NYSE:WU Western Union Q2 2023 Earnings Report $9.80 +0.06 (+0.56%) Closing price 04/17/2025 03:59 PM EasternExtended Trading$9.85 +0.04 (+0.41%) As of 04/17/2025 06:18 PM 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$0.51Consensus EPS $0.39Beat/MissBeat by +$0.12One Year Ago EPS$0.51Western Union Revenue ResultsActual Revenue$1.17 billionExpected Revenue$1.05 billionBeat/MissBeat by +$124.47 millionYoY Revenue Growth+2.80%Western Union Announcement DetailsQuarterQ2 2023Date7/26/2023TimeAfter Market ClosesConference Call DateWednesday, July 26, 2023Conference Call Time4:30PM ETUpcoming EarningsWestern Union's Q1 2025 earnings is scheduled for Wednesday, April 23, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Western Union Q2 2023 Earnings Call TranscriptProvided by QuartrJuly 26, 2023 ShareLink copied to clipboard.There are 13 speakers on the call. Operator00:00:00Good day, and welcome to the Western Union Second 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. I would now like to turn the conference over to Tom Hadley, Head of Investor Relations. Operator00:00:19Tom, please go ahead. Speaker 100:00:22Thank you. On today's call, we will discuss the company's Q2 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. 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 Kegwin. Speaker 100:00:52Today'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. We have reconciled those items to 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 200:01:39Good afternoon, And welcome to Western Union's Q2 2023 financial results conference call. We are pleased with the results We reported today and the progress we are making against our Evolv 2025 strategy. The work we have been doing to deliver sustainable positive revenue growth is beginning to take effect. In the quarter, we continued to drive improvements in the underlying trajectory of our business with positive transaction trends across both our branded digital and our retail businesses. Recall, 2 key pillars Our evolved 2025 strategy includes stabilizing our retail business and returning our digital business to low double digit growth rates. Speaker 200:02:31The 2nd quarter was continued evidence we are making good progress on both objectives. The 2nd quarter was the first time in 8 quarters that we have achieved positive transaction growth across the company with total C2C transactions, excluding Iraq, growing 2% year over year. This is a significant improvement from the double digit negative transaction trends we saw for most of 2022. I will provide more details on some of the initiatives we are working on, but first, let me provide a quick summary of our financial results. Our total revenue in the quarter reached $1,170,000,000 reflecting a 9% increase On a constant currency basis, when excluding the contribution from Business Solutions compared to the same period last year. Speaker 200:03:28This growth was driven by several factors, including improving fundamentals in our core business, the increase in revenue from Iraq and the benefit of Argentinian inflation. Adjusted earnings per share came in strong in the quarter at $0.51 Matt will further discuss our financial results in more detail and provide an update on our enhanced 2023 financial outlook. Shifting to the macro. Last month, the World Bank came out with its semiannual migration and development brief, which is calling for low single digit remittance principal growth in both 'twenty three and 2024. The World Bank noted headwinds to faster growth in remittance volumes, including a slowing global economy, persistent high inflation, Increased interest rates and Russia's invasion of the Ukraine. Speaker 200:04:28These are all macro themes that we have spoken about in recent quarters in factors we are paying close attention to. Nevertheless, we continue to see resilience in our own customer base. With the average PPT, excluding the higher PPT from IRAC, remaining relatively flat year over year. We also continue to believe that there are significant opportunities within our own business that will allow us to One of those important opportunities is the acceleration of our branded digital business, which has been a key focus and the primary driver of the transaction improvements we have seen in recent quarters. This business has continued to show momentum in the quarter With 12% growth in transactions globally, which is a significant acceleration of the transaction growth trend We reported in the Q1 of 2023, which was up 7%. Speaker 200:05:39Constant currency branded digital revenue Also improved this quarter sequentially to minus 2% with transactions up 12%, which reflects improvement in the underlying health of the business compared to the Q2 of last year, by focusing on growing our customer base again, which in turn would lead to growth in transactions and finally, growth in revenue would follow. I am pleased that we are on track and maybe even slightly ahead of the trajectory we laid out at our Investor Day last fall. These improvements in our branded digital business are attributable to the successful execution of our updated go to market strategy, which is driving meaningfully more customers to our digital properties. In the quarter, we saw global new customer acquisition up 20%, which underscores the effectiveness of our marketing and customer acquisition strategies as well as the improvements made to our customer onboarding, Funnel conversion and overall customer experience. A central element of our updated go to market strategy It's the constant focus on ongoing improvements in funnel optimization. Speaker 200:07:11In the second quarter, We simplified our historical registration process by limiting the number of fields required to register and by moving our value proposition front and center to help drive customer conversion. As a result, We have improved our web registration conversion rates by almost 500 basis points in our U. S. Outbound business relative to the Q1 of 2023. In addition to approving our registration conversion rates, We've also seen dramatic improvement in our first transaction approval rates. Speaker 200:07:50In the Q2, our first transaction approval rates And our U. S. Outbound business increased roughly 600 basis points year over year, driven by several improvements we have made to our decisioning models. For example, our new omni channel customers For our new omni channel customers, we now use a customer's previous retail transaction history in our digital approval process, which predictably significantly enhances decision outcomes. As previously discussed, our updated go to market strategy is focused on optimizing LTV to CAC By leveraging data driven insights to improve audience targeting and funnel conversion, we continue to see a sustained improvement And our branded digital customer acquisition costs, which has strengthened our belief that the changes we are making Are indeed durable. Speaker 200:08:55Moving now to our retail business, which is powered by our extensive agent network Of over 400,000 active locations providing accessible financial services to those customers who prefer in person transactions. As we have discussed and expected, given the scale and dispersion of our retail business, Performance improvements will take more time. Our retail business saw positive transaction trends in the quarter With 120 basis point improvement in the growth rate relative to the Q1, excluding Iraq, Russia and Belarus. Performance year to date supports our belief that the retail transaction trends can continue to improve over time, which is needed to stabilize our retail business as laid out in our Evolve 2025 strategy last fall. Nowhere has this evolution been truer than in Africa. Speaker 200:09:57In the quarter, we saw 6% revenue growth in our retail business in Africa. The management team that we have there is top notch and has been laser focused on driving improved retail performance across the region. More broadly, in Europe, we continue to make progress on our controlled distribution strategy, where we have now launched over 70 new concept stores since last year. During the Q2, we also opened 2 exclusive Western Union Branded Corporate Owned Stores in Belgium. This type of distribution allows us to control the customer experience, increase the number of products and services we offer, promote the retail to digital escalator and allows us to have deeper engagement with our customers. Speaker 200:10:50Our focus with the Evolve 2025 in retail Has been to significantly improve our customer and agent experiences, including faster transactions, Better end to end customer and agent experiences and higher quality agent support. As an example, I want to give you just a quick Update on the quick resend function that we discussed on the last call. The use of quick resend, where repeat transactions can be executed in a Fraction of the time that was historically required continues to increase across our U. S. Agent base and has grown by over 10 times from March of this year. Speaker 200:11:35In June, over 30% of all transactions completed at our V Go brand We're done using this quick resend functionality. These types of process improvements may sound small in isolation, but we believe they can add up and become meaningful. A better customer and agent experience can ultimately improve retention and drive growth in the near term, but they are also driving efficiency throughout our organization. For example, roughly 15% to 20% of all calls to our call centers We're associated with a refund request. As a result, we launched a process called 1 Step Refund, which created a self-service tool for our agents to process refunds in one step and avoid the need to engage our support staff. Speaker 200:12:32During the month of June, we saw a 20% reduction in refund support calls. In more recent weeks, The percentage of refunds processed by our agents without call center support surpassed 50% of all refunds processed globally, up meaningfully from the mid teens range that we were at early last year before we scaled this one step Refund process. The 1 step refund process was designed primarily to improve agent and customer satisfaction. However, by simplifying the refund process, we now have fewer calls coming into our call center and thus can reduce run rate costs while focusing our customer service representatives on resolving more complex issues with better, more personalized support. Last year, on the Q1 earnings call, I talked about the process improvement opportunities I saw It could enable us to invest for growth while maintaining our strong margins. Speaker 200:13:41While transaction volumes Have been increasing in recent months, monthly call center volume has decreased to the lowest level in at least 8 years. Agent support calls have also dropped and collectively we have seen a 30% decrease in total call volume, driving our contact rate down by over 20% year over year. I look forward to sharing more on this topic with you in coming quarters. We continue the build out of our broader ecosystem strategy and are pleased to announce the launch of our new prepaid debit card in North America. Just this month, we completed the first commercial transaction on our prepaid card and have begun a friends and family rollout in the U. Speaker 200:14:32S. This card will provide with a convenient and secure payment solution, allowing them to manage their finances with greater flexibility. By reintroducing a prepaid card solution, we aim to expand our product offerings and provide additional value to our customers. We are also now in the final phase of our friends and family testing in Brazil, and we expect our new digital wallet to go live In the Q3, Brazil is one of the few markets where our digital business is larger than our retail business on a transaction basis. As such, we are excited to be able to expand our digital offering in this important market. Speaker 200:15:18Last month, I had the opportunity to visit Europe and review the progress we are making with our digital wallet there. We have continued to focus on the 4 markets we have launched so far and have made improvements to the onboarding processes And to the customer migration experiences, as noted on the last call, current Informer, digital and retail Western Union customers Continue to be our most valuable wallet customers. Improving the omnichannel experience will be important to further expand with these segments. Finally, shifting to some new additions to our executive team and partnerships. First, I would like to announce the addition of Sam Jawad to our management team as the new Head of Ecosystem. Speaker 200:16:09Sam joins us from ACI, where he served as the Executive Vice President and Global Head of Banking. Sam brings nearly 20 years of experience in digital banking and payments and has a strong track record of business building. I would also like to announce the addition of Karen Whelan as our new Chief People Officer. Karen joins us from West Corporation, where she was the CHRO. Karen brings nearly 20 years of experience in human resources and is a high impact leader that will play an important role in supporting us with our ongoing Evolv 2025 transformation. Speaker 200:16:55Lastly, We have partnered with UNICEF to provide our