- Q4 GAAP revenue of $1.05 billion, down 4% on a reported
basis, or up 3% on an adjusted basis
- Q4 GAAP EPS of $0.35, down 46%, and Q4 adjusted EPS of
$0.37, up 16%
- Consumer Money Transfer transactions grew 5% in Q4 led by
13% growth in Branded Digital transactions
- Generated nearly $800 million in operating cash flow in
2023, with adjusted free cash flow conversion over 100%
- Board of Directors approve dividend of $0.235 per share in
the first quarter of 2024
The Western Union Company (the “Company” or “Western Union”)
(NYSE: WU) today reported fourth quarter and full year 2023
results.
The Company’s fourth-quarter revenue of $1.05 billion declined
4% on a reported basis or grew 3% on a constant currency basis
excluding the contribution from Business Solutions, compared to the
prior year period. Argentinian inflation benefited revenue by
approximately four percentage points.
“2023 was an important year for Western Union, as it was the
first full year implementing our ‘Evolve 2025’ strategy,” said
Devin McGranahan, President and Chief Executive Officer. “We made
significant progress on strategic objectives including returning
our Branded Digital business back to revenue growth and stabilizing
retail transaction growth. We also delivered strong operating cash
flow and returned significant capital to our shareholders through
dividends and share repurchases.”
McGranahan added, “As we enter 2024, we are confident in our
ability to continue executing on our strategy, to drive long-term
growth, and expand our value proposition to better serve the
aspiring populations of the world.”
GAAP EPS in the fourth quarter was $0.35 compared to $0.65 in
the prior year period. The year-over-year decrease in GAAP EPS was
due to the prior year period being positively impacted by both the
sale of the Business Solutions business and a lower GAAP effective
tax rate due to the reversal of uncertain tax positions. Adjusted
EPS in the fourth quarter was $0.37 compared to $0.32 in the prior
year period, with the current year period benefiting from higher
adjusted operating profit and a lower share count.
The Board of Directors today approved the first quarter dividend
of $0.235 per common share, payable March 29, 2024, to shareholders
of record at the close of business on March 15, 2024.
Q4 Business Results
- The Company’s Consumer Money Transfer (CMT) segment revenue,
which was previously referred to as the Consumer-to-Consumer (C2C)
segment, decreased 1% on a reported and constant currency basis,
while transactions increased 5% compared to the prior year period.
Regionally, revenue increased in MEASA, led by Iraq, and LACA. This
growth was partially offset by softness in Europe & CIS, North
America, and APAC, which all improved sequentially.
- Branded Digital revenue increased 4% on a reported and constant
currency basis with transaction growth of 13%. The Branded Digital
business represented 23% and 29% of total CMT revenues and
transactions, respectively.
Q4 Financial Results
- GAAP operating margin in the quarter was 15.1%, compared to
13.9% in the prior year period. The adjusted operating margin was
16.1% compared to 15.8% in the prior year period. The increase in
the GAAP and adjusted operating margin was due to the net savings
related to the Company’s Operating Expense Redeployment Program and
changes in foreign currencies, partially offset by higher marketing
investment.
- The GAAP effective tax rate in the quarter was 11.9%, compared
to (15.2%) in the prior year period. The adjusted effective tax
rate was 14.1% in the quarter, compared to 14.7% in the prior year
period.
2023 Full Year Financial
Results
- The Company’s full year 2023 revenue of $4.36 billion declined
3% on a reported basis or grew 4% on a constant currency basis
excluding the contribution from Business Solutions, compared to the
prior year. Argentinian inflation benefited revenue by
approximately three percentage points.
- GAAP operating margin was 18.8%, compared to 19.8% in the prior
year. The adjusted operating margin was 19.6% compared to 20.4% in
the prior year. The decrease in the GAAP and adjusted operating
margin was primarily due to higher variable costs and technology
spend related to the Company’s ‘Evolve 2025’ strategy, partially
offset by net savings related to the Company’s 5-year $150 million
Operating Expense Redeployment Program, which generated savings of
over $50 million in 2023.
- The GAAP effective tax rate for 2023 was 16.1% compared to 9.7%
in the prior year. The adjusted effective tax rate was 15.2%
compared to 15.0% in the prior year.
- GAAP EPS was $1.68, compared to $2.34 in 2022, while adjusted
EPS was $1.74, compared to $1.76 in 2022. In 2022, Business
Solutions and operations in Russia and Belarus contributed $0.09 to
EPS. The year-over-year decrease in GAAP EPS was primarily due to
the gain on sale from the Business Solutions business as well as a
lower effective tax rate due to the reversal of uncertain tax
positions in the prior year. The year-over-year decrease in
adjusted EPS was due to lower operating profit, partially offset by
lower share count.
- Cash flow from operating activities was $783 million for the
year. In 2023, the Company returned approximately $646 million to
shareholders in dividends and share repurchases, consisting of $346
million in dividends and $300 million in share repurchases.
2024 Outlook
The Company expects the following financial outlook for full
year 2024, which assumes no material changes in macroeconomic
conditions, including changes in foreign currencies or Argentinian
inflation.
GAAP
Adjusted
Revenue (in millions)1
$4,075 to $4,175
$4,100 to $4,200
Operating Margin
18% to 20%
19% to 21%
EPS2
$1.57 to $1.67
$1.65 to $1.75
1 Adjusted revenue excludes the impact of
currency and Argentinian inflation; Iraq expected to contribute
between $50 million to $100 million in revenue in 2024
2 The GAAP and adjusted effective tax
rates are expected to be in the mid-teens range
Non-GAAP Measures
Western Union presents a number of non-GAAP financial measures
because management believes that these metrics provide meaningful
supplemental information in addition to the GAAP metrics and
provide comparability and consistency to prior periods. Constant
currency results assume foreign revenues are translated from
foreign currencies to the U.S. dollar, net of the effect of foreign
currency hedges, at rates consistent with those in the prior
year.
