Western Union Fourth Quarter 2025 Earnings Call - Digital and Consumer Services Cushion Remittance Weakness, Intermex Expected in Q2

Operator: Good day, and welcome to the Western Union fourth quarter 2025 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. I would now like to turn the conference over to Tom Hadley, Vice President of Investor Relations. Tom, please go ahead.

Tom Hadley, Vice President of Investor Relations, Western Union: Thank you. On today’s call, we will discuss the company’s fourth quarter and full year 2025 results, 2026 outlook, 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. Additional 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, Matt Cagwin. 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 2025 Form 10-K, which will be filed later today, 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. We have reconciled these items to the most comparable GAAP measures in our earnings release attached to our Form 8-K, 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.

Devin McGranahan, Chief Executive Officer, Western Union: Good morning, and welcome to Western Union’s fourth quarter 2025 financial results conference call. It was great to see many of you at our Investor Day last fall for the launch of our Beyond strategy. We are excited about building a digital-first, retail-enabled, consumer services company that is powered by payments and innovation. We remain optimistic about the longer-term outlook for our business, as we believe our core retail remittance business will improve as migration patterns normalize and we work to increase both our revenue and share gains in this important market. We believe that our focus on becoming market competitive, driving productivity, expanding our payments capabilities, and growing share within higher growth corridors and geographies is the key to delivering on this vision. A key element of our strategy has been to build everyday financial services that can leverage our global brand and our extensive payment capabilities.

As these products and services gain critical mass, they will moderate some of the swings we have seen in the core remittance business, as they tend to be less correlated with immigration trends. As witnessed in this quarter, where our consumer services business continued to perform, which allowed us to report a reasonable quarter against a difficult macro backdrop, demonstrating the benefits of our global and now multiproduct business model. For the fourth quarter, we reported revenue of $1 billion. On an adjusted basis, this was a decline of 5% year-over-year. Consumer Money Transfer transactions were down 2.5% in the quarter, and cross-border principal growth was up on a constant currency basis, speaking to the resilience of our customer base and their perseverance in the current macro environment.

In this quarter, we again saw incremental improvement in transactions as Q4 was better than Q3, coming off of the lows that we saw in the second quarter of 2025. We continue to focus on operational efficiencies as we seek to benefit from our scale. This strong operational focus allowed us to deliver at the top end of our earnings guidance this year, even in the face of these macro-driven revenue headwinds. Adjusted earnings per share came in at $0.45, compared to $0.40 this quarter a year ago. Our retail business in the Americas continued to face headwinds associated with the current geopolitical environment, and while it may be too early to say that we have reached bottom, we are potentially seeing some stabilization.

We did see strong performance in many corridors and geographies, offset by continued weakness in the Americas across several large corridors, most notably U.S. to Mexico. Although, from a transaction growth rate perspective, the U.S. to Mexico quarter improved hundreds of basis points relative to the third quarter. Our Branded Digital Business increased transactions 13% and adjusted revenue by 6% in the quarter, with gains driven by some of the new relationships that we have recently signed in the Middle East earlier in the year. Consumer Services adjusted revenue was up 26% in the quarter and roughly 30% for the full year, driven by growth in Travel Money, led by eurochange, as well as growth in our bill payments business.

We expect consumer services to have another strong year in 2026, as our travel money business is expected to approach $150 million in revenue, up from nearly nothing a few years ago. We see a market opportunity for a globally branded travel money franchise as the market remains very fragmented and some of the prior large global players have retreated since COVID. Given the strength of our brand, our global footprint, and strong retail distribution, we believe there will be many more opportunities for geographic expansion.... A hallmark of the company for many years has been a strong commitment to returning excess capital to shareholders. Over the past year, we delivered again with above-average industry margins and a return of over $500 million via dividend and share buybacks.

I am also excited about the capabilities we’ve been building on the M&A front, the deals we were able to do in 2025, and I now look forward to welcoming Intermex into our family, hopefully in the second quarter of this year. Matt will discuss our fourth quarter results in 2026 outlook in more detail later in the call. Switching briefly to the macro environment, while economic conditions globally remain reasonable, with inflation rates declining in key markets around the world and GDP outlooks remaining relatively strong, the landscape for human capital mobility continues to shift each and every day. For example, in the last quarter, we saw an election in Chile that will have implications across the region for immigration and mobility. Also, a change in leadership in Venezuela, for which the implications are still being assessed.

These kinds of macro conditions provide a dynamic and constantly changing environment for our business. While we expect them to stabilize over time, in the near term, we believe that companies with larger and more global operating models are better positioned to withstand disruption in any individual country or region. On the policy side, the U.S. remittance tax went into effect on January first for all cash-based international money transfer transactions originated in the United States. I would like to take a brief moment to call out the strong work our team did and the flexibility of our new retail platform that enabled us to implement the tax across all our channels and all our partners flawlessly. We have received positive feedback from both send and receive side partners on our relative execution.

