NYSE:WU Western Union Q4 2023 Earnings Report $9.55 -0.11 (-1.10%) Closing price 05/7/2025 03:59 PM EasternExtended Trading$9.61 +0.06 (+0.60%) As of 04:38 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Western Union EPS ResultsActual EPS$0.37Consensus EPS $0.37Beat/MissMet ExpectationsOne Year Ago EPS$0.32Western Union Revenue ResultsActual Revenue$1.05 billionExpected Revenue$1.02 billionBeat/MissBeat by +$30.02 millionYoY Revenue Growth-3.60%Western Union Announcement DetailsQuarterQ4 2023Date2/6/2024TimeAfter Market ClosesConference Call DateTuesday, February 6, 2024Conference Call Time4:30PM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Western Union Q4 2023 Earnings Call TranscriptProvided by QuartrFebruary 6, 2024 ShareLink copied to clipboard.There are 11 speakers on the call. Operator00:00:00Good day, and welcome to the Western Union 4th Quarter 2023 Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Speaker 100:00:15I would now like to turn the conference over to Tom Hadley, Vice President of Investor Relations. Tom, please go ahead. Thank you. On today's call, we will discuss the company's 4th quarter and full year 2023 results and then we will take your questions. The slides that accompany this call and webcast can be found at westernunion.com under the Investor Relations tab and will remain available after the call. Speaker 100:00:42Additional operational statistics have been provided in supplemental tables with our press release. Joining me on the call today is our CEO, Devin McGranahan and our CFO, Mac Hagwin. Today's call is being recorded and our comments include forward looking statements. Please refer to the cautionary language in the earnings release and in Western Union's filings with the Securities and Exchange Commission, including the 2022 Form 10 ks for additional information concerning factors that could cause actual results to differ materially from the forward looking statements. During the call, we will discuss some items that do not conform to generally accepted accounting principles. Speaker 100:01:23We have reconciled those items the most comparable GAAP measures in our earnings release attached to our Form 8 ks as well as on our website, westernunion.com, under the Investor Relations section. I will now turn the call over to our Chief Executive Officer, Devin McGranahan. Speaker 200:01:42Good afternoon, And welcome to Western Union's 4th Quarter 2023 Financial Results Conference Call. Now, 2 years into my tenure as CEO, I am pleased with the improvements we are seeing in our trajectory under our Evolve 2025 strategy. As you know, over the last 18 months, we have focused on returning our digital business to double digit revenue growth and achieving stability in our retail business. The 4th quarter is further evidence that we are indeed on the right path. Today, we are reporting a strong finish to the year with positive adjusted revenue growth and improved transaction trends across both our retail and digital businesses with transaction growth north of 5% for the 2nd consecutive quarter. Speaker 200:02:36Consistent and sustainable transaction growth is the strongest indicator of the future health of our business. It has been nearly a decade since the company has delivered 5% plus transaction growth for multiple quarters in a row, excluding the COVID recovery period. We are pleased with this significant change in our trajectory. Digging in. Looking at a quarter level trends, you can see the change in trajectory is both widespread and meaningful. Speaker 200:03:09Whether looking at the U. S. To Mexico, France to Africa or the world to the Philippines, These corridors show the same picture, considerable improvements in transaction growth rates over the last 18 months. As this graph illustrates, our work over the last 18 months to improve our customer experience, streamline our operational processes and accelerate our market effectiveness is driving significantly improved outcomes. Our confidence in achieving sustainable profitable revenue growth by 2025 increases each quarter as we stabilize our retail business, accelerate our digital business, expand our ecosystem offerings, enhance our customer and agent experiences and maintain industry leading margins like we did this past quarter. Speaker 200:04:06For the Q4, our revenue reached $1,050,000,000 reflecting a 3% increase on a constant currency basis when excluding the contribution from Business Solutions compared to the same period last year. Adjusted earnings per share came in strong at $0.37 up 16% on a year over year basis and allowed us to achieve the upper end of our EPS guidance. Maintaining our long history of returning capital to shareholders, We produced another year of solid cash flow with operating cash flow of $800,000,000 of which $650,000,000 was returned to our shareholders via dividends and stock buybacks. As we discussed at our Investor Day in 2022, to date, we have funded all the required investments in our transformation, while maintaining our 19% to 21% adjusted margins and continuing strong returns of capital To our investors, Matt will further discuss our financial results in more detail and provide our 2024 outlook later in this call. In addition to improving financial results, we continue to execute well on our strategic priorities. Speaker 200:05:31Over the last year, we have made meaningful progress on our most important initiatives, including improving our retail operations, updating our digital platforms and go to market strategy, refining our customer and agent experiences and enhancing our overall value proposition in the marketplace. While our journey is not over, I would like to share some of the highlights from this past year. Starting with our retail business. In 2023, We made material enhancements to our point of sale system with new functionalities like Remember Me, Quick Resend, Debit Payment Enablement, digital receipts and enhanced payout to account capabilities. These improvements, while not groundbreaking, have made our retail customer and agent experience more competitive and have contributed significantly to the improvements you see in our retail transaction trends over the last 18 months. Speaker 200:06:31Additionally, we will continue to roll out these functionalities across the globe and anticipate further benefits in 2024. In addition to our point of sale improvements, We also made significant progress on expanding our controlled distribution strategy, which includes both owned and concept stores Operator00:06:58in Speaker 200:07:02exclusive Western Union experience in high impact locations, we believe we have more control over the customer experience, can test new products and services and creates a new low cost acquisition engine for our digital business. This strategy, which prior to 2023 was largely a Latin American phenomena with own networks in both Argentina and Brazil, has now been expanded to every region in the company. In 2023, We opened 100 new owned locations and 200 new concept stores, which increased our controlled distribution strategy by over 35%. In addition to new store openings, we also updated roughly 30,000 high impact retail locations around the world with our new Western Union brand format presenting a more contemporary and omnichannel message to our retail customers. To complement our controlled distribution strategy, Last year, we also enhanced our digital capabilities, including launching our next generation digital app now in 12 countries around the globe, launching a digital wallet in 4 European and 1 Latin American country and implementing a new digital go to market strategy. Speaker 200:08:26This strategy has allowed us to drive more traffic to our digital platforms, increase our conversion rates, improve our marketing messages and enhance our value proposition while materially lowering our customer acquisition costs. As evidence of this, in 2023, we were able to grow new digital customers double digits, while at the same time lowering our customer acquisition costs by over 15%. Scalable, cost effective new customer acquisition is the foundation for continued double digit growth of new digital transactions. Given the journey we are on, ongoing operational performance improvement is a powerful driver of agent and customer satisfaction and ultimately will lead to improved retention. Last year, we made significant changes across key elements of our customer and agent experiences. Speaker 200:09:29These changes resulted in millions of fewer phone calls to our call center and improvements in both agent and customer satisfaction. For example, we improved self-service tools like our Track and Transfer to integrate across channels so that customers can get status updates on their transfer through the Western Union mobile app regardless of whether that transfer was initiated on the app or at more than one at more than over 400,000 retail active locations around the world. As you will recall, in late 2022, we started rolling out our new digital go to market strategy. This strategy included revised marketing, a focus on funnel effectiveness, improved onboarding processes, promotional pricing for new customers and market based pricing on subsequent transactions. The program has led to double digit new customer growth and double digit transaction growth throughout 2023. Speaker 200:10:34By the end of the Q1 of 2024, we will anniversary both the U. S. And the European launches of this strategy. And as such, we expect the gap between transaction growth rates and revenue growth rates to continue to narrow throughout the year. Likewise, on the retail side, last year, we also began rolling out a new go to market program To complement our focus on location productivity, that program included revised marketing, seasonal and holiday promotions and some Corridor and geographic specific pricing initiatives. Speaker 200:11:13The majority of these actions occurred in the 2nd and third quarters of last year, and we are now holistically happy with the results that they are producing. We believe these changes have helped us deliver positive retail transaction growth for the first time in many years and has reinforced our belief that we can achieve a stable retail business in the near future. One of the regions that has benefited immensely from these changes implemented over the last year is our APAC region, a region that has been in cyclical decline for over 5 years. APAC was early in the launch of our next Generation Digital App, and they have been advancing our efforts through controlled distribution. This region now has some of the highest digital new customer growth rates, the highest digital conversion rates, and has the most significant change growth rates we have seen anywhere in the world led by Australia. Speaker 200:12:15Transaction growth rates in APAC have improved 1,000 basis points or more year over year in every quarter of 2023. This type of improvement you can see You have when you have the right technology, the right distribution strategy and great customer and agent experience. We believe the right user interface and a keen focus on funnel management will help us meet our expectations of returning our digital business to double digit revenue growth. Looking ahead, while there is more work to be done Operator00:12:55and the team is committed to the Speaker 200:12:55ongoing continuous improvement of our core remittance business, we are also working diligently to expand our total addressable market beyond cross border remittances. Given the strength of our brand, The reach of our distribution and the trust of nearly 120,000,000 customers, we are focused on creating and delivering additional products and services They cater to the needs of the aspiring populations of the world. This strategy currently includes our digital wallet, our retail money order business, our bill payment business, and we have recently added products like our prepaid debit card, lending services in Argentina and Australia and a 4x currency conversion business that we have launched in select locations across Europe In APAC, we now have over 200,000 customers on boarded to our digital wallet in Europe and over 50,000 in Argentina. Our retail money order business, which we have focused on over the last 18 months, has grown substantially over the last couple of years, with principal up nearly 20% and investable assets up over $135,000,000 Growth in investable assets has been important for a business that generates substantial revenue on its asset portfolio. This business now accounts for roughly 1 third of our consumer services revenue, formerly referred to as other in our financials. Speaker 200:14:30With a revamped value proposition, improved distribution and a new point of sale system on the horizon, We are excited about continuing to see strong growth in this product ahead. As we continue this journey, Our goal is not only to drive organic growth, but also seek acquisition opportunities that will enable us to build stronger customer loyalty and an increase in our portion of our customers' financial wallets over time. As one of the key pillars of our Evolve 2025 strategy, we believe we are in the very early innings of this market expansion opportunity and will continue to invest