The Western Union Company (NYSE:WU) Q4 2022 Earnings Call Transcript

Devin McGranahan: That has been our experience and our customers have benefited from increased wages while suffering the consequences of high inflation. The net of that has been 4% larger transactions across our entire footprint. It obviously varies by geography and by corridor where some in some corridors are seeing greater, some quarters we’re seeing less. But the net take for us is — the business is fairly resilient in the face of moderate to significant economic headwinds around the world.

Bryan Keane: My follow up. Just thinking once we comes to that positive branded digital growth is that coming normalize growth rate you guys thinking come at year or two once we make that turn.

Devin McGranahan: I will tell you what our aspiration is. Our aspiration is to get back to high single digit, low double digit revenue growth in our digital business, which we believe given our scale and the diversity of our markets will reliably enable us to outgrow the market and be a market winner in most of the important places of the world.

Operator: Our next question comes to us from Andrew Schmidt from Citi. Our next question comes to us from Chris Zhong from Credit Suisse. Please ask your question.

Chris Zhong: This is Chris Zhong at Credit Suisse. So the first one related to the critical produce transaction that prior mentioned, we’ve definitely been very strong growth going up 1 year to 2 year and 3 year constant currency basis. And wanted to zoom in a little bit on the underlying assumption for the revenue guide in 2023, where called out on the global macro outlook. But are you seeing the principal project transaction growth holding up in 2023? Or there’s any direction probably have? And this is the first one. I’ll follow up with the next one.

Matthew Cagwin: Chris, this is Matt. There’s lots of moving parts in our guidance. The price, there’s principal, there’s new customer acquisition. So I’m not going to comment on micro topics within our overall guidance. But we are confident that we can obtain our outlook we gave out this year on this call today as well as Investor Day.

Chris Zhong: And for one of the factors to achieve your medium-term outlook, we’re seeing some early days in your progress. It’s up 36 basis points reduction in the attrition or just increasing in the retention. And I think previously you called out they have the source of attrition mainly due to pricing and transaction time per customer interaction. And can you just share maybe some of the thoughts on how much of the retention is coming from different sources, noticeably. It’s probably going to be less pricing intentionally, but if your transactions shift incrementally towards digital? Is that also going to be a factor as well?

Devin McGranahan: So a couple of things embedded in there, Chris. Thanks for calling in today. The focus on retention really started in the second half of the year as we rolled out the Evolve 2025 strategy. So we were encouraged by the retention results that we got by focusing on it and believe that a continued focus can ultimately get us to our long-term aspiration of improving retention by 200 basis points a year. Secondly, some of the work that we have been doing, and remember, we have a complicated ecosystem of multiple generations of point-of-sale systems, including gateway applications for our large strategic agents in one of those, which we call WUPOS 2.0, we’ve been working hard on increasing transactional efficiency.