Teleconferência de resultados do 3T26 da Western Union (WU): economia de custos atinge US$ 80 milhões

A Western Union (NYSE: WU) reportou receita de US$ 1,0 bilhão no 3T26, queda de 1% em relação ao mesmo período do ano anterior em base ajustada. Reduções de custos impulsionaram a rentabilidade sequencial, enquanto a pressão contínua nas remessas de varejo nas Américas e a saída do volume de pagamentos em conta de baixa margem na Arábia Saudita pesaram sobre as perspectivas.

Principais destaques

• A receita ajustada do 3T26 caiu 1% ano a ano, para US$ 1,0 bilhão. As transações de transferência de dinheiro ao consumidor (CMT) cresceram 2%, enquanto a receita ajustada de CMT recuou 2%.
• O LPA ajustado foi de US$ 0,42. A margem operacional ajustada atingiu 18%, abaixo dos 20% registrados um ano antes, mas 300 pontos-base acima do nível do primeiro semestre.
• As transações digitais de marca própria aumentaram 21% e a receita ajustada cresceu 8%. No entanto, o parceiro saudita em processo de rescisão contribuiu com cerca de 50% do crescimento da receita digital de marca própria durante o trimestre.
• A Western Union identificou mais de US$ 80 milhões em economia anualizada (run rate) de despesas operacionais, superando sua meta original para o encerramento do ano de US$ 50 milhões.
• A administração espera que a receita orgânica ajustada de 2026, excluindo a Intermex, registre queda de 1% a 2%. A projeção de LPA ajustado para o ano completo foi elevada em US$ 0,03, para a faixa de US$ 1,28 a US$ 1,38.
• Aproximadamente US$ 20 milhões em USDPT estavam em circulação, com volume de transações de cerca de US$ 150 milhões a US$ 200 milhões a cada 30 dias.

Principais dados financeiros

Desempenho operacional e dos negócios

As remessas de varejo nas Américas continuaram sendo o principal ponto de pressão. A administração afirmou que o crescimento das transações de varejo na América do Norte melhorou em 400 pontos-base do 1T até outubro. Em todos os canais, o corredor EUA-México melhorou 600 pontos-base frente ao 4T25, embora tenha permanecido em declínio.

Foi registrado crescimento em corredores que incluem dos EUA para Jamaica, Filipinas, Quênia e Tailândia. Venezuela, Nicarágua e Guatemala continuaram desafiadoras. A gestão acredita que o crescimento geral das transações originadas nos EUA pode se tornar positivo em 2027, a depender do desempenho dos corredores, de parcerias estratégicas e de tendências de imigração.

O canal digital continuou sendo o principal motor de crescimento. As transações tanto originadas quanto pagas digitalmente aumentaram mais de 20%, com a receita avançando a dois dígitos. As transações originadas no varejo e liquidadas digitalmente cresceram cerca de 20% a partir de uma base menor. Os pagamentos sem dinheiro em espécie (non-cash) representaram mais de 20% das transações de varejo na América do Norte.

A Western Union interrompeu o volume de pagamentos em conta com um grande parceiro saudita após a rentabilidade das transações se deteriorar. A administração citou mudanças nos reembolsos da Pakistan Remittance Initiative, custos de capital mais altos e forte concorrência. A decisão deve reduzir o crescimento digital de marca própria ao longo dos próximos trimestres, mas não deve afetar materialmente o lucro, já que a operação apresentava margens baixas.

A plataforma digital Beyond já está em funcionamento no Canadá, Argentina, Panamá e Peru, com lançamento limitado no Chile. A Western Union planeja lançamentos na Dinamarca, Noruega, Suécia e Finlândia, seguidos por México, Austrália e EUA no primeiro semestre de 2027. A plataforma foi projetada para consolidar mais de 40 aplicativos em um número reduzido de aplicações regionais.

O programa de eficiência Beyond gerou mais de US$ 80 milhões em economias anualizadas (run rate) identificadas. As medidas incluíram um corte de mais de 500 postos de trabalho em tempo integral e um programa de demissão voluntária previsto para abranger quase 150 funcionários. A Western Union também acelerou os planos para transferir seu centro operacional regional das Américas da Costa Rica para a Guatemala, uma mudança que a administração espera gerar mais de US$ 25 milhões em economia quando totalmente implementada. Os custos de reestruturação relacionados foram de quase US$ 40 milhões.

Em ativos digitais, o USDPT é emitido pelo Anchorage Digital Bank e desenvolvido na rede Solana. Dois agentes latino-americanos já utilizavam a liquidação em USDPT, com outros agentes em processo de integração. A Western Union também lançou o Stablecard, combinando uma conta USDPT com um cartão com garantia (secured card) da Visa. A administração planeja lançar o Receiver Redirect antes do encerramento de 2026.

Projeções da administração

A Western Union apresentou suas perspectivas de receita para 2026 sob dois cenários:

• Caso a aquisição da Intermex seja concluída até 10 de novembro, a administração espera um crescimento da receita ajustada de 0% a 1%, incluindo a aquisição.
• Excluindo a Intermex, a expectativa é de que a receita orgânica ajustada recue de 1% a 2% no ano.
• A receita orgânica do 4T deve ser ligeiramente mais fraca do que a dos primeiros nove meses, refletindo a saída dos pagamentos em conta na Arábia Saudita e receitas mais brandas de travel money e ordens de pagamento no varejo.
• O LPA ajustado para o ano inteiro deve ficar entre US$ 1,28 e US$ 1,38, representando uma melhora de US$ 0,03 em relação à projeção inicial.
• As despesas de capital para o ano todo devem ser de aproximadamente US$ 190 milhões, devido à conquista de parceiros estratégicos e a um ciclo de renovações mais intenso.

