Q4 2019 Earnings Call
Today's call is being.
Recorded in our comments include forward-looking statements. Please refer to the cautionary language in the earnings release and in Western Unions filings with the Securities and Exchange Commission, including the 2018 form 10-K for additional information concerning factors that could cause actual results to differ materially from forward-looking statements during the call. We will discuss some items that do not conform to generally accepted accounting principles. We have reconciled those items to the most comparable gaap measures on our website, under the investor relations section. We will also discuss certain adjusted metrics. Although the expense the expenses that have been excluded from adjusted metrics are specific to those initiatives these types of offenses may be similar to types of expenses of the company has previously incurred and can be can reasonably be expected to incur in the future all statements made by Western Union Officers in this call are the property of the Western Union company and subject to copyright page. I put on the replay noted in our press release Western Union has not authorized and disclaims responsibility for any recording replay or distribution of any transcription of this call before I turn the call over to hit my God.
I would I would like to take the opportunity to announce that we have brought in a new daily leader for investor relations Brendan the Toronto who?
Coins from joins us from evercore is I where he was in equity research analyst you'll be hearing more from Brendan in the near future Stickman. Well, thank you Brad and good afternoon everyone.
I am pleased to say that our business delivered solid results in the fourth quarter driven by continued strong performance in our digital offerings fourth quarter Revenue increased 3. And on that adjusted constant currency basis and adjusted EPS was $0.38 for the full year or adjusted results were in line with the financial outlay be provided with third-quarter results.
Returning cash to shareholders Remain the priority as be returned over $880 million dollars to shareholders in 2019. I am pleased. I'm I'm pleased that today. We also announced at 13% increase in the quarterly dividend which reflects the strength of our business and strong profit expectations for twenty G20 and confidence in our new Global strategy.
mm
18 was a pivotal year for Western Union as we made significant progress towards our vision of being the leader in cross-border cross-currency money movement and payments and delivered strong financial results. So I would like to take a moment to review some of the key strategic accomplishments from 2019.
First be simplified and created a sharper Focus for the business largely completing our exit from non-core operations with the cell of birth pay us domestic field payment service and the US payment Mortgage Service in the second quarter.
The 750 million dollars in proceeds funded enhanced cash returns to shareholders.
With the device Chargers and smaller domestic money transfers our business now primarily focused on cross-border services for consumers financial institutions Banks and other businesses our Focus alliance with our core competencies in foreign-exchange, cross-border settlement compliance and Global retail and account payout Network.
second
Accomplishment in 2019 was we continue to expand our digital business to West Union. Now accounts for 15% for Consumer revenues and cross-border revenue increased 26% in the fourth quarter. We also begun unlocking the value of our leading Global physical and digital cross-border cross-currency platform opening into third-party partners. For example, we added to significant customers among others SDC pay and spare Bank our total digital to transfer revenues increased 24% reported or 25% constant currency in the fourth quarter.
Today, we operate one of the most extensive digital platforms for cross-border cross-currency money moment. Whether branded vehicle parents, like receiving. Or digital offerings, like walk-in able our partners like TD Bank bear bank or HTC pay both red and white label offerings continue to have very strong growth potential wage recently integrated Digital Services with three of Europe's largest possible institutions, France Flamenco style Italian pasta pay and I'm supposed
You also recently announced a new partnership with.
Bharti Airtel a global telecommunications company with operations across Asia and Africa, we will soon offer real-time payments into millions of Airtel payment bank account off India and mobile wallets across 14 countries in Africa. We have established non-residents white label payments use cases such as our partnership with Amazon for Global e-commerce payments further expanding our addressable Market to Consumer to business payments and in business payments, Rossini Business Solutions continued its growth Trend led by a strong performance in the education and financial institution verticals, which translated into solid Revenue growth of 4% on a constant currency basis or 2019. So it was a quite good year.
