank Conference XXXX hope Western have joining you a day. Second Results Quarter great Call. for the you We

The Western Union Company (WU) 26 Jul 232023 Q2 Earnings call transcript