accordingly. Finally, I would like to walk briefly talk briefly about our automation journey and highlight a new partnership that we entered into in the 4th quarter. We have a long history of innovation and have continued to expand our automation capabilities, resulting in cost efficiencies, higher quality output, improved customer and agent experiences, and risk reduction. Speaker 200:15:40Over the past 2 years, we have made significant investments in robotic process automation, building capabilities in agent collections and reactivation, customer refund processing, risk exception decisioning, proactive agent credit limit increases, and receiver name changes. While the elimination of manual processes drives cost efficiencies, The speed and quality of the outputs have also led to better experiences. We are now taking a similar approach to artificial intelligence as we have with robotics, including exploring ways to use generative AI in areas like software development, marketing content creation, price decisioning, Customer Care Assistance and Translation Services. While early in the journey, we believe generative AI has the potential to increase revenue, further improve efficiency and productivity over time and thus provide additional value to our shareholders. Last, we are pleased to announce a meaningful expansion of our relationship with Visa. Speaker 200:16:54This long term global strategic relationship covers issuance, Visa Direct and further enables collaboration between the 2 companies across 40 countries and 5 regions. Visa has been a long term strategic partner of Western Unions, and we are thrilled to extend this relationship for years to come. Looking ahead, we remain optimistic about our strategic direction and the positive progress we have made. We are pleased with the change in the underlying trajectory of our business, driven by improved transaction trends across both digital and retail businesses, while continuing to deliver improved top line results and strong cash flow. We've also made substantial progress on our talent evolution, including a meaningful realignment of the top 100 executives at the company. Speaker 200:17:49This was done through both internal promotions and external hires, I believe we now have the right people in the right roles to allow us to continue to execute on our evolved 2025 strategy. We have a loyal customer base that trusts our brand and values our services. We have a global network that provides unparalleled access and convenience nearly 120,000,000 people around the world and have now achieved a turnaround in transaction trends, thus validating the relevance of our offering and our brand. We have a talented and dedicated team that is focused on executing our strategy and driving innovation. And we have a clear vision in early progress on how we can leverage our assets to create new revenue streams and growth opportunities. Speaker 200:18:39I am confident that we have the right strategy, the right capabilities, the right team and the right mindset to achieve our strategic priorities. Thank you for joining the call today. I will now turn the call over to Matt to discuss our financial results and our forecast for next year in more detail. Speaker 300:18:58Thank you, Devin, and good afternoon, everyone. I'm pleased to be here today to walk you through our 2023 Q4 and full year results and our 2024 financial outlook. Before I begin, I would like to share with you the updated names of our segments to more accurately reflect the underlying businesses associated with them. Our C2C segment will now be referred to as Consumer Money Transfer or CMT and our other segment will be referred to as Consumer Services or CS, as Devin mentioned earlier. The names of the segments are the only thing that changed. Speaker 300:19:36We have not changed the composite of the business within them. For the full year, adjusted revenue grew 4%, which is meaningfully better than our original outlook of down 2% to 4% due to better core results, the benefit of Iraq and Argentinian inflation. In the 4th quarter, we delivered adjusted revenue of $1,100,000,000 representing a 3% increase year over year. Results benefited from a 400 basis point impact from Argentinian inflation, a revenue increase from Iraq and the ongoing progress of our Evolve 2025 strategy. 4th quarter results were above our expectations. Speaker 300:20:22As discussed during our last call, Iraq volumes slowed in the 4th quarter. They benefit our results by 3 percentage points versus 8% benefit in the 3rd quarter and a 10% benefit in the 2nd quarter. For the full year, Iraq contributed 6% to adjusted revenue growth. Uncertainty remains high in Iraq due to the challenging regulatory environment. When we last spoke in October, our largest agent in the country had recently been suspended, leading us to believe that the volumes will return to levels closer to 2022. Speaker 300:21:01This agent note therefore has been reactivated in early December. CMT transactions grew 5% in the quarter, led by continued momentum of our branded digital business, which grew double digits, Growth in our digital white label business and continued stabilization of our retail transaction trends ex Iraq. Adjusted operating margin was 16.1% compared to 15.8% last year. With the increase due to net savings related to our operating expense redeployment program and changes in foreign currency, partially offset by higher marketing investments. In 2023, our full year adjusted operating margin was 19.6%, which was in line with our outlook. Speaker 300:21:50Adjusted EPS was $0.37 versus $0.32 last year with the current period benefiting from higher operating profit and lower share count. For the full year, we delivered adjusted EPS of $1.74 which was meaningfully above our original outlook of $1.55 to 1 $0.65 This was driven by better revenue performance and the benefit of our operating expense redeployment program, which we partially reinvested back in the business by accelerating our go to market programs in both retail and branded digital as well as incremental technology investments. Now turning to our CMT business. Revenue declined 1% on a constant currency basis with transaction growth of 5%. Excluding ARC CMT domestic money transfer business, Revenue and transaction growth would have been 1 percentage point higher for both. Speaker 300:22:55Branded digital revenue was up 4% on a constant currency basis with transaction growth of 13%, driven by our go to market strategy launched in the Q3 of 2022, which showed continued momentum after reaching positive revenue growth last quarter. We're excited about the sustainability of our transaction growth, which has increased double digit for the 3rd consecutive quarter, while achieving positive revenue growth for the 2nd consecutive quarter. Leading the way is North America, The first region where we launched our new go to market strategy, which drove mid to high teens transaction growth in the 4th quarter and revenue in the high single digit range. We are also seeing impressive results in APAC, as Devin discussed earlier, led by Australia, which was an earlier adopter of our new digital platform. APAC drove mid teens transaction growth in mid single digit revenue growth in the 4th quarter, which we expect will continue to improve as we lap a new the go to market launch in mid-twenty 23. Speaker 300:24:07Moving to our retail business. We maintained stable transaction trends For the 2nd consecutive quarter, as we continue to make progress against our strategic priorities, including operational improvements, optimization to our network and enhancing our value proposition in the marketplace. When normalizing for Russia, Belarus and Iraq, We improved full year retail transaction growth by 500 basis points. Europe and CIS led the improvement in our retail transaction trends in the 4th quarter with transactions growing in the low single digit range driven by our Evolve 2025 strategy. We also benefited as we lapsed an agent loss in the 4th quarter and have executed well on our remediation plan for the 2nd agent that we're losing. Speaker 300:24:59Over the last couple of years, our European Retail business has not only faced macro related challenges like war and inflation, but has also lost 2 important agents. With this backdrop, we've taken the opportunity to test new approaches in the marketplace. For example, we opened 100 concept stores across Europe in nearly 20 markets in 2023. We also improved our value proposition in key markets driving double digit transaction growth in our independent channel during the second half of twenty twenty three. North America grew retail transactions low single digit in the 4th quarter, continuing its momentum from the 3rd quarter. Speaker 300:25:45Prior to this year, our North America retail business hadn't seen positive transaction growth since the Q2 of 2017. Enhancements we've made like 1 step refund and quick resend help to drive better customer and agent experience. Now moving to our Consumer Services segment, formerly known as Other, which represents 7% of total company revenue in the quarter. Revenue for the full year was up 13% on a reported basis, while revenue in the 4th quarter was down 1%. Revenue in the 4th quarter was impacted by tougher comparisons Due to a portfolio optimization that we completed last year, further optimization of our float portfolio in the current period, which resulted in a loss in the current quarter, will add value over time as well as a 5 percentage point drag related to the net impact of Argentine peso devaluation. Speaker 300:26:48We are excited about our Consumer Services segment with 2023 marking the 2nd consecutive year of double digit revenue growth. With the innovations that Devin highlighted earlier today and over the past few quarters, such as our new retail money order platform Launched in the Q4, our prepaid card that was relaunched in the Q3 or our digital wallet that's currently live in 5 countries, We are bullish that we can continue to grow consumer services in the low double digit range going forward. At our Investor Day, we launched a 5 year $150,000,000 operating expense redeployment program, And we feel very good about the progress we've made to date. Broadly speaking, we see opportunity to continue to drive efficiency, Manage our cost structure and leverage our scale. In 2023, we took action that allowed us to save over $50,000,000 The savings last year were primarily driven by talent reallocation, technology efficiencies, marketing improvements, call center enhancements and optimizing our real estate footprint. Speaker 300:28:00As a result of these savings, we are able to invest in technology advancements benefiting our ecosystem platform and our retail point of sale system as well as other opportunities like expanding our controlled distribution network. Heading into 2024, I remain optimistic of our continued efficiency opportunities and I'm confident that we can hit a similar savings amount again this year. Now turning to our cash flow and balance sheet. In 2023, we generated $783,000,000 of operating cash flow, which includes a transition tax payment of $119,000,000 paid in the 2nd quarter. These tax payments will continue to step up to $160,000,000 in 20.24 and $200,000,000 in 2025. Speaker 300:28:53I was proud of how well the organization embraced a more diligent approach to free cash flow and capital expenditure management. Capital expenditures were $31,000,000 in the 4th quarter $148,000,000 in 2023. Capital expenditures were over 25% lower In 2022 2021, we are going to remain vigilant on investing in the right areas in shifting our agents from large signing bonuses to performance driven commission structures. Our strong free cash flow and disciplined expense management allowed us to continue to maintain a strong balance sheet with cash and cash equivalents of $1,300,000,000 and debt of $2,500,000,000 Our leverage ratio remains strong And we're at 2.4 times and 1.2 times on a gross and net basis, which provides us flexibility for potential M and A, while maintaining our investment grade credit rating. This strong free cash flow also allowed us to return almost $650,000,000 to our shareholders in 2023, which included roughly $350,000,000 in dividends $300,000,000 in share repurchases, including $200,000,000 in the 4th quarter. Speaker 300:30:17Now moving on to our outlook. Today, We provided our financial outlook for 2024, reflecting current macroeconomic conditions. We expect adjusted revenue to be in the range of $4,100,000,000 to $4,200,000,000 This range reflects continued growth in our Branded Digital business, the continued stabilization of our retail business and double digit growth in our consumer services segment driven by the advancements in our ecosystem strategy. We also expect Iraq to generate between $50,000,000 $100,000,000 during the year. We also expect adjusted operating margins to be in the range of 19% to 21%, and we expect EPS to be in the range of $1.65 to 1.75 Finally, we would like to provide an update on our 4 key performance indicators that we shared at our Investor Day. Speaker 300:31:14Starting with retention. In 2023, retail retention improved 70 basis points versus 2022. As we believe improving retention is a critical