Q4 2021 Western Union Co Earnings Call

Yes.

Thank you.

Speaker 1: Good day and welcome to the Western Union fourth quarter and full year 2021 results conference call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this is

Good day and welcome to the Western Union fourth quarter and full year 2021 results conference call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded.

Speaker 1: I would now like to turn the conference over to Brad Winbigler, Head of Treasury and Investor Relations. Brad, please go ahead.

I would now like to turn the conference over to Brad when Bigler head of Treasury and Investor Relations. Brad. Please go ahead.

Speaker 2: Thank you. On today's call, we will discuss the company's fourth quarter and full year 2021 results, our financial outlook for 2022. And then we will take your questions.

Thank you.

On today's call, we will discuss the company's fourth quarter and full year 2021 results our financial outlook for 2022, and then we will take your questions. The slides that accompany this call and webcast can be found at Western Union Dot com under the Investor Relations tab and will remain available after the call additional operational statistics have been provided in supplemental.

Speaker 2: The slides that accompany this call and webcast can be found at westernunion.com under the investor relations tab and will remain available after the call. Additional operational statistics have been provided in supplemental tables with our press report.

Tables with our press release.

Speaker 2: On our call today is our CEO , Devin McGranahan, and our CFO , Raj Agarwal. Devin McGranahan joined Western Union in late December 2021, succeeding TICMED-IRSEC. As you may know, before joining Western Union, Devin served as Executive Vice President and Senior Group President, Global Business Solutions at Vyserv, a global provider of payments and financial services technology solutions.

On our call today is our CEO , Devin mcgranahan, and our CFO Raj Agarwal.

Devin Mcgranahan joined Western Union in late December 2021, six the seating Hikmet <unk> as many as you may know before joining western Union Devin served as executive Vice President and Senior group President Global business solutions at Pfizer, a global provider of payments and financial services technology solutions.

Speaker 2: Today's call is being recorded, and our comments include forward-looking statements. Please refer to the cautionary language in the earnings release and in Western Union's filings with the Securities and Exchange Commission, including the 2020 Form 10-K , for additional information concerning factors that could cause actual results to differ materially from the forward-looking statement.

Today's call is being recorded and our comments include forward looking statements. Please refer to the cautionary language in the earnings release and in Western Union's filings with the Securities and Exchange Commission, including the 2020 Form 10-K for additional information concerning factors that could cause actual results to differ materially from the forward looking statements during.

Speaker 2: 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, westernunion.com, under the investor relations section. We will also discuss certain adjusted metrics. The expenses that have been included from adjusted metrics are specific to certain initiatives that may be similar to the types of expenses that the company has previously incurred and can reasonably expect to incur in the future.

During the call we will discuss some items that do not conform to generally accepted accounting principles. We've reconciled those items to the most comparable GAAP measures on our website Western Union Dot com under the Investor Relations section. We will also discuss certain adjusted metrics. The expenses that have been included from adjusted metrics are specific to certain initiatives that may be similar to the types of expenses that the company has.

Previously incurred and can reasonably expect to incur in the future.

Speaker 2: All statements made by Western Union officers on this call are the property of the Western Union Company and subject to copyright protection. Other than 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. I will now turn the call over to our CEO , Devin McGranahan.

All statements made by Western Union officers on this call are the property of the Western company and subject to copyright protection other than 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 I will now turn the call over to our CEO Devin Mcgranahan.

Thank you Brad good afternoon, everyone. We appreciate you.

Speaker 2: We appreciate you joining us today to discuss our fourth quarter 2021 financial results. As all of you know, this is my inaugural Western Union earnings.

Joining us today to discuss our fourth quarter 2021 financial results as all of you know this is my inaugural Western Union earnings call.

Speaker 2: I'm very happy to be here and to have the opportunity to talk with you about my initial thoughts 45 days into the job.

I'm very happy to be here and to have the opportunity to talk with you about my initial thoughts 45 days into the job.

Speaker 3: Given my background in payments and financial services technology, I am quickly getting up to speed in learning about the uniqueness of Western Union as a business.

Given my background in payments and financial services technology, I'm quickly getting up to speed and learning about the uniqueness of Western Union as a business.

Speaker 3: I'm excited about being in a consumer facing business with strong operations, a global footprint and in every other year you develop very significant sales strain.

I am excited about being in a consumer facing business with strong operations a global footprint.

And an amazing brand.

Speaker 3: These are assets we can build upon. In the short time that I've been here, I've begun to develop some hypotheses about where we might take the business.

These are assets, we can build upon.

In the short time that I've been here I've.

Begun to develop some hypotheses about where we might take the business.

Speaker 3: that I will share later in this call. But before we go there, let's look at our fourth quarter and the full year of 2021 results.

I will share later in this call.

Before we go there, let's look at our fourth quarter and the full year of 2021 results.

Speaker 3: As shared in our earnings press release, Western Union had a solid fourth quarter, leading to strong profitability. For the full year, constant currency revenues were up 4.5% to $5.1 billion, with strong performance from our digital platform and our Western Union business solution.

As shared in our earnings press release, Western Union had a solid fourth quarter, leading to strong profitability.

For the full year constant currency revenues were up four 5% to five $1 billion with strong performance from our digital platform and our Western Union business solutions.

Speaker 3: Nevertheless, we did see a slowing of top line growth as the year progressed, and we see this continuing as we move into the first quarter of 2022.

Nevertheless, we did see a slowing of top line growth as the year progressed and we see this continuing as we move into the first quarter of 2022.

For the fourth quarter, our results were similar to what we saw in the third quarter of 2021 the.

Speaker 3: For the fourth quarter, our results were similar to what we saw in the third quarter of 2021.

Speaker 3: The digital business has generated strong growth while our retail business declined due to uneven economic recovery negatively impacting our customers.

The digital business has generated strong growth, while our retail business declined due to uneven economic recovery.

Negatively impacting our customers.

Speaker 3: As you know, labor force participation is an important driver of our retail business.

As you know labor force participation as an important driver of our retail business.

Speaker 3: And while there have been small improvements in labor force participation, we remain below pre-pandemic trends.

And while there have been small improvements in labor force participation, we remain below pre pandemic trend.

Speaker 3: In addition, although economic improvement is occurring broadly, we continue to see the lingering effects of COVID in key industries like hospitality and service, which employ many of our customers.

In addition, although economic improvement is occurring broadly we continue to see the lingering effects of Covid in key industries, like hospitality and service, which employ many of our customers.

Speaker 3: In the face of some of these adverse factors, our business continued to show its resilience by generating strong operating cash flows year over year, which enabled us to return over 780 million dollars to shareholders during 2021.

In the face of some of these adverse factors our business continued to show its resilience by generating strong operating cash flows year over year, which enabled us to return over $780 million to shareholders during 2021.

Speaker 3: consisting of over $380 million in dividends and $400 million in share repurchase.

Consisting of over $380 million in dividends and $400 million in share repurchases.

Speaker 3: As you would imagine, we are in the midst of reviewing many aspects of our business.

As you would imagine we are in the midst of reviewing many aspects of our business.

Speaker 3: We are planning an investor day in the September , October timeframe, at which time we will provide a comprehensive update on our vision for the future and our medium to long-term plan.

We are planning an investor day in the September October timeframe at which time, we will provide a comprehensive update on our vision for the future and our medium to long term plans.

Speaker 3: We hope to see all of you there and in person, pandemic permitting.

We hope to see all of you there and in person pandemic permitting.

Speaker 3: In the meantime, I've begun to develop some perspectives that will guide our Go Forward strategy.

In the meantime, I have begun to develop some perspectives that will guide our go forward strategy.

Speaker 3: I believe that despite uneven and potentially adverse market conditions in our core business, we do have significant opportunities to create shareholder value.

I believe that despite uneven and potentially adverse market conditions in our core business, we do have significant opportunities to create shareholder value.

First.

Speaker 3: We have strong and hard to replicate foundational assets.

We have strong and hard to replicate foundational assets.

Speaker 3: We start with an iconic, trusted global brand, which is both well-known and given our 170-year history, Alaska.

We start with an iconic trusted global brand.

Which is both well known and given our 170 year history elastic.

Speaker 3: We have a diversified omni-channel offering with a global retail agent network consisting of hundreds of thousands of locations, serving millions of loyal Western Union customers around the globe every day.

We have a diversified omnichannel offering.

The global retail agent network, consisting of hundreds of thousands of locations serving millions of loyal Western union customers around the globe.

Every day.

Speaker 3: We have strong regulatory compliance and risk management assets that enable us to move money reliably in over 200 countries and territories. We have a-

We have strong regulatory compliance and risk management assets that enable us to move money reliably and over 200 countries and territories.

We have a billion dollars plus digital business.

Speaker 3: which grew double digits in the fourth quarter, including over 9 million Western Union.com customers who trust their cross-border financial transactions to us.

Which grew double digits in the fourth quarter, including over 9 million Western Union Dot Com customers, who trust their cross border financial transactions to us.

Speaker 3: We also have a talented and dedicated workforce that wakes up every day to help our customers and their families build social and economic bridges that enable the upward mobility of millions of people.

We also have a talented and dedicated workforce. The wakes up every day to help our customers and their families build social and economic bridges that enable the upward mobility of millions of people.

Speaker 3: I personally am very excited to be part of a purpose-driven company that is recognized for the value that our services bring to society.

I personally am very excited to.

It would be part of a purpose driven company that is recognized for the value that our services bring to society.

Speaker 3: A genuine purpose is an increasingly valuable asset as more and more people want to work for and do business with a company that stands for something.

A genuine purpose is an increasingly valuable asset.

As more and more people want to work for and do business with a company that stands for something.

Speaker 3: Secondly, we can use these assets to expand our addressable market.

Secondly, we can use these assets to expand our addressable markets.

Speaker 3: We need to position the company for better long-term growth by focusing on products in markets that have strong underlying growth characteristics.

We need to position the company for better long term growth by focusing on products and markets that have strong underlying growth characteristics.

