Shift4 Payments Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
FOUR$43.96+2.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001794669-24-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001794669-24-000033
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 151 previous paragraphs and 153 current paragraphs.
92 unchanged; 39 reworded; 19 added; 18 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 32 previous and 32 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Recent Acquisition
Current report
On November 8, 2024, we completed the acquisition of Givex Corp. (“Givex”) for approximately $146 million of total purchase consideration, comprised entirely of cash on hand. Givex is a global provider of gift cards, loyalty programs, and point-of-sale solutions. We believe this acquisition will significantly increase our overall customer base and geographic footprint.
Current report
Payments-based revenue increased by $179.9 million, or 29%, compared to the prior year period, primarily due to:
Current report
•The increase in end-to-end payment volume of $15.6 billion, or 56%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Current report
Interest income remained generally consistent for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
Current report
The increase in interest expense during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 was primarily due to the issuance of our 2032 Senior Notes. The annual interest expense related to the 2032 Senior Notes is expected to be approximately $76.0 million.
Current report
Nine months ended September 30, 2024 compared to nine months ended September 30, 2023
Current report
Payments-based revenue increased by $479.7 million, or 28%, compared to the prior year period, primarily due to:
Current report
•The increase in end-to-end payment volume of $39.9 billion, or 52%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Current report
The increase in interest expense during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was primarily due to the issuance of our 2032 Senior Notes. The annual interest expense related to the 2032 Senior Notes is expected to be approximately $76.0 million.
Current report
The effective tax rate for the nine months ended September 30, 2024 was approximately (223)%, compared to the effective tax rate for the nine months ended September 30, 2023 of approximately (6)%. The income tax benefit for the nine months ended September 30, 2024 relates primarily to the release of the previously recorded valuation allowance against certain deferred tax assets in the U.S.
Current report
Convertible Notes and Senior Notes
Current report
Second Amended and Restated Revolving Credit Facility
Current report
On September 5, 2024, we entered into a Second Amended and Restated First Lien Credit Agreement (the “Credit Agreement”) to increase the borrowing capacity under our revolving credit facility (“Revolving Credit Facility”) from $100.0 million to $450.0 million, $112.5 million of which is available for the issuance of letters of credit. The Revolving Credit Facility matures on September 5, 2029. The Credit Agreement requires periodic interest payments until maturity.
Current report
Loans incurred under the Revolving Credit Facility bear interest at our option at either the SOFR rate of 2.00% per year or the alternate base rate (the highest of the Federal Funds rate plus 0.50%, or the prime rate announced from time to time in The Wall Street Journal) of 1.00% per year (“Applicable Rate”). The Applicable Rate varies depending on our total leverage ratio (as defined in the Credit Agreement). The alternate base rate is subject to a zero percent floor. In addition, we are required to pay a commitment fee under the Revolving Credit Facility in respect of the unutilized commitments thereunder at a rate of 0.25% per year. We are also subject to customary letter of credit and agency fees. The Revolving Credit Facility has a borrowing capacity of $450.0 million. As of September 30, 2024, we had no outstanding borrowings under the Revolving Credit Facility.
Current report
Settlement Line Agreement
Current report
On September 30, 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”). Draws under the Settlement Line bear interest at a rate per annum equal to either (x) a daily simple SOFR based rate (subject to a 0.0% floor), plus an applicable margin of 0.75%, or (y) to the extent required by the Settlement Line Agreement upon the occurrence of certain specified events, an alternate base rate (equal to the highest of the Federal Funds Effective Rate plus 0.50%, the daily simple SOFR rate (subject to a 0.0% floor) plus 1.00%, and the prime rate announced by Citizens from time to time). In addition to making periodic interest payments on the principal amount of outstanding draws under the Settlement Line, we are required to pay an unused fee under the Settlement Line in respect of the unused availability thereunder at a rate equal to 0.15% per annum. The purpose of the Settlement Line is to provide financing for certain settlement obligations of Shift4 LLC’s merchants and to eliminate the requirement for cash collateral under the sponsorship agreement with Citizens (the “Sponsorship Agreement”), which was amended in conjunction with the closing of the settlement line agreement. There were no borrowings under the Settlement Line as of September 30, 2024. The Settlement Line is scheduled to mature on September 29, 2025, subject to extensions.