A administração afirmou que a projeção pressupõe estabilidade macroeconômica. As recompras de ações continuam suspensas, já que a Western Union mira uma relação dívida/EBITDA de 2,5x a 3,0x.

Riscos e pontos de atenção

• O desempenho do varejo nas Américas permanece exposto às tendências de imigração. A gestão afirmou que o saldo migratório negativo em 2025 e 2026 limitou a recomposição de sua base de clientes.
• A rescisão com o parceiro saudita reduzirá o crescimento de transações e receitas digitais de marca própria no curto prazo, embora a administração espere impacto limitado no lucro.
• O crescimento de travel money desacelerou em meio à pressão macroeconômica europeia e exige maior cobertura de custos fixos do que diversas outras operações.
• A transição de pagamentos em dinheiro para pagamentos em conta reduz a receita por transação e exige que a Western Union estabeleça conexões com parceiros em condições economicamente favoráveis.
• A transação com a Intermex ainda requer a aprovação de mudança de controle na Califórnia. 10 de novembro de 2026 é o prazo-limite (outside date) do acordo de fusão, após o qual qualquer uma das partes poderá rescindir o contrato.
• A implementação do programa de eficiência Beyond envolve despesas não recorrentes de reestruturação e risco de execução, à medida que a Western Union reduz custos enquanto continua financiando projetos estratégicos.

Destaques da sessão de perguntas e respostas com analistas

A administração afirmou que a economia anualizada de US$ 80 milhões decorre principalmente de aposentadorias precoces, reestruturação nas funções de tecnologia e produto, melhorias nos fluxos de trabalho com suporte de IA e ganhos de eficiência em centros operacionais. As áreas de investimento foram blindadas, e a empresa não espera um impacto relevante em sua capacidade de execução.

A Western Union destacou diversas iniciativas de distribuição. A operação com o Canada Post entrou em funcionamento em setembro, enquanto a com o Deutsche Post continua ganhando escala na Alemanha. A parceria com a Total Wireless, da Verizon, já havia sido lançada em cerca de 850 pontos de venda até o final de outubro, com a gestão almejando 1.000 até o final do ano e maior expansão em 2027.

A administração descreveu a questão dos pagamentos em conta na Arábia Saudita como específica de um mercado no qual exigências regulatórias de licenciamento aumentam a dependência de parceiros locais. A companhia afirmou que não há outros negócios similarmente grandes e de margem muito baixa gerando a mesma preocupação no momento.

A divisão de Serviços ao Consumidor continua mirando um crescimento de dois dígitos ao longo do tempo. A administração apontou o Stablecard, a rede de ativos digitais e os recursos planejados de pagamento internacional de contas como potenciais motores de crescimento a partir de 2027.

Transcrição completa da teleconferência de resultados

Transcrição completa da teleconferência de resultados

Comentários da administração

Operator

Good day, and welcome to the Western Union Third Quarter 2026 Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Tom Hadley, Vice President of Investor Relations. Tom, please go ahead.

Tom Hadley

Thank you. On today's call, we will discuss the company's third quarter results and full year 2026 outlook, and then we will take your questions. 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 release.

Joining me on the call today is our CEO, Devin McGranahan; and our CFO, Matt Cagwin. 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 2025 Form 10-K for additional information concerning factors that could cause actual results to differ materially from the forward-looking statements. During the call, we will discuss some items that do not conform to generally accepted accounting principles. Where possible, we have reconciled those items to the most comparable GAAP measures in our earnings release attached to our Form 8-K as well as on our website, westernunion.com, under the Investor Relations section.

I will now turn the call over to our Chief Executive Officer, Devin McGranahan.

Devin McGranahan

Good afternoon, and welcome to third quarter 2026 Financial Results Conference Call. The last 18 months have been a difficult period for the remittance industry, particularly for those of us with relatively large retail franchises in the Americas. We have seen both an overall decline in the retail market and an acceleration of the shift towards digital. Our Americas digital business has held up much better than our retail business. That said, we are seeing signs of gradual improvement with the North America retail transaction growth rate improving by 400 basis points from the first quarter through October. This is mirrored in key corridors such as U.S. to Mexico, where we have seen a 600 basis point improvement in transaction growth rates across all channels since the fourth quarter of last year.

We are now seeing growth in key corridors such as U.S. to Jamaica, U.S. to Philippines, U.S. to Kenya and Thailand. And while U.S. to Venezuela, Nicaragua and Guatemala remain challenging. Given these trends, we remain optimistic that overall transaction growth from the U.S. has the potential to turn positive in next year. As has been the case throughout this difficult period, our business benefits from our broad offerings and our global footprint. As a result, in the third quarter, we continued to see more normalized performance despite the strong macro headwinds we continue to face in the Americas. This enabled us to report revenue of $1 billion, which on an adjusted basis was a decline of only 1% year-over-year. Consumer Money Transfer, or CMT transactions grew 2% in the quarter and CMT revenue declined just 2%, a 100 basis point improvement from the second quarter. Adjusted earnings per share were $0.42 in the quarter. This was ahead of our expectations as we have made substantial progress on our Beyond efficiency program, which I will discuss in greater detail later in my prepared remarks.