quick cash services. This partnership links closely with our purpose, which aims to help people prosper. We are also publishing our annual ESG report in the coming weeks, which will highlight our ongoing progress with key ESG focus areas, including furthering economic prosperity and promoting the integrity of the global money movement system. Looking ahead, we remain optimistic about our strategic direction and the positive progress we are making. The global payments landscape continues to evolve rapidly, driven by increasing digitization, changing customer preferences and our customers' aspirations for more. Speaker 200:17:44Western Union is well positioned to capitalize on these trends. Our digital services, Combined with our extensive retail network, position us as a trusted provider of flexible and reliable financial solutions To the aspiring populations of the world. In conclusion, we are pleased with the improved trajectory of our business, Driven by improving transaction trends across both our digital and retail businesses, our investments in digital acceleration And customer centric initiatives are driving the company forward. We are excited about the launch of our new prepaid card solution in North America and the opportunities it presents as part of our ecosystem offering. We remain committed to delivering value for our customers, our shareholders and other stakeholders, while adapting to the rapidly evolving market dynamic. Speaker 200:18:43Thank you for joining the call today. I would now like to turn the call over to Matt to discuss our financial results in more detail. Speaker 300:18:52Thank you, Devin, and good afternoon, everyone. I'm delighted to be here today to discuss our financial performance over the past quarter and highlight some of our key achievements. I will also outline our outlook for the remainder of the year. Let's start by discussing our financial results. In the Q2, Westin Union delivered adjusted revenue of $1,170,000,000 Representing a 9% increase year over year, we exceeded our internal expectation due to the revenue increase from Iraq as well as a 3% benefit from Argentinean inflation. Speaker 300:19:34As you may recall, we shared last quarter that a monetary policy change in Iraq drove a 2% benefit to adjusted revenue as we are able to quickly adapt to serve our customers. That benefit continued in Q2, providing a 10% benefit to adjusted revenue. While this meaningful benefit in the quarter, We expect Iraq volumes to be significantly lower going forward. I will discuss our forward looking assumptions when we get to the financial outlook in a few moments. We also continue to make progress with our Evolve 2025 strategy, growing C2C transactions for the first time since 2021, led by the continued momentum of our branded digital business, which grew 12% in the quarter. Speaker 300:20:26As Devin highlighted earlier, we are optimizing our branded digital go to market strategy and saw sequential improvement and overall funnel conversion during the quarter. Our retail business also saw improving transaction trends even excluding Iraq. Adjusted operating margin was 21.8% compared to 23.3% last year. Nearly half the decrease was driven by currency impacts, including those related to our hedging program. The remainder of the decrease was due to higher variable costs In investments related to our vol 2025 strategy, partially offset by lower marketing spend and net savings related to our expense redeployment program. Speaker 300:21:16As you may remember, last October, we launched a 5 year $150,000,000 expense redeployment program. I'm excited about our progress. Since launching, we have taken action that will allow us to free up more than $45,000,000 in 2023 with over $30,000,000 of total savings recognized year to date. This has positively impacted our adjusted operating margins It is our ability to save continues to outpace our ability to invest. Adjusted EPS was $0.51 and was flat year over year with the current period benefiting from lower share count, lower adjusted tax rate, partially offset by lower profit. Speaker 300:22:03Now turning to the C2C segment. Revenue grew 5% on a constant currency basis led by Iraq with transaction growth of 4%. All regions except for Laca drove sequential transaction improvements and Laca's historically strong growth stayed flat quarter over quarter. For our Branded Digital business, revenue was down 2% on a constant currency basis On transaction growth of 12% and had new customer growth of 20%, driven by our updated go to market strategy launched last We expect to see positive global revenue growth in the Q4 of this year. Now moving to the regional results. Speaker 300:22:50In the Q2, North American adjusted revenue decreased 7%, while transactions accelerated and grew 4% led by our branded digital business, which had 15% growth in the quarter. Transaction trends also improved 100 basis points sequentially in our retail business. And in North America, we continue to expect revenue growth in our North America branded digital business in the 3rd quarter. Revenue in Europe and CIS was down 10% on a constant currency basis, while transactions declined just 1%. As we've discussed previously, the region has faced a tough macro backdrop along with continued competitive pressures driven by the Russian invasion of the Ukraine, stubbornly high inflation and the loss of which is a combination of leveraging our controlled distribution through owned and concept stores, as Devin discussed earlier, new agent onboarding and enhancing our value proposition in the marketplace. Speaker 300:24:06We're very encouraged by our early results of this program, which led to a 300 basis point sequential improvement in retail transactions, excluding Russia and Belarus. Revenue in the Middle East, Africa and South Asia region accelerated meaningfully, growing 67% driving the revenue growth. As Devin mentioned, we are also seeing solid improvement in our African retail business with revenue up 6% on 500 basis points of sequential improvement in transactions. This is driven by enhanced On the ground execution and marketing, several new wallet partnerships and good adoption of some of our new retailer enhancements such as One Step Refund. Constant currency revenue and transactions in Latin America and the Caribbean were up 8%. Speaker 300:25:10This solid performance in the quarter was led by strength in Argentina, Ecuador and Venezuela. The sequential revenue growth was down due to mix, including yield impacts from higher exchange rates, which have put pressure on higher ticket transactions in certain countries. And finally, revenue in APAC was down 4% on a constant currency basis with transactions up 1%, led by our branded digital business. APAC has driven a significant improvement in its transaction trends versus the double digit declines that we experienced last year. This has been led by growth in Australia, Japan and Korea. Speaker 300:25:55Now moving to our other segment, which primarily consists of retail bill payment in Argentina and the United States In retail money order in the U. S, other represents 7% of total company revenue and grew 10% year over year On a reported basis, benefiting from higher interest rates in our retail money order business as well as solid transaction growth. We are also excited to announce the completion of the final phase of Business Solution disposition, which occurred on July 1. Now turning to our cash flow and balance sheet. Year to date, we have generated $264,000,000 of operating cash flow, which includes a transition tax payment of $119,000,000 in the second quarter. Speaker 300:26:45As a reminder, these tax payments Capital expenditures were $33,000,000 in the quarter and $90,000,000 year to date. As mentioned last quarter, we expect lower agent signing bonuses And the Q1 included large payment that was committed to during the second half of twenty twenty one. We continue to maintain a strong balance sheet with cash and cash equivalents of $1,600,000,000 and debt of $2,800,000,000 Our leverage ratios were at 2.7 times and 1.2 times on a gross to net basis, which is up given the timing of payments around the Eid holiday. These leverage ratios continue to provide us with flexibility for potential M and A while maintaining investment grade credit rating. Now moving to our outlook. Speaker 300:27:43Today, we raised our 2023 adjusted revenue and EPS outlook due to higher revenues in Iraq. As mentioned earlier, We expect these volumes from Iraq to be significantly lower going forward. This is due to recent U. S. Government actions, which shut down a number of our agents in Iraq, potential regulatory changes in Iraq or the U. Speaker 300:28:07S. And or policy changes made by ourselves in the region. As a result, due to the high degree of uncertainty, we have only included the elevated remittance volume from Iraq Speaker 200:28:23And our outlook Speaker 300:28:23through the end of July. Our outlook also assumes no material changes in macroeconomic conditions. We now expect adjusted revenue to be in the range of down 1% to up 1%. This is an improvement from our previous range by 300 basis points. We continue to expect to have adjusted operating margins to be in the range of 19% to 21%. Speaker 300:28:46And lastly, Adjusted EPS is now expected to be in the range of $1.65 to $1.75 which is a $0.10 increase from our previous range. Looking ahead, we remain optimistic about our prospects for the remainder of the year. We will continue to invest in key growth areas related to our Evolve 2025 strategy, including prioritizing customer and agent satisfaction. Thank you for joining the call. And operator, we're now ready to take questions. Operator00:29:17We will pause momentarily to compile the Q and A roster. As a reminder, Our first question comes to us from Will Nance from Goldman Sachs. Please ask your question. Speaker 400:29:44Hey, guys. Thanks for taking the question. You mentioned you think you might be trending ahead of your own So a lot of inside that strategy, you mentioned a few things that you're doing To improve authorization rates, customer acquisition, digital transaction growth, anywhere in particular within those initiatives where you would point That kind of drove that. And then I guess secondarily, you kind of have this sort of one off windfall from Iraq. You mentioned accelerating some investments in the At least that being an offset in the quarter on the Evolve25 strategy. Speaker 400:30:22So if we put it all together, you're ahead of plan and you've got more Resources, where do you think is the best place to incrementally accelerate investment strategy? Speaker 200:30:32Will, thanks for joining the call. We are excited about the progress that we're making with EVOLVE 2025. And I think as demonstrated today In the sequential improvement in transaction trends in both digital and retail, We're at or slightly better than what we expected as we had talked about first growing customers, then growing transactions, which will then turn into revenue. Our ongoing investments fall into 2 or 3 categories. 1 is around continuing to update Our product experience and our customer service and agent experience. Speaker 200:31:12And you heard today some of the places where we've been investing in our platform and our products and our ability to deliver those seamlessly to our customers and through our agents. As we find opportunities and have the capacity, We will continue to accelerate in those kinds of investments that can indeed improve either our onboarding experiences, our funnel Our output or our agent support experiences, many times that requires investing in technology, as we talked about in Evolve 2025, Driving both our customers and our agents towards better self-service and more automated experiences Not only reduces operating costs, but improves our ability to serve and grow those customer bases. The second place where we really look is To our go to market, and you heard on the call today, both continuing to invest in our audience targeting and our marketing, as well as in our retail footprint and our go to market strategy. So as again, as we have capacity and ability, we'll continue to make Investments in those. The 3rd place is in our human resources and on our team and our talent. Speaker 200:32:22You heard about 2 additions today to our senior team. That is trickling through our entire organization as we bring new capabilities and new team members on board to help drive the strategy. I'll turn it over to Matt for the second part of your question. Speaker 300:32:38Hey, Will. Just to your second part. Also as you think about this, the vast majority of the uplift we got from Iraq, we have flowed through our revised guidance. We've only taken a modest amount into our Investments Devin just walked through. As we also highlighted, we've been able to save much faster on investment levels. Speaker 400:33:00Got it. Appreciate that. And then maybe just a clarification on the rock moving pieces. I mean, you mentioned in the press release, Discussion with policymakers, obviously, distinction. I guess on the other side of this event, like do you expect The Iraq revenues be like the same or is it going to be at a lower level post the sanction event? Speaker 