With that said, through the first 6 weeks of this year, we have not seen a material impact on our business, but we continue to monitor the situation closely. Since the beginning of the year, however, we have seen an uptick in our prepaid cards and our Vigo Money Wallet. We launched the Vigo Money Wallet in the U.S. in March 2025. Since then, we have onboarded over 30,000 customers and have a couple of thousand weekly active user base now. An important note here is the vast majority of these customers are the result of a money transfer redirect. We have spent very few marketing dollars on customer acquisition. This is a powerful and effective approach to building our digital wallet customer base.

These payout customers, who traditionally have taken their money and left Western Union, are now becoming weekly active users who are frequently using their debit card at points of sale, and about a third of them are initiating new international money transfer transactions. While these numbers remain small compared to the scope of our overall U.S. business, they do highlight the power of the model we are building. As you know, the U.S. Wallet is an extension of our broader wallet strategy. Our goal is to create a two-sided network that makes it easy for our customers to move funds cross-border while staying within the Western Union ecosystem. In addition to our U.S. Wallet, we are continuing to see strong results out of our wallets in both Argentina and Brazil.

In Brazil now, we have onboarded roughly 20,000 customers since our launch in May of last year, and in the most recent month, we have redirected roughly 5% of all inbound transfers to the country into our wallet. This saves commission expense, as well as gives us an opportunity to increase retention and potentially monetize our receiver base, like we are seeing in the U.S., as referenced above. For context, in Argentina, which we launched earlier than Brazil, we are now up to 17% of all inbound remittances ending up in our wallet in that country. We have anticipated launching a wallet in Australia later this year, and we continue down the path of developing a wallet for Mexico as we await regulatory approval for our pending acquisition.

In addition, we believe that we will see an expansion of our wallet capabilities in Singapore, the Philippines, and potentially Israel as well, all in 2026. Since the beginning of 2026, our sale of prepaid cards has also gone up. With now over 1,000 agent locations enabled to sell prepaid cards, we are seeing a market-driven increase, which we believe may be because of the remittance tax. Linkages between this consumer services product and our core business are high, with over 30% of all transactions being Western Union money transfers and 60% of newly loaded cards being used to send a cross-border remittance with Western Union. Two years ago, we began a program to enable digital payment acceptance in our point of sale for retail agents. We firmly believe that the retail experience and value proposition is more than just being about cash.

It is about the trust needed for an important transaction that comes from personal assistance in language, culturally appropriate communications, and high-quality service in the event of an issue. As more and more of our customers have access to payment and banking products, we need our retail systems to support card-based payments. The passage of the remittance tax has accelerated this transition in the U.S., with debit cards now accounting for 15% of all retail funding in the U.S. in the month of January on our Western Union point-of-sale system. This is up materially over the last several months. Another focus in the U.S. market in the quarter was U.S. to Mexico. The team has been working hard to identify market and agent segment opportunities to focus on, driving promotions and pricing strategies, and increasing our digitally directed payout services.

That said, while it is still negative on a year-over-year basis, we are beginning to see improvements on a quarter-over-quarter basis, with last summer being the low point. And while corridors like Mexico, Venezuela, Ecuador, Nicaragua, and Colombia continue to decline, we have begun to see transaction growth in the quarter to a number of other important corridors, including Brazil, Guatemala, Jamaica, and the Philippines. The Bank of Mexico data would seem to indicate that the worst may be behind us, with principal growth in the most recent reported month going slightly positive on a year-over-year basis, improving materially from the summer lows. Although there may have been some pull forward in that number as customers look to move money ahead of the implementation of the U.S. retail remittance tax. Despite these short-term headwinds, we believe the long-term trajectory remains clear. Global migration is not disappearing, it is adapting.

People will continue to move in search of opportunity, education, and family, and Western Union will continue to provide trusted, compliant, and accessible financial services. As the market continues to evolve, we continue to see a shift towards the digital channel, particularly among younger and more technologically savvy customer cohorts. This varies by region and country, but the trend is generally consistent globally. It does not mean, however, that a growing digital business necessarily means a shrinking retail business. In Scandinavia, for example, a region that is highly digital and has nearly eliminated the use of cash, our retail business grew transactions and revenue double digits last year. What does it mean?

What it does mean is that the most attractive and growing part of the market, we will have to be able to compete with digital natives that do not have the complexity or the history of a large retail business. To do this, we believe we have two real sources of competitive advantage. First, we see our strong brand recognition and the large base of existing customers as the key building blocks to cost effectively build our digital business without having to overinvest in non-scalable marketing expense. Second, our unit economics for key functions like compliance, tech, network management, payout costs, and customer service benefit from our overall scale as the largest remittance player in the market. Now that we have largely achieved price competitiveness, we believe these benefits can be more easily transferred into competitive advantage.

In the end, there will only be a few players that will have the scale to effectively compete on a global basis digitally. We believe we are well positioned to be one of them. To capture this opportunity, we have to deliver a digital-first customer experience throughout the entire journey across the majority of our markets. With the launch of our Beyond platform in 2025, we believe we now have the infrastructure to achieve this goal. We are planning to have all of our markets on the Beyond platform by the end of 2027. This will be a meaningful acceleration to the work that we have been doing to modernize our technology and experience over the past 2-3 years. Second, we need to translate our brand strength and market presence into scalable gains in new customer acquisition.

