Thank you. On today's call, we will discuss the company's second quarter results and our 2026 full-year outlook.

And then we will take your questions. The slides that accompany this call and webcast can be found at westernunion.com under the Investor Relations tab and will remain available after the call.

Additional operational statistics have been provided in supplemental tables with our press release. Joining me on the call today is our CEO, Devin McGranahan, and our CFO, Matthew Cagwin.

Today's call is being recorded, and our comments include forward looking statements. Please refer to the cautionary language in the earnings release and in Western Union's filings with the Securities and Exchange Commission including the 2025 Form 10-K for additional information concerning factors that could cause actual results, to differ materially from the forward looking statements.

During the call, we will discuss some items that do not conform to Generally accounting principles. Where possible, we have reconciled those items to the most comparable GAAP measures in our earnings release attached to our Form 8-K as well as on our web westernunion.com under the Investor Relations section.

I will now turn the call over to our Chief Executive Officer, Devin McGranahan.

Good afternoon. And welcome to Western Union's Second Quarter 26 financial results conference call.

In the second quarter, we continued to face significant margin pressures due to the ongoing slowdown in the retail business in The Americas, higher agent commissions and the continued acceleration of our digital payout to account business. The quarter came in $0.06 better than Q1 having eliminated many of the 1 time effects we saw in the first quarter.

However, the accelerated shift from cash payout transactions with higher revenue per transaction RPT, and higher contribution profit per transaction CPPT, to pure digital transactions continues to weigh on profitability. On a more positive note, despite the strong macro headwinds, our strategy and our significant geographic diversification enabled us to report revenue of $1 billion.

On an adjusted basis, this was a decline of only 1% year-over-year. Consumer money transfer transactions grew at 3% in the quarter, which was a 300-basis-point improvement from Q1 a 600-basis-point improvement year over year and the highest transaction growth rate since the second quarter of 2024.

We continue to see quarter over quarter improvements as we lap the worst of last year. For example, U.

S. To Mexico declined a little over 3% on a transaction basis in the quarter, a nearly 1 thousand-basis-point improvement year over year.

Yet overall U. S.

Retail continued to be mid teens negative on a transaction basis in the second quarter well below our expectations. While overall global transaction growth has improved significantly, it is important to note that it comes from lower contribution profit per transaction which is putting pressure on our margins.

Adjusted earnings per share came in at $0.31 in the quarter, compared to $0.42 this quarter a year ago. This is below our expectations and is driven by lower profitability in our Americas retail business, and lower profitability in our Middle East business as volumes there continue to shift rapidly from our legacy partners in the region to newer digital only partners at lower RPTs and profitability.

Our branded digital business continued to perform well with transactions increasing by 25% this quarter and adjusted revenue by 6%. While transaction growth continues to accelerate, the revenue growth is being muted by strong growth in lower RPT corridors and a significant increase in digital payout to account which saw 55% growth in the quarter.

As I mentioned in previous calls, our new customer acquisition economics remain challenged in the quarter, which impacted the overall revenue growth and profitability of our digital business. We continue to roll out our Beyond Digital platform, I believe will enable better customer experience improve our ability to market at a corridor level, and potentially reduce the magnitude of needed new offer incentives.

In consumer services, adjusted revenue was up 12% in the quarter, driven by growth in our bill pay business as well as continued growth in travel money. Our financial results in this quarter came in below our expectations for the second quarter in a row.

This is not acceptable. We are not satisfied with the current operating performance and will be implementing significant changes as a result.

While the external macro factors over the past 12 months have undoubtedly accelerated the underlying trends in the business, we recognize that in the near term, these trends are not likely to continue at elevated levels. We have been navigating this mix shift away from payout to cash over the past several years as well as the move from retail to digital through cost savings initiatives and the reallocation of investments.

The impact of ongoing changes in immigration in The Americas has accelerated those dynamics and we must now more aggressively change our cost base to reflect the reality of a future with continued pressure on CPPT. Over the past 12 months, we have seen the percentage of payout to account and payout to wallet transactions grow by 25%.

This is an important trend that will likely continue to cause ongoing margin headwinds unless we vigilantly reduce our fixed cost base, lower our account payout costs and increase our ability to cost effectively drive digital growth. We have spent much of the last 8 weeks evaluating what is working across these 3 dimensions and what is not.

That process has reinforced our belief that the long term fundamentals of the business remain intact. Our brand, customer relationships, market position scale and digital capabilities continue to provide a strong foundation upon which to build.

However, a strong foundation alone is no longer enough. We must accelerate the transformation of our operating model to enable us to maintain our ability to invest in our next jet generation digital initiatives while simultaneously significantly lowering our ongoing operating costs.

The program we have launched is called Beyond Efficiency, It has 5 key program elements and we will be targeting a run rate operating cost reduction of $50 million by the end of the year. The 5 key program pillars include the first pillar, accelerate the dual track strategy by reducing redundancy and streamlining processes that do not align with the Beyond strategy.

As a 175-year-old company, we have a lot in the garage. Organizations build up over time, and what were once new ideas or areas of investment are now ongoing operating costs with limited or no contribution to the Beyond strategy.

