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What changed in Shift4 Payments, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Shift4 Payments, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+484 added−406 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-29)

Top changes in Shift4 Payments, Inc.'s 2024 10-K

484 paragraphs added · 406 removed · 294 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

61 edited+43 added−59 removed72 unchanged
Biggest changeDavis was Director of Early Stage Projects at X (formerly Google X) where she provided strategic direction and oversight for a portfolio of early-stage technology ventures. As Corporate Counsel and then Principal of New Business Development from 2003 to 2008, she oversaw internal operations for Google’s groundbreaking 2004 IPO and scaled some of the company’s innovative, early-stage businesses.
Biggest changeDavis spent over a decade in executive leadership at Alphabet from 2003 to 2008 and from 2016 to 2022, overseeing Google’s internal operations for its groundbreaking IPO and driving growth of some of the company’s most successful new businesses, most recently as a Director at X (formerly Google X).
Technology Solutions Our suite of technology solutions is designed to streamline our customers’ business operations, drive growth through strong consumer engagement and improve their business using rich transaction-level data. • SkyTab POS – We provide purpose-built POS workstations pre-loaded with powerful, mission-critical software suites and integrated payment functionality.
Technology Solutions Our suite of technology solutions is designed to streamline our customers’ business operations, drive growth through strong consumer engagement and improve their business using rich transaction-level data. • SkyTab POS – We provide purpose-built POS workstations pre-loaded with powerful, mission-critical software and integrated payment functionality.
Marketplace also includes a variety of functional applications including loyalty and inventory management. Sales and Distribution Our payments platform and technology solutions are delivered to our merchants through our distribution network. Today, our network includes thousands of software partners and regional internal sales and support hubs, allowing us to provide the support that many merchants demand.
Marketplace also includes a variety of functional applications including loyalty and inventory management. Sales and Distribution Our payments platform and technology solutions are delivered to our merchants through our distribution network. Today, our network includes thousands of partners and regional internal sales and support hubs, allowing us to provide the support that many merchants demand.
Our payments platform is a full suite of integrated payment products and services that can be used across multiple channels (in-store, online, mobile and tablet-based) and industry verticals, including: • end-to-end payment processing for a broad range of payment types; • merchant acquiring services; • proprietary omni-channel gateway capable of multiple methods of mobile, contactless and QR code-based payments; • complementary software integrations; • full eCommerce capabilities, including web-store design, hosting, shopping cart management and fulfillment integrations; • integrated and mobile POS solutions; • security and risk management solutions; and • reporting and analytical tools.
Our payments platform is a full suite of integrated payment products and services that can be used across multiple channels (in-store, online, mobile and tablet-based) and industry verticals, including: • end-to-end payment processing for a broad range of payment types; • merchant acquiring services; • a proprietary omni-channel gateway capable of multiple methods of mobile, contactless and QR code-based payments; • complementary third-party software integrations; • full eCommerce capabilities, including web-store design, hosting, shopping cart management and fulfillment integrations; • integrated and mobile POS solutions; • security and risk management solutions; and • reporting and analytical tools.
Depending on the card network rules, merchants are now also allowed to provide discounts or other incentives to entice consumers to pay with an alternative payment method, such as cash, checks, or debit cards.
Depending on the card network rules, merchants are also allowed to provide discounts or other incentives to entice consumers to pay with an alternative payment method, such as cash, checks, or debit cards.
Grover is qualified to serve on our Board due to her experience and insight acquired from leading companies in the restaurant and consumer industries. 18 Table of Contents Jonathan Halkyard has served as a member of the Board since June 2020. Mr. Halkyard has served as the Chief Financial Officer of MGM Resorts International since January 2021.
Grover is qualified to serve on our Board due to her experience and insight acquired from leading companies in the restaurant and consumer industries. 16 Table of Contents Jonathan Halkyard has served as a member of the Board since June 2020. Mr. Halkyard has served as the Chief Financial Officer of MGM Resorts International since January 2021.
Our enterprise customers consist of stadiums, arenas, resorts, and airlines, among others. • Value added resellers – We partner with VARs to sell our solutions to merchants. Our VARs include third-party resellers and organizations that provide distribution support for ISVs. VARs act as trusted and localized service providers to our merchants by providing them with software and services.
