Company Announcements

• Q3 GAAP revenue of $1.04 billion, down 6% on a reported basis; Adjusted revenue, excluding Iraq, was up 1%
• Branded Digital reported revenue grew 8%, or 9% on an adjusted basis, with transactions up 15%
• Consumer Services revenue grew 32% on a reported basis and 15% on an adjusted basis
• Q3 GAAP EPS of $0.78 or adjusted EPS of $0.46

DENVER--(BUSINESS WIRE)--Oct. 23, 2024-- The Western Union Company (the “Company” or “Western Union”) (NYSE: WU) today reported third quarter 2024 financial results.

The Company’s third-quarter revenue of $1.04 billion decreased 6% on a reported basis. The revenue decline was driven by lower contribution from Iraq compared to the prior year period, which negatively impacted the revenue growth rate by 7 percentage points, partially offset by growth in Branded Digital and Consumer Services.

“We are pleased with third quarter results, which demonstrate continued progress of our Evolve 2025 strategy,” said Devin McGranahan, President and Chief Executive Officer. “We’ve maintained mid-single digit transaction growth in our Consumer Money Transfer business for five quarters in a row and are now seeing the effect on revenue, with positive adjusted consolidated revenue growth for two consecutive quarters, excluding Iraq.”

GAAP EPS in the third quarter was $0.78 compared to $0.46 in the prior year period. Adjusted EPS was $0.46 compared to $0.43 in the prior year period. GAAP EPS in the current period included a benefit of $0.40 from a settlement with the U.S. Internal Revenue Service regarding the Company’s 2017 and 2018 federal income tax returns. Adjusted EPS in the current period benefited from lower share count and a lower adjusted effective tax rate, partially offset by a lower contribution from Iraq.

Q3 Business Results

• The Company’s Consumer Money Transfer (CMT) segment revenue decreased 9% on a reported basis and 8% on an adjusted basis, while transactions increased 3% compared to the prior period. The revenue decline was driven by lower contribution from Iraq.

• Branded Digital revenue increased 8% on a reported basis or 9% on an adjusted basis with transaction growth of 15%. The Branded Digital business represented 25% and 32% of total CMT revenues and transactions, respectively.

• Consumer Services segment revenue grew 32% on a reported basis and 15% on an adjusted basis, benefiting from new and expanded products led by the expansion of the Company’s retail foreign exchange business and the addition of the Company’s newly launched media network business, as well as the continued strength of the retail money order business.

Q3 Financial Results

• GAAP operating margin in the quarter was 15.9%, compared to 19.2% in the prior year period, while the adjusted operating margin was 19.1% compared to 19.6% in the prior year period. GAAP operating margin in the current period included redeployment program costs and Russia asset impairments and termination costs. Adjusted operating margins decreased due to a lower contribution from Iraq and strategic investments in new and expanded products in Consumer Services.

• The GAAP effective tax rate in the quarter was a benefit of 95.2%, compared to a provision of 16.3% in the prior year period. The adjusted effective tax rate in the quarter was a provision of 8.4%, compared to a provision of 16.6% in the prior year period. The decrease in the GAAP effective rate was primarily related to the IRS settlement, partially offset by the effects of the sale of the Company's Business Solutions business in the prior periods. The decrease in the adjusted effective tax rate was primarily due to discrete tax benefits.

2024 Outlook

The Company revised its GAAP operating margin and EPS outlook to include the impact related to redeployment program costs, Russia asset impairments and termination costs, and the IRS settlement. The Company reiterated its full year 2024 adjusted outlook based on performance. The outlook assumes no material changes in macroeconomic conditions.

Non-GAAP Measures

Western Union presents a number of non-GAAP financial measures because management believes that these metrics provide meaningful supplemental information in addition to the GAAP metrics and provide comparability and consistency to prior periods. Constant currency results assume foreign revenues are translated from foreign currencies to the U.S. dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year. The Company estimates Argentina inflation as the revenue growth not attributable to either transaction growth or the change in price (revenue divided by principal).

Reconciliations of non-GAAP to comparable GAAP measures are available in the accompanying schedules and in the “Investor Relations” section of the Company’s website at https://ir.westernunion.com.

Additional Statistics

Additional key statistics for the quarter and historical trends can be found in the supplemental tables included with this press release. All amounts included in the supplemental tables to this press release are rounded to the nearest tenth of a million, except as otherwise noted. As a result, the percentage changes and margins disclosed herein may not recalculate precisely using the rounded amounts provided.

Environmental, Social, and Governance (ESG)

Western Union is committed to making a positive impact. For more details on how Western Union is addressing some of the most pressing issues facing society, our shared environment, and our Company, please view our latest ESG report: https://corporate.westernunion.com/esg.

Investor and Analyst Conference Call and Presentation

The Company will host a conference call and webcast at 4:30 p.m. ET today.

The webcast and presentation will be available at https://ir.westernunion.com. Registration for the event is required, so please register at least 15 minutes prior to the scheduled start time. A webcast replay will be available shortly after the event.

To listen to the conference call via telephone in the U.S., dial +1 (719) 359-4580 15 minutes prior to the start of the call, followed by the webinar ID, which is 947 6420 1357, and the passcode, which is 330235, or follow this link. To listen to the conference call via telephone outside the U.S., dial the country number from the international directory, followed by the webinar ID, which is 947 6420 1357, and the passcode, which is 330235.