Our branded digital business continued to perform well in the quarter with transactions up 21% and adjusted revenue up 8%. Results were again supported by strong growth in our Middle Eastern digital business, where we continue to see meaningful transaction growth from Saudi Arabia. In September, based on unit level economics, we decided to reduce our payout to account volume with one of our larger Saudi partners. As we work to strengthen our operating margins in the back half of the year, we no longer view this business as economically viable.

Transaction level profitability has continued to deteriorate due to recent changes in the reimbursement from the Pakistan Remittance Initiative, or PRI, a higher cost of capital associated with this business and intense competition in the Saudi market. This decision will likely lead to meaningfully lower branded digital results in the next few quarters, particularly in transaction growth rates. However, given the low margin of this business, we do not expect a meaningful impact on profits.

In Consumer Services, adjusted revenue grew 4% in the quarter versus the prior year quarter, in line with the mid-single-digit growth we discussed last quarter, driven by growth in our bill pay business.

While there is still plenty of room for improvement, I am pleased with our overall financial results in the quarter as I believe they reflect significant improvement in execution by the team in a difficult operating environment. Our adjusted operating margin increased to 18% in the quarter, a 300 basis point improvement over the first half of the year.

A key driver of this improved operating performance was the actions we began taking in the second quarter to better align our cost structure with the realities of becoming a more digital-first company. As I discussed last quarter, our brand, customer relationships, market position and digital capabilities continue to provide a strong foundation on which to build. However, we must accelerate the transformation of our operating model so that we can continue investing in our next-generation digital initiatives while significantly lowering our ongoing operating costs. Our goal was to reduce run rate operating costs by $50 million by the end of the year. We are now on track to meaningfully exceed that goal with actions taken to date representing more than $80 million in run rate operating expense savings.

Last quarter, we outlined the five key pillars of our Beyond efficiency program. We have made progress across all five. A few highlights include accelerating the relocation of our Americas regional operating center from Costa Rica to Guatemala, we now expect the transition to take place in the first half of next year. Once fully implemented, we believe this change will generate more than $25 million in savings for the company. Executing a meaningful restructuring during the quarter that will allow us to continue evolving our workforce and focus on our most compelling projects. These actions resulted in a reduction of more than 500 FTEs. We launched a voluntary retirement program where we expect nearly 150 full-time employees to accelerate their retirement before year-end. Finally, we have successfully implemented AI in our treasury funding operations, our customer care Q&A function, HR support and in technology engineering, improving performance and reducing manual effort. We believe the adoption of our platform and these tools is now broad enough to continue to drive ongoing innovation and additional benefits across the company. These initiatives are designed to create a leaner organization while maintaining our ability to invest in our most important strategic priorities. Although Beyond efficiency program lowers ongoing operating costs, implementing these changes also entails onetime costs as reflected in the quarterly financial results we released this afternoon. We are encouraged by the momentum we have built through this program, and I look forward to updating you on our continued progress in the coming quarters.

Long-term success of our shareholders depend for our shareholders, depends on transforming Western Union from a predominantly retail cash-to-cash consumer remittance company into a digital-first omnichannel consumer financial services company. We have many of the assets and capabilities needed to make this possible. However, a transformation of this scale at a large public company is neither easy nor seamless.

We experienced challenges earlier this year as the disruption to our legacy business model outpaced our ability to transform our cost structure. Following this past quarter, I believe we are moving our cost structure back into alignment with the pace of change in our business. Our three platforms for future growth are our global digital remittance business, our omnichannel consumer services business and our U.S. dollar payment token or USDPT, stablecoin platform and related initiatives.

Our digital payout remittance business continues to perform well. Transactions originated and paid out digitally grew 20-plus percent with revenue up double digits compared to prior year. Transactions and revenue originated at retail and paid out digitally grew about 20%, albeit from a smaller base. Our branding, pricing and payout network enables us to succeed in this growing and competitive market. We are confident that this is the future of the remittance business and believe we are well positioned to continue to win. Success will depend on how effectively we manage our business as the market continues to move away from cash transactions. For example, noncash funding accounted now for more than 20% of our North American retail transactions in the quarter, putting us in what we believe is a leading position as retail also evolves towards digital funding and digital payout.

As we accelerate our digital transformation, a key to success is ensuring that our customer-facing experiences are and remain best-in-class. This is an area where we have historically lagged. I am, therefore, pleased with the continued pace of the rollout of our Beyond digital platform, which we believe will put us at the forefront of digital remittance experiences. We have launched the platform in Canada and are now accelerating the rollout across other markets. The platform is now live in Argentina, Panama and Peru and is in the family and friends phase of rollout in Chile. We plan to launch in Denmark, Norway, Sweden and Finland in the coming weeks, followed by Mexico, Australia and U.S. in the first half of 2027. The Beyond platform is expected to improve customer onboarding and the user experience while enabling us to deploy updates and make changes much faster. It simplifies our technology footprint from the more than 40 applications we have today to a small number of regional applications, creating a more scalable and efficient platform as well.

