The financial institution (FI) recorded a strong performance in its foundational services, consumer-to-consumer transactions and remittances, with digitization of its services a key driver of growth.
President and CEO Hikmet Ersek noted during Thursday’s earnings call a 96 percent increase in digital money transfer transactions through WesternUnion.com as well as its third-party partner ecosystem.
Ersek noted a hit taken by the FI’s B2B segment, stating its business solution segment, which represents about 7 percent of the firm’s revenue, “has been affected by macro headwinds related to COVID-19 over the past two quarters due to exposure to small- to medium-size enterprises, travel and tourism, and education.”
On a more positive note, however, the CEO highlighted Western Union’s “quick and dramatic rebound” of margins late in the year’s second quarter, driving a positive outlook in the long term.
“Our strategy, planning and execution enabled us to adjust to changing market conditions, rebound quickly from the sharp downturn COVID-19 caused during the second quarter, and deliver strong profitability for shareholders,” said Ersek, adding that while macroeconomic headwinds persist, “our business continues to improve.”
Moving forward, Western Union will continue to look toward its digitization strategy for growth.
“We are ramping up our platform and continue to invest in technology to move more of our operations to the cloud,” said Ersek, adding that digitization will open up new use cases for its money transfer service in consumer, business and government customer bases.
All told, Western Union beat analyst expectations in posting 55 cents per share. Ersek noted earnings came in at $228.6 million, compared with $135 million during 2019’s Q3. The figures beat previous expectations of 46 cents per share, according to Nasdaq figures. Revenue for Q3 dropped by 3.8 percent, however, to $1.26 billion.
According to Chief Financial Officer Raj Agrawal, the FI’s revised outlook for the full year 2020 improved to EPS of between $1.80 to $1.85, up from the previous expectation of $1.78.
Western Union expanded its international real-time payout capabilities earlier this month, with real-time remittance services now live in 80 of the more than 120 countries in which the company operates.