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WU Q1 Earnings Miss Estimates on Higher Costs & Incentive Timing
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Key Takeaways
WU Q1 EPS fell 39% YoY and missed estimates, hurt by higher costs and margin compression.
CMT revenue dipped, but Branded Digital transactions jumped 21% with solid revenue growth.
CS segment revenue surged on Travel Money and bill payments, though margins sharply declined.
The Western Union Company (WU - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of 25 cents, which missed the Zacks Consensus Estimate by 37.5%. The bottom line declined 39% year over year.
Total revenues were $982.7 million, which marginally declined from the prior-year period's level. However, the top line beat the Zacks Consensus Estimate by 1.7%.
Higher operating expenses, along with a sharp decline in operating income and margin compression across both segments, weighed on first-quarter earnings. Lower fixed cost coverage in owned locations, vendor incentive timing and FX movement also affected the bottom line. The downside was partly offset by resilient revenues and strong growth in the Branded Digital and Travel Money business expansion.
The Western Union Company Price, Consensus and EPS Surprise
Adjusted operating margin fell 600 bps to 13%, caused by higher North America expenses, foreign currency headwinds, and weaker fixed cost coverage in owned locations.
Total expenses rose 7% year over year to $859.7 million. The year-over-year increase resulted from the higher cost of services and SG&A expenses.
Operating income of $123 million declined 31% year over year and lagged our estimate of $169 million.
Segment Analysis of WU
The Consumer Money Transfer segment recorded revenues of $845.4 million in the first quarter, which slipped 3.2% year over year. The figure exceeded both the Zacks Consensus Estimate of $836.2 million and our model estimates of $838.6 million.
Operating income declined 31% year over year to $110.5 million. The metric missed the consensus mark of $144.8 million and our estimate of $141.5 million. The operating income margin declined 500 bps year over year to 13%.
Transactions within the CMT segment, on an adjusted basis excluding Iraq, dipped 6% year over year. There was 21% transaction growth in the Branded Digital business. Branded Digital revenues, which accounted for 32% of CMT’s first-quarter revenues, rose 9% on a reported basis and 6% on an adjusted basis.
The Consumer Services segment’s revenues rose 24% year over year on a reported basis and 33% on an adjusted basis, reaching $137.3 million in the quarter. Growth was driven by the expansion of the Travel Money business and increased revenues from the bill payment segment. The metric beat the Zacks Consensus Estimate of $130.9 million.
Operating income totaled $16.2 million, which decreased 40% year over year. The metric missed the consensus mark as well as our estimate. The operating income margin declined 1,200 bps year over year to 12%.
WU’s Financial Position (As of March 31, 2026)
Western Union exited the first quarter with cash and cash equivalents of $909.2 million, which decreased from the 2025-end level of $1.2 billion. Total assets of $8.1 billion declined from $8.3 billion at 2025-end.
Borrowings totaled $2.6 billion, down from $2.9 billion at 2025-end.
Total stockholders’ equity declined to $910.5 million from $957.8 million at the end of 2025.
WU generated net cash from operations of $109 million in the first quarter, down from $148.2 million in the year-ago period.
Western Union’s Capital Deployment
Western Union rewarded its shareholders with $74 million in dividends and share buybacks worth $45 million in the first quarter of 2026.
WU’s 2026 View
Management reaffirmed its guidance for 2026. Adjusted revenue growth is expected to be between 6% and 9%.
Adjusted EPS is forecasted to be in the range of $1.75-$1.85, the mid-point of which indicates a 2.9% improvement from the 2025 reported figure of $1.75.
GAAP EPS is currently forecasted to be in the band of $1.50-$1.60, the mid-point of which implies 2% growth from the 2025 figure of $1.52.
The Zacks Consensus Estimate for Dave’s first-quarter 2026 earnings is pinned at $2.84 per share and has witnessed one upward revision over the past 60 days against one movement in the opposite direction. Dave beat earnings estimates in each of the trailing four quarters, with the average surprise being 54.2%. The consensus estimate for first-quarter 2026 revenues is pegged at $146.1 million, implying 35.3% year-over-year growth.
The Zacks Consensus Estimate for GigaCloud Technology’s first-quarter 2026 earnings is pinned at 87 cents per share and has witnessed one upward revision over the past 60 days, against no movement in the opposite direction. GigaCloud Technology beat earnings estimates in each of the trailing four quarters, with the average surprise being 64.5%. The consensus estimate for first-quarter 2026 revenues is pegged at $344.9 million, implying 26.8% year-over-year growth.
The Zacks Consensus Estimate for GDS Holdings’ first-quarter 2026 earnings is pinned at $1.06 per share and has witnessed one upward revision in the past 60 days, against no movement in the opposite direction. GDS beat earnings estimates in each of the trailing four quarters, with the average surprise being 678.4%. The consensus estimate for first-quarter 2026 revenues is pegged at $440.7 million, implying 17.4% year-over-year growth.
