Shift4 Payments Inc
For the period ended Dec 31, 2024. Filed Feb 19, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 19, 2025
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-K
Period ended 2023-12-31; filed 2024-02-29.
0001794669-24-000007
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-19.
0001794669-25-000011
Item 7. 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 158 previous paragraphs and 169 current paragraphs.
82 unchanged; 47 reworded; 36 added; 26 removed; 3 previous and 4 current paragraphs rearranged.
Tables are not compared: 18 previous and 19 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 (36)
Current report
At Shift4, our mission is to boldly redefine commerce by simplifying complex payments ecosystems across the world.
Current report
Chief Executive Officer Succession Planning
Current report
In December 2024, President Donald Trump nominated Jared Isaacman, our Founder, Chief Executive Officer and Chairman of the Board, to be the next administrator of NASA. Mr. Isaacman has announced his intention to remain as the Company’s Chief Executive Officer and Chairman of the Board subject to the ratification and confirmation by the U.S. Senate, and to retain the majority of his equity interest while reducing his voting power. As a result, Mr. Isaacman intends to continue to serve as the Chief Executive Officer and Chairman of the Board during the confirmation process. As part of planned succession planning, Taylor Lauber, our President, is expected to succeed Mr. Isaacman as our Chief Executive Officer upon Mr. Isaacman’s confirmation by the U.S. Senate.
Current report
As previously disclosed, our Board periodically reviews the Company’s leadership structure and may make such changes in the future as it deems appropriate. The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure to provide robust oversight of management and to determine whether it continues to best serve the Company and its stockholders. The nominating and corporate governance committee of our Board is responsible for overseeing the Company’s succession plan for the Chief Executive Officer and other executive officer roles. We continually strive to foster the professional development of management and team members. As a result, we have developed what we believe to be a very experienced and strong group of leaders, with their performance subject to ongoing monitoring and evaluation, as potential successors to our senior management.
Current report
Pending Acquisitions
Current report
On February 16, 2025, we entered into a Transaction Agreement (the “Transaction Agreement”) with Global Blue Group Holding AG, a stock corporation incorporated under the laws of Switzerland (“Global Blue”). Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Transaction Agreement.
Current report
Pursuant to the Transaction Agreement, and upon the terms and subject to the conditions set forth therein, we have agreed to file with the commercial register of the Canton of Zurich the documentation for the formation of a new wholly-owned Swiss limited liability company (“Merger Sub”), and following such registration of Merger Sub, cause Merger Sub to commence as promptly as reasonably practicable (but in no event later than 25 business days following the date of the Transaction Agreement), a tender offer (the “Offer”) to acquire all of the outstanding (i) registered ordinary shares, nominal value of CHF 0.01 per share, of Global Blue (the “Global Blue Common Shares”), at a price per share equal to $7.50 (the “Common Shares Consideration”), (ii) registered series A convertible preferred shares, nominal value of CHF 0.01 per share, of Global Blue (the “Global Blue Series A Shares”), at a price per share equal to $10.00, (iii) registered series B convertible preferred shares, nominal value of CHF 0.01 per share, of Global Blue (the “Global Blue Series B Shares”, and together with the Global Blue Common Shares and the GB Series A Shares, the “Global Blue Shares”), at a price per share equal to $11.81.
Current report
Pursuant to the Transaction Agreement, Merger Sub’s obligation (and our obligation to cause Merger Sub) to accept for payment (such time of acceptance, the “Acceptance Time”) and pay for any Global Blue Shares tendered pursuant to the Offer is subject to customary conditions, including that, prior to the expiration of the Offer: (i) there be validly tendered and not properly withdrawn a number of Global Blue Shares that, together with any Global Blue Shares directly or indirectly owned by us or Merger Sub, would represent at least 90% of all the Global Blue Shares outstanding at the Acceptance Time (excluding any Global Blue Shares held by Global Blue) (the “Minimum Condition”); (ii) no governmental entity of competent jurisdiction in certain applicable jurisdictions shall have enacted or promulgated any law or order (whether temporary, preliminary or permanent) to prohibit, restrain, enjoin or make illegal the consummation of the Offer that remains in effect; (iii) certain required regulatory approvals shall have been obtained, received or deemed to have been received or in the case of any applicable waiting period, such waiting period shall have terminated or expired, in each case, either unconditionally or subject only to conditions the satisfaction of which would not have a Burdensome Effect (as defined in the Transaction Agreement); (iv) the Transaction Agreement shall not have been terminated; (v) Global Blue shall have obtained a written confirmation of the Swiss Federal Tax Administration confirming that the transaction structure does not result in Swiss withholding tax being triggered or imposed on Global Blue or Merger Sub as a result of or in connection with the Merger (as defined below) pursuant to the liquidation by proxy doctrine (stellvertretende Liquidation); and (vi) certain other customary conditions set forth in the Transaction Agreement, including on Annex C of the Transaction Agreement.