400:33:21And then on the expense side, are there any kind of Expense compliance related investments that will result from the subsequent? Speaker 300:33:30Yes. Will, thanks for the question. So since the new guidance coming out from the U. S. Fed, which was put out about a week ago, we've seen a decline in our run rate from the first Part of July by about 70% reduction. Speaker 300:33:44That turned off a number of our agents in that marketplace. To your question about Investments for compliance and other things, as you know, we've got a very robust compliance program. It's one of the reasons why we're able to take the ability to service these clients when the opportunity came arise. But we have also put a little bit more money into that market, some of where the incremental revenue and profit we got from Iraq has gone back into the compliance space over the last few months. Operator00:34:16Our next question comes to us from David Togut From Evercore, please ask your question. Speaker 400:34:23Thank you. Good afternoon. Just to clarify, how much of the $0 increase in the EPS guidance range for this year comes from Iraq? Speaker 300:34:34David, it's Matt. Virtually all of it or all of it, All of it. Our core business is operating as we expected. We had a as we talked about for our guidance last year, We put out a range and we are well on our way for where that was and then Iraq is driving the after uplift. Speaker 400:34:53And then maybe just staying on this point, how much of the change in Iraq do you think is structural where there could There should be some benefit to Western Union beyond 2023. Speaker 300:35:04It's too early to know, David. That's one of the reasons why we put it out there as it being uncertain. It's been a very evolving situation. We have regular calls with the regulators in both markets. We're trying to help They're trying to balance overall macros around the world. Speaker 300:35:21So it's uncertain what they're going to do. Speaker 200:35:24The only thing I would add, David, is evidenced by the last, call it, 4 or 5 months, we are well positioned in the market relative to Other alternatives, as Matt highlighted, we have very strong risk and compliance. And so as the situation evolves, Know that we are at the ready and prepared to evolve with it and take advantage of anything that might be advantageous Operator00:35:57Our next question comes to us from Darrin Peller from Wolfe Research. Please ask your question. Speaker 500:36:07Guys, thanks. I mean, very quickly, just a follow-up again on Iraq, but I do want to Another more fundamental question, but the magnitude of contribution from Iraq, I guess, 10 points over $100,000,000 I guess it's a bit surprising when you generally don't see more than a few percent concentration in any one given market. So how is it that material You guys given what you're describing is a 10 point lift to revenue growth. Maybe just help us understand the dynamics. So some of that Maybe sustainable, some part of that seems pretty high. Speaker 500:36:39And then more constructively and fundamentally, I would say, the Digital transaction acceleration to be followed by revenue growth across the business is definitely what we wanted to see. And so, Devin, maybe just revisit that again. I mean, the timeline on transaction acceleration, U. S, maybe Europe next, How that translates to revenue growth reacceleration on the digital side? And then a quick comment on retail, because it looks like that did get a little better, Just looking at the math between the digital growth and the total transaction growth and what's going on in Speaker 400:37:11the retail side. Thanks guys. Speaker 200:37:13Hey, Darren. Thanks for joining the call. With regard to Iraq, remember back in February, early March timeframe, there was a change in the Central Bank Policy for the entire country. Western Union was uniquely positioned, given the strength of our agent distribution relationship, particularly the relationship with local Iraqi banks, to take advantage of that change in policy and enable the ongoing out flow of remittances and remittance values, which as you can see from this, were significant. In essence, what was a shutdown of the banking system's ability in Iraq to do outbound remittances. Speaker 200:37:56We would not have any expectation that it would continue At this level, Matt has highlighted both the regulators in Iraq and in the U. S. As well as the central banks We are working to find a new policy and a new procedure for the regulated banks in the country to go back into the export That said, as I said earlier, we continue to be well positioned. And as the market evolves, one of the things that We have noted is there's been an adoption of more digitally oriented services, of which, again, we've had strong partnerships with The digital players and the digital wallets in the country, which may induce consumers to stay within that experience and not go back to the more bank oriented experience that prevailed in the marketplace before this change. So it's a rapidly evolving situation. Speaker 200:38:53We continue to have strong presence on the ground. We continue to work across the regulators and the central banks, And we look forward to keeping you guys updated as it goes along. Outside of Iraq, we are pleased with the trajectory both on digital and retail. For digital, we continue to lay out a plan that Brings us to positive revenue growth in the Q3 for the U. S, which is where we launched The program in August of 2022, but really didn't start ramping it until September. Speaker 200:39:31As we originally laid out On our Investor Day, we had talked about a 12 to 18 month timeframe in order to You'll lap the investments that we were making in order to drive new customer acquisition. I anticipate we will do that within the We expect the entire business and as you recall after we started seeing success in North America, we We began rolling it out to important countries in Europe. And then in the Q1, we started expanding that to important countries in the rest of the world, including places like Australia. And so if you see in our results the growing transaction trends not just in North America, but as our new go to market program Evolves into the rest of the world, the same outcomes and performances are being repeated. That said, we expect, as Matt indicated, to get to Global positive revenue growth by the end of this year in Q4. Speaker 200:40:37And so we are on pace with the plan we laid out at our Investor Day, Transaction and revenue growth will normalize as we continue to grow over the investments that we made over the course of the last year. On the retail side, we're quite excited about and one of the reasons I spent a bunch of time highlighting the progress that we're making In changing our agent experience, changing the productivity of our agent base and in better serving our retail customers, which is now starting to articulate into the results that you're seeing on a quarter over quarter basis. Even in the most troubled places like in Europe where we have struggled with our agent network And the macro forces there, you saw that we're now approaching nearly flat transaction growth period over period. Speaker 500:41:33That's great. Thanks, Evan. Operator00:41:36Our next question comes to us from Bryan Keane from Deutsche Bank. Speaker 400:41:49Hi, guys. Devin, I want to follow-up on that, on Europe and CIS, that improvement that It's been significantly negative growth rates, double digit growth rates for several quarters. Just to understand the turn there, It's almost flat now and what's the outlook going forward? Can that go positive going forward in Europe and CIS region? Speaker 200:42:14Look, we have Europe is the place where we've been working quite hard, particularly on the retail side, And there are multiple factors in Europe, both across the macro of the region, but also across And so what you see is we are seeing pockets of growth where we've made investments, where our in going position with our agents and Customers was better. Those include Spain, the U. K. And Italy, in larger markets where like France and Germany, where we have a weaker starting point from when we launched the program, those are still mid to high single digit negative transaction growth. So we believe as we bring the larger countries, and we add more agents and we add more distribution Closer in line with some of the other places where we're seeing net transaction positive growth, we can get the whole region As we have stated in our strategy last fall to low single digit transaction growth. Speaker 400:43:22Got it. And I don't know, Matt, if you guys gave this number, but the in the Middle East and That region that had the big pop in revenue growth, primarily due to Iraq, What would have been the normalized transaction growth rate, I guess, ex Iraq in that region? Speaker 300:43:46We did not provide that number. It would have still been a Sequential improvement like many of the regions around the world approaching 0. Speaker 400:44:03Got it. Okay. Thanks for the help guys. Operator00:44:07Our next question comes to us from Tien tsin Huang From JPMorgan, please ask your question. Speaker 600:44:15Great. Thank you. Thanks. Good afternoon. Just on the acceleration to the 12% growth it's nice to see for The digital branded piece, does that, Devon, change your thinking on broadening your promotions and geo expansion? Speaker 600:44:27I'm curious on that. And is it related some of the comments you made on improved transaction approval rates and things like that, I wasn't sure if those things We're tied. And I guess if you don't mind, if I just add my follow on to that, just with the approval rates, Any changes in the fraud activity or surprises there? Thanks. Speaker 200:44:49Thanks, Tien Tsin. Great to have you on the call. Our ongoing investments and you can see it in the numbers, We've talked a lot about being very disciplined with our LTV to CAC. And so one of the things we've been working hard with this program Is to improve the efficacy of those marketing dollars and to convert more people from our top of funnel to bottom of funnel, which is what I was talking about in terms of our conversion rates, both on registration, on first time Risk acceptance. And we're working, Finjan, more broadly across the funnel in every case to ensure that the changes we're making are sustainable and durable over time. Speaker 200:45:36And so as you know, we've talked a lot On the call about ensuring that our promotional pricing activities, in fact, turn into customers and those customers turn into transactions, right? And so I think we have growing confidence that the overall program, aside from the promotional pricing, It's in fact driving real benefits and real outcomes, which is now you're seeing in the 12% transaction growth globally and the 15% in North America. So to answer your question, I don't anticipate a lot more rolling out of any promotional pricing activities. There are a few places in the world we might explore, but in most of the big important places, we are well on our way and we aren't Requiring or needing any more promotional pricing. Speaker 600:46:28Got it. And then just on the fraud piece, I know that In the past, we've always asked about that as you open up the funnel, does it bring on more fraud? Any interesting observations There, that's all I had for you. Speaker 300:46:42Yes. Thanks for the question. Early observations are no as we've opened it up and we've not seen any meaningful change in our Fraud losses is something we're monitoring very closely and will adapt. Our main focus we've talked about with the team that runs this is we're looking for profitable transactions, not just Speaker 400:46:58transactions and revenue. So it's one of those things we're Speaker 300:46:58going to monitor and adapt as we So it's one of those things we're going to monitor and adapt as we find that sweet spot. Speaker 200:47:04In Tien Tsin, I think Matt would have the specifics, but one of the Things as we again are working on funnel optimization, we actually saw our fraud results improve Significantly, which then gave us the ability to say how could we use that capability to grow our customers. So year over year period Over period, our fraud results have improved, not worsened. Operator00:47:32Our next question Comes to us from Rayna Kumar from UBS. Please ask your question. Speaker 700:47:39Hi, good evening. Thanks for taking my question. Just wondering on the Q2 operating margin, that was expected to be below the full year outlook, I think was your initial guide, but And it ended up being near the high end of the range. So just curious what came in better than expected there? Speaker 300:47:57Hey, Rana, it's Matt. The principal driver of that is Iraq, having the extra revenue there that was not anticipated when we put out our guidance. That represents a large portion of the over delivery. The other part that's driving it is the fact that we are still outrunning our ability to invest with our cost savings program. Speaker 700:48:17Understood. And then, as a follow-up, I know last year you guided to mid single digit EPS growth beyond $0.23 So is it a safe assumption to say that you're still on track For that mid