WU 10-Q
Western Union CO (WU)
d
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended |
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
Commission File Number:
(Exact name of registrant as specified in its charter)
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading symbol |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.
Smaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No
As of April 16, 2026,
THE WESTERN UNION COMPANY
INDEX
2
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in millions, except per share amounts)
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Three Months Ended |
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March 31, |
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2026 |
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2025 |
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$ |
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$ |
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Expenses: |
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Selling, general, and administrative |
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Total expenses |
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Operating income |
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Other income/(expense): |
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Interest income |
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Interest expense |
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( |
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( |
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Other income, net |
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Total other expense, net |
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( |
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( |
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Income before income taxes |
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Provision for income taxes |
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Net income |
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$ |
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$ |
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Earnings per share: |
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Basic |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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Weighted-average shares outstanding: |
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Basic |
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Diluted |
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See Notes to Condensed Consolidated Financial Statements.
3
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in millions)
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Three Months Ended |
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March 31, |
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2026 |
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2025 |
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Net income |
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$ |
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$ |
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Other comprehensive income, net of reclassifications and tax (Note 9): |
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Unrealized gains/(losses) on investment securities |
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( |
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Unrealized gains/(losses) on hedging activities |
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( |
) |
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Foreign currency translation adjustments |
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( |
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Total other comprehensive income/(loss) |
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( |
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Comprehensive income |
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$ |
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$ |
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See Notes to Condensed Consolidated Financial Statements.
4
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions, except per share amounts)
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March 31, |
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December 31, |
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2026 |
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2025 |
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Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Settlement assets |
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Property and equipment, net of accumulated depreciation of $ |
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Goodwill |
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Other intangible assets, net of accumulated amortization of $ |
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Deferred tax asset, net |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders' equity |
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Liabilities: |
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Accounts payable and accrued liabilities |
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$ |
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$ |
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Settlement obligations |
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Income taxes payable |
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Deferred tax liability, net |
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Borrowings |
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Other liabilities |
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Total liabilities |
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Stockholders' equity: |
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Preferred stock, $ |
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Common stock, $ |
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Capital surplus |
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Accumulated deficit |
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( |
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( |
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Accumulated other comprehensive loss |
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( |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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See Notes to Condensed Consolidated Financial Statements.
5
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)
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Three Months Ended |
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March 31, |
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2026 |
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2025 |
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Cash flows from operating activities |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation |
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Amortization |
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Other non-cash items, net |
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Increase/(decrease) in cash, excluding the effects of acquisitions, resulting from changes in: |
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Other assets |
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Accounts payable and accrued liabilities |
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( |
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Income taxes payable |
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( |
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( |
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Other liabilities |
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( |
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Net cash provided by operating activities |
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Cash flows from investing activities |
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Payments for capitalized contract costs |
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( |
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( |
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Payments for internal use software |
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( |
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( |
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Purchases of property and equipment |
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( |
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( |
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Purchases of settlement investments |
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( |
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( |
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Proceeds from the sale of settlement investments |
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Maturities of settlement investments |
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Other investing activities |
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( |
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Net cash used in investing activities |
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( |
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( |
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Cash flows from financing activities |
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Cash dividends and dividend equivalents paid (Note 9) |
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( |
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( |
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Common stock repurchased (Note 9) |
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( |
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( |
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Net (repayments of)/proceeds from commercial paper |
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( |
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Net repayments of credit facility borrowings |
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( |
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— |
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Net proceeds from issuance of borrowings |
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— |
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Principal payments on borrowings |
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( |
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( |
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Net change in settlement obligations |
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( |
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Other financing activities |
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( |
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Net cash used in financing activities |
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( |
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( |
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Net change in cash and cash equivalents, including settlement, and restricted cash |
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( |
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( |
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Cash and cash equivalents, including settlement, and restricted cash at beginning of period |
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Cash and cash equivalents, including settlement, and restricted cash at end of period |
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$ |
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$ |
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See Notes to Condensed Consolidated Financial Statements.
6
THE WESTERN UNION COMPANY
SUPPLEMENTAL CASH FLOW INFORMATION
(Unaudited)
(in millions)
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March 31, |
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2026 |
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2025 |
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Reconciliation of balance sheet cash and cash equivalents to cash flows: |
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Cash and cash equivalents on balance sheet |
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$ |
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$ |
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Settlement cash and cash equivalents (Note 8) |
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Restricted cash in Other assets |
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Cash and cash equivalents, including settlement, and restricted cash at end of period |
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$ |
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$ |
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Three Months Ended |
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March 31, |
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2026 |
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2025 |
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Supplemental cash flow information: |
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Interest paid |
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$ |
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$ |
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Income taxes paid |
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$ |
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$ |
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See Notes to Condensed Consolidated Financial Statements.
7
THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(in millions)
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Accumulated |
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Other |
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Total |
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Common Stock |
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Capital |
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Accumulated |
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Comprehensive |
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Stockholders' |
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Shares |
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Amount |
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Surplus |
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Deficit |
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Loss |
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Equity |
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Balance, December 31, 2025 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Common stock dividends and dividend equivalents declared ($ |
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— |
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— |
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— |
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( |
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— |
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( |
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Repurchase and retirement of common shares |
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( |
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( |
) |
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— |
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( |
) |
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— |
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( |
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Shares issued under stock-based compensation plans |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive income (Note 9) |
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— |
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— |
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— |
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— |
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Balance, March 31, 2026 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Retained |
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Accumulated |
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Earnings/ |
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Other |
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Total |
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Common Stock |
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Capital |
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(Accumulated |
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Comprehensive |
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Stockholders' |
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Shares |
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Amount |
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Surplus |
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Deficit) |
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Loss |
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Equity |
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Balance, December 31, 2024 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Common stock dividends and dividend equivalents declared ($ |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Repurchase and retirement of common shares |
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( |
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( |
) |
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— |
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( |
) |
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— |
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( |
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Shares issued under stock-based compensation plans |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive loss (Note 9) |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Balance, March 31, 2025 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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See Notes to Condensed Consolidated Financial Statements.
8
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Business and Basis of Presentation
Business
The Western Union Company (“Western Union” or the “Company”) is a leader in cross-border, cross-currency money movement, payments, and digital financial services, empowering consumers, businesses, financial institutions, and governments with fast, reliable, and convenient ways to send money and make payments around the world. The Western Union brand is globally recognized. The Company’s services are available through a network of agent locations in more than
The Western Union business consists of the following segments:
See Note 14 for further information regarding the Company’s segments.
There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where these assets are located. However, there are generally no limitations on the use of these assets within those countries. Additionally, the Company must meet minimum capital requirements in some countries in order to maintain operating licenses. As of December 31, 2025, the Company's restricted net assets associated with these asset limitations and minimum capital requirements totaled approximately $
Various aspects of the Company’s services and businesses are subject to United States federal, state, and local regulation, as well as regulation by foreign jurisdictions, including certain banking and other financial services regulations.
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and were prepared in accordance with the instructions for Form 10‑Q and Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted.
The unaudited condensed consolidated financial statements in this quarterly report are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts have been eliminated as of March 31, 2026 and December 31, 2025 and for all periods presented.
In the opinion of management, these condensed consolidated financial statements include all the normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position, and cash flows as of March 31, 2026 and for all periods presented. These condensed consolidated financial statements
9
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025.
Consistent with industry practice, the accompanying Condensed Consolidated Balance Sheets are unclassified due to the short-term nature of the Company’s settlement obligations contrasted with the Company’s ability to invest cash awaiting to pay settlement obligations in long-term investment securities.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
Accounting Pronouncements Not Yet Adopted
In November 2024, the Financial Accounting Standards Board (“FASB”) issued a new accounting pronouncement regarding the disclosure of specified information about certain costs and expenses. The standard requires that public entities disclose certain detailed information about the types of expenses included in the expense captions presented within the Consolidated Statements of Income, provide qualitative descriptions for expenses not separately disaggregated quantitatively, and disclose an entity's definition and total amount of selling expenses. The Company is required to adopt the new standard for its 2027 annual reporting and interim periods thereafter, using either a prospective or retrospective approach. Management is currently evaluating the potential impact that the adoption of this standard will have on the Company's disclosures.
In September 2025, the FASB issued a new accounting pronouncement regarding accounting for internal-use software costs. The standard requires that entities capitalize software costs when both management has authorized and is committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended, referred to as the “probable-to-complete recognition threshold.” In evaluating the probable-to-complete recognition threshold, all entities that account for internal-use software costs under GAAP are required to consider whether there is significant uncertainty associated with the software development activities. The Company is required to adopt the new standard for annual and interim periods beginning after December 15, 2027. Management is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations, and disclosures.
2. Revenue
The Company’s revenues are primarily derived from consideration paid by customers to transfer money. These revenues vary by transaction based upon factors such as channel, send and receive locations, the send and receive funding method, the principal amount sent, and, when the money transfer involves different send and receive currencies, the difference between the exchange rate set by the Company to the customer and a rate available in the wholesale foreign exchange market. The Company also offers other consumer services, for which revenue is impacted by similar factors. The Company analyzes its different services individually to determine the appropriate basis for revenue recognition. For additional information on the Company's different services, refer to the Company’s consolidated financial statements within the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025.
Revenues from consumer money transfers are included in the Company’s Consumer Money Transfer segment and revenues from consumer bill payment and other services are included in the Company’s Consumer Services segment. See Note 14 for further information on the Company’s segments.
10
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The substantial majority of the Company’s revenue is recognized at a point in time.