Over the past 12-18 months, we have seen a flattening of our customer acquisition trends outside of the Middle East, and we need to improve upon that. These opportunities will be accelerants to our digital business, which has now grown in transaction double digits and revenue mid-single digits for 2 straight years. Our digital business now accounts for over 40% of the principal we send around the world, and as the world continues to move more digital, we will continue to move right along with it. You see this with our payments network, where we have made meaningful progress in creating one of the largest at-scale funds in and funds out platforms anywhere in the world. Today, we have over 300 funds in types that we support and billions of accounts and wallet endpoints in our digital funds out network.

We are using this network not only to drive both our retail business and our digital business, but to launch new businesses like our recently announced digital asset network. As a matter of fact, I just returned from a trip to Dubai to visit some of our large partners in that region. There may not be a region in the world that is moving to digital at a more rapid pace than the Middle East. Last year, we announced two partnerships in the Middle East to complement our existing business there.... As you know, these markets are difficult for traditional MTOs, given the restrictive ownership and licensing requirements in most of these Middle Eastern countries.

These partnerships are with well-known digital native brands who have accumulated large customer bases and essentially function as super apps or financial ecosystems for their customers to provide a wide range of telecommunications and financial services. We are pleased to be partners with these institutions and offer them the benefits of our payout network and our scale that few others can match, which enables us to win their business. Next, I would like to provide a quick update on our digital asset strategy. At our Investor Day a few months ago, we laid out an ambitious plan to use our assets in new and unique ways and to become a more meaningful player in the digital asset economy. Over the last few months, we have successfully minted our first U.S. dollar payment token, USDPT, and have moved it between our Treasury Department and our agents’ wallets.

These pilots are focused on leveraging on-chain settlement to reduce dependency on legacy correspondent banking systems, shorten settlement windows, and improve our capital efficiency. We see significant opportunities for us to move money faster and at lower cost, without compromising compliance or customer trust. These milestones put us on a path to meet our expectation of offering our payment token to the market by the middle of this year. I’m happy to report that we remain on schedule, and we were looking forward to our market launch. Finally, we are expanding our partnerships and capabilities to allow our customers to move and hold stablecoin digital assets and to allow them to have more control in how they manage and move their money. In many parts of the world, being able to hold a U.S. dollar-denominated asset has real value as inflation and currency devaluation rapidly erodes an individual’s purchasing power.

We are working with Rain and Visa to bring the first USDPT stable card to market and are targeting an initial launch of more than a dozen countries later this year. I look forward to continuing to update you on these initiatives as the year progresses, and we are excited about the opportunities in front of us. Finally, I would like to take a moment to highlight several new agent wins. Over the last two years, we’ve invested heavily in modernizing our retail technology platform, making both integration and ongoing experience management significantly easier. We believe our Partner OS platform is now the gold standard in the industry for large retail networks. Combining these improvements with our move to a more competitive consumer value proposition and the extensive work we have done on our agent support model, we are seeing renewed momentum and interest from large distribution networks.

A little over a month ago, we put an announcement out that we have re-signed the Deutsche Post. This was one of the two significant European agents we lost a couple of years ago as they made the decision to exit the remittance business. With our improved market position and capabilities, Deutsche Post has decided to return to the remittance business with a multiyear exclusive relationship with Western Union and a planned relaunch sometime in the middle of this year. This will be a great addition to our German business, and we look forward to offering our services across the Deutsche Post network. Second, we recently signed an exclusive five-year contract with Canada Post. This is a new win for us and a competitive takeaway.

Canada Post is expected to begin offering Western Union service in the majority of its 5,600 locations in the coming months, and we look forward to servicing our Canadian customers throughout the Post’s extensive network. This win should help bolster our North American business and provide a substantial retail network across Canada. Third, we have recently signed a long-term exclusive contract with the California grocery store chain, Vallarta Markets, which caters to the Latino community across the state. This is a new relationship for Western Union, and we look forward to offering our services to customers in Vallarta locations. Lastly, we announced at Investor Day, we have gone back to being exclusive with Kroger for money transfer. This builds on the 40-plus-year relationship we have had with the company.

We look forward to continued collaboration and are excited to see now what we can accomplish together in this exclusive partnership. With these partnerships that I have discussed today, we expect at least an incremental $100 million of retail revenue per year when fully ramped. I am excited not only about these four opportunities, but about the future prospects as our pipeline continues to remain robust. The changes we have made to our retail technology platforms, our agent support, our improved pricing, and our leading payout network has put us in a position to grow our agent base for the first time in several years. In closing, I want to reiterate our confidence in the path we’re on. Western Union is transforming, becoming more digital, more agile, and more aligned with the evolving needs of our global customer base....

We are expanding our product suite, modernizing our platforms, and unlocking new opportunities for growth across all of our channels. We are positioning Western Union to lead in the future of cross-border and accessible financial services across the globe. It is a privilege to be the CEO of this wonderful and now 175-year-old company. I am proud of what we have been able to accomplish so far. I would like to thank our board of directors for their continuing support and our combined commitment to drive shareholder value. I would also like to thank my leadership team and our nearly 10,000 employees for their laser focus on delivering for our customers, even in these tough times. Thank you all. I will now turn the call over to Matt Cagwin, our Chief Financial Officer.