Our enterprise customers consist of stadiums, arenas, resorts, and airlines, among others. • Value added resellers – We partner with VARs to sell our solutions to merchants. These VARs include third-party resellers and organizations that provide distribution for ISVs. VARs act as trusted and localized service providers to our merchants by providing them with software and services.
In addition, sponsor banks may terminate their sponsorship of us or could require us to stop providing payment processing services, which would adversely affect our ability to conduct our business. Payment network rules are regulatory updated and compliance with changes may increase the cost of doing business.
In addition, sponsor banks may terminate their sponsorship of us or could require us to stop providing payment processing services, which would adversely affect our ability to conduct our business. Payment network rules are regularly updated and compliance with changes may increase the cost of doing business.
We continue to innovate and evolve our payments offering as new technology and payment methods are adopted by consumers. Through our proprietary gateway, our payments platform is integrated with over 500 software suites including some of the largest and most recognized software providers in the world.
We continue to innovate and evolve our payments offering as new technology and payment methods are adopted by consumers. Through our proprietary gateway, our payments platform is integrated with over 550 software suites including some of the largest and most recognized software providers in the world.
In the U.S., we comply with certain provisions of the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, and its implementing regulations (collectively “the BSA”) which are enforced by the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury and the U.S. Department of Justice.
For example, in the U.S., we comply with certain provisions of the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, and its implementing regulations (collectively “the BSA”) which are enforced by the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury and the U.S. Department of Justice.
Our partners are typically able to board even the largest and most complex merchants within 24 hours of submitting an application. • Merchant training – We provide a full curriculum of training materials to our merchants via a dedicated training department and content delivery platform. • Merchant risk management – Our risk management operations are designed to monitor merchant accounts on an on-going basis.
Our partners are typically able to board even the largest and most complex merchants within 24 hours of submitting an application. • Merchant training – We provide a full curriculum of training materials to our merchants via a dedicated training department and content delivery platform. 8 Table of Contents • Merchant risk management – Our risk management operations are designed to monitor merchant accounts on an on-going basis.
Our sponsor financial institutions have substantial discretion in approving certain aspects of our business practices, including the terms of our agreements with our Automated Clearing House processing clients. 12 Table of Contents Privacy and information security regulations We, our partners and certain of our merchants provide services that may be subject to various state, federal, and foreign privacy laws and regulations, including, among others, the Financial Services Modernization Act of 1999, which we refer to as the Gramm-Leach-Bliley Act (“GLBA”), the EU General Data Protection Regulation 2016/679 (“EU GDPR”), the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (the “CPRA”), the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (collectively, the “UK GDPR”), the Personal Information Protection and Electronic Documents Act in Canada and Israeli privacy laws, in particular in relation to Finaro.
Our sponsor financial institutions have substantial discretion in approving certain aspects of our business practices, including the terms of our agreements with our Automated Clearing House processing clients. 11 Table of Contents Privacy and information security regulations We, our partners and certain of our merchants provide services that may be subject to various state, federal, and foreign privacy laws and regulations, including, among others, the Financial Services Modernization Act of 1999, which we refer to as the Gramm-Leach-Bliley Act (“GLBA”), the EU General Data Protection Regulation 2016/679 (“EU GDPR”), the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (the “CCPA”), the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (collectively, the “UK GDPR”), the Personal Information Protection and Electronic Documents Act in Canada and Israeli privacy laws, in particular in relation to our European business.
We are selective in identifying and choosing our software partners, and we seek to align our business objectives with those that have strong networks, local expertise, high-quality merchant portfolios, and trusted relationships.
We are selective in identifying and choosing our VAR partners, and we seek to align our business objectives with those that have strong networks, local expertise, high-quality merchant portfolios, and trusted relationships.
For certain services and solutions, including end-to-end payments, we compete with non-integrated payment processors (such as Chase Paymentech, Elavon, FIS, Fiserv and Global Payments) and integrated payment providers (such as Adyen, Lightspeed POS, Shopify, Square and Toast). For our hospitality gateway offering, we compete primarily with Elavon and FreedomPay.
For certain services and solutions, including end-to-end payments, we compete with non-integrated payment processors (such as Chase Paymentech, Elavon, Worldpay, Fiserv and Global Payments) and integrated payment providers (such as Adyen, Lightspeed, Shopify, Square and Toast). For our hospitality gateway offering, we compete primarily with Elavon and FreedomPay.