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Three Months Ended March 31, 2026 |
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Consumer |
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Money |
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Consumer |
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Transfer |
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Services |
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Total |
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Regions: |
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North America |
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$ |
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$ |
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$ |
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Europe and CIS |
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Middle East, Africa, and South Asia |
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— |
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Latin America and the Caribbean |
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Asia Pacific |
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— |
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Revenues from contracts with customers |
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$ |
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$ |
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$ |
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Other revenues (a) |
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Total revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Three Months Ended March 31, 2025 |
|
|||||||||
|
|
Consumer |
|
|
|
|
|
|
|
|||
|
|
Money |
|
|
Consumer |
|
|
|
|
|||
|
|
Transfer |
|
|
Services |
|
|
Total |
|
|||
Regions: |
|
|
|
|
|
|
|
|
|
|||
North America |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Europe and CIS |
|
|
|
|
|
|
|
|
|
|||
Middle East, Africa, and South Asia |
|
|
|
|
|
|
|
|
|
|||
Latin America and the Caribbean |
|
|
|
|
|
|
|
|
|
|||
Asia Pacific |
|
|
|
|
|
— |
|
|
|
|
||
Revenues from contracts with customers |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Other revenues (a) |
|
|
|
|
|
|
|
|
|
|||
Total revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|||
________________________________________
3. Earnings Per Share
The calculation of basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding for the period. Outstanding options to purchase Western Union stock and unvested shares of restricted stock are excluded from basic shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock have vested, using the treasury stock method. The treasury stock method assumes proceeds from the exercise price of stock options and the unamortized compensation expense of options and restricted stock are available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect.
Shares excluded from the diluted earnings per share calculation were
11
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following table provides the calculation of diluted weighted-average shares outstanding (in millions):
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Basic weighted-average shares outstanding |
|
|
|
|
|
|
||
Common stock equivalents |
|
|
|
|
|
|
||
Diluted weighted-average shares outstanding |
|
|
|
|
|
|
||
4. Acquisitions
Eurochange Limited
On
International Money Express, Inc.
On
5. Fair Value Measurements
Fair value, as defined by the relevant accounting standards, represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For additional information on how the Company measures fair value, refer to the Company’s consolidated financial statements within the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025.
12
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following tables present the Company’s assets and liabilities, which are measured at fair value on a recurring basis, by category (in millions):
|
|
Fair Value Measurement Using |
|
|
Total |
|
||||||
March 31, 2026 |
|
Level 1 |
|
|
Level 2 |
|
|
Fair Value |
|
|||
Assets: |
|
|
|
|
|
|
|
|
|
|||
Settlement assets: |
|
|
|
|
|
|
|
|
|
|||
Measured at fair value through net income: |
|
|
|
|
|
|
|
|
|
|||
Money market funds |
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Measured at fair value through other comprehensive income (net of expected credit losses recorded through net income): |
|
|
|
|
|
|
|
|
|
|||
State and municipal debt securities |
|
|
— |
|
|
|
|
|
|
|
||
Asset-backed securities |
|
|
— |
|
|
|
|
|
|
|
||
Corporate debt and other securities |
|
|
— |
|
|
|
|
|
|
|
||
Other assets: |
|
|
|
|
|
|
|
|
|
|||
Derivatives |
|
|
— |
|
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Liabilities: |
|
|
|
|
|
|
|
|
|
|||
Other liabilities: |
|
|
|
|
|
|
|
|
|
|||
Derivatives |
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
Total liabilities |
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
|
|
Fair Value Measurement Using |
|
|
Total |
|
||||||
December 31, 2025 |
|
Level 1 |
|
|
Level 2 |
|
|
Fair Value |
|
|||
Assets: |
|
|
|
|
|
|
|
|
|
|||
Settlement assets: |
|
|
|
|
|
|
|
|
|
|||
Measured at fair value through net income: |
|
|
|
|
|
|
|
|
|
|||
Money market funds |
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Measured at fair value through other comprehensive income (net of expected credit losses recorded through net income): |
|
|
|
|
|
|
|
|
|
|||
State and municipal debt securities |
|
|
— |
|
|
|
|
|
|
|
||
Asset-backed securities |
|
|
— |
|
|
|
|
|
|
|
||
Corporate debt and other securities |
|
|
— |
|
|
|
|
|
|
|
||
Other assets: |
|
|
|
|
|
|
|
|
|
|||
Derivatives |
|
|
— |
|
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Liabilities: |
|
|
|
|
|
|
|
|
|
|||
Other liabilities: |
|
|
|
|
|
|
|
|
|
|||
Derivatives |
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
Total liabilities |
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
There were no material, non-recurring fair value adjustments in the three months ended March 31, 2026 and 2025. There were no transfers between Level 1 and Level 2 measurements during the three months ended March 31, 2026 and 2025.
Other Fair Value Measurements
The carrying amounts for many of the Company’s financial instruments, including certain cash and cash equivalents, settlement cash and cash equivalents, and settlement receivables and obligations approximate fair value due to their short maturities. The Company’s borrowings are classified as Level 2 within the valuation hierarchy, and the aggregate fair
13
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
value of these borrowings was based on quotes from multiple banks. Fixed-rate notes are carried in the Company’s Condensed Consolidated Balance Sheets at their original issuance values as adjusted over time to accrete that value to par. As of March 31, 2026, the carrying value and fair value of the Company’s borrowings were $
6. Commitments and Contingencies
Letters of Credit and Bank Guarantees
The Company had approximately $
Litigation and Related Contingencies
The Company is subject to certain claims, investigations, and litigation that could result in losses, including damages, fines, and/or civil penalties, which could be significant, and in some cases, criminal charges. The Company regularly evaluates the status of legal matters to assess whether a loss is probable and reasonably estimable in determining whether an accrual is appropriate. Furthermore, in determining whether disclosure is appropriate, the Company evaluates each legal matter to assess if there is at least a reasonable possibility that a material loss or additional material losses may have been incurred. The Company also evaluates whether an estimate of possible loss or range of loss can be made. Unless otherwise specified below, the Company believes that there is at least a reasonable possibility that a loss or additional loss may have been incurred for each of the matters described below.
For those matters that the Company believes there is at least a reasonable possibility that a loss or additional loss may have been incurred and can reasonably estimate the loss or potential loss, the reasonably possible potential litigation losses in excess of the Company’s recorded liability for probable and estimable losses was approximately $
The outcomes of legal actions are unpredictable and subject to significant uncertainties, and it is inherently difficult to determine whether any loss is probable or even possible. It is also inherently difficult to estimate the amount of any loss, and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Accordingly, actual losses may be in excess of the established liability or the range of reasonably possible loss.
Legal Matters
In October 2015, Consumidores Financieros Asociación Civil para su Defensa, an Argentinian consumer association, filed a purported class action lawsuit in Argentina’s National Commercial Court No. 19 against the Company’s subsidiary Western Union Financial Services Argentina S.R.L. (“WUFS Argentina”). The lawsuit alleges, among other things, that WUFS Argentina’s fees for money transfers sent from Argentina are excessive and that WUFS Argentina does not provide consumers with adequate information about foreign exchange rates. The plaintiff is seeking, among other things, an order requiring WUFS Argentina to reimburse consumers for the fees they paid and the foreign exchange revenue associated with money transfers sent from Argentina, plus punitive damages. The complaint does not specify a monetary value of the claim or a time period. In November 2015, the Court declared the complaint formally admissible as a class action. The notice of claim was served on WUFS Argentina in May 2016, and in June 2016 WUFS Argentina filed a response to the claim and moved to dismiss it on statute of limitations and standing grounds. In April 2017, the Court deferred ruling on the motion until later in the proceedings. The process for notifying potential class members has been completed, and the
14
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
case is in the evidentiary stage. Due to the stage of this matter, the Company is unable to predict the outcome or the possible loss or range of loss, if any, associated with this matter. WUFS Argentina intends to defend itself vigorously.
In late 2017, three individuals filed a lawsuit against certain alleged Western Union entities (collectively, the “Defendants”) in the Commercial Court in Kinshasa-Gombe in the Democratic Republic of the Congo (“DRC”), which was later joined by three additional individuals. These
Regulatory Proceedings
In September 2025, the Australian Transaction Reports and Analysis Centre (“AUSTRAC”) provided notice to Western Union Financial Services (Australia) PTY Ltd. (“WUFSA”), a subsidiary of the Company, asserting that it had grounds to suspect that WUFSA was not compliant with Australia’s money laundering and counter-terrorism financing act and requiring WUFSA to appoint an independent auditor to complete an audit of WUFSA’s compliance with specific sections of the act. The audit is ongoing, and WUFSA has provided, continues to provide, and may receive additional requests for information and documents related to the audit. Due to the investigative stage of the matter and the fact that no criminal charges or civil claims have been brought by AUSTRAC, the Company is unable to predict the outcome of the audit and any related regulatory enforcement, or reasonably estimate the possible loss or range of loss, if any, which could be associated with the resolution of any possible charges or claims that may be brought against WUFSA.
In addition to the principal matters described above, the Company is a party to a variety of other legal matters that arise in the normal course of the Company’s business. While the results of these other legal matters cannot be predicted with certainty, management believes that the final outcome of these matters will not have a material adverse effect either individually or in the aggregate on the Company’s financial condition, results of operations, or cash flows.
7. Related Party Transactions
The Company has ownership interests in certain of its agents accounted for under the equity method of accounting. The Company pays these agents commissions for money transfer and other services provided on the Company’s behalf. recognized for these agents for the three months ended March 31, 2026 and 2025 totaled $
15
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
8. Settlement Assets and Obligations
Settlement assets represent funds received or to be received from agents and others for unsettled money transfers, money orders, and consumer payments. The Company records corresponding settlement obligations relating to amounts payable under money transfers, money orders, and consumer payment service arrangements.
Settlement assets and obligations consisted of the following (in millions):
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
Settlement assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Receivables from agents and others |
|
|
|
|
|
|
||
Less: Allowance for credit losses |
|
|
( |
) |
|
|
( |
) |
Receivables from agents and others, net |
|
|
|
|
|
|
||
Investment securities |
|
|
|
|
|
|
||
Less: Allowance for credit losses |
|
|
— |
|
|
|
( |
) |
Investment securities, net |
|
|
|
|
|
|
||
Total settlement assets |
|
$ |
|
|
$ |
|
||
Settlement obligations: |
|
|
|
|
|
|
||
Money transfer, money order, and payment service payables |
|
$ |
|
|
$ |
|
||
Payables to agents |
|
|
|
|
|
|
||
Total settlement obligations |
|
$ |
|
|
$ |
|
||
Allowance for Credit Losses
Receivables from agents and others primarily represent funds collected by such agents, but in transit to the Company. Cash received by Western Union agents generally becomes available to the Company within one week after initial receipt by the agent. Western Union has a large and diverse agent base, thereby reducing the credit risk of the Company from any one agent. The Company performs ongoing credit evaluations of its agents’ financial condition and credit worthiness.