Current report
Covenants
Current report
The Company expects to be in compliance with such financial covenants for at least 12 months following the issuance of these unaudited condensed consolidated financial statements.
Removed paragraphs (18)
Previous report
Recent Acquisitions
Previous report
Revel
Previous report
On June 13, 2024, we completed the acquisition of Revel Systems, Inc. (“Revel”) and its subsidiaries. Revel offers a cloud-based POS system primarily for multi-location merchants, focusing on restaurants, as well as back office and marketing tools that we believe will strengthen our presence within the restaurant and retail markets.
Previous report
Vectron
Previous report
On June 14, 2024, we acquired a majority stake in Vectron Systems AG (“Vectron”). Based in Germany, Vectron is a supplier of POS systems to the restaurant and hospitality verticals and we believe also provides us with local product expertise and a European distribution network of POS resellers.
Previous report
Payments-based revenue increased by $155.7 million, or 26%, compared to the prior year period, primarily due to:
Previous report
•The increase in end-to-end payment volume of $13.3 billion, or 50%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Previous report
Advertising and marketing expenses remained consistent for the three months ended June 30, 2024, compared to the three months ended June 30, 2023.
Previous report
Changes in the fair value of investments in securities for the three months ended June 30, 2024 were not significant.
Previous report
Interest expense remained consistent for the three months ended June 30, 2024, compared to the three months ended June 30, 2023.
Previous report
The effective tax rate for the three months ended June 30, 2024 was different than the U.S. federal statutory income tax rate of 21% primarily due to the income allocated to the noncontrolling interest, the full valuation allowance on Shift4 Payments, Inc., a $5.2 million tax benefit related to the valuation allowance release on certain corporate subsidiaries, and the lower foreign rate differential in overseas jurisdictions compared to the U.S. federal statutory income tax rate. The effective tax rate for the three months ended June 30, 2023 was different than the U.S. federal statutory income tax rate of 21% primarily due to the income allocated to the noncontrolling interest, the full valuation allowances on Shift4 Payments, Inc. and certain corporate subsidiaries in the U.S., and a $1.5 million tax benefit related to the valuation allowance release due to acquired deferred tax liabilities from Focus POS Systems (“Focus”).
Previous report
Six months ended June 30, 2024 compared to six months ended June 30, 2023
Previous report
Payments-based revenue increased by $299.8 million, or 27%, compared to the prior year period, primarily due to:
Previous report
•The increase in end-to-end payment volume of $24.4 billion, or 50%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Previous report
Interest expense remained consistent for the six months ended June 30, 2024, compared to the six months ended June 30, 2023.
Previous report
The effective tax rate for the six months ended June 30, 2024 was approximately (0.5)%, compared to the effective tax rate for the six months ended June 30, 2023 of approximately (14)%.
Previous report
The effective tax rate for the six months ended June 30, 2024 was different than the U.S. federal statutory income tax rate of 21% primarily due to the income allocated to the noncontrolling interest, the full valuation allowance on Shift4 Payments, Inc., a $5.2 million tax benefit related to the valuation allowance release on certain corporate subsidiaries, and the lower foreign rate differential in overseas jurisdictions compared to the U.S. federal statutory income tax rate. The effective tax rate for the six months ended June 30, 2023 was different than the U.S. federal statutory income tax rate of 21% primarily due to the income allocated to the noncontrolling interest, the full valuation allowances on Shift4 Payments, Inc. and certain corporate subsidiaries in the U.S., a $4.8 million tax benefit related to the valuation allowance release due to a legal entity restructuring and a $1.5 million tax benefit related to the valuation allowance release due to acquired deferred tax liabilities from Focus.