Well be made significant progress in 2019. You are not content and will continue to drive our business forward in 2020. You laid out our strategic Vision package. It's our September investors day. And I would like to highlight three keys radio objectives. We will focus on in 2020 enhancing our Global Network driving our digital growth and optimizing our organization. We will work to enhance our Global Payments Network improving the cost coverage and quality off your leverage it with additional third-party partnership today are was platform capabilities include both digital and physical physical money movement networks with over 500,000 locations across more than two hundred countries and territories digital sent capable capabilities in an over 70 countries and bank account payout capabilities. Yep.
over hundred markets
Offering across to billions of accounts we will continue to grow our Network and will also improve the quality by adding new value-added services like real-time account pay out which we expanded during 2019. We now offer customers the ability to transfer funds into an account in real time in over twenty countries with plans to expand it off over a hundred countries this year the value-added payout Services should help us gain new customer segments such as e-commerce and financial institutions.
We will drive our digital strategy forward to serve consumers Whenever Wherever and however, they desire and expand aggressively over the next few years including large opportunities life 220 billion dollar off on Market in the Gulf States or the 25 billion dollar out front market in China and India. Our goal is involved in the world am agnostic Network for payments and cross-border money moments.
We are also transitioning are West Indian branded consumer business from a transaction-based bottle to a lifetime value model optimizing the customer experience and improving retention place this call. We have further developing and applying strong data analytic capabilities to a rich pool of global data over 200 countries allowing us to price dynamically Black Market more precisely and ultimately enhance our ability to drive Revenue growth.
Our third objective is to strengthen and optimize our organization we're seeing in has tremendous Talent building on the foundation of who else in capabilities and the transformation of it. We will leverage internal resources more effectively to improve execution and hence profitability and drive margin. In addition to that. We will continue to selectively add new team members who can impact our business a great example is the recent edition of shell swing back our new president of product and platform Shelly comes to a senior from Accenture where she was instrumental in building the firm's Digital Services wage salary reports directly to me and play a critical role in enhancing our Global platform.
While the while we will continue to focus on driving shareholder value with strong financial results. We will also focus on delivering value for all stakeholders office environment. So social and governance efforts, the details of these efforts can be found in our 2018 EST report. We plan to issue r6900. Yes to report later this spring and one more thing.
During the apartment. We have also achieved a significant milestone in our us joint settlement agreements.
The term of the deferred-prosecution agreement with the Department of Justice expired on January 19th under the DPA to close out to close out this matter the doj has 90 days from the expiration to file for dismissal of the charges. We understand that that doj will make a motion to dismiss the DEA promptly. We will continue to work to protect our customers and partners by maintaining strong compliance programs, which we believe give us a competitive advantage in closing you made significant progress in 2019, and we begin 2020 better position than ever before to capitalize on the South African opportunity in the large and growing money transfer and Global Payments Market.
I'm confident.
In our ability to deliver the 2022 margin and EPS targets and our Outlook this year reflects our expectations for a strong start of our goals with Rodger will discuss our financial Outlook and long-term Targets in more detail. I remain excited about our long-term prospects and would like to thank to all our team members took their hard work and commitment and the big thank you to our business partners agents consumers and shareholders from all over the world for your trust and loyalty off with that. I'll turn the call over to Ranch. Thank you. I will focus my comments primarily on the fourth quarter the similar information for the full year. It can be found in our press release and attached Financial schedules given the impact of the divestiture on prior. Comparison and restructuring costs from our productivity program. There are a number of puts and takes in our fourth-quarter results dead.
our adjusted results
Move most of the impact of the factors, which will not affect our future results.
Fourth-quarter Revenue at one point three billion dollars declined 7% compared to the prior-year period while adjusted constant currency Revenue which excludes our domestic businesses in the prior-year. Increase 3% currency translation of the impact of Hedges reduce fourth-quarter Revenue by approximately $42 compared to the prior-year primarily due to the depreciation of the month and pay. So the decline in peso negatively impacted reported Revenue by 2% while the effect of inflation on our Argentina businesses is estimated to have positively impacted both reported in constant currency Revenue by approximately 1%
And the consumer-to-consumer segment reported Revenue was flat or increased 1% constant currency while transaction declined 1% primarily due to some civil unrest macroeconomic and market-specific issues in a few countries.
So we'll see to see cross-border principal increased 1% or 2% on a constant currency basis principal per transaction was flat or increased 1% constant currency the spread between a C2C transaction in Revenue growth in the quarter was 1% with a negative 1% impact and currency pricing was higher in the fourth quarter compared to the prior year and was largely offset by mix the net impact was positive on revenue and the quarter.
turning to the
No results North America Revenue grew 1% on a reported and constant currency basis while transaction declined 4% Revenue growth in the region was led by the US de Mexico Corridor and off u.s. Cell phone businesses, which was partially offset by continued declines in US domestic money transfer USD Mt. Transfer similar to last quarter, and we expect you plans will continue this year as well as the business for cash flow.