Speaker 3: Here are three interesting opportunities that we need to accelerate. These should not be judged as our go-forward strategy, but rather as opportunities I have observed from my first month.

Here are three interesting opportunities that we need to accelerate this.

You should not be judged as our go forward strategy, but rather as opportunities I have observed.

My first month.

Speaker 3: We have opportunities to leverage our brand to expand beyond cross-border remittance.

We have opportunities to leverage our brand to expand beyond cross border remittance.

Speaker 3: With the commercial launch of our multi-currency wallet and digital bank, we are moving in the right direction.

With the commercial launch of our multi currency wallet and digital bank.

Moving in the right direction.

Speaker 3: We need to accelerate the rollout beyond Germany and Romania and at a pace that can begin to make a difference for our customers and our performance.

We need to accelerate the rollout beyond Germany, and Romania, and at a pace that can begin to make a difference for our customers and our performance.

Speaker 3: We must take advantage of the strength of our network and our core capabilities in compliance and money movement.

We must take advantage of the strength of our network and our core capabilities in compliance and money movement.

Speaker 3: In an increasingly digital and potentially crypto-enabled world, we believe the demand for our core assets and capabilities will grow, including omni-channel on and off ramps, KYC, and our retail distribution. We must now prioritize opportunities and then rigorously drive integration and execution efforts.

In an increasingly digital and potentially crypto enabled world. We believe the demand for our core assets and capabilities will grow including Omnichannel on and off ramps Ky C and our retail distribution.

Must now prioritize opportunities and then rigorously drive integration and execution efforts.

Speaker 3: We believe we can accelerate the growth of our digital footprint and our customer acquisition engine.

We believe we can accelerate the growth of our digital footprint and our customer acquisition engine over.

Speaker 3: Over the past two years, we have seen market demand for leveraging our digital money movement platform by large financial institutions.

Over the past two years, we have seen market demand for leveraging our digital money movement platform by large financial institutions.

Speaker 3: We must pick partners that fit with our brand and can accelerate our trajectory in certain parts of the world.

We must pick partners that fit with our brand and accelerate our trajectory in certain parts of the world.

Speaker 3: Thirdly, I see opportunities to improve our core operations. Our focus will be on delivering

Thirdly, I see opportunities to improve our core operations.

Our focus will be on delivering performance improvements that can improve both near term results and also create capacity for further investment.

Speaker 3: that can improve both near-term results and also create capacity for further investment.

Speaker 3: You'll be hearing about more of this in the future, but I believe a few highlights might include...

You'll be hearing about more of this in the future, but I believe a few highlights might include.

Speaker 3: growing our base of high value digital and omni-channel customers.

Growing our base of high value digital.

And omni channel customers.

Speaker 3: significantly increasing the percentage of customers that return to Western Union year over year.

Significantly increasing the percentage of customers that return to western Union year over year.

Speaker 3: improving our competitive position at the point of sale, particularly in non-exclusive situations.

Improving our competitive position at the point of sale, particularly in nonexclusive situations.

Speaker 3: and innovating on our end-to-end customer experience across all channels.

And innovating on our end to end customer experience across all channels.

Speaker 3: Finally, we will continue to have growing opportunities to prudently deploy capital.

Finally, we will continue to have growing opportunities to prudently deploy capital.

Speaker 3: I'm sure many of you are asking if there will be a change in capital allocation strategy.

I'm sure. Many of you are asking if there will be a change in capital allocation strategy.

Speaker 3: With the pending sale of Western Union Business Solutions, this question is even more relevant.

With the pending sale of Western Union business solutions. This question is even more relevant.

Speaker 3: It is obviously too early in my tenure to be able to fully answer this question.

It is obviously too early in my tenure to be able to fully answer this question.

Speaker 3: However, what I can tell you is that we will continue to allocate our strong cash flows in ways that maximize long-term shareholder value. Our focus is and will always be on creating sustainable shareholder value through disciplined capital and resource allocation.

However, what I can tell you is that we will continue to allocate our strong cash flows in ways that maximize long term shareholder value.

Our focus is and will always be on creating sustainable shareholder value through disciplined capital and resource allocation.

Speaker 3: I understand that capital is a finite resource, and it is our obligation

I understand the capital is a finite resource and it is our obligation.

Speaker 3: as stewards of your capital to find the best opportunities with the highest view

As stewards of your capital to find the best opportunities.

With the highest risk adjusted returns.

Speaker 3: We will assess those opportunities through the lens of returning that capital to you, our shareholders, and we will provide you with the roadmaps, the milestones, and the detailed progress updates for you to be able to evaluate our performance on capital management.

We will assess those opportunities through the lens of returning that capital to you our shareholders and we will provide you with the roadmap the milestones and the detailed progress updates for you to be able to evaluate our performance on capital management.

Speaker 3: We clearly have work to do, and it must be done with speed and focus. I am confident that our...

We clearly have work to do in.

And it must be done with speed and focus.

I am confident that our strong foundation.

Speaker 3: combined with the trusted relationships that we have established with our customers, will enable us to become a broader digital payments platform, helping customers address more of their payments and financial services needs either directly under our brand or via our strategic growth partners.

Combined with the trusted relationships that we've established with our customers will enable us to become a broader digital payments platform helping.

Helping customers address more of their payments and financial services needs either directly under our brand or via our strategic growth partners.

Speaker 3: Now, I'd like to highlight some important recent developments in our business, and then I will turn it over to Raj to talk in more detail about our results and our outlook for 2022.

Now I'd like to highlight some important recent developments in our business and then I will turn it over to Raj to talk in more detail about our results and our outlook for 2022.

Speaker 3: As we begin the year, I am pleased to announce today that we have renewed our partnership with Spare in Russia, one of our largest digital partners.

As we begin the year I am pleased to announce today that we have renewed our partnership with spare in Russia.

One of our largest digital partners.

Speaker 3: In addition, we are happy to announce the renewal of our long-term relationship with Seven Bank in Japan.

In addition, we are happy to announce the renewal of our long term relationship with seven bank in Japan.

Speaker 3: who has been a valued Western Union partner for over a decade.

Who has been a valued western union partner for over a decade.

Speaker 3: This is an exciting development. Japan is one of the largest remittance markets in the APAC region, and Shevin Bank is an important partner of ours in that region.

This is an exciting development a Japan is one of the largest remittance markets in the APAC region and seven bank is an important partner of ours in that region.

Speaker 3: These partners and others rely on our platforms and technology to serve their customers.

These partners and others rely on our platforms and technology to serve their customers.

Speaker 3: I too view our company at its core as a technology company.

To view our company at its core is a technology company.

Speaker 3: And as with all technology companies, we have the need to continue to innovate and invest in next generation capabilities. A few highlights...

And as with all technology companies, we have the need to continue to innovate and invest in next generation capabilities.

A few highlights from 2021.

Speaker 3: We are making a significant technology migration to the cloud.

We are making a significant technology migration to the cloud.

Speaker 3: Many of our core processes and most of our data have been migrated. We are working to finish the migration of our core transaction engine, which will be completed by the end of this year.

Many of our core processes and most of our data have been migrated.

We are working to finish the migration of our core transaction engine, which will be completed by the end of this year.

Speaker 3: We have also improved our customer experience and servicing platforms by placing many of our CRM components in the cloud.

We have also improved our customer experience and servicing platforms by placing many of our CRM components in the cloud.

Speaker 3: Finally, our previously announced pilot in Germany and Romania for our next generation, real-time, multi-currency digital wallet and digital banking platform that started in the fourth quarter has been successfully concluded and we are now live in those markets with production technology.

Finally, our previously announced pilot in Germany, and Romania for our next generation real time, multi currency digital wallet and digital banking platform that started in the fourth quarter has been successfully concluded and we are now.

<unk> in those markets with production technology.

Speaker 3: While there is always work to be done, I am pleased with the progress we are making on technology and the platform that we will have going forward.

While there is always work to be done I am pleased with the progress we are making on technology and the platform that we will have going forward.

Speaker 3: In closing, I look forward to meeting with many of you and hearing your perspectives as our owners.

In closing I look forward to meeting with many of you in hearing your perspectives as our owners in.

Speaker 3: In the meantime, you can expect that I will bring passion and discipline to driving the in-period results of our company while working to identify, prioritize, and commercialize a set of initiatives that will increase the long-term value of this business.

In the meantime, you can expect that I will bring passion and discipline to driving the in period results of our company.

While working to identify prioritize and commercialize a set of initiatives that will increase the long term value of this business.

Speaker 3: You can expect to hear more on our next earnings call and certainly at our investor day later this year.

You can expect to hear more on our next earnings call and certainly at our Investor Day later this year.

Speaker 3: I will now turn the call over to Raj to discuss our fourth quarter results in more detail.

I will now turn the call over to Raj to discuss our fourth quarter results in more detail.

Speaker 2: Thank you, Devin, and good afternoon, everyone. Today, I will discuss our fourth quarter results and 2022 financial outlook. I will focus my comments primarily on the fourth quarter. The similar information for the full year can be found in our press release and the attached financial schedule.

Thank you Devin and good afternoon, everyone today, I will discuss our fourth quarter results and 2022 financial outlook.

I'll focus my comments, primarily on the fourth quarter.

Similar information for the full year can be found in our press release and the attached financial schedules.

Speaker 4: Fourth quarter revenue of 1.3 billion dollars increased 1% on a reported basis or 2% on a constant currency basis.

Fourth quarter revenue of $1 3 billion increased 1% on a reported basis or 2% on a constant currency basis currency translation net of the impact from hedges reduced fourth quarter revenues by approximately $15 million compared to the prior year.

Speaker 4: Currency translation net of the impact from hedgers reduced fourth quarter revenues by approximately 15 million dollars compared to the prior year.

Speaker 4: In the C2C segment, revenue declined 1% on a reported basis and was also slightly negative on a constant currency basis.

In the <unk> segment revenue declined 1% on a reported basis and was also slightly negative on a constant currency basis.

Speaker 4: C2C transactions were flat compared to the same period in the prior year, while digital money transfer continued a strong transaction trend with 17% growth in the fourth quarter, which was offset by a decline in retail money transfer.

