Devin McGranahan: Yes. So, Ken, thanks for joining the call. We’re not having a major change in our retail RPTs. I think you’re using probably too low of an RPT for Iraq. We’ve talked previously on calls that are our yield and RPT for Iraq is higher than the average business. The principal amounts are larger, the more C2B type transactions. So you have to anticipate more than the average for the company, call it almost more double, our RPT for Iraq, and hopefully that will get you to a number that’s not a major change for our retail business. The other thing, Ken, you might be seeing is there are some mix shifts in the business, which we highlighted, particularly on the retail side, the strength in Europe has been good with nearly mid-single-digit transaction growth.
In general, RPTs are higher in Europe than they are in some other parts of the world. And so you’re seeing some mix shift in some of those calculations probably as well. But we’re really pleased that that gap has closed by 300 basis points as well.
Operator: Our next question comes to us from Jason Kupferberg from Bank of America. Please ask your question.
Jason Kupferberg: Hi, thank you, guys. Just to follow up on Iraq, just to make sure I’ve got the math right, I think you said it contributed 4 points of growth in the quarter, so I guess that’s about $40 million. And I think you said, you’re tracking to call it the $100 million level for the year. So how should we think about kind of a base case for the quarterly cadence, from here, and then just how much of the full-year revenue guidance raise is coming from Iraq. Would it be kind of half to two-thirds. I think that was your answer to Tien-Tsin’s question in terms of the source of upside in the quarter, but just wanted to check that for the year. Thanks.
Devin McGranahan: Hi, Jason, thanks for joining the call today. To your first question, your math’s a little bit different on the estimating what Q1 was. It’s 4% – contributing 4% growth. There was an amount last year as well, as we disclosed around $25 million last year. So the number’s somewhere a little bit more than the low end of our range we’d given for the full year. I also, in my prepared remarks, said that some of our – we’ve solved some of the operational issues for Iraq, which is why we’re flagging it will be around the upper end of the range now because there are some things we’ve not solved. Best way to think about what Iraq could be going forward, I’m going to give you a very wide range because it’s still a fluid market, but think about somewhere in that $10 million to $30 million range per quarter for the rest of the year.
Jason Kupferberg: Okay, that’s helpful.
Devin McGranahan: And just coming back to the raise, though. I think, the raise is driven by the confidence in the underlying trends and revenue. As Matt said, Iraq remains volatile. There’s still issues to be resolved. But we see strength in our underlying core business, which gives us confidence in that raise without having to rely on some outsized performance from Iraq.
Jason Kupferberg: Understood. Yes. Thanks for that. And then just in terms of the digital revenue growth trend, obviously nice improvement there to 9% in the quarter. How do you see that trending during the balance of the year. I mean, I know the year-over-year comp start to flip around and get tougher. But do you think we exit the year double digit plus or – I want to get a sense of that. Thanks.
Matt Cagwin: Yes, so we still are believing that we can get to be a double digit grower. Q1, as I mentioned in the prepared remarks, had the extra day for leap year. So I think that we will continue to bounce around the high single digit to low double digit range is our optimism, but a lot more work to do.
Operator: Our next question comes to us from Bryan Keane from Deutsche Bank. Please ask your question.
Bryan Keane: Hi, thanks for taking my question. Just hoping you could flush out the new loyalty program and its potential improve – seen improvement in the retail business and how that could have a factor going forward to sustainable growth in retail.
Devin McGranahan: Thank you for the question. We’re excited about the new loyalty program. As you know from our Evolve 2025 Strategy outline, improving retention across our business is one of the key drivers of long term sustainable growth, particularly in retail. And so we are focused on recognizing our customers at every point of interaction, and then for our best customers, rewarding them for their loyalty over time. Our prior retail – Our prior loyalty program was not terribly effective in the retail environment. It was exceptionally hard both for agents, to administer and for customers to redeem. It required a code and a special sequence of actions In order to do that. We’ve actually changed the program it’s now customer based regardless of channel.
It will allow a customer to earn a reward after five transactions and to seamlessly redeem that reward on any transaction, whether that is online or at a retail location. And we’re providing incentives over time to our agents to participate and help us grow that program and obviously, loyalty with our retail customers.
Bryan Keane: Got it. And just the follow up question I had thinking about the spread, but I wanted to think about the spread ex Iraq. So maybe you could just give us the numbers ex Iraq on the spread. And did that close at all from last quarter. It seemed like it was pretty similar GAAP there between revenue and transactions.
Matt Cagwin: The digital business closing spread that Devin talked about has no Iraq in it. Iraq’s all within the non-digital business. So yes, it closed without it.
Operator: Our next question comes to us from Ramsey El-Assal from Barclays. Please ask your question. Ramsey, are you there? We’ll go to the next question from James Faucette from Morgan Stanley. Please ask your question.
James Faucette: Great. Thank you very much. I wanted to ask just a couple of quick follow-up questions. First, and I’ll just put them both out there simultaneously. First, on Iraq, message is clear for this year. How and when will we have visibility into how much of kind of that quarterly cadence could carry into next year and what are the key factors in determining that. And then obviously your expected growth for multiple years in consumer services is quite compelling. But I’m wondering how we should think about the evolution of profitability and how closely that may track consumer services and the profitability of those services. Thanks.
Matt Cagwin: Hi, James, thanks for joining the call today. I’ll tackle the first question on that on the Iraq side. It’s a fluid market, so it’s hard for me to tell you what’s going to happen in Q1 of 2025. But we have now made some meaningful progress to stabilize some of the operational issues. It’s come down to a more repeatable amount over the last couple of months, so we feel optimistic this thing could last a while. That’s why we’ve rolled it into our guide and didn’t overly emphasize it in our prepared remarks today. So we do view it as hopefully a sustainable part of our business in that range of $10 million to $30 million a quarter.
Devin McGranahan: On the second question, with regard to consumer services, as you saw in the prepared remarks and on the slides, there’s a wide range of products and services that we are working to deliver with varying margin profiles. We remain committed to grow consumer services at margins that are consistent with the overall company, if not better. So we do not expect consumer services to be margin dilutive over time. And we are hoping particularly for some of the higher value products and services like debit interchange and the prepaid cards, as well as some of our investments that are coming to fruition around foreign exchange could yield better margins than our core transactional business in some cases.
James Faucette: Well, appreciate that. Thanks to both of you.
Devin McGranahan: Awesome. Thanks for joining.
Operator: There are no additional questions in the queue at this time. Thank you for joining the Western Union first quarter 2024 conference call. We hope you have a great day.