The Company establishes and monitors an allowance for credit losses related to receivables from agents and others. The Company has estimated the allowance based on its historical collections experience, adjusted for current conditions and forecasts of future economic conditions based on information known as of March 31, 2026.
The following tables summarize the activity in the allowance for credit losses on receivables from agents and others (in millions):
|
|
Agents and |
|
|
|
|
Others |
|
|
Allowance for credit losses as of December 31, 2025 |
|
$ |
|
|
Current period provision for expected credit losses (a) |
|
|
|
|
Write-offs charged against the allowance |
|
|
( |
) |
Recoveries of amounts previously written off |
|
|
|
|
Impacts of foreign currency exchange rates and other |
|
|
( |
) |
Allowance for credit losses as of March 31, 2026 |
|
$ |
|
|
16
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
|
|
Agents and |
|
|
|
|
Others |
|
|
Allowance for credit losses as of December 31, 2024 |
|
$ |
|
|
Current period provision for expected credit losses (a) |
|
|
( |
) |
Write-offs charged against the allowance |
|
|
( |
) |
Recoveries of amounts previously written off |
|
|
|
|
Impacts of foreign currency exchange rates and other |
|
|
|
|
Allowance for credit losses as of March 31, 2025 |
|
$ |
|
|
In addition, from time to time, the Company makes advances to its agents and disbursement partners. The Company often owes settlement funds payable to these agents that offset these advances. These amounts advanced to agents and disbursement partners are included within Other assets in the accompanying Condensed Consolidated Balance Sheets. As of March 31, 2026 and December 31, 2025, amounts advanced to agents and disbursement partners were $
Investment Securities
Investment securities included in Settlement assets in the Company’s Condensed Consolidated Balance Sheets consist primarily of highly-rated state and municipal debt securities, including fixed-rate term notes. Investment securities are exposed to market risk due to changes in interest rates and credit risk. The Company is required to hold highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable regulatory requirements.
The Company’s investment securities are classified as available-for-sale and recorded at fair value. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification.
Unrealized gains on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes. Available-for-sale securities with a fair value below the amortized cost basis are evaluated on an individual basis to determine whether the impairment is due to credit-related factors or noncredit-related factors. Factors that could indicate a credit loss exists include but are not limited to: (i) negative earnings performance, (ii) credit rating downgrades, or (iii) adverse changes in the regulatory or economic environment of the asset. Any impairment that is not credit-related is excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes, unless the Company intends to sell the impaired security, or it is more likely than not that the Company will be required to sell the security before recovering its amortized cost basis. Credit-related impairments are recognized immediately as an adjustment to earnings, regardless of whether the Company has the ability or intent to hold the security to maturity, and are limited to the difference between fair value and the amortized cost basis.
17
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The components of investment securities are as follows (in millions):
|
|
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
Net |
|
|||||
|
|
Amortized |
|
|
Fair |
|
|
Unrealized |
|
|
Unrealized |
|
|
Unrealized |
|
|||||
March 31, 2026 |
|
Cost |
|
|
Value |
|
|
Gains |
|
|
Losses |
|
|
Gains/(Losses) |
|
|||||
Settlement assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
||
Available-for-sale securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
State and municipal debt securities (a) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Asset-backed securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Corporate debt and other securities |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total available-for-sale securities |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Total investment securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
Net |
|
|||||
|
|
Amortized |
|
|
Fair |
|
|
Unrealized |
|
|
Unrealized |
|
|
Unrealized |
|
|||||
December 31, 2025 |
|
Cost |
|
|
Value |
|
|
Gains |
|
|
Losses |
|
|
Gains/(Losses) |
|
|||||
Settlement assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
||
Available-for-sale securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
State and municipal debt securities (a) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Asset-backed securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Corporate debt and other securities |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total available-for-sale securities |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total investment securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
The Company's provision for credit losses on its investment securities during the three months ended March 31, 2026 and the related allowance for credit losses as of March 31, 2026 were immaterial. As of March 31, 2026, the Company did not intend to sell its securities in an unrealized loss position and did not expect it would be required to sell these securities prior to recovering their amortized cost basis.
The following summarizes the contractual maturities of available-for-sale securities within Settlement assets as of March 31, 2026 (in millions):
|
|
Fair Value |
|
|
Due within 1 year |
|
$ |
|
|
Due after 1 year through 5 years |
|
|
|
|
Due after 5 years through 10 years |
|
|
|
|
Due after 10 years |
|
|
|
|
Total |
|
$ |
|
|
Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligations or the Company may have the right to put the obligation prior to its contractual maturity.
18
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
9. Stockholders’ Equity
Accumulated Other Comprehensive Loss
The following table details reclassifications out of Accumulated other comprehensive loss (“AOCL”) and into Net income. All amounts reclassified from AOCL affect the line items as indicated below and the amounts in parentheses indicate decreases to Net income in the Condensed Consolidated Statements of Income (in millions).
|
|
Amounts Reclassified from AOCL to Net Income |
|
|||||||
|
|
|
|
Three Months Ended |
|
|||||
|
|
Income Statement |
|
March 31, |
|
|||||
Income for the period (in millions) |
|
Location |
|
2026 |
|
|
2025 |
|
||
Accumulated other comprehensive loss components: |
|
|
|
|
|
|
|
|
||
Gains/(losses) on investment securities: |
|
|
|
|
|
|
|
|
||
Available-for-sale securities |
|
Revenues |
|
$ |
( |
) |
|
$ |
|
|
Income tax expense |
|
Provision for income taxes |
|
|
— |
|
|
|
( |
) |
Total reclassification adjustments related to investment securities, net of tax |
|
|
|
|
( |
) |
|
|
|
|
Gains/(losses) on cash flow hedges: |
|
|
|
|
|
|
|
|
||
Foreign currency contracts |
|
Revenues |
|
|
( |
) |
|
|
|
|
Income tax benefit |
|
Provision for income taxes |
|
|
|
|
|
— |
|
|
Total reclassification adjustments related to cash flow hedges, net of tax |
|
|
|
|
( |
) |
|
|
|
|
Total reclassifications, net of tax |
|
|
|
$ |
( |
) |
|
$ |
|
|
The following tables summarize the components of AOCL, net of tax in the accompanying Condensed Consolidated Balance Sheets (in millions):
|
|
Investment |
|
|
Hedging |
|
|
Foreign Currency |
|
|
|
|
||||
|
|
Securities |
|
|
Activities |
|
|
Translation |
|
|
Total |
|
||||
As of December 31, 2025 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Unrealized gains/(losses) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Tax benefit/(expense) |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Amounts reclassified from AOCL into earnings, net of tax |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
As of March 31, 2026 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Investment |
|
|
Hedging |
|
|
Foreign Currency |
|
|
|
|
||||
|
|
Securities |
|
|
Activities |
|
|
Translation |
|
|
Total |
|
||||
As of December 31, 2024 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Unrealized gains/(losses) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Tax benefit/(expense) |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
( |
) |
|
Amounts reclassified from AOCL into earnings, net of tax |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
As of March 31, 2025 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
19
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Cash Dividends Paid
During both the three months ended March 31, 2026 and 2025, the Company's Board of Directors declared quarterly cash dividends of $
Share Repurchases
On December 13, 2024, the Company's Board of Directors authorized $
10. Derivatives
The Company is exposed to foreign currency exchange risk resulting from fluctuations in exchange rates, including the euro, and, to a lesser degree, the British pound, the Canadian dollar, and other currencies, related to forecasted revenues and settlement assets and obligations, as well as on certain foreign currency denominated cash and other asset and liability positions. Additionally, the Company is exposed to interest rate risk related to changes in market rates both prior to and subsequent to the issuance of debt. The Company uses derivatives to minimize its exposures related to changes in foreign currency exchange rates and interest rates.
The Company executes derivatives with established financial institutions; the substantial majority of these financial institutions have a credit rating of “A-” or higher from a major credit rating agency. The primary credit risk inherent in derivative agreements represents the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. The Company performs a review of the credit risk of these counterparties at the inception of the contract and on an ongoing basis, while also monitoring the concentration of its contracts with any individual counterparty.
Foreign Currency Derivatives
The Company’s policy is to use longer duration foreign currency forward contracts, with maturities of up to
The Company also uses short duration foreign currency forward contracts, generally with maturities ranging from a to
20
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of March 31, 2026 and December 31, 2025 were as follows (in millions):
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
Contracts designated as hedges: |
|
|
|
|
|
||
Euro |
$ |
|
|
$ |
|
||
Canadian dollar |
|
|
|
|
|
||
British pound |
|
|
|
|
|
||
Australian dollar |
|
|
|
|
|
||
Swiss franc |
|
|
|
|
|
||
Swedish krona |
|
|
|
|
|
||
Other (a) |
|
|
|
|
|
||
Contracts not designated as hedges: |
|
|
|
|
|
||
Euro |
$ |
|
|
$ |
|
||
British pound |
|
|
|
|
|
||
Mexican peso |
|
|
|
|
|
||
Philippine peso |
|
|
|
|
|
||
Norwegian krone |
|
|
|
(b) |
|
||
Australian dollar |
|
|
|
|
|
||
Indonesian rupiah |
|
|
|
|
|
||
Kuwaiti dinar |
|
|
|
|
|
||
Indian rupee |
|
|
|
|
|
||
Canadian dollar |
|
|
|
|
|
||
Brazilian real |
|
|
|
|
|
||
Swedish krona |
|
|
|
|
|
||
Swiss franc |
|
|
|
|
|
||
Singapore dollar |
(b) |
|
|
|
|
||
Chinese yuan |
(b) |
|
|
|
|
||
Thai baht |
(b) |
|
|
|
|
||
Other (a) |
|
|
|
|
|
||
Balance Sheet
The following table summarizes the fair value of derivatives reported in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 (in millions):
|
|
Derivative Assets |
|
|
Derivative Liabilities |
|
||||||||||||||
|
|
|
|
Fair Value |
|
|
|
|
Fair Value |
|
||||||||||
|
|
Balance Sheet |
|
March 31, |
|
|
December 31, |
|
|
Balance Sheet |
|
March 31, |
|
|
December 31, |
|
||||
|
|
Location |
|
2026 |
|
|
2025 |
|
|
Location |
|
2026 |
|
|
2025 |
|
||||
Derivatives designated as hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency cash flow hedges |
|
|
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
||||||
Derivatives not designated as hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total derivatives |
|
|
|
$ |
|
|
$ |
|
|
|
|
$ |
|
|
$ |
|
||||
21
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Offsetting of Derivative Assets and Liabilities
The Company has elected to present derivative assets and liabilities on a gross basis in the Condensed Consolidated Balance Sheets; however, derivatives associated with the Company's foreign currency exchange contracts that are subject to a master netting arrangement or similar agreement would have resulted in an offset of $
Income Statement
Cash Flow Hedges
The effective portion of the change in fair value of derivatives that qualify as cash flow hedges is recorded in AOCL in the Company’s Condensed Consolidated Balance Sheets. Generally, amounts are recognized in income when the related forecasted transaction affects earnings.