Safe Harbor Compliance Statement for Forward-Looking Statements

This press release contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict. Actual outcomes and results may differ materially from those expressed in, or implied by, our forward-looking statements. Words such as “expects,” “intends,” “targets,” “anticipates,” “believes,” “estimates,” “guides,” “provides guidance,” “provides outlook,” “projects,” “designed to,” and other similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” “could,” and “might” are intended to identify such forward-looking statements. Readers of this press release of The Western Union Company (the “Company,” “Western Union,” “we,” “our,” or “us”) should not rely solely on the forward-looking statements and should consider all uncertainties and risks discussed in the Risk Factors section and throughout the Annual Report on Form 10-K for the year ended December 31, 2023. The statements are only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement.

Possible events or factors that could cause results or performance to differ materially from those expressed in our forward-looking statements include the following: (i) events related to our business and industry, such as: changes in general economic conditions and economic conditions in the regions and industries in which we operate, including global economic downturns and trade disruptions, or significantly slower growth or declines in the money transfer, payment service, and other markets in which we operate, including downturns or declines related to interruptions in migration patterns or other events, such as public health emergencies, epidemics, or pandemics, civil unrest, war, terrorism, natural disasters, or non-performance by our banks, lenders, insurers, or other financial services providers; failure to compete effectively in the money transfer and payment service industry, including among other things, with respect to price or customer experience, with global and niche or corridor money transfer providers, banks and other money transfer and payment service providers, including digital, mobile and internet-based services, card associations, and card-based payment providers, and with digital currencies and related exchanges and protocols, and other innovations in technology and business models; geopolitical tensions, political conditions and related actions, including trade restrictions and government sanctions, which may adversely affect our business and economic conditions as a whole, including interruptions of United States or other government relations with countries in which we have or are implementing significant business relationships with agents, clients, or other partners; deterioration in customer confidence in our business, or in money transfer and payment service providers generally; failure to maintain our agent network and business relationships under terms consistent with or more advantageous to us than those currently in place; our ability to adopt new technology and develop and gain market acceptance of new and enhanced services in response to changing industry and consumer needs or trends; mergers, acquisitions, and the integration of acquired businesses and technologies into our Company, divestitures, and the failure to realize anticipated financial benefits from these transactions, and events requiring us to write down our goodwill; decisions to change our business mix; changes in, and failure to manage effectively, exposure to foreign exchange rates, including the impact of the regulation of foreign exchange spreads on money transfers; changes in tax laws, or their interpretation, any subsequent regulation, and unfavorable resolution of tax contingencies; any material breach of security, including cybersecurity, or safeguards of or interruptions in any of our systems or those of our vendors or other third parties; cessation of or defects in various services provided to us by third-party vendors; our ability to realize the anticipated benefits from restructuring-related initiatives, which may include decisions to downsize or to transition operating activities from one location to another, and to minimize any disruptions in our workforce that may result from those initiatives; our ability to attract and retain qualified key employees and to manage our workforce successfully; failure to manage credit and fraud risks presented by our agents, clients, and consumers; adverse rating actions by credit rating agencies; our ability to protect our trademarks, patents, copyrights, and other intellectual property rights, and to defend ourselves against potential intellectual property infringement claims; material changes in the market value or liquidity of securities that we hold; restrictions imposed by our debt obligations; (ii) events related to our regulatory and litigation environment, such as: liabilities or loss of business resulting from a failure by us, our agents, or their subagents to comply with laws and regulations and regulatory or judicial interpretations thereof, including laws and regulations designed to protect consumers, or detect and prevent money laundering, terrorist financing, fraud, and other illicit activity; increased costs or loss of business due to regulatory initiatives and changes in laws, regulations and industry practices and standards, including changes in interpretations, in the United States and abroad, affecting us, our agents or their subagents, or the banks with which we or our agents maintain bank accounts needed to provide our services, including related to anti-money laundering regulations, anti-fraud measures, our licensing arrangements, customer due diligence, agent and subagent due diligence, registration and monitoring requirements, consumer protection requirements, remittances, immigration, and sustainability reporting including climate-related reporting; liabilities, increased costs or loss of business and unanticipated developments resulting from governmental investigations and consent agreements with, or investigations or enforcement actions by regulators and other government authorities; liabilities resulting from litigation, including class-action lawsuits and similar matters, and regulatory enforcement actions, including costs, expenses, settlements, and judgments; failure to comply with regulations and evolving industry standards regarding consumer privacy, data use, the transfer of personal data between jurisdictions, and information security, failure to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as regulations issued pursuant to it and the actions of the Consumer Financial Protection Bureau and similar legislation and regulations enacted by other governmental authorities in the United States and abroad related to consumer protection; effects of unclaimed property laws or their interpretation or the enforcement thereof; failure to maintain sufficient amounts or types of regulatory capital or other restrictions on the use of our working capital to meet the changing requirements of our regulators worldwide; changes in accounting standards, rules and interpretations, or industry standards affecting our business; and (iii) other events, such as catastrophic events and management’s ability to identify and manage these and other risks.

About Western Union

The Western Union Company (NYSE: WU) is committed to helping people around the world who aspire to build financial futures for themselves, their loved ones and their communities. Our leading cross-border, cross-currency money movement, payments and digital financial services empower consumers, businesses, financial institutions and governments—across more than 200 countries and territories and over 130 currencies—to connect with billions of bank accounts, millions of digital wallets and cards, and a global footprint of hundreds of thousands of retail locations. Our goal is to offer accessible financial services that help people and communities prosper. For more information, visit www.westernunion.com.

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