Previous report
Convertible Notes, Senior Notes and Revolving Credit Facility
Reworded paragraphs (39)
Previous wording
Subscription and other revenues include software as a service (“SaaS”) fees for point of sale (“POS”) systems and terminals provided to merchants. POS and terminal SaaS fees are assessed based on the type and quantity of equipment deployed to the merchant. SaaS fees also include statement fees, fees for our proprietary business intelligence software and other annual fees. Subscription and other revenues also includes revenue derived from hardware sales, software license sales, third-party residuals and fees charged for technology support.
Current wording
Subscription and other revenues include software as a service (“SaaS”) fees for point of sale (“POS”) systems and terminals provided to merchants. POS and terminal SaaS fees are assessed based on the type and quantity of equipment deployed to the merchant. SaaS fees also include statement fees, fees for our proprietary business intelligence software and other annual fees.
Previous wording
Unrealized gain (loss) on investments in securities represents adjustments to the fair value of our investments in securities.
Current wording
Unrealized gain on investments in securities represents adjustments to the fair value of our investments in securities.
Previous wording
Income tax benefit represents federal, state, local and foreign income taxes.
Current wording
Income tax benefit (expense) represents federal, state, local and foreign income taxes.
Previous wording
(a)Depreciation and amortization expense includes depreciation of equipment under lease of $13.0 million and $8.2 million for the three months ended June 30, 2024 and 2023, respectively.
Current wording
(a)Depreciation and amortization expense includes depreciation of equipment under lease of $14.1 million and $9.3 million for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
Gross revenue increased by $190.0 million, or 30%, compared to the prior year period. Gross revenue is comprised of payments-based revenue and subscription and other revenues.
Current wording
Gross revenue increased by $233.8 million, or 35%, compared to the prior year period. Gross revenue is comprised of payments-based revenue and subscription and other revenues.
Previous wording
Subscription and other revenues increased by $34.3 million, or 93%, compared to the prior year period. The increase in subscription and other revenues was primarily driven by higher SaaS revenue associated with our SkyTab solutions as well as the impact of recent acquisitions.
Current wording
Subscription and other revenues increased by $53.9 million, or 111%, compared to the prior year period. The increase in subscription and other revenues was primarily driven by the impact of recent acquisitions as well as higher SaaS revenue associated with our SkyTab solutions.
Previous wording
The 24% increase in network fees was primarily due to the increase in payments-based revenue, which increased 26%, compared to the prior year period.
Current wording
The 26% increase in network fees was primarily due to the increase in payments-based revenue, which increased 29%, compared to the prior year period.
Previous wording
Gross revenue less network fees increased by $156.2 million, or 36%, compared to the prior year period, primarily due to the increase in end-to-end payment volume. See Key Performance Indicators and Non-GAAP Measures for a discussion and reconciliation of gross revenue less network fees.
Current wording
Gross revenue less network fees increased by $122.1 million, or 50%, compared to the prior year period, primarily due to the increase in end-to-end payment volume and higher SaaS revenue. See Key Performance Indicators and Non-GAAP Measures for a discussion and reconciliation of gross revenue less network fees.
Previous wording
The increase in general and administrative expenses was primarily due to expenses associated with our growth, which includes the impact of our recent acquisitions.
Current wording
The increase in general and administrative expenses was primarily due to expenses associated with our continued growth, which includes the impact of our recent acquisitions.
Previous wording
The expense for revaluation of contingent liabilities during the six months ended June 30, 2024 was primarily driven by fair value adjustments to contingent liabilities arising from various acquisitions we completed in 2022 and 2023. The expense for revaluation of contingent liabilities during the six months ended June 30, 2023 was primarily driven by the remeasurement of the contingent liability related to the acquisition of Online Payments Group.
Current wording
The expense for revaluation of contingent liabilities during the three months ended September 30, 2024 was primarily driven by fair value adjustments to contingent liabilities arising from various acquisitions we completed in 2022 and 2023. The expense for revaluation of contingent liabilities during the three months ended September 30, 2023 was primarily driven by the remeasurement of the contingent liability related to the acquisition of Online Payments Group.