Current report
Following the completion of the Offer and provided that at such time we directly or indirectly have acquired or control at least 90% of the then outstanding Global Blue Shares (excluding Global Blue Shares held by Global Blue), we and Global Blue intend that, in accordance with the laws of Switzerland, and a merger agreement (the “Merger Agreement”) to be entered into between Merger Sub and Global Blue following the Acceptance Time, Merger Sub and Global Blue will consummate a statutory squeeze-out merger pursuant to which Global Blue will be merged with and into Merger Sub in accordance with Article 8 (2) of the Swiss Merger Act, and Merger Sub will continue as the surviving entity (the “Merger”). At the effective time of the Merger, each Global Blue Share (other than Global Blue Shares owned by us or Merger Sub) that is not validly tendered and accepted pursuant to the Offer after the Acceptance Time will thereupon be cancelled by operation of law as of the deletion of Global Blue from the commercial register in accordance with Article 21 (3) of the Swiss Merger Act and converted into the right to receive the Merger Consideration, and each Global Blue Share owned by us or Merger Sub will thereupon be deemed cancelled without any conversion thereof, in each case, on the terms and subject to the conditions set forth in the Merger Agreement.
Current report
The foregoing description of the Offer, the Merger and the Transaction Agreement does not purport to be complete and is qualified in its entirety by reference to the Transaction Agreement. The Transaction Agreement has been incorporated herein by reference to provide information regarding the terms of the Transaction Agreement and is not intended to modify or supplement any factual disclosures about Global Blue or us in any public reports filed with the SEC by Global Blue or us. In particular, the assertions embodied in the representations, warranties and covenants contained in the Transaction Agreement were made only for the purposes of the Transaction Agreement, were solely for the benefit of the parties to the Transaction Agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by information in confidential disclosure schedules provided by Global Blue to us in connection with the signing of the Transaction Agreement. These disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Transaction Agreement. Moreover, the representations and warranties in the Transaction Agreement were used for the purpose of allocating risk between Global Blue and us, rather than establishing matters of fact. Accordingly, the representations and warranties in the Transaction Agreement may not constitute the actual state of facts about Global Blue or us. The representations and warranties set forth in the Transaction Agreement may also be subject to a contractual standard of materiality different from that generally applicable to investors under federal securities laws. Therefore, the Transaction Agreement is included with this filing only to provide investors with information regarding the terms of the Transaction Agreement, and not to provide investors with any other factual information regarding the parties or their respective businesses.
Current report
Tender and Support Agreements
Current report
On February 16, 2025, in connection with the Transaction Agreement, we entered into Tender and Support Agreements (each a “Support Agreement” and collectively, the “Support Agreements”) with each of the following shareholders of Global Blue (i) SL Globetrotter, L.P., (ii) Global Blue Holding LP, (iii) Ant International Technologies (Hong Kong) Holding Limited, (iv) CK Opportunities Wolverine S.À.R.L., (v) Partners Group Private Equity (Master Fund), LLC, (vi) Partner Group Barrier Reef, L.P., (vii) Partners Group Client Access 5 L.P. Inc., (viii) Tencent Mobility Limited and (ix) certain other investors of Global Blue management (each, a “Supporting Shareholder”, and together, the “Supporting Shareholders”), pursuant to which each Supporting Shareholder agreed, among other things, to tender its Global Blue Shares in the Offer and vote its Global Blue Shares at any meeting of the shareholders of Global Blue (i) for, among other things, the approval and adoption of the Board Modification and any other proposal required for the consummation of the transactions contemplated by the Transaction Agreement, (ii) against any proposal or motion that would reasonably be expected to (A) directly result in a breach of any covenant, representation or warranty or any other obligation or agreement of Global Blue contained in the Transaction Agreement, or (B) result in any conditions to the Offer set forth in Annex C of the Transaction Agreement not being satisfied prior to 5:00 p.m., New York City time on September 30, 2025 (or February 16, 2026 if such date is extended pursuant to the Transaction Agreement), (iii) against any change in the Global Blue Board (other than the Board Modification or in the event of a director’s death or resignation, to fill the vacancy created thereby) and (iv) against any Company Takeover Proposal and against any other action, agreement or transaction involving Global Blue that would reasonably be expected to materially impede, materially delay or prevent the consummation of the Offer. As of February 16, 2025, the Supporting Shareholders owned an aggregate of approximately 90% of the Global Blue Shares.
Current report
The foregoing description of the Support Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of each of the Support Agreements.
Current report
Debt Commitment Letter
Current report
On February 16, 2025, in connection with the Transaction Agreement, 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, LLC’s 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. The Facilities are available together with cash on hand to, among other things, finance the consideration payable by us and our subsidiaries under the Transaction Agreement, refinance certain indebtedness of GB and its subsidiaries, and to pay costs, fees and expenses in connection with the Facilities and the transactions contemplated by the Transaction Agreement. Prior to the funding thereof, Shift4 Payments, LLC may, at its election, reallocate the commitments under the Bridge Facilities among the Senior Secured Bridge Facility and the Senior Unsecured Bridge Facility. The consummation of the Offer and the Merger are not subject to any financing condition.
Current report
Please see Part I Item 1A. “Risk Factors—Risks Related to the Transactions” for an overview of the risks related to the transactions contemplated by the Transaction Agreement.
Current report
On November 18, 2024, wecompleted the acquisition of Eigen Payments (“Eigen”) for $115.0 million of cash, net of cash acquired. Eigen is a Canadian-based provider of payment solutions for the retail, restaurant and hospitality industries.
Current report
On November 8, 2024, we completed the acquisition of Givex Corp. (“Givex”) for$127.8 million of cash, net of cash acquired. Givex is a global provider of gift cards, loyalty programs, and point-of-sale solutions.
Current report
We believe both of these transactions will increase our customer base and geographic footprint.
Current report
The increase in other costs of sales was primarily driven by our recent acquisitions and incremental residual commissions associated with revenue growth.