single digit growth in 2024 excluding that $0.10 benefit from Iraq. Speaker 300:48:35So I am looking forward to talking about 24 in February, But you've probably directionally got some good assumptions. Speaker 700:48:44Thank you. Operator00:48:48Our next question comes to us from Tim Chiodo from Credit Suisse. Please ask your question. Our next question comes to us from Ken Chukauski from Autonomous. Please ask your questions. Speaker 800:49:18Hi, good afternoon, everyone. Thanks for taking the questions. I like the chart on Slide 8 of the slide deck that shows the transaction growth and the constant FX revenue growth for the branded digital business. And it looks like the gap Between those two lines has widened a bit in 2Q versus 2Q or 2Q versus 1Q. I'm just curious how you expect that spread to Trends over the next few quarters. Speaker 800:49:43Thanks. Speaker 300:49:45Hey, Ken. Thanks for joining the call. As we talked about last quarter, we expected this quarter The widest part of that expansion, I think we talked about that in the Q1 call, and we would expect it to narrow throughout the remainder of this year. And as Devin talked about a few moments ago, we would we've been talking about when we constantly give out our new customer growth, We're expecting the all three numbers will converge over the future quarters. Speaker 200:50:11And Ken, the gap is probably A little bit wider than we anticipated, and that's driven by success On ongoing customer transaction trends that are slightly better than we anticipated as well. And so what you're seeing is Slightly better retention of the new customer base is transacting slightly higher than we expected, which is causing The transaction trends to outpace a little bit of what we thought. Speaker 800:50:42Okay, great. And then maybe just as my follow-up, I want Ask about the composition of the digital business because obviously this is a business that's accelerating, looks like North America growth Strong. What's the geographic composition of that business? And maybe you could provide some detail on the growth rates Across those regions, I'm just curious if you're seeing improvement in Europe and other parts of the world? Speaker 300:51:08Hey, Ken. We have historically not We've not given that information out, but what we've typically told everybody is you can look at the mix of our overall C2C by region and that will give you a sense for The overall dispersion around the world, they pretty closely match the size of each region around the world. So as Devin talked about, we launched in North America First, followed by Europe. Those are the Operator00:51:40Our next question comes to us from Jason Kupferberg from Bank of America. Please ask your question. Speaker 900:51:48Thank you. I have a question just related to the outlook for the balance of the year. I'm just looking at adjusted revenue growth through the first half of the year. I think that's up 4%, the midpoint of the full year guide is 0. So I guess we're looking at negative 4% In the second half, I know that Iraq helped you by 10 points in the second quarter, so you would have been minus 1% instead of Plus 9. Speaker 900:52:13So I guess I'm just looking at that kind of -one Iraq adjusted number in Q2 and trying to see what the pieces are between the 1 in Q2 and then what looks like kind of minus 4 in the second half and just want to make sure we have all those piece parts in the model. Thank you. Speaker 300:52:32Jason, I'm not sure I completely follow, but I'll try to play it back. And if I get it wrong, we can take it offline with Tom and team. But What we have done this quarter is we've taken up our guide based on the revenue expectation from Iraq for the 3 month period of April through July, and flowed that through. And the outlook for the back half of the year is largely similar to what we had originally when we gave our guide. Speaker 400:52:58So I Speaker 600:52:58don't know Speaker 300:52:59if I answered your question, but we can take it offline and go a little deeper if you want. Speaker 900:53:04Okay. Yes, no, We'll do that. I guess my follow-up just on the C2C transaction growth if we exclude Iraq and Russia, Belarus, obviously the plus 2% in the quarter. What are you assuming for that metric in the second half? And then if you would deconstruct it into digital versus retail as well? Speaker 900:53:24Thanks. Speaker 300:53:26Yes. We're not really providing that level of outlook. There's a lot of moving parts in our business and we're Operator00:53:42Our next question comes to us from Andrew Schmidt from Citi. Please ask your question. Speaker 1000:53:51Hey, Devin. Hey, Matt. Thanks for taking my questions. I appreciate all the commentary here. On the digital business, I'm wondering if now that we're further along in the new strategy, if there are any comments in terms of what you're seeing in terms of LTV to CAC or payback period levels and then correspondingly, as you do get more comfortable with the new economics Of the digital business, post the new promotional strategy, if there's an opportunity to get more aggressive with marketing budgets and customer Speaker 200:54:28Andrew, thank you. As you can see in the Results, we are in fact being disciplined on LTV to CAC, which is one of the reasons marketing spend is down period over period. One of the important parts of our program, and that is part of why I was talking about those conversion rates and those acceptance rates, Is to be able to scale marketing investment profitably in order to continue the growth trajectory that we aspire to. And so we would and will, as we can, deploy more marketing dollars to drive more growth, but we are going to ensure that we are doing so at a responsible level. Speaker 300:55:08And Andrew, just a reminder, you probably heard this last quarter, but our CAC came down last quarter about 20%. We didn't update that this call here, but we'll continue, as Devin just talked about, to be very mindful where we spend it and making sure we have that right conversion ratio. Speaker 200:55:24While we're driving while we've been driving 20% new customer growth, right? Speaker 300:55:28Correct. Speaker 200:55:29This has been a comfort for good things, right? Speaker 1000:55:33Yes. Understood. Very clear. And then just A quick follow-up. Great to hear about the sequential improvement in the retail business. Speaker 1000:55:40I know we get a lot of questions about that. Maybe in North America, if you could talk about Just independent channel versus big box. I know, Devin, you talked about a lot of improvements you're making and those are good to hear. But Curious if there's any, just qualitative commentary on the performance across those 2 channels. Thank you very much. Speaker 200:56:01We believe, Andrew, that our branded distribution, both big box And independent is a strategic advantage for us. That's true in North America, but it's also, as we've talked about, true in Europe where we're expanding what we call concept stores or branded exclusive distribution. So we've been actually putting a lot of emphasis on how do we Grow that, how do we create great experiences for those agents and how do we serve customers through those channels. As you know, the independent agent channel, the customers exist And the agents basically compete on the basis of price and agent commissions. And so over time, that's just a less attractive channel in which to drive growth. Speaker 200:56:46We will compete in it, and I think we're doing well as evidenced by Europe, which is predominantly independent agent channel at this point. But over time, we will be emphasizing our branded exclusive, both strategic, which is what you call big box And independent, which is our smaller mom and pops. Operator00:57:09Our next question comes to us from Tim Chiodo From Credit Suisse, please ask your question. Speaker 1100:57:16Great. Thanks a lot. Sorry about that earlier. The Slide 9 seems to be one of the core slides In terms of the core underlying trend for retail, it excludes some of the year over year impacts from the IRAC impact and it shows an improving trend there. I know Jason took a stab at that in terms of seeing where that could exit the year, but it does seem to be working its way back towards positive. Speaker 1100:57:37Maybe you could just put a little bit more regional color on maybe some of the areas of strength in terms of the core retail business that is driving that line upward? And then as a brief follow-up, this was kind of referenced earlier, but this topic comes up from time to time. But rather than looking Added on a percentage of retail locations, but maybe you could just give a brief update on in terms of percentage of transactions, how many of those are coming from Speaker 300:58:07Hey, Tim. Thanks for joining. On your question about where is it coming from, we're actually seeing strength in really all of our regions. The only place that's really been flat quarter over quarter, I talked about in the prepared remarks, is Laca, But they've obviously been the high watermark now for a number of quarters in a row, whereas other regions are starting to make improvement. I also highlighted in my remarks about APAC, they have seen really strong improvement in retail as well as our digital business. Speaker 300:58:36Devin highlighted and I added to it on Africa has seen a 500 basis point sequential improvement largely as a retail market. So you can really see this in a lot of places around the world. It's not one place. It's a lot of the things that we're building on our platform around customer service and on our POS solutions It's benefiting most of the regions, if not all. Speaker 200:58:56And the only thing I would add to that, Tim, right, and it was in the prepared remarks, getting Europe To now what is near flat negative 1 percent transaction growth, given the sheer scale of European Retail Business and our Global Retail business is a big driver of the change from negative 6 to negative 2, just from a math basis. Operator00:59:22Our final question comes to us from Vasu Govil from KBW. Please ask your question. Speaker 1200:59:30Thanks for taking my question. I guess 2 quick ones. 1 on just the margin guide. I know the margin guide is unchanged, but we're tracking Ahead on a year to date basis, so should we expect to be at the higher end of the range, sort of any color that you can offer on the cadence of margin expectation from here? Speaker 300:59:49Hey, Vasu. Thanks for joining the call. We're not going to guide one way or the other in the range. We intentionally left it wide because we want to have flexibility, but we are committed to The EPS range we provided, so you can model a couple of different sensitivities there and think about where it may go within the range based on what happens in non op and taxes. But our focus is to maintain some flexibility if the right opportunities for investments happen and then make sure that we deliver the commitments we've made to you all and our shareholders. Speaker 1201:00:18Got it. Thank you for that. And one question for Gavin. I wanted to ask about the digital bank initiative. I know you rolled it out in a couple of regions in Europe now, in Brazil, in the U. Speaker 1201:00:26S. Sort of. In Europe now, in Brazil and the U. S. Sort of, the whole thesis there was to help increase engagement And retention even if it didn't bring any new revenues. Speaker 1201:00:37And so just curious, it's early days, but what have you seen on that front? And Any metrics you've seen that sort of help demonstrate the increase in engagement that you might be seeing? Speaker 201:00:50Anya, thanks for asking. I think the comments that we had on the second or the Q1 call now into the Q2 call Remain consistent, right? We are live in 4 countries. We are anticipating going live here in Brazil shortly, and we are looking forward to a launch in the U. S. Speaker 201:01:09At least in friends and family before the end of the year. Our experience has been pretty much validating, which says Current and existing retail and digital customers as well as surprisingly, lapsed Retail and digital customers using the Digital Wallet product end up being more valuable customers to us in the Digital Wallet product, both from an engagement standpoint, I. E, the number of transactions per month is up significantly as well as on an economic value in terms of the value or revenue generated per customer on a monthly basis. So we've been working hard on improving the experience and the onboarding for those existing and former customers In terms of being able to grow that population of the customer base in the wallet versus what we call new to franchiser, Customers who are not traditional remittance customers, those look a lot more like other people's digital banking customers, which are less economically Operator01:02:25Thank you for joining the Western Union's 2nd quarter 2023 results conference call. We hope you have a great day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallWestern Union Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Western Union Earnings HeadlinesMagnite (MGNI) Partners with Western Union to Enhance Ad Buying CapabilitiesApril 17 at 9:30 PM | gurufocus.comWestern Union Partners With Magnite to Grow Media Network BusinessApril 16, 2025 | pymnts.comTrump to unlock 15-figure fortune for America (May 3rd) ?We were shown this map by former Presidential Advisor, Jim Rickards, one of the most politically connected men in America. Rickards has spent his fifty-year career in the innermost circles of the U.S. government and banking. And he believes Trump could soon release this frozen asset to the public. April 20, 2025 | Paradigm Press (Ad)Western Union (WU) Partners with Magnite to Enhance Media Buying CapabilitiesApril 16, 2025 | gurufocus.comWestern Union Media Network Taps Magnite to Expand Advertising CapabilitiesApril 16, 2025 | globenewswire.comWestern Union (WU) to Release Earnings on WednesdayApril 16, 2025 | americanbankingnews.