For example, as we move to the Beyond digital framework, we have made the decision to close down our existing digital wallets in Europe saving the company a run rate of $6 million to $8 million. We anticipate launching our Beyond Digital platform to replace those in Europe by the end of the year.

The second pillar is to reduce discretionary operations and technology work by 20% that is not directly tied to growing digital. We are targeting a 20% reduction in discretionary operations and technology capacity by the end of the year.

Forcing a prioritization that will cause only the most impactful initiatives to get done. The third pillar is to rapidly adopt AI to drive automation and reduce manual work given our legacy system limitations.

We have ramped up our adoption of AI and other automation platforms significantly over the past 6 months, and we see meaningful opportunity to eliminate manual work and reduce the friction that results from our large geographically dispersed and highly regulated business. The fourth pillar is to move to a more aligned operating model.

As part of our Beyond Efficiency program, we are looking to align people in work closer to the region they support. This will require us to localize what today are distributed global functions.

For example, we have been moving agent onboarding for the Asia Pacific region from Lithuania and Costa Rica to our operating center in Manila. This will improve time zone and geographical alignment and reduce unit labor costs.

We anticipate this will improve on all 3 dimensions of cost, quality and speed. The fifth pillar is to reduce the operating costs of moving money.

In a world that is rapidly going to digital payouts, we must reduce the cost of capital that we have floating around the system lower payout costs, improve FX rate competitiveness and accelerate real time settlement through our own digital currency USDPT. These initiatives are focused on creating a leaner organization while maintaining our ability to invest in the areas that matter most strategically.

Importantly, this is not a short term exercise designed solely to reduce near term costs. Rather, it is a structural effort to improve how we operate and to position the company for stronger, more sustainable profitability in the years ahead.

We understand that our investors expect tangible evidence that these actions are producing results. While meaningful transformation takes time, our view is that the combination of improving growth and enhanced cost discipline will strengthen margins, improve profitability, and increase returns over time.

Our objective remains straightforward. Generate consistent growth improve operating profitability, strengthen free cash flow generation and create long term shareholder value.

I look forward to updating you on the progress of this program in the coming quarters. Now, switching briefly to the macro.

As you know, remittances in The Americas have faced meaningful pressure that began in late 2024 driven by the changes in immigration policy. While growth rates have improved meaningfully from the summer of 2025 lows, and continue to improve, with U.

S. To Mexico, for example, revenue growth rates improving 500 basis points sequentially compared to the first quarter, Retail continues to underperform relative to digital and that dynamic continues to weigh on the profitability of our Americas businesses.

As we have discussed, the growth in retail business is almost always dependent on new migration. When immigrants come to a new country, most frequently they transact in retail.

Out of necessity, given cultural and language issues. Lack of access to digital funding and often heavy cash remuneration.

When migration goes negative like we have seen in the U.S. and around parts of the Latin American region, it becomes difficult to replace customers that migrate to digital channels find alternative options, or leave the country to return home.

This does not mean the retail business cannot improve like we have seen over the last several quarters. It just means it will be difficult to get the business back to true growth without a meaningful change in immigration policy or much more aggressive gains in our market share.

We do believe we can take market share and we should start to see the benefits as Canada Post and Deutsche Post ramp up, which will provide a tailwind starting in Q3 and continuing into 2027. We also recently launched an industry first partnership with Total Wireless, a Verizon value brand that combines wireless connectivity and cross border money movement.

The partnership expands our reach into the telecom channel providing access to millions of subscribers through thousands of retail locations and extending our distribution footprint across both digital and retail channels. Recognizing that consumer behavior continues to evolve, digital engagement is becoming increasingly important across every aspect of the customer journey.

We believe our digital first strategy and our digital platforms represent the most attractive growth opportunities over the long term. Over the last couple of quarters, we have seen substantial gains in The Middle East, while our digital business in other parts of the world has plateaued.

We spoke on the last couple of calls about needing to better manage promotional offers in places like The United States and Europe, and as such, we have begun to pull back. While the benefits of this more disciplined approach are not immediately obvious in this quarter's results, in the last few months, new customer growth rates have improved and have done so at higher RPTs, which should bode well for better revenue and profitability in future quarters.

That said, pulling back on new customer incentives is just 1 element of our revised approach. Since our Investor Day, we have been executing our digital acceleration program along 3 axes: The first is the restructuring of our digital go to market model and team.

We have now completed the restructuring of our go to market team moving digital team members into the regional operating units that they support. This now brings decision making and local market knowledge together in 1 team.

We have also been adding new senior digital talent with sector expertise across the regions. In particular, I would like to welcome Shishir Singh who joined us last quarter as our new Chief Digital Officer leading the global digital product team and the North American go to market team.

Shishir brings deep knowledge and experience to us and has already begun to make material impacts. Second, we are accelerating our Beyond Digital platform.

Having now seen early returns we are accelerating the rollout across our major markets with planned launches in Australia, Europe and The U. S.

Before the end of this year. We are expecting the Beyond Digital platform to enable us to improve new customer onboarding success rates and thus improve the return on new customer acquisition in these important markets.

We continue to target rolling out the Beyond Digital platform to all of our major markets by the end of 2027. Third, we are focusing on investments by corridor.