Revenue in the Europe and see is region increased 1% or 2% on a constant currency basis driven by Spain Russia and France transactions in the region increased 5% dated Again by off the spare Bank White Label business Revenue in the Middle East Africa and South Asia region was flat on both they reported and consequently basis Revenue Trends in the region reflected slower growth in Saudi Arabia and the UAE in the quarter civil unrest in Lebanon and continued hard currency limitations in certain African markets transactions declined 1% of strong and digital transactions was offset by declines and Retail sends from the region to India were negatively impacted by cash tax implemented in September that impacted our agents ability to make cash payments. It was subsequently removed, but it may take some time to return to previous transaction levels. We are also making adjustments to marketing pricing and other incentives in the region to improve growth.
the Latin america-caribbean regions of
Strong consequently Revenue growth right by Chile and Mexico outbound despite civil unrest in multiple South American countries Revenue in the region declined 2% on a reported basis or increased 6% constant currency while transactions grew 4% in the Apec region Revenue declined 10% on both of reported and constant currency basis. Revenue Trends improved compared to last month trade partially due to pricing actions in certain markets transactions were down 7% of the region driven primarily by the Philippines domestic business, which has limited impact on profits.
Is it a money transfer revenues increased 25% on a constant currency basis in the quarter including westernunion.com and third-party white label Services westernunion.com Revenue through 17 months or 18% constant currency we.com. Now represents 15% of total see to see Revenue in the quarter cross-border westernunion.com Revenue increased approximately 26% off which was partially offset by declines and domestic money transfer.
Is this is?
Revenue was flat on a reported basis or increased 1% constant currency and represented 7% of company revenues in the quarter constant. Currency Revenue growth was driven by strong performance in Europe as well as strong growth in the education and financial institution verticals, which are all set by slower growth and had you services
Other revenues which consists primarily of our retail bill payments businesses in the US and Argentina decrease 52% in the quarter, which reflects the impact of the speed pay and pay map divestitures in May 9th. You'll walk in business in Argentina posted good increases in transactions and local-currency revenue growth other revenues represented 7% of total company revenues in the quarter.
I need to margins and profitability. We will focus on Consolidated margins as segment margins are not comparable with the prior-year. Due to reallocation of corporate cost following the divestiture of the same day business. We're also providing adjusted metrics to exclude restructuring expenses merger and acquisition costs and related tax affects. The Consolidated gaap operating margin was 17.3% in the quarter compared to 19.3 in the prior year. The decline was primarily due to higher marketing investment compared to the prior-year. The impact of restructuring expenses in the corner and the divestiture of the speed pay in May of 2019. We encourage $17 of restructuring expense in the fourth quarter and $115 for the full year, which was dead higher than we expected in 2019 due to the timing of some items, but we continue to expect a total of approximately $150 of restructuring spent with the remainder to be incurred this year.
adjusted operating
In the fourth quarter was 18.7% compared to 19.9% in the prior year. With the decreased primarily due to higher marketing investment and the speed divestiture speed Bangkok. About sixty basis points to last year's fourth-quarter. Margin while foreign exchange hedge has provided a benefit of $7 in the current quarter and a benefit of four million dollars in the prior-year.
The Gap effective tax rate was 31.4% in the quarter compared to 9.8% in the prior year. While the adjusted tax rate of 24.5% compared to 6.8% in the prior year. Increase in the Gap and adjusted tax rates primarily due to certain discrete benefits in the prior year. Also while we expected the fourth quarter to have the highest tax rate of the year was further increased by one time settlement in certain geographies. The Gap rate also included additional taxes associated with the May 2019 divestitures.
Yep, earnings per share in the quarter was $0.32 compared to $0.48 in the prior-year. And adjusted earnings per share in the quarter was $0.38 compared to $0.51 in the prior-year of your of your decrease in both gas and adjusted EPS was primarily due to a higher effective tax rate the divestitures and higher marketing investment partially offset by fewer shares outstanding.
furniture
Castle and balance sheet the app cash flow from operating activities with $915 for the full-year which exceeded our Outlook primarily due to favorable working capital items adjusted cash flow from operating activities took one point 1 billion dollars and 2019.