Any new rules or regulations, implemented by the CFPB or the Financial Stability Oversight Council or in connection with the Dodd-Frank Act that are applicable to us, or any changes that are adverse to us resulting from litigation brought by third parties challenging such rules and regulations, could increase our cost of doing business or limit permissible activities.
Any new rules or regulations, implemented by the CFPB or the Financial Stability Oversight Council or in connection with the Dodd-Frank Act that are applicable to us or directly or indirectly adversely impact our business, or any changes that are adverse to us resulting from litigation brought by third parties challenging such rules and regulations, could increase our cost of doing business or limit permissible activities.
Bakhshandehpour has served José Andrés Group as an operating partner, advisor and investor. In his current capacity, Mr. Bakhshandehpour leads the execution of company strategy globally, across the restaurant, brand, hotel, and media divisions. Since 2015, Mr. Bakhshandehpour has also been the CEO & Managing Partner of Silverstone, a vertically integrated hospitality and lifestyle investment firm.
Bakhshandehpour has served José Andrés Group as an operating partner, advisor and investor. In his current capacity, Mr. Bakhshandehpour leads the execution of company strategy globally, across the restaurant, brand, hotel, and media divisions. Since 2015, Mr. Bakhshandehpour has also been the Chief Executive Officer & Managing Partner of Silverstone, a vertically integrated hospitality and lifestyle investment firm.
From 2012 to 2015, Mr. Bakhshandehpour served as President, CEO and Board Member of SBE Entertainment, a Colony Capital portfolio company, where he was responsible for SBE Entertainment’s global operations across the hotel, restaurant and entertainment divisions. Since October 2023, Mr. Bakhshandehpour has served as a member on the advisory board of Fiserv, Inc., a financial services company.
From 2012 to 2015, Mr. Bakhshandehpour served as President, Chief Executive Officer and Board Member of SBE Entertainment, a Colony Capital portfolio company, where he was responsible for SBE Entertainment’s global operations across the hotel, restaurant and entertainment divisions. Since October 2023, Mr. Bakhshandehpour has served as a member on the advisory board of Fiserv, Inc., a financial services company.
Whitman School of Management and a Juris Doctor and Master’s in Business Administration from Quinnipiac University’s School of Law and Quinnipiac University Lender School of Business, respectively. 17 Table of Contents Taylor Lauber has served as Shift4 Payments, Inc.’s President since February 2022 and Chief Strategy Officer since its formation.
Whitman School of Management and a Juris Doctor and Master’s in Business Administration from Quinnipiac University’s School of Law and Quinnipiac University Lender School of Business, respectively. 15 Table of Contents Taylor Lauber has served as Shift4 Payments, Inc.’s President since February 2022 and served as Chief Strategy Officer from its formation to 2024.
We have designed our payments platform to be: • Integrated – fully integrated and seamlessly connected, facilitating easy data capture and compatibility across all solutions; • Reliable – supports the most demanding payment environments seven days a week, 24 hours a day, 365 days a year; and • Secure – Payment Card Industry (“PCI”)-validated Point-to-Point Encryption (“P2PE”) tokenization and EMV-ready solutions.
We have designed our payments platform to be: • Integrated – fully integrated and seamlessly connected, facilitating easy data capture and compatibility across all solutions; • Reliable – supports the most demanding payment environments 24 hours a day, 365 days a year; and • Secure – Payment Card Industry (“PCI”)-validated Point-to-Point Encryption (“P2PE”) tokenization and EMV-ready (Europay, Mastercard, and Visa) solutions.
Our distribution approach and commitment to our internal sales team and software partners are part of our go-to-market strategy. • Independent software vendors – Our solutions are connected into over 500 integrations with market-leading software providers, including some of the largest and most recognizable technology companies in the world.
Our distribution approach and commitment to our internal sales team and software partners are key to our go-to-market strategy. • Independent software vendors – Our solutions are connected into over 550 integrations with market-leading software providers, including some of the largest and most recognizable technology companies in the world.