Our analytics and insights have improved and we have begun to differentiate our level of new customer investment in both marketing and new customer incentives at the corridor level. This higher level of fidelity and targeting, we believe, will enable us to earn better returns on the same overall investment pool.

Even if it means slowing down in some larger corridors where competitive dynamics inhibit strong returns. Before I turn the call over to Matthew, I would like to discuss for a few minutes to provide an update on our digital asset strategy and the progress we are making.

At the center of this strategy is USDPT, our U. S.

Dollar stablecoin. USDPT is designed to maintain a 1-to-1 value with the U.

S. Dollar and is backed by reserves, including cash and U.

S. Treasury instruments.

First, we successfully launched USDPT in May of this year, which established the foundation for a regulated digital dollar that can support payments, treasury operations and customer use cases across our global network. USDPT is now live and available through an expanding ecosystem of exchanges, financial institutions and partners.

With the first 4 exchanges now live, and actively trading USDPT. Second, we have introduced our treasury bridge solution which utilizes USDPT to support more efficient movement of liquidity and capital across our global network.

This initiative has the potential to enhance funding flexibility improve settlement speed and reduce reliance on the traditional correspondent banking infrastructure. We are testing with multiple counterparties to use USDPT as a form of settling our cross border money transfer transactions.

Third, we launched the digital asset network, or DAN, which extends Western Union's unique global distribution capabilities to the digital asset ecosystem. Through DAN, digital assets, exchanges and other partners can connect to Western Union's payout infrastructure enabling customers to convert digital assets into local currency and access funds throughout our global network.

This creates a bridge between the rapidly growing digital asset economy and the real world economy that customers can use every day. We have successfully launched our first partner and we expect the launch of several more in the coming weeks with the goal of having tens of millions of consumer digital wallets connected to our digital asset network by the end of the year.

And lastly, we continue to advance our consumer proposition with the development of our USDPT powered wallet and card capabilities. Our vision is to provide customers with the ability to redirect remittances, hold the USDPT digital dollars and spend them through a payment card seamlessly transitioning between digital assets and traditional financial services.

We are launching the USDPT Stable Card today. We view the digital assets as an opportunity to expand Our TAM, and to free up capital.

Our objective is simply is not simply to participate in the digital asset system. Our objective is to leverage Western Union's trusted brand regulatory expertise, global reach and distribution network to become a critical infrastructure provider within that ecosystem.

What differentiates Western Union is that we are focused on real world utility, We are not building speculative products. We are building solutions that address practical agent and customer needs, faster settlement, lower friction, improved accessibility and broader financial inclusion.

While we remain in the early stages of this journey, we are encouraged by the momentum we are seeing. We have moved beyond strategy and are now into execution.

2026 will be a foundational year for our digital asset initiatives. We have successfully launched the core building blocks of this ecosystem and our focus now shifts towards execution, adoption and scaling.

We remain confident that digital assets, stablecoins and blockchain-enabled payments can become meaningful contributors to Western Union's future growth and reinforce our mission of making financial services accessible to people everywhere. Before I conclude, I would like to give a quick update on Intermex.

We remain actively engaged in discussions with regulators on the final approval. I remain optimistic that we will be able to obtain the outstanding approval needed.

This would enable us to close the transaction upon receipt of this approval as well as satisfaction of other outstanding and customary closing conditions. In closing, while we are disappointed with our current results, we remain confident in our ability to improve performance and unlock the value that exists within this business.

The path forward is clear. We are focused on driving growth through our digital initiatives improving efficiency throughout the organization allocating capital with discipline and executing against a well defined strategic plan.

We recognize that rebuilding momentum requires patience and execution. However, we believe the actions that we are taking today will position the company for a stronger future.

We appreciate the continued support of our shareholders and the dedication of our employees who remain committed to serving our agents and customers every day. While there is significant work ahead, we are focused on delivering the results that our stakeholders expect and deserve.

Thank you, And I now turn it over to Matthew to review our financial results in more detail.

Thank you, Devin. Good afternoon, everyone.

Going to walk you through our 26 second quarter results in more detail our 2026 financial outlook. In the second quarter, GAAP revenue was $1 billion which on an adjusted basis was down 1%, a meaningful improvement from down 5% last year.

The decrease was driven by continued slowing of our Americas retail business while our consumer services, and branded digital businesses grew 12% and 6%, respectively. Adjusted operating margin was 15% in the quarter, which was impacted by lower revenue from our retail business mix higher agent signing bonuses and higher operating expenses.

As Devin said, we are clearly not satisfied with our performance of our business this quarter. And we remain committed to driving higher operating profitability.

We are in the process of accelerating our operational efficiency program beyond efficiency, with the goal of taking out $50 million between now and the end of the year and $200 million of run rate by the end of 2027. The drivers of our Beyond Efficiency Program will be the 5 elements that Devin discussed earlier.

Which includes the additional scale we will get from our Intermex acquisition. Adjusted EPS was $0.31 in the current quarter.

Adjusted EPS in the current period was driven by lower operating margin for the reasons I stated previously offset by lower tax rate in the quarter. Our adjusted effective tax rate in the quarter was 14%, compared to 16% in the prior year.

The decrease in adjusted effective tax rate was primarily due to discrete expenses in the prior year period. Now turning to Consumer Services business contributed 15% of total revenue in the quarter compared to 6% in 2022.

