Core Insights - Western Union Company (WU) reported third-quarter 2025 adjusted earnings per share (EPS) of 47 cents, exceeding the Zacks Consensus Estimate by 9.3% and reflecting a year-over-year growth of 2.2% [1][9] - Total revenues remained flat at $1 billion, surpassing the consensus mark by 1.2% [1][9] Financial Performance - The adjusted operating margin improved by 100 basis points year over year to 20%, driven by cost efficiencies [3] - Total expenses decreased by 5% year over year to $830.7 million, lower than the estimated $833.7 million [3] - Operating income increased by 22% year over year to $201.9 million, exceeding the estimate of $191.3 million [4] Segment Analysis - The Consumer Money Transfer (CMT) segment reported revenues of $878 million, down 6% year over year, falling short of both the Zacks Consensus Estimate of $891 million and the estimate of $903.7 million [5] - Operating income for the CMT segment declined by 9% year over year to $172.2 million, although it beat the consensus mark of $171 million [5] - The Branded Digital business experienced a 12% transaction growth, with revenues rising 7% on a reported basis [6] - The Consumer Services (CS) segment's revenues surged by 49% year over year to $154.6 million, significantly exceeding the Zacks Consensus Estimate of $128 million [7] Financial Position - As of September 30, 2025, Western Union had cash and cash equivalents of $947.8 million, a decrease of 35.7% from the end of 2024 [8] - Total assets declined by 7% to $7.8 billion, while borrowings decreased by 11.9% to $2.6 billion [8] Shareholder Returns - In the first nine months of 2025, Western Union returned $230 million to shareholders through dividends and $200 million via share buybacks [11] Future Outlook - Management maintains guidance for adjusted revenues between $4.035 billion and $4.135 billion, with adjusted EPS forecasted in the range of $1.65-$1.75, indicating a 2.3% decline from 2024 [12]

Core Insights - LyondellBasell (LYB) is highlighted as a chemical giant with a notable dividend yield of 11%, suggesting potential investment opportunities but also caution regarding the sustainability of such high yields [1] Company Analysis - The analysis emphasizes the importance of being cautious when encountering high dividend levels, as they may indicate underlying risks or market conditions that warrant further investigation [1] Investment Perspective - The author has extensive experience in managing investments since 1999, providing a broad perspective across various market cycles, which enhances the credibility of the analysis [1] - The focus is on identifying mispriced assets that the market may have overlooked, indicating a strategic approach to investment analysis [1]

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Financial Data and Key Metrics Changes - For the third quarter, the company reported adjusted revenue of $1.033 billion, reflecting a decline of 1% year-over-year when excluding impacts from Iraq [7][25] - Adjusted earnings per share (EPS) was $0.47, slightly up from $0.46 in the same quarter last year [9][25] - Adjusted operating margins improved to 20%, up from 19% in the prior year [25][26] Business Line Data and Key Metrics Changes - Consumer services adjusted revenue surged by 49%, driven by the acquisition of Eurochange and a strong performance in the travel money segment [9][26] - Consumer money transfer transactions decreased by 2.5% in the quarter, excluding Iraq, while average principal per transaction increased by approximately 6% [8][28] - The branded digital business saw a 12% increase in transactions and a 6% rise in adjusted revenue, marking the eighth consecutive quarter of mid-single-digit or better revenue growth [9][29] Market Data and Key Metrics Changes - The retail business in North America faced challenges due to geopolitical factors, particularly in the U.S. to Mexico corridor, which is critical for the company [5][11] - Transaction growth was positive in corridors such as Brazil, India, and Vietnam, while declines were noted in Mexico, El Salvador, and Peru [11][12] - The company noted improvements in transaction trends in the latter part of September and early October, suggesting potential stabilization [85] Company Strategy and Development Direction - The company aims to enhance its retail model in the U.S. and is optimistic about the long-term outlook, expecting migration patterns to stabilize [6][7] - The acquisition of Intermex is expected to accelerate the company's retail strategy and improve its competitive positioning [6][82] - The company is focused on becoming more digital-centric, with over 40% of principal moved through digital channels and a growing digital wallet strategy [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macroeconomic environment, citing declining inflation rates and stable GDP outlooks [10] - The company is adapting to changing migration policies and customer behaviors, which have impacted transaction frequencies [11][66] - Management believes that the long-term trajectory for global migration remains positive, despite short-term headwinds [13][23] Other Important Information - The company