Current report
Professional expenses included expenses associated with acquisitions. The increase in professional expenses was primarily driven by higher acquisition-related costs as compared to the prior year period.
Current report
The increase in advertising and marketing expenses was primarily due to new sponsorship contracts.
Current report
The increase in other income was primarily due to transactional gains related to foreign currency in 2024, as compared to losses in 2023.
Current report
The increase in interest expense during the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily due to the issuance of our 2032 Senior Notes in August 2024. The annual cash interest expense related to the 2032 Senior Notes is expected to be approximately $74.0 million.
Current report
The income tax benefit for the year ended December 31, 2024 relates primarily to the release of the previously recorded valuation allowance against certain deferred tax assets in the U.S. During 2024, we assessed the realizability of deferred tax assets and concluded that it is more likely than not that our net deferred tax assets will be realized and that a full valuation allowance is no longer required. The assessment included the fact that as of September 30, 2024, we are no longer in a three-year cumulative loss position and are projecting sufficient income in future periods to realize our deferred tax assets. We expect income tax expense to increase in future years as a result of increased taxable income.
Current report
See “Pending Acquisitions—Debt Commitment Letter” for a description of our financing arrangements in connection with the Transaction Agreement described in that section.
Current report
Net cash provided by financing activities was $929.2 million for the year ended December 31, 2024, an increase of $1,039.1 million compared to net cash used in financing activities of $109.9 million for the year ended December 31, 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 $73.2 million increase in borrowings on the settlement line of credit, partially offset by $70.8 million of customer bank deposits being returned to depositors in connection with our transition of Finaro from a bank to a payment institution in 2024 and a $40.5 million increase in payments for the repurchase of common stock.
Current report
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 financing cash flow.
Current report
Senior Notes – 2032 Notes
Current report
In September 2024, Shift4 Payments, LLC (the “Borrower”) entered into a Second Amended and Restated First Lien Credit Agreement (the “Credit Agreement”), providing for a $450.0 million senior secured revolving credit facility (“Revolving Credit Facility”), $112.5 million of which is available for the issuance of letters of credit. The Credit Agreement amended, restated and replaced the Borrower’s prior Amended and Restated First Lien Credit Agreement, entered into on January 29, 2021, as amended, and refinanced the $100.0 million revolving credit facility thereunder. The Company capitalized approximately $4.3 million of financing fees in connection with this refinancing.
Current report
There were no borrowings and borrowing capacity on the Revolving Credit Facility was $450.0 million as of December 31, 2024.
Current report
Settlement Line Agreement
Current report
In September 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. The Settlement Line is scheduled to mature on September 29, 2025, subject to extensions. As of December 31, 2024, there were $73.2 million of borrowings against the Settlement Line. The borrowings against the Settlement Line have been deposited in an account owned and controlled by Citizens. The deposit and borrowing have been netted on the Company’s Consolidated Balance Sheet because a right of offset exists and the parties intend to net settle.
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 consolidated financial statements.
Current report
We recorded a valuation allowance against a majority of the deferred tax assets as of December 31, 2023. During the year ended December 31, 2024, management assessed the realizability of deferred tax assets and concluded that it is more likely than not that its net deferred tax assets will be realized and that a full valuation allowance is no longer required. The assessment included the fact that we are no longer in a three-year cumulative loss position and is projecting sufficient income in future periods to realize its deferred tax assets. We continue to maintain a valuation allowance on the portion of deferred tax assets that require capital gains income because there are no current projections of capital gains income at this time. In the future, changes to our estimates regarding the realizability of our gross deferred tax assets could materially impact our results of operations.
Removed paragraphs (26)
Previous report
In December 2023, our Board authorized a new stock repurchase program (the “December 2023 Program”), pursuant to which we are authorized to repurchase up to $250.0 million shares of our Class A common stock between January 1, 2024 and December 31, 2024. The December 2023 Program replaces our prior program which expired on December 31, 2023.
Previous report
Finaro
Previous report
On October 26, 2023, we acquired Finaro for$211.9 million of cashand 7.4 million shares of our Class A common stock. Finaro is a cross-border eCommerce platform and bank specializing in solving complex payment problems for multi-national merchants that we believe will help drive our expansion into international markets.
Previous report
Appetize
Previous report
On October 2, 2023, we acquired SpotOn Technologies, Inc.’s sports and entertainment division, formerly known as Appetize, for $109.5 million of cash. Appetize is a payments and software company that primarily serves sports and entertainment customers. We believe this acquisition, paired with our VenueNext technology solution, will accelerate our growth within the sports and entertainment vertical.
Previous report
The decrease in other cost of sales is primarily due to:
Previous report
•Residual commissions decreased primarily due to residual commission buyouts completed in 2022.
Previous report
•This was partially offset by higher costs of sales attributable to our recent acquisitions and higher capitalized software development cost amortization.
Previous report
•Higher residual commission buyout amortization due to the residual commission buyouts completed in 2022,
Previous report
•The amortization of new intangible assets as a result of our recent acquisitions.
Previous report
Professional expenses were comparable with the prior year. Professional expenses include expenses associated with acquisitions. There were $12.9 million of transaction expenses associated with the acquisition of Finaro during the year ended December 31, 2023.
Previous report
Advertising and marketing expenses generally remained consistent for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Previous report
If in the future, 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.
