FOUR
Shift4 Payments, INC
NYSE
8-K: Shift4 Payments Reports Strong Q4 2023 Results, Eyes Global Expansion
Sentiment:
Quarterly Report
27 February 2024 7:05 AM
Shift4 Payments announced robust fourth-quarter results for 2023, marked by significant growth in payment volume and adjusted EBITDA, while also expanding its global footprint.
Better than expected
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.
Delay expected
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.
Summary
- Shift4 Payments reported a strong fourth quarter for 2023, with end-to-end payment volume reaching $32.1 billion, a 55% increase year-over-year.
- Gross revenue for the quarter was $705.4 million, up 31% compared to the same period in 2022.
- The company's gross profit rose to $184.6 million, a 33% increase year-over-year.
- Gross revenue less network fees was $269.3 million, a 35% increase year-over-year.
- Net income for the quarter was $19.2 million, while adjusted net income reached $68.5 million, or $0.76 per share.
- Adjusted EBITDA for the quarter was $136.1 million, a 44% increase year-over-year, with an adjusted EBITDA margin of 51%.
- Net cash provided by operating activities was $105.3 million, and adjusted free cash flow was $75.3 million.
- The company added thousands of new SkyTab customers and saw a 69% year-over-year growth in restaurant-related SaaS revenue.
- Shift4 launched its first locations in the UK and Canada and introduced an AI-powered restaurant website builder.
- The company also secured new partnerships with major sports and entertainment venues, including the NY Yankees and LA Dodgers.
- Shift4 is reaffirming its commitment to exceed its midterm outlook and is well-positioned for 2024 with solid guidance.
Sentiment
Score: 8
Explanation: The document conveys a positive sentiment due to strong financial results, significant growth metrics, and successful strategic initiatives. However, the ongoing strategic review and slight revenue miss temper the overall optimism.
Positives
- Shift4 experienced strong growth across key performance indicators, including end-to-end payment volume, gross profit, and adjusted EBITDA.
- The company successfully expanded its market share in the food and beverage space with the rollout of SkyTab.
- Shift4 is making significant progress in international expansion, including the launch of operations in the UK and Canada.
- The company has secured partnerships with major sports and entertainment venues, enhancing its brand visibility and market reach.
- The acquisition of Finaro is performing well, contributing to the company's growth and global expansion.
- Shift4 is demonstrating improved unit economics, with each incremental dollar of gross revenue less network fees generating 99 cents of incremental gross profit.
- The company is well-positioned for 2024 with solid guidance and a commitment to exceed its midterm outlook.
Negatives
- Gross revenue less network fees came in slightly below expectations due to delays in enterprise deals and the timing of gateway migrations.
- EBITDA decreased by 7% year-over-year, while adjusted EBITDA increased by 44% year-over-year, indicating some non-recurring items impacted the results.
- The company is undergoing a strategic review of alternatives, which introduces uncertainty.
Risks
- The company faces intense competition in the financial services, payments, and payment technology industries.
- There are risks associated with acquisitions and the integration of acquired businesses.
- The company is exposed to cybersecurity risks and potential breaches.
- Compliance with governmental regulations, particularly related to privacy and data protection, poses a challenge.
- The company's expansion into international operations carries risks related to foreign governmental policies and exchange rates.
- The company is dependent on merchant and software partner relationships.
- The CEO has significant influence over the company, which could impact decision-making.
Future Outlook
Shift4 provides full-year 2024 guidance, projecting gross revenue between $2.60 billion and $2.63 billion, gross revenue less network fees between $1.30 billion and $1.35 billion, and adjusted free cash flow of at least $358 million. The company expects to exceed its medium-term guidance.
Management Comments
- CEO Jared Isaacman stated he is reasonably pleased with the results and summarized the fourth quarter as excellent.
- He noted that while gross revenue less network fees was slightly light due to delayed enterprise deals, the company focused on what it could control, such as expanding adjusted EBITDA margins and free cash flow generation.
- Isaacman mentioned that the Board of Directors' formal review of alternatives is still active and ongoing, with updates to be provided as soon as available.
- He emphasized that the company remains focused on running the business and executing its game plan.
Industry Context
This announcement comes amid a competitive landscape in the payment processing industry, where companies are vying for market share through technological innovation and strategic partnerships. Shift4's focus on expanding into new verticals and international markets aligns with broader industry trends.
Comparison to Industry Standards
- Shift4's 55% year-over-year growth in end-to-end payment volume is significantly higher than the industry average, which is typically in the low double-digits.
- Companies like Global Payments and Fiserv, which are also major players in the payment processing space, have reported lower growth rates in their recent quarterly results.
- Shift4's adjusted EBITDA margin of 51% is competitive with industry leaders, indicating strong profitability.
- The company's focus on integrated payment solutions and its expansion into new verticals, such as sports and entertainment, positions it well against competitors who may be more focused on traditional payment processing.
- The acquisition of Finaro and its integration into Shift4's operations is a strategic move to compete with global players like Worldline, which has a strong presence in Europe.
Stakeholder Impact
- Shareholders are likely to react positively to the strong financial results and growth prospects.
- Employees may benefit from the company's growth and expansion.
- Customers will gain access to new and improved payment solutions.
- Suppliers and partners may see increased business opportunities.
- Creditors will likely view the company's financial health favorably.
Next Steps
- Shift4 plans to continue its strategic review of alternatives.
- The company aims to install over 30,000 SkyTab systems domestically in 2024.
- Shift4 intends to add over 10,000 restaurants and hotels in Europe and Canada in 2024.
- The company will continue to expand its international capabilities and follow strategic customers into new regions.
- Shift4 will focus on integrating and leveraging its recent acquisitions, including Finaro and Appetize.
Key Dates
- February 27, 2024: Date of the report and announcement of Q4 2023 financial results.
- December 31, 2023: End of the reporting period for the fourth quarter and full year 2023.
Keywords
payments, fintech, SaaS, EBITDA, payment processing, SkyTab, international expansion, M&A, adjusted free cash flow, end-to-end payment volume
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.
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.
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
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.