component to our strategy of achieving long term sustainable growth across both our retail and digital channels Starting this year, we will report our total consumer money transfer retention. Our long term aspiration to improve retention 200 basis points annually hasn't changed, but we've learned a lot in 2023, including the effects of a downward pressure that growing new customers can drive. We also made good strides on improving branded digital retention with 120 basis point improvement in 2023. Speaker 300:32:03We continued to believe that customer acquisition is a key metric in accelerating our growth of our branded digital business to drive more customers to our digital platform and remain committed to growing this double digit annually. In 2023, we grew customer acquisition by 13%, which was even higher on a cross border basis. Next, moving to our omnichannel. At our Investor Day, we shared that this small customer base was valuable to Western Union, generating 2.5 times more transactions than a single channel customer. While we initially thought our omni channel is a permanent state for our customers, We have found that omni channel largely serves a pass through as they migrate between channels. Speaker 300:32:53Only 30% of our 2022 Omnichannel customers remained omnichannel at the end of 2023. While retail to digital migration accounted for 5% of our new branded digital customers in 2023. We will continue to focus on a seamless omnichannel customer experience and building an account based relationship with our customers instead of a transactional one and believe that these benefits will be captured in other metrics. However, we will no longer report this metric going forward as we believe is not significant to our overall business. Lastly, at Investor Day, we shared our goal to add 100,000 digital banking customers each month. Speaker 300:33:40However, since Investor Day, we have shifted our focus from NeoBank customers to high quality cross border remittance customers. Additionally, as Devin highlighted today, our ecosystem strategy includes not only a digital wallet, but it's broader and includes an array of products and services including retail money order, bill payments, prepaid cards, lending products, and foreign currency exchange. These results will be directly reflected in the Consumer Services segment and not our Consumer Money Transfer segment. We continue to believe the benefits of these new products and services will drive not only higher engagement, but over time will help us improve retention as we shift to an account based relationship. As a result, Our goal moving forward will be to grow our profitable consumer services segment revenue double digit annually, which better reflects the progress of our ecosystem strategy. Speaker 300:34:41To recap, we're pleased with the progress we've made so far our evolved 2025 strategy, and we remain optimistic for the year ahead. Thank you for joining the call today. And operator, we're ready to take questions. Operator00:35:09Our first question comes to us from Will Nance from Goldman Sachs. Please ask your question. Speaker 400:35:16Hey guys, appreciate all the details today. Maybe I can start off with some of the comments that you made around omni channel customers. I know you previously talked around the retail digital escalator over time. And I know you're not focusing on having omni channel customers anymore, but I guess When you see these customers get off the escalator, do you still see them transacting at much higher levels? And is there any kind of overall change in your thought process about the value of these customers? Speaker 200:35:49Hey, Will, it's Devin. Thanks for joining the call. Indeed, you are correct. One of the reasons, as Matt highlighted, that we're making this change is the real economic benefit to us is that retail to digital escalator. And as Matt highlighted, 5% of our new customers digital customers in 2023 or prior retail customers. Speaker 200:36:12Those customers turn out to have better retention and stronger ARPUs than customers that we acquire de novo as new to franchise digital customers. So growing and increasing our ability through omnichannel activities, But the focus really is on the escalator and less on a pool of customers who live in both retail and digital. Speaker 400:36:34Got it. That makes sense. And then just a question Speaker 200:36:37on And we think it gives well, it gives us a cost benefit advantage in terms of our overall CAC. And so our ability to continue to grow the digital customer base and using the retail base as a feeder is an important part of the strategy and will be reflected in our ability to continue to grow new digital customers. Speaker 400:36:57Got it. That makes sense. And then just maybe a different question on some of the guidance and the kind of the guidance philosophy, particularly around reinvestment. Just a couple of data points that I'm picking up. I guess you came a little bit ahead of expectations on revenue. Speaker 400:37:12We saw the expenses come in much higher bottom line kind of roughly in line with expectations, sort of a similar dynamic going on in the full year guide. I think if we look at revenue Iraq that's coming in a little bit lower than maybe what you previously talked about, kind of later last year. We're still seeing earnings overall coming in roughly in line with expectations And the Iraq revenues kind of helping out. So just when you constructed that guide, how did the incremental Iraqi revenues that maybe you weren't Expecting when you spoke to us in December, how did that kind Speaker 500:37:44of factor into the construction of Speaker 400:37:45the guide? Is there any conservatism in the overall numbers to account the uncertainty in Iraq? And did you guys make any incremental investments on the revenue side that may have impacted the ex Iraq numbers in light of these incremental revenues? Thanks. Speaker 300:37:59Hey, Will. Thanks for the question. The main focus we've got is obviously on the top line and EPS. Sometimes you end up with items down in other, which to make further investments if you got the right thing to invest in. But on your question about Iraq itself, we have made a fair bit of pricing during 2023 that have a carryover effect into 2024, as well as we continue to monitor that. Speaker 300:38:22So that's been factored into our thinking here. The opportunity as we get into 24, as we gave them the $50,000,000 to $100,000,000 range is slightly higher than we would have thought back in December when we met or November, I think it may have been actually, but not meaningfully higher. We just knew we had a carryover effect to the actions we took this past year. Operator00:38:43Our next question one second, please. Speaker 200:38:45It's still a highly uncertain situation. We are our main settlement partner has notified us that they will not settle for us for our cash exchange retail customers in Iraq at the end of the first quarter. That's a significant portion of our volume. And while we continue to look for alternatives to that, we really, I think it put into the guide a reasonable outcome given the uncertainty of what may or may not transaction post March. Operator00:39:22Our next question comes to us from Vasu Govil from KBW. Please ask your question. Speaker 600:39:28Hi, thank you for taking my questions. Speaker 200:39:29Hey, Angela or Hannah, I'm going Speaker 300:39:31to shift to a different call. Speaker 600:39:35Jeremy? Operator00:39:57Basu, go ahead and ask your question. Our next question comes to us from Andrew Schmidt from Citi. Please ask your question. Speaker 700:40:22Hey, guys. Thanks for taking my questions here. This is just a higher level question To start off with, obviously, you look at U. S. Migration trends, been pretty robust, only one market, but clearly the biggest outbound market in the world. Speaker 700:40:36I'm wondering to what extent you're seeing that show up in your results. I know that You mentioned pretty positive, I think, double digit transaction growth in the independent channel. And I know it's a mix of self improvement initiatives also in there. But I'm curious to what extent you're seeing that positive remittance or I should say positive migration trends show up in your results? Speaker 200:41:06Andrew, it's a great question. Thank you for joining the call today. We are seeing the benefit. In fact, our business is driven by, as you know, 2 Primary factors overall global macroeconomic growth and by migration. And so The increased migration into North America over the last couple of years is benefiting particularly those outbound corridors from the U. Speaker 200:41:34S. To certain regions in Latin America. And so we see double digit transaction growth in those corridors as a result of the migration. There's less of that when Matt was talking about the improved transaction trends in retail in Europe. There's been less net migration into Europe over the last year or 2. Speaker 200:41:55And so that is more of a result of kind of ongoing performance improvement, enhancing the quality of our distribution network and our stronger go to market value proposition there. Speaker 300:42:07Hey, Andrew. I want to build on Devin's comment is You're focusing on the specific question you asked, but holistically, we believe the hard work we're doing with our agents and our customers are really driving the progress we're making. Think we have a modest tailwind as Devin just described. But when you look at it, we've now starting to move from being a share donor to holding our fair share with a little bit of tailwind from this. Speaker 200:42:28In Mexico is the perfect corridor example where for many years we were probably losing share U. S. To Mexico in the last 12 months we've returned back to growing share in that important corridor. And obviously, it's in a corridor that the Central Bank of Mexico publishes is growing in the mid to high single digits year over year. Speaker 700:42:55Super helpful. Appreciate that. And then if I could dig into just the branded digital transaction growth up 13% this quarter. And I know you elaborated on this a little bit, but if you could break down just the drivers of that, whether it's new customer growth, whether it's retention, whether it's behavior, transactions per customer, any additional just new disaggregation of that would be helpful so can get a better understanding of the underlying mechanics of that transaction growth? Speaker 300:43:22Thanks a Speaker 700:43:23lot guys. Speaker 300:43:23Yes. Thanks, Andrew, for the question. I mean, really it's all three. I highlighted a few of the components you can back into the 3rd, but I highlighted in the metrics conversation at the end that our retention has improved in branded digital by 110 basis points in 20 3%. We've also highlighted that we continue to grow our new customers in the double digit range. Speaker 300:43:43Full year was 13%. And then we are seeing a little bit of an uptick in transactions per customer, but that's the lower the 3. Thanks for the question. Speaker 200:43:57And Andrea, as we've done I'm going to Operator00:43:59go back to Vasu Govil. Speaker 600:44:03Hi, thanks for taking my question. Hopefully, you guys can hear me this time. I guess my first question for you, Devin, on the digital wallet strategy. Historically, you've been focused on sort of positioning that to drive more retention and engagement. And I think today, the description you guys gave, it seemed like you were focusing a little bit on the revenue potential there as well. Speaker 600:44:25Is that a fair read? Speaker 200:44:30Vasu, I might slightly reframe that. We are focusing on growing revenue from our overall ecosystem strategy and we believe that that is an important metric to gauge our ability to return Western Union to profitable revenue growth as part of our evolved 2025 strategy. A component of that is in fact growing our digital wallet, which we believe will primarily benefit retention as it is a more account based relationship and thus will drive increased revenue through lower customer churn and obviously the increased ARPU from extended customers. So while we still have a strong focus on growing our digital wallet, We're doing so more with a focus on our remittance business and on driving retention with our digital remittance customers by them having more of an account based relationship, which we believe will drive revenue of ancillary products and services, including interchange, including bill payment, including other services that are available digitally in the wallet that's not available in our traditional transaction cross border remittance platform. Speaker 600:45:49Super helpful. And then a quick one for you, Mike. I was wondering on the Margin guidance for 2024, if you could help us a little bit about what to expect for the cadence throughout the year? Speaker 300:46:06Hey, Vasu. It's going to bounce around. It's going to be not linear. We kept the guidance of the 2019 to 2021 because as we think As revenue accelerates, that's going to provide us incremental profitable revenue growth. As you have opportunity to make investments, that will pull it down. Speaker 300:46:22Our goal is to hit the number throughout the full year, but any