Previous wording
•The amortization of intangible assets recognized in connection with recent acquisitions.
Current wording
•The amortization of intangible assets recognized in connection with recent acquisitions; and
Previous wording
•Increased equipment under lease associated with the growth of our SkyTab offering, and;
Current wording
•Increased equipment under lease associated with the growth of our SkyTab offering.
Previous wording
The increase in advertising and marketing expenses was primarily due to higher marketing and sponsorship expenses.
Current wording
The increase in advertising and marketing expenses was primarily due to new sponsorship contracts.
Previous wording
The increase in other income was primarily due to transactional gains related to foreign currency in 2024, as compared to losses in 2023.
Current wording
The decrease in other expense was primarily due to transactional losses related to foreign currency in 2024.
Previous wording
The unrealized gain on investments in securities for both the six months ended June 30, 2024 and 2023 was primarily due to fair value adjustments to our non-marketable equity investment in Space Exploration Technologies Corp, commonly known as SpaceX.
Current wording
The unrealized gain on investments in securities for both the three months ended September 30, 2024 and 2023 was due to fair value adjustments to our non-marketable equity investments.
Previous wording
In the future, if we conclude it is probable that we will be able to realize additional tax benefits associated with the TRA, it could result in a material increase to the TRA liability. As of June 30, 2024, we have not recognized the remaining $284.8 million liability under the TRA after concluding it was not probable that we will be able to realize the remaining tax benefits based on estimates of future taxable income. See Note 13 to the accompanying unaudited condensed consolidated financial statements for more information on the TRA.
Current wording
As of September 30, 2024, we concluded that it was probable that we will be able to realize substantially all of the tax benefits associated with the TRA to date, based on estimates of future taxable income. In the future, we expect the TRA liability to increase as additional tax benefits are established through exchanges of LLC Interests with Rook. See Note 13 to the accompanying unaudited condensed consolidated financial statements for more information on the TRA.
Previous wording
The effective tax rate for the three months ended June 30, 2024 was approximately (3)%, compared to the effective tax rate for the three months ended June 30, 2023 of approximately (10)%.
Current wording
The effective tax rate for the three months ended September 30, 2024 was approximately (135)%, compared to the effective tax rate for the three months ended September 30, 2023 of approximately 2%. The income tax benefit for the three months ended September 30, 2024 relates primarily to the release of the previously recorded valuation allowance against certain deferred tax assets in the U.S.
Previous wording
Comparison of Results for the Six Months Ended June 30, 2024 and 2023
Current wording
Comparison of Results for the Nine Months Ended September 30, 2024 and 2023
Previous wording
(a)Depreciation and amortization expense includes depreciation of equipment under lease of $24.9 million and $15.4 million for the six months ended June 30, 2024 and 2023, respectively.
Current wording
(a)Depreciation and amortization expense includes depreciation of equipment under lease of $39.0 million and $24.7 million for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
Gross revenue increased by $350.4 million, or 30%, compared to the prior year period. Gross revenue is comprised of payments-based revenue and subscription and other revenues.
Current wording
Gross revenue increased by $584.2 million, or 31%, compared to the prior year period. Gross revenue is comprised of payments-based revenue and subscription and other revenues.
Previous wording
Subscription and other revenues increased by $50.6 million, or 69%, compared to the prior year period. The increase in subscription and other revenues was primarily driven by higher SaaS revenue associated with our SkyTab solutions as well as the impact of recent acquisitions.
Current wording
Subscription and other revenues increased by $104.5 million, or 86%, compared to the prior year period. The increase in subscription and other revenues was primarily driven by the impact of recent acquisitions as well as higher SaaS revenue associated with our SkyTab solutions.
Previous wording
The 26% increase in network fees was primarily due to the increase in payments-based revenue, which increased 27%, compared to the prior year period.
Current wording
The 26% increase in network fees was primarily due to the increase in payments-based revenue, which increased 28%, compared to the prior year period.