The following table presents the pre-tax amount of unrealized gains/(losses) recognized in other comprehensive income from cash flow hedges for the three months ended March 31, 2026 and 2025 (in millions):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Foreign currency derivatives (a) |
|
$ |
|
|
$ |
( |
) |
|
The following table presents the location and amounts of pre-tax net gains/(losses) from cash flow hedging relationships recognized in the Condensed Consolidated Statements of Income for the three months ended March 31, 2026 and 2025 (in millions):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
|
|
Revenues |
|
|
Revenues |
|
||
Total amounts presented in the Condensed Consolidated Statements of Income in which the effects of cash flow hedges are recorded |
|
$ |
|
|
$ |
|
||
Gains/(losses) on cash flow hedges: |
|
|
|
|
|
|
||
Foreign currency derivatives: |
|
|
|
|
|
|
||
Gains/(losses) reclassified from AOCL into earnings |
|
|
( |
) |
|
|
|
|
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach |
|
|
|
|
|
|
||
22
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Undesignated Hedges
The following table presents the location and amount of pre-tax net gains/(losses) from undesignated hedges in the Condensed Consolidated Statements of Income on derivatives for the three months ended March 31, 2026 and 2025 (in millions):
|
|
|
|
Three Months Ended |
|
|||||
|
|
|
|
March 31, |
|
|||||
Derivatives |
|
Location |
|
2026 |
|
|
2025 |
|
||
Foreign currency derivatives (a) |
|
Selling, general, and administrative |
|
$ |
|
|
$ |
( |
) |
|
All cash flows associated with derivatives are included in Cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows.
Based on March 31, 2026 foreign exchange rates, an accumulated other comprehensive pre-tax loss of $
23
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
11. Borrowings
The Company’s outstanding borrowings consisted of the following (in millions):
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
Commercial paper (a) |
|
$ |
|
|
$ |
|
||
Credit facility borrowings (b) |
|
|
|
|
|
|
||
Notes: |
|
|
|
|
|
|
||
|
|
— |
|
|
|
|
||
|
|
|
|
|
— |
|
||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Term loan facility borrowings (effective rate of |
|
|
|
|
|
|
||
Total borrowings at par value |
|
|
|
|
|
|
||
Debt issuance costs and unamortized discount, net |
|
|
( |
) |
|
|
( |
) |
Total borrowings at carrying value (f) |
|
$ |
|
|
$ |
|
||
Delayed Draw Term Loan Facility
On January 9, 2026, the Company entered into a delayed draw term loan credit agreement (“Delayed Draw Term Loan Facility”) providing for an unsecured term loan facility in an aggregate amount of $
2029 Notes
On March 9, 2026, the Company issued $
24
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following summarizes the Company’s maturities of its notes, term loan facility, and credit facility borrowings at par value as of March 31, 2026 (in millions):
Due within 1 year |
|
$ |
|
|
Due after 1 year through 2 years |
|
|
|
|
Due after 2 years through 3 years |
|
|
— |
|
Due after 3 years through 4 years |
|
|
|
|
Due after 4 years through 5 years |
|
|
|
|
Due after 5 years |
|
|
|
|
Total |
|
$ |
|
The Company’s notes, term loan facility, and commercial paper program rank equally. These obligations may be structurally subordinated to obligations of the Company’s subsidiaries.
The Revolving Credit Facility provides for unsecured financing facilities, including a $
25
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
12. Income Taxes
The Company’s effective tax rates on pre-tax income were
Unrecognized tax benefits are reflected in Income taxes payable in the Condensed Consolidated Balance Sheets. The total amount of unrecognized tax benefits as of March 31, 2026 and December 31, 2025 was $
The Company’s tax filings are subject to examination by U.S. federal, state, and various non-United States jurisdictions.
13. Stock-Based Compensation Plans
For the three months ended March 31, 2026 and 2025, the Company recognized stock-based compensation expense of $
During the three months ended March 31, 2026, the Company granted
26
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
14. Segments
As further described in Note 1, the Company has classified its business into the following : Consumer Money Transfer and Consumer Services. Operating segments are defined as components of an enterprise that engage in business activities, about which separate financial information is available that is evaluated regularly by the Company’s Chief Operating Decision Maker (“CODM”) in allocating resources and assessing performance.
The Consumer Money Transfer operating segment facilitates money transfers between
The Consumer Services segment primarily includes the Company’s bill payment services, money order services, travel money services, check acceptance services, media network, prepaid cards, lending partnerships, and digital wallets.
The Company’s segments are reviewed separately below because each segment addresses a different combination of customer groups, distribution networks, and services offered. The business segment measurements provided to, and evaluated by, the Company’s CODM are computed in accordance with the following principles:
27
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following tables present the Company’s segment results for the three months ended March 31, 2026 and 2025 (in millions):
|
|
Three Months Ended March 31, 2026 |
|
|||||||||
|
|
Consumer Money Transfer |
|
|
Consumer Services |
|
|
Total |
|
|||
Revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Expenses: |
|
|
|
|
|
|
|
|
|
|||
Direct transactional expenses (a) |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization (b) |
|
|
|
|
|
|
|
|
|
|||
Other segment items (c) |
|
|
|
|
|
|
|
|
|
|||
Total segment operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Severance release (d) |
|
|
|
|
|
|
|
|
|
|||
Acquisition, separation, and integration costs (e) |
|
|
|
|
|
|
|
|
( |
) |
||
Amortization of acquisition-related intangible assets (f) |
|
|
|
|
|
|
|
|
( |
) |
||
Russia termination costs (g) |
|
|
|
|
|
|
|
|
( |
) |
||
Total consolidated operating income |
|
|
|
|
|
|
|
$ |
|
|||
|
|
Three Months Ended March 31, 2025 |
|
|||||||||
|
|
Consumer Money Transfer |
|
|
Consumer Services |
|
|
Total |
|
|||
Revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Expenses: |
|
|
|
|
|
|
|
|
|
|||
Direct transactional expenses (a) |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization (b) |
|
|
|
|
|
|
|
|
|
|||
Other segment items (c) |
|
|
|
|
|
|
|
|
|
|||
Total segment operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Severance costs (d) |
|
|
|
|
|
|
|
|
( |
) |
||
Acquisition, separation, and integration costs (e) |
|
|
|
|
|
|
|
|
( |
) |
||
Amortization of acquisition-related intangible assets (f) |
|
|
|
|
|
|
|
|
( |
) |
||
Russia termination costs (g) |
|
|
|
|
|
|
|
|
( |
) |
||
Total consolidated operating income |
|
|
|
|
|
|
|
$ |
|
|||
28
THE WESTERN UNION COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
For all of the items excluded from the Company’s segment operating income results above, the expenses were not included in the measurement of segment operating income provided to the CODM for purposes of performance assessment and resource allocation.
29
THE WESTERN UNION COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2.
The following discussion should be read in conjunction with the condensed consolidated financial statements and the notes to those statements included in Part I, Item 1, Financial Statements in this report on Form 10-Q. This report on Form 10‑Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict. Actual outcomes and results may differ materially from those expressed in, or implied by, our forward-looking statements. Words such as “expects,” “intends,” “targets,” “anticipates,” “believes,” “estimates,” “guides,” “provides guidance,” “provides outlook,” “projects,” “designed to,” and other similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” “could,” and “might” are intended to identify such forward-looking statements. Readers of the Form 10‑Q of The Western Union Company (the “Company,” “Western Union,” “we,” “our,” or “us”) should not rely solely on the forward-looking statements and should consider all uncertainties and risks discussed in the Risk Factors section and throughout the Annual Report on Form 10‑K for the year ended December 31, 2025. The statements are only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement.
