FOUR
Shift4 Payments, INC
NYSE
10-K: Shift4 Payments Reports 2023 Financial Results, Highlights Strategic Growth and Acquisitions
Sentiment:
Annual Results
29 February 2024 4:06 PM
Shift4 Payments' 2023 annual report showcases significant growth in payment volume and strategic acquisitions, alongside a focus on technology and international expansion.
Better than expected
The company's gross revenue increased by 29%, and end-to-end payment volume increased by 52%, both exceeding expectations.
Summary
- Shift4 Payments, a leading independent provider of software and payment processing solutions, released its 2023 annual report.
- The company experienced a 29% increase in gross revenue, reaching $2.56 billion, driven by a 52% increase in end-to-end payment volume, totaling $109 billion.
- The report highlights strategic acquisitions, including Finaro and Appetize, aimed at expanding international reach and strengthening its position in the sports and entertainment sectors.
- Shift4's focus on technology solutions, such as SkyTab POS and VenueNext, is emphasized, along with its commitment to innovation and a strong distribution network.
- The company's revenue is primarily generated from fees paid by merchants, including processing fees based on payment volume and subscription fees for software and technology solutions.
- Shift4 also benefits from a high degree of operating leverage due to its scalable payments platform and strong customer unit economics.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong growth metrics and strategic acquisitions, but also acknowledges risks and challenges, resulting in a positive but cautious sentiment.
Positives
- Shift4 experienced substantial growth in both revenue and payment volume, indicating strong market demand for its services.
- Strategic acquisitions are expected to accelerate growth in international markets and specific industry verticals.
- The company's diversified merchant base reduces reliance on any single customer.
- Recurring revenue streams provide stability and predictability to the company's financial performance.
- Shift4's focus on innovation and technology positions it well for future growth and competitiveness.
- The company's strong internal sales team and software partner network provide a robust distribution channel.
Negatives
- The company's operating expenses increased due to growth and acquisitions, which may impact short-term profitability.
- The company is exposed to fluctuations in foreign currency exchange rates as it expands internationally.
- The company is subject to various legal and regulatory risks, including cybersecurity threats and data privacy regulations.
- The company relies on third-party vendors for certain products and services, which could be a risk if they fail to fulfill their obligations.
- The company has substantial indebtedness, which could limit its ability to raise additional capital or react to changes in the economy.
Risks
- Intense competition in the financial services and payments technology industries could adversely affect the company's business.
- Changes in the competitive landscape, including disintermediation, could harm the company's business.
- Global economic and political conditions may impact consumer spending and demand for the company's services.
- The company is exposed to fluctuations in inflation, which could negatively affect its business.
- Cybersecurity risks and data breaches could damage the company's reputation and expose it to financial penalties.
- Failure to comply with privacy, data protection, and information security regulations could result in material financial penalties and legal liabilities.
- The company's reliance on third-party vendors and strategic partnerships could be a risk if these relationships are disrupted.
- The company's substantial indebtedness could limit its ability to raise additional capital or react to changes in the economy.
- The company's founder has significant influence over the company, which could lead to decisions that are not in the best interest of all shareholders.
Future Outlook
The company expects to continue to grow through its internal sales team and integrated software partners, and to convert gateway-only customers to its end-to-end payments offering. Shift4 also plans to pursue strategic acquisitions and expand its international operations.
Management Comments
- The company's mission is to enable commerce by providing a seamless customer experience with a secure and reliable suite of payments and technology offerings.
- Management believes that the company's strategic acquisitions will accelerate growth in international markets and specific industry verticals.
- The company is committed to attracting and retaining top talent and fostering an inclusive culture where employees can thrive.
Industry Context
Shift4 operates in a highly competitive and rapidly evolving financial services and payments technology industry. The company competes with both non-integrated and integrated payment providers, as well as new entrants offering alternative payment systems. The company's focus on integrated solutions and strategic partnerships is aimed at differentiating itself in this competitive landscape.
Comparison to Industry Standards
- Shift4 competes with non-integrated payment processors like Chase Paymentech, Elavon, FIS, Fiserv, and Global Payments, and integrated payment providers like Adyen, Lightspeed POS, Shopify, Square, and Toast.
- Shift4's end-to-end payment volume growth of 52% is a strong indicator of its market position and ability to capture market share.
- The company's focus on software integrations and technology solutions aligns with industry trends towards integrated payment experiences.
- Shift4's acquisition of Finaro is a strategic move to expand its international presence, similar to other payment companies seeking global growth.
- The company's emphasis on security and compliance is consistent with industry standards and regulatory requirements.
Stakeholder Impact
- Shareholders may benefit from the company's growth and strategic initiatives, but also face risks associated with market competition and economic conditions.
- Employees may benefit from the company's focus on talent attraction and retention, as well as its commitment to diversity and inclusion.
- Merchants may benefit from the company's innovative technology solutions and seamless payment processing capabilities.
- Software partners may benefit from the company's integrated platform and distribution network.
- Customers may benefit from the company's focus on providing a seamless and secure payment experience.
Next Steps
- The company will continue to focus on converting gateway-only customers to its end-to-end payments offering.
- Shift4 will continue to invest in product development, distribution, and operations.
- The company will continue to pursue strategic acquisitions to enhance shareholder value.
- Shift4 will continue to expand its international operations.
Legal Proceedings
- The company is involved in various litigation matters from time to time.
- 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.
- Another shareholder filed a similar complaint against the same defendants in the same court.
- The company disputes the allegations in the above-referenced matters, intends to defend the matters vigorously, and believes that the claims are without merit.
Related Party Transactions
- The company has a service agreement with Jared Isaacman, the company's Chief Executive Officer and founder, including access to aircrafts and a property.
- The company made distributions related to income taxes paid on behalf of Rook.
- The Founder agreed to fund 50% of a one-time discretionary equity award program for non-management employees 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 to secure a margin loan.
- The Founder, through a special purpose vehicle, entered into variable prepaid forward contracts with a dealer, covering shares of the company's Class A common stock.
Key Dates
- June 9, 2020: Shift4 Payments, Inc. initial public offering (IPO) completed.
- October 29, 2020: Issuance of $450 million 4.625% Senior Notes due 2026.
- December 7, 2020: Issuance of $690 million 0.00% Convertible Senior Notes due 2025.
- January 29, 2021: Amended and restated First Lien Credit Agreement.
- July 26, 2021: Issuance of $632.5 million 0.50% Convertible Senior Notes due 2027.
- February 28, 2022: Acquisition of The Giving Block.
- September 29, 2022: Acquisition of Online Payments Group AG.
- April 3, 2023: Acquisition of Focus POS Systems.
- October 2, 2023: Acquisition of Appetize.
- October 26, 2023: Acquisition of Finaro.
- December 31, 2023: Expiration of the May 2023 stock repurchase program.
- December 31, 2024: Expiration of the December 2023 stock repurchase program.
Keywords
payment processing, software solutions, fintech, acquisitions, international expansion, SaaS, cybersecurity, financial services, payment volume, merchant acquiring
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.