MoneyGram International posted results that missed top-line expectations, but beat at the bottom as restructuring efforts continued amid weakness within the company’s domestic money transfer business but growth in international corridors.

In terms of headline numbers, adjusted earnings of 12 cents a share beat the Street by a nickel. Revenues of $323.8 million were down 13.6 percent year on year and missed the consensus by roughly $20.5 million.

During the conference call with analysts, CEO Alex Holmes said the quarter was impacted by “slower than anticipated recovery of the U.S. outbound market along with continuing market challenges in the U.S. to U.S. business.”

Holmes said that beyond the U.S., “we returned to growth … in many key corridors,” and that more than half of the company’s top 100 markets had achieved year-over-year transaction growth, a momentum that continued into July. Digital remained a strong point in the quarter, where excluding the U.S., MoneyGram’s online transactions saw 109 percent year-over-year growth, leading to 47 percent revenue growth from this channel from a year ago.

The CEO noted, though, that the rate of decline within the U.S. was 8 percent year on year, where the slowdown actually declined by several hundred basis points.

Digital Efforts

The app and website are now live in 24 countries, according to management. And in further developments related to online efforts, the company said that in initiatives to “fully digitize the agent experience,” MoneyGram rolled out its first web-based agent portals to two countries. Overall, the firm noted, agent satisfaction and ease of use scores have increased 20 percent since the beginning of the year.

Holmes said 70 percent of transactions are initiated on local devices, and that the digital offerings enable MoneyGram to compete with any FinTech or legacy competitor. The company has said that as many as 50 million consumers utilize its platform on an annualized basis, and the company has seen growing numbers of returning customers.

In reference to the Ripple partnership announced in June, Holmes said the two companies had begun facilitating cross-border transactions through a commercial agreement, in which MoneyGram is utilizing Ripple's xRapid blockchain product, as well as XRP, Ripple's cryptocurrency.

“Ripple has become our chief partner for cross-border settlement using digital assets,” said Holmes. “MoneyGram is now live and transacting on the Ripple xRapid platform. We started executing trades earlier this week … we are literally settling currencies in seconds.” Revenue should decline 8 percent through 2019, said the company, though Holmes said the company has been “slightly behind where we expected to be … but the return to growth is picking up speed.”

In reference to analyst questions on pricing, Holmes said digital transactions had been marked by disruptive pricing with new launches of websites, but that pricing has adjusted as the company has settled into new markets, especially outside the U.S. He added, however, that MoneyGram intends to maintain its strategy to be low-priced “and disruptive as [it looks] to grow those platforms and keep acquiring customers on a go-forward basis.” The legacy platform, Holmes noted, had been marked by relatively high prices and challenges to growth, though it has been repositioning that business.

Overall, the CEO said, the trend will be for transactions to outpace revenues, “but the fact that you’ve seen revenue growth against that backdrop is super-positive.”