10-K: Shift4 Payments Reports Strong 2024 Results, Announces Global Blue Acquisition

• Shift4 Payments' 10-K filing reports on the company's business, risks, financial performance, and future outlook for the year ended December 31, 2024.
• The company's mission is to redefine commerce by simplifying complex payments ecosystems.
• Shift4 is a leading independent provider of software and payment processing solutions in the U.S., powering billions of transactions annually.
• A key development is the pending acquisition of Global Blue, with a Transaction Agreement signed on February 16, 2025, expected to close on or before September 30, 2025.
• The company's growth strategy includes expanding end-to-end payment volume, merchant acquisition and retention, technology innovation, global expansion, and strategic M&A.
• Shift4 faces substantial competition in the financial services, payments, and payment technology industries.
• The company relies on intellectual property rights, including patents and trademarks, to protect its proprietary software and brands.
• Shift4's operating results are subject to seasonality, with revenue typically strongest in the second and third quarters.
• The company is subject to various U.S. federal, state, and local regulations, as well as regulations outside the U.S., including the Dodd-Frank Act and rules promulgated by card networks.
• Shift4's workforce includes approximately 4,000 employees as of December 31, 2024, with a focus on talent development, inclusion, compensation, and health initiatives.
• The company's principal asset is its interest in Shift4 Payments, LLC, and it depends on distributions from Shift4 Payments, LLC to pay its taxes and expenses.
• As of December 31, 2024, the company had $2,872.5 million total principal amount of debt outstanding.
• The company's Founder, Jared Isaacman, has been nominated to be the next administrator of NASA but intends to remain as the Company's Chief Executive Officer and Chairman of the Board.
• The company's Class A common stock is traded on the New York Stock Exchange under the ticker symbol FOUR.
• The company has not declared or paid any cash dividends on its common stock and does not anticipate doing so in the foreseeable future.

Score: 7

Explanation: The document presents a generally positive outlook with strong financial results and strategic growth initiatives, but also acknowledges significant risks and challenges.

• Significant increase in end-to-end payment volume and adjusted EBITDA.
• Strategic acquisitions of Eigen Payments and Givex Corp. to expand market presence.
• Pending acquisition of Global Blue to further expand global reach.
• Release of valuation allowance against deferred tax assets, resulting in a substantial income tax benefit.
• Strong focus on talent development and employee engagement.
• The company is no longer in a three-year cumulative loss position and is projecting sufficient income in future periods to realize its deferred tax assets.

• The company faces substantial competition in the financial services, payments, and payment technology industries.
• The company is subject to various regulations and compliance requirements, which can be complex and costly.
• The company is exposed to cybersecurity risks and data breaches, which could harm its reputation and result in financial penalties.
• The company's substantial indebtedness could adversely affect its ability to raise additional capital and limit its flexibility.
• The company's Founder has significant influence over the company, which could lead to decisions that are not in the best interests of all stockholders.
• The company is subject to restrictions on dealings with Vectron, which may delay the implementation of its acquisition strategy.

• The consummation of the proposed Merger with Global Blue is subject to numerous risks and uncertainties.
• The company may be unable to integrate the Global Blue business successfully or realize the anticipated synergies and related benefits of the Transactions.
• Substantial and increasingly intense competition worldwide in the financial services, payments and payment technology industries may adversely affect the company's overall business and operations.
• Potential changes in the competitive landscape, including disintermediation from other participants in the payments chain, could harm the company's business.
• Global economic, political and other conditions may adversely affect trends in consumer, business and government spending, which may adversely impact the demand for the company's services and the company's revenue and profitability.
• The company is exposed to fluctuations in inflation, which could negatively affect the company's business, financial condition and results of operations.
• The company's inability to protect its IT Systems and Confidential Information, as well as the IT Systems of third parties the company relies on, from continually evolving cybersecurity risks, security breaches or other technological risks could affect the company's reputation and brand among its merchants and consumers and may expose the company to material financial penalties and legal liability.
• The company collects, processes, stores, and uses data, including personal information, which subjects the company to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and marketing across different markets where the company conducts its business.
• The company is subject to a variety of laws and regulations, including those relating to financial services, anti-money laundering, anti-bribery, sanctions, and counter-terrorist financing, consumer protection, and cryptocurrencies in various jurisdictions where the company conducts its business.
• The company may not be able to continue to expand its share of the existing payment processing markets or expand into new markets which would inhibit the company's ability to grow and increase its profitability.
• As the company expands into new markets, the company is subject to additional risks associated with its international operations, including compliance with and changes in foreign regulations and governmental policies.
• The company's services and products must integrate with a variety of operating systems, software, devices, and web browsers, and the company's business may be materially and adversely affected if the company is unable to ensure that its services interoperate with such operating systems, software, devices, and web browsers.
• The company depends, in part, on its merchant and software partner relationships and strategic partnerships with various institutions to operate and grow its business.
• The company's Founder has significant influence over the company, including control over decisions that require the approval of stockholders, including a change in control.
• The company's balance sheet includes significant amounts of goodwill and intangible assets.
• The company's substantial indebtedness could adversely affect its ability to raise additional capital to fund its operations, limit its ability to react to changes in the economy or its industry, expose it to interest rate risk to the extent of its variable rate debt and prevent it from meeting its debt obligations.
• Restrictions on Shift4s dealings with Vectron may delay the implementation of our acquisition strategy and could adversely impact our results of operations.