Sam Bakhshandehpour has served as a member of the Board since October 2022. Since 2020, Mr. Bakhshandehpour has served as the President and board member of José Andrés Group (f/k/a ThinkFoodGroup), and alongside José Andrés and Rob Wilder, serves in the Office of the CEO. Over the past decade, Mr.
Sam Bakhshandehpour has served as a member of the Board since October 2022. Since 2020, Mr. Bakhshandehpour has served as the President and board member of José Andrés Group (f/k/a ThinkFoodGroup), and alongside José Andrés and Rob Wilder, serves in the Office of the Chief Executive Officer. Over the past decade, Mr.
Modifications to the interchange fees permitted could adversely affect our business, financial condition or results of operations. In addition, members of Congress have periodically introduced legislation to reduce credit card interchange, such as The Credit Card Competition Act of 2023. If any such legislation is passed, our business, financial condition or results of operations may be adversely affected.
In addition, members of Congress have periodically introduced legislation to reduce credit card interchange, such as The Credit Card Competition Act of 2023. If any such legislation is passed, our business, financial condition or results of operations may be adversely affected.
Our merchants have the flexibility to utilize our payments platform in one of two ways: as a gateway or as an end-to-end payment solution. End-to-end payments merchants benefit from a single, unified vendor solution for payment acceptance, devices, POS software solutions and a full suite of business intelligence tools.
Our merchants have the flexibility to utilize our payments platform in one of two ways: as a gateway or as an end-to-end payment solution. Gateway merchants benefit from interoperability with many third-party payment processors. End-to-end payments merchants benefit from a single, unified vendor solution for payment acceptance, devices, POS software solutions and a full suite of business intelligence tools.
The address of the SEC’s website is www.sec.gov . 16 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS AND DIRECTORS The following table provides information regarding our executive officers and members of our board of directors (the “Board”) as of the date of this Annual Report: Name Age Position(s) Jared Isaacman 41 Founder, Chief Executive Officer and Chairman Nancy Disman 53 Chief Financial Officer Jordan Frankel 41 Secretary, General Counsel and Executive Vice President, Legal, Risk and Compliance Taylor Lauber 40 President and Chief Strategy Officer Donald Isaacman 77 Director Christopher Cruz 39 Director Karen Roter Davis 51 Director Sarah Goldsmith-Grover 59 Director Jonathan Halkyard 59 Director Sam Bakhshandehpour 48 Director Executive Officers and Directors Jared Isaacman has served as Shift4 Payments, Inc.’s Chief Executive Officer and the Chairman of the Board since its formation, and is the Founder of Shift4 Payments, LLC, as well as serving as the Chief Executive Officer of Shift4 Payments, LLC since its founding in 1999.
The address of the SEC’s website is www.sec.gov . 14 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS AND DIRECTORS The following table provides information regarding our executive officers and members of our board of directors (the “Board”) as of the date of this Annual Report: Name Age Position(s) Jared Isaacman 42 Founder, Chief Executive Officer and Chairman Nancy Disman 54 Chief Financial Officer Jordan Frankel 42 Secretary, General Counsel and Executive Vice President, Legal, Risk and Compliance Taylor Lauber 41 President Donald Isaacman 78 Director Christopher Cruz 40 Director Karen Roter Davis 52 Director Sarah Goldsmith-Grover 60 Director Jonathan Halkyard 60 Director Sam Bakhshandehpour 49 Director Executive Officers and Directors Jared Isaacman has served as Shift4 Payments, Inc.’s Chief Executive Officer and the Chairman of the Board since its formation, and is the Founder of Shift4 Payments, LLC, as well as serving as the Chief Executive Officer of Shift4 Payments, LLC since its founding in 1999.
In addition, our underwriting strategy offers expedited activation to merchants with a low risk profile, which enhances their customer experience. 9 Table of Contents • Merchant onboarding and activation – A business owner can enroll for a merchant account within minutes via our web based portal.
In addition, our underwriting strategy offers expedited activation to merchants with a low risk profile, which enhances their customer experience. • Merchant onboarding and activation – A business owner can enroll for a merchant account within minutes via our online portal.
Government Regulation Various aspects of our business and service areas are subject to U.S. federal, state, and local regulation, as well as regulation outside the U.S. As we continue to expand our business globally, we will become subject to more government regulation in new markets.