<unk> transactions were flat compared to the same period in the prior year, while digital money transfer continued strong transaction trends with 17% growth in the fourth quarter, which was offset by a decline in retail money transfer.

Speaker 4: Total C2C cross-border principal growth accelerated to 5% on both the reported and constant currency basis primarily due to growth and digital money transfer.

Total <unk> cross border principal growth accelerated to 5% on both a reported and constant currency basis, primarily due to growth in digital money transfer.

Speaker 4: Total C2C principal per transaction or PPT was up 4% on a reported and constant currency basis driven by mix and changes in consumer behavior.

Total CDC principal per transaction for our PBT was up 4% on a reported and constant currency basis, driven by mix and changes in consumer behavior.

Speaker 4: Digital money transfer revenues, which include Woo.com and digital partnerships, increased 13% on a reported basis or 12% constant currency. Our digital money transfer business again achieved a quarterly high in transactions, revenue and principal. Woo.com revenue grew 9% on a reported and constant currency basis on transaction growth of 6%. Woo.com cross-border revenue was up 12% in a quarter.

Digital money transfer revenues, which include <unk> dot com and digital partnerships increased 13% on a reported basis or 12% constant currency, our digital money transfer business again achieved a quarterly high and transactions revenue and principal.

We are a com revenue grew 9% on a reported and constant currency basis on transaction growth of 6% with Dot Com Cross border revenue was up 12% in the quarter.

Speaker 4: Moving to regional results. In the fourth quarter, North America revenue increased 2% on both a reported and constant currency basis. on transaction

Moving to regional results in the fourth quarter, North America revenue increased 2% on both a reported and constant currency basis.

Transaction declines of 2%.

Speaker 4: Revenue growth was supported by solid US outbound trends, partially offset by US to Cuba due to regulations limiting our ability to provide services, and we continue to see softness in US domestic money transfer. We are pleased with the momentum we are seeing at Walmart in the US, and we expect this to be a more meaningful contributor to 2022 results.

Revenue growth was supported by solid U S outbound trends, partially offset by a U S to Cuba due to regulations limiting our ability to provide services and we continued to see softness in U S. Domestic money transfer. We are pleased with the momentum we are seeing at Walmart in the U S and we expect this to be a more meaningful contributor.

To 2022 results.

Speaker 4: Revenue in the Europe and CIS region declined 8% on a reported basis or 7% constant currency on transaction growth of 1%.

Revenue in the Europe , and CIS region declined 8% on a reported basis or 7% constant currency on transaction growth of 1%.

Speaker 4: The digital partnership business continued to show solid growth, offset by softness in the retail business, as the region grew over a tough comparison given the strong rebound we saw in the prior year period.

The digital partnership business continued to show solid growth offset by softness in the retail business as the region grew over a tough comparison given the strong rebound we saw in the prior year period.

Speaker 4: The spread between transactions and constant currency revenue in the quarter was primarily related to the digital partnership business, which has been performing very well.

The spread between transactions and constant currency revenue in the quarter was primarily related to the digital partnership business, which has been performing very well.

Speaker 4: Revenue in the Middle East, Africa, and South Asia region grew 2% on both a reported and constant currency basis, while transactions increased 6%. Digital offerings continue to drive revenue and transaction growth in the region offset by softness in retail.

Revenue in the Middle East Africa, and South Asia region grew 2% on both a reported and constant currency basis, while transactions increased 6%.

Digital offerings continue to drive revenue and transaction growth in the region offset by softness in retail.

Speaker 4: The digital partnership business continued to generate strong, solid performance and was the main contributor to the spread between revenue and transaction.

The digital partnership business continued to generate strong solid performance and was the main contributor to the spread between revenue and transactions.

Speaker 4: Revenue growth in the Latin America and Caribbean region was up 8% or 12% constant currency on transaction growth of 2% as the region grew over COVID-19 impacts.

Revenue growth in the Latin America, and Caribbean region was up 8% or 12% constant currency on transaction growth of 2% as the region grew over COVID-19 impacts.

Speaker 4: We continue to see solid growth coming from Mexico, Colombia, and Chile. The driver of the spread between transactions and constant currency revenue growth resulted from mixed factors in the retail business.

We continue to see solid growth coming from Mexico, Colombia and Chile.

The driver of the spread between transactions and constant currency revenue growth resulted from mixed factors in the retail business.

Speaker 4: Revenue in the APAC region was flat on both the reported and constant currency basis, while transactions declined 13%, driven by softness in our intra-Sulipin's business. This is a low revenue per transaction business, resulting in a larger impact on transactions and relatively lower impact on revenue.

Revenue in the APAC region was flat on both a reported and constant currency basis, while transactions declined 13% driven by softness in our intra Philippines business. This is a low revenue per transaction business, resulting in a larger impact on transactions and relatively lower impact on revenue.

Speaker 4: Business Solutions revenue increased 22% on both a reported and constant currency basis. Revenue growth was driven by improvements in international trade as well as increased activity in the education and financial institution verticals.

Business solutions revenue increased 22% on both a reported and constant currency basis revenue growth was driven by improvements in international trade as well as increased activity in the education and financial institution verticals.

Speaker 4: The segment represented 8% of company revenues in the quarter and benefited by growing over a depressed revenue level in the prior year period.

The segment represented 8% of company revenues in the quarter and benefited by growing over a depressed revenue level in the prior year period.

Speaker 4: In addition, we remain on track with the timing of the planned divestiture of business solutions.

In addition, we remain on track with the timing of the planned divestiture of business solutions.

Speaker 4: As a reminder, the transaction is anticipated to close in two parts, with the first closing expected to occur in the first quarter of 2022, and the second closing expected to occur later in the year.

As a reminder, the transaction is anticipated to close in two parts with the first closing expected to occur in the first quarter of 2022 and the second closing expected to occur later in the year.

Speaker 4: I will discuss the impacts to our financials in the outlook section.

I will discuss the impacts to our financial outlook and two our financials and the outlook section.

Speaker 4: The other revenues represented 5% of total company revenues and increased 5% on a reported basis compared to the prior year period. Other revenues primarily consist of retail bill payments in the US and Argentina and retail money orders in the US.

The other revenues represented 5% of total company revenues increased 5% on a reported basis compared to the prior year period.

Other revenues primarily consist of retail bill payments in the U S and Argentina in retail money orders in the U S.

Speaker 4: Turning to margins and profitability, the consolidated gap operating margin in the quarter was 24.7% compared to 17.9% in the prior year period, while the consolidated adjusted operating margin was 24.9% in the quarter compared to 18.8% in the prior year.

Turning to margins and profitability the consolidated GAAP operating margin in the quarter was 24, 7% compared to 17, 9% in the prior year period, while it can be consolidated adjusted operating margin was 24, 9% in the quarter compared to 18, 8% in the prior year the.

Speaker 4: The gap and adjusted margin increases resulted primarily from increased profitability in our business solutions segment, lower planned marketing expense, lower agent losses, and the savorables foreign exchange impact.

The GAAP and adjusted margin increases resulted primarily from increased profitability in our business solutions segment, lower planned marketing expense lower agent losses, and the favorable foreign exchange impact.

Speaker 4: Our marketing investment for the full year was consistent with the prior year. However, the timing differed on a quarter by quarter basis.

Our marketing investment for the full year was consistent with the prior year. However, the timing difference on a quarter by quarter basis.

Speaker 4: The gap operating margin also improved due to restructuring costs in the prior year period.

The GAAP operating margin also improved due to restructuring costs in the prior year period.

Speaker 4: Adjusted operating margin excludes M&A expenses in both the current and prior year period and last year's restructuring expense.

Our adjusted operating margin excludes M&A expenses in both the current and prior year period and last year's restructuring expenses.

Speaker 4: Moving to segment margins, note that M&A expenses are included in other operating margin for both the current and prior year period, and segment margins exclude last year's restructuring charges.

Moving to segment margins note that M&A expenses are included in other operating margin for both the current and prior year period and segment margins exclude last years restructuring charges.

Speaker 4: In the fourth quarter of 2021, C2C operating margin was 24.2% compared to 20.5% in the prior year period. The increase in the operating margin was driven by favorability in commission mix and other variable costs including lower agent losses as well as lower plant marketing expense.

In the fourth quarter of 2021, CDC operating margin was 24, 2% compared to 25% in the prior year period. The increase in the operating margin was driven by favorability in commission mix and other variable costs, including lower agent losses, as well as lower planned marketing expense.

Speaker 4: Business Solutions operating margin was 30.8% in the quarter compared to negative 0.2% in the prior year period. The increase in operating margin was primarily due to increased revenue and facility closure costs increased.

Business solutions operating margin was 38% in the quarter compared to negative 2% in the prior year period. The increase in operating margin was primarily due to increased revenue and a facility closure.

Costs incurred in 2020.

Speaker 4: During 2021, the business solutions segment generated $422 million of revenue and, excluding corporate allocations, delivered $120 million of EBITDA and $104 million of operating profit. In total, business solutions contributed approximately 22 cents to 2021 adjusted EPS.

During 2021, the business solutions segment generated $422 million of revenue and excluding corporate allocations delivered $120 million of EBITDA and $104 million of operating profit.

Total business solutions contributed approximately 22 to.

Through 2021 adjusted EPS.

Speaker 4: Other operating margin was 21.3% compared to 15.8% in the prior year period, primarily due to higher revenue.

Other operating margin was 21, 3% compared to 15, 8% in the prior year period, primarily due to higher revenue.

Speaker 4: The gap effective tax rate in the quarter was 6.7% compared to 11% in the prior year period, while the adjusted effective tax rate in the quarter was 12.1% compared to 11.6% in the prior year period. The decrease in the company's gap effective tax rate was due to discrete benefits associated with the pension termination.

The GAAP effective tax rate in the quarter was six 7% compared to 11% in the prior year period, while the adjusted effective tax rate in the quarter was 12, 1% compared to 11, 6% in the prior year period. The decrease in the company's GAAP effective tax rate was due to discrete benefits associated.

