Western Union Q1 Earnings Call Highlights

Key Points

• Q1 revenue near $1.0B with improving transaction trends—Branded Digital revenue rose and CMT transactions turned slightly positive—but adjusted EPS missed at $0.25 (vs. $0.41 yr‑ago) due to seasonal Travel Money effects, a foreign‑exchange loss, higher investment and agent costs.
• M&A to accelerate digital and retail reach: Western Union closed acquisitions of Lana (Mexico) and Dash (Singapore) and expects to close Intermex soon, which should add ~10,000 U.S. agent locations, strengthen Latin America corridors and deliver synergies likely above the prior $30M target.
• Scaling digital assets: The company plans to launch its USDPT stablecoin imminently, is rolling out its Digital Asset Network partner integration next week, and will pilot a consumer U.S. dollar “Stable Card” across dozens of markets later in 2026.

Western Union NYSE: WU reported first-quarter 2026 revenue of about $1.0 billion and said it is seeing early signs of stabilization in the U.S. remittance market, even as profitability fell short of management’s expectations due to a mix of seasonal factors, investment spending, and a foreign exchange loss.

Chief Executive Officer Devin McGranahan said the company is “beginning to show stabilization and even potentially signs of improvement” in key U.S.-to-Latin America corridors after steep declines in 2025, while also outlining a series of recent and pending acquisitions and upcoming launches tied to the company’s digital asset strategy.

Quarter results show improving transaction trends, but lower EPS

In the quarter, Western Union reported GAAP revenue of $983 million, according to CFO Matt Cagwin. McGranahan said the company reported $1 billion of revenue and that, on an adjusted basis, revenue declined 1% year-over-year—an improvement of roughly 400 basis points from the fourth quarter.

McGranahan said Consumer Money Transfer (CMT) transactions were “slightly positive” year-over-year for the first time since the first quarter of 2025, while cross-border principal again grew at a mid-single-digit pace. However, adjusted earnings per share fell to $0.25 from $0.41 a year earlier. McGranahan said the EPS result was “below our expectations,” attributing the outcome to quarter-specific items and a seasonal change linked to the growth of the Travel Money business.

Cagwin said adjusted operating margin was 13% and reiterated that the company had previously flagged the first quarter as a lower margin period. He cited several drivers:

• Absence of vendor incentive payments in Q1, which he said the company expects to receive later in the year
• Higher costs tied to new agent signings
• A foreign currency loss
• Seasonality in Travel Money, which has “lower fixed cost coverage” in the first quarter

During the Q&A, Cagwin said roughly half of the year-over-year earnings decline was tied to factors management anticipated, including vendor incentive timing and Travel Money seasonality. He added that two items were not anticipated eight weeks earlier: an FX loss that was “multiple pennies of EPS,” and what he described as a temporary “dislocation” in the company’s “dual track” of investing for growth while pulling costs out of legacy operations.

Americas remittances stabilize; branded digital growth accelerates

McGranahan said Western Union’s retail business in the Americas continued to face headwinds linked to geopolitical conditions, but that performance has improved from the “steep declines” seen in mid-2025. He pointed to strength in a number of corridors—such as Italy to Morocco, France to Cameroon, and Kuwait to Bangladesh—while noting continued weakness in the Americas, particularly the U.S. to Mexico corridor. Still, he said the U.S.-to-Mexico transaction growth rate improved by 350 basis points compared with the fourth quarter.

McGranahan also highlighted signs of improved trends across corridors such as U.S. to Ecuador and U.S. to Guatemala, while noting not all markets have improved, citing U.S. to Colombia as still weak. He said March revenue growth rates in several corridors were “800 basis points or better” relative to lows last summer.

On the digital side, McGranahan said Branded Digital transactions grew 21% and adjusted revenue rose 6%, driven by relationships signed in the Middle East. He said the gap between transaction and revenue growth reflected mix and pricing factors, including growth in “lower RPT corridors,” continued increases in payout to account, and promotional offers aimed at customer acquisition. Cagwin added that the quarter marked the 10th consecutive quarter of revenue growth for Branded Digital, with the Middle East described as a major growth region.

Cagwin said account payout transactions grew more than 45% in the quarter, calling it the strongest quarterly growth Western Union has seen in four years.

Consumer Services boosted by Travel Money and bill pay

Consumer Services adjusted revenue increased 33% in the quarter, driven by Travel Money—led by eurochange—and growth in consumer bill pay, management said. Consumer Services represented 14% of total revenue in the quarter, according to Cagwin.