Capital expenditures were approximately $34 in the quarter and $128 for the full year at the end of the year. We had cash at one point five billion dollars and debt a 3.2 billion dollars during the fourth quarter. We issued $500 in 2.85% notes. We redeemed 325 million dollars in notes do this year and reduced commercial paper wage earned $149 to shareholders in the fourth quarter, including 84 million dollars in dividends and $65 million dollars of share repurchases which represented approximately 2.5 million shares.
The outstanding share count was 418 million shares and we had $1000000 remaining under our share repurchase authorization. Which expires December 2021.
As noted we're off to a good start to deliver on our strategic initiatives and restructuring plans, which is reflected in our strong operating margin and EPS growth outlook for 2020 are out wage has no material change from current macroeconomic conditions. We expect gaap revenues for the full year to be a flat too low single-digit decline primarily due to the divestiture of speed pay in May 2009 an adjusted constant currency basis. We expect most single digit Revenue growth this year, which excludes the speed pay revenues and any benefit related to Argentina inflation.
Operating margin on a gaap basis now expected to be approximately 20% while adjusted operating margin is expected to be approximately 21% as we continue to focus on generating efficiencies, and I will begin to benefit from restructuring savings weighted toward the second half.
We continue to expect to realize approximately fifty million dollars of annual savings from restructuring in 2020 increasing to $100 in 2021. In addition to Thursday. We expect to realize other efficiencies Savings of $50 by 2022 for a total of $150 of annual Savings in 2022. We expected Gap and adjusted effective tax rate to be in the mid-teens range of this year.
Gabby PS4 the
Is expected to be in a range of a dollar eighty cents to a dollar ninety seven while adjusted earnings-per-share is expected to be in a range of a dollar and $95 to $200 which represents growth and 13 cash flow from operating activities is expected to be approximately $900 while adjusted cash flow from operating activities is expected to be approximately 1 billion dollars. We expect to spend approximately $500 on share repurchases for the full year.
In summary, we delivered our full-year adjusted Financial Outlook in 2019. We made good progress and our restructuring activities and our new Global strategy designed to drive profitability efficiency and long-term growth. We generated strong cash flow and continue to return significant funds to shareholders. We look forward to delivering on our strategy and our long-term Financial targets of operating margin of approximately twenty-three thousand two thousand twenty two and a low double-digit earnings per share Kar for the three years ending 2022 off of adjusted 2019 eps.
Thanks for joining the call today.
An operator we are now ready to take your questions.
We will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the key to withdraw your question, please press * then two at this time. We will pause momentarily to assemble our roster.
And our first question comes from Brian Keene of Deutsche Bank, please go ahead. Hey guys, this is Corey Marcelo on for Brian Keene. I wanted to ask I guess first on the guidance office. I know the 3-year Outlook is calling for two to three percent growth in consumer. But any color just for next year in terms of how you think Business Solutions and maybe other Revenue will shape up I guess in particular you're going to have some language impacts from the divestiture. So I didn't know if you had any comments on sort of the quarterly Cadence of Revenue growth for the year.
well
I can jump in but let me start lookin the fundamentals. Nothing has change. We really assume that our business will perform especially our digital expansion will perform digital expansion for us. Is it friend or white labeling Bill going to go and test the you saw the recent numbers on our growth numbers are quite impressive and that's what my differences based on the competitors. Right? We have been investing here for a long time and growing very strong in digit expansion that continue to go to other part. Is that dropping money on a on real-time on the account. So, continue to go and offering a retail cash pay up and dropping money in real time. It's a huge competitive Advantage within our capabilities and look up also started to drop money for businesses. Right? I mean, we are collecting for Amazon, you know from consumer in different countries businesses. We are doing transactions for third parties dead.