<unk> with the pension termination.

Speaker 4: Gap earnings per share or EPS was 42 cents in the quarter compared to 43 cents in the prior year period, while adjusted EPS was 64 cents in the quarter compared to 45 cents in the prior year period.

GAAP earnings per share or EPS was <unk> 42 in the quarter compared to <unk> 43 in the prior year period, while adjusted EPS was <unk> 64 in the quarter compared to <unk> 45 in the prior year period. The decrease in GAAP EPS reflects the noncash charge for the pension plan termination, partially offset by increased <unk>.

Speaker 4: The decrease in GAAP EPS reflects the non-cash charge for the pension plan termination partially offset by increased business solutions segment operating profit and lower planned marketing expense, while adjusted EPS increase due to the same factors adjusted for certain items including the pension plan termination and acquisition and divestiture costs.

<unk> solution segment operating profit and lower planned marketing expense, while adjusted EPS increased due to the same factors adjusted for certain items, including the pension plan termination and acquisition and divestiture costs.

Speaker 4: To offer some color on our pension plan termination non-cash charge, we have transitioned our obligations through the purchase of annuities, completing the previously announced process in a surplus position.

To offer some color on our pension plan termination noncash charge, we have transitioned our obligations through the purchase of annuities completing the previously announced process in a surplus position.

Speaker 4: Turning to our cash flow and balance sheet, during 2021, our business generated over $1 billion of operating cash flows, of which almost 75% was returned to our shareholders as a combination of dividends and share repurchasers.

Turning to our cash flow and balance sheet. During 2021, our business generated over $1 billion of operating cash flows of which almost 75% was returned to our shareholders has a combination of dividends and share repurchases.

Speaker 4: The outstanding share count at quarter end was 394 million shares. And today we announced that our board of directors has approved a new three year $1 billion share repurchase authorization and a 23 and a half cent quarterly dividend payable on March 31, 2022.

The outstanding share count at quarter end was 394 million shares and today, we announced that our board of directors has approved a new three year $1 billion share repurchase authorization and a 23 five cent quarterly dividend payable on March 31 2022.

Speaker 4: Capital expenditures in the year were approximately $215 million.

Capital expenditures in the year were approximately $215 million.

Speaker 4: At the end of the quarter, we had cash in cash equivalents of $1.2 billion and debt of $3 billion.

At the end of the quarter, we had cash and cash equivalents of $1 $2 billion and debt of $3 billion.

Speaker 4: Moving to our outlook, today we provided a financial outlook for full year 2022, reflecting recent business trends and macroeconomic conditions.

Moving to our outlook today, we provided a financial outlook for full year 2022, reflecting recent business trends and macroeconomic conditions.

Speaker 4: Our outlook assumes no material change of macroeconomic conditions.

Our outlook assumes no material change in macroeconomic conditions.

Speaker 4: Japs figures reflect an expected partial year of business solutions ownership, including contractual payments to the buyer representing profits between the first and second closing.

GAAP figures reflect an expected partial year of business solutions ownership, including contractual payments to the buyer representing profits between the first and second closings associated divestiture and acquisition costs and an estimated pre tax gain of approximately $280 million subject to regulatory working capital.

Speaker 4: associated divestiture and acquisition costs, and an estimated pre-tax gain of approximately $280 million, subject to regulatory and working capital adjustments.

Speaker 4: As the divestiture is expected to close in two phases, approximately 60% of the pre-tax gain is expected to be recognized in the first quarter at the time of the first expected closing, with the remainder recognized at the time of the second closing approximately six months after the first closing.

Capital adjustments as.

As the divestiture is expected to close in two phases, approximately 60% of the pre tax gain is expected to be recognized in the first quarter at the time of the first expected closing with the remainder recognized at the time of the second closing approximately six months after the first closing.

Speaker 4: Please note that the precise timing of closings may differ from our current estimate.

Please note that the precise timing of closings may differ from our current estimates.

Speaker 4: We also expect to incur incremental divestiture costs in 2022 as we separate business solutions.

We also expect to incur incremental divestiture costs in 2022, as we separate business solutions.

Speaker 4: Adjusted revenue growth and operating margin exclude contributions from business solutions.

Adjusted revenue growth and operating margin exclude contributions from business solutions.

Speaker 4: In addition, adjusted operating margin excludes associated divestiture and acquisition costs.

In addition, adjusted operating margin excludes associated divestiture and acquisition costs.

Speaker 4: The adjusted effective tax rate and EPS exclude the expected gain on sale and M&A costs, but will include approximately three cents of EPS from Business Solutions partial year results.

The adjusted effective tax rate and EPS exclude the expected gain on sale and M&A costs, but will include approximately <unk> <unk> of EPS from business solutions partial year results.

Speaker 4: We expect gap revenue to decline mid single digits primarily due to the business solutions divestiture and currency

We expect GAAP revenue to decline mid single digits, primarily due to the business solutions divestiture and currency.

Speaker 4: Embedded in our GAAP Revenue Outlook, we have included approximately $130 million of revenue from Business Solutions for the full year. Adjusted constant currency revenue growth is expected to be flat to low single digit increase, excluding the impact of Argentina inflation and excluding the results of Business Solutions in both 2021 and 2022.

Embedded in our GAAP revenue outlook, we haven't included approximately $130 million of revenue from business solutions for the full year.

Adjusted constant currency revenue growth is expected to be flat to low single digit increase excluding the impact of Argentina inflation and excluding the results of business solutions in both 2021 and 2022.

Speaker 4: Our gap and adjusted operating profit margin is expected to be between 21 and 22 percent.

Our GAAP and adjusted operating profit margin is expected to be between 21 and 22%.

Speaker 4: The anticipated gas effective tax rate will be in the high teams range, reflecting tax on the gain on the sale of business solutions.

The anticipated GAAP effective tax rate will be in the high teens range, reflecting tax on the gain on the sale of business solutions the.

Speaker 4: The adjusted effective tax rate is expected to be in the mid teens range.

The adjusted effective tax rate is expected to be in the mid teens range.

Speaker 4: GAPI PS for the year is expected to be in a range of $2.38 to $2.48, which includes the gain on the sale of business solutions.

GAAP EPS for the year is expected to be in a range of $2 38.

To $2 48, which includes the gain on the sale of business solutions.

Speaker 4: Adjusted EPS for 2022 is expected to be in a range of $1.90 to $2.00.

Adjusted EPS for 2022 is expected to be in a range of a $1 90 to $2.

Speaker 4: During 2022, we anticipate adjusted revenue growth rates in the second half of the year to exceed growth rates in the first half of the year as our Business with Walmart new agent signings and our digital partnership business continues to ramp.

During 2022, we anticipate adjusted revenue growth rates in the second half of the year to exceed growth rates in the first half of the year as our business with Walmart new agent signings and our digital partnership business continues to ramp.

Speaker 4: We also expect 2022 adjusted operating profit margin and adjusted EPS to be higher in the second half of the year.

We also expect 2022, adjusted operating profit margin and adjusted EPS to be higher in the second half of the year.

Speaker 4: similar to the progression we saw in 2021 due to seasonality and the timing of investment.

Similar to the progression we saw in 2021 due to seasonality and the timing of investments.

Speaker 4: For the first quarter, we expect recent macro trends to continue, resulting in revenue and the consumer business performing consistent with last year's exit rate. For the first quarter of GAAP revenue, our outlook includes $75 million related to business solutions.

For the first quarter, we expect recent macro trends to continue resulting in revenue and the consumer business performing consistent with last year's exit rate for the first quarter GAAP revenue our outlook includes $75 million related to business solutions.

Speaker 4: Thank you for joining our call today, and operator, we are now ready to take questions.

Thank you for joining our call today and operator, we are now ready to take questions.

Speaker 1: We will pause momentarily to compile the Q&A roster. As a reminder, each person is allowed one question with one follow-up question. All participants will be in listen-only mode.

We will pause momentarily to compile the Q&A roster as a reminder, each person is allowed one question with one follow up question all participants will be in listen only mode.

Speaker 1: Our first question comes from Tianjin Wang from JP Morgan. Please ask your question.

Our first question comes from Tien Tsin Huang from Jpmorgan. Please ask your question.

Hey, thanks.

Speaker 5: Appreciate the update, Devin. Welcome to the call. I guess I'll kick it off and ask...

I appreciate the opportunity doesn't welcome to the caller I guess I'll kick it off and ask you Devin.

Speaker 5: Devin, I appreciate your initial insights here and look forward to learning more. I heard the concept of strong brand and consumer tech platforms. So, you know, I'm curious if you thought about benchmarking growth and margin.

Devin I know I appreciate your initial insights here and look forward to learning more.

I heard that.

Concept of strong brand and consumer Tech platform. So.

I'm curious, if you've thought about benchmarking growth and margins.

Speaker 5: And thoughts on balancing new customer growth versus RPO expansion, because I did hear a little bit about product. So I don't know if you thought about some of those big picture things. I'd love to hear your thoughts on those if you don't mind.

And thoughts on balancing new customer growth versus our pure expansion. So I'd just give you a little bit about products. So I don't know if you thought about some of the big picture things slipped to hear your thoughts on those two months.

Speaker 3: Tian, thanks for the call or the question. It's great to be on the call.

And Jason Thanks for the call or the question, it's great to be on the call.

Speaker 3: We are clearly going through a end-to-end strategy review process. We are looking at our business across markets and across market opportunities.

We are clearly going through a end to end strategy review process.

Looking at our business across markets and across market opportunities you highlighted an important idea, which is what is the value of our customers and the power of our customer acquisition engine, which is quite strong given the $1 billion revenue digital business that has been built over the last.

Speaker 3: You highlight an important idea, which is what is the value of our customers and the power of our customer acquisition engine, which is quite strong, given the billion dollar revenue digital business that has been built over the last couple of years.

Speaker 3: And then how do we think about ARPU and potentially expanding those relationships relative to this digital acquisition engine that we have built? That is all work that is underway. As you heard in my comments, I believe given the relationship that we have with our customers, the trust that they place in our brand, we do have opportunities to expand that product set and ARPU on a going forward basis.