Reconciliations of non-GAAP to comparable GAAP measures are
available in the accompanying schedules and in the “Investor
Relations” section of the Company’s website at
https://ir.westernunion.com.
Additional Statistics
Additional key statistics for the quarter and historical trends
can be found in the supplemental tables included with this press
release. All amounts included in the supplemental tables to this
press release are rounded to the nearest tenth of a million, except
as otherwise noted. As a result, the percentage changes and margins
disclosed herein may not recalculate precisely using the rounded
amounts provided.
Environmental, Social, and Governance
(ESG)
Western Union is committed to making a positive impact. For more
details on how Western Union is addressing some of the most
pressing issues facing society, our shared environment, and our
Company, please view our latest ESG report:
https://corporate.westernunion.com/esg.
Investor and Analyst Conference Call
and Presentation
The Company will host a conference call and webcast at 4:30 p.m.
ET today.
The webcast and presentation will be available at
https://ir.westernunion.com. Registration for the event is
required, so please register at least 15 minutes prior to the
scheduled start time. A webcast replay will be available shortly
after the event.
To listen to the conference call via telephone in the U.S., dial
+1 (719) 359-4580 15 minutes prior to the start of the call,
followed by the meeting ID, which is 995 0186 3336, and the
passcode, which is 753563. To listen to the conference call via
telephone outside the U.S., dial the country number from the
international directory, followed by the meeting ID, which is 995
0186 3336, and the passcode, which is 753563.
Safe Harbor Compliance Statement for Forward-Looking
Statements
This press release contains certain statements that are
forward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are not guarantees
of future performance and involve certain risks, uncertainties, and
assumptions that are difficult to predict. Actual outcomes and
results may differ materially from those expressed in, or implied
by, our forward-looking statements. Words such as "expects,"
"intends," "targets," "anticipates," "believes," "estimates,"
"guides," "provides guidance," "provides outlook," "projects,"
"designed to," and other similar expressions or future or
conditional verbs such as "may," "will," "should," "would,"
"could," and “might” are intended to identify such forward-looking
statements. Readers of this press release of The Western Union
Company (the “Company,” “Western Union,” “we,” “our,” or “us”)
should not rely solely on the forward-looking statements and should
consider all uncertainties and risks discussed in the Risk Factors
section and throughout the Annual Report on Form 10-K for the year
ended December 31, 2022. The statements are only as of the date
they are made, and the Company undertakes no obligation to update
any forward-looking statement.
Possible events or factors that could cause results or
performance to differ materially from those expressed in our
forward-looking statements include the following: (i) events
related to our business and industry, such as: changes in general
economic conditions and economic conditions in the regions and
industries in which we operate, including global economic downturns
and trade disruptions, or significantly slower growth or declines
in the money transfer, payment service, and other markets in which
we operate, including downturns or declines related to
interruptions in migration patterns or other events, such as public
health emergencies, epidemics, or pandemics, civil unrest, war,
terrorism, natural disasters, or non-performance by our banks,
lenders, insurers, or other financial services providers; failure
to compete effectively in the money transfer and payment service
industry, including among other things, with respect to price or
customer experience, with global and niche or corridor money
transfer providers, banks and other money transfer and payment
service providers, including digital, mobile and internet-based
services, card associations, and card-based payment providers, and
with digital currencies and related exchanges and protocols, and
other innovations in technology and business models; geopolitical
tensions, political conditions and related actions, including trade
restrictions and government sanctions, which may adversely affect
our business and economic conditions as a whole, including
interruptions of United States or other government relations with
countries in which we have or are implementing significant business
relationships with agents, clients, or other partners;
deterioration in customer confidence in our business, or in money
transfer and payment service providers generally; failure to
maintain our agent network and business relationships under terms
consistent with or more advantageous to us than those currently in
place; our ability to adopt new technology and develop and gain
market acceptance of new and enhanced services in response to
changing industry and consumer needs or trends; mergers,
acquisitions, and the integration of acquired businesses and
technologies into our Company, divestitures, and the failure to
realize anticipated financial benefits from these transactions, and
events requiring us to write down our goodwill; decisions to change
our business mix; changes in, and failure to manage effectively,
exposure to foreign exchange rates, including the impact of the
regulation of foreign exchange spreads on money transfers; changes
in tax laws, or their interpretation, any subsequent regulation,
and unfavorable resolution of tax contingencies; any material
breach of security, including cybersecurity, or safeguards of or
interruptions in any of our systems or those of our vendors or
other third parties; cessation of or defects in various services
provided to us by third-party vendors; our ability to realize the
anticipated benefits from restructuring-related initiatives, which
may include decisions to downsize or to transition operating
activities from one location to another, and to minimize any
disruptions in our workforce that may result from those
initiatives; our ability to attract and retain qualified key
employees and to manage our workforce successfully; failure to
manage credit and fraud risks presented by our agents, clients, and
consumers; adverse rating actions by credit rating agencies; our
ability to protect our trademarks, patents, copyrights, and other
intellectual property rights, and to defend ourselves against
potential intellectual property infringement claims; material
changes in the market value or liquidity of securities that we
hold; restrictions imposed by our debt obligations; (ii) events
related to our regulatory and litigation environment, such as:
liabilities or loss of business resulting from a failure by us, our
agents, or their subagents to comply with laws and regulations and
regulatory or judicial interpretations thereof, including laws and
regulations designed to protect consumers, or detect and prevent
money laundering, terrorist financing, fraud, and other illicit
activity; increased costs or loss of business due to regulatory
initiatives and changes in laws, regulations and industry practices
and standards, including changes in interpretations, in the United
States and abroad, affecting us, our agents or their subagents, or
the banks with which we or our agents maintain bank accounts needed
to provide our services, including related to anti-money laundering
regulations, anti-fraud measures, our licensing arrangements,
customer due diligence, agent and subagent due diligence,
registration and monitoring requirements, consumer protection
requirements, remittances, immigration, and sustainability
reporting including climate-related reporting; liabilities,
increased costs or loss of business and unanticipated developments
resulting from governmental investigations and consent agreements
with or enforcement actions by regulators; liabilities resulting
from litigation, including class-action lawsuits and similar
matters, and regulatory enforcement actions, including costs,
expenses, settlements, and judgments; failure to comply with
regulations and evolving industry standards regarding consumer
privacy, data use, the transfer of personal data between
jurisdictions, and information security, failure to comply with the
Dodd-Frank Wall Street Reform and Consumer Protection Act, as well
as regulations issued pursuant to it and the actions of the
Consumer Financial Protection Bureau (“CFPB”) and similar
legislation and regulations enacted by other governmental
authorities in the United States and abroad related to consumer
protection; effects of unclaimed property laws or their
interpretation or the enforcement thereof; failure to maintain
sufficient amounts or types of regulatory capital or other
restrictions on the use of our working capital to meet the changing
requirements of our regulators worldwide; changes in accounting
standards, rules and interpretations, or industry standards
affecting our business; and (iii) other events, such as
catastrophic events and management’s ability to identify and manage
these and other risks.
