The Western Union Company

Western Union reported Q2 GAAP revenue of $1 billion and said adjusted revenue was down 1% year over year, an improvement from down 5% last year. Adjusted EPS was $0.31 versus $0.42 a year ago, and adjusted operating margin was 15%. Consumer money transfer transactions rose 3% year over year, branded digital adjusted revenue grew 6% and transactions grew 25%, and consumer services adjusted revenue grew 12%. Year to date, operating cash flow was $214 million, capital expenditures were $88 million, cash and cash equivalents were $920 million, and the company reported leverage ratios of 3x gross and 2x net. For 2026, management raised guidance to adjusted revenue growth of 4% to 6% including Intermex, with an assumed September 1 close, and adjusted EPS of $1.25 to $1.35. Management said second-half EPS should be better than first-half EPS, helped by new agent wins, seasonality, better revenue mix, and Beyond Efficiency.

Devin McGranahan said the quarter was disappointing and that results were below expectations for a second straight quarter. He emphasized that the business is being squeezed by a mix shift from cash payout to digital payout, weaker Americas retail due to immigration-related pressure, and lower profitability in the Middle East as more volume moves through digital-only partners. At the same time, he argued the company’s brand, scale, and digital capabilities still support long-term growth, and he framed Beyond Efficiency and Beyond Digital as structural changes to improve profitability and keep investing in growth.

Matthew Cagwin focused on the financial pressure from lower revenue mix and a slower pace of cost reduction. He said adjusted operating margin was 15%, Q2 adjusted EPS was $0.31, and the company is targeting $50 million of run-rate cost savings by year-end and $200 million by the end of 2027. He also highlighted cash generation and balance-sheet flexibility: $214 million of operating cash flow year to date, $88 million of capex year to date, $920 million of cash and cash equivalents, and leverage of 3x gross and 2x net. He said the company paused share repurchases to keep debt-to-EBITDA in the 2.5x to 3x range and reiterated that the dividend remains supported by the board.

Analysts pressed management on the mix shift away from cash payout toward digital payout and why it is happening so fast. Management said the biggest pressure is coming from lower-RPT, lower-profit branded digital growth in the Middle East and from cash-to-digital substitution in corridors like Colombia, while also noting that it is actively lowering digital payout costs and has already reduced one Colombia payout cost from over $2 to less than $0.50. Questions also covered customer acquisition costs, agent bonuses, retail weakness, tax proposals such as Tennessee, travel money profitability, and Intermex timing; management said it is pulling back on expensive new-customer offers, renewing major retail partners at workable economics, and still expects Intermex synergies, though the close is pending regulatory approval.