given quarter can bounce around. I can't really guide to that at this point. Operator00:46:34Our next question comes to us from Tien Tsin Huang from JPMorgan. Please ask your question. Hi, thanks. Speaker 800:46:42I just want to ask on the customer additions. I know that's trending nicely in the double digits, But also the acquisition cost has been lower. How do you expect those two dynamics to trend here and 24 ahead. Can we count on acquisition costs staying lower or is there potential to maybe turn that dial differently? Speaker 300:47:03Hey, Tien Tsin, this is Matt. I think we saw further opportunity. As Devin talked about earlier, we have generative AI we're working on. We've done some things around robotics. Bob, who leads that organization, has been at the company now for 18 months, and he's continuing to add skills into the organization. Speaker 300:47:19So we think there's further opportunity as we enhance that as far as we're rolling out incremental our new digital platform in different countries that will provide additional opportunities. So we don't see pressure on that. I can't say it's going to be the same level of reduction in 2024 as we did in 2023, but we do see opportunity to keep making enhancements there. Speaker 200:47:39Tien Tsin, one of the things we talk a lot about, which is our ability to scale at cost effective tax around the world, right? And so in some markets that are exceptionally well developed like the U. S, the team has done a very nice job of that, which you see in the strong customer growth in the mid to upper teen transaction levels that we saw last year. As we work our way around the world, increasing our capabilities to scale marketing acquisition and to do it cost effectively will be one of our priorities in 2024. Speaker 800:48:15Good. Now I'm glad to focus. On the just my last follow-up just the consumer services, expectations for double digit growth again in 'twenty four. Should other components going to be different? I know there's flowed another thing to consider, but anything to call out there or rank bigger contributors? Speaker 300:48:34Yes. I think as you think about this year and last year, the vast majority of the growth has come through our legacy products that we had there bill pay and money order. As you highlighted, there's been a little bit of a tailwind from higher interest rates. We do have a relatively moderate term as we disclosed it probably about 4, 4.5 years is the duration for our investments there. So feel good about 24 for where we are in interest. Speaker 300:48:57Devin talked about in these calls the number of new products we put there, whether it be prepaid, ForEx, revamping our money order business and so forth. As you get in 2024 and beyond, we think that we're going to start seeing a larger portion of our growth coming from those new product additions. Operator00:49:18Our next question comes to us from Darrin Peller from Wolfe Research. Please ask your question. Speaker 900:49:25Hey, guys. I guess my question is really more around just the trend line. Devin, I liked your comment about the narrowing between the transaction growth trends, which we've seen improving consistently and the revenue growth trends, which is still mean, if you calculate the Iraq and Argentina impact, still I think around negative 4, unchanged. So you've seen transactions improve, revenue seems Speaker 1000:49:48like there's going to be to Speaker 900:49:49it, but you did comment on the narrowing. So can you just get a little more detail on that because I think that's the crux of what I know we and some investors are looking for to follow on from the obvious improvements you're having in the transaction side of the business? Speaker 200:50:03Hey, Darren, thanks for joining the call. Indeed, we are closely monitoring that gap. And I think we've talked about 3 things in the past, which I'll reiterate. 1, Our long term aspiration is to maintain the ratio between transactions and revenue to be a 200 to 300 basis point GAAP as we kind of continue to evolve our business. And so our goal is to get revenue up to reach that 200 to 300 basis point gap during the duration of our evolved 2025 strategy. Speaker 200:50:39The second is the way we rolled out, particularly on the digital side, but also on the retail side, our side, our revised go to market strategy, which was kind of on a region by region basis, creates some lumpiness as to how you see that gap closed because of the effects of the new region rolling into it. As I commented on the public prepared notes, we will be lapping at least on the digital side both the North American and European, which is the preponderance of our digital business by the end of this quarter. So the acceleration in closing the gap will the gap closure will accelerate in the second half of this year. And then 3rd, we are continuing to iterate as we go across segments, geographies and channels. And so as we've always said, we compete in a lot of different places around the world. Speaker 200:51:35So we'll continue to optimize. But our goal really is to close that gap and to close it over the course of the duration of our strategy. Speaker 900:51:44Devin, that's really helpful. I guess just one quick follow-up would be around the Is there any read on retention metrics on cohorts you gained via the promotional efforts now over the last year or so in the U. S? It's just Again, it looks like it's great to see the transaction trends. Just curious to know a little more on the puts and takes of net new versus retention? Speaker 300:52:06Hey, Darren. Thanks for the question. We continue we've probably been 2 quarters now, but we continue to see strong results in the 90 day, 180 day retention for the newer cohorts are coming into promotional pricing. It's driven through the reengagement campaigns we've talked about in past calls, Having better market based pricing, more streamlined transaction processing as well as we're targeting we're starting to target companies that are doing APN transactions, which have a higher retention rate as well. And we continue to see a high 20s, low 30% growth rate in our APN business, both in the retail and digital side. Speaker 200:52:48APN being payout to account. The other thing I think, Aaron, you can look at, Matt talked about the 110 basis point improvement in digital transactions year over year. That is the composition of our history, I. E, the accumulated book. And as you know, as customers tenure in this category, retention goes up. Speaker 200:53:15So we've been growing new customers aggressively, but increasing the overall retention of the book, which says something about the quality of the new customers and the retention in that subset of the portfolio in order to achieve that. In that subset of the portfolio in order to achieve that. Operator00:53:32Our next question comes to us from Ken Cicholski from Autonomous. Please ask your question. Speaker 1000:53:40Hi, good afternoon everyone. Thanks for taking the question. I just wanted to ask a couple on the physical retail business and Maybe we can exclude Iraq, just to strip out some of the noise. The revenue per transaction in that part of the business has declined over the last handful of quarters. So I was wondering if you could talk about what's causing that revenue per transaction decline in retail ex Iraq. Speaker 1000:54:06And then it looks like over the last few quarters pricing adjustments were needed to accelerate transaction growth in that part of the business. So do you think the lower pricing in that physical retail XRA rack is sort of behind you Or do you feel like you need to be more aggressive on that front to accelerate transaction growth even further into as you Speaker 300:54:30go throughout the year? Hey, Ken. Thank you very much for the question. As you think about the change in RPT ex Iraq over the last, call it year, about 2 thirds of that is really mix driven and you have about the remaining portion being more conscious price reductions that we've done. We've started doing some tests. Speaker 300:54:51We talked about it in the last call in a large European country where we changed our FX yields multiple times throughout the day to be competitive, which is driving pricing. We've done some other tests around the world that we've now kept permanent for many of them. So it's a little bit of a mix of both, of mix and conscious decision to drive performance. The one that we'll highlight, you've seen in our charts both this quarter's past, you can see improvements in our transaction trends prior to sort of push in price changes in Q2 and Q3, as we're starting to do additional work with our agents and our customers on both the product side and customer service. So to us, we believe that really all three elements are making a difference. Speaker 300:55:31It's not a battle about price only. It's a matter of having market competitive prices Great service, great product. As far as the future, we're always going to be adjusting the market looking at what competitors do. So we are committed to our guidance. Speaker 1000:55:46Yes. Okay. That's helpful, Matt. And then what's the expectation around revenue growth in the physical retail business in 2024, I guess, including and excluding Iraq because it looks like you'll start to lap some of the Iraq revenue contribution in the Q1 of this year. Speaker 300:56:03So, Ken, we're not going to give out guidance at the segment level really for most things. Operator00:56:13Our next question comes to us from Tyler DuPont from Bank of America. Please ask your question. Speaker 500:56:21Hi, good afternoon, Devin and Matt. This is Tyler on for Jason. Thanks for taking the questions. I wanted to 1st touch on the current geopolitical events in the Middle East. Given your geographic footprint, not specific to Israel or anything, but sort of the region more broadly, there any dynamics you're seeing worth calling out, whether those are change in money transfer volumes or mix between retail and digital or just any other dynamics that are worth considering that haven't been mentioned so far? Speaker 200:56:50Hey, thanks for the question. We've seen very obviously overall volumes in the region are down, but they haven't gone to 0. And there's been little change in terms of the mix of retail and digital. It's predominantly a retail environment in that of the world. We continue to monitor it, but the overall region itself is relatively small relative to our total business. Speaker 200:57:17So we're more concerned about the lives of the people, protecting our agents, our employees and hoping that the conflict ends quickly than the economic impacts for our business. Speaker 500:57:31Okay. That's helpful. And then just as a follow-up, I believe you mentioned in the prepared remarks that customer acquisition Costs declined by around 15% in the year. Can you speak to how the company's LTV to CAC has evolved throughout 2023? And you anticipate this metric will continue to evolve through 2024, particularly as we're shifting the mindset from more of an omnichannel focus to selling consumer services to just sort of The dynamics there and any pieces to the puzzle worth noting? Speaker 300:58:00Tyler, thanks for the question. As you think about it, we've highlighted a couple of key drivers of that math. We've talked about the fact that our digital retention has improved by 110 basis points. That's pushing the life out longer for our historical customers over before making this change. We've reduced our rates to some degree and then we've obviously lowered our CAC. Speaker 300:58:21Holistically, it's about the same as it was before for those moving parts. Speaker 200:58:26And I would add 2 things to it. As you know, when we launched this program, which is now 18 months into the program, we made the explicit shift which hereto before we had not managed to, which was to a target LTV to CAC goal. And so we've maintained that goal throughout the program. And as either LTV or CAC adjusts, we adjust accordingly in terms of our marketing spend and our ability to drive new programs into the marketplace. And so as LTV goes up, that enables us to spend more. Speaker 200:59:05As cat goes down, that enables us to spend more. And obviously in reverse hopefully that won't happen, but if it did then we would spend less. Operator00:59:18Our next question comes to us from Ramsey El Assal from Barclays. Please ask your question. Our next question in the queue comes to us from James Faucette from Morgan Stanley. Please ask your question. Our next question comes to us from Jamie Friedman from SIG. Operator01:00:02We have no additional questions in the queue at this time. Thank you for joining the Western Union 4th quarterRead morePowered by Conference Call Audio Live Call not available Earnings Conference CallWestern Union Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Western Union Earnings HeadlinesThe Western Union Company: Western Union Earnings: Money-Transfer Business Takes Small Hit Amid Tough EnvironmentApril 30, 2025 | ca.finance.yahoo.comThe Western Union Company (WU): One of the Cheap Dividend Stocks Being Targeted by Short SellersApril 30, 2025 | msn.comAltucher: Turn $900 into $108,000 in just 12 months?We are entering the final Trump Bump of our lives. But the biggest returns will not be in the stock market.May 8, 2025 | Paradigm Press (Ad)Western Union Sees Unusually Large Options Volume (NYSE:WU)April 29, 2025 | americanbankingnews.comBrokers Offer Predictions for Western Union Q2 EarningsApril 29, 2025 | americanbankingnews.comWestern Union’s Earnings Call: Growth Amid ChallengesApril 25, 2025 | tipranks.comSee More Western Union Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Western Union? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Western Union and other key companies, straight to your email. Email Address About Western UnionWestern Union (NYSE:WU) provides money movement and payment services worldwide. The company operates through Consumer Money Transfer and Consumer Services segments. The Consumer Money Transfer segment facilitates money transfers for international cross-border and intra-country transfers, primarily through a network of retail agent locations, as well as through websites and mobile devices. The Consumer Services segments offers bill payment services, which facilitate payments for consumers, businesses, and other organizations, as well as money order services, retail foreign exchange services, prepaid cards, lending partnerships, and digital wallets. 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There are 11 speakers on the call. Operator00:00:00Good day, and welcome to the Western Union 4th Quarter 2023 Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Speaker 100:00:15I would now like to turn the conference over to Tom Hadley, Vice President of Investor Relations. Tom, please go ahead. Thank you. On today's call, we will discuss the company's 4th quarter and full year 2023 results and then we will take your questions. The slides that accompany this call and webcast can be found at westernunion.com under the Investor Relations tab and will remain available after the call. Speaker 100:00:42Additional operational statistics have been provided in supplemental tables with our press release. Joining me on the call today is our CEO, Devin McGranahan and our CFO, Mac Hagwin. Today's call is being recorded and our comments include forward looking statements. Please refer to the cautionary language in the earnings release and in Western Union's filings with the Securities and Exchange Commission, including the 2022 Form 10 ks for additional information concerning factors that could cause actual results to differ materially from the forward looking statements. During the call, we will discuss some items that do not conform to generally accepted accounting principles. Speaker 100:01:23We have reconciled those items the most comparable GAAP measures in our earnings release attached to our Form 8 ks as well as on our website, westernunion.com, under the Investor Relations section. I will now turn the call over to our Chief Executive Officer, Devin McGranahan. Speaker 200:01:42Good afternoon, And welcome to Western Union's 4th Quarter 2023 Financial Results Conference Call. Now, 2 years into my tenure as CEO, I am pleased with the improvements we are seeing in our trajectory under our Evolve 2025 strategy. As you know, over the last 18 months, we have focused on returning our digital business to double digit revenue growth and achieving stability in our retail business. The 4th quarter is further evidence that we are indeed on the right path. Today, we are reporting a strong finish to the year with positive adjusted revenue growth and improved transaction trends across both our retail and digital businesses with transaction growth north of 5% for the 2nd consecutive quarter. Speaker 200:02:36Consistent and sustainable transaction growth is the strongest indicator of the future health of our business. It has been nearly a decade since the company has delivered 5% plus transaction growth for multiple quarters in a row, excluding the COVID recovery period. We are pleased with this significant change in our trajectory. Digging in. Looking at a quarter level trends, you can see the change in trajectory is both widespread and meaningful. Speaker 200:03:09Whether looking at the U. S. To Mexico, France to Africa or the world to the Philippines, These corridors show the same picture, considerable improvements in transaction growth rates over the last 18 months. As this graph illustrates, our work over the last 18 months to improve our customer experience, streamline our operational processes and accelerate our market effectiveness is driving significantly improved outcomes. Our confidence in achieving sustainable profitable revenue growth by 2025 increases each quarter as we stabilize our retail business, accelerate our digital business, expand our ecosystem offerings, enhance our customer and agent experiences and maintain industry leading margins like we did this past quarter. Speaker 200:04:06For the Q4, our revenue reached $1,050,000,000 reflecting a 3% increase on a constant currency basis when excluding the contribution from Business Solutions compared to the same period last year. Adjusted earnings per share came in strong at $0.37 up 16% on a year over year basis and allowed us to achieve the upper end of our EPS guidance. Maintaining our long history of returning capital to shareholders, We produced another year of solid cash flow with operating cash flow of $800,000,000 of which $650,000,000 was returned to our shareholders via dividends and stock buybacks. As we discussed at our Investor Day in 2022, to date, we have funded all the required investments in our transformation, while maintaining our 19% to 21% adjusted margins and continuing strong returns of capital To our investors, Matt will further discuss our financial results in more detail and provide our 2024 outlook later in this call. In addition to improving financial results, we continue to execute well on our strategic priorities. Speaker 200:05:31Over the last year, we have made meaningful progress on our most important initiatives, including improving our retail operations, updating our digital platforms and go to market strategy, refining our customer and agent experiences and enhancing our overall value proposition in the marketplace. While our journey is not over, I would like to share some of the highlights from this past year. Starting with our retail business. In 2023, We made material enhancements to our point of sale system with new functionalities like Remember Me, Quick Resend, Debit Payment Enablement, digital receipts and enhanced payout to account capabilities. These improvements, while not groundbreaking, have made our retail customer and agent experience more competitive and have contributed significantly to the improvements you see in our retail transaction trends over the last 18 months. Speaker 200:06:31Additionally, we will continue to roll out these functionalities across the globe and anticipate further benefits in 2024. In addition to our point of sale improvements, We also made significant progress on expanding our controlled distribution strategy, which includes both owned and concept stores Operator00:06:58in Speaker 200:07:02exclusive Western Union experience in high impact locations, we believe we have more control over the customer experience, can test new products and services and creates a new low cost acquisition engine for our digital business. This strategy, which prior to 2023 was largely a Latin American phenomena with own networks in both Argentina and Brazil, has now been expanded to every region in the company. In 2023, We opened 100 new owned locations and 200 new concept stores, which increased our controlled distribution strategy by over 35%. In addition to new store openings, we also updated roughly 30,000 high impact retail locations around the world with our new Western Union brand format presenting a more contemporary and omnichannel message to our retail customers. To complement our controlled distribution strategy, Last year, we also enhanced our digital capabilities, including launching our next generation digital app now in 12 countries around the globe, launching a digital wallet in 4 European and 1 Latin American country and implementing a new digital go to market strategy. Speaker 200:08:26This strategy has allowed us to drive more traffic to our digital platforms, increase our conversion rates, improve our marketing messages and enhance our value proposition while materially lowering our customer acquisition costs. As evidence of this, in 2023, we were able to grow new digital customers double digits, while at the same time lowering our customer acquisition costs by over 15%. Scalable, cost effective new customer acquisition is the foundation for continued double digit growth of new digital transactions. Given the journey we are on, ongoing operational performance improvement is a powerful driver of agent and customer satisfaction and ultimately will lead to improved retention. Last year, we made significant changes across key elements of our customer and agent experiences. Speaker 200:09:29These changes resulted in millions of fewer phone calls to our call center and improvements in both agent and customer satisfaction. For example, we improved self-service tools like our Track and Transfer to integrate across channels so that customers can get status updates on their transfer through the Western Union mobile app regardless of whether that transfer was initiated on the app or at more than one at more than over 400,000 retail active locations around the world. As you will recall, in late 2022, we started rolling out our new digital go to market strategy. This strategy included revised marketing, a focus on funnel effectiveness, improved onboarding processes, promotional pricing for new customers and market based pricing on subsequent transactions. The program has led to double digit new customer growth and double digit transaction growth throughout 2023. Speaker 200:10:34By the end of the Q1 of 2024, we will anniversary both the U. S. And the European launches of this strategy. And as such, we expect the gap between transaction growth rates and revenue growth rates to continue to narrow throughout the year. Likewise, on the retail side, last year, we also began rolling out a new go to market program To complement our focus on location productivity, that program included revised marketing, seasonal and holiday promotions and some Corridor and geographic specific pricing initiatives. Speaker 200:11:13The majority of these actions occurred in the 2nd and third quarters of last year, and we are now holistically happy with the results that they are producing. We believe these changes have helped us deliver positive retail transaction growth for the first time in many years and has reinforced our belief that we can achieve a stable retail business in the near future. One of the regions that has benefited immensely from these changes implemented over the last year is our APAC region, a region that has been in cyclical decline for over 5 years. APAC was early in the launch of our next Generation Digital App, and they have been advancing our efforts through controlled distribution. This region now has some of the highest digital new customer growth rates, the highest digital conversion rates, and has the most significant change growth rates we have seen anywhere in the world led by Australia. Speaker 200:12:15Transaction growth rates in APAC have improved 1,000 basis points or more year over year in every quarter of 2023. This type of improvement you can see You have when you have the right technology, the right distribution strategy and great customer and agent experience. We believe the right user interface and a keen focus on funnel management will help us meet our expectations of returning our digital business to double digit revenue growth. Looking ahead, while there is more work to be done Operator00:12:55and the team is committed to the Speaker 200:12:55ongoing continuous improvement of our core remittance business, we are also working diligently to expand our total addressable market beyond cross border remittances. Given the strength of our brand, The reach of our distribution and the trust of nearly 120,000,000 customers, we are focused on creating and delivering additional products and services They cater to the needs of the aspiring populations of the world. This strategy currently includes our digital wallet, our retail money order business, our bill payment business, and we have recently added products like our prepaid debit card, lending services in Argentina and Australia and a 4x currency conversion business that we have launched in select locations across Europe In APAC, we now have over 200,000 customers on boarded to our digital wallet in Europe and over 50,000 in Argentina. Our retail money order business, which we have focused on over the last 18 months, has grown substantially over the last couple of years, with principal up nearly 20% and investable assets up over $135,000,000 Growth in investable assets has been important for a business that generates substantial revenue on its asset portfolio. This business now accounts for roughly 1 third of our consumer services revenue, formerly referred to as other in our financials. Speaker 200:14:30With a revamped value proposition, improved distribution and a