McGranahan said the Travel Money business is expected to approach $150 million in revenue in 2026, “up from nearly nothing a few years ago.” Cagwin said Western Union expects Travel Money to be a $150 million business this year and said the company sees a “durable path to double-digit growth” in the Consumer Services segment over time, driven by organic expansion, acquisitions, and digital innovation.

McGranahan also discussed how the conflict in the Middle East affected results: he said travel from Europe to the Middle East declined, which hurt Travel Money in the U.K. in the first quarter, while outbound remittances from the region saw “a moderate acceleration” early in the conflict.

M&A: Lana and Dash closed; Intermex pending

McGranahan said Western Union has shifted from “complete capital return” to a more balanced approach that includes targeted acquisitions intended to expand corridor strength, platform functionality, and product offerings.

He said the company closed the acquisition of Lana in Mexico last month. McGranahan said the deal provides a license to launch a digital wallet in Mexico later this year on the Beyond digital platform and is expected to strengthen wallet-to-wallet capabilities. He described the opportunity as a way to enable a “two-sided network” and potentially reduce commission expense while opening new revenue streams.

Earlier in the month, Western Union completed the acquisition of Dash, Singtel’s digital wallet business in Singapore. McGranahan said Dash adds technology and distribution capabilities intended to accelerate digital onboarding and improve cross-payment efficiency in Southeast Asia. In discussing the rationale, Cagwin emphasized the importance of local licensing and talent, saying the acquisitions bring licenses and “really strong tech talent” that can help the company accelerate wallet expansion across Asia.

McGranahan said Western Union expects to close the acquisition of Intermex in the current quarter, subject to regulatory approvals, and that only one jurisdiction remains. He said the deal is expected to strengthen agent network density, improve corridor economics, and reinforce leadership in the U.S., while offering cost synergies that could exceed the company’s previously disclosed $30 million synergy target. He added he expects synergies to be “front-loaded” compared with the original two-year timeline. Cagwin said Intermex would add about 10,000 U.S. agent locations and strengthen the retail footprint in key Latin America corridors.

Separately, management reiterated that eurochange has added scale to the company’s Travel Money platform in the U.K.

Digital assets: stablecoin, network launch, and Stable Card rollout

McGranahan said Western Union is moving from “launch readiness” to scaling in digital assets. He said the company’s U.S. dollar-backed stablecoin, USDPT, is in its final stages of readiness and “expected to go live next month.” He described USDPT’s initial role as an institutional tool rather than a consumer product, aimed at improving settlement processes with agent partners compared with traditional banking rails.

He also said Western Union’s Digital Asset Network (DAN) is set to launch its first partner “next week,” enabling digital asset wallet users to convert to local currency using Western Union’s retail network. McGranahan said the partner pipeline represents “tens of millions of crypto wallets globally.”

Looking further ahead, McGranahan said the company plans to launch a consumer-oriented “U.S. dollar Stable Card” later this year, allowing customers to hold value in stablecoin form and spend globally wherever cards are accepted. He said the initial rollout is expected across “dozens of markets” later in 2026, with initial launches in select countries within the next 90 to 180 days.

Cash flow, capital return, and 2026 outlook reaffirmed

Western Union generated $109 million in operating cash flow in the first quarter, down 26% year-over-year due to lower operating profit, Cagwin said. Capital expenditures were $47 million, up year-over-year, driven by higher agent signing bonuses. The company ended the quarter with $900 million in cash flow equivalence and $2.6 billion of debt, with gross and net leverage of 2.8x and 1.8x, respectively, according to Cagwin.

The company returned more than $120 million to shareholders through dividends and stock repurchases during the quarter. Cagwin also said the Intermex acquisition will be funded with a delayed draw bank facility, and leverage is expected to be elevated for 12 to 18 months after closing.

For full-year 2026, Cagwin reaffirmed guidance, assuming “no macroeconomic changes and no significant impact from the conflict in the Middle East.” The company continues to expect adjusted revenue growth of 6% to 9%, inclusive of the Intermex acquisition, and adjusted EPS of $1.75 to $1.85. Cagwin said he expects second-quarter EPS to be similar to last year and to accelerate in the back half of 2026 on improving remittance trends, new agent wins, Travel Money seasonality, and benefits from operating efficiency efforts, including Intermex synergies and lower vendor and labor costs supported by process optimization and AI.

About Western Union NYSE: WU

Western Union Company NYSE: WU is a global leader in cross-border, cross-currency money movement and payments. The company enables individuals and businesses to send and receive money through a variety of channels, including its vast agent network, online platforms, and mobile applications. Core services include person-to-person money transfers, business-to-business cross-border payments, bill payment services and prepaid card programs.

Through its digital offerings, Western Union provides customers with the ability to initiate transfers via its website and mobile app, as well as track transactions in real time.

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