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WU Q1 Earnings Miss Estimates on Higher Costs & Incentive Timing
Key Takeaways
The Western Union Company (WU - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of 25 cents, which missed the Zacks Consensus Estimate by 37.5%. The bottom line declined 39% year over year.
Total revenues were $982.7 million, which marginally declined from the prior-year period's level. However, the top line beat the Zacks Consensus Estimate by 1.7%.
Higher operating expenses, along with a sharp decline in operating income and margin compression across both segments, weighed on first-quarter earnings. Lower fixed cost coverage in owned locations, vendor incentive timing and FX movement also affected the bottom line. The downside was partly offset by resilient revenues and strong growth in the Branded Digital and Travel Money business expansion.
The Western Union Company Price, Consensus and EPS Surprise
The Western Union Company price-consensus-eps-surprise-chart | The Western Union Company Quote
Q1 Performance of WU
Adjusted operating margin fell 600 bps to 13%, caused by higher North America expenses, foreign currency headwinds, and weaker fixed cost coverage in owned locations.
Total expenses rose 7% year over year to $859.7 million. The year-over-year increase resulted from the higher cost of services and SG&A expenses.
Operating income of $123 million declined 31% year over year and lagged our estimate of $169 million.
Segment Analysis of WU
The Consumer Money Transfer segment recorded revenues of $845.4 million in the first quarter, which slipped 3.2% year over year. The figure exceeded both the Zacks Consensus Estimate of $836.2 million and our model estimates of $838.6 million.
Operating income declined 31% year over year to $110.5 million. The metric missed the consensus mark of $144.8 million and our estimate of $141.5 million. The operating income margin declined 500 bps year over year to 13%.
Transactions within the CMT segment, on an adjusted basis excluding Iraq, dipped 6% year over year. There was 21% transaction growth in the Branded Digital business. Branded Digital revenues, which accounted for 32% of CMT’s first-quarter revenues, rose 9% on a reported basis and 6% on an adjusted basis.
The Consumer Services segment’s revenues rose 24% year over year on a reported basis and 33% on an adjusted basis, reaching $137.3 million in the quarter. Growth was driven by the expansion of the Travel Money business and increased revenues from the bill payment segment. The metric beat the Zacks Consensus Estimate of $130.9 million.
Operating income totaled $16.2 million, which decreased 40% year over year. The metric missed the consensus mark as well as our estimate. The operating income margin declined 1,200 bps year over year to 12%.
WU’s Financial Position (As of March 31, 2026)
Western Union exited the first quarter with cash and cash equivalents of $909.2 million, which decreased from the 2025-end level of $1.2 billion. Total assets of $8.1 billion declined from $8.3 billion at 2025-end.
Borrowings totaled $2.6 billion, down from $2.9 billion at 2025-end.
Total stockholders’ equity declined to $910.5 million from $957.8 million at the end of 2025.
WU generated net cash from operations of $109 million in the first quarter, down from $148.2 million in the year-ago period.
Western Union’s Capital Deployment
Western Union rewarded its shareholders with $74 million in dividends and share buybacks worth $45 million in the first quarter of 2026.
WU’s 2026 View
Management reaffirmed its guidance for 2026. Adjusted revenue growth is expected to be between 6% and 9%.
Adjusted EPS is forecasted to be in the range of $1.75-$1.85, the mid-point of which indicates a 2.9% improvement from the 2025 reported figure of $1.75.
GAAP EPS is currently forecasted to be in the band of $1.50-$1.60, the mid-point of which implies 2% growth from the 2025 figure of $1.52.
WU’s Zacks Rank & Key Picks
WU currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Business Services space are Dave Inc. (DAVE - Free Report) ,GigaCloud Technology Inc. (GCT - Free Report) , and GDS Holdings Limited (GDS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dave’s first-quarter 2026 earnings is pinned at $2.84 per share and has witnessed one upward revision over the past 60 days against one movement in the opposite direction. Dave beat earnings estimates in each of the trailing four quarters, with the average surprise being 54.2%. The consensus estimate for first-quarter 2026 revenues is pegged at $146.1 million, implying 35.3% year-over-year growth.
The Zacks Consensus Estimate for GigaCloud Technology’s first-quarter 2026 earnings is pinned at 87 cents per share and has witnessed one upward revision over the past 60 days, against no movement in the opposite direction. GigaCloud Technology beat earnings estimates in each of the trailing four quarters, with the average surprise being 64.5%. The consensus estimate for first-quarter 2026 revenues is pegged at $344.9 million, implying 26.8% year-over-year growth.
The Zacks Consensus Estimate for GDS Holdings’ first-quarter 2026 earnings is pinned at $1.06 per share and has witnessed one upward revision in the past 60 days, against no movement in the opposite direction. GDS beat earnings estimates in each of the trailing four quarters, with the average surprise being 678.4%. The consensus estimate for first-quarter 2026 revenues is pegged at $440.7 million, implying 17.4% year-over-year growth.