All right. I see the countdown starting. Thanks everyone for joining. My name is Tien-Tsin Huang. I cover the payments and IT services sector at J.P. Morgan. Really excited to have Devin McGranahan back, CEO of Western Union. You know, enjoyed having him here last year and, you know, bridging from Fiserv into Western Union, he's put in a lot of good change, and excited to get through that with him today. We are gonna take questions from the portal as well as from the audience. The Ask a Question portal, have that ready, so feel free to submit questions there. Devin, thank you for being here. Yeah, it's great to be here. Thanks for having us. No, it's great. Yeah, I figured we'd start with a progress report. I'll ask you about Evolve 2025. I know we're eagerly tracking that as we go, but I'm sure you're doing the same internally. You know, catch us up on what's going on with that. We launched Evolve 2025 in the fall, and as you know, there were a couple of important pillars to that strategy. We've talked extensively about the first, which is reinvigorating our digital business and bringing it back to double-digit growth. We launched the program in August, first in North America, and then have subsequently been rolling it out across the world. In the Q2 of 2022, our digital business shrank 3% on a transaction basis. By the end of 2022, we were positive 1%-2%, and we announced at the end of the Q1 we were positive 7%. We continue to execute that program around the globe and believe we're in fact on the right path to returning the digital business to double-digit growth rates. The second, which was really stabilizing our retail business. The retail business is obviously a lot larger and more diverse with over 400,000 locations around the world. Obviously some of the macro effects that are existing in the world economy affect the retail business more than the digital business. As we announced on the end of the Q1, we've seen 200-300 basis point sequential improvements in our retail transaction growth in almost every geography around the world. We feel good about both of those. We also announced the launch of our, what we call our ecosystem, which was expanding the product set beyond just what we do in cross-border remittance. We have the privilege of serving 120 million people around the world, bringing new products and services both physically and digitally to that customer base. We are in the process of relaunching our prepaid product, which will go live here this quarter in the U.S. We launched a digital bank in four countries in Europe, Poland, Romania, Germany and Italy. We now have over 150,000 enrolled customers and continue to see upside in the migration of existing Western Union digital and retail customers into the digital bank, which we highlighted some of at the end of the Q1. We will go live in Brazil this month, so we're finishing our friends and family, and we are working on bringing the digital wallet to North America before the end of this year. We feel good about the progress we're making on the ecosystem as well. As I said on the Q1 call, we don't anticipate that the ecosystem will make a material difference to revenue generation. ...this year and maybe even next year, but it is the foundation for long-term increases in customer engagement, customer retention, and obviously TAM expansion. We're continuing to invest in that portfolio of products and services. You also saw on the end of the Q1, you know, the work that we've been doing around our bill pay business, our retail money order business, you know, our transactional services businesses that are part of that ecosystem have all been doing very well, both in North America and South America. We're pleased with the progress we're making there as well. Yeah. No, real progress. You talked about sequential growth. I mean, Devin, we get this question a bit just upfront here. How cyclical is the business in terms of, you know, consumer health, user health? Maybe you wanna walk us around the globe a little bit. Any interesting trends to call out? We, you know, we highlighted on the call the what we believe is the durability of our customer base. We've continued to see principal per transaction stable and in some cases slightly expanding. Our customer has enjoyed, despite the macroeconomic effects, mostly high employment in most regions around the world, that makes a difference for our customers. Our business is probably more sensitive to changes in exchange rates and monetary policy than it is to general macroeconomic effects. Right now you're seeing real strength in the Mexican peso, so that affects one of the largest corridors in the world, U.S. to Mexico. You know, as we highlighted in the call, there was a change in economic policy in Iraq, so we saw some benefit from that in the Q1 as well. In general, you know, we pay attention to the macro effects. We've come to believe that the global GDP is a pretty good tracker for cross-border remittances. You know, we have seen some slowing as global GDP has slowed, but nothing falling off a