WU Q3 Deep Dive: Digital Expansion and Consumer Services Offset North America Weakness

Money transfer company Western Union (NYSE:WU) reported Q3 CY2025 results beating Wall Street’s revenue expectations, but sales were flat year on year at $1.03 billion. The company’s full-year revenue guidance of $4.14 billion at the midpoint came in 1% above analysts’ estimates. Its non-GAAP profit of $0.47 per share was 9.5% above analysts’ consensus estimates.

Is now the time to buy WU? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Western Union’s third quarter results drew a positive market reaction, as management attributed flat year-over-year sales to continued strength in digital channels and robust growth in its Consumer Services segment, despite ongoing weakness in North America. CEO Devin McGranahan highlighted that improved execution in Europe and Asia, as well as the scaling of travel money and digital wallet initiatives, helped to offset softness in key U.S. corridors, particularly the U.S. to Mexico money transfer route. Management credited cost discipline and operational efficiency for sustaining margins amid a challenging geopolitical and macroeconomic environment.

Looking ahead, Western Union’s leadership expects the digital transformation and new product launches to provide ongoing momentum, with particular focus on integrating Intermex to strengthen its U.S. retail presence. Management believes that the evolving migration landscape and expanded digital wallet capabilities will drive customer adoption. CFO Matthew Cagwin emphasized that the company’s ability to deliver on its strategy relies on further scaling digital and account-to-account offerings, noting, “We expect our digital business to continue double-digit growth, supported by new partnerships and payout innovations.”

Key Insights from Management’s Remarks

Management pointed to the resilience of its digital and Consumer Services businesses, alongside prudent cost controls, as core drivers of the quarter’s performance. The company also highlighted recent strategic moves to accelerate its retail transformation in the U.S.

• Digital channel momentum: The branded digital business achieved 12% transaction growth and 6% revenue growth, supported by new partnerships in the Middle East and the growing importance of account-to-account money transfers, which now represent over half of digital principal volume.
• Consumer Services expansion: Consumer Services segment revenue rose 49%, driven by the Travel Money business and the Eurochange acquisition. Management noted that these offerings now account for approximately 15% of company revenue and see a “long runway” for further growth.
• Retail transformation in the U.S.: The company is accelerating its U.S. retail strategy by expanding its independent agent network and integrating Intermex’s go-to-market model, aiming for a more competitive and diversified distribution base.
• Cost discipline and margin improvement: Operational cost control and the completion of a cost redeployment program two years ahead of schedule helped increase the company’s operating margin. Management also cited technology upgrades, including a global point-of-sale rollout, as contributors to efficiency gains.
• Adoption of digital assets: Western Union is piloting stablecoin-enabled treasury solutions and expanding partnerships to facilitate customer movement between fiat and digital currencies, reflecting a cautious but proactive approach to integrating digital assets into its network.

Drivers of Future Performance

Western Union’s outlook is underpinned by continued investment in digital channels, product innovation, and the integration of acquired businesses, while remaining attentive to shifting migration trends and regulatory developments.

• Digital wallet and payout growth: Management expects further adoption of digital wallets and payout-to-account services to support double-digit digital revenue growth, particularly as new licenses in Australia and expanded offerings in Latin America and Asia roll out over the next year.
• Retail and agent network optimization: The integration of Intermex and the application of European strategic pricing models in the U.S. are expected to stabilize and potentially revive retail performance, with a focus on increasing productivity through independent agents and company-owned stores.
• Migration and policy uncertainties: Management identified evolving migration patterns and restrictive U.S. immigration policies as ongoing risks that could impact transaction volumes, particularly in North America. However, stability in other regions and new outbound corridors, such as Argentina and Canada-India, may provide partial offsets.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the pace of digital wallet adoption and expansion into new markets like Australia and Mexico, (2) integration milestones and performance lift from the Intermex acquisition in the U.S. retail segment, and (3) continued margin resilience and cost control as technology and AI enhancements are deployed globally. The sustainability of Consumer Services growth and the evolution of migration-driven transaction trends will also be key signposts.

Western Union currently trades at $9.12, up from $8.14 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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