Matt Cagwin, Chief Financial Officer, Western Union: Thank you, Devin, and good morning, everybody. I’m delighted to be here today to walk you through our fourth quarter and full year results, as well as our 2026 financial outlook. For the full year, we delivered GAAP revenue of $4.1 billion. Adjusted revenue came in below our outlook, reflecting ongoing industry disruption. Adjusted revenue growth, excluding Iraq, was down 2%, driven by growth in Consumer Services and Branded Digital, offset by the Americas retail business. In the fourth quarter, GAAP revenue was down $1 billion, and our adjusted revenue was down 5%, driven by our Consumer Services and Branded Digital business, offset by the Americas business, which continues to struggle with macro headwinds. The deceleration relative to Q3 was largely due to the slowdown in Consumer Services, as communicated last quarter.

In 2025, our full-year adjusted operating margin was 20%, up from 19% in the prior period. Adjusted operating margin in the quarter was 20%, compared to 17% in the prior year, benefiting from our continued cost discipline. For the full year, we delivered adjusted EPS of $1.75, which benefited from higher adjusted operating profit and fewer shares outstanding, offset by higher interest expense, which landed us at the top end of our guidance range of $1.65-$1.75. Adjusted EPS was $0.45 in the fourth quarter, compared to $0.40 a year ago. Adjusted EPS benefited from our cost management discipline, as well as fewer shares outstanding, partially offset by higher interest expense. The adjusted tax rate for the quarter and the full year was 12% and 13% respectively, consistent with the same prior year.

Now turning to Consumer Services, which contributed 14% to total revenue this quarter. Fourth quarter adjusted revenue grew 26%, driven by growth in our Travel Money business, as well as growth in our bill pay business. I’m pleased to share that in 2025, adjusted revenue from Consumer Services grew almost 30%. We continue to believe that our Consumer Services business will grow double-digit annually over the next several years. This growth will come from continued market expansion of existing products, as well as potential new product offerings, and through inorganic growth strategies that can benefit from Western Union’s brand, scale, and global nature of our business. As Devin highlighted, we are continuing to evolve our portfolio, moving beyond remittances to build a broader suite of consumer services. Travel Money demonstrates what’s possible.

In just a few years, we’ve grown from a few $ million to over $100 million dollar business, and we believe there’s more to come. This illustrates the power of our brand, global footprint, and unique capabilities. Now transitioning to Consumer Money Transfer, or CMT. For the full year, CMT adjusted revenue, excluding Iraq, was down 6%, while transactions excluding Iraq declined 1%. In the fourth quarter, CMT adjusted revenue declined 9%, while CMT transactions declined 2%, driven by the slowdown in our retail business as industry conditions remained challenging throughout the quarter. U.S. immigration policies have continued to impact customer activity. These dynamics have been present for most of the year and remain a factor in our results in the fourth quarter. Customers continue to send fewer transactions, but with higher average principal per transaction.

Our PPT roughly increased roughly 5% in the fourth quarter compared to the prior year on a constant currency basis. We see this as the new normal for the industry in the short term, and we continue to look for ways to improve this, improve in this environment. In the fourth quarter, our Branded Digital Business grew adjusted revenue by 6%, with a 13% increase in transactions. This marks the ninth straight quarter of solid revenue growth. Our performance in this environment reinforce our confidence in the Western Union brand. We’ve also seen strong branded digital transaction growth across the globe, underpinned by the Middle East, APAC, and the Americas. Account payout transactions continue their strong momentum, growing over 30% in the quarter.

For the full year, adjusted revenue grew 6% and transactions grew 12%. As Devin highlighted, a big contributor of branded digital growth over the past couple of quarters has come from some of the new digital partnerships in the Middle East. These relationships have led to a substantial growth in transactions, but a more muted growth in revenue as they are primarily account-to-account transactions, where revenue per transaction is lower than our traditional Western Union licensed business. This will likely cause a spread between transaction growth and revenue growth to remain elevated. We are even likely to see an increase in transaction growth rate over the next couple of quarters as these partners are gaining real traction in the market. Turning to our retail business. Overall, the performance in our retail business was similar to Q3 on a transaction basis and slightly worse on a revenue basis.

We will continue to see softness in North America, but from a growth rate perspective, North America transactions improved 200 basis points in the fourth quarter compared to the third. Although some of these improvements may have been pulled forward ahead of the new remittance tax, as it went into effect on January 1st. APAC also improved in the fourth quarter from a revenue growth rate perspective, while Europe, Middle East, and LACA slowed slightly. Now turning to our cash flow and balance sheet. In 2025, we generated $544 million in operating cash flow, compared to $406 million in the prior year period. Included in this year’s number is approximately $220 million in cash taxes paid related to the transition tax.

We’re excited to have these tax obligations behind us and look forward to the additional flexibility that we will have to invest our free cash flow in support of our business or to return it to our owners. Western Union continues to be a cash flow machine, with adjusted free cash flow conversion of over 100% for the past three years. In 2025, our CapEx was $151 million, up 15% from the prior year. CapEx increased slightly due to higher technology infrastructure spend and a busy year in new agent wins and renewals, which drove a slightly higher CapEx number. We expect CapEx to remain elevated in 2026 due to the strategic wins and the addition of Intermex.