About Western Union
The Western Union Company (NYSE: WU) is committed to helping
people around the world who aspire to build financial futures for
themselves, their loved ones and their communities. Our leading
cross-border, cross-currency money movement, payments and digital
financial services empower consumers, businesses, financial
institutions and governments—across more than 200 countries and
territories and over 130 currencies—to connect with billions of
bank accounts, millions of digital wallets and cards, and a global
footprint of hundreds of thousands of retail locations. Our goal is
to offer accessible financial services that help people and
communities prosper. For more information, visit
www.westernunion.com.
WU-G
THE WESTERN UNION COMPANY CONSOLIDATED STATEMENTS OF
INCOME (Unaudited) (in millions, except per share
amounts) Three Months Ended Twelve Months
Ended December 31, December 31,
2023
2022
%
Change
2023
2022
%
Change
Revenues
$
1,052.3
$
1,091.9
(4)%
$
4,357.0
$
4,475.5
(3)%
Expenses: Cost of services
656.1
681.0
(4)%
2,671.7
2,626.4
2%
Selling, general, and administrative
236.9
259.3
(9)%
867.8
964.2
(10)%
Total expenses
893.0
940.3
(5)%
3,539.5
3,590.6
(1)%
Operating income
159.3
151.6
5%
817.5
884.9
(8)%
Other income/(expense): Gain on divestiture of business (a)
—
96.9
(b)
18.0
248.3
(b)
Interest income
4.6
6.6
(30)%
15.6
13.9
13%
Interest expense
(26.3)
(26.2)
0%
(105.3)
(101.0)
4%
Other income/(expense), net
6.5
(12.4)
(b)
—
(37.5)
(b)
Total other income/(expense), net
(15.2)
64.9
(b)
(71.7)
123.7
(b)
Income before income taxes
144.1
216.5
(33)%
745.8
1,008.6
(26)%
Provision/(benefit) for income taxes
17.1
(32.9)
(b)
119.8
98.0
22%
Net income
$
127.0
$
249.4
(49)%
$
626.0
$
910.6
(31)%
Earnings per share: Basic
$
0.35
$
0.65
(46)%
$
1.69
$
2.35
(28)%
Diluted
$
0.35
$
0.65
(46)%
$
1.68
$
2.34
(28)%
Weighted-average shares outstanding: Basic
359.7
382.5
370.8
387.2
Diluted
361.1
383.9
371.8
388.4
(a) On March 1, 2022, December 31, 2022 and July 1,
2023, the Company completed the first, second and final closes,
respectively, of the sale of its Business Solutions business to
Goldfinch Partners LLC and The Baupost Group LLC (collectively,
"the Buyer"). (b) Calculation not meaningful.
THE WESTERN UNION COMPANY CONSOLIDATED BALANCE SHEETS
(Unaudited) (in millions, except per share amounts)
December 31, December 31,
2023
2022
Assets Cash and cash equivalents $
1,268.6
$
1,285.9
Settlement assets
3,687.0
3,486.8
Property and equipment, net of accumulated depreciation of $438.8
and $512.8, respectively
91.4
109.6
Goodwill
2,034.6
2,034.6
Other intangible assets, net of accumulated amortization of $685.9
and $616.3, respectively
380.2
457.9
Other assets
737.0
859.9
Assets held for sale (a)
—
261.6
Total assets $
8,198.8
$
8,496.3
Liabilities and stockholders' equity Liabilities: Accounts
payable and accrued liabilities $
453.0
$
464.0
Settlement obligations
3,687.0
3,486.8
Income taxes payable
659.5
725.3
Deferred tax liability, net
147.6
158.5
Borrowings
2,504.6
2,616.8
Other liabilities
268.1
384.6
Liabilities associated with assets held for sale (a)
—
182.5
Total liabilities
7,719.8
8,018.5
Stockholders' equity: Preferred stock, $1.00 par value; 10
shares authorized; no shares issued
—
—
Common stock, $0.01 par value; 2,000 shares authorized; 350.5
shares and 373.5 shares issued and outstanding as of December 31,
2023 and 2022, respectively
3.5
3.7
Capital surplus
1,031.9
995.9
Accumulated deficit
(389.1)
(353.9)
Accumulated other comprehensive loss
(167.3)
(167.9)
Total stockholders' equity
479.0
477.8
Total liabilities and stockholders' equity $
8,198.8
$
8,496.3
(a) Includes balances associated with the Company’s
Business Solutions business, which were held for sale as of
December 31, 2022. The Company completed the final closing of its
Business Solutions business on July 1, 2023.