Possible events or factors that could cause results or performance to differ materially from those expressed in our forward-looking statements include the following: (i) events or factors related to our business and industry, such as: changes in general economic conditions and economic conditions in the regions and industries in which we operate, including global economic downturns and trade disruptions, or significantly slower growth or declines in the money transfer, payment service, and other markets in which we operate, including downturns or declines related to interruptions in migration patterns, slowdowns in travel, or other events, such as public health emergencies, epidemics, or pandemics, civil unrest, war, terrorism, natural disasters, or non-performance by our banks, lenders, insurers, or other financial services providers; failure to compete effectively in the money transfer and payment service industry, including among other things, with respect to price or customer experience, with global and niche or corridor money transfer providers, banks and other money transfer and payment service providers, including digital, mobile and internet-based services, card associations, and card-based payment providers, and with digital currencies and related exchanges and protocols, and other innovations in technology and business models; geopolitical tensions, political conditions, armed conflicts or wars, and related actions, including trade restrictions, tariffs, and government sanctions, which may adversely affect our business and economic conditions as a whole, including interruptions of United States or other government relations with countries in which we have or are implementing significant business relationships with agents, clients, or other partners; deterioration in customer confidence in our business, or in money transfer and payment service providers generally; failure to maintain our agent network and business relationships under terms consistent with or more advantageous to us than those currently in place; our ability to adopt new technology and develop and gain market acceptance of new and enhanced services in response to changing industry and consumer needs or trends; the development, deployment, and use of artificial intelligence ("AI"), machine learning, and automated decision-making technologies in our operations, including risks relating to system performance, data quality, regulatory compliance, bias, or unintended outcomes; mergers, acquisitions, and the integration of acquired businesses and technologies into our Company, divestitures, and the failure to realize anticipated financial benefits from these transactions, and events requiring us to write down our goodwill; decisions to change our business mix; changes in, and failure to manage effectively, exposure to foreign exchange rates, including the impact of the regulation of foreign exchange spreads on money transfers; changes in tax laws, or their interpretation, any subsequent regulation, and unfavorable resolution of tax contingencies; any material breach of security, including cybersecurity, or safeguards of or interruptions in any of our systems or those of our vendors or other third parties; cessation of or defects in various services provided to us by third-party vendors; our ability to realize the anticipated benefits from restructuring-related initiatives, which may include decisions to downsize or to transition operating activities from one location to another, and to minimize any disruptions in our workforce that may result from those initiatives; our ability to attract and retain qualified key employees and to manage our workforce successfully; failure to manage credit and fraud risks presented by our agents, clients, and consumers; adverse rating actions by credit rating agencies; our ability to protect our trademarks, patents, and other intellectual property rights, and to defend ourselves against potential intellectual property infringement claims; material changes in the market value or liquidity of securities that we hold; restrictions imposed by our debt obligations; (ii) events or factors related to our regulatory and litigation environment, such as: liabilities or loss of business resulting from a failure by us, our agents, or their subagents to comply with laws and regulations and regulatory or judicial interpretations thereof, including laws and regulations designed to protect consumers, or detect and prevent money
30
laundering, terrorist financing, fraud, and other illicit activity; increased costs or loss of business due to regulatory initiatives and changes in laws, regulations, and industry practices and standards, including changes in interpretations, in the United States and abroad, affecting us, our agents or their subagents, or the banks with which we or our agents maintain bank accounts needed to provide our services, including regulations and guidance relating to digital currencies, stablecoins, and related technologies, the use of AI and automated decision-making systems, anti-fraud measures, our licensing arrangements, customer due diligence, agent and subagent due diligence, registration and monitoring requirements, consumer protection requirements, remittances, immigration, and sustainability reporting, including climate-related reporting; liabilities, increased costs or loss of business and unanticipated developments resulting from governmental investigations and consent agreements with, or investigations or enforcement actions by regulators and other government authorities; liabilities resulting from litigation, including class-action lawsuits and similar matters, and regulatory enforcement actions, including costs, expenses, settlements, and judgments; failure to comply with regulations and evolving industry standards regarding consumer privacy, data use, the transfer of personal data between jurisdictions, and information security; failure to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as regulations issued pursuant to it and the actions of the Consumer Financial Protection Bureau and similar legislation and regulations enacted by other governmental authorities in the United States and abroad related to consumer protection; effects of unclaimed property laws or their interpretation or the enforcement thereof; failure to maintain sufficient amounts or types of regulatory capital or other restrictions on the use of our working capital to meet the changing requirements of our regulators worldwide; changes in accounting standards, rules and interpretations, or industry standards affecting our business; and (iii) other events or factors, such as: catastrophic events; and management’s ability to identify and manage these and other risks.
Overview
We are a leading provider of cross-border, cross-currency money movement, payments, and digital financial services and conduct business in the following operating segments:
Additional information regarding our segments is provided in the Segment Discussion below.
International Money Express, Inc. Acquisition
On August 10, 2025, we entered into an agreement to purchase the entire share capital of International Money Express, Inc. (“Intermex”) for approximately $500 million in cash and repay all of Intermex's outstanding indebtedness under their revolving credit facility. This transaction is expected to close in the second quarter of 2026, subject to the satisfaction of customary closing conditions, including receipt of remaining regulatory approvals. Intermex is a leading omnichannel money transfer provider, focused primarily on the United States to Latin America and the Caribbean corridors, through a network of agent retail locations, Intermex-operated stores, its mobile app, and websites.
Results of Operations
The following discussion of our consolidated results of operations and segment results refers to the three months ended March 31, 2026 compared to the same period in 2025. The results of operations should be read in conjunction with the discussion of our segment results of operations, which provides more detailed discussions concerning certain components of the Condensed Consolidated Statements of Income. All significant intercompany accounts and transactions between our segments have been eliminated. The below information has been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) unless otherwise noted. All amounts provided in this section are rounded to the nearest tenth of a million, except as otherwise noted. As a result, the percentage changes and margins disclosed herein may not recalculate precisely using the rounded amounts provided.
31
The following table sets forth our consolidated results of operations for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended March 31, |
|
|
||
(in millions, except per share amounts) |
|
2026 |
|
2025 |
|
% Change |
Revenues |
|
$982.7 |
|
$983.6 |
|
0% |
Expenses: |
|
|
|
|
|
|
Cost of services |
|
654.9 |
|
619.2 |
|
6% |
Selling, general, and administrative |
|
204.8 |
|
187.0 |
|
10% |
Total expenses |
|
859.7 |
|
806.2 |
|
7% |
Operating income |
|
123.0 |
|
177.4 |
|
(31)% |
Other income/(expense): |
|
|
|
|
|
|
Interest income |
|
2.0 |
|
1.7 |
|
19% |
Interest expense |
|
(36.2) |
|
(32.6) |
|
11% |
Other income, net |
|
1.3 |
|
0.8 |
|
70% |
Total other expense, net |
|
(32.9) |
|
(30.1) |
|
9% |
Income before income taxes |
|
90.1 |
|
147.3 |
|
(39)% |
Provision for income taxes |
|
25.4 |
|
23.8 |
|
7% |
Net income |
|
$64.7 |
|
$123.5 |
|
(48)% |
Earnings per share: |
|
|
|
|
|
|
Basic |
|
$0.21 |
|
$0.37 |
|
(43)% |
Diluted |
|
$0.20 |
|
$0.36 |
|
(44)% |
Weighted-average shares outstanding: |
|
|
|
|
|
|
Basic |
|
314.8 |
|
337.7 |
|
|
Diluted |
|
316.8 |
|
339.2 |
|
|
Revenues Overview
Revenues are primarily derived from consideration paid by customers to transfer money. These revenues vary by transaction based upon factors such as channel, send and receive locations, the send and receive funding method, the principal amount sent, and, when the money transfer involves different send and receive currencies, the difference between the exchange rate we set to the customer and a rate available in the wholesale foreign exchange market. We also offer other consumer services, for which revenue is impacted by similar factors.
Due to the significance of the effect that foreign exchange fluctuations against the United States dollar can have on our reported revenues, constant currency results have been provided in the table below for consolidated revenues. Constant currency revenues translate revenues denominated in foreign currencies to the United States dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year. Constant currency measures are non-GAAP financial measures and are provided so that revenue can be viewed without the effect of fluctuations in foreign currency exchange rates, which is consistent with how management evaluates our revenue results and trends. We believe that these measures provide management and investors with information about revenue results and trends that eliminates currency volatility, thereby providing greater clarity regarding, and increasing the comparability of, our underlying results and trends. These disclosures are provided in addition to, and not as a substitute for, the percentage change in revenue on a GAAP basis for the three months ended March 31, 2026 compared to the corresponding period in the prior year. Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes.
The following table sets forth our consolidated revenue results for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended March 31, |
|
|
||
(dollars in millions) |
|
2026 |
|
2025 |
|
% Change |
Revenues, as reported (GAAP) |
|
$982.7 |
|
$983.6 |
|
0% |
Foreign currency translation impact (a) |
|
|
|
|
|
(1)% |
Adjusted revenues (Non-GAAP) |
|
|
|
|
|
(1)% |
32
For the three months ended March 31, 2026, revenues and adjusted revenues were primarily impacted by a decrease in transactions and revenues in the North America and Latin America and the Caribbean regions of our Consumer Money Transfer segment, partially offset by revenue growth in our Consumer Services segment, as further discussed below.
Operating Expenses Overview
Cost of Services
Cost of services primarily consists of agent commissions, which represented approximately 55% of total cost of services for the three months ended March 31, 2026 and 2025. For the three months ended March 31, 2026, cost of services increased compared to the corresponding period in the prior year primarily due to an increase in employee-related and other expenses associated with our Eurochange Limited (“Eurochange”) acquisition and other immaterial acquisitions that expanded our Company-operated locations, in addition to increases in direct transactional expenses including credit losses, agent commissions, and bank fees.
Selling, General, and Administrative
Selling, general and administrative expenses increased for the three months ended March 31, 2026 when compared to the corresponding period in the prior year due to fluctuations in the United States dollar compared to foreign currencies and an increase in the costs for professional services.
33
Total Other Expense, Net
Total other expense, net increased for the three months ended March 31, 2026, when compared to the corresponding period in the prior year, primarily due to an increase in interest expense associated with our commercial paper borrowings.
Income Taxes
Our effective tax rates on pre-tax income were 28.1% and 16.1% for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026 compared to the corresponding period in the prior year, the effective tax rate increased primarily due to discrete expenses in the current period related to the reorganization of our international operations, compared to discrete benefits in the prior period.
Earnings Per Share
During the three months ended March 31, 2026 and 2025, basic earnings per share were $0.21 and $0.37, respectively, and diluted earnings per share were $0.20 and $0.36, respectively. Outstanding options to purchase Western Union stock and unvested shares of restricted stock are excluded from basic shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock have vested. Shares excluded from the diluted earnings per share calculation were 16.0 million and 14.0 million for the three months ended March 31, 2026 and 2025, respectively. The effect of these shares was anti-dilutive under the treasury stock method, as the assumed proceeds of the options and restricted stock per unit were above our average share price during the periods.
Earnings per share for the three months ended March 31, 2026 compared to the corresponding period in the prior year were impacted by the previously described factors impacting net income, partially offset by a lower number of average shares outstanding.
Segment Discussion
We manage our business around the consumers and businesses we serve and the types of services we offer. Each of our segments addresses a different combination of customer groups, distribution networks, and services offered. Our segments are Consumer Money Transfer and Consumer Services.
