FOUR
Shift4 Payments, INC
NYSE
10-Q: Shift4 Payments Reports Strong Q2 Growth Driven by Payment Volume and Acquisitions
Sentiment:
Quarterly Report
8 August 2024 6:29 PM
Shift4 Payments saw a significant increase in revenue and payment volume in the second quarter of 2024, boosted by recent acquisitions and growth in its SkyTab solutions.
Better than expected
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.
Summary
- Shift4 Payments reported a 30% increase in gross revenue, reaching $827 million in the second quarter of 2024, compared to $637 million in the same period last year.
- Payments-based revenue grew by 26% to $755.8 million, driven by a 50% increase in end-to-end payment volume, which totaled $40.1 billion.
- Subscription and other revenues saw a substantial 93% increase to $71.2 million, primarily due to higher SaaS revenue from SkyTab and recent acquisitions.
- The company's net income attributable to Shift4 Payments, Inc. was $39.2 million, compared to $25.1 million in the second quarter of 2023.
- EBITDA reached $125.5 million, while adjusted EBITDA was $162.4 million for the quarter.
- The company completed the acquisitions of Revel Systems, Inc. and a majority stake in Vectron Systems AG during the quarter, expanding its market presence and product offerings.
Sentiment
Score: 8
Explanation: The document presents a very positive outlook with strong growth metrics and strategic acquisitions. The company is performing well and expanding its market presence. However, there are some risks and challenges that need to be monitored.
Positives
- The company experienced significant growth in both payment volume and subscription revenue.
- Recent acquisitions are contributing to revenue growth and market expansion.
- The company's SkyTab solution is driving higher SaaS revenue.
- Shift4 Payments is showing improved profitability compared to the same period last year.
- The company is successfully integrating new businesses into its operations.
Negatives
- Growth in end-to-end payment volume outpaced payments-based revenue growth due to onboarding larger merchants with lower unit pricing.
- General and administrative expenses increased due to growth and acquisitions.
- Interest income decreased due to a lower average interest-earning cash balance.
- The company has a significant amount of debt outstanding.
Risks
- The company is subject to restrictions in its dealings with Vectron under German law, which may delay the implementation of its acquisition strategy.
- The company may be obligated to compensate any annual net loss of Vectron if a Domination and/or Profit and Loss Transfer Agreement is established.
- The company's debt obligations could impact its financial flexibility.
- The company's future performance is subject to various market and economic risks.
Future Outlook
The company expects its cash and cash equivalents and future cash flow from operations will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months and into the foreseeable future based on its current operating plan.
Industry Context
The company's growth reflects the broader trend of increasing adoption of digital payment solutions and the demand for integrated software and payment platforms in the hospitality and retail sectors. The acquisitions of Revel and Vectron position Shift4 to compete more effectively in these markets.
Comparison to Industry Standards
- Shift4's 50% growth in end-to-end payment volume significantly outpaces the industry average, indicating strong market share gains.
- The 93% increase in subscription revenue demonstrates the success of Shift4's SaaS strategy, which is a key differentiator compared to traditional payment processors.
- The company's adjusted EBITDA margin of approximately 19.6% (162.4/827) is competitive with other leading payment technology companies.
- Compared to companies like Global Payments and Fiserv, Shift4 is demonstrating higher growth rates, particularly in its subscription-based offerings.
- The acquisitions of Revel and Vectron are strategic moves to expand into new markets and verticals, similar to how other payment companies have grown through M&A.
Stakeholder Impact
- Shareholders will benefit from the company's strong financial performance and strategic acquisitions.
- Employees may see increased opportunities due to the company's growth.
- Customers will have access to a broader range of products and services.
- Suppliers may see increased demand for their products and services.
- Creditors will be reassured by the company's strong financial position.
Next Steps
- The company will attempt to acquire additional ownership of Vectron through a public tender offer.
- The company will implement a process to gain operational control of Vectron.
- The company will continue to integrate recent acquisitions into its operations.
- The company will continue to monitor and assess the impacts of Pillar Two rules set to take effect in 2025.
Legal Proceedings
- A shareholder class action lawsuit has been filed against the company alleging false and misleading statements about the company's business, operations, and compliance policies. The company intends to defend the matter vigorously.
Related Party Transactions
- The company has a service agreement with its CEO, Jared Isaacman, 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 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 wholly-owned special purpose vehicle (SPV), entered into two variable prepaid forward contracts (VPF Contracts) with an unaffiliated dealer.
Key Dates
- 2019-11-05: Shift4 Payments, Inc. was incorporated.
- 2021-09-01: Founder entered into variable prepaid forward contracts (VPF Contracts).
- 2022-09-29: Acquisition of Online Payments Group AG.
- 2023-10-02: Acquisition of SpotOn Technologies, Inc.'s sports and entertainment division (Appetize).
- 2023-10-26: Acquisition of Credorax, Inc. d/b/a Finaro.
- 2024-06-13: Acquisition of Revel Systems, Inc.
- 2024-06-14: Acquisition of a majority stake in Vectron Systems AG.
Keywords
payments, payment processing, SaaS, acquisitions, revenue, EBITDA, SkyTab, point of sale, POS, fintech
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.
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.
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.
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.