Government Regulation Various aspects of our business and service areas are subject to U.S. federal, state, and local regulation, as well as regulation outside the U.S. (in particular, European Union (“EU”) and United Kingdom (“UK”) regulation). As we continue to expand our business globally, we will become subject to more government regulation in new markets.
Cruz was in the leveraged finance and restructuring group at UBS Investment Bank, from 2006 to 2008. Mr. Cruz also serves on the boards of Neon NewCo Corp. (an entity funding the pending acquisition of Netspend Corp.) as of August 2022, Flowbird Group as of February 2022, and Sightline Payments as of December 2020. Mr.
Cruz was in the leveraged finance and restructuring group at UBS Investment Bank, from 2006 to 2008. Mr. Cruz also serves on the board of Neon NewCo Corp. (an entity funding the pending acquisition of Netspend Corp.) as of August 2022. Mr.
In addition to her Entrada-related boards, she serves on the board of 360Learning S.A., where she is a member of the audit and M&A and finance committees, and she previously served on the board of Innovyze, acquired by Autodesk, where she was chair of the audit committee and member of the compensation committee, and as a member of Lawrence Livermore National Laboratory’s Carbon Impact Initiative Committee.
In addition to her Entrada-related boards, she serves on the board of 360Learning S.A., where she is a member of the audit and M&A and finance committees, and she previously served on the board of Innovyze, acquired by Autodesk, where she was chair of the audit committee and member of the compensation committee. Ms.
We are also subject to certain economic and trade sanctions programs that are administered by the Department of Treasury’s Office of Foreign Assets Control (“OFAC”), which prohibit or restrict transactions to or from, or dealings with, specified countries, their governments, and in certain circumstances, their nationals, and with individuals and entities that are specially-designated nationals of those countries, narcotics traffickers, and terrorists or terrorist organizations.
We have policies, procedures, systems, and controls designed to promote compliance with such laws and regulations. 12 Table of Contents We are also subject to economic and trade sanctions programs that are administered by the Department of Treasury’s Office of Foreign Assets Control (“OFAC”), which prohibit or restrict transactions to or from, or dealings with, specified countries, their governments, and in certain circumstances, their nationals, and with individuals and entities that are specially-designated nationals of those countries, narcotics traffickers, and terrorists or terrorist organizations.
Because we are not a “member bank” in the U.S. and Canada as defined in certain of the payment networks’ rules, we are not eligible for primary membership in certain payment networks and are therefore unable to directly access them.
Our entities that are not a “member bank” as defined in certain of the payment networks’ rules are not eligible for primary membership in certain payment networks and are therefore unable to directly access them.
Cruz previously served on the board of M&M Food Market from July 2014 to February 2022. He holds a Bachelor of Arts in Honors Business Administration from the Richard Ivey School of Business at the University of Western Ontario. We believe Mr.
Cruz previously served on the boards of Sightline Payments from December 2020 to February 2025, Flowbird Group from February 2022 to January 2025, and M&M Food Market from July 2014 to February 2022. He holds a Bachelor of Arts in Honors Business Administration from the Richard Ivey School of Business at the University of Western Ontario. We believe Mr.
By consolidating these functions through a single, unified vendor solution, these merchants are usually able to reduce total spend on payment acceptance solutions and access gateway and technology solutions as value-added features. Gateway merchants benefit from interoperability with many third-party payment processors.
By consolidating these functions through a single, unified vendor solution, these merchants are typically able to reduce total spend on payment acceptance solutions and access gateway and technology solutions as value-added features.
The Bank is also subject to the Banking Act, Chapter 371 of the laws of Malta, and all subsidiary regulation as well as any banking rules issued by the Malta Financial Services Authority as the competent authority. 13 Table of Contents Unfair trade practice regulations We, our partners and certain of our merchants are subject to various federal, state, and international laws prohibiting unfair or deceptive trade practices, such as Section 5 of the Federal Trade Commission Act and the prohibition against unfair, deceptive, or abusive acts or practices (“UDAAPs”) under the Dodd-Frank Act, and prohibiting misrepresentations and other activities related to telemarketing, such as the Telemarketing Sales Act.