Second quarter's adjusted revenue increased 12% driven by the growth of our consumer bill pay business, travel money business as well as the addition of check cashing. As a reminder, the current quarter marks the anniversary of our EuroChain acquisition, which was acquired on April 1st.

The Consumer Services segment's profitability was lower in the quarter driven by lower operating profits in our Travel Money business, lower float income in our Retail Money Order business as well as the delayed reduction in overhead due to the acquisition we made of a check cashing partner that we had planned to integrate with Intermex. Now transitioning to our consumer money transfer or CMT, business.

CMT transactions grew 3% in the quarter, relative to a year ago. This was driven by continued strength of our branded digital business, which delivered 25% transaction growth in the current quarter.

While retail trends in The Americas remained under pressure, the ongoing shift of digital continues to support the overall transaction growth and customer engagement. CMT adjusted revenue declined 3% year-over-year, reflecting the continued pressures in The Americas retail business driven by uncertainty in The U.

S. Immigration policy.

But this was a 300-basis-point improvement relative to the first quarter of this year. The CMT segment's profitability was lower in the quarter due to revenue mix, including declines in cash payout transactions, offset by lower profitability from digital payout transactions, which increased.

Higher commission costs associated with new partners and renewals and higher operating expenses. In the second quarter, our branded digital business grew adjusted revenue by 6% and transactions by 25%.

This marks the eleventh straight quarter of solid revenue growth. Consistent with the recent trends, growth was increasingly driven by our Middle East partnerships, While these channels continue to expand our reach and support volume growth, their economics differ from those of our traditional license business.

Resulting in a more pronounced gap between transactions and revenue. We continue to view this as a strategic trade off that supports the long term expansion of our digital platform.

As a reminder, we began to ramp the Middle East partnerships in late Q3 of last year. So we expect transaction growth rates to moderate as we anniversary these partnerships.

Account payout transactions also continued with a strong momentum growing at 50% in the quarter. Which is the strongest quarterly growth rate in several years.

Turning to our retail business. Overall, the performance of our retail business was in line with previous quarters on a transaction basis, and a few hundred basis points better on a revenue basis.

The business remains challenged in The Americas as U. S.

Immigration policy continues to weigh on our operating results. New migration is the lifeline of our retail business.

With borders closed, it is difficult to offset natural attrition that comes from digital migration, industry competition and reverse migration as consumers return home to their native countries. Looking ahead, we remain focused on strengthening our retail franchise, with new agent relationships a vastly improved platform, and a better consumer experience.

Now turning to our cash flow and balance sheet. We generated $214 million of operating cash flow year to date.

up 45% versus last year, driven by lower cash taxes. Year to date, capital expenditures were $88 million, or 65% higher than the prior year due to signing bonuses associated with recent agent wins and renewals.

As discussed in February, we expect CapEx to be roughly $200 million this year due to new strategic partnerships as well as a higher renewal cycle. Moving to our balance sheet.

At the end of the quarter, we had cash and cash equivalents of $920 million and $2.7 billion. Our leverage ratios were at 3x and 2x on a gross and net basis.

As we announced a few weeks back, we extended our delayed draw bank facility until November. This preserves the financial flexibility while ensuring that we have the committed funds in place to support the Intermex transaction.

As a result, post closing, we expect our debt to EBITDA ratios to be elevated above historical levels. In the quarter, we returned over $80 million to our owners via dividends and stock repurchases.

We have decided to pause our share buyback program in order to maintain our debt to EBITDA ratios of 2.5x to 3x. Now moving to our 2026 outlook.

Which assumes no major macroeconomic changes. Based on our performance year to date, and our view on the remainder of the year, we are updating our 2026 guidance We now believe adjusted revenue will be in the range of 4% to 6% revenue growth inclusive of the Intermex acquisition.

Our outlook assumes a September 1st close. From a modeling standpoint, we expect retail CMT to continue to improve throughout the back half of this year.

Digital CMT to be in a similar ballpark of recent quarters and consumer services to grow low single digit as we lap the EuroChain acquisition as well as the ramp of a large travel money partner as well as rightsizing our underperforming products. Devin talked about earlier.

Our adjusted EPS for the full year, we believe, will be between $1.25 and $1.35 We expect the second half EPS to be better than the first, driven by new agent wins, back half seasonality, better revenue mix and the accelerated pace of our Beyond Efficiency program. Thank you for joining the call today, and operator, we will take questions now.

Thanks. I think I am on mute.

Can you hear me?

Tien-Tsin.

Hey. Thanks.

Always good to catch up with you. So, yeah, you went through a lot of detail here.

Thinking about the revenue, which is much in line with us, but obviously, the topics would be very strong. I am just trying to price back here on the cost front.

Is it really the password mix shift with the digital? there is a lot of factors.

So I am just trying to summarize it a little bit easier. Can you give us a little bit more there?

Absolutely, Tom. And you broke up a little bit there, but I believe your question was, can you give a little more on cost side and what is going on there?

Is that correct? Yes, sir.

Perfect.

Yep. Happy to drain that a little.

Just a reminder, I know you know this, but our Q2 margins and adjusted EPS were 200 basis points and $0.06 better than Q1 but it is still a far cry from what we expected.