cliff anywhere. Got it. Thinking about policy and regulation in general, I always think about it like a pendulum. It swings in your favor or out of your favor. Where do you see it swinging today? Maybe can you expand upon the, you know, the Iraq piece and how much that helped and why? Iraq was a change in monetary policy as the central bank in Iraq is shifting to basically strengthen the banking system and have a better outward-facing mechanism for dealing with its currency. That benefited MTOs like us because the delays in which were put in place for banks to move money out of the country. I think it is temporal. As Iraq stabilizes, as the central bank continues to adopt and modify its policy, this is a temporal change that, you know, will abate over time without a doubt. The rest of the world, right? You know, is right now from a policy standpoint relatively stable. Obviously, with the rescinding of Title 42, people had expected a significant change in the migration situation on the southern border. The Biden administration put in a different set of rules, which have largely maintained the status quo. A number of our customers are in Mexico awaiting entry into the United States. When you're on both sides of a border, or you're on all sides of the border, you know, people from Colombia, Guatemala, Nicaragua, wherever, who are in Mexico, are receiving money in Mexico, so we're seeing, you know, strength in our Mexico business. Good. Yeah, no, we've been tracking that. The performance there has been good. Pricing, I know is always a fun topic, and you've educated us quite a bit here, Devin, on pricing. You mentioned the promotional activity, and it sounds like you're moving more towards this market-based pricing, which is different than what I remember with Western Union being the premium priced product. Catch us up on the promotion activity, where it stands and how much further you could go on that. More importantly, market-based pricing, what does that mean? We launched promotional pricing in August, which in many cases is first transaction free, first transaction 50% off in our digital business. We have subsequently evolved our ongoing pricing to, as you know, what I refer to as market-based pricing. We have a pretty sophisticated view of the prices by corridor around the world. Our goal is to be, you know, within the market basket. We're not aspiring to be the lowest price, but we're also not aspiring to be the highest price. Right. Right? I think for some period of time, Western Union had a strategy and potentially even a belief that the strength of the brand, which is about all that exists in the digital business, at this point, was sufficient to command a market premium. At some level it will, but it won't command a market premium and drive double-digit growth. We are in the pursuit of growing our business double digits and as a result, a more competitive price in the marketplace. Combined with the strength of our brand, our strong compliance capabilities, and obviously our great payout network, is enabling that to happen. To be clear, you can see pricing very, very closely, right? In any corridor at any moment in time, so it is dynamic. It is a real-time proposition where we look at prices across 20,000 corridors. We are continuously updating that. You know, obviously, U.S. to Mexico, probably one of the most heavily competed corridors in the world. You know, that has a lot of price transparency and a lot of price, ongoing price management that goes on. You know, if you're Gabon to Angola, you know, that's a different game. Got it. The pathway to double-digit growth on the digital side, Devin, talk to us about the optimal formula in your mind to get there across retention, you know, price, transaction activity, et cetera? Yeah. You know, the beauty of a digital business is it's relatively straightforward. Yeah. We've been working on three things, one of which you've talked about, which is competitive offers in the marketplace. The second is we've really been working a lot on the end-to-end funnel, right? Improving the efficacy of our marketing dollars, both in terms of bringing eyeballs to westernunion.com and to our digital apps, but also then the conversion of those, you know, price check to transaction. You know, we said on the Q1 call, you know, we've seen a significant increase in the efficacy of our marketing and a double-digit lowering of our CAC on a period-over-period basis. That effort, and you've heard me talk a couple of times about shifting the mindset of the organization to really be focusing on LTV to CAC or CAC to LTV. ... versus transaction economics. Much of the work that had been done was around maximizing the value of a transaction. We're really trying to maximize the value of a customer. Part of that equation is how much you pay to acquire that customer, and then what's the value of that customer over time. The third thing really is around retention. We've publicly said we're seeing the same, if not better retention around the world from these new cohorts of customers