Western Union Q2 Earnings Call Highlights

Key Points

• Second-quarter results fell short of expectations: Revenue declined 1% year over year to $1 billion, while adjusted EPS dropped to $0.31 from $0.42. Weakness in Americas retail transfers, lower-margin digital payouts, higher agent commissions and Middle East profitability pressures weighed on results.
• Consumer Money Transfer transactions grew 3%, but the shift from higher-margin cash payouts to digital account and wallet payouts continued to pressure margins. Branded Digital transactions rose 25% and Consumer Services revenue increased 12%, although profitability declined in both areas due to unfavorable mix and higher costs.
• Western Union launched its Beyond Efficiency program, targeting $50 million in annualized cost savings by the end of 2026 and $200 million by the end of 2027, while expanding its Beyond Digital platform and stablecoin initiatives. The company maintained its 2026 outlook for 4%–6% adjusted revenue growth and $1.25–$1.35 in adjusted EPS, including the planned Intermex acquisition.

Western Union NYSE: WU reported second-quarter 2026 revenue of $1 billion, with adjusted revenue declining 1% from a year earlier, as continued weakness in Americas retail money transfers and a shift toward lower-profit digital payout transactions weighed on results.

Adjusted earnings per share were $0.31, down from $0.42 in the prior-year quarter and below the company’s expectations. Chief Executive Officer Devin McGranahan said the result reflected lower profitability in the Americas retail business, lower profitability in the Middle East, higher agent commissions and continued migration from cash payouts to digital account and wallet payouts.

“Our financial results in this quarter came in below our expectations for the second quarter in a row,” McGranahan said. “This is not acceptable, we are not satisfied with the current operating performance and will be implementing significant changes as a result.”

Transaction Growth Improves, but Mix Pressures Margins

Consumer Money Transfer transactions increased 3% year over year, marking the company’s highest transaction growth rate since the second quarter of 2024. McGranahan said the result was a 300-basis-point improvement from the first quarter and a 600-basis-point improvement from the prior year.

However, the growth came disproportionately from lower-contribution-profit channels. The company said cash payouts generally generate higher revenue per transaction and contribution profit per transaction than digital payout transactions. Western Union has also seen rapid growth in digital payout-to-account and payout-to-wallet activity, which management said has created margin headwinds.

Account payout transactions grew 50% during the quarter, while CEO McGranahan said payout-to-account and payout-to-wallet transactions have increased 25% over the past 12 months. He cited Colombia as an example of the changing mix, where remittance volumes have shifted from cash payouts toward bank accounts, the Nequi wallet and the country’s Bre-B real-time payments system.

Chief Financial Officer Matt Cagwin said retail money transfers in the U.S. remained under pressure because immigration policy has reduced new migration, which management described as a key source of new retail customers. U.S. retail transactions remained down in the mid-teens during the quarter, though U.S.-to-Mexico transaction declines improved to slightly more than 3%.

Management said policy-related impacts have stabilized in some corridors and improved from the lows of 2025, but have not eased as much as the company expected at the beginning of the year.

Digital and Consumer Services Growth Continue

Western Union’s Branded Digital business recorded 25% transaction growth and 6% adjusted revenue growth in the second quarter. The company said much of that growth was driven by partnerships in the Middle East, where transaction volumes have expanded but revenue per transaction and profitability are lower than in its traditional licensed operations.

McGranahan said the company has started to pull back on certain promotional offers in the U.S. and Europe after determining that aggressive customer incentives were not delivering acceptable longer-term returns. He said new-customer growth has recently improved at higher revenue per transaction levels.

The company is also accelerating deployment of its Beyond Digital platform, with planned launches in Australia, Europe and the U.S. before year-end. Western Union expects the platform to improve onboarding and customer acquisition returns, and continues to target deployment across major markets by the end of 2027.

Consumer Services adjusted revenue rose 12%, supported by Bill Pay, Travel Money and check-cashing contributions. Consumer Services represented 15% of total revenue during the quarter, compared with 6% in 2022, according to Cagwin. Segment profitability declined, however, due to lower Travel Money operating profit, lower float income in Retail Money Order and delayed overhead reductions tied to a check-cashing acquisition.

Beyond Efficiency Program Targets $200 Million Run Rate

Western Union launched a cost-reduction initiative called Beyond Efficiency, targeting $50 million in run-rate operating cost reductions by the end of 2026 and $200 million by the end of 2027. The program includes reducing redundant work, cutting discretionary operations and technology capacity by 20%, expanding automation and artificial intelligence use, localizing certain operating functions and reducing the costs of moving money.

Among the actions, the company plans to close its existing digital wallets in Europe, which management said should save $6 million to $8 million on a run-rate basis. Western Union expects to replace those wallets with its Beyond Digital platform by the end of the year.

Management also said it is pursuing lower digital payout costs. McGranahan said the company recently reduced the payout cost for transactions to Colombia’s Nequi wallet from more than $2 to less than $0.50.

Digital Asset Initiatives and Updated Outlook

Western Union said it launched its USDPT U.S. dollar stablecoin in May and has made it available through four exchanges. The company is testing USDPT with counterparties for settlement of cross-border money transfers and has introduced a Treasury Bridge solution intended to improve liquidity movement and settlement speed.

The company also launched its Digital Asset Network, designed to connect exchanges and digital-asset partners to Western Union’s payout infrastructure. McGranahan said the first partner is live, with several additional launches expected in coming weeks. Western Union also launched its USDPT Stablecard.

For 2026, Western Union now expects adjusted revenue growth of 4% to 6%, including the planned Intermex acquisition and assuming a Sept. 1 close. The company expects adjusted EPS of $1.25 to $1.35 for the year, with second-half earnings anticipated to exceed first-half earnings due to new agent wins, seasonality, improved revenue mix and efficiency actions.

Western Union generated $214 million in year-to-date operating cash flow, up 45% from the prior year, and ended the quarter with $920 million of cash and cash equivalents and $2.7 billion of debt. The company returned more than $80 million to shareholders through dividends and repurchases during the quarter, but said it has paused buybacks to maintain targeted leverage levels while awaiting the Intermex transaction.

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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