In addition to improving our customer-facing applications, we are focused on digital delivery. Payout to account is by far the fastest-growing part of our business. Expanding our network to reach the endpoints where customers want as efficiently as possible is one of our highest priorities. On a recent call, we discussed the rapidly evolving payout market in Colombia, where we believe it is a microcosm of the global market. It illustrates the power of digital delivery when a real-time payments network, an active banking market and a well-funded digital wallet coexist in the same ecosystem.

Speed and access are and will remain competitive differentiators. We need connections to the right partners on economically favorable terms so that we can price transactions competitively, deliver them in real time and earn attractive margins. When done correctly, revenue per transaction is indeed lower, but so is the cost of delivery, allowing us to offer a compelling consumer experience while still earning an attractive margin.

Managing the difference in unit economics between cash payouts and account payouts as the market transitions will be important to our success. Our goal is to ensure that we emerge with a strong position in this evolving market. It would be easy for us to rely on cash payout economics for as long as possible, but we believe doing so would risk seeding the future of the market to newer, more digitally focused players. This is the lesson we learned from our U.S. domestic money transfer experience over the past decade.

I would now like to discuss our third growth engine. In the last three months, we have made significant progress and are now gaining traction in the market with our USDPT platform. We currently have about $20 million in USDPT in circulation and are seeing approximately $150 million to $200 million in transaction volume every 30 days. As a reminder, our objective is straightforward: use regulated digital assets to improve how Western Union settles with its agent network, connect digital value to real-world liquidity and give customers practical ways to hold and spend dollar value. We believe Western Union is uniquely positioned to address the core challenges in this space, cross-border settlement, last-mile access, trust, compliance and distribution. We launched USDPT in May as a U.S. dollar-denominated payment stablecoin, fully backed by U.S. dollars issued by Anchorage Digital Bank and built on Solana. It is the first -- its first purpose is institutional, to create a near instant 24/7 settlement layer between Western Union and our agents. Over time, we expect that this can reduce the latency and fragmentation of the traditional correspondent banking, lower idle cash balances and allow us to deploy liquidity more dynamically across our network.

In June, ByBit became the first major crypto exchange to integrate USDPT, creating an on- and off-ramp in select Latin American markets that allow our agents to convert USDPT into local currency. Two agents are now using our USDPT settlement capabilities in that region and several more are onboarding -- are in the onboarding process. In August, we launched Stablecard by Western Union, which combines a USDPT account with a Visa secured card. It allows consumers to receive Western Union transfers, hold USDPT and spend wherever Visa is accepted. If you have not done so already, I encourage you to search for Stablecard by Western Union in the App Store and download the Western Union USDPT app and give it a try. This product is particularly relevant in markets where consumers face currency volatility or limited access to dollar-denominated value. The goal is not to ask customers to become crypto experts. It is to give them a simple compliant experience that lets them preserve value and use it immediately for purchases or cash access.

Receiver Redirect, which we plan to launch before the end of the year, brings these pieces together. Ascender can initiate a transfer through Western Union. The value can move on the blockchain using USDPT and the recipient can receive and hold that value. It creates a direct connection between our global money movement network, our digital asset ecosystem while expanding customer choice in how funds are received and used.

Our near-term focus is disciplined scaling. This means expanding our availability market by market, adding high-quality partners, building liquidity and reliability and embedding compliance at every step. We will move deliberately because trust is central to our brand and regulatory requirements differ by jurisdiction. We will measure progress by adoption and utility, not headlines. Key indicators will include settlement volumes, receiver redirects, market expansion, customer engagement and the economics of these new transaction flows. As these capabilities scale, we expect to learn quickly, refine the customer experience and prioritize the use cases with the clearest path to sustainable returns.

Stepping back, digital assets reinforce the broader transformation of Western Union. We have global reach, a trusted brand, deep regulatory capabilities and a differentiated ability to connect digital and physical channels. USDPT gives us a settlement foundation. The digital asset network extends access and stable card creates everyday consumer utility. We are still in the early stages of this initiative and execution remains the priority. But the strategy is tangible, the products are launching and the partner ecosystem is developing. Our goal is to make digital assets useful on a global scale. faster and more efficient behind the scenes, simple and practical for customers and grounded in the trust and compliance that have defined Western Union for generations.

Before I conclude, I would like to give a quick update on Intermex. We have now passed our second HSR review window, which expired on November 2, again, clearing us of the HSR review requirement as laid out in the merger agreement. We are actively engaged in discussions with California regulators around their change of control approval, a requirement needed to close the transaction. We have recently received feedback from the DFPI and are actively working to determine an acceptable path forward. November 10, 2026, is the outside date included in the merger agreement, at which point either party has a right to terminate the agreement.

In closing, our financial results this quarter better reflected our underlying business, and we remain confident in our ability to continue to improve performance and unlock the value that exists within this franchise. We are focused on driving growth through our digital initiatives, improving efficiency throughout the organization, allocating capital with discipline and executing against a well-defined strategic plan. We recognize that rebuilding momentum requires both patience and execution. However, we believe the actions that we are taking today will position the company for a stronger future. We appreciate the continued support of our shareholders and the dedication of our employees who remain committed to serving our agents and our customers and advancing our strategy. While there is significant work ahead, we are focused on delivering the results that drive long-term value for our shareholders.

