FOUR
Shift4 Payments, INC
NYSE
8-K: Shift4 Payments Announces Strong Q1 Results, New Stock Buyback Program, and Strategic Update
Sentiment:
Quarterly Report
9 May 2024 7:13 AM
Shift4 Payments reported a robust first quarter with significant growth in payment volume and revenue, alongside a new $500 million stock repurchase program and an update on their strategic review.
Better than expected
The company's Q1 results exceeded expectations with a 50% increase in end-to-end payment volume and a 36% increase in adjusted EBITDA, indicating better than expected performance.
Summary
- Shift4 Payments announced its financial results for the quarter ended March 31, 2024, showcasing strong growth.
- End-to-end payment volume reached $33.4 billion, a 50% increase compared to the same quarter last year.
- Gross revenue was $707.4 million, up 29% year-over-year, while gross profit increased by 27% to $175.9 million.
- Gross revenue less network fees totaled $263.7 million, a 32% increase year-over-year.
- Net income for the quarter was $28.5 million, and adjusted net income was $50.5 million, or $0.54 per diluted share.
- Adjusted EBITDA reached $121.7 million, a 36% increase year-over-year, with an adjusted EBITDA margin of 46%.
- The company's board approved a new stock repurchase program authorizing up to $500 million in buybacks, effective immediately and expiring on December 31, 2025.
- Shift4 is providing quarter-by-quarter guidance for the remainder of the year to better reflect the seasonal nature of their business.
- The company has developed a partnership with a major casino operator and signed a deal with Foxwoods, with more in the works.
- Shift4 is expanding internationally, following strategic e-commerce customers into new countries and growing payment volume.
Sentiment
Score: 8
Explanation: The document conveys a strong positive sentiment due to the impressive financial results, strategic wins, and the new stock repurchase program. The management's confidence in the company's future and its ability to continue growing further reinforces this positive outlook.
Positives
- Shift4 experienced significant growth in key financial metrics, including payment volume, revenue, and EBITDA.
- The new stock repurchase program signals confidence in the company's future and provides value to shareholders.
- Strategic partnerships with major casino operators and properties demonstrate the company's expanding market reach.
- International expansion efforts are progressing well, with new partnerships and market entries.
- The company is successfully deploying capital with high returns, including strategic acquisitions and investments.
- SkyTab POS system installations are ahead of schedule, indicating strong product adoption.
- The company is generating strong free cash flow, which can be used for strategic initiatives and shareholder returns.
- Shift4 is winning new business in various verticals, including restaurants, hotels, sports, and entertainment.
Negatives
- Net income was $28.5 million, which is lower than the adjusted net income of $50.5 million due to non-cash and non-recurring items.
- The company's stock price is currently undervalued, according to management.
- The strategic review did not result in a sale of the company, which may disappoint some investors.
- The company is facing competition in the financial services, payments, and payment technology industries.
- The company is reliant on third-party vendors for products and services.
- The company is exposed to cybersecurity risks and data breaches.
- The company is subject to governmental regulations and legal obligations.
Risks
- The company faces intense competition in the financial services and payment technology industries.
- Global economic and political conditions could impact consumer and business spending.
- The company's reliance on third-party vendors poses a risk to its operations.
- Cybersecurity risks and data breaches could disrupt operations and damage reputation.
- Compliance with governmental regulations and legal obligations is a continuous challenge.
- The company's international expansion exposes it to foreign exchange rate fluctuations and compliance risks.
- The company's stock repurchase program may not be conducted as expected.
- The company's future results may differ materially from forward-looking statements.
Future Outlook
Shift4 is providing quarter-by-quarter guidance for the remainder of 2024 and plans to continue its growth strategy through product innovation, customer acquisition, strategic M&A, and share repurchases. The company aims to expand its presence in key verticals and international markets.
Management Comments
- Jared Isaacman, CEO, stated that the company had a reasonably strong quarter despite consensus estimates not capturing the seasonal nature of the business.