Shift4 aims to accelerate growth by increasing payment volume through its integrated platform, expanding proprietary software integrations, and extending its footprint into international markets. The company believes these initiatives combine organic growth, technological innovation, and strategic expansion to best position it for success.

• Jared Isaacman intends to remain as the Company's Chief Executive Officer and Chairman of the Board subject to the ratification and confirmation of his nomination by the U.S. Senate, and to retain the majority of his equity interest while reducing his voting power.

Shift4 competes in a highly competitive market with a range of providers, including non-integrated payment processors and integrated payment providers. The company believes it competes favorably based on reputation, domain expertise, scale of distribution channels, breadth of offerings, simplicity, pace of innovation, price, data security, and customer service.

• Shift4 competes with non-integrated payment processors like Chase Paymentech, Elavon, Worldpay, Fiserv, and Global Payments.
• The company also competes with integrated payment providers such as Adyen, Lightspeed, Shopify, Square, and Toast.
• For its hospitality gateway offering, Shift4 competes primarily with Elavon and FreedomPay.
• The document does not provide a direct comparison of Shift4's financial results to those of its competitors, but it does state that Shift4 believes it competes favorably with respect to reputation, domain expertise, scale of distribution channels, breadth of offerings, simplicity and ease-of-use of solutions, pace of innovation, price, data security and customer service.

• Shareholders: The company's financial performance and strategic decisions, such as the Global Blue acquisition, directly impact shareholder value.
• Employees: The company's commitment to talent development, inclusion, and compensation affects employee morale and retention.
• Customers: The company's focus on simplifying commerce and providing innovative solutions impacts the customer experience.
• Suppliers: The company's reliance on third-party vendors and strategic partnerships affects supplier relationships.
• Creditors: The company's substantial indebtedness and compliance with debt covenants impact creditor confidence.

• Complete the acquisition of Global Blue, expected by September 30, 2025.
• Continue to expand end-to-end payment volume and merchant acquisition.
• Further develop and innovate technology and product offerings.
• Continue global expansion efforts.
• Monitor and manage cybersecurity risks and compliance requirements.

• A shareholder filed a putative securities class action against the Company and certain of its current and former executive officers in the U.S. District Court for the Eastern District of Pennsylvania (the Court), captioned OMeara v. Shift4 Payments, Inc., et al., Case No. 5:23-cv-03206-JFL (the OMeara Action).
• On October 13, 2023, another shareholder represented by the same law firm as OMeara filed a similar complaint against the same defendants in the Court, captioned Baer v. Shift4 Payments, Inc., et al., Case No. 5:23-cv-03969-JFL (the Baer Action).
• On November 3, 2023, the Court consolidated the OMeara and Baer Actions and appointed Plaintiff Baer as the lead plaintiff in the consolidated action.
• Lead Plaintiff Baer and Plaintiff OMeara filed an amended complaint on January 5, 2024, purportedly brought on behalf of purchasers of the Company's securities between June 5, 2020 and April 18, 2023, and alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, based on allegedly false and misleading statements about the Company's business, operations, and compliance policies.
• The Company moved to dismiss the consolidated amended complaint on February 19, 2024.
• The Court granted the Company's motion to dismiss on August 14, 2024, with leave to amend.
• Lead Plaintiff Baer filed a second amended complaint on September 3, 2024, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder purportedly on behalf of purchasers of the Company's securities between June 5, 2020 and October 21, 2022.
• The Company filed a motion to dismiss on October 1, 2024.
• On January 22, 2025, the Court granted defendants motion to dismiss with prejudice.