that we brought in, than we have historically seen. That was obviously one of the concerns some folks had, which is: Would you acquire the same quality of customer with promotional marketing activity? I think now, you know, 9 months, 10 months into this, we can definitively say the customers that we've acquired within this program are as good, if not better, in terms of retentiveness ability over time. Good. I know you've been very, very clear upfront around the LTV to CAC, which I think from a relationship standpoint makes a ton of sense. Translating that to margins, can the margins of the digital business sustain at a premium to the retail business as you see it longer term? In general, the digital business is margin accretive on a percentage basis to the company. As you can imagine, you know, the cash-in, cash-out business is high commission pretty much on both sides of that transaction. Obviously, there's a lot of operating costs with the cash. Funds in, generally bank account or card, that's pretty predictable. Our funds out, particularly funds out to account business, which has superior economics, is growing quite rapidly. On a unit economic basis, the digital business is less dollars per transaction. Managing that mix over time is one of the things that we're working hard on. We see the digital business and the strength and growth of the digital business to be accretive to the overall business from both a revenue growth and a margin perspective. Right. What could increase the digital business on the revenue per side would be some of the ecosystem initiatives, right? Right. Let's talk about that before we do the retail business. You know, we've liked this idea on the ecosystem side, right? That you've built this trust, you're taking all these inflows from your users, why not bank them, right? With this digital bank initiative, you're talking about prepaid as well, bill pay, the wallet being a bank, how do you prioritize all these things, Devin, and which ones are you the most excited about? Yeah. We talked a little bit about this recently. There are two primary benefits of the digital ecosystem. The first is around engagement. The work that we've been doing in Europe, you know, we're seeing two to three times as many transactions. Transactions can be funds in, it can be top ups, it can be debit card transactions, it can be IMT, it can be sending money across borders. It can be DMT, it can be sending to other people in the ecosystem. That increase in transactions drives an increase in engagement. Cross-border remittance, even in the digital realm, is largely an event based. I need to send money, I do that once a month, or I do that once a quarter, or I do that at holidays. By increasing engagement, having that stickiness, the benefit comes in retention, right? When Mother's Day does come along or Ramadan does come along, you know, you're already part and engaged with Western Union, you're not then searching for how you're gonna send money. It's a natural part of the platform that you're already engaging on. The second is obviously each of those types of transactions, whether they be debit card transactions, whether it be currency exchange, whether it be bill pay, those are all incremental revenue per customer per transaction, right? Being able to provide our customers with incremental products and services, increases the LTV of the customer. Kinda dual effect of increasing retention, by driving engagement and then increasing LTV by driving product penetration. The markets that you're choosing to go after these opportunities, would you say there's already fintech competitors in place today? Are you choosing ones that are maybe a little bit less competitive? How are you going about prioritizing the countries that you're going after? Yeah. You know, we are doing two things. one, obviously we started in Europe where we already owned a bank. That was a natural, "I want it to get this out in the marketplace." As you recall, I've only been doing this for 15 months. Knowing you like you've been doing it for a very long time. We've been doing it for a long time. We wanted to get into marketplace pretty quickly, and it was easiest to do that in Europe with our European banking charter. We said, "Let's pick send and receive pairs." One of the beauties of our business is we're a two-sided payment network. We picked Germany and Romania, then Italy and Poland. The four of those are two big outbound markets, two big inbound markets. That gives us the ability to start playing with send and receive. One of the things we just did in the U.K. and in the U.S. in our retail business, we have mandated in for a customer sending to Romania, a cell phone number. Romania is largely still a pay out to cash market. We now will SMS the customer, the receive customer, and offer them an incremental 100 RON if they want to receive that money in their Western Union digital wallet. They can pay it out in cash, or they can do something else, right? To try that notion of send and receive pairs and building a two-sided payment