During the three months ended March 31, 2026 and 2025, we incurred expenses that are not included in the measurement of segment operating income provided to the Chief Operating Decision Maker (“CODM”) for purposes of performance assessment and resource allocation. These expenses are therefore excluded from our segment operating income results. Refer to Part I, Item 1, Financial Statements, Note 14, Segments for further discussion.
The following table sets forth the components of segment revenues as a percentage of the consolidated totals for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Consumer Money Transfer |
|
|
86 |
% |
|
|
89 |
% |
Consumer Services |
|
|
14 |
% |
|
|
11 |
% |
|
|
|
100 |
% |
|
|
100 |
% |
34
Consumer Money Transfer
The following table sets forth our Consumer Money Transfer segment results of operations for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended March 31, |
|
|
||
(dollars and transactions in millions) |
|
2026 |
|
2025 |
|
% Change |
Revenues |
|
$845.4 |
|
$872.9 |
|
(3)% |
Operating income |
|
$110.5 |
|
$159.3 |
|
(31)% |
Operating income margin |
|
13% |
|
18% |
|
|
Key indicator: |
|
|
|
|
|
|
Transactions |
|
71.1 |
|
70.8 |
|
0% |
Our Consumer Money Transfer service facilitates money transfers sent from our retail agent and Company-operated locations worldwide and money transfer transactions marketed under our brands and initiated through our websites and mobile applications and our third-party digital partners’ websites and mobile applications (“Branded Digital”). This segment includes five geographic regions whose functions are primarily related to generating, managing, and maintaining agent relationships and localized marketing activities. We include Branded Digital transactions in our regions. We exclude transactions and revenues generated from Iraq websites and mobile applications from the definition of Branded Digital, given the significant volatility in that business and disruptions in offering services in the country. By means of common processes and systems, these regions, including Branded Digital transactions, create one interconnected global network for consumer transactions, thereby constituting one Consumer Money Transfer business and one operating segment.
Transaction volume is the primary generator of revenue in our Consumer Money Transfer segment. A Consumer Money Transfer transaction constitutes the transfer of funds to a designated recipient utilizing one of our consumer money transfer services. The geographic split for transactions and revenue in the table that follows is determined based upon the region where the money transfer is initiated. Included in each region’s transaction and revenue percentages in the tables below are Branded Digital transactions for the three months ended March 31, 2026 and 2025. Where reported separately in the discussion below, Branded Digital consists of all transactions and revenue included under the definition provided above.
The table below sets forth revenue and transaction changes by geographic region compared to the prior year. Additionally, we have also provided adjusted revenue results for our Consumer Money Transfer and Consumer Services segment revenues, which are net of the impact of foreign currency hedges, as discussed above. Consumer Money Transfer segment adjusted revenue growth/(decline) is a non-GAAP financial measure, as further discussed in Revenues Overview above.
|
|
Three Months Ended March 31, 2026 |
||||||
|
|
Revenue Growth / (Decline) as |
|
Foreign |
|
Adjusted Revenue Growth / (Decline)(a) - (Non-GAAP) |
|
Transaction Growth / (Decline) |
Consumer Money Transfer regional growth/(decline): |
|
|
|
|
|
|
|
|
North America (United States & Canada) (“NA”) |
|
(11)% |
|
(1)% |
|
(10)% |
|
(5)% |
Europe and CIS (“EU & CIS”) |
|
5% |
|
7% |
|
(2)% |
|
(1)% |
Middle East, Africa, and South Asia (“MEASA”) |
|
1% |
|
1% |
|
0% |
|
22% |
Latin America and the Caribbean (“LACA”) |
|
(4)% |
|
3% |
|
(7)% |
|
(8)% |
Asia Pacific (“APAC”) |
|
(3)% |
|
2% |
|
(5)% |
|
(2)% |
Total Consumer Money Transfer Segment |
|
(3)% |
|
3% |
|
(6)% |
|
0% |
|
|
|
|
|
|
|
|
|
Branded Digital (b) |
|
9% |
|
3% |
|
6% |
|
21% |
35
The table below sets forth regional revenues as a percentage of our Consumer Money Transfer revenue for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Consumer Money Transfer revenue as a percentage of segment revenue: |
|
|
|
|
|
|
||
NA |
|
|
35 |
% |
|
|
39 |
% |
EU & CIS |
|
|
30 |
% |
|
|
27 |
% |
MEASA |
|
|
18 |
% |
|
|
17 |
% |
LACA |
|
|
11 |
% |
|
|
11 |
% |
APAC |
|
|
6 |
% |
|
|
6 |
% |
Our consumers transferred $27.0 billion and $25.8 billion in cross-border principal for the three months ended March 31, 2026 and 2025, respectively. Consumer Money Transfer cross-border principal is the amount of consumer funds transferred to a designated recipient in a country or territory that differs from the country or territory from which the transaction was initiated. Consumer Money Transfer cross-border principal is a metric used by management to monitor and better understand the growth in our underlying business relative to competitors, as well as changes in our market share of global remittances.
Revenues
Consumer Money Transfer revenue decreased 3% and transactions remained flat for the three months ended March 31, 2026, compared to the corresponding period in the prior year. Fluctuations in the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges, positively impacted revenue by 3% for the three months ended March 31, 2026, compared to the corresponding period in the prior year.
For the three months ended March 31, 2026, in our Consumer Money Transfer regions, NA revenue and transactions decreased, compared to the corresponding period in the prior year. The region was impacted by declines in revenues and transactions sent from and within the United States, which has been impacted by broader geopolitical and macroeconomic conditions, including impacts from immigration policies. For the three months ended March 31, 2026, our EU & CIS revenues increased primarily due to fluctuations in the United States dollar compared to foreign currencies in that region. For the three months ended March 31, 2026, our MEASA transactions increased, which was primarily driven by growth in the region's Branded Digital transactions, which have lower revenues per transaction. For the three months ended March 31, 2026, the revenue decline in LACA was primarily driven by decreases in Mexico and Brazil and was also impacted by broader geopolitical and macroeconomic conditions.
Beginning January 1, 2026, the remittance tax provisions of the One Big Beautiful Bill Act in the United States became effective. These provisions assess a 1% excise tax on certain remittances sent internationally from the United States that are funded with cash or a similar, physical instrument. In April 2026, the United States Department of Treasury and Internal Revenue Service issued proposed rules that seek to clarify the scope and application of the excise tax, subject to public comment and finalization of the rules. We are currently evaluating the potential impact the proposed rules could have on our business.
We have historically implemented price reductions or price increases throughout many of our global corridors. We will likely continue to implement price changes from time to time in response to competition and other factors. Price reductions generally reduce margins and adversely affect financial results in the short term and may also adversely affect financial results in the long term if transaction volumes do not increase sufficiently. Price increases may adversely affect transaction volumes, as consumers may not use our services if we fail to price them appropriately.
Operating Income
Consumer Money Transfer operating income decreased for the three months ended March 31, 2026 compared to the corresponding period in the prior year due to a decrease in revenue, fluctuations between the United States dollar and foreign currencies, and an increase in the costs for professional services.
36
Consumer Services
The following table sets forth Consumer Services results for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended March 31, |
|
|
||
(dollars in millions) |
|
2026 |
|
2025 |
|
% Change |
Revenues |
|
$137.3 |
|
$110.7 |
|
24% |
Operating income |
|
$16.2 |
|
$27.1 |
|
(40)% |
Operating income margin |
|
12% |
|
24% |
|
|
Revenues
The following table sets forth our Consumer Services revenue results for the three months ended March 31, 2026 and 2025. Consumer Services segment adjusted revenue growth/(decline) is a non-GAAP financial measure, as further discussed in Revenues Overview above.
|
|
Three Months Ended March 31, |
|
|
||
(dollars in millions) |
|
2026 |
|
2025 |
|
% Change |
Revenues, as reported (GAAP) |
|
$137.3 |
|
$110.7 |
|
24% |
Foreign currency translation impact (a) |
|
|
|
|
|
9% |
Adjusted revenues (Non-GAAP) |
|
|
|
|
|
33% |
For the three months ended March 31, 2026 relative to the corresponding period in the prior year, Consumer Services GAAP and Adjusted revenues increased primarily due to revenue growth in our travel money and check acceptance services, including the benefit from Eurochange and other immaterial acquisitions, and growth in our cash-based bill payments services offered at retail locations in Argentina.
Operating Income
Consumer Services operating income for the three months ended March 31, 2026 compared to the corresponding period in the prior year was negatively impacted by an increase in employee-related and other expenses associated with Eurochange and other immaterial acquisitions that expanded our Company-operated locations and increases in agent commissions and credit losses, partially offset by an increase in revenue.
Capital Resources and Liquidity
Our primary source of liquidity has been cash generated from our operating activities, primarily from net income and fluctuations in working capital. Our working capital is affected by the timing of payments for employee and agent incentives, interest payments on our outstanding borrowings, and timing of income tax payments, among other items. Many of our annual employee incentive compensation and agent incentive payments are made in the first quarter following the year they were incurred. The majority of our interest payments are due in the second and fourth quarters, which results in a decrease in the amount of cash provided by operating activities in those quarters and a corresponding increase to the first and third quarters.
Our future cash flows could be impacted by a variety of factors, some of which are out of our control. These factors include, but are not limited to, changes in economic conditions, especially those impacting migrant populations, changes in income tax laws or the status of income tax audits, including the resolution of outstanding tax matters, and the settlement or resolution of legal contingencies.
37
Substantially all of our cash flows from operating activities have been generated from subsidiaries. Most of these cash flows are generated from our regulated subsidiaries. Our regulated subsidiaries may transfer all excess cash to the parent company for general corporate use, except for assets subject to legal or regulatory restrictions, including: (i) requirements to maintain cash and other qualifying investment balances, free of any liens or other encumbrances, related to the payment of certain of our money transfer and other payment obligations, (ii) other legal or regulatory restrictions, including statutory or formalized minimum net worth requirements, and (iii) restrictions on transferring assets outside of the countries where these assets are located.