Also, as I am sure, as you know, last year, we were able to reduce our cost of sales expenses by 3% and SG&A and D&A by 14%, which helped us fully offset the revenue decline last year and helped us grow operating income. As you dig into this, there is really 2 major drivers that really stick out that we should talk about.

1 is the pace of our cost reduction. This has slowed from the reason why I want to give you the context of last year.

It slowed from where we were last year We were able to rightsize many different departments, exit some programs. In the first half of the year, that is gotten a little harder.

We do have a very good strong pipeline, as Devin outlined, the Beyond Efficiency Program. Which gives us confidence that over the rest of this year and going into next year, we can exit with a run rate savings of $50 million and $200 million.

The other part of it is revenue mix. We have seen a shifting of to lower contribution profit per transaction I will just give you a couple of examples.

We are seeing the acceleration of our cash payout to digital in both U. S and The Middle East.

Both accelerating. And we see higher profit dollars per transaction from cash payout versus account payout?

We are also seeing different results between quarters. As you know, this business is made up of tens of thousands or thousands of corridors and the economics vary massively from each 1.

As you heard Devin talk about, we have seen quarter over quarter improvements for U. S.

To Mexico. Which has also been talked about by the Central Bank of Mexico We have also seen improvements in U.S.

to US and US to Canada. We have seen a deterioration quarter over quarter of US really to the rest of the world.

there is a few spots where it is shining. But as you know, the yields vary between the different corridors.

The improvements we have seen in U. S.

And Mexico come in a corridor where there is lots of competition and the yields are much lower relative to the rest of the world, we have a much higher yield. And that is putting pressure on us.

The other thing that is helped us grow and have some improvements in the U.S. is we have had some regional agent wins over the last couple of quarters that have ramped as the quarters have gone on.

These have come at higher commissions per transaction to win them. They are still very profitable deals and things we are excited to have.

We talked about 1 of them earlier in the year with Vallarta, which is principally focused on customers that are Latin America based with a very heavy concentration of Mexicans. Okay.

Thanks for going through that, Matthew.

Maybe just as a quick follow-up, the cadence of the million then, you said you are going to attack the cost structure here. How quickly would that be realized and how much do you need Intermex to be able close on time to fully capture?

So it will ramp throughout the rest of year. I will use the example Devin gave in his discussion earlier.

We made the decision to turn off the European wallets because the more modern platform is better and will help us free up costs immediately. That benefit will start helping us in Q4.

there is a migration time for the customers who are in the platform, turning off the tech costs and all that. So the actions we are taking will ramp as the year progresses, and that is why we try to get to a year exit rate of $50 million and then next year being $200 million Our next question comes to us from Will Nance at Goldman Sachs.

Question. I just wanted to maybe circle back to the mix shift in the in the transactions that you are seeing in the quarter.

I mean, if I am hearing correct, it sounds like from a revenue perspective, you know, the kind of the improvement in some of the larger corridors have offset you know, decelerations in some of the other corridors. And then when you look at the contribution margin per transaction, you know, the accelerating corridors are just lower than the decelerating corridors.

So I guess I just wanna make sure we understand that dynamic. But maybe more importantly, it seems rather sudden the acceleration and some of that mix shift that is happened.

And so I am just wondering if can you point to anything specific that is driven that acceleration because it does seem to be happening at a really accelerated pace for your comments and I guess, you know, for some of the numbers that we are seeing in terms of, like, gross margin this quarter.

Yes, Will. So it is really a combination of a couple of things, just pulling the thread on what you just asked for.

Retail is very profitable. Particularly cash payout.

We have now been going on 6 to 8 quarters of pressure on that on the U.S. side.

We have been having double digit declines there for going on about 6 quarters. That compounding effect is having some pressure On top of that, we have been able to make progress on it from a transaction revenue standpoint with some of the wins we have had.

Those wins have been in the ballpark of our other strategic partners or the example I just gave to Tien-Tsin on the regionals, but they are at the upper bounds of what we have for partners. So it is putting pressure on commission cost per transaction but still helping us to grow revenue and prop up the profit.

Well, I will give you another example. Which to your point has even surprised us.

So most of the world principally from The US and Spain, but of the world to Colombia. The shift that has happened from what was traditionally a very significant payout to cash business for us.

To payout to account Bancolombia but more importantly, payout to a wallet there called the Nequi wallet, and this shift to the use of their real time payment system, Transfiya, has truly been amazing at how quickly this has happened. And so we were fortunate that we were enabled into the Nequi wallet and then we enabled Transfiya Matt will remember, probably in the fourth quarter of last year or the first quarter of this year.

So we have been able to capture some of that but the volume has been shifting and that shift has been significant economically because the economics of paying to a digital wallet over a real time payment switch is far different than the payout to cash economics in the same country, the same corridor.

Got it. that is helpful.

I appreciate that. And so maybe just pulling on that last bit, is there any way to decompose like, the extent to which these payout to account transactions are less profitable than your retail business, how much of that do you attribute to just the structural differences on profitability in the transactions versus maybe things that are more under your control and your ability to improve the margin structure, build scale in some of these digital payout channels.

I guess I am trying to say, like, how much can you close that gap between your digital payout and your cash payout channels? Thank you.