• The company has a service agreement with Jared Isaacman, the company's Chief Executive Officer and founder (Founder), including access to aircrafts and a property.
• During the year ended December 31, 2024, the company made $19.8 million of distributions related to income taxes paid on behalf of Rook, which are included in Distributions to noncontrolling interests in the company's Consolidated Statements of Cash Flows.
• In November 2021, the company implemented a one-time discretionary equity award program for non-management employees.
• The Founder agreed to fund 50% of this program through a contribution of shares of his Class C common stock.
• Rook has entered into margin loan agreements, pursuant to which, in addition to other collateral, it has pledged LLC Interests and shares of the Company's Class A and Class B common stock (collectively, Rook Units) to secure a margin loan.
• In September 2021, the Founder, through a wholly-owned special purpose vehicle (SPV), entered into two variable prepaid forward contracts (VPF Contracts) with an unaffiliated dealer (Dealer), one covering approximately 2.18 million shares of the Company's Class A common stock and the other covering approximately 2.26 million shares of the Company's Class A common stock.

• 1999: Founding of Shift4 Payments, LLC.
• June 9, 2020: Completion of Shift4 Payments, Inc.'s initial public offering (IPO).
• July 2010: The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) was signed into law in the U.S.
• December 2020: Shift4 Payments, Inc. issued an aggregate principal amount of $690.0 million of 2025 Convertible Notes.
• October 2020: Shift4 Payments, LLC and Shift4 Payments Finance Sub, Inc. issued an aggregate $450.0 million principal amount of the 2026 Senior Notes.
• July 2021: Shift4 Payments, Inc. issued an aggregate principal amount of $632.5 million of 2027 Convertible Notes.
• August 2022: Nancy Disman has served as Shift4 Payments, Inc.'s Chief Financial Officer since August 2022.
• August 2021: Karen Roter Davis has served as a member of the Board since August 2021.
• October 2022: Sam Bakhshandehpour has served as a member of the Board since October 2022.
• February 2022: Taylor Lauber has served as Shift4 Payments, Inc.'s President since February 2022.
• March 2022: We entered into a supplemental indenture to allow for the repurchase of capital stock as part of the Market Capitalization exception under the original indenture.
• April 2023: Short seller Blue Orca Capital issued a short report on us, resulting in a decrease in the price of our Class A common stock on the day the short report was issued.
• May 2024: The Board authorized a stock repurchase program (the May 2024 Program), pursuant to which we were authorized to repurchase up to $500.0 million of shares of our Class A common stock through December 31, 2025.
• June 14, 2024: We acquired a majority stake in Vectron, which is based in Germany and a supplier of POS systems to the restaurant and hospitality verticals.
• June 2024: The Company acquired Revel Systems, Inc. (Revel) by acquiring 100% of its common stock for $245.3 million of total purchase consideration, net of cash acquired.
• August 2024: The Issuers issued an aggregate $1,100.0 million principal amount of the 2032 Senior Notes.
• September 2024: Shift4 Payments, LLC (the Borrower) entered into a Second Amended and Restated First Lien Credit Agreement (the Credit Agreement), providing for a $450.0 million senior secured revolving credit facility (Revolving Credit Facility).
• September 2024: We entered into the Settlement Line Credit Agreement (the Settlement Line Agreement), by and between Shift4 LLC, as the borrower, and Citizens Bank, N.A. (Citizens), as the lender, providing for a settlement line of credit with an aggregate available amount of up to $100.0 million (the Settlement Line).
• November 8, 2024: We completed the acquisition of Givex Corp. (Givex) for $127.8 million of cash, net of cash acquired.
• November 18, 2024: We completed the acquisition of Eigen Payments (Eigen) for $115.0 million of cash, net of cash acquired.
• December 2024: President Donald Trump nominated Jared Isaacman, our Founder, Chief Executive Officer and Chairman of the Board, to be the next administrator of NASA.
• February 16, 2025: We entered into a Transaction Agreement with Global Blue Group Holding AG.
• September 30, 2025: Expected completion date of the Offer to acquire Global Blue.
• February 16, 2026: Potential extension date for the Offer to acquire Global Blue.