new point of sale system on the horizon, We are excited about continuing to see strong growth in this product ahead. As we continue this journey, Our goal is not only to drive organic growth, but also seek acquisition opportunities that will enable us to build stronger customer loyalty and an increase in our portion of our customers' financial wallets over time. As one of the key pillars of our Evolve 2025 strategy, we believe we are in the very early innings of this market expansion opportunity and will continue to invest accordingly. Finally, I would like to walk briefly talk briefly about our automation journey and highlight a new partnership that we entered into in the 4th quarter. We have a long history of innovation and have continued to expand our automation capabilities, resulting in cost efficiencies, higher quality output, improved customer and agent experiences, and risk reduction. Speaker 200:15:40Over the past 2 years, we have made significant investments in robotic process automation, building capabilities in agent collections and reactivation, customer refund processing, risk exception decisioning, proactive agent credit limit increases, and receiver name changes. While the elimination of manual processes drives cost efficiencies, The speed and quality of the outputs have also led to better experiences. We are now taking a similar approach to artificial intelligence as we have with robotics, including exploring ways to use generative AI in areas like software development, marketing content creation, price decisioning, Customer Care Assistance and Translation Services. While early in the journey, we believe generative AI has the potential to increase revenue, further improve efficiency and productivity over time and thus provide additional value to our shareholders. Last, we are pleased to announce a meaningful expansion of our relationship with Visa. Speaker 200:16:54This long term global strategic relationship covers issuance, Visa Direct and further enables collaboration between the 2 companies across 40 countries and 5 regions. Visa has been a long term strategic partner of Western Unions, and we are thrilled to extend this relationship for years to come. Looking ahead, we remain optimistic about our strategic direction and the positive progress we have made. We are pleased with the change in the underlying trajectory of our business, driven by improved transaction trends across both digital and retail businesses, while continuing to deliver improved top line results and strong cash flow. We've also made substantial progress on our talent evolution, including a meaningful realignment of the top 100 executives at the company. Speaker 200:17:49This was done through both internal promotions and external hires, I believe we now have the right people in the right roles to allow us to continue to execute on our evolved 2025 strategy. We have a loyal customer base that trusts our brand and values our services. We have a global network that provides unparalleled access and convenience nearly 120,000,000 people around the world and have now achieved a turnaround in transaction trends, thus validating the relevance of our offering and our brand. We have a talented and dedicated team that is focused on executing our strategy and driving innovation. And we have a clear vision in early progress on how we can leverage our assets to create new revenue streams and growth opportunities. Speaker 200:18:39I am confident that we have the right strategy, the right capabilities, the right team and the right mindset to achieve our strategic priorities. Thank you for joining the call today. I will now turn the call over to Matt to discuss our financial results and our forecast for next year in more detail. Speaker 300:18:58Thank you, Devin, and good afternoon, everyone. I'm pleased to be here today to walk you through our 2023 Q4 and full year results and our 2024 financial outlook. Before I begin, I would like to share with you the updated names of our segments to more accurately reflect the underlying businesses associated with them. Our C2C segment will now be referred to as Consumer Money Transfer or CMT and our other segment will be referred to as Consumer Services or CS, as Devin mentioned earlier. The names of the segments are the only thing that changed. Speaker 300:19:36We have not changed the composite of the business within them. For the full year, adjusted revenue grew 4%, which is meaningfully better than our original outlook of down 2% to 4% due to better core results, the benefit of Iraq and Argentinian inflation. In the 4th quarter, we delivered adjusted revenue of $1,100,000,000 representing a 3% increase year over year. Results benefited from a 400 basis point impact from Argentinian inflation, a revenue increase from Iraq and the ongoing progress of our Evolve 2025 strategy. 4th quarter results were above our expectations. Speaker 300:20:22As discussed during our last call, Iraq volumes slowed in the 4th quarter. They benefit our results by 3 percentage points versus 8% benefit in the 3rd quarter and a 10% benefit in the 2nd quarter. For the full year, Iraq contributed 6% to adjusted revenue growth. Uncertainty remains high in Iraq due to the challenging regulatory environment. When we last spoke in October, our largest agent in the country had recently been suspended, leading us to believe that the volumes will return to levels closer to 2022. Speaker 300:21:01This agent note therefore has been reactivated in early December. CMT transactions grew 5% in the quarter, led by continued momentum of our branded digital business, which grew double digits, Growth in our digital white label business and continued stabilization of our retail transaction trends ex Iraq. Adjusted operating margin was 16.1% compared to 15.8% last year. With the increase due to net savings related to our operating expense redeployment program and changes in foreign currency, partially offset by higher marketing investments. In 2023, our full year adjusted operating margin was 19.6%, which was in line with our outlook. Speaker 300:21:50Adjusted EPS was $0.37 versus $0.32 last year with the current period benefiting from higher operating profit and lower share count. For the full year, we delivered adjusted EPS of $1.74 which was meaningfully above our original outlook of $1.55 to 1 $0.65 This was driven by better revenue performance and the benefit of our operating expense redeployment program, which we partially reinvested back in the business by accelerating our go to market programs in both retail and branded digital as well as incremental technology investments. Now turning to our CMT business. Revenue declined 1% on a constant currency basis with transaction growth of 5%. Excluding ARC CMT domestic money transfer business, Revenue and transaction growth would have been 1 percentage point higher for both. Speaker 300:22:55Branded digital revenue was up 4% on a constant currency basis with transaction growth of 13%, driven by our go to market strategy launched in the Q3 of 2022, which showed continued momentum after reaching positive revenue growth last quarter. We're excited about the sustainability of our transaction growth, which has increased double digit for the 3rd consecutive quarter, while achieving positive revenue growth for the 2nd consecutive quarter. Leading the way is North America, The first region where we launched our new go to market strategy, which drove mid to high teens transaction growth in the 4th quarter and revenue in the high single digit range. We are also seeing impressive results in APAC, as Devin discussed earlier, led by Australia, which was an earlier adopter of our new digital platform. APAC drove mid teens transaction growth in mid single digit revenue growth in the 4th quarter, which we expect will continue to improve as we lap a new the go to market launch in mid-twenty 23. Speaker 300:24:07Moving to our retail business. We maintained stable transaction trends For the 2nd consecutive quarter, as we continue to make progress against our strategic priorities, including operational improvements, optimization to our network and enhancing our value proposition in the marketplace. When normalizing for Russia, Belarus and Iraq, We improved full year retail transaction growth by 500 basis points. Europe and CIS led the improvement in our retail transaction trends in the 4th quarter with transactions growing in the low single digit range driven by our Evolve 2025 strategy. We also benefited as we lapsed an agent loss in the 4th quarter and have executed well on our remediation plan for the 2nd agent that we're losing. Speaker 300:24:59Over the last couple of years, our European Retail business has not only faced macro related challenges like war and inflation, but has also lost 2 important agents. With this backdrop, we've taken the opportunity to test new approaches in the marketplace. For example, we opened 100 concept stores across Europe in nearly 20 markets in 2023. We also improved our value proposition in key markets driving double digit transaction growth in our independent channel during the second half of twenty twenty three. North America grew retail transactions low single digit in the 4th quarter, continuing its momentum from the 3rd quarter. Speaker 300:25:45Prior to this year, our North America retail business hadn't seen positive transaction growth since the Q2 of 2017. Enhancements we've made like 1 step refund and quick resend help to drive better customer and agent experience. Now moving to our Consumer Services segment, formerly known as Other, which represents 7% of total company revenue in the quarter. Revenue for the full year was up 13% on a reported basis, while revenue in the 4th quarter was down 1%. Revenue in the 4th quarter was impacted by tougher comparisons Due to a portfolio optimization that we completed last year, further optimization of our float portfolio in the current period, which resulted in a loss in the current quarter, will add value over time as well as a 5 percentage point drag related to the net impact of Argentine peso devaluation. Speaker 300:26:48We are excited about our Consumer Services segment with 2023 marking the 2nd consecutive year of double digit revenue growth. With the innovations that Devin highlighted earlier today and over the past few quarters, such as our new retail money order platform Launched in the Q4, our prepaid card that was relaunched in the Q3 or our digital wallet that's currently live in 5 countries, We are bullish that we can continue to grow consumer services in the low double digit range going forward. At our Investor Day, we launched a 5 year $150,000,000 operating expense redeployment program, And we feel very good about the progress we've made to date. Broadly speaking, we see opportunity to continue to drive efficiency, Manage our cost structure and leverage our scale. In 2023, we took action that allowed us to save over $50,000,000 The savings last year were primarily driven by talent reallocation, technology efficiencies, marketing improvements, call center enhancements and optimizing our real estate footprint. Speaker 300:28:00As a result of these savings, we are able to invest in technology advancements benefiting our ecosystem platform and our retail point of sale system as well as other opportunities like expanding our controlled distribution network. Heading into 2024, I remain optimistic of our continued efficiency opportunities and I'm confident that we can hit a similar savings amount again this year. Now turning to our cash flow and balance sheet. In 2023, we generated $783,000,000 of operating cash flow, which includes a transition tax payment of $119,000,000 paid in the 2nd quarter. These tax payments will continue to step up to $160,000,000 in 20.24 and $200,000,000 in 2025. Speaker 300:28:53I was proud of how well the organization embraced a more diligent approach to free cash flow and capital expenditure management. Capital expenditures were $31,000,000 in the 4th quarter $148,000,000 in 2023. Capital expenditures were over 25% lower In 2022 2021, we are going to remain vigilant on investing in the right areas in shifting our agents from large signing bonuses to performance driven commission structures. Our strong free cash flow and disciplined expense management allowed us to continue to maintain a strong balance sheet with cash and cash equivalents of $1,300,000,000 and debt of $2,500,000,000 Our leverage ratio remains strong And we're at 2.4 times and 1.2 times on a gross and net basis, which provides us flexibility for potential M and A, while maintaining our investment grade credit rating. This strong free cash flow also allowed us to return almost $650,000,000 to our shareholders in 2023, which included roughly $350,000,000 in dividends $300,000,000 in share repurchases, including $200,000,000 in the 4th quarter. Speaker 300:30:17Now moving on to our outlook. Today, We provided our financial outlook for 2024, reflecting current macroeconomic conditions. We expect adjusted revenue to be in the range of $4,100,000,000 to $4,200,000,000 This range reflects continued growth in our Branded Digital business, the continued stabilization of our retail business and double digit growth in our consumer services segment