Western Union (NYSE:WU) executives used the company’s fourth-quarter 2025 earnings call to emphasize a strategy shift toward a “digital-first, retail-enabled” consumer services model, while acknowledging that macro-driven pressure on core retail remittances—especially in the Americas—continued to weigh on results.
Fourth-quarter results: revenue down, earnings up on cost discipline
For the fourth quarter, Western Union reported revenue of $1 billion. On an adjusted basis, management said revenue declined 5% year-over-year. Consumer Money Transfer (CMT) transactions were down 2.5% in the quarter, while cross-border principal grew on a constant-currency basis.
CFO Matt Cagwin said adjusted operating margin for the quarter was 20%, compared with 17% in the prior-year quarter. For the full year, he said adjusted operating margin was also 20%, up from 19% in the prior period.
Full-year 2025: Consumer Services growth offset by retail headwinds
For 2025, Western Union delivered GAAP revenue of $4.1 billion. Cagwin said adjusted revenue came in below the company’s outlook due to “ongoing industry disruption.” Excluding Iraq, adjusted revenue was down 2% for the year, with growth in Consumer Services and Branded Digital offset by weakness in the Americas retail business.
Within CMT, Cagwin said full-year adjusted revenue (excluding Iraq) declined 6%, while transactions (excluding Iraq) declined 1%. In the fourth quarter, CMT adjusted revenue fell 9% and transactions fell 2%, driven by retail softness amid challenging industry conditions. Management also noted customers were sending fewer transactions but with higher average principal per transaction; Cagwin said principal per transaction increased roughly 5% year-over-year in the fourth quarter on a constant-currency basis.
Adjusted EPS for the full year was $1.75, landing at the top end of the company’s guidance range of $1.65 to $1.75, supported by higher adjusted operating profit and fewer shares outstanding, offset by higher interest expense. The adjusted tax rate was 12% for the quarter and 13% for the full year, consistent with the prior year.
Consumer Services and digital: key growth engines
Executives repeatedly highlighted Consumer Services as a key growth driver and a way to reduce reliance on migration-driven remittance swings. In the fourth quarter, Consumer Services accounted for 14% of total revenue and delivered 26% adjusted revenue growth, driven by travel money (including eurochange) and bill payments. For the full year, Consumer Services adjusted revenue grew nearly 30%.
CEO Devin McGranahan said the travel money business is expected to approach $150 million in revenue in 2026, “up from nearly nothing a few years ago,” and described the market as fragmented, with some large global players having retreated since COVID.
On the digital side, Western Union’s Branded Digital business grew transactions 13% and adjusted revenue 6% in the fourth quarter, supported by new relationships in the Middle East. Cagwin said the quarter marked the ninth straight quarter of solid Branded Digital revenue growth; for the full year, Branded Digital adjusted revenue rose 6% and transactions increased 12%. He cautioned that newer Middle East partnerships are driving faster transaction growth than revenue growth because they are primarily account-to-account transactions with lower revenue per transaction, and that this gap may persist or widen in the near term as partners scale.
U.S. remittance tax, wallets, and retail funding shift
McGranahan discussed the U.S. remittance tax that took effect Jan. 1 on cash-based international money transfers originated in the U.S. He said the company implemented the tax “flawlessly” across channels and partners, and that through the first six weeks of the year Western Union had not seen a material impact, though management continues to monitor trends.
He also said the company has seen an uptick in prepaid cards and activity in its Vigo Money Wallet since the start of 2026. Western Union launched Vigo Money Wallet in the U.S. in March 2025 and has onboarded over 30,000 customers, with “a couple of thousand” weekly active users. McGranahan said most wallet customers have come from “money transfer redirect” efforts with minimal marketing spend, and that about a third are initiating new international money transfers.
Internationally, he said Western Union has onboarded roughly 20,000 wallet customers in Brazil since launching in May of last year, with about 5% of inbound transfers recently being redirected into the wallet. In Argentina, he said 17% of inbound remittances end up in the wallet. Management anticipates launching a wallet in Australia later in 2026 and said it is developing a wallet for Mexico, pending regulatory approval tied to the planned Intermex acquisition. McGranahan also cited potential wallet capability expansion in Singapore, the Philippines, and possibly Israel in 2026.
In retail, management said the remittance tax has accelerated card-based funding in the U.S., with debit cards accounting for 15% of U.S. retail funding in January on Western Union’s point-of-sale system.
Intermex acquisition, agent wins, and 2026 guidance
McGranahan said he expects to welcome Intermex into Western Union “hopefully in the second quarter,” while Cagwin’s 2026 outlook assumed the deal closes mid-quarter in Q2. In Q&A, management reiterated that the previously discussed $0.10 per share accretion target was for the first full year and should be viewed as more of a 2027 outcome as synergies ramp, though they expect the deal to be accretive in 2026.
Western Union also pointed to renewed momentum in retail distribution, citing several exclusive partnerships or renewals:
- Re-signing Deutsche Post, with a planned relaunch in mid-2026
- An exclusive five-year contract with Canada Post, expected to roll out to most of its 5,600 locations in coming months
- A long-term exclusive contract with Vallarta Markets in California
- Returning to exclusivity with Kroger for money transfer
McGranahan said these partnerships are expected to add at least $100 million of incremental retail revenue per year when fully ramped, while Cagwin said their margin profile should be “better than our overall OI.”
For capital allocation, management said Western Union returned more than $500 million to shareholders in 2025, including $305 million in dividends and $225 million in share repurchases. The company generated $544 million in operating cash flow for 2025, and ended the year with $1.2 billion in cash and cash equivalents and $2.9 billion in debt.
Looking ahead, Cagwin said Western Union’s 2026 outlook assumes no material changes in macroeconomic conditions. The company guided for adjusted revenue growth of 6% to 9% (inclusive of Intermex) and adjusted EPS of $1.75 to $1.85, reflecting higher interest expense tied to refinancing notes maturing in the first quarter. He also said the outlook assumes roughly $100 million of stock repurchases in 2026 as the company integrates Intermex and evaluates M&A opportunities.
About Western Union (NYSE:WU)
Western Union Company (NYSE: WU) is a global leader in cross-border, cross-currency money movement and payments. The company enables individuals and businesses to send and receive money through a variety of channels, including its vast agent network, online platforms, and mobile applications. Core services include person-to-person money transfers, business-to-business cross-border payments, bill payment services and prepaid card programs.
Through its digital offerings, Western Union provides customers with the ability to initiate transfers via its website and mobile app, as well as track transactions in real time.