network. After those four, we said, "Let's start looking at places in the world that, you know, we have a natural customer base." People have talked a lot about this. Look, I'm not trying to compete head to head with Revolut or N26 or Chime, or pick your favorite money-losing digital bank. I'm actually trying to engage the 120 million customers I already have, trying to drive increased retention and incremental product, right? I have a natural customer base. You know, we have several million customers in our digital business already. Our evolution then is where do we have natural places that we have existing customers who are likely to interact with us in this manner? Which leads you to Brazil. Brazil, our digital business is bigger than our retail business at this point. We've been very successful there. More importantly in Brazil, and you've heard me talk about this, is, you know, we have 60-ish owned physical locations that are entirely Western Union, where we do currency exchange, bill pay, and IMT. That's a natural on-ramp to feeding a already very strong digital business. Coincidentally, we also own a bank in Brazil, that allows us to pay interest and do a few other things. That's why we're in Brazil. You know, we're coming to the US obviously as the natural largest digital business that we have, and many of our customers in the US are more digital than they are in other parts of the world already. You know, we're gonna see how those progress, and we'll continue evolving. This is a long-term strategy. As I said, we should, you know, be thinking about this in the 2025, 2026 timeframe. It's evolving nicely, and we like the progress we're making. Yeah. No, I think it makes a lot of sense in terms of, you know, planting the seeds for growth here in the, in the midterm. Before I open it up, let me ask you, since you mentioned Brazil, the retail business, I know overall returning the retail business' stability is the, is the goal, part of that is to embrace omnichannel, as you sort of called out there. I'm curious, how is that tech being embraced? How are the agents responding to some of the changes? I'm curious if you're seeing any real impact already. Are there examples? Look, the agents, people have expressed concern about. The agents are not monolithic, right? Yes, there are some agents, if you go to the Middle East and visit with some of my agents, they think this is the worst idea known to mankind. That is a relative minority. Many of our smallest agents are looking for ways to compete and partners to help them succeed. I was with a large check cashing client, they see Cash App as a existential threat to their business, right? They don't see Block, Inc. as a partner for them. They see us as a partner for them. They wanna know what can we do together if we bring a digital wall to the US, how can they participate? How can they benefit from some of the economics of enrolling their customers in a Western Union-based product versus a Cash App product. You know, the strategic partners are some of the most interesting. The big retailers, many of them have strong, what I'll call omni-channel strategies, so whether this be the big grocers, whether this be the drugstore chains, et cetera. They're all looking for partners in their move to omni-channel in a more digital. They can't staff service desks. They can't get the labor. One of my large grocery store retailers has actually closed all of the service desks in California because of the labor shortage and labor costs. When we showed up and said, "Hey, we'd really be interested in a more omni-channel experience, kiosk-driven, in-lane-driven, digital and retail together," we'll launch that pilot in California in end of the 2nd quarter. They were so eager to try something. I think, again, not all agents are the same. Yes, there are some that, you know, they view this as competitive. There are enough that don't. Plus, with our own on-ramps, we still believe that our own retail base is a great opportunity and feeder for our digital platforms. Could we see Western Union own more stores that are self-branded? Yeah. We're in the process of rolling out a, you know, we call it a hub and spoke system. You know, we've talked a little bit about what we've done in LACA. We've probably added somewhere between 50 and 100 stores over the last year in LACA. We've now launched close to 50 what we call concept stores in Europe. Think of a concept store as a wholly branded Western Union in partnership with an agent that only provides Western Union branded products and services, right? Again, returning to this idea of exclusive distribution, whether it's owned, which we'll be quite judicious with, because you need to be in a pretty high volume place, but where you are in a high volume place, the economics work out. Matt has said, on average, our company-owned locations are the same, if not better margins than our agent. Also the opportunity to go back to agents and create a value proposition around exclusivity and around the Western Union brand, which we had moved away from