driven by the advancements in our ecosystem strategy. We also expect Iraq to generate between $50,000,000 $100,000,000 during the year. We also expect adjusted operating margins to be in the range of 19% to 21%, and we expect EPS to be in the range of $1.65 to 1.75 Finally, we would like to provide an update on our 4 key performance indicators that we shared at our Investor Day. Speaker 300:31:14Starting with retention. In 2023, retail retention improved 70 basis points versus 2022. As we believe improving retention is a critical component to our strategy of achieving long term sustainable growth across both our retail and digital channels Starting this year, we will report our total consumer money transfer retention. Our long term aspiration to improve retention 200 basis points annually hasn't changed, but we've learned a lot in 2023, including the effects of a downward pressure that growing new customers can drive. We also made good strides on improving branded digital retention with 120 basis point improvement in 2023. Speaker 300:32:03We continued to believe that customer acquisition is a key metric in accelerating our growth of our branded digital business to drive more customers to our digital platform and remain committed to growing this double digit annually. In 2023, we grew customer acquisition by 13%, which was even higher on a cross border basis. Next, moving to our omnichannel. At our Investor Day, we shared that this small customer base was valuable to Western Union, generating 2.5 times more transactions than a single channel customer. While we initially thought our omni channel is a permanent state for our customers, We have found that omni channel largely serves a pass through as they migrate between channels. Speaker 300:32:53Only 30% of our 2022 Omnichannel customers remained omnichannel at the end of 2023. While retail to digital migration accounted for 5% of our new branded digital customers in 2023. We will continue to focus on a seamless omnichannel customer experience and building an account based relationship with our customers instead of a transactional one and believe that these benefits will be captured in other metrics. However, we will no longer report this metric going forward as we believe is not significant to our overall business. Lastly, at Investor Day, we shared our goal to add 100,000 digital banking customers each month. Speaker 300:33:40However, since Investor Day, we have shifted our focus from NeoBank customers to high quality cross border remittance customers. Additionally, as Devin highlighted today, our ecosystem strategy includes not only a digital wallet, but it's broader and includes an array of products and services including retail money order, bill payments, prepaid cards, lending products, and foreign currency exchange. These results will be directly reflected in the Consumer Services segment and not our Consumer Money Transfer segment. We continue to believe the benefits of these new products and services will drive not only higher engagement, but over time will help us improve retention as we shift to an account based relationship. As a result, Our goal moving forward will be to grow our profitable consumer services segment revenue double digit annually, which better reflects the progress of our ecosystem strategy. Speaker 300:34:41To recap, we're pleased with the progress we've made so far our evolved 2025 strategy, and we remain optimistic for the year ahead. Thank you for joining the call today. And operator, we're ready to take questions. Operator00:35:09Our first question comes to us from Will Nance from Goldman Sachs. Please ask your question. Speaker 400:35:16Hey guys, appreciate all the details today. Maybe I can start off with some of the comments that you made around omni channel customers. I know you previously talked around the retail digital escalator over time. And I know you're not focusing on having omni channel customers anymore, but I guess When you see these customers get off the escalator, do you still see them transacting at much higher levels? And is there any kind of overall change in your thought process about the value of these customers? Speaker 200:35:49Hey, Will, it's Devin. Thanks for joining the call. Indeed, you are correct. One of the reasons, as Matt highlighted, that we're making this change is the real economic benefit to us is that retail to digital escalator. And as Matt highlighted, 5% of our new customers digital customers in 2023 or prior retail customers. Speaker 200:36:12Those customers turn out to have better retention and stronger ARPUs than customers that we acquire de novo as new to franchise digital customers. So growing and increasing our ability through omnichannel activities, But the focus really is on the escalator and less on a pool of customers who live in both retail and digital. Speaker 400:36:34Got it. That makes sense. And then just a question Speaker 200:36:37on And we think it gives well, it gives us a cost benefit advantage in terms of our overall CAC. And so our ability to continue to grow the digital customer base and using the retail base as a feeder is an important part of the strategy and will be reflected in our ability to continue to grow new digital customers. Speaker 400:36:57Got it. That makes sense. And then just maybe a different question on some of the guidance and the kind of the guidance philosophy, particularly around reinvestment. Just a couple of data points that I'm picking up. I guess you came a little bit ahead of expectations on revenue. Speaker 400:37:12We saw the expenses come in much higher bottom line kind of roughly in line with expectations, sort of a similar dynamic going on in the full year guide. I think if we look at revenue Iraq that's coming in a little bit lower than maybe what you previously talked about, kind of later last year. We're still seeing earnings overall coming in roughly in line with expectations And the Iraq revenues kind of helping out. So just when you constructed that guide, how did the incremental Iraqi revenues that maybe you weren't Expecting when you spoke to us in December, how did that kind Speaker 500:37:44of factor into the construction of Speaker 400:37:45the guide? Is there any conservatism in the overall numbers to account the uncertainty in Iraq? And did you guys make any incremental investments on the revenue side that may have impacted the ex Iraq numbers in light of these incremental revenues? Thanks. Speaker 300:37:59Hey, Will. Thanks for the question. The main focus we've got is obviously on the top line and EPS. Sometimes you end up with items down in other, which to make further investments if you got the right thing to invest in. But on your question about Iraq itself, we have made a fair bit of pricing during 2023 that have a carryover effect into 2024, as well as we continue to monitor that. Speaker 300:38:22So that's been factored into our thinking here. The opportunity as we get into 24, as we gave them the $50,000,000 to $100,000,000 range is slightly higher than we would have thought back in December when we met or November, I think it may have been actually, but not meaningfully higher. We just knew we had a carryover effect to the actions we took this past year. Operator00:38:43Our next question one second, please. Speaker 200:38:45It's still a highly uncertain situation. We are our main settlement partner has notified us that they will not settle for us for our cash exchange retail customers in Iraq at the end of the first quarter. That's a significant portion of our volume. And while we continue to look for alternatives to that, we really, I think it put into the guide a reasonable outcome given the uncertainty of what may or may not transaction post March. Operator00:39:22Our next question comes to us from Vasu Govil from KBW. Please ask your question. Speaker 600:39:28Hi, thank you for taking my questions. Speaker 200:39:29Hey, Angela or Hannah, I'm going Speaker 300:39:31to shift to a different call. Speaker 600:39:35Jeremy? Operator00:39:57Basu, go ahead and ask your question. Our next question comes to us from Andrew Schmidt from Citi. Please ask your question. Speaker 700:40:22Hey, guys. Thanks for taking my questions here. This is just a higher level question To start off with, obviously, you look at U. S. Migration trends, been pretty robust, only one market, but clearly the biggest outbound market in the world. Speaker 700:40:36I'm wondering to what extent you're seeing that show up in your results. I know that You mentioned pretty positive, I think, double digit transaction growth in the independent channel. And I know it's a mix of self improvement initiatives also in there. But I'm curious to what extent you're seeing that positive remittance or I should say positive migration trends show up in your results? Speaker 200:41:06Andrew, it's a great question. Thank you for joining the call today. We are seeing the benefit. In fact, our business is driven by, as you know, 2 Primary factors overall global macroeconomic growth and by migration. And so The increased migration into North America over the last couple of years is benefiting particularly those outbound corridors from the U. Speaker 200:41:34S. To certain regions in Latin America. And so we see double digit transaction growth in those corridors as a result of the migration. There's less of that when Matt was talking about the improved transaction trends in retail in Europe. There's been less net migration into Europe over the last year or 2. Speaker 200:41:55And so that is more of a result of kind of ongoing performance improvement, enhancing the quality of our distribution network and our stronger go to market value proposition there. Speaker 300:42:07Hey, Andrew. I want to build on Devin's comment is You're focusing on the specific question you asked, but holistically, we believe the hard work we're doing with our agents and our customers are really driving the progress we're making. Think we have a modest tailwind as Devin just described. But when you look at it, we've now starting to move from being a share donor to holding our fair share with a little bit of tailwind from this. Speaker 200:42:28In Mexico is the perfect corridor example where for many years we were probably losing share U. S. To Mexico in the last 12 months we've returned back to growing share in that important corridor. And obviously, it's in a corridor that the Central Bank of Mexico publishes is growing in the mid to high single digits year over year. Speaker 700:42:55Super helpful. Appreciate that. And then if I could dig into just the branded digital transaction growth up 13% this quarter. And I know you elaborated on this a little bit, but if you could break down just the drivers of that, whether it's new customer growth, whether it's retention, whether it's behavior, transactions per customer, any additional just new disaggregation of that would be helpful so can get a better understanding of the underlying mechanics of that transaction growth? Speaker 300:43:22Thanks a Speaker 700:43:23lot guys. Speaker 300:43:23Yes. Thanks, Andrew, for the question. I mean, really it's all three. I highlighted a few of the components you can back into the 3rd, but I highlighted in the metrics conversation at the end that our retention has improved in branded digital by 110 basis points in 20 3%. We've also highlighted that we continue to grow our new customers in the double digit range. Speaker 300:43:43Full year was 13%. And then we are seeing a little bit of an uptick in transactions per customer, but that's the lower the 3. Thanks for the question. Speaker 200:43:57And Andrea, as we've done I'm going to Operator00:43:59go back to Vasu Govil. Speaker 600:44:03Hi, thanks for taking my question. Hopefully, you guys can hear me this time. I guess my first question for you, Devin, on the digital wallet strategy. Historically, you've been focused on sort of positioning that to drive more retention and engagement. And I think today, the description you guys gave, it seemed like you were focusing a little bit on the revenue potential there as well. Speaker 600:44:25Is that a fair read? Speaker 200:44:30Vasu, I might slightly reframe that. We are focusing on growing revenue from our overall ecosystem strategy and we believe that that is an important metric to gauge our ability to return Western Union to profitable revenue growth as part of our evolved 2025 strategy. A component of that is in fact growing our digital wallet, which we believe will primarily benefit retention as it is a more account based relationship and thus will drive increased revenue through lower customer churn and obviously the increased ARPU from extended customers. So while we still have a strong focus on growing our digital wallet, We're doing so more with a focus on our remittance business and on driving retention with our digital remittance customers by them having more of an account based relationship, which we believe will drive revenue of ancillary products and services, including interchange, including bill payment, including other services that are available digitally in the wallet that's not available in our traditional transaction cross border remittance platform. Speaker 600:45:49Super helpful. And then a quick one