our business the business has had a
What year growing by 4% so generally I would say that nothing has changed from our investors day. We are in a good momentum. We like our business. We like how we are performing especially on a transformational activities and our efficiency activities are very promising and we are still in Target with our 2022 goals. Anyone you want to add something else. I think you've covered it. I mean, yeah, so I think we're good. Okay, great. I guess just as a follow-up, you know, you mentioned obviously Amazon and third parties there. I guess. Can you give maybe a broader update? I am kind of what the what the pipeline looks looks like for this third parties and in particular maybe the Amazon partnership any update there in terms of like plans for the year and Market go live. And is there anything kind of baked into the guys from some of this stuff that you know, you've called out as more longer-term I guess for next year. Thanks. Yeah, I think it's as you said it's a longer-term we started in a very good, you know, very good strong digital growth Thursday.
our partnership helps on our
Strong growth right you look we go to market. We are talking and you know in some countries we offering our own business in some countries on our digital white labeling part depending on our partner depends on the legal environment depending on the consumer relationship, but the good news is that the partners are choosing our capabilities to move cross-border cross-currency money. And that's with that capability having two countries and capable operating in two hundred countries is unique and so, uh, I mean, it's still small but growing very very strong and has good potential and we will definitely the update with additional Partners. I mean, we recently signed three big postal offices like the UK and Italy post until a positive or instance having access to seven million consumers Italian consumers with their mobile phones, right and you know, the illegal they do transaction cross-border by using our platform. It's quite impressive.
I'd be dropped money in in real time for them. And that's going to continue. It depends really on the partnership. They choose if they choose West Union brand or you know, we
No partner, like Amazon, which Amazon uses their own codes. We are afford em a service provider to collect money for their online services.
All right. Thanks guys.
Our next question comes from Darren Keller of wolf research, please. Go ahead.
Hey guys, this is Andrew on behalf of Darren. I wanted to travel into North America. Hey, how's it going rush to North America for a little bit. You know, it looks like the Delta between money transactions and revenues as was relatively stable over the last couple of quarters and widened a little bit this quarter. I was wondering you know, is there any impact of the digital transactions in that number is that largely all domestic? And if you can provide any other additional color on you know, what you saw in domestic in the quarter and you know further into the outlook for 2020.
Yeah, North America, you know, I'd say that one of the key driver was really declines in our domestic money transfer transactions in the US. We also have a very small European Central Business that has a heavy number of transactions, which was also declining so that has an impact on overall mix from the u.s. To Mexico Market also was just softer from a standpoint. Although we continue to gain share there and then you know, we also put new principal limits in place for u.s. To Cuba. So some of these things had an impact in the quarter, you know, but overall I would say that, you know, the digital part of the business. If you look at the cross-border part of you. Again, which you know, North America is a contributor there obviously, you know that grid 26,000. So the digital part continues to do. Well the the domestic part of digital certainly was a little bit worse in the quarter than it was in the previous quarter.
and then that that new metric
The the digital revenues that you called out, you know, how should we think about that mix across all the different regions that you have? I mean, I think it's the first time that you've really been able to separate them like that. So maybe just letting us get a better sense of we should think about that across segments. Thanks. Yeah. I mean right now, you know the the digital which grew 25% of the quarter in fact we.com. And as well as the digital Lab Partners, and we only have a handful of those right now and the two primary ones are Saudi Telecom in Saudi Arabia and spare Bank in Russia. So those are the two primary ones that are driving a lot of the additional growth. So there's not much to cut in terms of where it is globally. It's in those two regions if you will and not released as well as in Europe and you know, so, you know, certainly we want to sign more partners and more more opportunities, you know, we really look at the wage.
Little digital as being one type of offering with branded and non-branded offerings and they're both leveraging our platform capabilities. Basically use our same platform you go to market and it's the part decision if they use their their rent in that case in Saudi Arabia for Saudi Telecom did user but it's the best scene. Platform and our our platform to platform and our Network. We dropped money over our Network. So it's really a digital transaction with different brand.
All right. Thanks guys.
Sure. You too.
Our next question comes from Ramsey of Barclays, please. Go ahead. Hey guys. This is actually been on for Ramsey. I wanted to kind of follow up on the the white label wallet talked about and just kind of looking at the growth in Europe versus the Middle East. I know you called out some one-time factors in Impact in the Middle East Coast, but is there anything to read through there like maybe the, you know growth in in transaction to age growing better than those STC or is that really all related to kind of those those one-time factors that you called out? Yeah, I would say most of it is related to the the one-time factors and you know, we'll see how long you know the Lebanon civil unrest we called out there's some in Syria and then obviously the India tax is also the other factor which you know, the the issue was reversed. So the box came into play late in the third quarter, but then it was reversed in the fourth quarter, but we did have some customer attrition and and that's what we're working through right now. So, you know, we've assumed that in the first part of this year, we'll we'll see.