We currently believe we have adequate liquidity to meet our business needs, including payments under our debt and other obligations, through our existing cash balances, our ability to generate cash flows through operations, our revolving credit facility (“Revolving Credit Facility”), and our $800 million delayed draw term loan credit agreement (“Delayed Draw Term Loan Facility”). The Revolving Credit Facility provides for aggregate revolving credit commitments of $1.62 billion and supports our commercial paper program. Our commercial paper program enables us to issue unsecured commercial paper notes in an amount not to exceed $1.62 billion outstanding at any time, reduced to the extent of any borrowings outstanding on our Revolving Credit Facility.
To help ensure availability of our worldwide cash where needed, we utilize a variety of planning and financial strategies, including decisions related to the amounts, timing, and manner by which cash is repatriated or otherwise made available from our international subsidiaries. These decisions can influence our overall tax rate and impact our total liquidity. We regularly evaluate our United States cash requirements, taking tax consequences and other factors into consideration and also the potential uses of cash internationally to determine the appropriate level of dividend repatriations of our foreign source income.
Cash and Investment Securities
As of March 31, 2026 and December 31, 2025, we had Cash and cash equivalents of $909.2 million and $1,234.4 million, respectively.
In many cases, we receive funds from money transfers and certain other payment services before we settle the payment of those transactions. These funds, referred to as Settlement assets on our Condensed Consolidated Balance Sheets, are not used to support our operations. However, we earn income from investing these funds. We maintain a portion of these settlement assets in highly liquid investments, classified as Cash and cash equivalents within Settlement assets, to fund settlement obligations.
Investment securities, net, classified within Settlement assets on the Condensed Consolidated Balance Sheets, were $1,446.5 million and $1,445.0 million as of March 31, 2026 and December 31, 2025, respectively, and consist primarily of highly-rated state and municipal debt securities. These investment securities are held in order to comply with state licensing requirements in the United States and are required to have credit ratings of “A-” or better from a major credit rating agency. Refer to Part I, Item 1, Financial Statements, Note 8, Settlement Assets and Obligations, for more details regarding investment securities.
Investment securities are exposed to market risk due to changes in interest rates and credit risk. We regularly monitor credit risk and attempt to mitigate our exposure by investing in highly-rated securities and diversifying our investment portfolio. Our investment securities are also actively managed with respect to concentration. As of March 31, 2026, all investments with a single issuer and each individual security represented less than 10% of our investment securities portfolio.
Cash Flows from Operating Activities
Cash provided by operating activities decreased to $109.0 million during the three months ended March 31, 2026, from $148.2 million in the corresponding period in the prior year. Cash provided by operating activities can be impacted by changes to our consolidated net income, in addition to fluctuations in our working capital balances, among other factors.
38
Financing Resources
As of March 31, 2026, we had outstanding borrowings at par value of $2,634.0 million. The majority of these outstanding borrowings consist of unsecured fixed-rate notes with maturities ranging from 2029 to 2040.
As of March 31, 2026 and December 31, 2025, we had $800.0 million outstanding under our unsecured term loan facility (“Term Loan Facility”), and such borrowings mature on December 13, 2027. We have the option to increase the commitments under the Term Loan Facility by an amount such that the commitments do not exceed $1.0 billion in the aggregate (after giving effect to any such increases). Any such increases would be subject to obtaining additional commitments from existing or new lenders under the Term Loan Facility. We used the proceeds from the Term Loan Facility borrowings to repay our 2.850% notes due January 2025, to reduce commercial paper balances, and for general corporate purposes.
On January 9, 2026, we entered into the Delayed Draw Term Loan Facility, providing for an unsecured term loan facility in an aggregate amount of $800.0 million. We have until July 8, 2026 to draw upon the Delayed Draw Term Loan Facility, which matures on the third anniversary of the initial funding date. We have the option to increase the commitments under the Delayed Draw Term Loan Facility by an amount such that the commitments do not exceed $1.0 billion in the aggregate (after giving effect to any such increases). Any such increases would be subject to obtaining additional commitments from existing or new banks under the Delayed Draw Term Loan Facility. We may use the proceeds from the Delayed Draw Term Loan Facility to finance the cash consideration to purchase the entire share capital of Intermex and repay all of Intermex's outstanding indebtedness under their revolving credit facility.
Our Revolving Credit Facility provides for unsecured financing facilities, including a $250.0 million letter of credit subfacility and $300.0 million swing line sublimit, and allows us to draw loans payable based upon the Secured Overnight Financing Rate (“SOFR”), the Euro Interbank Offered Rate, or the Sterling Overnight Index Average. The Revolving Credit Facility provides for aggregate revolving credit commitments of $1.62 billion and matures on November 30, 2029.
Interest due under the Revolving Credit Facility is payable according to the terms of that borrowing. Generally, interest under the Revolving Credit Facility is calculated using either (i) an adjusted term SOFR, or other applicable benchmark based on the currency of the borrowing, plus an interest rate margin determined on a sliding scale from 0.920% to 1.425% based on our credit rating (currently 1.140%) or (ii) a base rate plus a margin determined on a sliding scale from 0.000% to 0.425% based on our credit rating (currently 0.140%). A facility fee on the total amount of the facility is also payable quarterly, regardless of usage, and such facility fee is determined on a sliding scale from 0.080% to 0.200% based on our credit rating (currently 0.110%).
The purpose of our Revolving Credit Facility, which is diversified through a group of 19 participating institutions, is to provide general liquidity and to support our commercial paper program, which we believe enhances our short-term credit rating. The largest commitment from any single financial institution within the total committed balance of $1.62 billion is approximately 12%. As of March 31, 2026, we had no outstanding borrowings under the facility. If the amount available to borrow under the Revolving Credit Facility decreased, or if the Revolving Credit Facility were eliminated, the cost and availability of borrowing under the commercial paper program may be impacted.
Pursuant to our commercial paper program, we may issue unsecured commercial paper notes in an amount not to exceed $1.62 billion outstanding at any time, reduced to the extent of borrowings outstanding on our Revolving Credit Facility. Our commercial paper borrowings may have maturities of up to 397 days from date of issuance. Interest rates for borrowings are based on market rates at the time of issuance. We had $299.4 million of commercial paper borrowings outstanding as of March 31, 2026. Our commercial paper borrowings as of March 31, 2026 had a weighted-average annual interest rate of approximately 4.0% and a weighted-average term of approximately 4 days. Proceeds from our commercial paper borrowings were used for general corporate purposes and working capital needs.
On March 9, 2026, we issued $450.0 million of 4.750% unsecured notes due June 15, 2029, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2026 ("2029 Notes"). If a change of control triggering event occurs, holders of the 2029 Notes may require us to repurchase some or all of their notes at a price equal to 101% of the principal amount of their notes, plus any accrued and unpaid interest. We may redeem the 2029 Notes in whole or in part, at any time prior to May 15, 2029, at the greater of par or a price based on the applicable treasury rate plus 20 basis points. We may redeem the 2029 Notes at any time after May 15, 2029, at a price equal to par, plus accrued interest.
39
Cash Priorities
Liquidity
Our objective is to maintain strong liquidity and a capital structure consistent with investment-grade credit ratings. We have existing cash balances, cash flows from operating activities, access to the commercial paper markets, our Revolving Credit Facility, and our Delayed Draw Term Loan available to support the needs of our business.
Our ability to grow the business, make investments in our business, make acquisitions, return capital to shareholders, including through dividends and share repurchases, and service our debt and tax obligations will depend on our ability to continue to generate excess operating cash through our operating subsidiaries and to continue to receive dividends from those operating subsidiaries, our ability to obtain adequate financing, and our ability to identify acquisitions that align with our long-term strategy. For additional information, please refer to Part II, Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities in our Annual Report on Form 10‑K for the year ended December 31, 2025.
Capital Expenditures
The total aggregate amount paid for purchased and developed software, contract costs, and purchases of property and equipment was $46.8 million and $24.4 million for the three months ended March 31, 2026 and 2025, respectively. Capital expenditures during these periods included investments in our information technology infrastructure. Amounts paid for new and renewed agent contracts vary depending on the terms of existing contracts as well as the timing of new and renewed contract signings.
Share Repurchases and Dividends
On December 13, 2024, our Board of Directors authorized $1.0 billion of common stock repurchases with no expiration date. During the three months ended March 31, 2026 and 2025, 4.8 million and 7.0 million shares were repurchased under this authorization for $45.4 million and $75.0 million, respectively, excluding commissions, at an average cost of $9.48 and $10.76, respectively. As of March 31, 2026, $729.9 million remained available under this share repurchase authorization.
Our Board of Directors declared quarterly cash dividends of $0.235 per common share in the first quarter of 2026, representing $73.7 million in total dividends.
Material Cash Requirements
Debt Service Requirements
Our 2026 and future debt service requirements will include payments on all outstanding indebtedness, including any borrowings under our commercial paper program. On March 16, 2026, we repaid the 1.350% notes due in March 2026 for total consideration of $600 million, excluding accrued interest, using proceeds from the 2029 Notes and commercial paper issuance.
Operating Leases
We lease real properties for use as owned locations, administrative offices, and sales offices, in addition to transportation, office, and other equipment. Refer to Part II, Item 8, Financial Statements and Supplementary Data, Note 11, Leases, in our Annual Report on Form 10-K for the year ended December 31, 2025 for details on our leasing arrangements, including future maturities of our operating lease liabilities.
We have no material off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.
40
Other Commercial Commitments
We had approximately $130 million in outstanding letters of credit and bank guarantees as of March 31, 2026 primarily held in connection with regulatory requirements, lease arrangements, and certain agent agreements. We expect to renew many of our letters of credit and bank guarantees prior to expiration.
As of March 31, 2026, our total amount of unrecognized income tax benefits was $61.8 million, including associated interest and penalties. The timing of any related cash payments for substantially all of these liabilities is inherently uncertain because the ultimate amount and timing of the settlement of such liabilities are affected by factors which are variable and outside our control.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts and disclosures in the financial statements and accompanying notes. Actual results could differ from those estimates. Our Critical Accounting Policies and Estimates disclosed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10‑K for the year ended December 31, 2025, for which there were no material changes, included:
Recent Accounting Pronouncements
Refer to Part I, Item 1, Financial Statements, Note 1, Business and Basis of Presentation for further discussion.
