The Western Union Company (NYSE:WU) FY Conference Transcript

Summary of Western Union Company FY Conference Call Company Overview - Company: Western Union Company (NYSE: WU) - Date of Conference: November 19, 2025 Key Industry Insights - Remittance Market Growth: The global remittance market is expected to grow in line with global GDP, projected at 3-4% [68] - Geopolitical Impact: The business is sensitive to geopolitical events, such as elections and conflicts, which can disrupt operations [68] Financial Performance - Evolve Strategy: The company is largely on track with its Evolve strategy set in 2022, although the current run rate is slightly lower than anticipated due to geopolitical factors [9][10] - Revenue Trends: In Q3, GAAP revenue was flat, with expectations of 0% to 2% growth, indicating challenges in North America [10][12] - Retail Business Size: The retail business is currently valued at approximately $2.5 billion, with expectations of low single-digit shrinkage in the coming years [36][37] Digital Strategy - Digital Growth: The digital business is projected to grow significantly, with a goal of 50% of revenue coming from digital and consumer services by 2028 [33][34] - Customer Acquisition Cost (CAC): The target is to maintain a CAC of under $20, which is considered industry-leading [27] - Expansion Plans: The company is expanding its digital services in underpenetrated markets, including the Philippines and Indonesia [28] Competitive Positioning - Market Competitiveness: Western Union is currently 70% competitive in pricing, with ongoing adjustments to maintain market position [14][15] - Compliance and Security: The company employs 3,000 compliance personnel to manage KYC and AML requirements, emphasizing the importance of regulatory adherence [21] Non-Remittance Revenue Growth - Diversification Strategy: Non-remittance revenue is expected to grow from 15% to 25% by 2028, driven by services like bill payment and digital wallets [46] - Consumer Services Growth: The consumer services segment is growing at over 20%, indicating strong demand for additional services [35] Acquisition of Intermex - Strategic Acquisition: The acquisition of Intermex is expected to add $500 million to $600 million in revenue, with significant synergies in digital capabilities and market reach [40][45] - Market Expansion: Intermex will allow Western Union to leverage its payout network to expand services to new corridors [43] Digital Asset Network - Stablecoin Initiative: The company is launching its own stablecoin, USDPT, which is expected to enhance transaction speed and reduce reliance on traditional banking systems [60][62] - Consumer Empowerment: The stablecoin will allow receivers to hold value in USD, providing them with more control over currency conversion [61] Risks and Opportunities - Execution Risks: The business is subject to execution risks related to geopolitical events and economic policies [68] - Upside Potential: Opportunities for growth include successful execution of the digital asset network, favorable immigration policies, and increased digital adoption [69] This summary encapsulates the key points discussed during the Western Union FY Conference Call, highlighting the company's strategic direction, financial performance, and market positioning.