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. The company was founded in 1851 and is headquartered in Denver, Colorado.View Western Union ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Aviation Unveils NYC Network Ahead of Key Earnings Report3 Reasons to Like the Look of Amazon Ahead of EarningsTesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? 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There are 13 speakers on the call. Operator00:00:00Good day, and welcome to the Western Union Second 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. I would now like to turn the conference over to Tom Hadley, Head of Investor Relations. Operator00:00:19Tom, please go ahead. Speaker 100:00:22Thank you. On today's call, we will discuss the company's Q2 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. 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 Kegwin. Speaker 100:00:52Today'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. We have reconciled those items to 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 200:01:39Good afternoon, And welcome to Western Union's Q2 2023 financial results conference call. We are pleased with the results We reported today and the progress we are making against our Evolv 2025 strategy. The work we have been doing to deliver sustainable positive revenue growth is beginning to take effect. In the quarter, we continued to drive improvements in the underlying trajectory of our business with positive transaction trends across both our branded digital and our retail businesses. Recall, 2 key pillars Our evolved 2025 strategy includes stabilizing our retail business and returning our digital business to low double digit growth rates. Speaker 200:02:31The 2nd quarter was continued evidence we are making good progress on both objectives. The 2nd quarter was the first time in 8 quarters that we have achieved positive transaction growth across the company with total C2C transactions, excluding Iraq, growing 2% year over year. This is a significant improvement from the double digit negative transaction trends we saw for most of 2022. I will provide more details on some of the initiatives we are working on, but first, let me provide a quick summary of our financial results. Our total revenue in the quarter reached $1,170,000,000 reflecting a 9% increase On a constant currency basis, when excluding the contribution from Business Solutions compared to the same period last year. Speaker 200:03:28This growth was driven by several factors, including improving fundamentals in our core business, the increase in revenue from Iraq and the benefit of Argentinian inflation. Adjusted earnings per share came in strong in the quarter at $0.51 Matt will further discuss our financial results in more detail and provide an update on our enhanced 2023 financial outlook. Shifting to the macro. Last month, the World Bank came out with its semiannual migration and development brief, which is calling for low single digit remittance principal growth in both 'twenty three and 2024. The World Bank noted headwinds to faster growth in remittance volumes, including a slowing global economy, persistent high inflation, Increased interest rates and Russia's invasion of the Ukraine. Speaker 200:04:28These are all macro themes that we have spoken about in recent quarters in factors we are paying close attention to. Nevertheless, we continue to see resilience in our own customer base. With the average PPT, excluding the higher PPT from IRAC, remaining relatively flat year over year. We also continue to believe that there are significant opportunities within our own business that will allow us to One of those important opportunities is the acceleration of our branded digital business, which has been a key focus and the primary driver of the transaction improvements we have seen in recent quarters. This business has continued to show momentum in the quarter With 12% growth in transactions globally, which is a significant acceleration of the transaction growth trend We reported in the Q1 of 2023, which was up 7%. Speaker 200:05:39Constant currency branded digital revenue Also improved this quarter sequentially to minus 2% with transactions up 12%, which reflects improvement in the underlying health of the business compared to the Q2 of last year, by focusing on growing our customer base again, which in turn would lead to growth in transactions and finally, growth in revenue would follow. I am pleased that we are on track and maybe even slightly ahead of the trajectory we laid out at our Investor Day last fall. These improvements in our branded digital business are attributable to the successful execution of our updated go to market strategy, which is driving meaningfully more customers to our digital properties. In the quarter, we saw global new customer acquisition up 20%, which underscores the effectiveness of our marketing and customer acquisition strategies as well as the improvements made to our customer onboarding, Funnel conversion and overall customer experience. A central element of our updated go to market strategy It's the constant focus on ongoing improvements in funnel optimization. Speaker 200:07:11In the second quarter, We simplified our historical registration process by limiting the number of fields required to register and by moving our value proposition front and center to help drive customer conversion. As a result, We have improved our web registration conversion rates by almost 500 basis points in our U. S. Outbound business relative to the Q1 of 2023. In addition to approving our registration conversion rates, We've also seen dramatic improvement in our first transaction approval rates. Speaker 200:07:50In the Q2, our first transaction approval rates And our U. S. Outbound business increased roughly 600 basis points year over year, driven by several improvements we have made to our decisioning models. For example, our new omni channel customers For our new omni channel customers, we now use a customer's previous retail transaction history in our digital approval process, which predictably significantly enhances decision outcomes. As previously discussed, our updated go to market strategy is focused on optimizing LTV to CAC By leveraging data driven insights to improve audience targeting and funnel conversion, we continue to see a sustained improvement And our branded digital customer acquisition costs, which has strengthened our belief that the changes we are making Are indeed durable. Speaker 200:08:55Moving now to our retail business, which is powered by our extensive agent network Of over 400,000 active locations providing accessible financial services to those customers who prefer in person transactions. As we have discussed and expected, given the scale and dispersion of our retail business, Performance improvements will take more time. Our retail business saw positive transaction trends in the quarter With 120 basis point improvement in the growth rate relative to the Q1, excluding Iraq, Russia and Belarus. Performance year to date supports our belief that the retail transaction trends can continue to improve over time, which is needed to stabilize our retail business as laid out in our Evolve 2025 strategy last fall. Nowhere has this evolution been truer than in Africa. Speaker 200:09:57In the quarter, we saw 6% revenue growth in our retail business in Africa. The management team that we have there is top notch and has been laser focused on driving improved retail performance across the region. More broadly, in Europe, we continue to make progress on our controlled distribution strategy, where we have now launched over 70 new concept stores since last year. During the Q2, we also opened 2 exclusive Western Union Branded Corporate Owned Stores in Belgium. This type of distribution allows us to control the customer experience, increase the number of products and services we offer, promote the retail to digital escalator and allows us to have deeper engagement with our customers. Speaker 200:10:50Our focus with the Evolve 2025 in retail Has been to significantly improve our customer and agent experiences, including faster transactions, Better end to end customer and agent experiences and higher quality agent support. As an example, I want to give you just a quick Update on the quick resend function that we discussed on the last call. The use of quick resend, where repeat transactions can be executed in a Fraction of the time that was historically required continues to increase across our U. S. Agent base and has grown by over 10 times from March of this year. Speaker 200:11:35In June, over 30% of all transactions completed at our V Go brand We're done using this quick resend functionality. These types of process improvements may sound small in isolation, but we believe they can add up and become meaningful. A better customer and agent experience can ultimately improve retention and drive growth in the near term, but they are also driving efficiency throughout our organization. For example, roughly 15% to 20% of all calls to our call centers We're associated with a refund request. As a result, we launched a process called 1 Step Refund, which created a self-service tool for our agents to process refunds in one step and avoid the need to engage our support staff. Speaker 200:12:32During the month of June, we saw a 20% reduction in refund support calls. In more recent weeks, The percentage of refunds processed by our agents without call center support surpassed 50% of all refunds processed globally, up meaningfully from the mid teens range that we were at early last year before we scaled this one step Refund process. The 1 step refund process was designed primarily to improve agent and customer satisfaction. However, by simplifying the refund process, we now have fewer calls coming into our call center and thus can reduce run rate costs while focusing our customer service representatives on resolving more complex issues with better, more personalized support. Last year, on the Q1 earnings call, I talked about the process improvement opportunities I saw It could enable us to invest for growth while maintaining our strong margins. Speaker 200:13:41While transaction volumes Have been increasing in recent months, monthly call center volume has decreased to the lowest level in at least 8 years. Agent support calls have also dropped and collectively we have seen a 30% decrease in total call volume, driving our contact rate down by over 20% year over year. I look forward to sharing more on this topic with you in coming quarters. We continue the build out of our broader ecosystem strategy and are pleased to announce the launch of our new prepaid debit card in North America. Just this month, we completed the first commercial transaction on our prepaid card and have begun a friends and family rollout in the U. Speaker 200:14:32S. This card will provide with a convenient and secure payment solution, allowing them to manage their finances with greater flexibility. By reintroducing a prepaid card solution, we aim to expand our product offerings and provide additional value to our customers. We are also now in the final phase of our friends and family testing in Brazil, and we expect our new digital wallet to go live In the Q3, Brazil is one of the few markets where our digital business is larger than our retail business on a transaction basis. As such, we are excited to be able to expand our digital offering in this important market. Speaker 200:15:18Last month, I had the opportunity to visit Europe and review the progress we are making with our digital wallet there. We have continued to focus on the 4 markets we have launched so far and have made improvements to the onboarding processes And to the customer migration experiences, as noted on the last call, current Informer, digital and retail Western Union customers Continue to be our most valuable wallet customers. Improving the omnichannel experience will be important to further expand with these segments. Finally, shifting to some new additions to our executive team and partnerships. First, I would like to announce the addition of Sam Jawad to our management team as the new Head of Ecosystem. Speaker 200:16:09Sam joins us from ACI, where he served as the Executive Vice President and Global Head of Banking. Sam brings nearly 20 years of experience in digital banking and payments and has a strong track record of business building. I would also like to announce the addition of Karen Whelan as our new Chief People Officer. Karen joins