See some of that but we should be able to work through that as as the months come along here. So it's really related to those factors rather than any shift in in mix.
If you will, okay, and then and then just kind of following up on again on the white labels, you know, would you say that performance has been kind of in line with expectations? I mean, we got like a little hint of it back at the office and look like since we're going quite nicely. Is there any any change to that or does seem like things are kind of moving along according to plan?
I would say things are moving along very much according to plan. They're doing quite well, and you know, we're very excited about them and we want to continue to have more and more Partners to the mix. Okay. Thanks for taking my questions.
Thank you.
Our next question comes from Google of please. Go ahead. Hi. Thanks for taking my question. I guess the first one on the pricing front. It seems like here that I went for a few couple of quarters now. Can you talk about whether you're starting to see them back from your Dynamic pricing initiative or it's just the underlying Trends or better then if you could also come and done what's the name the stability in the pricing environment? Because it doesn't seem like the competitive environment is necessarily abated.
Environment obviously as we said earlier the partly in fact by mixed partly the strong pricing, you know environment we feel comfortable with our with our Dynamic pricing activities, as you know, we adjust our pricing Cordoba Corridor, even uh, ZIP code by ZIP code customer Behavior by customer behavior and these efforts started wage, you know, we start in few corridors and we will expand that globally and that's something that we are very excited about that. You can compare like a big airliner you fly One Direction you had different customers with different needs a different price payment that's going to happen. And that's what we are aiming to and we started in some quarters and we see good good faith on that and that's just the beginning of the story though, and we are quite excited about that.
Great. Thanks and just a quick follow-up on the transaction go to and I think you mentioned on a previous question that you were assuming that that will kind of continue to be weak in the first half is that true for just the India P store all the various one-timers that you saw this quarter and then just to confirm this coronavirus have any impact on your business positive or negative?
Yeah, in terms of it one-time items that we called out for Q4. Obviously the ones that are under our control. We're we're actually those there are some things that are more country specific issue civil unrest not really under our control but we've assumed that some of these things will continue for the first part of this year. We don't expect them to continue to the entire year, but certainly will will you know update you as we should see more from a coronavirus standpoint. We have not assumed any material impact for Coronavirus China for us is about 2% of our total revenues and it's mostly in Downey nature and that you know, obviously the conditions are evolving every single day. So we need to see how that plays out. I'm trying to I mean, you know, first of all, we support our employees and look after them and you know, it's very important age locations, but most of the agents locations are active and as you said it's only 2% of our business, but at the same time, I want to mention that also we can log
money in in minutes on
An account in China, so if people don't feel to go to that location and have a physical payout they could also do it online and this is the one of the growing parts of our business. And so we don't really don't see big impact from Corona virus yet. Now, I can't judge It generally what we'll have that the general global economy, but that's specific areas. We don't see an impact on our business. That's very helpful. Thank you very much.
Our next question comes from Andrew Jeffrey of SunTrust, please go ahead. Hi. Good afternoon. Appreciate you taking the question just conceptually off. I'm just wondering how you how you're thinking about the business Rogers. I think you made a comment about the domestic business increasingly being, you know, a source of of free cash and presumably return of capital, you know, it would appear that strictly looking at, it's it's a hundred percent of your CDC growth today. Should we think about that? I'm sort of the future and the balance of the business is really being, you know, a a a cash cow for lack of a better term and and fueling Investments to support digit off and returning Capital to shareholders. Is that is that a a reasonable framework?
Yes.
I think Andrew has lead laid out at investor day. You know, we you know, are we we said that our assumption was for two to 3% overall growth over the next three years and that has not changed and the composition of that was a flattish type retail business. Obviously, we'd like to get a little bit of growth out of it. But we do believe that can be the case and then we expected digital to grow in the 20% range off of a base of $600 last year that's quite a bit of contribution and then we also expected and and continue to expect that the B2B business will go in the mid single-digit range. So those are the country thinking about obviously we want to drive to more than just two or three percent growth. That's not satisfactory. And that's where really our platform strategy comes into play and signing more and more Partners as we move along but just the last point on the on the domestic business. It was about 6% of our total revenues last year. So it's becoming a smaller and smaller piece over all of the company. And and that's yep.
