SharePoint Online Workflow not Emailing Users

I have a customer sharepoint workflow on a list that is set to run on creating a new item. This is how it works 

1. Email - Specific User
2. Set Workflow Status to - Email Sent

Transition to Stage

Go to End of Workflow

Now when i create a new item the specific user it is suppose to email does not email them. But the workflow status does get changed to Email Sent.

I have the user's email setup in users profile page and we are using exchange 2010 on premise and do not have it connected to our office 365. What can i do to get this to work? any help would be greatly appreciated.

Thanks

Derek