Couple of years.

And then how do we think about our pool and potentially expanding those relationships relative to this digital acquisition engine that we have built that is all work that is underway and as you heard in my comments I believe given the relationship that we have with our customers the trust they place in our brand we.

Do have opportunities to expand that product set and <unk> on going forward basis, I look forward to coming back to you. Both on the next call and back in October September October timeframe with more detail about how we might do that and what the implications will be longer term for our growth.

Speaker 3: I look forward to coming back to you both on the next call and back in October , September , October timeframe with more detail about how we might do that and what the implications will be longer term for our growth.

Speaker 5: Terrific. No, good. So, it's good to get a little bit of sneak preview there. So, maybe my follow-up for you, Raj.

Terrific good so.

I was going to give a bit of a sneak preview there. So maybe my follow up for you Ross just.

Speaker 5: You know, thinking about the year and digital versus traditional retail. I heard the Walmart and some of the agent ramping that should help.

Thinking about the year.

In digital versus traditional retail now I heard the Walmart and some of the agent ramping that should help.

Speaker 5: The second half, anything you can share on Outlook between those two channels, traditional versus digital?

In the second half anything you can share on outlook between those two channels traditional versus digital.

Speaker 4: Yeah, Tingjian, it's nice to speak with you. As I mentioned, we see the growth being better in the second half.

Yeah, Tien tsin, it's nice to speak with you.

As I mentioned, we see the growth being better in the second half.

Speaker 4: In both channels, we should see a progression. First quarter is likely to be the lowest. For digital specifically, as you may recall, one year ago in the first quarter of 2021, we grew in the mid 40% range. So we're going to have a tougher comp in the first quarter of this year. And that's why you're going to see lower digital growth. We expect digital could be in the double digit range this year, but it's going to be lower in the first quarter.

In both channels, we should see a progression.

First quarter is likely to be the lowest for digital specifically as.

As you may recall.

One year ago in the first quarter of 2021, and we grew in the mid 40% range. So we're going to have a tougher comp in the first quarter of this year and Thats why youre going to see lower digital growth, we expect digital could be in the double digit range. This year, but it's going to be lower in the first quarter.

Speaker 4: And then retail, given the exit rates that we had last year, which was negative, we expect that to be the case again in the early part of the year. But then ramping up as some of these other initiatives, Gainesville Life, Walmart, like the other agent signings and other initiatives that we have going on. So that's why we see more of a ramp up during the course of the year. Very good.

And then retail given the exit rates that we had last year.

Which was negative we expect that to be the case again in the early part of the year, but then ramping up as some of these other initiatives gain hold like Walmart the other agent signings.

Other initiatives that we have going on so that's why we see more of a ramp up during the course of the year.

Got it got it.

Thank you both.

Speaker 1: Our next question comes to us from Darren Peller from Wolf Research.

Our next question comes to Us from Darrin Peller.

From Wolfe Research. Please ask your question.

Speaker 2: Hey, thanks guys. Devin, nice to have you on the call and look forward to connecting more. Guys, when we look at the digital opportunity in terms of where you think you can get to as a percentage of your C2C mix.

Hey, Thanks, guys have a nice to have you on the call and look forward to connecting more guys. When we when we look at the digital opportunity in terms of where you think it can get to as a percentage of your <unk> mix.

Speaker 2: I think there's just a great level of looking for understanding on what you think it could really reach and what kind of implications that could have on the model, both margins and growth potentially over time as retail levels off. Said another way, where do we expect to see the retail side leveling off where there's just enough consumers that may not either be banked or may really rely on the cash ecosystem more? Maybe you could just start there with some thoughts. Thank you.

I think there was just a great level of.

Looking for understanding on what you think it can really reach and what kind of implications that could have on the model both margins and growth potentially over time as retail levels off set another way, where do we expect to see in the retail side leveling off where theres just enough consumers that may not need to re banked or may really rely on the cash ecosystem Mark maybe you can do.

Start there with some thoughts.

Darrin, it's devin thanks for the question.

Speaker 3: In the short time that I've been sitting in this seat, there is a powerful correlation I'm starting to see between our digital business and our retail business. As you know from previous commentary, a high percentage of our transactions that start just...

Yeah.

In the short time that I've been sitting in this seat there is a powerful correlation I'm starting to see between our digital business and our retail business as you know from previous commentary a high percentage of our transactions that start.

Speaker 3: start digitally end up as a cash out somewhere in the world.

Start digitally.

And up as a cash out somewhere in the world. So I think as we look at this picture and we look at what we can do with the digital customer acquisition engine. The expansion of a set of products and services that can be delivered both digitally and potentially physically through our network is where we're looking to take the company.

Speaker 3: So I think as we look at this picture and we look at what we can do with the digital customer acquisition engine.

Speaker 3: The expansion of a set of products and services that can be delivered both digitally and potentially physically through our network is where we're looking to take the company. And I would start thinking about the combo of our digital and our retail business and what can that do to drive the overall company in a more integrated fashion potentially than we might have talked about it in the past.

And I would start thinking about the combo of our digital and our retail business and what can that do to drive the overall company.

On a more integrated fashion potentially than we might have talked about it in the past Raj.

Speaker 4: I think that's right. With the digital banking initiative that is now live in Europe , the digital banking platform and the multi-currency payments wallet, I think those are additional opportunities that are outside of the direct remittance space for us to add more to the digital opportunity overall for the company.

I think thats right.

With the digital banking initiatives that is now.

Live in Europe , the digital banking platform and the multi currency payments wallet I think those are additional opportunities that are outside of the direct remittance space for us to add more to the digital opportunity overall for the company and we've gone a long way Darrin just in the last two or three years, where last year.

Speaker 4: You know, we've gone a long way, Darren, just in the last two or three years where last year our business was about, you know, 24% of our consumer revenues. And that's from mid-teens probably a couple of years ago. So it's gone quite far, quite fast.

Our business was about 24% of our consumer revenues and Thats from mid teens, probably a couple of years ago. So that's gone quite far quite fast and our objective is to try to try to drive that even further over the next couple of years.

Speaker 4: And our objective is to try to drive that even further over the next couple of years.

Speaker 2: That's helpful. Just one quick follow-up guys. I mean as we kick off the year with valuations having Certainly reset across the market and and in the private side of the world Um, you know your your proceeds coming in from the sale Can you give us more color on your uh your thought process on a capital allocation going forward from here? whether it's mma buybacks or other

Alright Thats helpful. Just one quick follow up guys I mean, as we kick off the year with valuations coming certainly reset across the market and in the private side of the world.

Youre proceeds coming in from the sale can you give us some more color on your on your thought process on capital allocation going forward from here, whether it's M&A or buybacks or other.

Speaker 4: Yeah, I mean, you saw from the announcement today, Darren, that we announced the next quarterly dividend, which we're very pleased with.

Yes, I mean, you saw from the announcement today.

And that we announced in the next quarterly dividend, which we're very pleased with how that's going to be a significant use of our cash this year the dividends.

Speaker 4: That's going to be a significant use of our cash this year, the dividends.

Speaker 4: We also announced a three-year buyback program for a billion dollars. So we're very excited about that. So you can see that we're continuing the pattern of things that we've had.

We also announced a three year buyback program for $1 billion. So we're very excited about that so you can see that we're continuing the pattern of things that we've had historically with respect to the proceeds from the business sale.

Speaker 4: historically with respect to the proceeds from the business sale, the solution sale, you know, we want to retain flexibility on how we're going to use those that's reflected in our outlook this year with the impact on EPS. We really do want to go through the strategy evaluation process that Devin mentioned that now we're going through the next several months and take a fresh look at what opportunities might be there for us to deploy those proceeds.

<unk> sale.

We want to retain flexibility on how we're going to use those thats reflected in our outlook. This year with the impact on EPS. We really do you want to go through the strategy evaluation process as Devin mentioned that now we're going through the next several months.

Take a fresh look at what opportunities might be there for us to deploy those proceeds in a more strategic manner. So that's really our objective 7 million if you want to add to that.

Speaker 3: in a more strategic manner. So that's really our objective. And Kevin, if you want to add to that. I would reiterate Raj's comments that, you know, we have launched a robust strategic review process.

I would reiterate Roger's comments that we have launched a robust strategic review process.

Speaker 3: we would like to retain the flexibility as we go through that process.

Would like to retain the flexibility as we go through that process anti.

Speaker 3: I anticipate us having a pretty good view by mid-year on what that would look like.

Anticipate us having a pretty good view by mid year on what that would look like and.

Speaker 3: One of the great attributes of this business is its ability to generate strong cash flow. So this will fortunately be a problem that we continue to struggle with, if that's appropriate. But, you know, we will continue to be disciplined allocators of capital, and we promise to do the same with the Western Union Business Solutions proceeds.

One of the great attributes of this business is its ability to generate strong cash flow. So this will fortunately be a problem that we continue to struggle with if that's appropriate but.

We will continue to be disciplined allocators of capital and we promise to do the same with the Western Union business solutions proceeds.

Okay.

Thanks, guys.

Speaker 1: Our next question comes to us from Vasu Govil from KBW. Please ask your question.

Our next question comes to us from Vasu.

Mobile from K VW. Please ask your question.

Okay.

Speaker 6: Yes, we can hear you. Hi, thank you for taking my question. And again, nice to talk to you, Devin. I guess my first question for you, you just talked about leveraging the Western Union brand beyond cross border remittance. And I know the digital banking strategy is obviously a part of it. But maybe you can elaborate a little bit more on what are some of the areas or use cases that you see as an act of extension for Western Union?

Yes, we can hear you.

We thank you for taking my question and again nice too.

I guess my first question for you just talked about leveraging the Western Union brand.

Cross border Remittance and I don't think about banking strategy, obviously, you're fine I think.

If you can elaborate a little bit more on some of the <unk> that you will see is a natural extension for Western Union.