We continue to maintain a strong balance sheet, with cash and cash equivalents of $1.2 billion and debt of $2.9 billion. Our leverage ratios were 2.9 times and 1.6 times on a gross and net basis, which we believe continues to provide us ample flexibility for capital return or potential M&A, while maintaining our investment-grade credit rating. I’m pleased to report that in 2025, we returned more than $500 million to our owners, with $305 million paid in dividends and $225 million used to repurchase shares. Now moving on to our 2026 outlook, which assumes no material changes in macroeconomic conditions.

Our adjusted revenue outlook for 2026 is for 6%-9% revenue growth, inclusive of Intermex, which we now expect to close in the second quarter of this year. Our adjusted EPS for the full year, we believe, will be between $1.75 to $1.85. This includes higher interest expense as we look to refinance our existing notes coming to maturity in Q1, which are currently yielding 1.35% to something closer to today’s interest rate environment. This also assumes roughly $100 million of stock repurchases for the full year as we look to integrate Intermex and potentially execute our robust M&A pipeline.

We believe that EPS will accelerate as we go throughout the year, as our travel money business is seasonal and has less fixed cost coverage in the first and fourth quarter of the year. In addition, some of our expense benefits related to incentives that hit in Q1 of 2025 will occur later this year. In both, the benefits of our operational efficiency programs announced at the Investor Day, as well as the benefits related to Intermex integration, will ramp as the year progresses. Thank you for joining the call, and operator, we’re ready to take questions.

Operator: We will pause momentarily to compile the Q&A roster. As a reminder, each person is allowed one question with one follow-up question. All participants will be in listen-only mode. Our first question comes to us from Tien-tsin Huang at JP Morgan. Please go ahead.

Tien-tsin Huang, Analyst, JP Morgan: Hi, everyone. Good morning. Thanks for going through all of this. So I’m just trying to think about what to ask here. So maybe on the outlook, with just January and February trends that you talked about, I’m curious how that informs your outlook in terms of what you learned. It sounded like there’s no real impact yet from the remittance tax so far, but you’re monitoring what’s happening across a lot of different countries, including Venezuela. So what’s baked in the outlook in terms of assumptions? And I’m very curious on what you’re assuming for Intermex in the outlook in terms of either contribution or impact from some of the trends that you’re seeing in the early part of the year.

Matt Cagwin, Chief Financial Officer, Western Union: ... Hey, Tien-tsin. Thanks for joining the call so early in the morning.

Tien-tsin Huang, Analyst, JP Morgan: No problem.

Matt Cagwin, Chief Financial Officer, Western Union: A couple things here on your question. So we are six weeks into the year. We are seeing an improvement relative to our Q4 performance six weeks into the year. As you know, we saw the slowdown in the Americas, in particular the U.S., starting in the second quarter of last year. So we’ll start to lap those, the harder comps we have here in Q1 as we get into Q2, 3. So all that will make the continued progress we’ve seen in the first couple of weeks get even easier as the year progresses. And then, as far as Intermex concerns, they have not published yet, so it’s not fair for me to give their numbers. But you could imagine-

Tien-tsin Huang, Analyst, JP Morgan: Right

Matt Cagwin, Chief Financial Officer, Western Union: ... their North America-centric business, so their results are largely consistent with what you’ve seen, both in our results today and largely consistent with what Euronet published. Something in that line will give you a good sense of where they are, and we factored them in as a Q2 close, so you can think about the middle of the quarter.

Tien-tsin Huang, Analyst, JP Morgan: Middle of Q2. Got it. And then just my follow-up then, the retail agent win stood out to me. It sounded like many were exclusive. Devin, you talked about $100 million incremental revenue once fully ramped. Couple questions there, just it sounds like there’s a pipeline for more of these deals, given your distribution. Correct me if I’m wrong there, and I’m curious, is there anything to share on the cost for this exclusivity and maybe the margin profile of these deals, if there’s anything different than what we’ve observed in the past? Thanks.

Devin McGranahan, Chief Executive Officer, Western Union: Thanks, Tien-tsin. We are excited about it. They are exclusive deals, which is part of the strength of the Western Union brand and model with large strategic partners. We believe that these will be meaningful, as they are largely competitive takeaways, so they benefit both our inbound and our outbound. So in the example of Canada, adding incremental distribution, this is similar to what we saw when we added the U.K. Post. Adding incremental distribution, particularly in some of the less metropolitan areas, will increase inbound into Canada. We saw that also when we lost the Deutsche Post, again, which has great coverage in the non-urban areas, we saw inbound to Germany go down.

So for us, these kinds of networks not only benefit outbound in the country, but help our global model and our global footprint because they provide important payout services in places where it’s difficult to sustain an independent agent on, you know, money transfer, remittance kind of revenue only. So we see them both as a network benefit overall, but also as great partners with great brands in these markets. Matt can talk about the economics, but they are generally consistent with our overall branded large network economics, so these are not deals that we bought. These are deals that we won based on a strong value proposition, good technology, and great partnership.