Previous wording
Gross revenue less network fees increased by $92.5 million, or 41%, compared to the prior year period, primarily due to the increase in end-to-end payment volume. See Key Performance Indicators and Non-GAAP Measures for a discussion and reconciliation of gross revenue less network fees.
Current wording
Gross revenue less network fees increased by $278.3 million, or 41%, compared to the prior year period, primarily due to the increase in end-to-end payment volume and higher SaaS revenue. See Key Performance Indicators and Non-GAAP Measures for a discussion and reconciliation of gross revenue less network fees.
Previous wording
The increase in general and administrative expenses was primarily due to expenses associated with our growth, which includes the impact of our recent acquisitions.
Current wording
The increase in general and administrative expenses was primarily due to expenses associated with our continued growth, which includes the impact of our recent acquisitions.
Previous wording
The expense for revaluation of contingent liabilities during the three months ended June 30, 2024 was primarily driven by fair value adjustments to contingent liabilities arising from various acquisitions we completed in 2022 and 2023. There were no significant revaluations during the three months ended June 30, 2024. The expense for revaluation of contingent liabilities during the three months ended June 30, 2023 was primarily driven by the remeasurement of the contingent liability related to the acquisition of Online Payments Group.
Current wording
The expense for revaluation of contingent liabilities during the nine months ended September 30, 2024 was primarily driven by fair value adjustments to contingent liabilities arising from various acquisitions we completed in 2022 and 2023. The expense for revaluation of contingent liabilities during the nine months ended September 30, 2023 was primarily driven by the remeasurement of the contingent liability related to the acquisition of Online Payments Group.
Previous wording
•The amortization of intangible assets recognized in connection with recent acquisitions.
Current wording
•The amortization of intangible assets recognized in connection with recent acquisitions; and
Previous wording
•Increased equipment under lease associated with the growth of our SkyTab offering, and
Current wording
•Increased equipment under lease associated with the growth of our SkyTab offering.
Previous wording
In the future, if we conclude it is probable that we will be able to realize additional tax benefits associated with the TRA, it could result in a material increase to the TRA liability. As of June 30, 2024, we have not recognized the remaining $284.8 million liability under the TRA after concluding it was not probable that we will be able to realize the remaining tax benefits based on estimates of future taxable income. See Note 13 to the accompanying unaudited condensed consolidated financial statements for more information on the TRA.
Current wording
As of September 30, 2024, we concluded that it was probable that we will be able to realize substantially all of the tax benefits associated with the TRA to date, based on estimates of future taxable income. In the future, we expect the TRA liability to increase as additional tax benefits are established through exchanges of LLC Interests with Rook. See Note 13 to the accompanying unaudited condensed consolidated financial statements for more information on the TRA.
Previous wording
(a)For the three months ended June 30, 2024, consisted of $7.6 million of restructuring costs and $6.1 million of acquisition-related costs. For the six months ended June 30, 2024, primarily consisted of $9.0 million of restructuring costs and $8.7 million of acquisition-related costs. For the three months ended June 30, 2023, primarily consisted of $3.8 million of restructuring costs and $2.0 million of acquisition-related costs. For the six months ended June 30, 2023, primarily consisted of $5.8 million of acquisition-related costs and $4.2 million of restructuring costs.
Current wording
(a)For the three months ended September 30, 2024, consisted of $4.9 million of restructuring costs and $3.7 million of acquisition-related costs. For the nine months ended September 30, 2024, primarily consisted of $13.9 million of restructuring costs and $12.4 million of acquisition-related costs. For the three months ended September 30, 2023, primarily consisted of $3.0 million of acquisition-related costs. For the nine months ended September 30, 2023, primarily consisted of $8.8 million of acquisition-related costs and $4.3 million of restructuring costs.
