Western Union(WU) - 2025 Q1 - Quarterly Results

Financial Performance - First quarter 2025 revenue was $984 million, a decrease of 6% year-over-year, primarily due to lower contributions from Iraq[2] - GAAP EPS for Q1 2025 was $0.36, down from $0.41 in the prior year, while adjusted EPS was $0.41, down from $0.45[3] - Total consolidated revenues decreased by 6% to $983.6 million in Q1 2025, down from $1,049.1 million in Q1 2024[24] - Net income for Q1 2025 was $123.5 million, a decrease of 13.5% from $142.7 million in Q1 2024[22] - Consumer Money Transfer revenues fell by 9% to $872.9 million, compared to $962.0 million in the same period last year[24] - The company reported revenues (GAAP) of $3,798 million for FY2024, with a year-over-year decline of 5%[45] - Adjusted revenues (non-GAAP) for FY2024 are projected to be $4,083.3 million, with a year-over-year decline of 3%[39] Segment Performance - Consumer Money Transfer segment revenue decreased 9% on a reported basis, with transactions increasing by 3% compared to the prior year[4] - The Consumer Services segment revenue grew 27% on a reported basis, but was down 3% on an adjusted basis due to challenges in Argentina[8] - The company reported a 27% increase in Consumer Services revenues, rising to $110.7 million from $87.1 million year-over-year[24] - Branded Digital revenue grew 7% on a reported basis, with a 14% increase in transactions[5] Future Projections - The company expects full year 2025 revenue to be between $4,090 million and $4,190 million, with adjusted revenue between $4,115 million and $4,215 million[8] - Operating margin for 2025 is projected to be between 18% and 20% on a GAAP basis, and between 19% and 21% on an adjusted basis[8] - The company anticipates a revenue decline of 6% in Q1 2025 compared to Q1 2024[37] - The effective tax rate (GAAP) for FY2025 is projected to be between 19% and 21%, while the adjusted effective tax rate (non-GAAP) is expected to be between 13% and 15%[47] Cash Flow and Assets - Net cash provided by operating activities increased significantly to $148.2 million, compared to $94.0 million in Q1 2024[22] - Cash and cash equivalents at the end of Q1 2025 were $1,447.4 million, down from $1,540.8 million at the end of Q1 2024[22] - Total assets as of March 31, 2025, were $8,337.9 million, a slight decrease from $8,370.5 million at the end of 2024[20] Taxation - The GAAP effective tax rate for Q1 2025 was 16%, with an adjusted effective tax rate of 10%[8] - The company recorded an effective tax rate (GAAP) of 16% in 1Q24, which is expected to stabilize around 16% in 1Q25[43] Acquisitions and Organizational Changes - The company acquired Eurochange Limited in April 2025, enhancing its retail foreign exchange services in the UK[8] - The Company reorganized its international operations in Q4 2024, recognizing deferred tax assets associated with this reorganization[50] - The Company excluded non-cash recognition of deferred tax assets from its reported results due to its significance[50] Market and Regulatory Environment - The Company experienced a significant increase in business originating from Iraq starting March 2023, attributed to policy changes by U.S. and Iraqi regulators[50] - 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[50] - The Central Bank of Iraq suspended the Company's largest agent in October 2023, but the agent was later reinstated[50] - Management believes that revenue measures excluding Iraq revenues provide better consistency and comparability to prior periods[50] Transaction Metrics - The number of transactions in Q1 2025 was 70.8 million, a 3% increase compared to 69.0 million in Q1 2024[28] - The geographic split for transactions is based on the region where the money transfer is initiated, with specific regions defined for reporting[50] - Transactions marketed under the Company's brands initiated through digital platforms are categorized as "Branded Digital," excluding those from Iraq due to volatility[50]