Matt Cagwin, Chief Financial Officer, Western Union: Let’s build on Devin’s point for two things here. I think what his closing was there is probably if you take away two takeaways on this, we alluded, a quarter ago or maybe two now, about a pipeline building. We knew these were well on the way at that time. We’ve put a lot of money into rebuilding our retail platform and having what we believe to be the gold standard now in the marketplace, so we believe this will be the first of many coming over the next two years. And then from a margin standpoint, you should view this, Tien-tsin, as it will contribute to our overall OI, so it’s better than our OI.

Devin McGranahan, Chief Executive Officer, Western Union: The other thing, Tien-tsin, in my tenure, it’s great to talk about adding, so that instead of talking about losing, so it’s a great transition for us.

Operator: Our next question is from Darren Peller at Wolfe Research. Please ask your question.

Darren Peller, Analyst, Wolfe Research: Hey, guys. Thanks. Can we touch on the digital transaction growth for a moment? I mean, I know it’s good to see the 13%, and I know that you wanted to see that even accelerate over the to the mid-teens over time. But we’re also. I’d like to hear more about your view of what you’re doing there to keep that sustainably in that rate or better, and your conviction around that. But I’d also love to hear more about the spread. I know at the Investor Day, we talked about that spread narrowing a bit. You touched on that earlier in the prepared remarks, so maybe just revisit that again, if you don’t mind.

I mean, what should we expect on the spread between the transaction growth and the revenue growth rate there, and what’s driving the spread now just a little bit wider? Thanks again, guys.

Devin McGranahan, Chief Executive Officer, Western Union: So Darren, let me take the transaction and the potential for acceleration, and then I’ll let Matt take the spread question. By the way, thanks for joining early in the morning. We, you know, we see market opportunity, so we are excited about our business now in the Middle East. For many years, we had a tougher Middle Eastern product and platform and strategy. Licensing is tough in those markets, and so we went to market, you know, with a model we called the Digital Master Agent, which was really one of our retail agents partnering with us to try to do digital.

We still have that model, but we’ve expanded our model again with the improvements in our technology platform to be a bit more partner-aligned with some of the larger digital players who have amassed a critical mass of customers in that region across a wide range of products, telecommunication, financial services. And so it’s opening up for us a market opportunity and a customer base that we had trouble accessing in our old Digital Master Agent model in the region, so we see potential there to accelerate. We also see regions in the world, like in Europe, where we believe, you know, we are underperforming the market, and that, with some changes in the approach, model, leadership, we’d like to see some acceleration there, which again, would be additive to the current results that we’re publishing. I’ll let Matt talk about the gap.

Matt Cagwin, Chief Financial Officer, Western Union: Hey, good morning, Darren. We actually alluded to this last quarter, in our Q3, as we were ramping these partners, that the gap would be wider for the year as we ramp it. Devin also had in the prepared remarks a minute ago, we’ve seen our new customer and our non-Middle Eastern business growth narrow a little bit, flatline. We are working hard on that to get it back. That will get the core non-Middle East to accelerate and narrow the gap, but as the Middle East is contributing to this, it is what’s causing the widening. The other thing, as you know, is we launched the program, I guess, been now 2, 3 years ago, where we did the new go-to-market strategy.

As that happened, we saw each region we went to accelerate and grow in the last part of that. Really is the Middle East, where we’re doing it through partners. So and then they come in at lower RPTs.

Darren Peller, Analyst, Wolfe Research: Okay. All right. That’s helpful. Guys, quick, quick follow-up would just be your comments around what you’re seeing with regard to the corridors impacted by migration policies in the U.S. I’m just, I wanna make sure I understand it. Are you saying that it’s gotten to a point where you think it’s now stable, maybe it’s a little bit better, we see a new norm? Mexico, for example, was stabilizing. I mean, I know it’s pressuring transaction, especially on the retail side, but do you think we’re at a new steady state now, or...? I’m just curious what you’re seeing in the data.

Devin McGranahan, Chief Executive Officer, Western Union: Yeah, so we, you know, the summer was pretty dramatic. Bank of Mexico data was negative in 2024 for the first time, Darren, in over a decade. And so, you know, it’s a tough situation, and it’s an important corridor for us given its relative size, and so we pay a lot of attention to that. We did see it turn positive at the end of the year, and we’ve continuing to see some reasonable trends in the first part of this year. That said, it does, as evidenced on the chart, jump up and down. October was starting to head in the right direction, and then November fell off a cliff. December came back-

Darren Peller, Analyst, Wolfe Research: Right

Devin McGranahan, Chief Executive Officer, Western Union: ... pretty well. So we think that is moving directionally in the right direction, and now we have, you know, a couple of months in a row that look a little bit better. It’s not where it was. You know, historically, it’s grown, you know, mid-teens, month-over-month, quarter-over-quarter, year-over-year, but at least it’s not descending at mid-teens like it was in the summer months. The rest of the LACA regions, it’s becoming a bit mixed, right? And so we see certain markets like Nicaragua, where we’re still, you know, seeing reasonably, you know, low performance, and others that are starting to stabilize, and in some cases, even begin to grow again like to Guatemala.

Darren Peller, Analyst, Wolfe Research: Right.