Appreciate for taking the questions.

Hey, Will. Thank you for the question.

As you know, the yields and the pricing, the profitability vary massively from quarter to quarter. So we can give some generalities But the real pressure here is we are seeing the vast majority of our branded digital growth coming from our Middle Eastern partners, which come at very, very low revenue per transaction, thus very low profit.

So that is causing part of this. As we Devin talked about in the prepared remarks, we have strengthened the team through multiple elements of new people, some of the things we are putting in place, the go to market they are taking from to market to our customers.

Those things take hold, which we are starting to see early glimmers of this, with getting revamping our core branded digital customer growth, That will help us grow more profitable branded digital in lots of countries. So really, it is being driven by the fact that we have this Middle Eastern partners that are very low RPTs and profit per transaction.

Beyond that, you also have just a mix, which varies because we have some corridors where digital payout might be a little higher. So it is hard to give any other than just generalities.

The key for us, we have got to get the overall growth humming and then see and drive improvements in The Americas from a retail standpoint.

And to what I would add, Will, right, if you remember is that it is generally again, Matthew's right, it is corridor to corridor, but in general, as a percentage digital transactions are roughly marginalized similar to retail transactions. Total dollars as I was talking about contribution profit per transaction, is you know, reasonably different.

And so when you start substituting the retail transactions, for the digital payout transactions, like I was talking about in Colombia, that is where you start to see some of the margin pressures that we are seeing. We do have 2 levers that we are working on.

Matthew highlighted 1, which is growing higher revenue and higher contribution profit per transaction, particularly in our digital business. The second, the team is working on quite aggressively is lowering digital payout costs.

So many of our digital payout partners in networks were negotiated 2, 3, 4, 5 years ago, in some cases, Some were part of our retail network and we used them as payment switches to reach other banks or other wallets. And so we are on a pretty active campaign and if you remember, we talked about at Investor Day our goal of lowering those payout costs This has brought that more to the forefront and we will share in upcoming calls the progress that we are making In that Colombia example, the team recently lowered the payout cost from over $2 to less than $0.50.

Right? And so the contribution per profit on those Nequi wallet is going to go up dramatically.

But previously, we saw a lot of volume shift and we were paying similar payout costs as we did to other options in Colombia. Even though they had lower revenue per transaction because they were digital.

Good evening. Thanks for taking my question.

Just given the current possibility pressures and broader business headwinds, how are you thinking about the sustainability of the current dividend over the medium term?

So I will start and then I will let Matthew follow-up with the math. We believe and the Board of Directors believe that the dividend is a strong return to our shareholders and that we believe we have sufficient financial capacity to continue and maintain that dividend.

At the present moment, we believe the strategy of continuing to return capital to our shareholders via the dividend is a good strategy.

And just to build on that a little more for you, Rayna. As you know, we have got over $900 million of cash in our books.

We talked earlier about the benefit we expect to be able to get out of USDPT is we are able to go get the treasury bridge ramped up. We are working very fast on 1 of the largest 3 markets in the world, which we hope to have a large partner on board by the end of this year and then ramping over $1 billion of float in the first quarter next year.

So that will start to free up capital from both the correspondent banking process as well as what we prefunded to some of our partners around the world. So we feel like we have line of sight to improve cash flow as Devin talked about, our Board's committed to the dividend.

Thank you. that is really helpful.

And as a follow-up, After 1 month into the third quarter, like, what are you seeing in terms of US immigration policy? Have things gotten worse?

Are they the same? Are you starting to see anything ease?

Thank you.

So what I would call it is a continuation of the policies and the effects of the policies that we have seen for a year. But as we have seen both in our financial results, and in certain places.

The effects of that you know, have stabilized at a certain level, and so we continue to see the negative effects of it but it is no longer worsening and in some cases and in some places, it is abating a bit. That is happening, however, slower than we anticipated at the beginning of the year.

We believe that by the time we lap the effects as you know, the real impacts on the policy started at the end of the first quarter of 2025. Felt them ramp in the second quarter of 2025 and really peaked in the third quarter of 2025.

We felt by this time of the year, we would be seeing the effects of lapping those things and more stability than we have. As noted earlier on the call, we also see, you know, varying effects by corridors, and so when you have a policy change with regard to Haitians or you have a event in Venezuela those are important corridors for us that will be impacted.

While we are seeing more stability in corridors like U.S. to Mexico.

And so again, this comes back to a corridor by corridor basis what policies are affecting what groups and how does that impact our customers and the mix of our customers in those corridors. But the overall effect is improving from the lows of last year, but not improving as significantly as we might have anticipated.

Alright. Hey.

Thanks, guys. Look.

You have obviously done well with growth in your branded digital users. As of many of your competitors also.

But our customer acquisition costs for branded digital now higher to the degree that it is impacting incremental profitability? I guess I am just trying to figure out, also, beyond managing expenses, can we can we just revisit the opportunities to expand ARPU?

Just trying to, you know, create more customer growth itself? Beyond digital, where are you in that, and what do you expect to see in terms of revenue per user expansion over the coming year or 2?

So let's tackle those in 2 parts. First, on the customer acquisition.

You know, we started talking about this probably 2-3 quarters ago. As the retail business began to see significant declines, competitive intensity in the digital business increased.