has generated over $400 million in operating cash flow year-to-date, with a strong balance sheet showing cash and cash equivalents of approximately $1 billion [31] - The company plans to return over $120 million to shareholders through dividends and share repurchases in the third quarter [31] Q&A Session Summary Question: Recent trends in retail and North America segment - Management noted improvements from lows in mid-summer, particularly in the Mexico corridor, but emphasized that trends remain lumpy [38] Question: Visibility on travel money growth - Management indicated that travel money is expected to grow significantly, with a strong management team in Europe driving expansion [40][41] Question: Long-term digital penetration outlook - Management expects digital penetration to continue growing at double-digit rates, with significant opportunities in specific corridors [66] Question: Dynamic pricing in Spain and its rollout - Management confirmed that dynamic pricing has been rolled out in a significant portion of the European market and plans to expand it in the U.S. [72] Question: Future cost efficiency programs - Management hinted at ongoing opportunities for cost efficiencies and plans to discuss this in detail at the upcoming Investor Day [75] Question: Integration of Intermex locations - Management intends to maintain the Intermex brand and model while integrating its strengths into the Western Union framework [82]

Financial Data and Key Metrics Changes - The company reported adjusted revenue of $1,033 million for Q3 2025, reflecting a 1% decline year-over-year when excluding Iraq [7][25] - Adjusted earnings per share (EPS) was $0.47, slightly up from $0.46 in the same quarter last year [9][25] - Adjusted operating margins improved to 20%, up from 19% in the prior year [25][26] Business Line Data and Key Metrics Changes - Consumer services adjusted revenue surged by 49% in Q3, driven by the acquisition of eurochange and a strong travel money business [9][26] - Consumer money transfer (CMT) transactions declined by 3% in the quarter, or 2% excluding Iraq, with higher average principal per transaction increasing by approximately 6% [28][29] - The branded digital business saw a 12% increase in transactions and a 6% rise in adjusted revenue, marking the eighth consecutive quarter of mid-single-digit or better revenue growth [9][29] Market Data and Key Metrics Changes - The retail business in North America faced headwinds due to geopolitical factors, while Europe experienced mid-single-digit transaction and revenue growth [5][8] - Transaction growth in the U.S. to Mexico corridor showed signs of improvement from previous lows, although it remains a critical area to monitor [12][84] - The company noted positive transaction growth to countries like Brazil, India, and Vietnam, while facing declines in corridors such as Mexico and El Salvador [11][12] Company Strategy and Development Direction - The company aims to enhance its retail model in the U.S. and is optimistic about the long-term outlook, expecting stabilization in migration patterns [6][7] - The acquisition of Intermex is expected to accelerate the company's retail strategy and improve its competitive positioning [6][81] - The company is focused on becoming more digital-centric, with over 55% of money transactions now being digital [15][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macroeconomic environment, citing declining inflation rates and stable GDP outlooks [10] - The company anticipates that global migration patterns will adapt rather than disappear, maintaining a strong connection to human mobility [13][14] - Management highlighted the importance of digital transformation and the potential for integrating digital assets into their business model [21][22] Other Important Information - The company generated over $400 million in operating cash flow year-to-date, with a strong balance sheet showing cash and cash equivalents of approximately $1 billion [31] - The 2025 outlook includes adjusted revenue guidance of $4,035 million to $4,135 million, with expectations to be at the lower end of this range [32][33] Q&A Session Summary Question: Recent trends in retail and North America segment - Management noted improvements from lows in mid-summer, particularly in the Mexico corridor, but emphasized that trends remain lumpy [38] Question: Visibility on travel money growth - Management indicated that travel money is expected to grow significantly, driven by the acquisition of eurochange and expansion into new markets [40][41] Question: Trends in LACA and North America - Management observed overall market stability and the lapping effects of previous declines due to elections in South America [55] Question: Digital transaction growth vs. revenue growth - Management explained that the acceleration in transactions was primarily due to partnerships in the Middle East, which typically have lower revenue per transaction [58][59] Question: Future of digital penetration - Management expects digital penetration to continue growing at double-digit rates, with significant opportunities in specific corridors [66][67] Question: Integration of Intermex model - Management intends to maintain the Intermex brand and model while integrating successful practices into their existing operations [81]