a bit. Yeah. Very clear. Any questions? Happy to take questions, you know, from here as well as in the ask a question portal. Anyone? Yep. If you don't mind using the mic. Hey, Devin, thanks so much for coming here to speak today. I'm from New York, and about 2 weeks ago, I saw, Thomas Mazzaferro, your Chief Data and Innovation Officer, speak. Yeah, big time. Was he dressed like Ghostbusters? He usually has on a black suit and a white shirt. He was decked out like that, but it was also a Salesforce event, so at the end they gave him a big old Salesforce hoodie to put on. My question today is, you know, a couple of weeks ago, Thomas was speaking about the 600,000 locations that you guys have worldwide. You're talking about, you know, this concept of a hub and spoke system. I'm curious about, you know, how much you guys care about, you know, continuing to expand on these physical in-store locations. I'm also curious, with your ever-expanding digital presence, are you guys also using the physical in-store locations to try to communicate and educate customers more and more on your digital presence to try to just, you know, get them more into the digital ecosystem from in-store? Yep. Great question. You know, one of the things, and it was in the K this year, that we've really started to talk about is location productivity. Growing productive capacity, not just growing capacity, right? We've talked about, you know, right agent, i.e. the right partner, with the right location, when location still matters quite a bit, given the dispersed nature of our customer bases, and the communities in which they live in with the right value proposition. We are looking to expand productive distribution capacity, both in an exclusive Western Union only branded, but also within our independent, non-exclusive channels here in the U.S., that's Vigo and OV. In other places of the world, it's also under the Western Union brand. We look to drive the productivity of our network and managing the productivity of our network. That will likely mean continued increases in the size and scale of our network, particularly in some parts of the world. The days of yore where my predecessors got on stage and talked about a million store network are over. We're not aspiring for network count for network count, and we're shaping the network relative to where we are. As a case in point, we closed a little over 50,000 locations in India. As anybody who follows know, India is now 90%+ P2A, given the changes in monetary policy and the changes in the underlying economy there. A massive retail network in India, particularly as a PAP network, is just much less valuable than it was 10, even 5 years ago. We're shaping the network, but the real thing that you'll hear as we continue on this journey to talk about is network productivity, and same store sales. Thanks. Tom's a great guy, by the way. Even if he was at a Salesforce conference. Prior to your tenure at Western Union, there'd been quite a bit of focus or, I don't wanna say shift in direction, but more focus placed on B2B payment solutions. Can you talk about the work going on in that area and how that importance that represents to the growth of the business? Much to my sadness and disappointment, the company had already sold its B2B payments business by the time I arrived. We have unfortunately been in, my entire tenure, through the transaction of divesting that. I believe, Matt, the final close is slated for this quarter, we will be out of the B2B payments business. I wouldn't say that's forever, given I came from a B2B payments background. I have a great degree of fondness for B2B payments, and it's obviously a place in which the electronification of the movement of money between businesses is a growth op. The, what was known as Western Union Business Solutions has been divested to... It's now called Convera. We're not in that business. Anyone else? Yeah, let's do one more of them. I can rapid fire a few more. Yeah, thanks. Just competitive landscape, who are your biggest threats and just in particular, MoneyGram, going private, wonder if that under their new ownership will be a continued, continual threat? I have a high degree of respect for my competitors. They have strong foundations. In the cases as of my digital competitors, you guys let them off easy and don't make them make money. That makes them a formidable force to reckon with if you don't have to actually turn a profit. I turn a 20% margin. I'm doing it with one hand tied behind my back relative to them. On the digital side, Remitly and Wise are very strong and growing quite aggressively. You know, on the retail side, Ria is a formidable competitor almost everywhere in the globe and continues to expand its physical distribution capability as well as its digital capability. I think MoneyGram's an interesting situation. It'll be, you know, having lived through divesting a small business solutions, they've obviously been in the throes of trying to get a deal done. Once they get through that, they're certainly someone to keep an eye