Previous report
Interest expense remained consistent for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Previous report
The effective tax rate for the year ended December 31, 2023 was approximately (2.8)%, compared to the effective tax rate for the year ended December 31, 2022 of approximately 0.2%.
Previous report
The effective tax rate for the year ended December 31, 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 POS Systems. The effective tax rate for the year ended December 31, 2022 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. and certain corporate subsidiaries in the U.S., the nontaxable adjustment related to the revaluation of the contingent liability of The Giving Block, and a $6.4 million income tax benefit related to the valuation allowance release due to acquired deferred tax liabilities from The Giving Block.
Previous report
(c)See Note 7 to the accompanying consolidated financial statements for more information on the impairment of intangible assets recognized during the year ended December 31, 2023.
Previous report
Net cash used in financing activities was $152.2 million for the year ended December 31, 2023, a decrease of $62.4 million, compared to net cash used in financing activities of $214.6 million for the year ended December 31, 2022. This decrease was primarily the result of lower payments for the repurchase of common stock of $80.5 million, partially offset by a $14.1 million increase in payments on contingent liabilities.
Previous report
In January 2021, Shift4 Payments, LLC amended and restated its First Lien Credit Agreement (the “Amended Credit Agreement”) and increased the borrowing capacity under its revolving credit facility (“Revolving Credit Facility”) from $90.0 million to $100.0 million. The Revolving Credit Facility matures on January 29, 2026 or, if greater than $150.0 million aggregate principal amount of our 2025 Convertible Notes remains outstanding on September 15, 2025, on that date. The Amended Credit Agreement requires periodic interest payments until maturity.
Previous report
In June 2023, Shift4 Payments, LLC amended its Amended Credit Agreement (the “Second Amended Credit Agreement”) to transition the reference rate of its Revolving Credit Facility from LIBOR to SOFR, effective July 1, 2023. All other terms of the Second Amended Credit Agreement remain unchanged.
Previous report
Stock repurchases
Previous report
Leases
Previous report
As of December 31, 2023, we are obligated under non-cancellable operating leases for our premises, which expire through November 2030. Future rent payments associated with outstanding operating leases total $29.3 million, with $7.5 million payable within twelve months.
Previous report
Bank Deposits
Previous report
Credorax Bank Limited (part of Finaro), a licensed credit institution in Malta, issues deposits to corporate counterparties and to individual retail customers. As of December 31, 2023, there were $72.3 million of deposit liabilities. Upon maturity of these instruments, or certain other events, we would be obligated to make payment to the depositors.
Previous report
We recorded a valuation allowance against a majority of the deferred tax assets as of December 31, 2023 and December 31, 2022. We intend to continue maintaining a valuation allowance on the deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. However, given the current earnings and anticipated future earnings, we believe there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain deferred tax assets and an increase to income tax benefit for the period the release is recorded. The exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that is able to be achieved.
Reworded paragraphs (47)
Previous wording
We are a leading independent provider of software and payment processing solutions in the U.S. based on total volume of payments processed. We have achieved our leadership position through decades of solving business and operational challenges facing our customers’ overall commerce needs. Our merchants range in size from small owner-operated local businesses to multinational enterprises conducting commerce throughout the world. We distribute our services through a scaled network of seasoned internal sales and support teams, as well as through our network of software partners. Our software partners are comprised of ISVs and VARs. For our software partners, we offer a single integration to a global end-to-end payment offering, a proprietary gateway and a robust suite of technology solutions to enhance the value of their software and simplify payment acceptance. For our merchants, we provide a seamless, unified consumer experience and fulfill business needs that would otherwise require multiple software, hardware and payment vendors.
Current wording
We are a leading independent provider of software and payment processing solutions in the U.S. based on total volume of payments processed. We power billions of transactions annually for hundreds of thousands of businesses in virtually every industry. We achieved our leadership position through decades of solving business and operational challenges facing our customers’ overall commerce needs. Our merchants range in size from small owner-operated local businesses to multinational enterprises conducting commerce globally.
Previous wording
Ability to attract and retain internal sales team and software partners. Our ability to attract and retain our internal sales team and software partners impacts our future growth and our ability to service our existing base of merchants. To facilitate internal talent attraction and retention, we strive to make Shift4 a diverse, inclusive and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by competitive compensation, benefits and health and wellness programs. It is also critical we maintain our product leadership through continued investment in innovative technology solutions as a means to ensure we retain our current software partners while attracting new software partners.
Current wording
Ability to attract and retain internal sales team and software partners. Our ability to attract and retain our internal sales team and software partners impacts our future growth and our ability to service our existing base of merchants. To facilitate internal talent attraction and retention, we strive to make Shift4 an inclusive and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by competitive compensation, benefits and health and wellness programs. It is also critical we maintain our product leadership through continued investment in innovative technology solutions as a means to ensure we retain our current software partners while attracting new software partners.
Previous wording
Pursuit of strategic acquisitions. We may continue to pursue strategic acquisitions as part of our growth strategy that includes adding complementary technology capabilities to service our base of customers and adding critical sales and support capabilities within a specific industry vertical or geography. While these acquisitions are intended to add long-term value, in the short term they may have an adverse impact on operating margins.
Current wording
Pursuit of strategic acquisitions. We intend to continue to pursue strategic acquisitions as part of our growth strategy that includes adding complementary technology capabilities to service our base of customers and adding critical sales and support capabilities within a specific industry vertical or geography. While these acquisitions are intended to add long-term value, in the short term they may have an adverse impact on operating margins.