Financial Data and Key Metrics Changes - The company reported GAAP revenue of $1,033 million for the third quarter, with adjusted revenue down 1% year-over-year, excluding Iraq [7][32] - Adjusted earnings per share (EPS) increased to $0.47 from $0.46 in the prior year, benefiting from cost management and fewer shares outstanding [9][33] - Adjusted operating margins improved to 20%, up from 19% in the prior year, primarily due to cost discipline [32] Business Line Data and Key Metrics Changes - Consumer Services adjusted revenue surged by 49%, driven by the travel money business and the acquisition of Eurochange [9][33] - The branded digital business saw a 12% increase in transactions and a 6% rise in adjusted revenue, marking eight consecutive quarters of revenue growth [8][37] - Consumer money transfer transactions declined by 2.5% year-over-year, with a 3% decline overall, attributed to U.S. immigration policies [7][35] Market Data and Key Metrics Changes - The retail business in North America faced challenges, particularly in the U.S. to Mexico corridor, while Europe experienced mid-single-digit transaction and revenue growth [4][8] - Transaction growth was positive in corridors like Brazil, India, and Vietnam, but flat to slightly negative in others such as the Philippines and Colombia [12][13] - The company noted improvements in transaction growth from lows in June, particularly in the U.S. to Mexico corridor [13][46] Company Strategy and Development Direction - The company aims to enhance its customer-centric approach and expand its retail model in the U.S., with the acquisition of Intermex expected to accelerate this strategy [6][9] - A focus on digital transformation is evident, with over 40% of principal moved through digital channels and a growing digital wallet strategy [17][19] - The company is exploring opportunities in digital assets, including stablecoin solutions, to enhance efficiency and customer experience [25][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term business prospects, anticipating stabilization in migration patterns and continued revenue growth [6][14] - The macroeconomic environment remains stable, with declining inflation rates and strong GDP outlooks, which are expected to improve further with interest rate cuts [10][14] - Management acknowledged the impact of recent policy changes on customer behavior but remains confident in the resilience of their customer base [11][12] Other Important Information - The company generated over $400 million in operating cash flow year-to-date, with a strong balance sheet showing cash and cash equivalents of approximately $1 billion [39] - The company returned over $120 million to shareholders through dividends and share repurchases in the third quarter [40] - The 2025 outlook includes adjusted revenue guidance of $4.35 billion to $4.135 billion, with expectations for adjusted EPS in the range of $1.65 to $1.75 [41][42] Q&A Session Summary Question: Recent trends in retail and Americas segment - Management noted improvements from mid-summer lows, particularly in Mexico, with some corridors showing stabilization [47][48] Question: Visibility on travel money growth - The travel money business is expected to grow significantly, with strong management and expansion plans in place [49][50] Question: Trends in LACA and North America - Management observed overall market stability and easier comparisons in the latter part of the year, contributing to improved trends [62][64] Question: Digital transaction growth vs. revenue growth - The acceleration in transactions was primarily due to partnerships in the Middle East, which typically have lower revenue per transaction [66][67] Question: Future of digital penetration - Management expects digital penetration to continue growing, with opportunities for acceleration in specific corridors [75][78] Question: Contribution from Eurochange - The Eurochange acquisition contributed nearly half of the overall growth in Consumer Services this quarter [119]

Financial Data and Key Metrics Changes - The company reported adjusted revenue of $1.033 billion for Q3 2025, reflecting a 1% decline year-over-year when excluding impacts from Iraq [6][25] - Adjusted earnings per share (EPS) was $0.47, slightly up from $0.46 in the same quarter last year [9][25] - Adjusted operating margins improved to 20%, up from 19% in the prior year period, benefiting from cost discipline [25][26] Business Line Data and Key Metrics Changes - Consumer services adjusted revenue surged by 49% in Q3, driven by the travel money business and the acquisition of Eurochange [9][26] - Consumer money transfer transactions declined by 2.5% in the quarter, excluding Iraq, while average principal per transaction increased by approximately 6% [7][27] - The branded digital business saw a 12% increase in transactions and a 6% rise in adjusted revenue, marking the eighth consecutive quarter of mid-single-digit or better revenue growth [8][27] Market Data and Key Metrics Changes - The retail business in North America