us from West Corporation, where she was the CHRO. Karen brings nearly 20 years of experience in human resources and is a high impact leader that will play an important role in supporting us with our ongoing Evolv 2025 transformation. Speaker 200:16:55Lastly, We have partnered with UNICEF to provide our quick cash services. This partnership links closely with our purpose, which aims to help people prosper. We are also publishing our annual ESG report in the coming weeks, which will highlight our ongoing progress with key ESG focus areas, including furthering economic prosperity and promoting the integrity of the global money movement system. Looking ahead, we remain optimistic about our strategic direction and the positive progress we are making. The global payments landscape continues to evolve rapidly, driven by increasing digitization, changing customer preferences and our customers' aspirations for more. Speaker 200:17:44Western Union is well positioned to capitalize on these trends. Our digital services, Combined with our extensive retail network, position us as a trusted provider of flexible and reliable financial solutions To the aspiring populations of the world. In conclusion, we are pleased with the improved trajectory of our business, Driven by improving transaction trends across both our digital and retail businesses, our investments in digital acceleration And customer centric initiatives are driving the company forward. We are excited about the launch of our new prepaid card solution in North America and the opportunities it presents as part of our ecosystem offering. We remain committed to delivering value for our customers, our shareholders and other stakeholders, while adapting to the rapidly evolving market dynamic. Speaker 200:18:43Thank you for joining the call today. I would now like to turn the call over to Matt to discuss our financial results in more detail. Speaker 300:18:52Thank you, Devin, and good afternoon, everyone. I'm delighted to be here today to discuss our financial performance over the past quarter and highlight some of our key achievements. I will also outline our outlook for the remainder of the year. Let's start by discussing our financial results. In the Q2, Westin Union delivered adjusted revenue of $1,170,000,000 Representing a 9% increase year over year, we exceeded our internal expectation due to the revenue increase from Iraq as well as a 3% benefit from Argentinean inflation. Speaker 300:19:34As you may recall, we shared last quarter that a monetary policy change in Iraq drove a 2% benefit to adjusted revenue as we are able to quickly adapt to serve our customers. That benefit continued in Q2, providing a 10% benefit to adjusted revenue. While this meaningful benefit in the quarter, We expect Iraq volumes to be significantly lower going forward. I will discuss our forward looking assumptions when we get to the financial outlook in a few moments. We also continue to make progress with our Evolve 2025 strategy, growing C2C transactions for the first time since 2021, led by the continued momentum of our branded digital business, which grew 12% in the quarter. Speaker 300:20:26As Devin highlighted earlier, we are optimizing our branded digital go to market strategy and saw sequential improvement and overall funnel conversion during the quarter. Our retail business also saw improving transaction trends even excluding Iraq. Adjusted operating margin was 21.8% compared to 23.3% last year. Nearly half the decrease was driven by currency impacts, including those related to our hedging program. The remainder of the decrease was due to higher variable costs In investments related to our vol 2025 strategy, partially offset by lower marketing spend and net savings related to our expense redeployment program. Speaker 300:21:16As you may remember, last October, we launched a 5 year $150,000,000 expense redeployment program. I'm excited about our progress. Since launching, we have taken action that will allow us to free up more than $45,000,000 in 2023 with over $30,000,000 of total savings recognized year to date. This has positively impacted our adjusted operating margins It is our ability to save continues to outpace our ability to invest. Adjusted EPS was $0.51 and was flat year over year with the current period benefiting from lower share count, lower adjusted tax rate, partially offset by lower profit. Speaker 300:22:03Now turning to the C2C segment. Revenue grew 5% on a constant currency basis led by Iraq with transaction growth of 4%. All regions except for Laca drove sequential transaction improvements and Laca's historically strong growth stayed flat quarter over quarter. For our Branded Digital business, revenue was down 2% on a constant currency basis On transaction growth of 12% and had new customer growth of 20%, driven by our updated go to market strategy launched last We expect to see positive global revenue growth in the Q4 of this year. Now moving to the regional results. Speaker 300:22:50In the Q2, North American adjusted revenue decreased 7%, while transactions accelerated and grew 4% led by our branded digital business, which had 15% growth in the quarter. Transaction trends also improved 100 basis points sequentially in our retail business. And in North America, we continue to expect revenue growth in our North America branded digital business in the 3rd quarter. Revenue in Europe and CIS was down 10% on a constant currency basis, while transactions declined just 1%. As we've discussed previously, the region has faced a tough macro backdrop along with continued competitive pressures driven by the Russian invasion of the Ukraine, stubbornly high inflation and the loss of which is a combination of leveraging our controlled distribution through owned and concept stores, as Devin discussed earlier, new agent onboarding and enhancing our value proposition in the marketplace. Speaker 300:24:06We're very encouraged by our early results of this program, which led to a 300 basis point sequential improvement in retail transactions, excluding Russia and Belarus. Revenue in the Middle East, Africa and South Asia region accelerated meaningfully, growing 67% driving the revenue growth. As Devin mentioned, we are also seeing solid improvement in our African retail business with revenue up 6% on 500 basis points of sequential improvement in transactions. This is driven by enhanced On the ground execution and marketing, several new wallet partnerships and good adoption of some of our new retailer enhancements such as One Step Refund. Constant currency revenue and transactions in Latin America and the Caribbean were up 8%. Speaker 300:25:10This solid performance in the quarter was led by strength in Argentina, Ecuador and Venezuela. The sequential revenue growth was down due to mix, including yield impacts from higher exchange rates, which have put pressure on higher ticket transactions in certain countries. And finally, revenue in APAC was down 4% on a constant currency basis with transactions up 1%, led by our branded digital business. APAC has driven a significant improvement in its transaction trends versus the double digit declines that we experienced last year. This has been led by growth in Australia, Japan and Korea. Speaker 300:25:55Now moving to our other segment, which primarily consists of retail bill payment in Argentina and the United States In retail money order in the U. S, other represents 7% of total company revenue and grew 10% year over year On a reported basis, benefiting from higher interest rates in our retail money order business as well as solid transaction growth. We are also excited to announce the completion of the final phase of Business Solution disposition, which occurred on July 1. Now turning to our cash flow and balance sheet. Year to date, we have generated $264,000,000 of operating cash flow, which includes a transition tax payment of $119,000,000 in the second quarter. Speaker 300:26:45As a reminder, these tax payments Capital expenditures were $33,000,000 in the quarter and $90,000,000 year to date. As mentioned last quarter, we expect lower agent signing bonuses And the Q1 included large payment that was committed to during the second half of twenty twenty one. We continue to maintain a strong balance sheet with cash and cash equivalents of $1,600,000,000 and debt of $2,800,000,000 Our leverage ratios were at 2.7 times and 1.2 times on a gross to net basis, which is up given the timing of payments around the Eid holiday. These leverage ratios continue to provide us with flexibility for potential M and A while maintaining investment grade credit rating. Now moving to our outlook. Speaker 300:27:43Today, we raised our 2023 adjusted revenue and EPS outlook due to higher revenues in Iraq. As mentioned earlier, We expect these volumes from Iraq to be significantly lower going forward. This is due to recent U. S. Government actions, which shut down a number of our agents in Iraq, potential regulatory changes in Iraq or the U. Speaker 300:28:07S. And or policy changes made by ourselves in the region. As a result, due to the high degree of uncertainty, we have only included the elevated remittance volume from Iraq Speaker 200:28:23And our outlook Speaker 300:28:23through the end of July. Our outlook also assumes no material changes in macroeconomic conditions. We now expect adjusted revenue to be in the range of down 1% to up 1%. This is an improvement from our previous range by 300 basis points. We continue to expect to have adjusted operating margins to be in the range of 19% to 21%. Speaker 300:28:46And lastly, Adjusted EPS is now expected to be in the range of $1.65 to $1.75 which is a $0.10 increase from our previous range. Looking ahead, we remain optimistic about our prospects for the remainder of the year. We will continue to invest in key growth areas related to our Evolve 2025 strategy, including prioritizing customer and agent satisfaction. Thank you for joining the call. And operator, we're now ready to take questions. Operator00:29:17We will pause momentarily to compile the Q and A roster. As a reminder, Our first question comes to us from Will Nance from Goldman Sachs. Please ask your question. Speaker 400:29:44Hey, guys. Thanks for taking the question. You mentioned you think you might be trending ahead of your own So a lot of inside that strategy, you mentioned a few things that you're doing To improve authorization rates, customer acquisition, digital transaction growth, anywhere in particular within those initiatives where you would point That kind of drove that. And then I guess secondarily, you kind of have this sort of one off windfall from Iraq. You mentioned accelerating some investments in the At least that being an offset in the quarter on the Evolve25 strategy. Speaker 400:30:22So if we put it all together, you're ahead of plan and you've got more Resources, where do you think is the best place to incrementally accelerate investment strategy? Speaker 200:30:32Will, thanks for joining the call. We are excited about the progress that we're making with EVOLVE 2025. And I think as demonstrated today In the sequential improvement in transaction trends in both digital and retail, We're at or slightly better than what we expected as we had talked about first growing customers, then growing transactions, which will then turn into revenue. Our ongoing investments fall into 2 or 3 categories. 