Speaker 3: Great question. As you know, the company was down the path before my arrival.

Great question as you know the company was down the path before my arrival as evidenced by the launch of the bank in terms of expanding the financial ecosystem and the products and services, we can bring to our client base, obviously in the near term dose would be more financially service.

Speaker 3: as evidenced by the launch of the bank in terms of expanding the financial ecosystem and the products and services we can bring to our client base. Obviously in the near term, those would be more financially services related with the addition of a wallet capability and a deposit banking capability. We can collect and hold funds. We've started issuing debit cards in some places in the world. That will become a revenue stream for us as well.

<unk> related with the addition of a wallet capability DNA deposit banking capability, we can collect and hold funds. We've started issuing debit cards in some places in the world that will become a revenue stream for us as well we are looking at opportunities that fit well with our customer base whether that.

Speaker 3: We are looking at opportunities that fit well with our customer base, whether that be things like offering earned early wage access or the ability to provide people with alternative payment type.

B things like offering earned early waged access or the ability to provide people with alternative payment types in.

Speaker 3: in solutions, maybe now, even buy now, pay later types of solutions in certain parts of the world.

In solutions, maybe now even buy now pay later types of solutions in certain parts of the world that is the strategy do you work that is underway to understand given our core customer base, our capabilities and platforms, which of those kinds of products and ideas resonate and we have confidence that we could deliver.

Speaker 3: That is the strategy work that is underway to understand, given our core customer base, our capabilities and platforms, which of those kinds of products and ideas resonate, and we have confidence that we could deliver into the marketplace successfully. We will be back to you with more clarity and distinct ideas that we intend to pursue, both in the latter half of this year, but more importantly, into 2023 and 2024.

We're into the marketplace successfully so we will be back to you with more clarity.

And distinct ideas that we intend to pursue both in the latter half of this year, but more importantly into 2023 and 2024.

Speaker 6: Great, and just as my follow up, my question was around cryptogram, seed and stable coins. That is something that frequently comes up in our discussions with investors as a potential disruption to the money-remittance industry. So maybe you can share your thoughts and if that is something you plan to incorporate into your strategy going forward.

And then just as my follow up my question was around <unk> that is something that frequently comes off kind of discussion.

With investors.

So all of the options faster the money remittance industry. So maybe you can share your thoughts and if that is something that you plan to incorporate into your strategy going forward.

Speaker 3: Great question. One of our core strategy work streams is indeed around cryptocurrency, but more importantly around blockchain technology. It offers both as you suggest, potentially a threat, although we could have a longer conversation about that. But also an opportunity. So we are looking at and.

Great question, one of our core strategy work streams is indeed around crypto currency, but more importantly around block chain technology.

It offers both as you suggest potentially a threat, although we could have a longer conversation about that.

But also an opportunity so we are looking at and.

Speaker 3: considering ways in which we can participate in what I'll call the crypto economy, leveraging our very strong compliance and risk management capabilities. I have a belief that as the world...

Considering ways in which we can participate and what I'll call. The crypto economy, leveraging our very strong compliance and risk management capabilities have a belief that as the world.

Speaker 3: evolves and crypto becomes more of an accepted form of transaction. The kinds of things that we are very good at, ensuring KYC, ensuring risk and compliance management across.

Evolves in crypto becomes more of an accepted form of transaction the kinds of things that we're very good at ensuring ky.

Insuring risk and compliance management across different regulatory regimes in the world can be very valuable to any offer we did develop but more importantly, potentially to the offer of others, who can leverage our platform and capabilities. So it's obviously a robust area that we will continue to explore and again we.

Speaker 3: different regulatory regimes in the world can be very valuable to any offer we develop, but more importantly potentially to the offer of others who can leverage our platforming capability.

Speaker 3: So it's obviously a robust area that we will continue to explore. And again, we will be back with further ideas later in the year. Thank you.

We'll be back with further ideas later in the year.

Great. Thank you very much.

Speaker 1: Our next question comes to us from Ashwin Shivakar from Citi. Please ask your question.

Our next question comes to Us from Ashwin <unk> from Citi. Please ask your question.

Can you hear me.

Yes.

Speaker 7: Great. Hey, Devon. Hi, Raj. Hi. How are you guys? And Devon, welcome to the call.

Great.

Hi, Kevin Hi, Raj I'm sorry.

You guys and welcome to the call.

Speaker 7: My first question for you, Devin, is you've had a preliminary look at what you inherited.

My first question for you David.

No what you inherited.

Speaker 7: And I completely appreciate it's too early to provide any specifics, but do you have a view with regards to whether you're going to primarily go towards what I would call incremental investments and adjustments or is this a situation that might require maybe a bigger slug of investment to kind of kick start a major transformation.

And I completely.

I appreciate it's too early to provide any specifics, but do you have a view.

With regards to weather.

Youre going to primarily go towards what I would call it incremental.

Investments.

Or does this.

Is this a situation that might require maybe a bigger slug.

Men.

To kind of kickstart a major transformation.

Speaker 3: Ashwin, thank you for the question. In the near term,

Ashwin. Thank you for the question.

In the near term.

Speaker 3: We have a $4 billion cost base. I see real opportunities for us both to prioritize within that cost base, as well as to create efficiency and effectiveness on how and where we spend our money. So at least in the short term, there is the ability for us to invest in the initiatives that we have laid out and talked about on this call, and we'll be coming back with broader perspectives if we have ideas that require us working outside of that box.

We have a $4 billion cost base.

Real opportunities for us both to prioritize within that cost base as well as to create efficiency and effectiveness on how loan where we spend our money. So at least in the short term there is the ability for us to invest in the initiatives that we've laid out and talked about on this call and we'll be coming back.

<unk> with broader perspectives, if we have ideas that require us working outside of that box.

Speaker 7: Got it. And digital bank update, it's good to hear of the successful pilot, but maybe I can push that a little further and ask, you know, what are some of the learnings or parameters that led you to conclude that it was successful? Maybe provide some type of color with regards to next steps.

Got it got it and digital bank update it's good to hear of the successful pilot, but maybe I can push that a little further and ask.

What are some of the learnings are parameters that led you to conclude that it was successful.

Maybe provide some.

Color with regards to next steps.

Speaker 3: Ashwin, it's exceptionally early days having just concluded the pilot and launched commercially, but there's a couple of important concepts that have encouraged us and we will continue to push on.

Ashwin, it's exceptionally early days, having just concluded the pilot and launched commercially but theres a couple of important concepts.

That have encouraged us and we will continue to push on.

Speaker 3: The first is the platform is a wallet-based platform, which allows us to move to an account or a customer-specific view. It allows us to converse and manage those customer relationships differently than we can on our largely transaction-based platform. And it opens up our ability, per earlier comments in this call, to bring additional products and services to that customer via that digital platform.

The first is the platform as a wallet based platform, which allows us to move to an account or a customer specific view. It allows us to converse and manage those customer relationships differently than we can on our largely transaction based platform and it opens up our ability.

Per our earlier comments in this call to bring additional products and services to that customer via that digital platform. So the combination of moving to a customer oriented technology architecture, and giving ourselves the flexibility to bring new products and services encourage us.

Speaker 3: So the combination of moving to a customer-oriented technology architecture and giving ourselves the flexibility to bring new products and services encourages us that this is the direction we'll be moving. Got it. Good to hear. I wish you all the best.

Ask.

This is the direction, we will be moving.

Yes.

Got it.

I wish you all the best.

Our next question comes to us from Ken.

Speaker 1: from Autonomous. Please ask your question.

So <unk>.

Autonomous please ask your question.

Yes.

Speaker 8: Hi, good afternoon, everyone. Thanks for taking the questions. And I want to echo the welcome to Devin.

Hi, good afternoon, everyone. Thanks for taking the questions.

Echo <unk> welcome to Devon.

Speaker 8: So look forward to working with you going forward. Devin, maybe we could start with you, a question for you. You mentioned really strong cash flow.

Due to working with you going forward.

If we could start with your question for you you mentioned <unk> strong cash flow.

Speaker 8: margins came in better this quarter. I mean, you obviously had an opportunity to go look at the business. Can you talk about your appetite to take on more risks around investment and trying new things out where maybe you're willing to sacrifice some short-term profitability for faster growth. I would love to get your thoughts on that.

Margins came in better this.

This quarter.

You, obviously had an opportunity to look at the business could you talk about your appetite to take on more risks around.

Investment in trying new things out where maybe you are willing to sacrifice some short term profitability for faster growth, we would love to get your thoughts on that.

Speaker 3: Ken, it's a great question. As we look at the business, I think we are initially focused on how can we drive the business.

Ken It's a great question as.

As we look at the business I think we are initially focused on how can we drive the business.

Speaker 3: particularly in ways that are relatively recognizable to us. So how do we increase our ability to acquire customers on our digital platform, which to your commentary will likely require us to increase the marketing dollars that we are allocating? I feel comfortable, though, within.

Particularly in ways that are relatively recognizable to us so how do we increase our ability to acquire customers on our digital platform, which gear commentary will likely require us to increase the marketing dollars that we are allocating I feel comfortable though within.

Speaker 3: the parameters that we have laid out in terms of our guidance, we can achieve that and start to accelerate things like our digital customer acquisition and things like the rollout of our digital wallet and our bank.

The parameters that we have laid out in terms of our guidance, we can achieve that and start to accelerate things like our digital customer acquisition and things like the rollout of our digital wallet and our bank as we explore broader ideas that could have.

Speaker 3: as we explore broader ideas that could have

Speaker 3: bigger implications on the go-forward growth rate, we will be back to you on what the implications of that might be from a go-forward margin look as well as from a go-forward capital requirement.

Bigger implications on the go forward growth rate, we will be back to you on what the implications of that might be from a go forward margin look as well as from a go forward capital requirement book.

Speaker 8: Okay, great. And maybe just for my follow up question, just just on the digital side, it looks like the transaction growth for the Woo.com business and the digital business slow during the quarter. Can you guys just talk about what's driving that and I'm curious, what kind of visibility do you have into the growth of that business going forward? Thank you.