- The CEO mentioned that the board received multiple formal offers at a share price premium materially higher than current levels.
- The CEO emphasized that Shift4 is a share-taking winner and is structurally set up to win in its focused verticals.
- The CEO stated that he intends to see the Shift4 story through as CEO and ensure the company's growth is problematic for the competition.
- The CEO highlighted the company's focus on the convergence of software and payments and its ability to buy, build, or partner to succeed.
Industry Context
Shift4's announcement comes amid a competitive landscape in the payment processing industry, where companies are vying for market share through technological innovation, strategic partnerships, and international expansion. The company's focus on integrating software and payments aligns with the broader industry trend of offering comprehensive solutions to merchants. The strategic review and subsequent decision to remain independent reflects a confidence in the company's long-term growth prospects.
Comparison to Industry Standards
- Shift4's 50% year-over-year growth in end-to-end payment volume significantly outpaces the industry average, which is typically in the high single to low double-digit range for established payment processors.
- Companies like Global Payments and Fiserv, while larger in overall scale, have not demonstrated the same level of organic growth in recent quarters, making Shift4 a standout performer in terms of growth rate.
- Shift4's adjusted EBITDA margin of 46% is competitive with industry leaders, but the company's focus on high-growth verticals and strategic acquisitions positions it for further margin expansion.
- The company's focus on end-to-end payment solutions and its success in converting merchants to its platform is a key differentiator compared to companies that primarily offer gateway services.
- The $500 million stock repurchase program is a significant move, indicating confidence in the company's valuation and future cash flows, which is a strategy often employed by mature, profitable companies in the sector.
Stakeholder Impact
- Shareholders will benefit from the new stock repurchase program and the company's strong financial performance.
- Employees will benefit from the company's growth and expansion.
- Customers will benefit from the company's innovative products and services.
- Suppliers and partners will benefit from the company's continued success.
Next Steps
- Shift4 will continue to execute its growth strategy, focusing on product innovation, customer acquisition, and strategic M&A.
- The company will deploy capital in a disciplined way with high returns and opportunistically buy back stock.
- Shift4 will continue to expand its presence in key verticals and international markets.
- The company will provide quarterly guidance for the remainder of the year.
Key Dates
- May 8, 2024: The Board of Directors approved a new stock repurchase program.
- May 9, 2024: Shift4 Payments announced its financial results for the quarter ended March 31, 2024.
- December 31, 2025: The stock repurchase program will expire.
Keywords
payments, fintech, stock repurchase, EBITDA, payment volume, acquisitions, international expansion, SkyTab, POS, casino, hospitality, sports, ticketing
FOUR
Shift4 Payments, INC
NYSE
Sector: TBD
Filings with Classifications
Worse than expected
4 June 2025 9:29 PM
Proxy Statement Supplement
- The previously announced restructuring transactions, which aimed to simplify the company's organizational and capital structure (Up-C Collapse and TRA waiver), have been terminated.
- The termination occurred because a key condition for the restructuring was not met, indicating a failure to achieve a significant strategic objective previously communicated.
Capital raise
16 May 2025 5:03 PM
Debt Offering Announcement
- Shift4 Payments, LLC and Shift4 Payments Finance Sub, Inc. completed the issuance and sale of 680 million aggregate principal amount of 5.500% Senior Notes due 2033 (the Euro Notes) and $550 million aggregate principal amount of 6.750% Senior Notes due 2032 (the New 2032 Notes and, together with the Euro Notes, the Notes).
Capital raise
15 May 2025 4:20 PM
Pro Forma Financial Information
- Shift4 issued 10,000,000 shares of 6.00% Series A Mandatory Convertible Preferred Stock, raising $1,000,000,000.
- Shift4 LLC expects to incur a new seven-year $1,000 million senior secured term loan B facility.
- Shift4 LLC and Shift4 Payments Finance Sub, Inc. are offering 680 million aggregate principal amount of 5.500% senior notes due 2033 (the Euro Notes) and $550 million in aggregate principal amount of their 6.750% senior notes due 2032.