1 is around continuing to update Our product experience and our customer service and agent experience. Speaker 200:31:12And you heard today some of the places where we've been investing in our platform and our products and our ability to deliver those seamlessly to our customers and through our agents. As we find opportunities and have the capacity, We will continue to accelerate in those kinds of investments that can indeed improve either our onboarding experiences, our funnel Our output or our agent support experiences, many times that requires investing in technology, as we talked about in Evolve 2025, Driving both our customers and our agents towards better self-service and more automated experiences Not only reduces operating costs, but improves our ability to serve and grow those customer bases. The second place where we really look is To our go to market, and you heard on the call today, both continuing to invest in our audience targeting and our marketing, as well as in our retail footprint and our go to market strategy. So as again, as we have capacity and ability, we'll continue to make Investments in those. The 3rd place is in our human resources and on our team and our talent. Speaker 200:32:22You heard about 2 additions today to our senior team. That is trickling through our entire organization as we bring new capabilities and new team members on board to help drive the strategy. I'll turn it over to Matt for the second part of your question. Speaker 300:32:38Hey, Will. Just to your second part. Also as you think about this, the vast majority of the uplift we got from Iraq, we have flowed through our revised guidance. We've only taken a modest amount into our Investments Devin just walked through. As we also highlighted, we've been able to save much faster on investment levels. Speaker 400:33:00Got it. Appreciate that. And then maybe just a clarification on the rock moving pieces. I mean, you mentioned in the press release, Discussion with policymakers, obviously, distinction. I guess on the other side of this event, like do you expect The Iraq revenues be like the same or is it going to be at a lower level post the sanction event? Speaker 400:33:21And then on the expense side, are there any kind of Expense compliance related investments that will result from the subsequent? Speaker 300:33:30Yes. Will, thanks for the question. So since the new guidance coming out from the U. S. Fed, which was put out about a week ago, we've seen a decline in our run rate from the first Part of July by about 70% reduction. Speaker 300:33:44That turned off a number of our agents in that marketplace. To your question about Investments for compliance and other things, as you know, we've got a very robust compliance program. It's one of the reasons why we're able to take the ability to service these clients when the opportunity came arise. But we have also put a little bit more money into that market, some of where the incremental revenue and profit we got from Iraq has gone back into the compliance space over the last few months. Operator00:34:16Our next question comes to us from David Togut From Evercore, please ask your question. Speaker 400:34:23Thank you. Good afternoon. Just to clarify, how much of the $0 increase in the EPS guidance range for this year comes from Iraq? Speaker 300:34:34David, it's Matt. Virtually all of it or all of it, All of it. Our core business is operating as we expected. We had a as we talked about for our guidance last year, We put out a range and we are well on our way for where that was and then Iraq is driving the after uplift. Speaker 400:34:53And then maybe just staying on this point, how much of the change in Iraq do you think is structural where there could There should be some benefit to Western Union beyond 2023. Speaker 300:35:04It's too early to know, David. That's one of the reasons why we put it out there as it being uncertain. It's been a very evolving situation. We have regular calls with the regulators in both markets. We're trying to help They're trying to balance overall macros around the world. Speaker 300:35:21So it's uncertain what they're going to do. Speaker 200:35:24The only thing I would add, David, is evidenced by the last, call it, 4 or 5 months, we are well positioned in the market relative to Other alternatives, as Matt highlighted, we have very strong risk and compliance. And so as the situation evolves, Know that we are at the ready and prepared to evolve with it and take advantage of anything that might be advantageous Operator00:35:57Our next question comes to us from Darrin Peller from Wolfe Research. Please ask your question. Speaker 500:36:07Guys, thanks. I mean, very quickly, just a follow-up again on Iraq, but I do want to Another more fundamental question, but the magnitude of contribution from Iraq, I guess, 10 points over $100,000,000 I guess it's a bit surprising when you generally don't see more than a few percent concentration in any one given market. So how is it that material You guys given what you're describing is a 10 point lift to revenue growth. Maybe just help us understand the dynamics. So some of that Maybe sustainable, some part of that seems pretty high. Speaker 500:36:39And then more constructively and fundamentally, I would say, the Digital transaction acceleration to be followed by revenue growth across the business is definitely what we wanted to see. And so, Devin, maybe just revisit that again. I mean, the timeline on transaction acceleration, U. S, maybe Europe next, How that translates to revenue growth reacceleration on the digital side? And then a quick comment on retail, because it looks like that did get a little better, Just looking at the math between the digital growth and the total transaction growth and what's going on in Speaker 400:37:11the retail side. Thanks guys. Speaker 200:37:13Hey, Darren. Thanks for joining the call. With regard to Iraq, remember back in February, early March timeframe, there was a change in the Central Bank Policy for the entire country. Western Union was uniquely positioned, given the strength of our agent distribution relationship, particularly the relationship with local Iraqi banks, to take advantage of that change in policy and enable the ongoing out flow of remittances and remittance values, which as you can see from this, were significant. In essence, what was a shutdown of the banking system's ability in Iraq to do outbound remittances. Speaker 200:37:56We would not have any expectation that it would continue At this level, Matt has highlighted both the regulators in Iraq and in the U. S. As well as the central banks We are working to find a new policy and a new procedure for the regulated banks in the country to go back into the export That said, as I said earlier, we continue to be well positioned. And as the market evolves, one of the things that We have noted is there's been an adoption of more digitally oriented services, of which, again, we've had strong partnerships with The digital players and the digital wallets in the country, which may induce consumers to stay within that experience and not go back to the more bank oriented experience that prevailed in the marketplace before this change. So it's a rapidly evolving situation. Speaker 200:38:53We continue to have strong presence on the ground. We continue to work across the regulators and the central banks, And we look forward to keeping you guys updated as it goes along. Outside of Iraq, we are pleased with the trajectory both on digital and retail. For digital, we continue to lay out a plan that Brings us to positive revenue growth in the Q3 for the U. S, which is where we launched The program in August of 2022, but really didn't start ramping it until September. Speaker 200:39:31As we originally laid out On our Investor Day, we had talked about a 12 to 18 month timeframe in order to You'll lap the investments that we were making in order to drive new customer acquisition. I anticipate we will do that within the We expect the entire business and as you recall after we started seeing success in North America, we We began rolling it out to important countries in Europe. And then in the Q1, we started expanding that to important countries in the rest of the world, including places like Australia. And so if you see in our results the growing transaction trends not just in North America, but as our new go to market program Evolves into the rest of the world, the same outcomes and performances are being repeated. That said, we expect, as Matt indicated, to get to Global positive revenue growth by the end of this year in Q4. Speaker 200:40:37And so we are on pace with the plan we laid out at our Investor Day, Transaction and revenue growth will normalize as we continue to grow over the investments that we made over the course of the last year. On the retail side, we're quite excited about and one of the reasons I spent a bunch of time highlighting the progress that we're making In changing our agent experience, changing the productivity of our agent base and in better serving our retail customers, which is now starting to articulate into the results that you're seeing on a quarter over quarter basis. Even in the most troubled places like in Europe where we have struggled with our agent network And the macro forces there, you saw that we're now approaching nearly flat transaction growth period over period. Speaker 500:41:33That's great. Thanks, Evan. Operator00:41:36Our next question comes to us from Bryan Keane from Deutsche Bank. Speaker 400:41:49Hi, guys. Devin, I want to follow-up on that, on Europe and CIS, that improvement that It's been significantly negative growth rates, double digit growth rates for several quarters. Just to understand the turn there, It's almost flat now and what's the outlook going forward? Can that go positive going forward in Europe and CIS region? Speaker 200:42:14Look, we have Europe is the place where we've been working quite hard, particularly on the retail side, And there are multiple factors in Europe, both across the macro of the region, but also across And so what you see is we are seeing pockets of growth where we've made investments, where our in going position with our agents and Customers was better. Those include Spain, the U. K. And Italy, in larger markets where like France and Germany, where we have a weaker starting point from when we launched the program, those are still mid to high single digit negative transaction growth. So we believe as we bring the larger countries, and we add more agents and we add more distribution Closer in line with some of the other places where we're seeing net transaction positive growth, we can get the whole region As we have stated in our strategy last fall to low single digit transaction growth. Speaker 400:43:22Got it. And I don't know, Matt, if you guys gave this number, but the in the Middle East and That region that had the big pop in revenue growth, primarily due to Iraq, What would have been the normalized transaction growth rate, I guess, ex Iraq in that region? Speaker 300:43:46We did not provide that number. It would have still been a Sequential improvement like many of the regions around the world approaching 0. Speaker 400:44:03Got it. Okay. Thanks for the help guys. Operator00:44:07Our next question comes to us from Tien tsin Huang From JPMorgan, please ask your question. Speaker 600:44:15Great. Thank you. Thanks. Good afternoon. Just on the acceleration to the 12% growth it's nice to see for The digital branded piece, does that, Devon, change your thinking on broadening your promotions and geo expansion? Speaker 600:44:27I'm curious on that. And is it related some of the comments you made on improved transaction approval rates and things like that, I wasn't sure if those things We're tied. And I guess if you don't mind, if I just add my follow on to that, just with the approval rates, Any changes in the fraud activity or surprises there? Thanks. Speaker 200:44:49Thanks, Tien Tsin. Great to have you on the call. Our ongoing investments and you can see it in the numbers, We've talked a lot about being very disciplined with our LTV to CAC. And so one of the things we've been working hard with this program Is to improve the efficacy of those marketing dollars and to convert more people from our top of funnel to bottom of funnel, which is what I was talking about in terms of our conversion rates, both on registration, on first time Risk acceptance. And we're working, Finjan, more broadly across the funnel in every case to ensure that the changes we're making are sustainable and durable over time. Speaker 200:45:36And so as you know, we've talked a lot On the call about ensuring that our promotional pricing activities, in fact, turn into customers and those customers turn into transactions, right? And so I think we have growing confidence that the overall program, aside from the promotional pricing, It's in fact driving real benefits and real outcomes, which is now you're seeing in the 12% transaction growth globally and the 15% in North America. So to answer your question, I don't anticipate a lot more rolling out of any promotional pricing activities. There are a few places in the world we might explore, but in most of the big important places, we are well on our way and we aren't Requiring or needing any more promotional pricing. Speaker 600:46:28Got it. And then just on the fraud piece, I know that In the past, we've always asked about that as you open up the funnel, does it bring on more fraud? Any interesting observations There, that's all I had for you. Speaker 300:46:42Yes. Thanks for the question. Early observations are no as we've opened it up and we've not seen any meaningful change in our Fraud losses is something we're monitoring very closely and will adapt. Our main focus we've talked about with the team that runs this is we're looking for profitable transactions, not just Speaker 400:46:58transactions and revenue. So it's one of those things we're Speaker 300:46:58going to monitor and adapt as we So it's one of those things we're going to monitor and adapt as we find that sweet spot. Speaker 200:47:04In Tien Tsin, I think Matt would have the specifics, but one of the Things as we again are working on funnel optimization, we actually saw our fraud results improve Significantly, which then gave us the ability to say how could we use that capability to grow our customers. So year over year period Over period, our fraud results have improved, not worsened. Operator00:47:32Our next question Comes to us from Rayna Kumar from UBS. Please ask your question. Speaker 700:47:39Hi, good evening. Thanks for taking my question. Just wondering on the Q2 operating margin, that was expected to be below the full year outlook, I think was your initial guide, but And it ended up being near the high end of the range. So just curious what came in better than expected there? Speaker 300:47:57Hey, Rana, it's Matt. The principal driver of that is Iraq, having the extra revenue there that was not anticipated when we put out our guidance. That represents a large portion of the over delivery. The other part that's