Unfair trade practice regulations We, our partners and certain of our merchants are subject to various federal, state, and international laws prohibiting unfair or deceptive trade practices, such as Section 5 of the Federal Trade Commission Act and the prohibition against unfair, deceptive, or abusive acts or practices (“UDAAPs”) under the Dodd-Frank Act, and prohibiting misrepresentations and other activities related to telemarketing, such as the Telemarketing Sales Act.
Anti-money laundering, anti-bribery, sanctions, and counter-terrorist regulations We are contractually required to comply with the anti-money laundering laws and regulations in certain countries.
Anti-money laundering, anti-bribery, sanctions, and counter-terrorist regulations We are contractually required to comply with the anti-money laundering laws and regulations in certain countries, and in others where we hold regulatory licenses, our relevant subsidiaries are directly subject to them.
The Bank is also required to comply with the anti-money laundering law and regulations applicable in the EU as transposed into Maltese by virtue of the Prevention of Money Laundering Act, Chapter 373 of the laws of Malta and all subsidiary legislation emanating from it. We are also subject to anti-corruption laws and regulations, including the U.S.
Our Maltese Financial Institution licensed entity is directly required to comply with the anti-money laundering law and regulations applicable in the EU as transposed into Maltese law by virtue of the Prevention of Money Laundering Act and the Prevention of Money Laundering and Financing of Terrorism Regulation, Chapter 373 of the laws of Malta and all subsidiary legislation emanating from it.
Instead, those payment networks require us to be sponsored by a member bank as a service provider, which we have accomplished through a sponsorship agreement with our sponsor bank. We are registered with Visa, Mastercard and other networks as service providers for member institutions.
Instead, those payment networks require payment service providers to be sponsored by a member bank, which, for the relevant entities, we have accomplished through a sponsorship agreement with a sponsor bank. We are registered with Visa, Mastercard and other networks as either direct members (in relation to jurisdictions where we hold appropriate licenses) or service providers for member institutions.
Among other things, Title X of the Dodd-Frank Act established the Consumer Financial Protection Bureau (“CFPB”) to regulate consumer financial products and services (including some offered by our partners). The CFPB may also have authority over us as a provider of services to regulated financial institutions in connection with consumer financial products.
Among other things, Title X of the Dodd-Frank Act established the Consumer Financial Protection Bureau (“CFPB”) to regulate consumer financial products and services (including some offered by our partners).
The majority of our merchant base operates in end markets with high card-present volume and low levels of fraud and chargeback losses.
Our operations and support services include: Merchant Operations and Support • Merchant underwriting – Our merchant underwriting team manages applications and risk evaluation of new merchants. The majority of our merchant base operates in end markets with high card-present volume and low levels of fraud and chargeback losses.
From April 2016 to March 2017, Ms. Disman served as the Chief Financial Officer and Chief Administrative Officer of the Merchant Acquiring Segment of Total System Services, Inc. (“TSYS”), a global provider of payment solutions, and from June 2014 to March 2016, Ms.
From November 2017 to August 2022, Ms. Disman was the Chief Financial Officer and Chief Administrative Officer of Intrado Corporation, a provider of cloud-based technology. From April 2016 to March 2017, Ms. Disman served as the Chief Financial Officer and Chief Administrative Officer of the Merchant Acquiring Segment of Total System Services, Inc.
There are greatly enhanced sanctions under GDPR for failing to comply, and penalties for certain breaches are up to the greater of EUR 20 million/ GBP 17.5 million or 4% of our global annual turnover. We are also subject to evolving EU and UK privacy laws on cookies, tracking technologies and e-marketing.
There are material sanctions under GDPR for failing to comply, and penalties for certain breaches are up to the greater of EUR 20 million/ GBP 17.5 million or 4% of our global annual turnover.
Separately, the Dodd-Frank Act directed the Federal Reserve to regulate debit interchange transaction fees that a card issuer or payment network receives or charges for an electronic debit transaction. Pursuant to the Dodd-Frank Act, debit interchange transaction fees must be “reasonable and proportional” to the cost incurred by the card issuer in authorizing, clearing, and settling the transaction.
Pursuant to the Dodd-Frank Act, debit interchange transaction fees must be “reasonable and proportional” to the cost incurred by the card issuer in authorizing, clearing, and settling the transaction.
Competition We compete with a range of providers, many of whom may provide a component of our offering, but do not provide an integrated offering capable of solving complex business challenges for software partners and merchants.