Previous wording
We have historically sourced our liquidity requirements primarily with cash flow from operations and, when needed, with debt or equity financing. The principal uses for liquidity have been acquisitions, capital expenditures, share repurchases and debt service. As of June 30, 2024, our cash and cash equivalents balance was $205.0 million, of which approximately $115.9 million was held outside of the U.S. by our foreign legal entities. We also have $74.8 million of funds deposited in a sponsor bank merchant settlement account that is legally restricted and not available for use in operations. This amount is presented as “Restricted cash” in the unaudited condensed consolidated balance sheet. In addition, “Settlement assets” includes $123.5 million of cash that will be used to settle merchant liabilities. The cash included within Settlement assets is typically paid to merchants within a few days of receipt in order to settle related liabilities.
Current wording
We have historically sourced our liquidity requirements primarily with cash flow from operations and, when needed, with debt or equity financing. The principal uses for liquidity have been acquisitions, capital expenditures, share repurchases and debt service. As of September 30, 2024, our cash and cash equivalents balance was $1,426.4 million, of which approximately $135.5 million was held outside of the U.S. by our foreign legal entities. In addition, “Settlement assets” includes $169.0 million of cash that will be used to settle merchant liabilities. The cash included within Settlement assets is typically paid to merchants within a few days of receipt in order to settle related liabilities.
Previous wording
For the six months ended June 30, 2024, net cash provided by operating activities of $172.8 million was primarily a result of net income of $83.0 million adjusted for non-cash expenses, including depreciation and amortization of $135.8 million and equity-based compensation of $37.1 million, partially offset by the unrealized gain on investments in securities of $(10.8) million and the impact from settlement activity of $(54.0) million. Settlement assets includes both cash and receivables from card networks. From period to period, the mix of cash and receivables included in Settlement assets may change, driving increases or decreases in operating cash flow.
Current wording
For the nine months ended September 30, 2024, net cash provided by operating activities of $354.9 million was primarily a result of net income of $155.2 million adjusted for non-cash expenses, including change in TRA liability of $294.2 million, depreciation and amortization of $213.1 million and equity-based compensation of $51.4 million, partially offset by deferred income taxes of $(300.1) million, unrealized gain on investments in securities of $(21.6) million and an impact from working capital items of $(52.6) million. Settlement assets includes both cash and receivables from card networks. From period to period, the mix of cash and receivables included in Settlement assets may change, driving increases or decreases in operating cash flow.
Previous wording
For the six months ended June 30, 2023, net cash provided by operating activities of $171.3 million was primarily a result of net income of $57.2 million adjusted for non-cash expenses, including depreciation and amortization of $97.6 million, equity-based compensation of $34.0 million, revaluation of contingent liabilities of $12.6 million, and unrealized gain on investments in securities of $(8.9) million. This was partially offset by an impact from working capital items of $(24.0) million.
Current wording
For the nine months ended September 30, 2023, net cash provided by operating activities of $283.0 million was primarily a result of net income of $103.7 million adjusted for non-cash expenses, including depreciation and amortization of $152.7 million, equity-based compensation of $46.4 million, revaluation of contingent liabilities of $21.5 million, and unrealized gain on investments in securities of $(11.5) million. This was partially offset by an impact from working capital items of $(39.1) million.
Previous wording
Net cash used in investing acti vities was $381.5 million for the six months ended June 30, 2024, an increase of $273.5 million compared to net cash used in investing activities of $108.0 million for the six months ended June 30, 2023. This increase was primarily the result of a $265.1 million increase in net cash paid for acquisitions.
Current wording
Net cash used in investing acti vities was $435.2 million for the nine months ended September 30, 2024, an increase of $284.1 million compared to net cash used in investing activities of $151.1 million for the nine months ended September 30, 2023. This increase was primarily the result of a $269.6 million increase in net cash paid for acquisitions.
Previous wording
Net cash used in financing activities was $100.8 million for the six months ended June 30, 2024, a decrease of $14.4 million compared to net cash used in financing activities of $115.2 million for the six months ended June 30, 2023. This decrease was primarily due to a $80.9 million decrease in payments for the repurchase of common stock, partially offset by $70.8 million of bank deposits being returned to depositors in 2024.