Previous wording
Impact of international operations. As our international operations continue to expand, we will become subject to foreign exchange risk due to fluctuations in exchange rates between the U.S. dollar and the foreign currencies of countries in which we operate. Additionally, international operations expose us to additional risks and subject us to international laws and regulations. While our foreign exchange and international operating risks have historically been negligible, we will be increasingly subject to these risks as we ramp up our international expansion efforts.
Current wording
Impact of international operations. As our international operations continue to expand, we will be increasingly subject to foreign exchange risk due to fluctuations in exchange rates between the U.S. dollar and the foreign currencies of countries in which we operate. Additionally, as described elsewhere in this Annual Report on Form 10-K, international operations expose us to additional risks and subject us to international laws and regulations.
Previous wording
Payments-based revenue includes fees for payment processing services and gateway services. Payment processing fees are primarily driven as a percentage of end-to-end payment volume. They may also have a fixed fee, a minimum monthly usage fee and a fee based on transactions. Gateway services, data encryption and tokenization fees are primarily driven by per transaction fees as well as monthly usage fees. Included in payments-based revenue are fees earned from our international payments platform, strategic enterprise merchant relationships, and alternative payments methods, including cryptocurrency and stock donations.
Current wording
Payments-based revenue includes fees for payment processing services and gateway services. Payment processing fees are primarily driven as a percentage of end-to-end payment volume. They may also have a fixed fee, a minimum monthly usage fee and a fee based on transactions. Gateway services, data encryption and tokenization fees are primarily driven by per transaction fees as well as monthly usage fees. Included in payments-based revenue are fees earned from our international payments platform, strategic enterprise merchant relationships, and alternative payments methods, including cryptocurrency, gift cards and stock donations.
Previous wording
Residual commissions represent monthly payments to third-party distribution partners. These costs are typically based on a percentage of payment-based revenue.
Current wording
Residual commissions represent monthly payments to third-party distribution partners. These costs are typically based on a percentage of payments-based revenue.
Previous wording
Depreciation and amortization expense consists of depreciation and amortization expenses related to merchant relationships, trademarks and trade names, residual commission buyouts, equipment, leasehold improvements, other intangible assets, and property, plant and equipment. We depreciate and amortize our assets on a straight-line basis. Leasehold improvements are depreciated over the lesser of the estimated life of the leasehold improvement or the remaining lease term. Maintenance and repairs, which do not extend the useful life of the respective assets, are charged to expense as incurred. Intangible assets are amortized on a straight-line basis over their estimated useful lives which range from two years to twenty years.
Current wording
Depreciation and amortization expense consists of depreciation and amortization expenses related to merchant relationships, trademarks and trade names, residual commission buyouts, equipment under lease, leasehold improvements, other intangible assets, and property, plant and equipment. We depreciate and amortize our assets on a straight-line basis. Leasehold improvements are depreciated over the lesser of the estimated life of the leasehold improvement or the remaining lease term. Maintenance and repairs, which do not extend the useful life of the respective assets, are charged to expense as incurred. Intangible assets are amortized on a straight-line basis over their estimated useful lives which range from two years to twenty years.
Previous wording
Other (expense) income, netprimarily consists of other non-operating items. This includes transactional gains and losses related to foreign currency.
Current wording
Other income (expense), netprimarily consists of other non-operating items. This includes transactional gains and losses related to foreign currency.
Previous wording
Unrealized gain on investments in securities represents adjustments to the fair value of our investments in securities.
Current wording
Gain on investments in securities represents adjustments to the fair value of our investments in securities.
Previous wording
Net income (loss) attributable to noncontrolling interests arises from net income (loss) from the non-owned portion of businesses where we have a controlling interest but less than 100% ownership. This represents the noncontrolling interests in Shift4 Payments, LLC and its consolidated subsidiaries, which is comprised of the income (loss) allocated to Continuing Equity Owners as a result of their proportional ownership of LLC Interests.
Current wording
Net income attributable to noncontrolling interests arises from net income from the non-owned portion of businesses where we have a controlling interest but less than 100% ownership. This represents the noncontrolling interests in Shift4 Payments, LLC and its consolidated subsidiaries, which is comprised of the income allocated to Continuing Equity Owners as a result of their proportional ownership of LLC Interests. In addition, this represents the income allocated to shareholders of Vectron common stock besides us.
Previous wording
(a)Depreciation and amortization expense includes depreciation of equipment under lease of $35.3 million and $28.4 million for the years ended December 31, 2023 and 2022, respectively.
Current wording
(a)Depreciation and amortization expense includes depreciation of equipment under lease of $54.4 million and $35.3 million for the years ended December 31, 2024 and 2023, respectively.
Previous wording
Gross revenue increased by $571.2 million, or 29%. Gross revenue is comprised of payments-based revenue and subscription and other revenues.
Current wording
Gross revenue increased by $765.8 million, or 30%. Gross revenue is comprised of payments-based revenue and subscription and other revenues.
Previous wording
Payments-based revenue increased by $528.9 million, or 28%, primarily due to:
Current wording
Payments-based revenue increased by $604.1 million, or 25%, primarily due to:
Previous wording
•The increase in end-to-end payment volume of $37.4 billion or 52%, for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Current wording
•The increase in end-to-end payment volume of $55.8 billion, or 51%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Previous wording
•Growth in end-to-end payment volume outpaced payments-based revenue growth, primarily due to our continued onboarding of larger merchants that have lower unit pricing than our existing customer base.