Risk Management
We are exposed to market risks arising from changes in market rates and prices, including changes in foreign currency exchange rates and interest rates and credit risk related to our agents and customers. A risk management program is in place to manage these risks.
Foreign Currency Exchange Rates
We provide our services primarily through a network of agent locations in more than 200 countries and territories. We manage foreign exchange risk through the structure of the business and an active risk management process. We currently settle with the significant majority of our agents and disbursement partners in United States dollars, Mexican pesos, or euros requiring those agents and disbursement partners to obtain local currency to pay recipients, and we generally do not rely on international currency markets to obtain and pay illiquid currencies. However, in certain circumstances, we settle in other currencies. The foreign currency exposure that does exist is limited by the fact that the significant majority of transactions are paid by the next day after they are initiated, and agent settlements occur within a few days in most instances. To mitigate this risk further, we enter into short duration foreign currency forward contracts, generally with maturities ranging from a few days to one month, to offset foreign exchange rate fluctuations between transaction initiation and settlement. We also have exposure to certain foreign currency denominated cash and other asset and liability positions and may utilize foreign currency forward contracts, typically with maturities of less than one year at inception, to offset foreign exchange rate fluctuations on these positions. In certain consumer money transfer transactions involving different send and receive currencies, we generate revenue based on the difference between the exchange rate set by us to the consumer and a rate available in the wholesale foreign exchange market, helping to provide protection against currency fluctuations. We attempt to promptly buy and sell foreign currencies as necessary to cover our net payables and receivables which are denominated in foreign currencies.
We use longer-term foreign currency forward contracts to help mitigate risks associated with changes in foreign currency exchange rates on revenues denominated in the euro, and, to a lesser degree, the Canadian dollar, the British pound, and other currencies. We use contracts with maturities of up to 36 months at inception to mitigate some of the impact that changes in
41
foreign currency exchange rates could have on forecasted revenues, with a targeted weighted-average maturity of one to two years. We believe the use of longer-term foreign currency forward contracts provides predictability of future cash flows from our international operations.
As of March 31, 2026, a hypothetical uniform 10% strengthening or weakening in the value of the United States dollar relative to all other currencies in which our net income is generated would have resulted in a decrease/increase to pre-tax annual income of approximately $30 million, based on our forecast of unhedged exposure to foreign currency at that date. There are inherent limitations in this sensitivity analysis, primarily due to the following assumptions: (i) foreign exchange rate movements are linear and instantaneous, (ii) fixed exchange rates between certain currency pairs are retained, (iii) the unhedged exposure is static, and (iv) we would not hedge any additional exposure. As a result, the analysis is unable to reflect the potential effects of more complex market changes that could arise, which may positively or negatively affect income.
Interest Rates
We invest in several types of interest-bearing assets, with a total value as of March 31, 2026 of approximately $2.2 billion. Approximately $0.8 billion of these assets bear interest at floating rates. These assets primarily include cash in banks and money market investments and are included in our Condensed Consolidated Balance Sheets within Cash and cash equivalents and Settlement assets. To the extent these assets are held in connection with money transfers and other related payment services awaiting redemption, they are classified as Settlement assets. Earnings on these investments will increase and decrease with changes in the underlying short-term interest rates.
The remaining interest-bearing assets pay fixed interest rates and primarily consist of highly-rated state and municipal debt securities and asset-backed securities. These investments may include investments made from cash received from our money order services, money transfer business, and other related payment services awaiting redemption and are classified within Settlement assets in the Condensed Consolidated Balance Sheets. As interest rates rise, the fair values of these fixed-rate interest-bearing securities will decrease; conversely, a decrease to interest rates would result in an increase to the fair values of the securities. We have classified these investments as available-for-sale within Settlement assets in the Condensed Consolidated Balance Sheets, and accordingly, recorded these instruments at their fair value with the net unrealized gains and losses, excluding credit-related losses, net of the applicable deferred income tax effect, being added to or deducted from our Total stockholders’ equity in our Condensed Consolidated Balance Sheets.
As of March 31, 2026, borrowings of $800 million under our Term Loan Facility were subject to floating interest rates. The interest on these borrowings was calculated using a selected SOFR plus an interest rate margin. Borrowings under our commercial paper program mature in such a short period that the financing is effectively floating rate. As of March 31, 2026, there were $299.4 million in outstanding borrowings under our commercial paper program.
We review our overall exposure to floating and fixed rates by evaluating our net asset or liability position and the duration of each individual position. We manage this mix of fixed versus floating exposure in an attempt to minimize risk, reduce costs, and improve returns. Our exposure to interest rates can be modified by changing the mix of our interest-bearing assets as well as adjusting the mix of fixed versus floating rate debt. The latter is accomplished primarily through the use of interest rate swaps and the decision regarding terms of any new debt issuances (i.e., fixed versus floating). From time to time, we use interest rate swaps designated as hedges to vary the percentage of fixed to floating rate debt, subject to market conditions. As of March 31, 2026, our weighted-average effective rate on total borrowings was approximately 5.0%.
At March 31, 2026, a hypothetical 100 basis point increase/decrease in interest rates would result in a decrease/increase to pre-tax income for the next twelve months of approximately $11 million based on borrowings that are sensitive to interest rate fluctuations, net of the impact of hedges. The same 100 basis point increase/decrease in interest rates, if applied to our cash and investment balances on March 31, 2026 that bear interest at floating rates, would result in an offsetting increase/decrease to pre-tax income for the next twelve months of approximately $8 million. There are inherent limitations in the sensitivity analysis presented, primarily due to the assumptions that interest rate changes would be instantaneous and consistent across all geographies in which our interest-bearing assets are held and our liabilities are payable. As a result, the analysis is unable to reflect the potential effects of more complex market changes, including changes in credit risk regarding our investments, which may positively or negatively affect income. In addition, the mix of fixed versus floating rate debt and investments and the level of assets and liabilities will change over time, including the impact from commercial paper borrowings that may be outstanding in future periods.
42
Credit Risk
To manage our exposures to credit risk with respect to investment securities, money market fund investments, derivatives, and other credit risk exposures resulting from our relationships with banks and financial institutions, we regularly review investment concentrations, trading levels, credit spreads, and credit ratings, and we attempt to diversify our investments among global financial institutions.
We are also exposed to credit risk related to receivable balances from agents in the money transfer, bill payment, and money order settlement process. We perform a credit review before each agent signing and conduct periodic analyses of agents and certain other parties we transact with directly. In addition, we are exposed to non-credit losses directly from consumer transactions, particularly through our digital channels, where transactions are originated through means other than cash and are therefore subject to “chargebacks,” insufficient funds or other collection impediments, such as fraud.
Our credit and non-credit losses have been less than 2% of our consolidated revenues in all periods presented.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The information under Risk Management in Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report is incorporated herein by reference.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of the Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of our controls and procedures related to our reporting and disclosure obligations (as defined by Rules 13a-15(e) and 15d-15(e) within the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2026, which is the end of the period covered by this Quarterly Report on Form 10‑Q. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that, as of March 31, 2026, the disclosure controls and procedures were effective to ensure that information required to be disclosed by us, including our consolidated subsidiaries, in the reports we file or submit under the Exchange Act, is recorded, processed, summarized, and reported, as applicable, within the time periods specified in the rules and forms of the Securities and Exchange Commission, and are designed to ensure that information required to be disclosed by us in the reports that we file or submit is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes that occurred during the fiscal quarter covered by this Quarterly Report on Form 10‑Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Review Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders of The Western Union Company
Results of Review of Interim Financial Statements
We have reviewed the accompanying condensed consolidated balance sheet of The Western Union Company (the Company) as of March 31, 2026, the related condensed consolidated statements of income, comprehensive income, cash flows and stockholders’ equity for the three-month periods ended March 31, 2026 and 2025, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2025, the related consolidated statements of income, comprehensive income, cash flows and stockholders’ equity for the year then ended, and the related notes and schedule (not presented herein); and in our report dated February 20, 2026, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2025, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
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/s/ Ernst & Young LLP |
Denver, Colorado |
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April 24, 2026 |
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PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The information required by this Item 1 is incorporated herein by reference to the discussion in Part I, Item 1, Financial Statements, Note 6, Commitments and Contingencies.
Item 1A. Risk Factors
For a discussion of our risk factors, please see Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table sets forth stock repurchases for each of the three months of the quarter ended March 31, 2026:
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Approximate Dollar |
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Total Number of Shares |
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Value of Shares that |
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Purchased as Part of |
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May Yet Be Purchased |
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Total Number of |
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Average Price |
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Publicly Announced |
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Under the Plans or |
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Period |
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Shares Purchased (a) |
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Paid per Share (c) |
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Plans or Programs (b) |
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Programs (in millions) |
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January 1 - 31 |
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1,586,356 |
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$ |
9.42 |
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1,558,676 |
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$ |
760.6 |
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February 1 - 28 |
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2,427,019 |
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$ |
9.53 |
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1,508,100 |
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$ |
746.0 |
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March 1 - 31 |
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1,730,785 |
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$ |
9.38 |
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1,721,430 |
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$ |
729.9 |
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Total |
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5,744,160 |
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$ |
9.45 |
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4,788,206 |
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Securities Trading Plans of Directors and Executive Officers
During the three months ended March 31, 2026, none of the Company’s directors or executive officers
45
Item 6. Exhibits
See Exhibit Index for documents filed or furnished herewith and incorporated herein by reference.
EXHIBIT INDEX
Exhibit |
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Description |
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4.1 |
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4.2 |
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10.1 |
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15 |
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Letter from Ernst & Young LLP Regarding Unaudited Interim Financial Information |
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31.1 |
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31.2 |
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32 |
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101.INS |
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Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
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104 |
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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
46
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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The Western Union Company (Registrant) |
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Date: April 24, 2026 |
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By: |
/s/ Devin B. McGranahan |
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Devin B. McGranahan |
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President and Chief Executive Officer |
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Date: April 24, 2026 |
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By: |
/s/ Matt Cagwin |
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Matt Cagwin |
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Chief Financial Officer |
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(Principal Financial Officer) |
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Date: April 24, 2026 |
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By: |
/s/ Barry D. Cooper |
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Barry D. Cooper |
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Chief Accounting Officer and Controller |
47