THE
WESTERN UNION COMPANY CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) (in millions) Year
Ended December 31,
2023
2022
Cash flows from operating activities Net income $
626.0
$
910.6
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation
39.1
42.7
Amortization
144.5
141.1
Gain on divestiture of business, excluding transaction costs
(18.0)
(254.8)
Deferred income tax benefit
(11.0)
(26.7)
Other non-cash items, net
113.9
115.4
Increase/(decrease) in cash, excluding the effects of divestitures,
resulting from changes in: Other assets
(36.3)
(209.2)
Accounts payable and accrued liabilities
(22.4)
42.6
Income taxes payable
(68.1)
(152.7)
Other liabilities
15.4
(27.4)
Net cash provided by operating activities
783.1
581.6
Cash flows from investing activities Payments for
capitalized contract costs
(36.4)
(71.9)
Payments for internal use software
(88.5)
(104.4)
Purchases of property and equipment
(22.9)
(31.9)
Purchases of settlement investments
(495.3)
(1,160.0)
Proceeds from the sale of settlement investments
262.0
919.3
Maturities of settlement investments
144.0
169.7
Purchases of non-settlement investments
—
(400.0)
Proceeds from the sale of non-settlement investments
100.0
300.0
Proceeds from divestiture, net of cash divested
—
887.2
Other investing activities
(3.7)
17.5
Net cash (used in)/provided by investing activities
(140.8)
525.5
Cash flows from financing activities Cash dividends and
dividend equivalents paid
(349.0)
(364.2)
Common stock repurchased
(308.4)
(369.9)
Net proceeds from/(repayments of) commercial paper
184.9
(95.0)
Principal payments on borrowings
(300.0)
(300.0)
Proceeds from exercise of options
0.2
9.5
Net change in settlement obligations
(122.8)
(56.4)
Other financing activities
(1.7)
(1.3)
Net cash used in financing activities
(896.8)
(1,177.3)
Net change in cash and cash equivalents, including settlement, and
restricted cash
(254.5)
(70.2)
Cash and cash equivalents, including settlement, and restricted
cash at beginning of period
2,040.7
2,110.9
Cash and cash equivalents, including settlement, and restricted
cash at end of period $
1,786.2
$
2,040.7
December 31,
2023
2022
Reconciliation of balance sheet cash and cash equivalents to
cash flows: Cash and cash equivalents on balance sheet $
1,268.6
$
1,285.9
Settlement cash and cash equivalents
496.0
708.1
Restricted cash in Other assets
21.6
41.5
Cash and cash equivalents included in Assets held for sale
—
5.2
Cash and cash equivalents, including settlement, and restricted
cash at end of period $
1,786.2
$
2,040.7
THE WESTERN UNION COMPANY SUMMARY SEGMENT DATA
(Unaudited) (in millions, unless indicated otherwise)
Three Months Ended Twelve Months Ended
December 31, December 31,
2023
2022
% Change
2023
2022
% Change
Revenues: Consumer Money Transfer $
975.5
$
985.2
(1)%
$
4,005.0
$
3,993.5
0%
Business Solutions (a)
—
29.5
(e)
29.7
196.9
(85)%
Consumer Services (b)
76.8
77.2
(1)%
322.3
285.1
13%
Total consolidated revenues $
1,052.3
$
1,091.9
(4)%
$
4,357.0
$
4,475.5
(3)%
Segment operating income: Consumer Money Transfer $
148.9
$
138.6
7%
$
750.8
$
765.1
(2)%
Business Solutions (a)
—
6.8
(e)
3.7
58.5
(e)
Consumer Services (b)
20.4
27.4
(25)%
92.5
100.8
(8)%
Total segment operating income
169.3
172.8
(2)%
847.0
924.4
(8)%
Russia/Belarus exit costs (c)
—
0.6
(e)
—
(10.0)
(e)
Business Solutions exit costs (c)
—
—
(e)
—
(7.7)
(e)
Operating expense redeployment program costs (d)
(10.0)
(21.8)
(e)
(29.5)
(21.8)
36%
Total consolidated operating income $
159.3
$
151.6
5%
$
817.5
$
884.9
(8)%
Segment operating income margin Consumer Money Transfer
15.3%
14.1%
1.2%
18.7%
19.2%
(0.5)%
Business Solutions (a) (e)
23.1%
(e)
12.4%
29.7%
(e)
Consumer Services (b)
26.6%
35.5%
(8.9)%
28.7%
35.4%
(6.7)%
(a)
On August 4, 2021, the Company entered
into an agreement to sell its Business Solutions business to the
Buyer. The sale was completed in three closings, the first of which
occurred on March 1, 2022. The second occurred on December 31, 2022
and the final occurred on July 1, 2023. The remaining operations of
the Business Solutions business were included in Revenues and
Operating income until their respective closings. During the period
between the first and final closings, the Company was required to
pay the Buyer a measure of profit from these operations, while
owned by the Company, adjusted for other charges, as contractually
agreed, which was included in Other income/(expense), net in the
Consolidated Statements of Income.
(b)
Consumer Services primarily includes the
Company’s bill payment services which facilitate payments from
consumers to businesses and other organizations and the Company’s
money order services.
(c)
Represents the exit costs incurred in
connection with the suspension of operations in Russia and Belarus
and the divestiture of the Business Solutions business. While
certain of the expenses are identifiable to the Company's segments,
the expenses are not included in the measurement of segment
operating income provided to the Chief Operating Decision Maker for
purposes of performance assessment and resource allocation.