Current wording
Net cash provided by financing activities was $950.6 million for the nine months ended September 30, 2024, an increase of $1,074.9 million compared to net cash used in financing activities of $124.3 million for the nine months ended September 30, 2023. This increase was primarily due to the $1,100.0 million of proceeds received from the issuance of the 2032 Senior Notes in 2024 and a $60.9 million decrease in payments for the repurchase of common stock, partially offset by $70.8 million of bank deposits being returned to depositors in 2024.
Previous wording
As of June 30, 2024 and December 31, 2023, we had $1,772.5 million total principal amount of debt outstanding, including $690.0 million of 2025 Convertible Notes, $632.5 million of 2027 Convertible Notes, and $450.0 million of 2026 Senior Notes.
Current wording
As of September 30, 2024 and December 31, 2023, we had $2,872.5 million total principal amount of debt outstanding, including $1,100.0 million of 2032 Senior Notes, $690.0 million of 2025 Convertible Notes, $632.5 million of 2027 Convertible Notes, and $450.0 million of 2026 Senior Notes.
Previous wording
In May 2024, the Board authorized a new stock repurchase program (the “May 2024 Program”), pursuant to which we are authorized to repurchase up to $500.0 million of our Class A common stock through December 31, 2025. The May 2024 Program replaces our prior stock repurchase program from December 2023. During thesix months ended June 30, 2024, we repurchased 230,400 shares of Class A common stock for$15.9 million, including commissions paid, at an average price paid of$68.79 per share. As of June 30, 2024,$484.2 million remains available under the May 2024 Program.
Current wording
In May 2024, the Board authorized a new stock repurchase program (the “May 2024 Program”), pursuant to which we are authorized to repurchase up to $500.0 million of our Class A common stock through December 31, 2025. The May 2024 Program replaces our prior stock repurchase program from December 2023. During thenine months ended September 30, 2024, we repurchased 528,888 shares of Class A common stock for$35.9 million, including commissions paid, at an average price paid of$67.77 per share. As of September 30, 2024,$464.1 million remains available under the May 2024 Program.
Previous wording
As of June 30, 2024, we had $1,772.5 million of fixed rate debt principal outstanding with maturities beginning in 2025. Future interest payments associated with the outstanding debt total $63.1 million, with $24.0 million payable within twelve months. In addition, we have $3.8 million of finance lease liabilities.
Current wording
As of September 30, 2024, we had $2,872.5 million of fixed rate debt principal outstanding, including the $690.0 million of 2025 Convertible Notes that mature in December 2025. Future interest payments associated with the outstanding debt total $655.5 million, with $98.2 million payable within twelve months.
Previous wording
As of June 30, 2024, the fair value of contingent liabilities to potentially be paid out in cash was $36.6 million, with $17.5 million payable within twelve months. As of June 30, 2024, the maximum amount of contingent liabilities to potentially be paid out in cash was $56.2 million, with $20.0 million payable within twelve months.
Current wording
As of September 30, 2024, the fair value of contingent liabilities to potentially be paid out in cash was $40.3 million, with $21.0 million payable within twelve months. As of September 30, 2024, the maximum amount of contingent liabilities to potentially be paid out in cash was $57.9 million, with $21.0 million payable within twelve months.
Previous wording
There have been no material changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
There have been no material changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 except for the release of the valuation allowance against deferred tax assets and related impact on the TRA liability. See Note 13 of the unaudited condensed consolidated financial statements for additional details.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Subscription and other revenues also includes revenue derived from hardware sales, software license sales, third-party residuals and fees charged for technology support.
Current report — wording carried from elsewhere
The increase in advertising and marketing expenses was primarily due to new sponsorship contracts.
Current report — wording carried from elsewhere
The unrealized gain on investments in securities for both the nine months ended September 30, 2024 and 2023 was due to fair value adjustments to our non-marketable equity investments.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
See Note 2 to the accompanying unaudited condensed consolidated financial statements for more information.
Previous report — wording carried elsewhere
The decrease in interest income was primarily due to a decrease in our average interest-earning cash balance.