Thank you, and I will now turn it over to Matt to review our financial results and outlook.

Matthew Cagwin

Thank you, Devin, and good afternoon, everyone. I'm going to provide additional color on our third quarter results as well as update you on our 2026 financial outlook.

In the third quarter, GAAP revenue was $1 billion, which on an adjusted basis was down 1% compared to the prior year period. The decrease was driven by a continued slowdown of our Americas retail business, partially offset by growth in our branded digital and consumer services businesses, which grew 8% and 5% on an adjusted basis. Adjusted revenue was slightly lower than our expectations, mainly due to ceasing account payout transactions for one of our larger Saudi partners, as Devin mentioned earlier.

Adjusted operating margins was 18% in the quarter, down from 20% in the prior year period, which was mainly impacted by revenue mix and higher agent signing bonuses. That said, adjusted operating margin improved substantially relative to the first half of the year, reflecting the early benefits of our Beyond efficiency program. We are beginning to see the results of our efforts come through with cost reductions across the organization, helping to offset revenue pressures and support margin performance. Compared to the first half of the year, we have demonstrated improved cost discipline with the benefits of these actions contributing to stronger sequential margin performance while we continue to make progress towards our longer-term efficiency goals.

As Devin mentioned, there remains significant opportunity ahead as we continue to execute our Beyond efficiency program across the business. I'm pleased to say that we're ahead of our plans of achieving $50 million of annualized run rate savings by the end of this year, driven by the actions executed to date. We believe this outperformance is setting us up well to deliver against our 2027 Beyond efficiency targets. These actions have resulted in almost $40 million in restructuring costs related to our Beyond efficiency program, primarily related to severance and early retirement costs. We expect the benefits from these actions to flow through our financial results over the next several quarters. These actions are expected to further improve our cost structure, enhance our operating leverage and drive sustainable margin improvement. Adjusted EPS came in at $0.42 in the current quarter, which was better than expected due to the timing of expenses, accelerated benefits from our Beyond efficiency program and a lower tax rate. Our adjusted effective tax rate in the quarter was 9% compared to 12% in the prior year period. The decrease in our adjusted effective tax rate was primarily due to discrete expenses in the prior year period, partially offset by a proportional impact of lower forecasted full year pretax income.

Now turning to Consumer Services business, which contributed 15% of total revenue this quarter. Consumer Services adjusted revenue grew 5%, consistent with our expectations, driven by growth in our bill pay business. As mentioned last quarter, we expected Consumer Services adjusted revenue growth to slow as we lap the acquisition of Eurochange and exited unprofitable product lines.

Now transitioning to our Consumer Money Transfer or CMT business. CMT transactions grew 2% in the quarter compared to a year ago. This was driven by continued strength in our branded digital business, which delivered 21% transaction growth in the current quarter. CMT adjusted revenue declined 2% year-over-year, which was a 100 basis point improvement from the second quarter. Retail trends in the Americas remain under pressure, although the strength of our digital business enabled us to deliver improved revenue growth, demonstrating the resilience of our franchise and progress that we're making on our strategic initiatives.

In the third quarter, our branded digital business grew adjusted revenue by 8% and transactions by 21%. This marks the 12th straight quarter of solid revenue growth. Our Middle Eastern partnerships have contributed meaningfully to digital transaction and revenue growth over the past year. Beginning in the fourth quarter, we expect both branded digital transactions and revenue to be lower as we have made the decision to move away from one of our partners' account payout business due to low profitability per transaction. While we anticipate a near-term impact on revenue, we remain confident in the strength of our broader digital strategy and growth opportunities across the platform. To help everyone with modeling, this partner contributed about 50% of branded digital revenue growth this quarter.

Turning to our retail business. Overall performance in our retail business was in line with previous quarter on both a transaction and revenue basis. The business remains challenged in the Americas as U.S. immigration policy continues to weigh on our operating results. New migration is the lifeline of our retail business and current migration trends have limited our ability to replenish our Americas customer base. Due to these pressures, we're focused on retaining and expanding our strategic partner base. As discussed earlier this year, we won the Canadian Post partnership, and I'm happy to share that they went live in September, and they're already making a difference.

Now turning to our cash flow and balance sheet. We have generated $321 million in operating cash flow year-to-date. This is down 21% versus last year, driven by our lower net income. Year-to-date, capital expenditures were $130 million or roughly 30% higher than prior year due to signing bonuses associated with recent agent wins and renewals. As discussed earlier, we expect CapEx to be roughly $190 million this year due to the new strategic partnership wins as well as a higher renewal cycle.

Moving to our balance sheet. At the end of the quarter, we had cash and cash equivalents of $1.1 billion and debt of $2.9 billion. Our leverage ratios were 3.3x and 2.0x on a gross and net basis. Our debt and cash balances include a $400 million in commercial paper that we took out in July in anticipation of closing Intermex. Without this balance, our gross leverage ratio would have been roughly 3.0x.

In the quarter, we've returned over $70 million to our owners via dividends. As we mentioned last quarter, we have paused our buyback activity to support our goal of maintaining a debt-to-EBITDA ratio of 2.5x to 3x.