(d)
Represents severance, expenses associated
with streamlining the Company's organizational and legal structure,
and other expenses associated with the Company's program to
redeploy expenses in its cost base through optimizations in vendor
management, real estate, marketing, and people strategy, as
previously announced in October 2022. In the fourth quarter of 2023
and 2022, expenses incurred under the program also included
non-cash impairments of operating lease right-of-use assets and
property and equipment.
(e)
Calculation not meaningful.
THE WESTERN UNION COMPANY KEY STATISTICS
(Unaudited) Notes*
4Q22
FY2022
1Q23
2Q23
3Q23
4Q23
FY2023
Consolidated Metrics Revenues (GAAP) - YoY % change
(15)%
(12)%
(10)%
3%
1%
(4)%
(3)%
Adjusted revenues (non-GAAP) - YoY % change (a)
(6)%
(4)%
(1)%
9%
7%
3%
4%
Operating margin (GAAP)
13.9%
19.8%
19.7%
20.7%
19.2%
15.1%
18.8%
Adjusted operating margin (non-GAAP) (b)
15.8%
20.4%
20.5%
21.8%
19.6%
16.1%
19.6%
Consumer Money Transfer (CMT) Segment Metrics
Revenues (GAAP) - YoY % change
(11)%
(9)%
(6)%
4%
4%
(1)%
0%
Adjusted revenues (non-GAAP) - YoY % change (h)
(9)%
(6)%
(5)%
5%
3%
(1)%
1%
Transactions (in millions)
69.3
274.1
65.3
70.6
70.6
72.9
279.4
Transactions - YoY % change
(12)%
(10)%
(6)%
4%
5%
5%
2%
Cross-border principal, as reported - YoY % change
(12)%
(10)%
(3)%
17%
13%
8%
9%
Cross-border principal (constant currency) - YoY % change (i)
(9)%
(7)%
(1)%
18%
11%
7%
9%
Operating margin
14.1%
19.2%
18.9%
21.5%
19.0%
15.3%
18.7%
Branded Digital revenues (GAAP) - YoY % change (gg)
(8)%
(3)%
(7)%
(2)%
3%
4%
0%
Branded Digital foreign currency translation impact (k)
2%
2%
1%
0%
0%
0%
0%
Adjusted Branded Digital revenues (non-GAAP) - YoY % change (gg)
(6)%
(1)%
(6)%
(2)%
3%
4%
0%
Branded Digital transactions - YoY % change (gg)
2%
0%
7%
12%
12%
13%
11%
CMT Segment Regional Metrics - YoY % change NA region
revenues (GAAP) (aa), (bb)
(7)%
(4)%
(8)%
(8)%
(3)%
(1)%
(5)%
NA region foreign currency translation impact (k)
0%
0%
0%
1%
0%
0%
0%
Adjusted NA region revenues (non-GAAP) (aa), (bb)
(7)%
(4)%
(8)%
(7)%
(3)%
(1)%
(5)%
NA region transactions (aa), (bb)
(2)%
(5)%
1%
4%
7%
6%
5%
EU & CIS region revenues (GAAP) (aa), (cc)
(23)%
(20)%
(16)%
(12)%
(9)%
(8)%
(11)%
EU & CIS region foreign currency translation impact (k)
6%
5%
3%
2%
(1)%
(1)%
0%
Adjusted EU & CIS region revenues (non-GAAP) (aa), (cc)
(17)%
(15)%
(13)%
(10)%
(10)%
(9)%
(11)%
EU & CIS region transactions (aa), (cc)
(31)%
(25)%
(23)%
(1)%
0%
4%
(6)%
MEASA region revenues (GAAP) (aa), (dd)
(9)%
(4)%
5%
66%
42%
12%
31%
MEASA region foreign currency translation impact (k)
2%
2%
1%
1%
0%
0%
1%
Adjusted MEASA region revenues (non-GAAP) (aa), (dd)
(7)%
(2)%
6%
67%
42%
12%
32%
MEASA region transactions (aa), (dd)
(5)%
(1)%
(3)%
8%
9%
7%
6%
LACA region revenues (GAAP) (aa), (ee)
11%
4%
15%
6%
10%
2%
8%
LACA region foreign currency translation impact (k)
2%
3%
2%
2%
(2)%
1%
1%
Adjusted LACA region revenues (non-GAAP) (aa), (ee)
13%
7%
17%
8%
8%
3%
9%
LACA region transactions (aa), (ee)
8%
5%
9%
8%
9%
4%
7%
APAC region revenues (GAAP) (aa), (ff)
(20)%
(13)%
(8)%
(7)%
(8)%
(7)%
(7)%
APAC region foreign currency translation impact (k)
6%
4%
3%
3%
1%
2%
2%
Adjusted APAC region revenues (non-GAAP) (aa), (ff)
(14)%
(9)%
(5)%
(4)%
(7)%
(5)%
(5)%
APAC region transactions (aa), (ff)
(12)%
(12)%
(2)%
1%
0%
6%
1%
% of CMT Revenue NA region revenues (aa), (bb)
39%
40%
38%
35%
37%
39%
37%
EU & CIS region revenues (aa), (cc)
27%
28%
26%
24%
24%
25%
25%
MEASA region revenues (aa), (dd)
16%
16%
19%
26%
23%
18%
21%
LACA region revenues (aa), (ee)
12%
10%
11%
10%
11%
12%
11%
APAC region revenues (aa), (ff)
6%
6%
6%
5%
5%
6%
6%
Branded Digital revenues (aa), (gg)
21%
22%
22%
21%
21%
23%
22%
Consumer Services (CS) Revenues (GAAP) - YoY % change
20%
12%
23%
10%
22%
(1)%
13%
Operating margin
35.5%
35.4%
38.6%
22.0%
27.5%
26.6%
28.7%
% of Total Company Revenue (GAAP) Consumer Money
Transfer segment revenues
90%
89%
91%
92%
93%
93%
92%
Business Solutions segment revenues
3%
5%
1%
1%
0%
0%
1%
Consumer Services revenues
7%
6%
8%
7%
7%
7%
7%
* See the “Notes to Key Statistics” section of the press
release for the applicable Note references and the reconciliation
of non-GAAP financial measures, unless already reconciled herein.
