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Research Alert: Wu Q1: Digital Progress Overshadowed By Margin Collapse And North America Drag

-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

WU posted Q1 2026 revenue of $983M (flat Y/Y), beating consensus by $20M, while adjusted EPS of $0.25 fell 39% and missed the Street's $0.39 estimate. Operating margin compressed to 13% from 18% due to higher expenses and discrete items, including foreign currency losses. The Branded Digital business provided a bright spot with 9% revenue growth and 21% transaction growth, now representing 32% of CMT revenues, demonstrating progress in transformation efforts, though insufficient to offset traditional retail declines. Management reaffirmed 2026 guidance of 5%-8% revenue growth and $1.75-$1.85 adjusted EPS, contingent on the expected Q2 Intermex acquisition closing. Consumer Services surged 24% to $137M, owing to Travel Money expansion, while Consumer Money Transfer declined 3% with North America falling 11%. We believe WU faces persistent structural challenges as competitive pressures from digital alternatives continue pressuring traditional channels, making margin expansion difficult despite digital momentum.

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