Western Union's Q4 Earnings Beat Estimates on Lower Costs

The Western Union Company WU reported fourth-quarter 2025 adjusted earnings per share (EPS) of 45 cents, which surpassed the Zacks Consensus Estimate by 4.3%. The bottom line grew 12.5% year over year.

Total revenues were $1 billion, which fell 5% on a reported basis. The top line missed the consensus mark by 2.7%.

The quarterly earnings benefited on the back of a declining expense level. The Branded Digital business posted transaction growth. However, the upside was partly offset by a revenue drop in the Consumer Money Transfer (CMT) segment, impacted by weaker transactions.

The Western Union Company Price, Consensus and EPS Surprise

The Western Union Company price-consensus-eps-surprise-chart | The Western Union Company Quote

Q4 Performance of WU

The adjusted operating margin of 20% improved 300 basis points (bps) year over year on the back of cost efficiencies achieved.

Total expenses came in at $823.1 million, which declined 6% year over year in the quarter under review and came lower than our estimate of $859.2 million. This resulted from a fall in the cost of services and selling, general and administrative expenses.

Operating income advanced 4% year over year to $185.3 million, which beat our estimate of $184.5 million.

Segment Analysis of WU

The CMT segment recorded revenues of $871.5 million in the fourth quarter, which slipped 7% year over year. The metric fell short of the Zacks Consensus Estimate of $889.5 million and our estimate of $893.6 million.

Operating income improved 3% year over year to $175.4 million. The metric beat the consensus mark of $159.1 million and our estimate of $158 million. The operating income margin improved 200 bps year over year to 20%.

Transactions within the CMT segment on an adjusted basis, excluding Iraq, dipped 2% year over year. However, there was 13% transaction growth in the Branded Digital business. Branded Digital revenues, which accounted for 30% of CMT’s fourth-quarter revenues, rose 7% on a reported basis and 6% on an adjusted basis.

The CS segment’s revenues climbed 15% year over year on a reported basis and 26% on an adjusted basis to $136.9 million in the quarter under review. However, the metric missed the Zacks Consensus Estimate of $147.6 million and our estimate of $150.1 million.

Operating income totaled $23.2 million, which increased from the year-ago figure of $13.4 million. The metric missed the consensus mark of $35.3 million and our estimate of $34.8 million. The operating income margin improved 600 bps year over year to 17%.

WU’s Financial Position (As of Dec. 31, 2025)

Western Union exited the fourth quarter with cash and cash equivalents of $1.2 billion, which plunged 16.3% from the 2024-end level. Total assets of $8.3 billion declined 0.8% from the figure at 2024-end.

Borrowings were $2.9 billion, down 2.1% from the figure as of Dec. 31, 2024.

Total stockholders' equity of $957.8 million slid 1.1% from the 2024-end level.

WU generated net cash from operations of $543.7 million in 2025, which soared 33.8% from the prior-year comparable period.

Western Union’s Capital Deployment

Western Union rewarded its shareholders with $305 million in the form of dividends and $225 million in share buybacks in 2025.

WU’s 2026 View

Management anticipates adjusted revenue growth to be between 6% and 9%.

Adjusted EPS is forecasted to be in the range of $1.75-$1.85, the mid-point of which indicates a 2.9% improvement from the 2025 reported figure of $1.75.

GAAP EPS is currently forecasted within the band of $1.50-$1.60, the mid-point of which implies 2% growth from the 2025 figure of $1.52.

WU’s Zacks Rank

WU currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did Peers Perform?

Several companies in the business services space, including Mastercard Incorporated MA, Visa Inc. V and Marsh & McLennan Companies, Inc. MRSH, have also reported their financial results for the December quarter of 2025. Here’s how they had performed:

Mastercard reported fourth-quarter 2025 adjusted earnings of $4.76 per share, which surpassed the Zacks Consensus Estimate by 13.3%. The bottom line improved 25% year over year. The quarterly results were aided by growing cross-border volumes, an increase in switched transactions and solid growth in value-added services revenues. However, the upside was partly offset by MA’s elevated operating expenses due to acquisitions and administrative costs.

Visa reported first-quarter fiscal 2026 earnings per share (EPS) of $3.17, which beat the Zacks Consensus Estimate of $3.14. The bottom line increased 15% year over year. The quarterly results benefited from higher payments and cross-border volumes. Resilient consumer spending remains a tailwind. However, the upside was partly offset by V’s increased operating expenses and lower-than-expected processed transactions.

Marsh reported fourth-quarter 2025 adjusted EPS of $2.12, which surpassed the Zacks Consensus Estimate by 7.6%. The bottom line advanced 10% year over year. The quarterly results benefited from solid growth in the Risk and Insurance Services and Consulting unit, particularly from the Guy Carpenter, Mercer and Marsh Management Consulting businesses. However, the upside was partially offset by MRSH’s elevated operating expenses, primarily due to increased compensation and benefits.

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