The Western Union Company Q3 FY2025 earnings call

• Reported solid quarter against difficult macro backdrop, benefiting from large-scale global and multiproduct business model. • Invested in becoming customer-centric, improving omnichannel experience. • Strong performance in Europe, South America, and Asia; retail business in Europe had mid-single-digit growth; branded digital business had 12% transaction growth and 6% adjusted revenue growth. • Acquired Intermex to accelerate retail model in U.S., awaiting HSR review completion. • Consumer Services adjusted revenue up 49% driven by Euro Change acquisition and strong European travel quarter. • Made progress in digital business with 8 consecutive quarters of mid-single-digit revenue growth, digital now accounting for over 40% of principal moved, and payout-to-account over half of digital principal. • Rolled out new point-of-sale system, and working on digital wallet strategy with launches in multiple countries.

In the third quarter, Consumer Services adjusted revenue was up 49%, driven by Travel Money and bill pay. The branded digital business grew adjusted revenue 6% and transactions by 12%. The retail business in Americas faced headwinds but had mid-single-digit revenue growth in Europe. Consumer Services now accounts for roughly 15% of total company revenues, up 70% over the last 2 years. The branded digital business now accounts for over 40% of the principal moved globally, and payout-to-account capabilities represent over half the principal sent through the digital business.

• Reaffirmed 2025 adjusted revenue range of $4.035 billion to $4.135 billion, but expects adjusted revenue to be at lower end of range. • Adjusted EPS expected in range of $1.65 to $1.75, expects to be at upper end of range. • Continued benefit from branded digital business, double-digit growth in Consumer Services, and slight improvement in retail. • Travel Money expected to approach $150 million in 2026.

• Macro environment challenges, including inflation and interest rates. • Migration patterns and U.S. immigration policies impacting business, such as declines in border crossings and enforcement actions affecting customer behavior. • Regulatory uncertainties, particularly around digital assets and crypto.

Q: Can you elaborate on recent trends in the retail and Americas segment?

A: We're seeing lows from mid-summer come back a bit, especially in Mexico, with some corridors growing and others approaching stable or flat. Things are still lumpy but trends are improving.

Q: On Consumer Services, visibility and incremental margins on Travel Money?

A: Expansion next year includes one more quarter from Eurochange, pushing into new markets with competent management team, and Intermex acquisition is on track for good return.

Q: On digital, why didn't revenue lift with transaction growth?

A: Partnerships in Middle East are account-to-account payout with lower RPT, and new customer pricing aggressiveness in marketplace causes degradation in revenue line relative to transaction line.

Q: On Intermex, how will it port over to Western Union?

A: Intention is to maintain Intermex brand, locations, and go-to-market model, and learn from their model to bring into Vigo and Western Union branded independent agents in U.S.

Q: On Consumer Services growth sustainability?

A: Consumer Services has had 3-4 years of 10%+ growth, with new products scaling and long runway for future growth.