Devin McGranahan, Chief Executive Officer, Western Union: So, I think we’re seeing stability, but again, as I said in the prepared comments, any given day, an election or a geopolitical change can happen that disrupts the region again for another 3-6 months.

Darren Peller, Analyst, Wolfe Research: Right. Makes sense. All right. Thanks, guys.

Operator: Our next question comes to us from Will Nance at Goldman Sachs. Please go ahead.

Darren Peller, Analyst, Wolfe Research0: Hey, guys. Thank you for taking the question. I wanna just ask the digital question a slightly different way. I mean, it sounds... I totally hear you on the Middle East and some of the makeshift dynamics you’re expecting around the spread. Just relative to the revenue growth rate that you just saw when you put all the moving pieces in a blender, like, how are you thinking about absolute levels of digital revenue growth over the course of the year? And then, I’ll just ask the second question now, but it- I was wondering if you could put a finer point on the IMXI revenue assumptions assumed in the guide for the closing, just so we can kinda true up the models ahead of the close. Thank you.

Matt Cagwin, Chief Financial Officer, Western Union: Hey, Will. Good morning. Let’s put those two tough questions together. So on the branded digital side, what are we expecting? What’s built into the guide? We’ve now had two years of mid-single-digit growth. We have built into our guide a modest improvement in that. We think there’s meaningful improvement opportunity, but our guide includes a very modest improvement, driven by we think we’re gonna continue to accelerate in the Middle East, and we think we can reinvigorate our growth rates for new customers in many other markets. On the Intermex side, we have built into our model a Q2 close.

As I talked about with Tien-tsin a minute ago, you can view that as something closer to the middle, and we’ve assumed a growth rate is commensurate with our North America or RIAs North America business growth rate, so you can look at industry growth rates for that.

Darren Peller, Analyst, Wolfe Research0: Got it. Appreciate taking the questions.

Operator: Our next question comes to us from Raina Kumar at Oppenheimer. Please go ahead.

Raina Kumar, Analyst, Oppenheimer: Good morning. Thanks for taking my question. So I also wanna ask about Intermex. I think you guys put out a $0.10 a share accretion number for the first year. Do you still expect to hit that target with Intermex? And I’ll ask my follow-up as well. You had some nice commentary on just the partnerships and products you’re adding with Stablecoin. I’m wondering if you’re actually starting to see some demand from consumers to send Stablecoin, and are they utilizing the on-and-off ramping for Stablecoin? Thank you.

Matt Cagwin, Chief Financial Officer, Western Union: Do the first, Jason. Hey, Raina. Thanks for joining the call today. To your first question on Intermex, when we had the announcement, latter part of or middle of last year, what we had indicated at the time was a $0.10 from the first full year, and our thought process there is we need some time for integration. There’s a meaningful amount of synergies that we are confident we can go get. We’re more confident today in those synergies than we were when we signed the deal because we’ve had a lot of time to do some integration planning. The deal’s coming a few months earlier than we thought right now, subject to regulatory approvals. There are still a few states to get approved and one country from a change of licenses.

All the competition stuff of material substance is done, but there is a few more lingering regulatory things to go. With the deal coming a few months earlier, it will be accretive this year. It’s in our $75-$85, but the ten cents you should view more as a 2027 activity for us as we get the benefits of all the synergies that we’re working on.

Devin McGranahan, Chief Executive Officer, Western Union: Let me try to take the stablecoin question. As you remember from Investor Day and in the prepared comments, we are most bullish on the use of stablecoins to create efficiency in the global movement of money, particularly between us and our partners, to increase speed, allow us to move money 24/7, and for Matt to get capital efficiency out of that process. I also talked about launching the stable card, which we believe doesn’t require senders to necessarily choose to open a digital asset wallet, buy a stablecoin, send a stablecoin.

It will enable a traditional retail or digital sender to have their customer receive a stablecoin-based asset in the stable card, which we believe has value in our remittance countries for allowing the receiver to have more control over exchange rates and the ability to hold a U.S. dollar-denominated assets. We have not seen strong market demand from our sender base clamoring to send money via stablecoin. We have, however, seen, and we believe that this is a market opportunity for us, people who already have customer bases with digital asset wallets are looking for ways to exchange those digital assets back into fiat currencies. And so what we’ve talked about is our digital asset network, and we continue to sign partnerships with existing digital asset players who own digital asset wallets and customer bases looking for those on-ramps and off-ramps.

So that’s another part of our digital asset strategy that’s coming along, and I will talk more about that on the next earnings call.

Operator: Our next question is from Timothy Chiodo at UBS. Please ask your question.

Timothy Chiodo, Analyst, UBS: Great. Thanks a lot. So you mentioned a few times now around some flattening of your customer acquisition trends outside of the Middle East. I was hoping you could dig into this a little bit more on two levels. One is a recap of some of the initiatives that you have to address that flattening, but also, what are you seeing in the competitive environment, whether it’s around advertising spend, or promotions, or other initiatives that might be impacting that, that flattening of customer acquisition that you mentioned? Thanks a lot.