We are Trend. We're going to see for a little while. So.
And that's what we've assumed in our outlook for this year as well.
Okay, so still still hoping that that retail business I guess can can turn the corner for you. Yeah. Yeah. Oh, yeah, I mean, you know, you know, we assume a flat business but nobody has the strength of retail even compared with our you know, our Global coverage and most importantly you connect digital with retail that we can pay off different economical environment different, you know, we serve different customer segments on the same side. We do serve different customers right now and receive site and combining that it's a big Advantage for us that drives the age of digital hang out in cash or pay a note in an account or pay it out in a wallet and that's in real time. It's a huge and that's definitely going to continue happening in the retail business. Yeah, I think as you age as you saw it invest your day and it continues to be the case, you know, the opportunity on the retail side is to drive more Dynamic pricing capabilities or time of day Dave week lowcock.
intensity those kinds
Depends give us confidence that we can keep the retail business in the flattish type range because there's more opportunity there that we haven't fully maximize yet.
Okay, and I apologize if I missed it, but it looks like yield on and improved again this quarter. What what's driving that?
Yeah, I mean there there was certainly some mix impact from the you know, the domestic business and things, you know, because we're running the the domestic parts of our business for for cash if you will and so that's the only has a part of the next on the on the revenue side. There was also some pricing that we did as we mentioned, you know, net pricing was was beneficial net of the mix in the quarter and you know, so often we we feel good about where the overall digital business is, you know, we had 25% Revenue growth in digital but over 30% transaction Grill in that digital business. So we're doing quite well overall on the digital side. Okay, so that's that's pricing specifically at yahoo.com or across the brand new., for yes. Okay. All right. Thank you God. Yes.
Our next question comes from Tim of Credit Suisse, please go ahead.
Good afternoon. Thanks for taking my question. I wanted to talk a little bit about the unit economics of some of the the digital white labeling programs. I know we've talked about in the past that the revenue per transaction is is obvious little bit lower. But maybe you could talk about the absolute dollars per transaction and how that might compared to a traditional Western Union transaction. Yeah. First of all, she would say it's still early stages on the White Label partners and we're going to continue to learn on what kind of Economics they can provide but you're you're absolutely right. You typically will have a lower starting point from a transaction standpoint, but we also don't have much cost in that transaction either as we do in our branded offerings, you know, the in a transaction we are paying off we're investing heavily in marketing to acquire customers. We also have fraud losses and other things that we're paying for but in a white label transaction, we are being delivered a customer who wants to do a transaction with us and he has a dog
Fine. All right, so we don't spend the marketing dollars there and we really have the processing costs to the margins in the white label offerings can be quite High actually and you know.
We're going to learn more as we launched more of these Partners, but based on our early experience. It can be a very profitable business and we're asking I would say is that we see a largely as an incremental business or incremental revenues and incremental profit off.
Right on. Thank you.
I need to get a little bit more at the absolute dollar. So I understand that the revenues lower in the margin percentage could be higher but could be the absolute dollar actually be similar.
It depends it depends, you know, I can tell you one of the examples we have that's currently going on is very profitable. The other one is not as profitable, but we're getting again incremental revenues and incremental profit off. So it's not you know, obviously it's important on how much money we're making per transaction. But as long as we're getting incremental business for the company and it's within our overall framework, that's the most important thing for so long will learn more overtime and we wouldn't be doing this if it wasn't profitable for us. It's both the sorry both are profitable and uh, but it depends on the partner. I mean also the new editions of are the post offices will be very profitable but it depends on the partner and the geography and which Corridor you are placing that off and it's like, you know started Arvest union.com business, as you know, as we started was only as we start to report it was only one per-cent of our Revenue now, it's about 15% of our consumer Revenue.
It's a huge part of that and same.
The same approach we think also could be done by by our digital business like adding on the wet combining. And digital business took a big part of the future of the company and will be very profitable.
Great. Thanks a lot. That's really helpful. I appreciate it. No problem. Do we have anyone else in the queue?
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