driving it is the fact that we are still outrunning our ability to invest with our cost savings program. Speaker 700:48:17Understood. And then, as a follow-up, I know last year you guided to mid single digit EPS growth beyond $0.23 So is it a safe assumption to say that you're still on track For that mid single digit growth in 2024 excluding that $0.10 benefit from Iraq. Speaker 300:48:35So I am looking forward to talking about 24 in February, But you've probably directionally got some good assumptions. Speaker 700:48:44Thank you. Operator00:48:48Our next question comes to us from Tim Chiodo from Credit Suisse. Please ask your question. Our next question comes to us from Ken Chukauski from Autonomous. Please ask your questions. Speaker 800:49:18Hi, good afternoon, everyone. Thanks for taking the questions. I like the chart on Slide 8 of the slide deck that shows the transaction growth and the constant FX revenue growth for the branded digital business. And it looks like the gap Between those two lines has widened a bit in 2Q versus 2Q or 2Q versus 1Q. I'm just curious how you expect that spread to Trends over the next few quarters. Speaker 800:49:43Thanks. Speaker 300:49:45Hey, Ken. Thanks for joining the call. As we talked about last quarter, we expected this quarter The widest part of that expansion, I think we talked about that in the Q1 call, and we would expect it to narrow throughout the remainder of this year. And as Devin talked about a few moments ago, we would we've been talking about when we constantly give out our new customer growth, We're expecting the all three numbers will converge over the future quarters. Speaker 200:50:11And Ken, the gap is probably A little bit wider than we anticipated, and that's driven by success On ongoing customer transaction trends that are slightly better than we anticipated as well. And so what you're seeing is Slightly better retention of the new customer base is transacting slightly higher than we expected, which is causing The transaction trends to outpace a little bit of what we thought. Speaker 800:50:42Okay, great. And then maybe just as my follow-up, I want Ask about the composition of the digital business because obviously this is a business that's accelerating, looks like North America growth Strong. What's the geographic composition of that business? And maybe you could provide some detail on the growth rates Across those regions, I'm just curious if you're seeing improvement in Europe and other parts of the world? Speaker 300:51:08Hey, Ken. We have historically not We've not given that information out, but what we've typically told everybody is you can look at the mix of our overall C2C by region and that will give you a sense for The overall dispersion around the world, they pretty closely match the size of each region around the world. So as Devin talked about, we launched in North America First, followed by Europe. Those are the Operator00:51:40Our next question comes to us from Jason Kupferberg from Bank of America. Please ask your question. Speaker 900:51:48Thank you. I have a question just related to the outlook for the balance of the year. I'm just looking at adjusted revenue growth through the first half of the year. I think that's up 4%, the midpoint of the full year guide is 0. So I guess we're looking at negative 4% In the second half, I know that Iraq helped you by 10 points in the second quarter, so you would have been minus 1% instead of Plus 9. Speaker 900:52:13So I guess I'm just looking at that kind of -one Iraq adjusted number in Q2 and trying to see what the pieces are between the 1 in Q2 and then what looks like kind of minus 4 in the second half and just want to make sure we have all those piece parts in the model. Thank you. Speaker 300:52:32Jason, I'm not sure I completely follow, but I'll try to play it back. And if I get it wrong, we can take it offline with Tom and team. But What we have done this quarter is we've taken up our guide based on the revenue expectation from Iraq for the 3 month period of April through July, and flowed that through. And the outlook for the back half of the year is largely similar to what we had originally when we gave our guide. Speaker 400:52:58So I Speaker 600:52:58don't know Speaker 300:52:59if I answered your question, but we can take it offline and go a little deeper if you want. Speaker 900:53:04Okay. Yes, no, We'll do that. I guess my follow-up just on the C2C transaction growth if we exclude Iraq and Russia, Belarus, obviously the plus 2% in the quarter. What are you assuming for that metric in the second half? And then if you would deconstruct it into digital versus retail as well? Speaker 900:53:24Thanks. Speaker 300:53:26Yes. We're not really providing that level of outlook. There's a lot of moving parts in our business and we're Operator00:53:42Our next question comes to us from Andrew Schmidt from Citi. Please ask your question. Speaker 1000:53:51Hey, Devin. Hey, Matt. Thanks for taking my questions. I appreciate all the commentary here. On the digital business, I'm wondering if now that we're further along in the new strategy, if there are any comments in terms of what you're seeing in terms of LTV to CAC or payback period levels and then correspondingly, as you do get more comfortable with the new economics Of the digital business, post the new promotional strategy, if there's an opportunity to get more aggressive with marketing budgets and customer Speaker 200:54:28Andrew, thank you. As you can see in the Results, we are in fact being disciplined on LTV to CAC, which is one of the reasons marketing spend is down period over period. One of the important parts of our program, and that is part of why I was talking about those conversion rates and those acceptance rates, Is to be able to scale marketing investment profitably in order to continue the growth trajectory that we aspire to. And so we would and will, as we can, deploy more marketing dollars to drive more growth, but we are going to ensure that we are doing so at a responsible level. Speaker 300:55:08And Andrew, just a reminder, you probably heard this last quarter, but our CAC came down last quarter about 20%. We didn't update that this call here, but we'll continue, as Devin just talked about, to be very mindful where we spend it and making sure we have that right conversion ratio. Speaker 200:55:24While we're driving while we've been driving 20% new customer growth, right? Speaker 300:55:28Correct. Speaker 200:55:29This has been a comfort for good things, right? Speaker 1000:55:33Yes. Understood. Very clear. And then just A quick follow-up. Great to hear about the sequential improvement in the retail business. Speaker 1000:55:40I know we get a lot of questions about that. Maybe in North America, if you could talk about Just independent channel versus big box. I know, Devin, you talked about a lot of improvements you're making and those are good to hear. But Curious if there's any, just qualitative commentary on the performance across those 2 channels. Thank you very much. Speaker 200:56:01We believe, Andrew, that our branded distribution, both big box And independent is a strategic advantage for us. That's true in North America, but it's also, as we've talked about, true in Europe where we're expanding what we call concept stores or branded exclusive distribution. So we've been actually putting a lot of emphasis on how do we Grow that, how do we create great experiences for those agents and how do we serve customers through those channels. As you know, the independent agent channel, the customers exist And the agents basically compete on the basis of price and agent commissions. And so over time, that's just a less attractive channel in which to drive growth. Speaker 200:56:46We will compete in it, and I think we're doing well as evidenced by Europe, which is predominantly independent agent channel at this point. But over time, we will be emphasizing our branded exclusive, both strategic, which is what you call big box And independent, which is our smaller mom and pops. Operator00:57:09Our next question comes to us from Tim Chiodo From Credit Suisse, please ask your question. Speaker 1100:57:16Great. Thanks a lot. Sorry about that earlier. The Slide 9 seems to be one of the core slides In terms of the core underlying trend for retail, it excludes some of the year over year impacts from the IRAC impact and it shows an improving trend there. I know Jason took a stab at that in terms of seeing where that could exit the year, but it does seem to be working its way back towards positive. Speaker 1100:57:37Maybe you could just put a little bit more regional color on maybe some of the areas of strength in terms of the core retail business that is driving that line upward? And then as a brief follow-up, this was kind of referenced earlier, but this topic comes up from time to time. But rather than looking Added on a percentage of retail locations, but maybe you could just give a brief update on in terms of percentage of transactions, how many of those are coming from Speaker 300:58:07Hey, Tim. Thanks for joining. On your question about where is it coming from, we're actually seeing strength in really all of our regions. The only place that's really been flat quarter over quarter, I talked about in the prepared remarks, is Laca, But they've obviously been the high watermark now for a number of quarters in a row, whereas other regions are starting to make improvement. I also highlighted in my remarks about APAC, they have seen really strong improvement in retail as well as our digital business. Speaker 300:58:36Devin highlighted and I added to it on Africa has seen a 500 basis point sequential improvement largely as a retail market. So you can really see this in a lot of places around the world. It's not one place. It's a lot of the things that we're building on our platform around customer service and on our POS solutions It's benefiting most of the regions, if not all. Speaker 200:58:56And the only thing I would add to that, Tim, right, and it was in the prepared remarks, getting Europe To now what is near flat negative 1 percent transaction growth, given the sheer scale of European Retail Business and our Global Retail business is a big driver of the change from negative 6 to negative 2, just from a math basis. Operator00:59:22Our final question comes to us from Vasu Govil from KBW. Please ask your question. Speaker 1200:59:30Thanks for taking my question. I guess 2 quick ones. 1 on just the margin guide. I know the margin guide is unchanged, but we're tracking Ahead on a year to date basis, so should we expect to be at the higher end of the range, sort of any color that you can offer on the cadence of margin expectation from here? Speaker 300:59:49Hey, Vasu. Thanks for joining the call. We're not going to guide one way or the other in the range. We intentionally left it wide because we want to have flexibility, but we are committed to The EPS range we provided, so you can model a couple of different sensitivities there and think about where it may go within the range based on what happens in non op and taxes. But our focus is to maintain some flexibility if the right opportunities for investments happen and then make sure that we deliver the commitments we've made to you all and our shareholders. Speaker 1201:00:18Got it. Thank you for that. And one question for Gavin. I wanted to ask about the digital bank initiative. I know you rolled it out in a couple of regions in Europe now, in Brazil, in the U. Speaker 1201:00:26S. Sort of. In Europe now, in Brazil and the U. S. Sort of, the whole thesis there was to help increase engagement And retention even if it didn't bring any new revenues. Speaker 1201:00:37And so just curious, it's early days, but what have you seen on that front? And Any metrics you've seen that sort of help demonstrate the increase in engagement that you might be seeing? Speaker 201:00:50Anya, thanks for asking. I think the comments that we had on the second or the Q1 call now into the Q2 call Remain consistent, right? We are live in 4 countries. We are anticipating going live here in Brazil shortly, and we are looking forward to a launch in the U. S. Speaker 201:01:09At least in friends and family before the end of the year. Our experience has been pretty much validating, which says Current and existing retail and digital customers as well as surprisingly, lapsed Retail and digital customers using the Digital Wallet product end up being more valuable customers to us in the Digital Wallet product, both from an engagement standpoint, I. E, the number of transactions per month is up significantly as well as on an economic value in terms of the value or revenue generated per customer on a monthly basis. So we've been working hard on improving the experience and the onboarding for those existing and former customers In terms of being able to grow that population of the customer base in the wallet versus what we call new to franchiser, Customers who are not traditional remittance customers, those look a lot more like other people's digital banking customers, which are less economically Operator01:02:25Thank you for joining the Western Union's 2nd quarter 2023 results conference call. 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