Now moving on to our 2026 outlook, which assumes no macroeconomic changes. Today, we're presenting our guidance this quarter, both with and without the acquisition of Intermex closing by November 10. Based on our performance to date, our views on the remainder of the year and if the acquisition of Intermex is able to close on November 10, we expect adjusted revenue to be in the range of flat to plus 1%, inclusive of the Intermex acquisition. Excluding Intermex -- excluding the Intermex acquisition, our organic business is expected to be down in the range of minus 2% to minus 1% this year, with Q4 slightly lower than the first nine months of the year due to the impact of exiting account payout transactions with one of our Saudi partners, which will affect our branded digital business. We also expect softer consumer services revenue in the fourth quarter due to softness in our travel money business and our retail money order business. Our adjusted EPS for the full year, we believe, will be in the range of $1.28 to $1.38. This is an improvement over our original guidance of $0.03.

Before turning the call over to the operator, please understand that we'll be limited on what we can say in regards to the Intermex transaction. We are actively working with the state of California regulators to continue to try and reach a resolution. We do not plan to give any additional color other than what we stated in the prepared remarks.

Thank you for joining the call today. And operator, ready to take questions.

Operator

[Operator Instructions] Our first question comes to us from Darrin Peller at Wolfe Research.

Perguntas e respostas

Darrin Peller

Let me ask you first, just a bigger picture question just post the election, obviously. I mean, I suppose we'll see what may change from a legislative standpoint, whether it's immigration related or not. But do you believe you have the infrastructure prepared in case we do see a greater influx from an immigration standpoint? Anything you would have to change from that standpoint to see the tailwinds that could come?

And then just as a side question, I'll put them both in one. The digital side of the business, when I look at trends, it continues to show, obviously, the impacts of some of the white labeled offerings. I'm curious what the core -- if you could just characterize the strategy on the core westernunion.com branded offering, what the latest developments are there to see that growth really move in the right direction?

Devin McGranahan

Thank you very much for the question. The first one is quite easy. The good news is it turns out we have relatively significant excess capacity, particularly in the Americas, particularly in our retail business, given the mid-teens declines that we've seen in that business over the course of the last 18 to 24 months. So we stand ready for any change that might happen and tough for us to say, but any change that might happen that would lead to a different stance on immigration and potentially a different flow of migrants and immigrants as Matt was talking, the net negative immigration that's transpired over 2025 and 2026 has been difficult for our business, particularly our retail business.

With regard to our core digital business, our core digital business continues to be focused on serving our customers across the 54 countries around the world where we are licensed and have a digital presence. We are in the process of rolling out a much more digital native, digital-first platform and application, as I highlighted in the prepared comments. We're also thinking about how we rethink potentially our stance in the Middle East. We recently made an investment in a minority share of a partner in a Middle Eastern country so that we can gain greater control and launch a digital wallet in the region. We're also looking at other partnerships potentially in Saudi Arabia, where, again, it could be less of a transactional model that we exited and more of a partnership model given the strength of the Western Union brand and payout network that some other partners might see value in. So we remain optimistic about the overall strategy and the approach and expect to see the benefits of the rollout of the Beyond platform here as we go into 2027.

Operator

Our next question comes to us from Tien-Tsin Huang at JPMorgan.

Tien-Tsin Huang

Just on the -- you're working really fast on the cost side. So if I heard correctly, now $80 million in run rate savings from the original $50 million you targeted. Just curious where those savings were found. Any revenue risk that might come with the changes? Any other detail you can share would be great.

Matthew Cagwin

Tien-Tsin, thanks for joining the call. Thanks for the question. That $80 million is split across a couple of different fronts. As Devin talked about in the prepared remarks, we have done an early retirement program, which really touched a small portion of lots of different teams across the North America platform that helped folks accelerate their retirement. That's providing a fair bit of that number.

The other big chunks that we have is we did a restructuring program where employees are currently leaving in the last six weeks into the remainder of the year that's got a heavy impact on the technology and product departments. When we looked at those functions, we're seeing a meaningful impact and a benefit of AI and the ability to streamline that work and some further benefits coming as well as our operations center.

You've heard Devin talk now for the last probably three, four years of it, we continue to improve on our operation centers and how many calls we get per transaction, and that's continued to provide volume and benefits. We don't expect any meaningful impact on our ability to go forward. We've ring-fenced all the investment areas, and that's our objective as we move forward.

Devin McGranahan

The one place, and we talked about this in the last quarter, we did make the decision as we transition now to the Beyond platform to shut the last generation digital wallet platform that we had in Europe. There is a small amount of revenue associated with that, that Matt can delineate. But it really was a way to get ahead of the rollout of the new platform, consolidate and save a lot on the tech infrastructure side. And so the trade-off on that for a little bit of revenue that we were going to lose, I think, we deemed as worthwhile.

Tien-Tsin Huang

Perfect. Understood. So just my follow-up question, just thinking about the -- what's coming in and coming out. I understand the Saudi change. You got the Canada Post ramping that started in September. Can you remind us of any other addition subtractions in terms of agents or deals, partners that can change things sequentially or month-to-month here as we exit the year?

Matthew Cagwin

There's no other big rocks. We are proud that we've been able to renew Publix here in the last couple of months, which is a continuation. But from a things coming in or things going out other than just macro and continued improvement in our business, there's no other big rocks in Q4.