And the competitive intensity, which was historically driven more by marketing spend and by kind of brand recognition. also started to envelop new customer offers and in some cases relatively significant new customer offers, You know, there are market -- there are offers in the market where you know, customers can get free transactions for a month or they can get 3, 4, 5 free transactions as a new customer.

These kinds of offers have a significant negative effect on near term revenue as you onboard those customers. We participated in some of that for a while.

And then as noted in the public commentary, have begun to back off on some of that. Simply because we did not see the longer term returns given the impact on near term revenue that has required in order to compete on that.

The second question in terms of ARPU we continue, and 1 of the things I talked about in the corridor, is focusing on you know, basically our CAC to LTV and in particular, LTV is driven by customer behaviors in terms of longevity, transactions for customer, and principle per customer. And so us and others in the industry are very focused on where are the most valuable customers the higher senders, the more frequent senders, so that you can really optimize that revenue per transaction.

More importantly, you can optimize the LTV, so the revenue and profit over the life cycle of the customer to focus those acquisition dollars in places where we are getting higher returns on a life cycle basis than in an individual transaction economics that we might acquire the first or second transaction.

All right, Devin. Thank you.

Quick follow-up just on Intermex. I know it is delayed obviously versus your prior expectation, but sorry about that.

But do you still expect the same financial synergy targets, just in a delayed time frame as you previously expected?

Darrin. Yes.

So ultimately, as we get close, we do expect to have actually higher synergy targets. As you probably remember from when we kicked this off a year ago, we had anticipated $30 million in synergies.

We talked last quarter that we were seeing more opportunity and expect it to be up a little bit. That continues to be the case.

It will ramp post closing. The year has gotten narrower.

As I have mentioned before, we have got in our model now the September 1 close. I cannot tell you we are going close on September 1.

it is up to regulatory approval. Just wanted make sure you all knew what day we modeled in our numbers.

So there will be some synergies this year, but what we expected originally was $0.10 in the first full year, what we talked about in August of last year. We would still expect that plus some.

Hey. Thanks for the question.

Another 1 on margin. So understand the points on kind of OpEx and the mix shift in transactions, but other factors that have come up on the call I wanted to touch on.

So on the higher agent bonuses, I know you mentioned the agents in Mexico, but wondering if that same dynamic is playing out in any other regions. Is there any reason to think that the cost that you are having to pay out to these agents is structurally higher now than it has been historically.

And then the other thing that came up in the prepared remarks was travel money operating profit being lower. So I wanted to hear some color on what was driving profitability in travel money lower specifically.

Yep. I will work my way backwards.

So on the travel money side, as we talked about last quarter, the first quarter of every year, they actually lose money because of fixed cost are higher than their revenue because it is a lower seasonal travel business. Typically, all the profit comes in the second, third quarter.

They are slightly positive in Q4. What we have seen this year is that travel is down In Europe, in particular, if you go look at Heathrow travel patterns, you are seeing it be negative for the first time since COVID.

So we are seeing less consumers coming in, which has put some pressure on the profitability of that business. It still grew As you can see, it was a contributor to our 12% growth rate this quarter.

But it is got it was not where we expected it to be. It was light a bit.

On your first part of your question about what are we seeing for signing bonuses or overall agent economics It varies from partner to partner. But as I mentioned a couple of times now and we had talked about with the $200 million of CapEx this year, it is a heavy agent renewal cycle.

We have talked about winning 2 new big partners plus a couple more moderate ones. We have signed up the Deutsche Post in Europe, which is ramping right now.

We have won -- it is a competitive takeaway. We have won the Canadian Post which will be ramping here in the latter part of Q3.

Both of those have some upfront costs to ramping and help build them out. Which have and they are slightly higher end of our typical strategic partners They are not above the range, but they are the higher end because of competitive takeaways.

And then we had the more smaller ones like a Vallarta or some of the other ones like that. That were also competitive takeaways that are at the higher end.

I would add that Matthew and I have talked about this that we went through a renewal cycle, particularly here in North America with the majority of our strategic partners in 1 of the crown jewels of the Western Union franchise is the majority of major retailers. We are proud of these relationships, whether it be Kroger, Walmart, Albertsons, Walgreens, Publix, HEB, Giant Eagle.

We have the majority of what we consider to be the strategic distribution in the U.S. As you can imagine, and we faced an unusual number of renewals over the past 12 months that we successfully have gotten through and I am pleased have renewed all of those contracts.

In the face of a down market, in the face of my commentary around 1 of the ways you deal with a down market is you work to steal share. We had some you know, increased competition looking to unseat us from some of those long-term relationships.

And so I think the team did an excellent job of navigating getting the renewals, continuing to secure those relationships, and doing it at economics that were not too different from the ones that we had previously.

Thanks. that is super helpful.

For a follow-up, I did want to ask on taxes more broadly, not on the federal side, but I know there are some other local or state proposals floating out there. I know Tennessee is 1 that comes to mind.

So on Tennessee specifically, wondering if you could give your thoughts on that specific proposal, whether you think it gets implemented. I know there are some challenges out there.

On that 1 specifically. And then any other state or local taxes that we should be tracking that could potentially be on the horizon?