Current wording
•Growth in end-to-end payment volume outpaced payments-based revenue growth, primarily due to our continued onboarding of larger merchants with lower unit pricing than our existing customer base.
Previous wording
Subscription and other revenues increased by $42.3 million, or 31%. The increase in subscription and other revenues was primarily driven by higher SaaS fee revenue.
Current wording
Subscription and other revenues increased by $161.7 million, or 90%. 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 28% increase in network fees was primarily due to the increase in payments-based revenue, which also increased 28%.
Current wording
The 22% increase in network fees was primarily due to the increase in payments-based revenue, which increased 25%.
Previous wording
Gross revenue less network fees increased by $212.9 million, or 29%, primarily due to the increase in end-to-end payment volume. See Key Performance Indicators and Non-GAAP Measuresfor a discussion and reconciliation of gross revenue less network fees.
Current wording
Gross revenue less network fees increased by $414.0 million, or 44%, primarily due to the increase in end-to-end payment volume, the impact of recent acquisitions and higher SaaS revenue. See Key Performance Indicators and Non-GAAP Measuresfor a discussion and reconciliation of gross revenue less network fees.
Previous wording
The increase in general and administrative expenses is 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 year ended December 31, 2023 was primarily driven by the remeasurement of the contingent liability related to the acquisition of Online Payments Group, versus the gain on the remeasurement of the contingent liability related to The Giving Block during the year ended December 31, 2022.
Current wording
The expense for revaluation of contingent liabilities during the year ended December 31, 2024 was primarily driven by fair value adjustments to contingent liabilities arising from various acquisitions we completed in 2022, 2023 and 2024. The expense for revaluation of contingent liabilities during the year ended December 31, 2023 was primarily driven by the remeasurement of the contingent liability related to the acquisition of Online Payments Group.
Previous wording
The increase in depreciation and amortization expense is primarily due to:
Current wording
The increase in depreciation and amortization expense was primarily due to the amortization of intangible assets recognized in connection with recent acquisitions, and increased equipment under lease associated with the growth of our SkyTab offering.
Previous wording
The increase in interest income is primarily due to a higher weighted average interest rate earned on our cash and cash equivalents.
Current wording
The increase in interest income was primarily due to an increase in our average interest-earning cash balance.
Previous wording
The unrealized gain on investments in securities for both the years ended December 31, 2023 and 2022 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 realized gain on investments in securities for the year ended December 31, 2024 was due to the sale of one of our non-marketable equity investments. The unrealized gain on investments in securities for both the years ended December 31, 2024 and 2023 was due to fair value adjustments to our non-marketable equity investments.
Previous wording
(e)See Note 13 to the accompanying consolidated financial statements for more information on the TRA.
Current wording
During the year ended December 31, 2024, in connection with our assessment of the valuation allowance on deferred tax assets, 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 consolidated financial statements for more information on the TRA.
Previous wording
End-to-end payment volume is defined as the total dollar amount of payments that we deliver for settlement on behalf of our merchants. Included in end-to-end volume are dollars routed via our international payments platform and alternative payment methods, including cryptocurrency and stock donations, plus volume we route to one or more third party merchant acquirers on behalf of strategic enterprise merchant relationships. This volume does not include volume processed through our legacy gateway-only offering.
Current wording
End-to-end payment volume is defined as the total dollar amount of payments that we deliver for settlement on behalf of our merchants. Included in end-to-end payment volume are dollars routed via our international payments platform and alternative payment methods, including cryptocurrency and stock donations, plus volume we route to one or more third party merchant acquirers on behalf of strategic enterprise merchant relationships. This volume does not include volume processed through our legacy gateway-only offering.
Previous wording
Adjusted EBITDA is the primary financial performance measure used by management to evaluate its business and monitor results of operations. Adjusted EBITDA represents EBITDA further adjusted for certain non-cash and other nonrecurring items that management believes are not indicative of ongoing operations. These adjustments include acquisition, restructuring and integration costs, revaluation of contingent liabilities, unrealized gains or losses on investments in securities, changes in TRA liability, equity-based compensation expense, and other nonrecurring items. The financial impact of certain elements of these activities is often significant to our overall financial performance and can adversely affect the comparability of our operating results and investors’ ability to analyze the business from period to period.
Current wording
Adjusted EBITDA is the primary financial performance measure used by management to evaluate its business and monitor results of operations. Adjusted EBITDA represents EBITDA further adjusted for certain non-cash and other nonrecurring items that management believes are not indicative of ongoing operations. These adjustments include acquisition, restructuring and integration costs, revaluation of contingent liabilities, unrealized gains or losses on investments in securities, changes in TRA liability, equity-based compensation expense, and foreign exchange and other nonrecurring items. The financial impact of certain elements of these activities is often significant to our overall financial performance and can adversely affect the comparability of our operating results and investors’ ability to analyze the business from period to period.
Previous wording
(a)The determination of gross profit is inclusive of depreciation of equipment under lease that is included within Depreciation and amortization expense in the Consolidated Statements of Operations. The table reflects the determination of gross profit for all periods presented. Although gross profit is not presented on the Consolidated Statements of Operations, it represents the most comparable metric calculated under U.S. GAAP to non-GAAP gross revenues less network fees.