THE WESTERN UNION COMPANY NOTES TO KEY STATISTICS
(Unaudited) (in millions, unless indicated otherwise)
Western Union’s management believes the non-GAAP financial
measures presented within this press release and related tables
provide meaningful supplemental information regarding the Company’s
results to assist management, investors, analysts, and others in
understanding the Company’s financial results and to better analyze
operating, profitability, and other financial performance trends in
the Company’s underlying business because they provide consistency
and comparability to prior periods or eliminate currency
volatility, increasing the comparability of the Company's
underlying results and trends. A non-GAAP financial measure
should not be considered in isolation or as a substitute for the
most comparable GAAP financial measure. A non-GAAP financial
measure reflects an additional way of viewing aspects of the
Company’s operations that, when viewed with the Company’s GAAP
results and the reconciliation to the corresponding GAAP financial
measure, provides a more complete understanding of the Company’s
business. Users of the financial statements are encouraged to
review the Company’s financial statements and publicly-filed
reports in their entirety and not to rely on any single financial
measure. A reconciliation of non-GAAP financial measures to the
most directly comparable GAAP financial measures is included below,
where not previously reconciled above.
Notes
4Q22
FY2022
1Q23
2Q23
3Q23
4Q23
FY2023
Consolidated Metrics (a) Revenues (GAAP) $
1,091.9
$
4,475.5
$
1,036.9
$
1,170.0
$
1,097.8
$
1,052.3
$
4,357.0
Foreign currency translation impact (k)
49.4
185.5
35.2
40.6
25.6
41.9
143.3
Revenues, constant currency (non-GAAP)
1,141.3
4,661.0
1,072.1
1,210.6
1,123.4
1,094.2
4,500.3
Less Business Solutions revenues, constant currency (non-GAAP) (k),
(n)
(34.0)
(216.4)
(16.0)
(13.9)
—
—
(29.9)
Adjusted revenues (non-GAAP) $
1,107.3
$
4,444.6
$
1,056.1
$
1,196.7
$
1,123.4
$
1,094.2
$
4,470.4
Prior year revenues (GAAP) $
1,284.8
$
5,070.8
$
1,155.7
$
1,138.3
$
1,089.6
$
1,091.9
$
4,475.5
Less prior year revenues from Business Solutions (GAAP) (n)
(109.2)
(421.8)
(89.1)
(35.7)
(42.6)
(29.5)
(196.9)
Adjusted prior year revenues (non-GAAP) $
1,175.6
$
4,649.0
$
1,066.6
$
1,102.6
$
1,047.0
$
1,062.4
$
4,278.6
Revenues (GAAP) - YoY % change
(15)%
(12)%
(10)%
3%
1%
(4)%
(3)%
Revenues, constant currency (non-GAAP) - YoY% change
(11)%
(8)%
(7)%
6%
3%
0%
1%
Adjusted revenues (non-GAAP) - YoY % change
(6)%
(4)%
(1)%
9%
7%
3%
4%
(b) Operating income (GAAP) $
151.6
$
884.9
$
204.7
$
242.6
$
210.9
$
159.3
$
817.5
Acquisition and separation costs (m)
1.6
13.9
—
2.4
0.5
0.2
3.1
Russia/Belarus exit costs (o)
(0.6)
10.0
—
—
—
—
—
Operating expense redeployment program costs (q)
21.8
21.8
7.1
8.3
4.1
10.0
29.5
Less Business Solutions operating income (n)
(6.6)
(56.6)
(1.9)
(1.7)
—
—
(3.6)
Adjusted operating income (non-GAAP) $
167.8
$
874.0
$
209.9
$
251.6
$
215.5
$
169.5
$
846.5
Operating margin (GAAP)
13.9%
19.8%
19.7%
20.7%
19.2%
15.1%
18.8%
Adjusted operating margin (non-GAAP)
15.8%
20.4%
20.5%
21.8%
19.6%
16.1%
19.6%
(c) Net income (GAAP) $
249.4
$
910.6
$
151.8
$
176.2
$
171.0
$
127.0
$
626.0
Acquisition and separation costs (m)
1.6
13.9
—
2.4
0.5
0.2
3.1
Business Solutions gain (n)
(96.9)
(248.3)
—
—
(18.0)
—
(18.0)
Russia/Belarus exit costs (o)
(0.6)
10.0
—
—
—
—
—
Operating expense redeployment program costs (q)
21.8
21.8
7.1
8.3
4.1
10.0
29.5
Income tax benefit from reversal of significant uncertain tax
positions (p)
(68.5)
(81.7)
—
—
—
—
—
Income tax expense/(benefit) from other adjustments (m), (n), (o),
(q)
14.7
58.4
3.7
3.8
1.7
(4.6)
4.6
Adjusted net income (non-GAAP) $
121.5
$
684.7
$
162.6
$
190.7
$
159.3
$
132.6
$
645.2