Devin McGranahan

We did win Deutsche Post, which is still scaling.

Matthew Cagwin

Still scaling, yes.

Devin McGranahan

So as you know, we had left Deutsche Post three or four years ago. We won them back as an exclusive agent in Germany, which is one of the opportunities for us as our footprint was quite reduced after the exit of Deutsche Post. And so we're now building that back much more in like an independent agent model with actual local post offices. So it's a little slower to scale, but it will be more sustainable over time as kind of an independent network in Germany.

Tien-Tsin Huang

That's a ramp light switch.

Devin McGranahan

With Verizon's Total Wireless. So Verizon has 3,000 locations in their total wireless brand. It's a value brand. We went live with them both there and in a digital offer. So we're being included in new Verizon Total Wireless value packages with a fee-free transaction for Western Union. I believe, and I'll look to Matt. I think we've gone live with about 850 retail locations through the end of October with the goal to get to 1,000 by the end of the year and then continue to ramp that across their network in 2027.

Operator

Our next question is from Timothy Chiodo at UBS.

Timothy Chiodo

I was hoping we could just circle back a little bit to the large Saudi partner that you mentioned, the exiting of the business. Just to make sure that, that's a completely unique situation. Maybe you could just put a little more color around maybe some of the unique aspects of either the variable costs in that market or the competitive landscape just to get comfort that this is more of a one-off than something that there might be a few others that are similar.

Matthew Cagwin

Tim, thanks for joining the call tonight. Saudi Arabia is a very unique market. As Devin talked about in the prepared remarks. It's a very thin margin. There's lots of tie-ups between agents and directly to countries. We partner -- we have our investment in that country with a partner there called STC, which we've talked about now for the last five, six years. We've got a couple of small partners. And this one, we've been talking about for probably five or six quarters highlighting the benefit to our branded digital business. For most of that time, it was low margin but very successful in ramping, and we were happy with the partnership. That started to change here as we got into Q3 with the PRI change, the incremental working capital challenges that ultimately made them pivot to being more of a -- something that does not make sense go forward. Don't have any others that would fall in that same spectrum of very low-margin businesses that are large that we're watching and worrying about.

Devin McGranahan

I think the other thing that's relatively unique about Saudi, it's true in much of the Middle East, and it goes to my prior comments. These are countries where it's quite difficult for a player like us to have a license. And so where we don't have a license, we're much more dependent on partners and therefore, sharing economics with those partners in some way in which to -- as they actually own the compliance risk and the customer account given it's their license. And so that's not true in most of the rest of our digital footprint in the world. I actually can't think of anywhere outside of the Middle East, it's true at all. So again, it's a very limited business model in that region and in particularly dominant in that country, which is what led us to the investment partnership with STC because it's just a tough problem to solve.

Operator

Our next question comes to us from Nate Svensson at Deutsche Bank.

Christopher Svensson

I wanted to ask on North America and the U.S. in particular. I guess first part of the question, I get the point that the top of funnel and immigration flows in the country is still pressured, but you've talked a lot about retention and improving that over time. So I was hoping for an update on how retention in North America and the U.S. specifically has trended in the third quarter.

And then the follow-up related to that, you had mentioned some corridors that maybe were starting to look a little bit better, and you talked about the potential for this return to growth in 2027. So could you give just more detail on that and what you need to see to get more confident on the return to growth in '27?

Devin McGranahan

Yes. So I would characterize the return to growth based on three things: one, which is, obviously, it would be helpful if immigration flows changed, that would have a probably the most meaningful and short-term impact. The second is to continue to grow our competitive presence in the important corridors of which we're competing and doing well in a number, which I highlighted some of. As mostly at that point, it is competing for share, whether it's in retail or digital, if the net quantity of new customers in the country is flat to slightly declining. And then the third is continuing to win strategic partnerships. And so when we talk about what we're able to do with Canada Post, when we talk about what we're able to do with Verizon Total Wireless. We view ourselves as the leading player in large partnership-based remittance partnerships. And so that pipeline looks pretty good for us, and we've got a great team working to drive more of those deals in, which will help us continue to do well in North America.

The corridors where we're seeing stability and in some cases, growth tend to be more out of the Loca region, Philippines, Jamaica, the Pacific Islands. We continue to see pressure in Latin America, Nicaragua, Honduras, Venezuela, Haiti. And I think that will continue to be pressured while we have these immigration challenges.

Matthew Cagwin

Nate, just to build on Devin's point with a little math for you. If you just go back to last year and think about Q2, Q3, Q4, our business for North America or the outbound was down high single digit, very low double digit on a revenue basis. That has improved now to the point of we're about 500 basis points better sitting here today in Q3. You say what corridors are really driving that. Devin highlighted a few of the ones and examples. But even the biggest one in the world, Mexico, we've seen it where it was shrinking, call it, high teens in the high point last year to now it's more of a mid-single-digit, low single-digit range. So we're seeing a meaningful improvement in that space.

Operator

Our next question comes to us from Rayna Kumar at Oppenheimer.

Rayna Kumar

Can you talk a little bit about the transaction trends you're seeing into the fourth quarter? And if you're starting to see that stabilization in U.S. retail? And then secondarily, can you just discuss the pricing trends you're seeing in the competitive market, both in your digital and physical retail locations?