Current wording
(a)The determination of gross profit is inclusive of depreciation of equipment under lease that is included in Depreciation and amortization expense in the Consolidated Statements of Operations. The table reflects the determination of gross profit for all periods presented. Although gross profit is not presented on the Consolidated Statements of Operations, it represents the most comparable metric calculated under U.S. GAAP to non-GAAP gross revenues less network fees.
Previous wording
(a)For the year ended December 31, 2023, primarily consisted of $23.2 million of acquisition-related costs and $4.6 million of restructuring costs. For the year ended December 31, 2022, primarily consisted of $23.7 million of acquisition-related costs.
Current wording
(a)For the year ended December 31, 2024, primarily consisted of $19.7 million of acquisition-related costs and $18.6 million of restructuring costs. For the year ended December 31, 2023, primarily consisted of $23.2 million of acquisition-related costs and $4.6 million of restructuring costs.
Previous wording
(d)See Note 12 to the accompanying consolidated financial statements for more information on the investments in non-marketable securities.
Current wording
(c)See Note 12 to the accompanying consolidated financial statements for more information on the investments in non-marketable securities.
Previous wording
(f)Consisted of equity-based compensation expense for RSUs, including employer taxes for vested RSUs. See Note 19 to the accompanying consolidated financial statements for more information on equity-based compensation.
Current wording
(e)Consisted of equity-based compensation expense for RSUs, including employer taxes for vested RSUs. See Note 19 to the accompanying consolidated financial statements for more information on equity-based compensation. We exclude noncash equity-based compensation charges and additional Federal Insurance Contribution Act (“FICA”) and related payroll tax expense incurred when employees vest in restricted stock awards. Although noncash equity-based compensation and the additional FICA and related payroll tax expenses are necessary to attract and retain employees, we place our primary emphasis on stockholder dilution as compared to the accounting charges related to such equity-based compensation plans.
Previous wording
(g)For the year ended December 31, 2023, primarily consisted of $4.0 million of unrealized foreign exchange losses and $1.9 million of legal and professional expenses for non-routine matters. For the year ended December 31, 2022, primarily consisted of $1.1 million of costs associated with an internal processing system disruption that required technical remediation, in addition to numerous other items.
Current wording
(f)For the year ended December 31, 2024, primarily consisted of $9.7 million of other non-routine selling, general, and administrative expenses, $7.8 million of expenses related to the upgrade of our internal IT systems, and $5.2 million of legal and professional expenses for non-routine matters, partially offset by $1.4 million of unrealized foreign exchange gains. For the year ended December 31, 2023, primarily consisted of $4.0 million of unrealized foreign exchange losses and $1.9 million of legal and professional expenses for non-routine matters.
Previous wording
We have historically sourced our liquidity requirements 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 December 31, 2023, our cash and cash equivalents balance was $455.0 million, of which approximately $133.4 million was held outside of the U.S. by our foreign legal entities. We also have $84.4 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 consolidated balance sheet. In addition, settlement assets includes $182.4 million of cash that will be used to settle merchant 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 December 31, 2024, our cash and cash equivalents balance was $1,211.9 million, of which approximately $163.5 million was held outside of the U.S. by our foreign legal entities. In addition, “Settlement assets” includes $226.7 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
Net cash provided by operating activities consists of net income (loss) adjusted for certain non-cash items and changes in other assets and liabilities.
Current wording
Net cash provided by operating activities consists of net income adjusted for certain non-cash items and changes in other assets and liabilities.
Previous wording
For the year ended December 31, 2022, net cash provided by operating activities of $275.4 million was primarily a result of net income of $86.7 million adjusted for non-cash expenses, including depreciation and amortization of $149.1 million, equity-based compensation of $49.6 million, and revaluation of contingent liabilities of $(36.6) million. In addition, there was an impact from working capital items of $23.1 million.
Current wording
For the year ended December 31, 2024, net cash provided by operating activities of $500.3 million was primarily a result of net income of $294.5 million, change in TRA liability of $289.0 million, depreciation and amortization of $296.6 million and equity-based compensation of $65.5 million, partially offset by deferred income taxes of $(322.0) million, gain on investments in securities of $(66.7) million and an impact from working capital items of $(75.9) million.
Previous wording
For the year ended December 31, 2023, net cash provided by operating activities of $388.3 million was primarily a result of net income of $122.9 million adjusted for non-cash expenses, including depreciation and amortization of $214.6 million, equity-based compensation of $57.4 million, revaluation of contingent liabilities of $23.1 million, and unrealized gain on investments in securities of $(12.2) million. This was partially offset by an impact from working capital items of $(52.9) million.
Current wording
For the year ended December 31, 2023, net cash provided by operating activities of $346.0 million was primarily a result of net income of $122.9 million, depreciation and amortization of $214.6 million, equity-based compensation of $57.4 million, and revaluation of contingent liabilities of $23.1 million, partially offset by gain on investments in securities of $(12.2) million and an impact from working capital items of $(95.2) million.
Previous wording
Net cash used in investing activities includes cash paid for acquisitions, residual commission buyouts, purchases of property, plant and equipment, purchases of equipment to be leased, purchases of intangible assets, investments in securities, and capitalized software development costs.
Current wording
Net cash used in investing activities includes cash paid for acquisitions, deposits made with our sponsor bank, residual commission buyouts, purchases of property, plant and equipment, purchases of equipment to be leased, purchases of intangible assets, investments in securities, and capitalized software development costs.