(d) Net income (GAAP) $
249.4
$
910.6
$
151.8
$
176.2
$
171.0
$
127.0
$
626.0
Provision/(benefit) for income taxes
(32.9)
98.0
29.2
40.2
33.3
17.1
119.8
Interest income
(6.6)
(13.9)
(3.2)
(4.2)
(3.6)
(4.6)
(15.6)
Interest expense
26.2
101.0
25.0
27.0
27.0
26.3
105.3
Depreciation and amortization
46.4
183.8
46.6
45.9
46.0
45.1
183.6
Other expense, net
12.4
37.5
1.9
3.4
1.2
(6.5)
—
Business Solutions gain (n)
(96.9)
(248.3)
—
—
(18.0)
—
(18.0)
Acquisition and separation costs (m)
1.6
13.9
—
2.4
0.5
0.2
3.1
Russia/Belarus exit costs (o)
(0.6)
10.0
—
—
—
—
—
Operating expense redeployment program costs (q)
21.8
21.8
7.1
8.3
4.1
10.0
29.5
Less Business Solutions operating income (n)
(6.6)
(56.6)
(1.9)
(1.7)
—
—
(3.6)
Adjusted EBITDA (non-GAAP) (l) $
214.2
$
1,057.8
$
256.5
$
297.5
$
261.5
$
214.6
$
1,030.1
(e) Net cash provided by operating activities (GAAP) $
783.1
Payments for capitalized contract costs
(36.4)
Payments for internal use software
(88.5)
Purchases of property and equipment
(22.9)
Free cash flow (non-GAAP) $
635.3
Tax payment associated with the 2017 United States federal tax
liability (r)
119.5
Adjusted free cash flow (non-GAAP) $
754.8
Adjusted net income (non-GAAP) $
645.2
Adjusted free cash flow conversion (non-GAAP)
117%
(f) Effective tax rate (GAAP)
(15)%
10%
16%
19%
16%
12%
16%
Reversal of significant uncertain tax positions (p)
32%
8%
0%
0%
0%
0%
0%
Other adjustments (m), (n), (o), (q)
(2)%
(3)%
(2)%
(3)%
1%
2%
(1)%
Adjusted effective tax rate (non-GAAP)
15%
15%
14%
16%
17%
14%
15%
(g) Diluted earnings per share (GAAP) ($- dollars) $
0.65
$
2.34
$
0.40
$
0.47
$
0.46
$
0.35
$
1.68
Pretax impacts from the following: Acquisition and separation costs
(m)
—
0.03
—
0.01
—
—
0.01
Business Solutions gain (n)
(0.25)
(0.64)
—
—
(0.05)
—
(0.05)
Russia/Belarus exit costs (o)
—
0.03
—
—
—
—
—
Operating expense redeployment program costs (q)
0.06
0.06
0.02
0.02
0.01
0.03
0.08
Income tax expense/(benefit) impacts from the following: Reversal
of significant uncertain tax positions (p)
(0.18)
(0.21)
—
—
—
—
—
Other adjustments (m), (n), (o), (q)
0.04
0.15
0.01
0.01
0.01
(0.01)
0.02
Adjusted diluted earnings per share (non-GAAP) ($- dollars) $
0.32
$
1.76
$
0.43
$
0.51
$
0.43
$
0.37
$
1.74
CMT Segment Metrics (h) Revenues (GAAP) $
985.2
$
3,993.5
$
938.3
$
1,072.2
$
1,019.0
$
975.5
$
4,005.0
Foreign currency translation impact (k)
30.9
116.9
13.8
8.5
(3.3)
2.1
21.1
Revenues, constant currency (non-GAAP) $
1,016.1
$
4,110.4
$
952.1
$
1,080.7
$
1,015.7
$
977.6
$
4,026.1
Prior year revenues (GAAP) $
1,111.5
$
4,394.0
$
999.0
$
1,026.9
$
982.4
$
985.2
$
3,993.5
Revenues (GAAP) - YoY % change
(11)%
(9)%
(6)%
4%
4%
(1)%
0%
Adjusted revenues (non-GAAP) - YoY % change
(9)%
(6)%
(5)%
5%
3%
(1)%
1%
(i) Cross-border principal, as reported ($- billions) $
23.4
$
93.6
$
23.0
$
27.5
$
26.0
$
25.2
$
101.7
Foreign currency translation impact (k)
0.8
3.3
0.5
0.0
(0.3)
(0.2)
0.0
Cross-border principal, constant currency ($- billions) $
24.2
$
96.9
$
23.5
$
27.5
$
25.7
$
25.0
$
101.7
Prior year cross-border principal, as reported ($- billions) $
26.5
$
104.1
$
23.8
$
23.4
$
23.0
$
23.4
$
93.6
Cross-border principal, as reported - YoY % change
(12)%
(10)%
(3)%
17%
13%
8%
9%
Cross-border principal, constant currency - YoY % change
(9)%
(7)%
(1)%
18%
11%
7%
9%
Business Solutions Segment Metrics (j) Revenues
(GAAP) $
29.5
$
196.9
$
15.4
$
14.3
$
—
$
—
$
29.7
Foreign currency translation impact (k)
4.5
19.5
0.6
(0.4)
—
—
0.2
Revenues, constant currency (non-GAAP) $
34.0
$
216.4
$
16.0
$
13.9
$
—
$
—
$
29.9
Prior year revenues (GAAP) $
109.2
$
421.8
$
89.1
$
35.7
$
42.6
$
29.5
$
196.9
Revenues (GAAP) - YoY % change
(73)%
(53)%
(83)%
(60)%
* *
(85)%
Adjusted revenues (non-GAAP) - YoY % change
(69)%
(49)%
(82)%
(61)%
* *
(85)%
* Calculation not meaningful.
