On October 25, 2023, The Western Union Co (WU, Financial) released its third quarter 2023 earnings report. The company's Q3 revenue of $1.10 billion showed a 1% growth on a reported basis, or 7% on a constant currency basis, compared to the prior year period. The GAAP EPS in the third quarter was $0.46 compared to $0.45 in the prior year period. The year-over-year increase was due to the gain on sale of Business Solutions and a lower share count, partially offset by lower operating profit and a higher GAAP effective tax rate.
Financial Performance and Outlook
The Western Union Co (WU, Financial) reported that its Q3 GAAP operating margin was 19.2%, compared to 21.3% in the prior year period. The adjusted operating margin was 19.6% compared to 20.6% in the prior year period. The decrease in the GAAP and adjusted operating margin was primarily due to higher variable costs and technology spend associated with the Company’s ‘Evolve 2025’ strategy, partially offset by lower marketing spend.
The company improved its 2023 full-year revenue and EPS outlook, assuming no material changes in macroeconomic conditions, including changes in foreign currencies or Argentinian inflation. The revised 2023 outlook includes a GAAP revenue of (4%) to (3%), an adjusted revenue of 0% to 1%, an operating margin of 18% to 20%, and an EPS of $1.67 to $1.74.
Business Highlights
The Western Union Co (WU, Financial) reported that its C2C revenues grew 4% on a reported basis, or 3% constant currency, while transactions increased 5% compared to the prior year period. The company's branded digital revenue increased 3% on a reported and constant currency basis, and represented 21% and 28% of total C2C revenues and transactions, respectively. Transactions grew 12% in the quarter driven by the Company’s ‘Evolve 2025’ go-to-market strategy.
CEO's Commentary
Devin McGranahan, President and Chief Executive Officer of Western Union, commented on the results,
Third quarter results exceeded our expectations and demonstrate a continued positive trajectory against our ‘Evolve 2025’ goals. This quarter’s strong results were driven by continued revenue growth from the change in Iraqi monetary policy and by achieving positive global branded digital revenue growth a full quarter ahead of our expectations."
Summary
The Western Union Co (WU, Financial) reported a slight increase in its Q3 GAAP revenue and EPS, both growing by 2% year-over-year. The company's branded digital business achieved a 3% revenue growth in Q3 on double-digit transaction growth. The company also improved its full-year 2023 outlook.
Explore the complete 8-K earnings release (here) from The Western Union Co for further details.