Capital raise
8 May 2025 5:25 PM
Debt Offering Announcement
- Shift4 Payments is issuing €680 million in 5.500% senior notes due 2033.
- Shift4 Payments is issuing $550 million in additional 6.750% senior notes due 2032.
- The company intends to use the proceeds, along with other financing sources, to fund the acquisition of Global Blue and repay existing debt.
Capital raise
5 May 2025 4:35 PM
8-K Filing
- Shift4 Payments issued 10,000,000 shares of 6.00% Series A Mandatory Convertible Preferred Stock.
- The offering generated $1 billion in aggregate liquidation preference.
- The company intends to use the net proceeds from the offering, along with additional debt financing of up to $1,735.0 million, to fund the acquisition of Global Blue Group Holding AG and for general corporate purposes.
Capital raise
30 April 2025 9:24 AM
Capital Raise Announcement
- Shift4 Payments is launching an underwritten public offering of 7,500,000 shares of Series A Mandatory Convertible Preferred Stock.
- The company expects to grant underwriters a 30-day option to purchase up to 1,125,000 additional shares to cover over-allotments.
- Shift4 intends to raise up to $1,735.0 million in additional permanent debt financing.
Capital raise
30 April 2025 7:13 AM
8-K Filing
- Shift4 is proposing to issue $750.0 million Series A Mandatory Convertible Preferred Stock via an underwritten public offering.
- Shift4 expects to grant to the underwriters a 30-day option to purchase up to an additional 15% of shares of Mandatory Convertible Preferred Stock at the public offering price, less underwriting discounts and commissions, solely to cover over-allotments.
- Shift4 and/or Shift4 LLC intend to obtain certain permanent debt financing, both secured and unsecured, of up to $1,735.0 million in order to finance a part of the cash consideration payable by Shift4 to consummate the Merger with Global Blue in lieu of leveraging the Bridge Facilities.
Capital raise
29 April 2025 4:05 PM
Quarterly Report
- Shift4 Payments, LLC (directly or through Shift4 and/or one or more of its subsidiaries) also intends to pursue a permanent financing arrangement with the Commitment Parties, as contemplated by the Debt Commitment Letter, which may include a combination of senior unsecured and/or unsecured notes, mandatory convertible or perpetual preferred equity and/or a senior secured term loan B facility (the Permanent Financing), in each case, on terms and conditions to be set forth in the definitive documentation for such Permanent Financing.
Delay expected
29 April 2025 4:05 PM
Quarterly Report
- Merger Sub announced an extension of the Expiration Time of the Offer until one minute after 11:59 p.m., New York City time, on May 6, 2025.
Better than expected
29 April 2025 7:14 AM
Earnings Release
- The company is raising its full-year guidance for gross revenue less network fees and adjusted EBITDA by $10 million on both the low and high end.
- Shift4 Payments experienced record payment volumes, gross revenue less network fees, and adjusted EBITDA in Q1 2025.
Better than expected
19 February 2025 4:06 PM
Annual Report
- The company's end-to-end payment volume increased by 51% to $164.8 billion for the year ended December 31, 2024.
- Gross revenue less network fees increased by 44% to $1.35 billion.
- Adjusted EBITDA increased to $677.4 million, compared to $459.9 million in the previous year.
- The company released a valuation allowance against certain deferred tax assets, resulting in an income tax benefit of $296.1 million.