for you, Mike. I was wondering on the Margin guidance for 2024, if you could help us a little bit about what to expect for the cadence throughout the year? Speaker 300:46:06Hey, Vasu. It's going to bounce around. It's going to be not linear. We kept the guidance of the 2019 to 2021 because as we think As revenue accelerates, that's going to provide us incremental profitable revenue growth. As you have opportunity to make investments, that will pull it down. Speaker 300:46:22Our goal is to hit the number throughout the full year, but any given quarter can bounce around. I can't really guide to that at this point. Operator00:46:34Our next question comes to us from Tien Tsin Huang from JPMorgan. Please ask your question. Hi, thanks. Speaker 800:46:42I just want to ask on the customer additions. I know that's trending nicely in the double digits, But also the acquisition cost has been lower. How do you expect those two dynamics to trend here and 24 ahead. Can we count on acquisition costs staying lower or is there potential to maybe turn that dial differently? Speaker 300:47:03Hey, Tien Tsin, this is Matt. I think we saw further opportunity. As Devin talked about earlier, we have generative AI we're working on. We've done some things around robotics. Bob, who leads that organization, has been at the company now for 18 months, and he's continuing to add skills into the organization. Speaker 300:47:19So we think there's further opportunity as we enhance that as far as we're rolling out incremental our new digital platform in different countries that will provide additional opportunities. So we don't see pressure on that. I can't say it's going to be the same level of reduction in 2024 as we did in 2023, but we do see opportunity to keep making enhancements there. Speaker 200:47:39Tien Tsin, one of the things we talk a lot about, which is our ability to scale at cost effective tax around the world, right? And so in some markets that are exceptionally well developed like the U. S, the team has done a very nice job of that, which you see in the strong customer growth in the mid to upper teen transaction levels that we saw last year. As we work our way around the world, increasing our capabilities to scale marketing acquisition and to do it cost effectively will be one of our priorities in 2024. Speaker 800:48:15Good. Now I'm glad to focus. On the just my last follow-up just the consumer services, expectations for double digit growth again in 'twenty four. Should other components going to be different? I know there's flowed another thing to consider, but anything to call out there or rank bigger contributors? Speaker 300:48:34Yes. I think as you think about this year and last year, the vast majority of the growth has come through our legacy products that we had there bill pay and money order. As you highlighted, there's been a little bit of a tailwind from higher interest rates. We do have a relatively moderate term as we disclosed it probably about 4, 4.5 years is the duration for our investments there. So feel good about 24 for where we are in interest. Speaker 300:48:57Devin talked about in these calls the number of new products we put there, whether it be prepaid, ForEx, revamping our money order business and so forth. As you get in 2024 and beyond, we think that we're going to start seeing a larger portion of our growth coming from those new product additions. Operator00:49:18Our next question comes to us from Darrin Peller from Wolfe Research. Please ask your question. Speaker 900:49:25Hey, guys. I guess my question is really more around just the trend line. Devin, I liked your comment about the narrowing between the transaction growth trends, which we've seen improving consistently and the revenue growth trends, which is still mean, if you calculate the Iraq and Argentina impact, still I think around negative 4, unchanged. So you've seen transactions improve, revenue seems Speaker 1000:49:48like there's going to be to Speaker 900:49:49it, but you did comment on the narrowing. So can you just get a little more detail on that because I think that's the crux of what I know we and some investors are looking for to follow on from the obvious improvements you're having in the transaction side of the business? Speaker 200:50:03Hey, Darren, thanks for joining the call. Indeed, we are closely monitoring that gap. And I think we've talked about 3 things in the past, which I'll reiterate. 1, Our long term aspiration is to maintain the ratio between transactions and revenue to be a 200 to 300 basis point GAAP as we kind of continue to evolve our business. And so our goal is to get revenue up to reach that 200 to 300 basis point gap during the duration of our evolved 2025 strategy. Speaker 200:50:39The second is the way we rolled out, particularly on the digital side, but also on the retail side, our side, our revised go to market strategy, which was kind of on a region by region basis, creates some lumpiness as to how you see that gap closed because of the effects of the new region rolling into it. As I commented on the public prepared notes, we will be lapping at least on the digital side both the North American and European, which is the preponderance of our digital business by the end of this quarter. So the acceleration in closing the gap will the gap closure will accelerate in the second half of this year. And then 3rd, we are continuing to iterate as we go across segments, geographies and channels. And so as we've always said, we compete in a lot of different places around the world. Speaker 200:51:35So we'll continue to optimize. But our goal really is to close that gap and to close it over the course of the duration of our strategy. Speaker 900:51:44Devin, that's really helpful. I guess just one quick follow-up would be around the Is there any read on retention metrics on cohorts you gained via the promotional efforts now over the last year or so in the U. S? It's just Again, it looks like it's great to see the transaction trends. Just curious to know a little more on the puts and takes of net new versus retention? Speaker 300:52:06Hey, Darren. Thanks for the question. We continue we've probably been 2 quarters now, but we continue to see strong results in the 90 day, 180 day retention for the newer cohorts are coming into promotional pricing. It's driven through the reengagement campaigns we've talked about in past calls, Having better market based pricing, more streamlined transaction processing as well as we're targeting we're starting to target companies that are doing APN transactions, which have a higher retention rate as well. And we continue to see a high 20s, low 30% growth rate in our APN business, both in the retail and digital side. Speaker 200:52:48APN being payout to account. The other thing I think, Aaron, you can look at, Matt talked about the 110 basis point improvement in digital transactions year over year. That is the composition of our history, I. E, the accumulated book. And as you know, as customers tenure in this category, retention goes up. Speaker 200:53:15So we've been growing new customers aggressively, but increasing the overall retention of the book, which says something about the quality of the new customers and the retention in that subset of the portfolio in order to achieve that. In that subset of the portfolio in order to achieve that. Operator00:53:32Our next question comes to us from Ken Cicholski from Autonomous. Please ask your question. Speaker 1000:53:40Hi, good afternoon everyone. Thanks for taking the question. I just wanted to ask a couple on the physical retail business and Maybe we can exclude Iraq, just to strip out some of the noise. The revenue per transaction in that part of the business has declined over the last handful of quarters. So I was wondering if you could talk about what's causing that revenue per transaction decline in retail ex Iraq. Speaker 1000:54:06And then it looks like over the last few quarters pricing adjustments were needed to accelerate transaction growth in that part of the business. So do you think the lower pricing in that physical retail XRA rack is sort of behind you Or do you feel like you need to be more aggressive on that front to accelerate transaction growth even further into as you Speaker 300:54:30go throughout the year? Hey, Ken. Thank you very much for the question. As you think about the change in RPT ex Iraq over the last, call it year, about 2 thirds of that is really mix driven and you have about the remaining portion being more conscious price reductions that we've done. We've started doing some tests. Speaker 300:54:51We talked about it in the last call in a large European country where we changed our FX yields multiple times throughout the day to be competitive, which is driving pricing. We've done some other tests around the world that we've now kept permanent for many of them. So it's a little bit of a mix of both, of mix and conscious decision to drive performance. The one that we'll highlight, you've seen in our charts both this quarter's past, you can see improvements in our transaction trends prior to sort of push in price changes in Q2 and Q3, as we're starting to do additional work with our agents and our customers on both the product side and customer service. So to us, we believe that really all three elements are making a difference. Speaker 300:55:31It's not a battle about price only. It's a matter of having market competitive prices Great service, great product. As far as the future, we're always going to be adjusting the market looking at what competitors do. So we are committed to our guidance. Speaker 1000:55:46Yes. Okay. That's helpful, Matt. And then what's the expectation around revenue growth in the physical retail business in 2024, I guess, including and excluding Iraq because it looks like you'll start to lap some of the Iraq revenue contribution in the Q1 of this year. Speaker 300:56:03So, Ken, we're not going to give out guidance at the segment level really for most things. Operator00:56:13Our next question comes to us from Tyler DuPont from Bank of America. Please ask your question. Speaker 500:56:21Hi, good afternoon, Devin and Matt. This is Tyler on for Jason. Thanks for taking the questions. I wanted to 1st touch on the current geopolitical events in the Middle East. Given your geographic footprint, not specific to Israel or anything, but sort of the region more broadly, there any dynamics you're seeing worth calling out, whether those are change in money transfer volumes or mix between retail and digital or just any other dynamics that are worth considering that haven't been mentioned so far? Speaker 200:56:50Hey, thanks for the question. We've seen very obviously overall volumes in the region are down, but they haven't gone to 0. And there's been little change in terms of the mix of retail and digital. It's predominantly a retail environment in that of the world. We continue to monitor it, but the overall region itself is relatively small relative to our total business. Speaker 200:57:17So we're more concerned about the lives of the people, protecting our agents, our employees and hoping that the conflict ends quickly than the economic impacts for our business. Speaker 500:57:31Okay. That's helpful. And then just as a follow-up, I believe you mentioned in the prepared remarks that customer acquisition Costs declined by around 15% in the year. Can you speak to how the company's LTV to CAC has evolved throughout 2023? And you anticipate this metric will continue to evolve through 2024, particularly as we're shifting the mindset from more of an omnichannel focus to selling consumer services to just sort of The dynamics there and any pieces to the puzzle worth noting? Speaker 300:58:00Tyler, thanks for the question. As you think about it, we've highlighted a couple of key drivers of that math. We've talked about the fact that our digital retention has improved by 110 basis points. That's pushing the life out longer for our historical customers over before making this change. We've reduced our rates to some degree and then we've obviously lowered our CAC. Speaker 300:58:21Holistically, it's about the same as it was before for those moving parts. Speaker 200:58:26And I would add 2 things to it. As you know, when we launched this program, which is now 18 months into the program, we made the explicit shift which hereto before we had not managed to, which was to a target LTV to CAC goal. And so we've maintained that goal throughout the program. And as either LTV or CAC adjusts, we adjust accordingly in terms of our marketing spend and our ability to drive new programs into the marketplace. And so as LTV goes up, that enables us to spend more. Speaker 200:59:05As cat goes down, that enables us to spend more. And obviously in reverse hopefully that won't happen, but if it did then we would spend less. Operator00:59:18Our next question comes to us from Ramsey El Assal from Barclays. Please ask your question. Our next question in the queue comes to us from James Faucette from Morgan Stanley. Please ask your question. Our next question comes to us from Jamie Friedman from SIG. Operator01:00:02We have no additional questions in the queue at this time. Thank you for joining the Western Union 4th quarterRead morePowered by