Previous wording
Net cash used in investing activities was $301.9 million for the year ended December 31, 2023, a decrease of $214.9 million compared to net cash used in investing activities of $516.8 million for the year ended December 31, 2022. This decrease was primarily the result of a $266.0 million decrease in residual commission buyouts, partially offset by a $34.4 million increase in net cash paid for acquisitions and a $24.0 million increase in purchases of equipment to be leased.
Current wording
Net cash used in investing activities was $691.1 million for the year ended December 31, 2024, an increase of $389.2 million compared to net cash used in investing activities of $301.9 million for the year ended December 31, 2023. This increase was primarily the result of a $384.9 million increase in net cash paid for acquisitions and $73.2 million of deposits made with our sponsor bank, offset by a $111.5 million increase in proceeds from the sale of investments in securities.
Previous wording
As of December 31, 2023 and December 31, 2022, 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 December 31, 2023, we had $1,772.5 million total principal amount of debt outstanding, including $690.0 million of 2025 Convertible Notes, $450.0 million of 2026 Senior Notes, and $632.5 million of 2027 Convertible Notes.
Previous wording
In October 2020, Shift4 Payments, LLC and Shift4 Payments Finance Sub, Inc., or the Issuers, issued an aggregate $450.0 million principal amount of the 2026 Senior Notes. We received net proceeds, after deducting initial purchasers’ discounts and estimated offering expenses, of approximately $442.8 million from the offering of the 2026 Senior Notes. The net proceeds of the 2026 Senior Notes offering, together with cash on hand, were used to repay all indebtedness outstanding under the First Lien Term Loan Facility. The 2026 Senior Notes mature on November 1, 2026, and accrue interest at a rate of 4.625% per year. Interest on the 2026 Senior Notes is payable semi-annually in arrears on each May 1, and November 1, commencing on May 1, 2021. At any time on or after November 1, 2022, the Issuers may redeem all or a portion of the 2026 Senior Notes at the redemption prices set forth in the indenture governing the 2026 Senior Notes, plus accrued and unpaid interest, if any, to but excluding, the date of redemption. In March 2022, we entered into a supplemental indenture to allow for the repurchase of capital stock as part of the Market Capitalization exception under the original indenture.
Current wording
In October 2020, Shift4 Payments, LLC and Shift4 Payments Finance Sub, Inc. (together, the “Issuers”) issued an aggregate $450.0 million principal amount of the 2026 Senior Notes. We received net proceeds, after deducting initial purchasers’ discounts and estimated offering expenses, of approximately $442.8 million from the offering of the 2026 Senior Notes. The net proceeds of the 2026 Senior Notes offering, together with cash on hand, were used to repay all indebtedness outstanding under the First Lien Term Loan Facility. The 2026 Senior Notes mature on November 1, 2026, and accrue interest at a rate of 4.625% per year. Interest on the 2026 Senior Notes is payable semi-annually in arrears on each May 1, and November 1, commencing on May 1, 2021. At any time, the Issuers may redeem all or a portion of the 2026 Senior Notes at the redemption prices set forth in the indenture governing the 2026 Senior Notes, plus accrued and unpaid interest, if any, to but excluding, the date of redemption. In March 2022, we entered into a supplemental indenture to allow for the repurchase of capital stock as part of the Market Capitalization exception under the original indenture.
Previous wording
Amended and Restated Revolving Credit Facility
Current wording
Second Amended and Restated Revolving Credit Facility
Showing the first 40 of 47 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
(d)See Note 13 to the accompanying consolidated financial statements for more information on the TRA.
Current report — wording carried from elsewhere
As of December 31, 2024, the $690.0 million of 2025 Convertible Notes are classified as current on our balance sheet, as they will mature within 12 months. We intend to settle conversions for the Convertible Notes by paying in cash up to the principal amount of the Convertible Notes with any excess to be paid or delivered, as the case may be, in cash or shares of Class A common stock or a combination of both at our election, based on the conversion rate.
Current report — wording carried from elsewhere
As of December 31, 2024, we had $2,872.5 million total principal amount of debt outstanding, including $690.0 million of 2025 Convertible Notes, $450.0 million of 2026 Senior Notes, $632.5 million of 2027 Convertible Notes and $1,100.0 million of 2032 Senior Notes.
Current report — wording carried from elsewhere
In August 2024, the Issuers issued an aggregate $1,100.0 million principal amount of the 2032 Senior Notes. We received net proceeds, after deducting initial purchasers’ discounts and estimated offering expenses, of approximately $1,088.7 million from the offering of the 2032 Senior Notes. The 2032 Senior Notes mature on August 15, 2032, and accrue interest at a rate of 6.750% per year. Interest on the 2032 Senior Notes is payable semi-annually in arrears on each February 15, and August 15, commencing on February 15, 2025. At any time on or after August 15, 2027, the Issuers may redeem all or a portion of the 2032 Senior Notes at the redemption prices set forth in the indenture governing the 2032 Senior Notes, plus accrued and unpaid interest, if any, to but excluding, the date of redemption.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
•Increased equipment under lease associated with the growth of our SkyTab offering, and;
Previous report — wording carried elsewhere
In December 2023, the Board authorized a new stock repurchase program (the “December 2023 Program”), pursuant to which we are authorized to repurchase up to $250.0 million shares of our Class A common stock between January 1, 2024 and December 31, 2024.
Previous report — wording carried elsewhere
Our material cash requirements include the following contractual obligations.