Capital raise
19 February 2025 4:06 PM
Annual Report
- Shift4 Payments, LLC, entered into a commitment letter with Goldman Sachs Bank USA (GS), pursuant to which GS has committed to (i) provide Shift4 Payments, LLC with 364-day bridge loan facilities in an aggregate principal amount of $1.795 billion (the Bridge Facilities), consisting of (x) a senior secured 364-day bridge loan facility in an aggregate principal amount of $1.0 billion (the Senior Secured Bridge Facility) and (y) a senior unsecured 364-day bridge loan facility in an aggregate principal amount of $795.0 million (the Senior Unsecured Bridge Facility), in each case, subject to customary conditions, and (ii) to backstop an amendment to, or replacement of, Shift4 Payments, LLCs existing $450.0 million senior secured revolving credit facility (the Backstop Revolving Facility and, together with the Bridge Facilities, collectively, the Facilities) in order to, among other things, permit the consummation of the transactions contemplated by the Transaction Agreement, the incurrence of the Bridge Facilities and any other permanent financing issued in lieu thereof or to refinance the loans thereunder, in each case, subject to customary conditions.
Capital raise
18 February 2025 4:22 PM
Merger Announcement
- Shift4 expects to finance the acquisition with cash on hand and a 364-day $1.795 million bridge loan facility entered in connection with the transaction.
Better than expected
12 November 2024 4:29 PM
Quarterly Report
- The company's revenue and payment volume growth exceeded expectations.
- The company released a valuation allowance against deferred tax assets, resulting in a significant tax benefit.
- The company's net income attributable to Shift4 Payments, Inc. increased to $53.8 million.
Better than expected
12 November 2024 7:04 AM
Quarterly Report
- The company exceeded expectations with record payment volume, strong revenue growth, and increased profitability.
- Shift4 raised its full-year guidance, indicating confidence in continued performance.
- The company's adjusted EBITDA and free cash flow were better than anticipated.
Capital raise
15 August 2024 5:27 PM
Debt Offering Announcement
- The document details the completion of a $1.1 billion senior notes offering.
- The company received net proceeds of approximately $1,087.9 million.
- The proceeds will be used for general corporate purposes, including debt retirement, acquisitions, and stock repurchases.
Capital raise
12 August 2024 8:40 PM
Debt Offering Announcement
- Shift4 Payments is raising $1.1 billion through a private offering of senior notes.
- The notes are being offered to qualified institutional buyers and certain persons outside the United States.
- The proceeds will be used for general corporate purposes, including potential debt repayment.
Capital raise
12 August 2024 8:25 AM
Debt Offering Announcement
- Shift4 Payments is proposing to offer $1.1 billion aggregate principal amount of senior notes.
- The offering is a private placement to qualified institutional buyers and certain persons outside the United States.
Better than expected
8 August 2024 6:29 PM
Quarterly Report
- The company's revenue, payment volume, and subscription growth all exceeded expectations.
- The company's net income and adjusted EBITDA also showed significant improvement compared to the prior year.
Better than expected
8 August 2024 7:02 AM
Quarterly Report
- The company's Q2 results exceeded expectations, leading to an increase in full-year guidance.
- The company's end-to-end payment volume, gross revenue, and adjusted EBITDA all showed significant year-over-year growth, surpassing previous estimates.
- The company's organic revenue growth was strong at 24%, with an expected acceleration in the back half of the year.
Better than expected
9 May 2024 5:51 PM
Quarterly Report
- The company's revenue, payment volume, and adjusted EBITDA all exceeded expectations, indicating strong financial performance.
- The company's growth in subscription revenue and international expansion are positive indicators for future performance.
Better than expected
9 May 2024 7:13 AM
Quarterly Report
- The company's Q1 results exceeded expectations with a 50% increase in end-to-end payment volume and a 36% increase in adjusted EBITDA, indicating better than expected performance.
Better than expected
29 February 2024 4:06 PM
Annual Results
- The company's gross revenue increased by 29%, and end-to-end payment volume increased by 52%, both exceeding expectations.
Delay expected
27 February 2024 7:05 AM
Quarterly Report
- The company experienced delays in closing enterprise deals and the timing of certain multi-billion-dollar gateway migrations, which slightly impacted gross revenue less network fees.
Better than expected
27 February 2024 7:05 AM
Quarterly Report
- The company's key financial metrics, including end-to-end payment volume, gross profit, and adjusted EBITDA, all exceeded expectations, demonstrating strong growth and profitability.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.