Devin McGranahan, Chief Executive Officer, Western Union: Thanks. Great question. I think there are two things that have transpired over the course of, call it, the last 12-18 months. The market for value propositions for new customer acquisitions has gotten increasingly competitive, as global macro forces have put pressure, particularly on lower-scale players. You’re seeing increasingly aggressive new customer offers. And so one of the things that we’re evaluating is: how do we compete with that and still maintain our rigor in terms of our ability to have the high returns on acquisition costs to lifetime value? And so we’re looking at how some of our models work and how we are going to go to market to compete with these more aggressive new customer acquisition offers.

The second thing that we’re seeing is, as search is changing and agentic AI and how people go to market, the traditional model of, you know, buying lots of space on Google or in the Apple Store, is a shifting landscape now in terms of how you gain access to customers and where those customers are actually shopping and looking for opportunities to send money. And so we are shifting our go-to-market strategy to align better with the kind of emerging landscape for digital customer acquisition.

Operator: Our next question comes to us from James Faucette at Morgan Stanley. Please ask your question.

James Faucette, Analyst, Morgan Stanley: Thank you very much. Appreciate all, all the details and color here. I wanted to, to follow up a little bit just on recent trends. As you mentioned, a lot of volatility in the latter months of 2025. How do you think about, like, what are the kind of primary drivers there? And, and just trying to think about the things that you’re looking at to extrapolate out for the rest of this year, especially given the month-to-month volatility.

Devin McGranahan, Chief Executive Officer, Western Union: Great question, and I think the month-to-month volatility has caused us to have a much more dynamic operating model. So, historically, this was a relatively predictable, calendar-driven, holiday-driven, paycheck-driven business. And many of us have publicly said that, you know, we could pretty much tell you what the next, you know, week, month, quarter was based on trends and the calendar. With some of this more dynamicism in terms of the landscape, we have to be a lot more agile, recognizing where the trends are moving, and shifting both our approach to go to market, but also, in some cases, our model for agent incentives and/or for marketing dollars, to recognize where the strengths are and start to quickly address where we’re seeing market change is on a much more dynamic basis.

But, you know, it has become the new normal for us, and so we are doing the best we can in this new normal to adjust our operating model to a more dynamic approach to dealing with it.

Matt Cagwin, Chief Financial Officer, Western Union: If I can just take one step back to building on Devin’s answer. You have to keep in mind the fact that we are global. We’re in 200 countries, so we do have some puts and takes. The conversation we’re having right now is a few countries in Latin America, U.S., and Mexico, which has been up and down over the last 6-9 months. Holistically, it’s been very similar across the U.S., the Latin America corridor, starting in Q2 last year. So we’ll start to lap that as we get into the second quarter and start having easier comps. So any given market’s volatile, the economy as a whole took a step down in Q2 for this industry, and we will start to lap that as we get into the second quarter.

James Faucette, Analyst, Morgan Stanley: Appreciate the nuance there and color. Just want to ask quickly to if you could compare and contrast a little bit around the European retail versus U.S. business. And in particular, I’m trying to get a sense from you how you think about what a realistic timeframe is to transition the U.S. model to look more like Europe. And maybe more importantly, at least for me in modeling purposes, what investment is going to be required? Thanks.

Devin McGranahan, Chief Executive Officer, Western Union: Yeah. Thank you for the question. The important impetus to transforming the U.S. model, as we’ve talked about publicly, is the close and then the integration of Intermex into Western Union. The Intermex model, as we’ve said publicly, is very similar to our European model, which a much more tactical, location-based strategy that relies on kind of agent-level and corridor-level activities and strategies. And so with a little bit of acceleration into the second quarter from our original belief on when the deal would close, I think that helps us move forward in terms of the transformation of the North American, and particularly the U.S. retail business.

Operator: Our final question is from Brian Keane at Citi. Please go ahead.

Brian Keane, Analyst, Citi: Yeah. Hi, guys. Thanks for all the details here on the call. Just want to ask about Consumer Services growth. Obviously, that’s been the strength in powering a lot of the top line. Can you talk a little bit about what we should expect for growth rates this year and some of the key driving factors? And then I’ll ask my second question. I think, Matt, what people are trying to figure out is the actual revenue dollar amount assumed in the Intermex transaction, and then maybe just what that means for organically the business this year, ex acquisition. Thanks.

Matt Cagwin, Chief Financial Officer, Western Union: So, Brian, I’ll, I’ll work my way backwards. On your second one, the simple answers are organic’s going to be closer to flattish, and then Intermex will help us get closer to the 6%-7%. We think we’ll get some positive growth, but call it flattish. And then for your question on Consumer Services, we have our last quarter of, the acquisition we did last year, which will help power Q1 to be, very solid, solid from a Consumer Services standpoint. And then I intentionally talked about we see a path for double-digit growth going forward as we continue to expand products, as we continue to, look at inorganic activities, and we expand it into new marketplaces.

View it as higher in Q1 and then working its way down closer to our double-digit, and then we may have some tweaks as the year progresses.

Brian Keane, Analyst, Citi: Great. Thanks, guys.

Devin McGranahan, Chief Executive Officer, Western Union: Thanks, everybody.

Operator: There are no more questions in the queue. Thank you for joining the Western Union Fourth Quarter 2025 Results Conference Call. We hope you have a great day!