faced headwinds due to geopolitical factors, while Europe experienced mid-single-digit transaction and revenue growth [4][8] - Transaction growth in the U.S. to Mexico corridor showed signs of improvement from previous lows, with recent data indicating an 8% decline, an improvement from June lows [12][11] - The company noted positive transaction growth to countries like Brazil, India, and Vietnam, while facing declines in corridors such as Mexico and El Salvador [11][12] Company Strategy and Development Direction - The company aims to enhance its retail model in the U.S. and is optimistic about the long-term outlook, expecting stabilization in migration patterns [5][6] - The acquisition of Intermex is expected to accelerate the company's progress in building a competitive retail presence [5][6] - The company is focused on becoming more digital-centric, with over 55% of money transactions now being digital [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the global economic conditions, noting declining inflation rates and stable GDP outlooks [10] - The company is adapting to changing migration policies and customer behaviors, which have influenced transaction frequencies [11][12] - Management highlighted the importance of digital transformation and the potential for growth in digital assets, particularly following regulatory changes [20][21] Other Important Information - The company generated over $400 million in operating cash flow year-to-date, with a strong balance sheet showing cash and cash equivalents of approximately $1 billion [31] - The company returned over $120 million to shareholders through dividends and share repurchases in Q3 [31] - The 2025 outlook includes adjusted revenue guidance of $4.035 billion to $4.135 billion, with expectations leaning towards the lower end of the range [32][33] Q&A Session Summary Question: Recent trends in retail and North America segment - Management noted improvements from lows in mid-summer, particularly in Mexico, but emphasized that trends remain lumpy [35][37] Question: Visibility on travel money growth - The company expects travel money to grow significantly, driven by the acquisition of Eurochange and expansion into new markets [38][39] Question: Long-term digital penetration - Management anticipates continued growth in digital transactions, with a stable retail business expected to coexist [54][55] Question: Contribution from Eurochange - Eurochange contributed nearly half of the overall growth in consumer services this quarter, with expectations for sustained growth [84]

Third Quarter 2025 Financial Results October 23, 2025 Western Union Tom Hadley Vice President of Investor Relations 2 Western Union Forward-Looking Statements This presentation 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 thos ...

Financial Performance - Third quarter 2025 revenue was $1.03 billion, flat compared to the prior year, with adjusted revenue down 1% excluding Iraq[2] - GAAP EPS for Q3 was $0.43, down 45% from $0.78 in the prior year, while adjusted EPS increased to $0.47 from $0.46[3][4] - The Company expects full year 2025 GAAP revenue between $4,085 million and $4,185 million, and adjusted revenue between $4,035 million and $4,135 million[8] - Net income for Q3 was $139.6 million, a decrease of 47% from $264.8 million in the prior year[20] - Total consolidated revenues for the nine months ended September 30, 2025, decreased by 3% to $3,042.3 million compared to $3,151.5 million in the same period of 2024[26] - Consumer Money Transfer revenues declined by 8% year-over-year to $2,635.9 million for the nine months ended September 30, 2025, down from $2,859.2 million in 2024[26] - Net income for the nine months ended September 30, 2025, was $385.2 million, a decrease of 30% from $548.5 million in 2024[24] - Total revenues (GAAP) for FY2024 were $4,209.7 million, with a YoY decrease of 3%[40] - Revenues for Q3 2024 (GAAP) were $932.2 million, reflecting a year-over-year decline of 9%[48] Revenue Growth and Segments - Consumer Services revenue grew 49% on both a reported and adjusted basis, driven by the expansion of the Travel Money business and higher revenues from Argentina bill pay[9] - Branded Digital revenue increased by 7% on a reported basis and 6% on an adjusted basis, with transaction growth of 12% compared to the prior year[9] - The company reported a decrease in CMT segment revenue by 6% on a reported basis, with adjusted revenues and transactions declining 7% and 2%, respectively[9] - The company reported a 49% increase in Consumer Services revenues for the three months ended September 30, 2025, reaching $154.6 million compared to $103.8 million in 2024[26] - Consumer Services segment revenues increased by 32% YoY in Q3 2024 and 56% in Q4 2024, with adjusted revenues showing a 15% increase in Q3 2024[35] - The Consumer Money Transfer segment accounted for 90% of total company revenue in Q3 2024[35] Operating Metrics - Operating margin for Q3 was 20%, up from 16% in the previous year, benefiting from improved cost efficiencies[9] - Operating income for the total segments increased by 4% to $572.0 million for the nine months ended September 30, 2025, compared