Okay great.

And maybe just for my follow up question, just just on the digital side it looks like the transaction growth.

<unk> dot com business and the digital business slowed during the quarter.

Can you guys just talk about what's driving that.

What kind of visibility do you have.

The growth of that business going forward. Thank you.

Speaker 4: Yeah, Ken, let me take that one. You know, it's primarily a result of just growing over tougher comparisons from the previous year. We had very strong growth, as you know, during the course of 2020 and into the early part of last year.

Yes, Ken let me take that one.

It's primarily a result of just growing over tougher comparisons from the previous year, we had very strong growth as you know during the course of 2020 and into the early part of last year.

Speaker 4: And so that's really one of the key drivers. As I mentioned in some of my other commentary, the first quarter of this year is gonna see some of that impact as well. We had very high growth in the first quarter of 2021 in the mid 40% range from a revenue standpoint.

And so that's really one of the key drivers.

As I mentioned in some of my other commentary the first quarter of this year is going to see.

Some of that impact as well, we had very high growth in the first quarter of 2021.

In the mid 40% range from a revenue standpoint.

Speaker 4: But we're still very confident about the longer term trajectory around digital and what it can become. But we are, you know, we're going to have to sort of grow into it during the course of this year. And the underlying characteristics of our digital business have not changed. So we're comfortable with that. And, you know, as I mentioned, we still expect to grow double digits in the digital business this year.

But we're still we're very confident about our longer term trajectory around digital and what it can become but.

But we are we're going to have to sort of grow into it during the course of this year.

The underlying characteristics of our digital business have not changed.

So we're comfortable with that and as I mentioned, we still expect to grow double digits in the.

In the digital business this year.

Speaker 1: Our next question comes to us from David Togut from Evercore. Please ask your question.

Our next question comes to Us from David <unk> from Evercore. Please ask your question.

Speaker 9: Thank you and congratulations, Devin. Look forward to meeting you in person sometime soon.

Thank you and congratulations to have and look forward to meeting you in person sometime soon.

Speaker 9: You've highlighted an increased focus on repeat business. Have you started to think through initiatives to drive more repeat business, for example, rewards, anything to encourage repeat customer buying?

You've highlighted.

An increased focus on repeat business.

Have you started to think through initiatives to drive more repeat business for example.

No.

Rewards.

Anything to encourage.

Set of repeat customer buying.

Speaker 3: David, in the short 45 days that I've been here, a couple of things that we started to talk about and to accelerate the rollout of. In addition to the rollout of our wallet-based technology that we are doing right now in Germany and Romania, we are putting forward a refresh of our core Western Union.

David.

In the short 45 days that I've been here.

<unk> things that we started to talk about and to accelerate the rollout of <unk>.

In addition to the rollout of our <unk> based technology that we are doing right now in Germany and Romania.

We are putting forward a refresh of our core western Union.

Speaker 3: digital platform. We will be piloting and launching that as we speak with hopefully a go live before the end of the first quarter. We expect that to help us increase both transaction throughput but also loyalty and return customers.

Digital platform, we will be piloting and launching that as we speak with hopefully a go live before the end of the first quarter, we expect that to help us increase both transaction throughput, but also loyalty in return customers.

Speaker 3: We are revising our existing WesternUnion.com loyalty program, and we are investing in that as a potential retentive device. And then as mentioned earlier, we are investing in our...

We are revising our existing western Union Dot Com loyalty program and we are investing in that as a potential retentive device and then as mentioned earlier, we are investing in our CRM technology and our ability to transact to move from a transaction based platform to a customer.

Speaker 3: CRM technology and our ability to transact, to move from a transaction-based platform to a customer-oriented orientation, which will again allow us to go back to customers who haven't transacted in the wild, to do customer-specific offers to entice people to come back to our platform. So there's a couple of avenues that we're going down that I think can and will bear fruit over time.

We're oriented orientation, which will again allow us to go back to customers, who havent transacted in a while to do customer specific offers to entice people to come back to our platform. So there is a couple of avenues that we're going down that I think can and will bear fruit over time.

Speaker 9: Thanks for that. Just as a follow up, you've indicated that some of your customers still remain pretty hard hit financially by the pandemic and you called out the hospitality industry. Have you started to review Western Union's pricing from a competitive standpoint and whether or not some reduction in price would lead to an attractive increase in volume?

Thanks for that just as a follow up.

You've indicated that some of your customers still remain pretty smart.

Actually by the pandemic and you called out the hospitality industry have you started to review western Union's pricing from a competitive standpoint and whether.

Whether or not some reduction in price, which would lead to.

An attractive increase in volume.

Speaker 4: Yeah, let me start with that one. I would say, David, that the pricing environment continues to be stable on a global macro basis as we look at it.

Yes, let me start with that one.

I would say David that are the pricing environment continues to be stable on a global macro basis as we look at it.

Speaker 4: As we've mentioned before, you know, we have 20,000 corridors or country pairs and we're always moving pricing up and down depending on the specific local situation and or in the different channels. But on a global macro...

As we've mentioned before.

We have 20000 corridors and our country pairs and we're always moving pricing up and down depending on the specific local situation and we are in the different channels, but on a global macro basis.

Speaker 4: there seems to be a fair amount of stability. And obviously we're going to be proactive and do what we need to do to drive the right transaction. We're going to be doing some of the most competitive corridors, we're very price competitive.

There seems to be a fair amount of stability.

And obviously, we're going to be proactive and do what we need to do to try to drive transaction growth as you know in some of the most competitive quarters, we're very price competitive and others, we may not need to be price competitive. So we really need to look at it on a quarter by quarter basis and.

Speaker 4: and others we may not need to be that price competitive. So we really need to look at it on a corridor by corridor basis and you know, but we don't see a significant you know.

But we don't see a significant.

Speaker 4: change in the overall pricing environment nor significant needs to do anything too dramatic.

Change in the overall pricing environment more significant need to do anything too dramatic.

Thank you.

Sure.

Speaker 1: Our next question comes to us from Cassie Chan from Bank of America. Please ask your question.

Our next question comes to US from Cathy Chan from Bank of America. Please ask your question.

Hey can you hear me.

Yes.

Speaker 10: Hello. Okay. Hey, this is Tassie Yang for Jason Kupferberg. Thanks for taking my question. So I first wanted to ask on margins, I know you guys touched upon it on your prepared remarks, but they were obviously very strong in 4Q. Looks like they're going to be down year over year based on the 21 to 22% outlook you guys provided for next year. I guess what were the factors impacting it in this quarter? And can you kind of help us bridge that with your outlook for next year? I know you guys know a bit of some business solutions being taken out, but just help us.

Okay, Hey, this is Kathy on for Jason Kupferberg. Thanks for taking my question. So I first wanted to ask on margins I know you guys touched upon it on your prepared remarks.

They're obviously very strong and pork you think theyre going to be down year over year based on the 21% 22% outlook you guys provided for next year I guess like what were the factors impacting it.

Quarter end can you kind of help us bridge that with your outlook for next year I know you guys.

It sounds like business solutions being taken out, but you can just help us.

Speaker 10: just like call out any other factors that we should be aware of. Thanks.

Just a call out any other factors that we should be aware of thanks.

Yes casting nice to speak with you.

Speaker 4: You know, it really is the factors that I mentioned. So in the fourth quarter, we had very strong growth again in the B2B business and

It really is a factor that I mentioned, so in the fourth quarter, we had very strong growth again in the <unk> business and that business has a relatively higher fixed cost base. So every incremental dollar of revenue has a large contribution to the profit line. We also had.

Speaker 4: That business has a relatively higher fixed cost base. So every incremental dollar of revenue has a large contribution to the profit.

Speaker 4: We also had a very positive impact from foreign exchange. It was in the range of 70 to 80 basis points, positive impact in the fourth quarter, and then just overall expense management. So that's why you saw higher margins in the fourth quarter. Most of those things go away as we go into this year, particularly in the first quarter. But what I would just say is if you look at it, 2021 to 2022,

A very positive impact from foreign exchange. It was in the range of 70 to 80 basis points positive impact in the fourth quarter and then just overall expense management. So that's why you saw higher margins in the fourth quarter.

Most of those things go away as we go into this year, particularly in the first quarter, but what I would say is if you look at 'twenty one to 'twenty two 2021 2022.

Speaker 4: The business, you know, the outlook we've given for this year of 21 to 22% margins is very similar to the outlook we gave last year. If you put aside these one-off type of items and the impacts from business solutions and FX, so it's in that same range as what we had last year. So not a big change in terms of what the business can achieve.

The business the outlook, we've given for this year of 21% to 22% margins is very similar to the outlook. We gave last year. If you put aside these one off type of items and the impacts from business solutions and FX. So it's in that same range as what we had last year. So not a big change in terms of what the business can achieve.

Speaker 10: Got it. Got it. Okay, that's helpful. And then just my second question, I just wanted to ask if there were any like country specific dynamics that we should be aware of in any of your key corridors. So I know you guys have talked about Cuba. You're probably not really baking anything in there in your outlooks, but just any other dynamics that you could share with us. Thanks.

Got it got it Okay. That's helpful. And then just my second question I just wanted to ask if there were any like country specific dynamics that we should be aware that any of your key corridors. I know you guys had talked about Cuba, and you're probably not really baking anything in that in your outlook, but just any any other dynamics.

Got you could you could share with us.

Speaker 4: Yeah, you're right. We have not built in anything for Cuba. We're hopeful that that can get turned on at some point, but there's no specific timing around that. But nothing else to really call out. I think we gave you some color around the different regions. So nothing specific to call out, Cassie.

Yeah, Youre right, we have not built in anything for Cuba.

We're hopeful that can get turned on at some point, but.

There is no specific timing around that and but nothing else to really call out I think we gave you some color around the different regions.

So nothing specific to call out Cassie.

Alright, thanks, guys.

Sure.

Speaker 1: Our next question comes to us from Jamie Friedman from Susquehanna. Please ask your question.

Our next question comes to Us from Jamie Friedman from Susquehanna. Please ask your question.