2024 Consolidated Outlook
Metrics Notes Range Revenues (GAAP)
$
4,075
$
4,175
Foreign currency translation impact, net of Argentina inflation (k)
25
25
Revenues, adjusted (non-GAAP)
$
4,100
$
4,200
Range Operating margin (GAAP)
18%
20%
Operating expense redeployment program costs (q)
1%
1%
Impact from acquisition and separation costs (m)
0%
0%
Operating margin, adjusted (non-GAAP)
19%
21%
Range Earnings per share (GAAP) ($- dollars)
$
1.57
$
1.67
Operating expense redeployment program costs (q)
0.08
0.08
Acquisition and separation costs (m)
—
—
Income taxes associated with these adjustments (m), (q)
—
—
Earnings per share, adjusted (non-GAAP) ($- dollars)
$
1.65
$
1.75
Non-GAAP related notes:
(k) Represents the impact from the fluctuation in exchange
rates between all foreign currency denominated amounts and the
United States dollar. Constant currency results exclude any benefit
or loss caused by foreign exchange fluctuations between foreign
currencies and the United States dollar, net of foreign currency
hedges, which would not have occurred if there had been a constant
exchange rate. Beginning in 2024, the Company will also remove the
effect of Argentina inflation from its adjusted revenues, due to
Argentina’s hyperinflationary economy. (l) Earnings before
Interest, Taxes, Depreciation, and Amortization (“EBITDA”) results
from taking operating income and adjusting for depreciation and
amortization expenses. EBITDA results provide an additional
performance measurement calculation which helps neutralize the
operating income effect of assets acquired in prior periods. (m)
Represents the impact from expenses incurred in connection
with the Company's acquisition and divestiture activity, including
for the review and closing of these transactions. Also includes
costs associated with the divestiture of the Business Solutions
business, primarily related to severance and non-cash impairments
of property and equipment and an operating lease right-of-use
asset. (n) During 2021, the Company entered into an
agreement to sell its Business Solutions business to Goldfinch
Partners LLC and The Baupost Group LLC (collectively, the "Buyer").
The sale was completed in three closings, the first of which
occurred on March 1, 2022 with the entirety of the cash
consideration collected at that time and allocated to the closings
on a relative fair value basis. The first closing excluded the
operations in the European Union and the United Kingdom and
resulted in a gain of $151.4 million. The second closing, which
included the United Kingdom operations, occurred on December 31,
2022 and resulted in a gain of $96.9 million. The final closing,
which included the European Union operations, occurred on July 1,
2023 and resulted in a gain of $18.0 million. Revenues have been
adjusted to exclude the carved out financial information for the
Business Solutions business to compare the year-over-year changes
and trends in the Company's continuing businesses, excluding the
effects of this divestiture. While the sale of the Company's
Business Solutions business does not qualify for or represent
discontinued operations, the Company has also adjusted operating
income, beginning in the first quarter of 2022 and concurrent with
the sale, to exclude the carved out direct profit of the Business
Solutions business. The operations of the Business Solutions
business sold continued to be included in Revenues and Operating
income until their respective closings. However, between the first
and final closings, the Company was required to pay the Buyer a
measure of the profits from these operations, while owned by the
Company, adjusted for other charges, and this expense was
recognized in Other expense, net. Therefore, the Company believes
that providing this information enhances investors' understanding
of the profitability of the Company's remaining businesses. The
Company has also excluded the gain on the sale, net of related
taxes, from its results. (o) Represents the exit costs
incurred in connection with the Company's suspension of its
operations in Russia and Belarus primarily related to severance and
non-cash impairments of property and equipment, an operating lease
right-of-use asset, and other intangible assets. (p)
Represents non-cash reversals of significant uncertain tax
positions. While the Company continues to reverse its uncertain tax
positions upon settlements with taxing authorities, the lapse of
the applicable statute of limitations, and other events, the
Company has excluded certain reversals of uncertain tax positions
in the third and fourth quarter of 2022 because of the significance
of these reversals on its reported results. (q) Represents
severance, expenses associated with streamlining the Company's
organizational and legal structure, and other expenses associated
with the Company's program to redeploy expenses in its cost base
through optimizations in vendor management, real estate, marketing,
and people strategy as previously announced in October 2022. In the
fourth quarter of 2023 and 2022, expenses incurred under the
program also included non-cash impairments of operating lease
right-of-use assets and property and equipment. The expenses are
not included in the measurement of segment operating income
provided to the Chief Operating Decision Maker for purposes of
performance assessment and resource allocation. The Company has
also excluded a tax benefit directly associated with streamlining
the Company’s legal structure in the fourth quarter of 2023 from
its measures of adjusted net income, adjusted effective tax rate,
and adjusted diluted earnings per share. (r) Represents an
installment payment on the tax liability on certain of our
previously undistributed earnings pursuant to United States tax
reform legislation enacted in December 2017.
Other notes: (aa) Geographic split for
transactions and revenue, including transactions initiated
digitally, as earlier defined, is determined entirely based upon
the region where the money transfer is initiated. (bb)
Represents the North America (United States and Canada) (“NA”)
region of the Company's Consumer Money Transfer segment. (cc)
Represents the Europe and the Commonwealth of Independent
States (“EU & CIS”) region of the Company's Consumer Money
Transfer segment. (dd) Represents the Middle East, Africa,
and South Asia (“MEASA”) region of the Company's Consumer Money
Transfer segment, including India and certain South Asian
countries, which consist of Bangladesh, Bhutan, Maldives, Nepal,
and Sri Lanka. (ee) Represents the Latin America and the
Caribbean (“LACA”) region of the Company’s Consumer Money Transfer
segment, including Mexico. (ff) Represents the East Asia and
Oceania (“APAC”) region of the Company’s Consumer Money Transfer
segment. (gg) Represents transactions conducted and funded
through websites and mobile applications marketed under the
Company’s brands (“Branded Digital”).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240205213737/en/
Media Relations: Brad Jones media@westernunion.com
Investor Relations: Tom Hadley
WesternUnion.IR@westernunion.com
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