Devin McGranahan

Yes. So I think on the transaction trends, we've before seen ups and downs. I think we saw a bit of a slowdown at the end of the third quarter, and we've seen a little bit of a pickup here at the beginning of the fourth quarter in October. And then we've seen a little bit of pickup kind of in late October and early November. I would say Matt had the overall trends right is any given month can go up and down. But over the last six months and over the last 12 months, we've seen steady progress towards stability and in some cases, improving to the point of us believing that at some point in next year, particularly in North America, we could see this thing stabilize and maybe turn into growth.

With regard to digital pricing, look, we see different players acting very differently. There are, I'd say, the major players continue to maintain some discipline in the market. We have not seen, as you can see in the RPTs degradate we have maintained a strategy of remaining market competitive, which was one of the important strategies in '23 and '24 was to go back to being market competitive. And so I would argue that in general, the markets are behaving reasonably rationally, and we've seen the stability in our RPTs while we continue to compete.

Operator

Our next question is from Vasu Govil at KBW.

Vasundhara Govil

Maybe I'll ask one on the travel money business. I know when you guys made the Eurochange acquisition, that was seen as a pretty attractive growth opportunity. And now we've kind of seen some softness in that business. Just curious what's changed? And do you view this softness as just cyclical and something that might rebound here in the near term or something else going on?

Matthew Cagwin

Vasu, thank you very much for the question. I'm going to -- we feel good that we've gotten to the $150 million revenue base as we talked about earlier this year and late last year. This business does come with some higher fixed cost coverage needs than a lot of other parts of our business. As we've cycled through this year, we've seen some pressure with the macros within Europe. As you know, this business is largely a European business for us.

We're still happy with the acquisition. It still surpassed what we expected it to, but the growth rates have slowed. -- we're still open and interested and excited about it, but it will have its ups and downs as the economy moves and people have more discretionary spending.

Devin McGranahan

One of the things that worked out well for us early is winning, again, it's a business that's a little bit like normal Western Union business in which strategic partners, particularly strategic distribution partners play an important role. And so we had won a large grocery store chain in the U.K., which enabled us to have organic growth on top of the acquisition. The team is focused on continuing that, and there's a pretty good pipeline of incremental partnerships that we can add both in the U.K. and across Europe. We continue to expand the travel money offering across our retail footprint. And so outside of the macro, we see the combination of being able to have travel money and remittance in the same location, carrying some of the fit costs, as Matt has described, across two product lines instead of one product line as, again, one of the rationales for the acquisition so that we could take the platform and the capabilities.

We are close to launching a next-generation travel money point-of-sale platform, which will integrate travel money and remittance into the same platform. So we will be able to offer the product across a much broader footprint of Western Union locations. And so that platform which will then sunset the Eurochange platform, I believe, Matt, should go live first quarter of next year, maybe, which will allow us then to expand the product offering at a more rapid rate than we've been able to date.

Operator

Our final question is from Jack Evans at Goldman Sachs.

Jack Evans

I guess a quick follow-up to Vasu's question. Obviously, you called out several headwinds. Obviously, you talked about Eurochange and obviously, you have the media network headwinds as well and then some of the divestitures or some of the pulling back of several noncore initiatives there. I guess how should we be thinking about the growth profile of CS over time? And do you still see that segment as a double-digit grower over time? Just any commentary there would be helpful.

Matthew Cagwin

Jack, thanks for the question. We do -- we are still very bullish about the Consumer Services business. Our aspiration is still to have double-digit growth in that business. Let me talk about a couple of things we're working on that we expect to have some benefits as we go into '27 and beyond. There's two primary ones. Devin spent probably 5, 10 minutes of his prepared remarks on the digital asset strategy. Our Stablecard and our DAN network, both are things that are going to drive overall revenue and help the Consumer Services business as well as we're right now in the process of working on cross-border bill payment.

You heard us talk about earlier today on the call that bill payment by itself is a very beneficial business for us. But the ability to take that and make it cross-border so that people can -- rather than sending your family member EUR 300 or dollars or whatever part of the world they're in and they pay their bills and spread it around, this will enable the sender to actually ensure the money goes where it's supposed to go to be able to do that. We're hoping to have that out early next year or the first half of next year. Both those things should provide some tailwind as we start to move forward.

Jack Evans

Got it. Super helpful. And then just a quick follow-up. obviously, a number of pretty impressive partnerships, and it's great to hear that the -- obviously Deutsche Post and Canada Post are going well. Any -- just out of curiosity, any more of these deals potentially on the come, how you're thinking about partnerships, obviously, in the near to medium future. Anything else that does seem like another future growth lever for you guys? Any incremental color there would be helpful.

Devin McGranahan

Yes. So Jack, I would say we've got a strong pipeline. We've got a great team working on it. We have a compelling value proposition. We've made significant investments in what I would consider to be our partner platform. We actually refer to it as partner OS. It allows much more seamless integration, a much quicker ability to connect capabilities such as payout to account. And so we think we are in a pole position for having a modern up-to-date offering and a compelling package with a great value proposition. So we remain bullish about our opportunity to win more, some cases, de novo like it was with Verizon. In some cases, it will be takeaway. So you can look forward to hearing more from us about that in the quarters going forward.

Operator

Thank you for joining the Western Union Third Quarter 2026 Results Conference Call. We hope you have a great day.