to $547.7 million in 2024[26] - The operating margin for the Consumer Services segment was reported at 9% in Q3 2024 and 11% in Q4 2024[35] - GAAP operating income for 3Q24 was $164.9 million, with an adjusted operating income of $197.5 million, reflecting an operating margin of 16% and an adjusted operating margin of 19%[42] Tax and Expenses - The GAAP effective tax rate was 17%, compared to a benefit of 95% in the prior year, primarily due to an IRS settlement[9] - Total expenses for Q3 decreased by 5% to $830.7 million, driven by a 14% reduction in selling, general, and administrative expenses[20] - The effective tax rate (GAAP) for 3Q24 was -95%, while the adjusted effective tax rate (non-GAAP) was 8%[46] Cash and Liabilities - Cash and cash equivalents at the end of the period were $1,375.4 million, a decrease from $1,427.6 million at the end of September 30, 2024[24] - Total liabilities decreased to $6,858.6 million as of September 30, 2025, from $7,401.6 million as of December 31, 2024[22] - The company’s total stockholders' equity decreased to $925.4 million as of September 30, 2025, from $968.9 million as of December 31, 2024[22] Regional Performance - North America region revenues decreased by 3% YoY in Q3 2024 and 5% in Q4 2024, with adjusted revenues showing a similar trend[33] - EU & CIS region revenues increased by 0% YoY in Q3 2024 and 3% in Q4 2024, with adjusted revenues showing a 1% increase in Q3 2024[33] - MEASA region revenues saw a significant decline of 32% YoY in Q3 2024 and 10% in Q4 2024, with adjusted revenues down 31% in Q3 2024[33] - APAC region revenues decreased by 2% YoY in Q3 2024 and 6% in Q4 2024, with adjusted revenues showing a 1% increase in Q3 2024[33] Future Projections - The company anticipates continued growth in adjusted operating income, with projections of $206.2 million for 3Q25[42] - The company projects FY 2025 revenues (GAAP) in the range of $4,085 million to $4,185 million[50] - Adjusted revenues (non-GAAP) for FY 2025 are expected to be between $4,035 million and $4,135 million[50] - Operating margin (GAAP) for FY 2025 is forecasted to be between 18% and 20%[50] - Earnings per share (GAAP) for FY 2025 is projected to be between $1.45 and $1.55[50] - The effective tax rate (GAAP) for FY 2025 is estimated to be between 19% and 21%[50] Operational Changes and Challenges - The company will no longer adjust for the estimated impact of Argentinian hyperinflation starting Q2 2025, as inflation has moderated[36] - The Company experienced a significant increase in business originating from Iraq starting March 2023, attributed to policy changes by U.S. and Iraqi regulators[54] - In July 2023, the U.S. Treasury and the Federal Reserve Bank of New York banned 14 Iraqi banks from conducting U.S. dollar transactions, impacting the Company's operations[54] - The Central Bank of Iraq suspended the Company's largest agent in October 2023, although the agent was later reinstated[54] - Management believes that revenue measures excluding Iraq revenues provide better consistency and comparability to prior periods[54] - The Company reorganized its international operations in Q4 2024, recognizing deferred tax assets associated with this reorganization[54] - The non-cash recognition of deferred tax assets has been excluded from reported results due to its significance[54] - The Company excludes transactions and revenues generated from Iraq websites and mobile applications from the definition of Branded Digital due to significant volatility[54] - The North America region represents the Company's Consumer Money Transfer segment, which includes the United States and Canada[54] - The Middle East, Africa, and South Asia region includes India and certain South Asian countries, contributing to the Company's Consumer Money Transfer segment[54] - The Company focuses on factors it believes are most relevant to operations by excluding severance costs from its measurement of non-GAAP profitability[54]

Core Viewpoint - Western Union is expected to report a decline in quarterly earnings and revenues, indicating potential challenges in its financial performance [1]. Financial Performance Estimates - Analysts predict quarterly earnings of $0.43 per share, a decrease of 6.5% year-over-year [1]. - Revenue is forecasted at $1.02 billion, reflecting a year-over-year decrease of 1.4% [1]. - The consensus EPS estimate has remained unchanged over the past 30 days, indicating a stable outlook among analysts [2]. Key Metrics Analysis - Estimated 'Revenue- Consumer Services' is projected at $127.65 million, showing a significant increase of 23% from the previous year [5]. - 'Revenue- Consumer Money Transfer' is expected to be $890.79 million, which represents a decline of 4.4% compared to the prior-year quarter [5]. - Total 'Consumer Money Transfer transactions' are estimated to be 71.50 million, down from 72.60 million a year ago [6]. Market Performance - Over the past month, Western Union shares have increased by 1.8%, outperforming the Zacks S&P 500 composite, which rose by 1.1% [6]. - The company holds a Zacks Rank of 4 (Sell), suggesting it may underperform the overall market in the near future [6].