on, 'cause as a private and well-funded company, you never wanna underestimate what they can or will be able to do. Let me rapid fire a few, if you don't mind, Devin. Just on the. These are from investors that I gathered this. You have 120 million customers. Is there a data or loyalty opportunity there that you could take advantage of? That's great question. We are in the throes of relaunching a new loyalty program. Sometime in the Q3 we will stop issuing points on what is called My WU, which is the current loyalty program. Sometime in the beginning of next year, we'll relaunch a completely revamped loyalty program. The objectives of that, the current loyalty program really is a reward for high-transacting clients. So we wanna move to a loyalty program that is an incentive to drive behaviors that we wanna reward. So that's gonna be omni-channel, that's gonna be product expansion, that's gonna be ongoing retention, right? So you'll see us, and to your point, the data's quite rich about what our customers do, who they are, and how we incent certain behaviors. You'll see that coming from us in, you know, let's call it the H1 of 2023. Loyalty's a big, a big opportunity. Okay. Good. Glad to hear it. On the data side, just building on that, generative AI, I know is gonna be a big theme at this tech conference here. As CEO, how are you gonna embrace it? How much opportunity is there, both on the growth side as well as productivity side or margins? Yeah, look, I think it is early days. We had a board meeting 2 weeks ago. It felt like the theme of the board meeting became AI, right? Because obviously we're in the process of putting all the policies in to make sure that we have the right privacy, we have the right tools, we have the right ability for our talented teams to be able to use the technology. It also opens up the question of what's the nature of the opportunity, right? I'll just give you one example we're working on. It's more on the productivity side, but could be on the revenue side. We answer the phone in 45 languages. We deal in over 180 countries and territories around the world. Today, the way we manage call quality is what everybody normally does, which is call sampling. We will listen to calls and then provide coaching to our frontline associates, many of which work with us through vendors. AI is amazing. We're in the process of working on a pilot where you literally can listen to every single call. You literally can tell the tonal inflections in 45 language about whether the call has gone well, whether the customer is satisfied, whether the customer is frustrated, whether the response is, you know, the number of times the question has been re-asked, right? AI can factor all of this in and basically give you a score for your call. They can give you a score for your agent, and can give you specific thoughts about how to coach that agent, and then if there's any follow-up required with the customer, right? It can do this in real time on every single call, right? Like, it is amazing how you could scale, basically call monitoring and the feedback mechanisms to improve your ability to serve your customers, where today it's just, you know, it's virtually impossible. Good. No, it's good examples. It'll be fun to track. Last one, maybe in 30 seconds. I know crypto was a big topic last year, less so this year, but I'm sure you're still thinking about it. Same question, big hype on gen AI. Yep. What's happening with crypto and how it fits now? Yep. You know, look, we have maintained two positions. One, we think moving money through digital assets is something that people will figure out at some point in time, and we look forward to that. The less money that I can move via the Swift banking system, the happier camper I will be. We also believe that society, a very long time ago, decided that if the anonymous movement of money creates bad things, and so long as society doesn't like terrorism, human trafficking, drug trafficking, any of the other ills that come from moving money anonymously, someone like us who provides high quality risk and compliance on both ends of the transaction, regardless of how the money moves, whether it moves via the banking system, whether it moves via rails, whether it moves via digital assets, whether it moves via carrier pigeon, it doesn't matter. as long as there's quality on both ends, on-ramps and off-ramps. We see ourselves as, regardless of how the money moves, having a stronghold with those 120 million customers and our ability to do KYC on both ends. We also believe that it is, particularly in some places of the world, a better alternative to fiat currencies in some places. We are rolling out, as we have publicly said, at our Investor Day, a buy, sell, hold capability as part of our digital ecosystem that will let our clients, you know, buy, sell, hold, I don't know, Matt, we're a 5-7 digital currencies as part of our digital wallet. Terrific. We should probably stop it there. I'm getting the signal. Devin, thank you. Thanks, everybody. Always appreciate your time.