Speaker 5: Hi, Devin, pleasure to meet you. It's great to get a fresh set of eyes on the business. My questions are a little bit more financial. I apologize. Raj, should we anticipate any strength in the business?

Hi.

Devin pleasure to meet you, it's great to get a fresh set of eyes on the business.

My questions are a little bit more financial.

Apologize, but raj.

Should we anticipate any stranded costs.

Speaker 5: I'm not sure if you said that. I heard you say something about 25 million, but anyway, that's one thing related to this position. I'm just going to ask my second one.

Im not sure. If you said that I heard you say something about $25 million, but anyway. That's one thing related to disposition and then I'll just ask my second one.

Speaker 11: at the same time which is um you know in your answer to the last question rise though you had also called out a couple other things impacted the margin like commission mix and agent losses and i haven't i don't remember you talking about those that much in the past so just hoping you can elaborate a bit thank you

At the same time, which is.

In your answer to the last question Raj you had also called out a couple of other things impacted the margin like commission mix and agent losses, and I Havent I don't remember you talking about those that much in the past. So just hoping you can elaborate a bit. Thank you yes.

Speaker 4: Yeah, let me start with the second one first, Jamie, the, you know, the agent losses were lower in the fourth quarter compared to one year ago, we had some higher agent losses in the fourth quarter of 2020. So that was certainly from a year over year standpoint, that was a factor. Commissions have been trending down, so variable costs were lower in 2021 compared to the previous year. So those are true.

Yes, let me start with the second one first Jamie.

The agent losses were lower in the fourth quarter compared to one year ago, we had some higher agent losses in the fourth quarter of 2020.

So that was certainly from a year over year standpoint that was a factor commissions have been trending down so variable costs were lower.

In 2021 compared to the previous year. So those are true.

Speaker 4: you know, and with respect to stranded costs, we will have some standard costs if you look at the segment results for the B2B business.

<unk>.

And with respect to stranded costs, we will have some stranded costs. If you look at the segment results for the <unk> business versus what I said it implies stranded costs in the range of $10 million or less and so we are working to try to eliminate some of those costs and we have some.

Speaker 4: versus what I said, it implies a standard cost in the range of $10 million or less. And so we are working to try to eliminate some of those costs. And we have some

Speaker 4: some activities potentially in place that will take out some of those costs. It's not a significant number, Jamie, but it is something that we want to try to address.

Some activities potentially in place that will take out some of those costs are and it's not a significant number.

Jamie, but it is something that we want to try to address.

Speaker 1: Our next question comes to us from Ramsey L. Assal from Barclays. Please ask your question.

Our next question comes to Us from Ramsey El <unk> from Barclays. Please ask your question.

Speaker 12: Good evening, gentlemen. This is Damian Onfor-Ramsey. Appreciate the question. So, I'm hoping you can give an update on the account-to-account and the cash-to-account businesses. You know, how does that fit into your broader digital strategy, and if you see that being a more important piece of business over time.

Good evening gentlemen, Damian on for Ramsey I appreciate the question so.

I'm, hoping you can give an update on the account to account and the cash account businesses.

How does that fit into your broader digital strategy and if you see that being a more important piece of the business over time.

Speaker 3: Hi, it's Devin here. Let me just comment and then I'll turn it over to Raj.

Hi, It's Kevin here, let me just comment and then I'll turn it over to Raj.

Speaker 3: Clearly in a growing digital ecosystem and an aspiration to be a broader payments provider and payments facilitator for our customers and on behalf of our partners, the account to account plays an important role. The company has invested significantly in our account payout network. I believe we are somewhere around 4 billion endpoints.

Clearly in a growing digital ecosystem and an aspiration to be a broader payments provider in payments facilitator for our customers and on behalf of our partners. The account to account plays an important role the company has invested significantly in our account payout network.

I believe we are somewhere around 4 billion endpoints Raj.

Speaker 3: Raj can verify that, which gives us a strategic platform and capability that I see as being able to leverage for growth.

Verify that.

Which gives us a strategic platform and capability that I see us being able to leverage for growth.

Speaker 3: As I mentioned in my earlier comments, we should not diminish though, particularly for certain corridors in certain parts of the world, the ability in a

As I mentioned in my earlier comments, we should not diminish, though particularly for certain corridors in certain parts of the world the ability.

Speaker 3: send country to originate a digital transaction that then gets delivered as a cash out in fiat currency someplace in the world. And that is actually one of the benefits and strengths of our ecosystem is to be able to continue to enable those kinds of transactions as different parts of the world move at different paces towards payment digitization.

Send country to originate.

A digital transaction that then gets delivered as a cash out.

In Fiat currency someplace in the world and that is actually one of the benefits and strengths of our ecosystem is to being able to continue to enable those kinds of transactions as different parts of the world move at different paces towards payment Digitization.

Speaker 4: Yeah, the business that's purely account to account, as we had mentioned last quarter, it is running at around $200 million annually. That includes any digitally initiated transactions that are paid out to an account and is one of the fastest growing parts of our consumer business. So we're very excited about that, but there's a lot more that we can do there to keep driving activity in that space. Let's hope we can keep driving this for significantly, you guys. OK. Thanks. That's a good point. OK. Thank you. Great. Thank you. Bye. Bye. Bye. Bye. Bye.

Yes.

The business Thats purely account to account as we had mentioned last quarter. It is.

Running at around $200 million annually that includes.

Any digitally initiated transactions in there that are paid out to an account and is one of the fastest growing parts of our consumer business. So we're very excited about that but there's a lot more that we can do there to keep driving activity in that space.

Speaker 12: I appreciate it. I'll ask one follow-up here and I'll pick up on one of Cassie's questions here about geographies. I just want to dig in on potential implications, I know it's early days, but implications of the current geopolitical risk in Eastern Europe . Is this something that we should be mindful of that might have a material impact on your business? Thanks.

Very helpful guys I appreciate it.

I'll ask one follow up here and I'll pick up on.

I wanted to ask these questions here about geographies I just wanted to dig in on potential implications I know, it's early days, but applications of <unk>.

The current political.

Political risk in Eastern Europe is this something that.

We should be mindful of that might have a material impact on your business. Thanks.

Speaker 4: Look, we're very focused on that. We're certainly aware of the issues there in Russia and what that might mean. It's mostly not under our control. We certainly have a great business that's going to, it's both an inbound and an outbound business in Russia. As you heard, we've renewed our relationship with Spare.

Look we're very focused on that.

Certainly aware of the <unk>.

Issues, there in Russia, and what that might mean.

It's mostly not under our control.

We certainly have a great business, that's going to it's both an inbound and outbound business in Russia as you heard we've renewed our relationship with spare and we're very happy with that relationship.

Speaker 4: and we're very happy with that relationship. So we're certainly monitoring the situation. I can tell you that it's not our top 10, not in our top 10 markets, but it's very important to us.

We're certainly monitoring the situation I can tell you that it is not our top 10 not in our top 10 markets, but it's very important to us and just to give you a sense. There is no single market, that's more than 7% of our revenues outside the U S and Russia is on the smaller side of that scale.

Speaker 4: And just to give you a sense, there's no single market that's more than 7% of our revenues outside the US, and Russia's on the smaller side of that scale. But it's very important to us, obviously. And so we're certainly monitoring. We're hopeful that we can get through this situation without any significant impact, but we're monitoring the situation.

But it is very important to us obviously and.

So we're certainly monitoring we're hopeful that we can get through this situation without any significant impact that but we're monitoring the situation.

Okay. Thanks, so much gentlemen.

Speaker 1: Our next question comes to us from Andrew Jeffery from True East. Please ask your question.

Our next question comes to Us from Andrew Jeffrey from Trieste. Please ask your question.

Speaker 4: Great. Oh, sorry. Can you hear me? Okay. Yes, we can.

Great.

Sorry can you hear me okay.

Yes, we can.

Speaker 8: Alright, yeah, hi, this is Joel on for Andrew Jeffery. I just had one question. I was wondering if you could just provide a little bit of additional color related to LTV to CAC for new digital customers, kind of just in terms of how we should think about quantifying that and any expectations you're going to have for customer acquisition going forward. I know you mentioned some acceleration in marketing spend towards the back after 2022, but that would just be helpful.

Alright, yes, highly Joel on for Andrew Jeffrey.

One question I was wondering if you could just provide a little bit of additional color related to LTV to CAC for new digital customers kind of just in terms of how we should think about quantifying that.

And any expectations you have for customer acquisition going forward I know you mentioned some acceleration in marketing spend towards the back half of 2022.

So that would just be helpful.

Speaker 3: Yeah, thanks for the question. One of the things that I was pleasantly surprised on is the strength of our digital acquisition engine and to date our ability to cost effectively acquire clients.

Yes. Thanks for the question one of the things that I was pleasantly surprised on the strength of our digital acquisition engine and to date, our ability to cost effectively acquire clients. It is one of the reasons that I believe there is room for us to continue to expand.

Speaker 3: It is one of the reasons that I believe there is room for us to continue to expand our marketing acquisition efforts and to be able to do so in a value creating manner. So I'm excited about the prospect. I think it's something that we are going to be looking towards as an area to help drive our digital growth. Roger. Yeah, I think you covered it Devanet. It's an opportunity for us and that's a key area of opportunity to keep investing in.

Our marketing acquisition efforts and to be able to do so in a value creating manner. So I'm excited about the prospect I think it's something that we are going to be looking towards as an area to help drive our digital growth.

Yes, I think you covered it Devin that it's an opportunity for us and that's a key area of opportunity to keep investing in.

Thanks, a lot.

Operator, do we have any other questions.

There are no additional questions at this time.

Speaker 8: Thank you everyone for joining.

Great. Thank.

Thank you everyone for joining.

Speaker 1: Thank you for joining today's fourth quarter and full year 2021 earnings call. Have a great day!

Alright.

Thank you for joining today's fourth quarter and full year 2021 earnings call have a great day.

Okay.

Okay.

Okay.

Yes.

Okay.

Yes.

Yes.