Yeah. As you know, when they passed the US remittance tax, which in our previous commentary, we do not believe had a significant impact It has driven up card acceptance.

I will make this up. So we are now at 20%-plus card acceptance in the retail network in the U.S., up from a couple of percentage points before the remittance tax.

So we have seen a lot of move to people using bank products to not pay the tax as was written into the legislation. But they left open the door for states to, in effect, pass a state specific tax of which several, Tennessee being probably the most notable and aggressive, have done so.

There have been a couple of states that, you know, have limited those taxes to what they considered to be foreign adversaries or specific corridors that they saw as problematic. We track this stuff.

If I could predict it, I probably would not be in this job. We do not think that it will have significant impact.

Tennessee is an important state, but as you can imagine, it is nothing like a Florida, Texas, California, New York in terms of the magnitude of the business that we have there. And in many cases, you know, customers will simply drive across the border and send money at a Western Union at a different state if the tax equation becomes significant between 1 state and another?

Great. Thank you.

I wanna go back to really the opening comment from the prepared remarks, and we have hit this in a few different ways, but maybe we can try another way. So retail and digital, and you were very clear that the contribution dollars or the contribution profit per transaction is lower for digital.

And you kinda mentioned meaningfully so. The first part is I was hoping that you could maybe just talk a little bit about that directionally in terms of how much meaningfully are we talking about in terms of how much lower it is.

And then from there, some of the items within the P&L of each that we should be considering that might be levers. So on the retail side, obviously, there is the commissions that we mentioned.

And then on the online side, believe the 2 big ones are the marketing costs and then, of course, the payout costs. And maybe just dig into the basically, the real levers within the kind of product specific P&L, if you will?

Yes. I will start and then I will let Matthew.

You know, I think I understand the desire to have the specificity That would certainly make life easier and it would make my life easier as well. Matthew highlighted particularly the growth in the nature of the business that we have in The Middle East.

Because The Middle East is a place where it is quite difficult to get licenses. Which we are working on by the way.

You know, much of our business there is partner driven And in a partner driven model, the economics, because you gotta pay the partner, are just fundamentally different than in the economics of our core business or our licensed businesses around the world. And so the shift in the growth of that particular business is a significantly different business than the more general shift from retail to payout to account.

There is a difference in the retail to payout to account. And that was part of what I was talking about needing to lower payout costs so that difference is less and renegotiating some of those payout costs relationships.

There are a bunch of other levers though that are important. And so, you know, in the digital space, payment acceptance costs so how much we pay to be able to do funds in, which is really a strategy of shifting our customers from funding with credit cards and debit cards to funding with bank accounts and digital wallets can significantly lower 1 of our bigger expense items, which is funding costs, managing card fraud and payment fraud is another significant expense for us again in the digital space.

1, shifting to bank funding helps that, but also managing those costs in a more aggressive way also helps it. We continue to look at other efficiency options particularly in that SG&A line, which you saw you know, go up in the quarter as we continue to invest.

And so as Matthew highlighted, shutting down it was not an easy decision to decide to shut down the European wallets before we had the next platform in place. But the opportunity to save run rate costs of, of $8 million, as Matthew highlighted, given the situation that we are facing, we made that decision.

So for us, lowering some of those operating costs associated with some of our legacy platforms is an important lever as well.

And I will repeat a little bit, so I apologize. But just as you think about what is in cost of sales or cost of services, biggest thing is commissions.

Commissions represent almost 2-thirds of the balance in there. But beyond that, there are, as Devin has highlighted, there are fraud losses, which we are working fast on and feverishly to get to leading loss rates and collection rates.

there is payment fees, making sure that you get the best payment fees to your partners. Actually running an RFP right now.

there is a call center cost within there, which Devin's talked about now for the last 3-4 years of we have cut the calls by more than half. that is actually slow.

that is 1 of the reasons why is this migration from cash payout to digital over the last couple of years have been happening that we have been able to manage through that on the cost of sales lines we have been saving on the call center side. That has plateaued a little bit, but we got some things through AI, some things we are working on to improve that further.

And the last part that is in that bucket is big platform costs. So today, we actually still operate 3 different digital platforms.

We still have a handful of settlement platforms that we are working through. And as we go and move down to 1 platform, which in the last year on the settlement side, we were able to eliminate 3 in the last 18 months.

We are able to eliminate the last couple that will allow us to continue to reduce the cost of sales side.

Hi. Thanks for squeezing me in here.

My first question, I am wondering if there is a way to drill down and disaggregate how much of the change in EPS guide is coming from each of the various factors you guys outlined? I know mix shift to digital payout seems to be the biggest 1, but also weaker retail, like in travel money weakness.

I do not know if there was some contribution assumed from Intermex for the year, so I do not know if you could help disaggregate that, that would be super helpful.

So Vasu, as you probably have seen, our first half of the year-over-year. Q1 was down $0.15 the second quarter was down $0.11.

Our guide for the full year is effectively $0.50 lower. We have talked about the drivers of the first half what drove those.

Q1 had a fair bit of pressure from FX loss, delayed money from a partner, and things of that nature, as well as the mix items we have talked about here today for both Q1 was roughly 50-60% for the things we talked about today. it is similar items for this quarter.