We believe these initiatives combine organic growth, technological innovation, and strategic expansion to best position us for success. Competition We compete in a highly competitive market with a range of providers, many of whom may provide a component of our offering, but do not provide an integrated offering capable of solving complex business challenges for software partners and merchants.
We also offer innovative technology solutions that go beyond payment processing. Some of our solutions are developed in-house, such as business intelligence and POS software, while others are powered by our network of complementary third-party applications.
We offer innovative technology solutions that go beyond payment processing. Some of our solutions are developed in-house, such as business intelligence and POS software, while others are powered by our network of complementary third-party applications. Our focus on innovation, combined with our product-driven culture, enables us to create scalable technology solutions that benefit from an extensive library of intellectual property.
Our VenueNext solutions include mobile ordering, countertop POS, self-service kiosk, and digital wallet to facilitate food and beverage, merchandise, and loyalty all within a white-labeled technology application that is fully integrated with our secure end-to-end payment processing platform. • Lighthouse – Our cloud-based suite of business intelligence tools includes customer engagement, social media management, online reputation management, scheduling and product pricing, as well as extensive reporting and analytics. • SkyTab Mobile – Our mobile payments offering, SkyTab Mobile, provides a complete feature set, including pay-at-the-table, order-at-the-table, delivery, customer feedback and email marketing, all of which are integrated with our proprietary gateway and Lighthouse .
Our SkyTab Venue solutions include mobile ordering, countertop POS, self-service kiosk, and digital wallet to facilitate food and beverage, merchandise, and loyalty all within a white-labeled technology application that is fully integrated with our secure end-to-end payment processing platform. • Lighthouse – Our cloud-based suite of business intelligence tools includes customer engagement, social media management, online reputation management, scheduling and product pricing, as well as extensive reporting and analytics. • The Giving Block – Our cryptocurrency donation marketplace allows donors to easily gift a variety of cryptocurrencies to over 2,000 charities. • Shift4Shop – Our turnkey eCommerce platform provides everything a merchant needs to build their business online.
In addition, we own a portfolio of trademarks in multiple jurisdictions around the world and have registered our primary trademarks, Shift4 Payments, Shift4, and SkyTab. Seasonality Our operating results and operating metrics are subject to seasonality based on historic patterns of consumer and business traveler spending behaviors coupled with exposure to seasonality experienced by our mix of merchants.
Seasonality Our operating results and operating metrics are subject to seasonality based on historic patterns of consumer and business traveler spending behaviors coupled with exposure to seasonality experienced by our mix of merchants.
In addition, the regulations contain non-exclusivity provisions that ban debit card networks from prohibiting an issuer from contracting with any other card network that may process an electronic debit transaction involving an issuer’s debit cards and prohibit card issuers and card networks from inhibiting the ability of merchants to direct the routing of debit card transactions over any network that can process the transaction. 11 Table of Contents On November 14, 2023, the Federal Reserve issued a notice of proposed rulemaking, pursuant to which the Federal Reserve proposes to update certain interchange rates for card issuers operating in the U.S. with assets of $10 billion or more.
In addition, the regulations contain non-exclusivity provisions that ban debit card networks from prohibiting an issuer from contracting with any other card network that may process an electronic debit transaction involving an issuer’s debit cards and prohibit card issuers and card networks from inhibiting the ability of merchants to direct the routing of debit card transactions over any network that can process the transaction.
She holds a Bachelor of Science in Business Administration and Accounting from the State University of New York at Albany and is a Certified Public Accountant in the State of New York.
Disman has also served as a member of the Audit Committee of the Board of Managers of West Technology Group LLC since August 2022. She holds a Bachelor of Science in Business Administration and Accounting from the State University of New York at Albany and is a Certified Public Accountant in the State of New York.
We leverage our over 30 years of operating history in the hospitality sector, as well as our enterprise domain expertise, to ensure our obligations to our customers are maintained and fulfilled effectively. Our operations and support services include: Merchant Operations and Support • Merchant underwriting – Our merchant underwriting team manages applications and risk evaluation of new merchants.
Operations and Support Services Our operations infrastructure is designed to deliver high-quality experiences to our customers and to drive efficiencies throughout the entire payment ecosystem. We leverage our over 30 years of operating history in the hospitality sector, as well as our enterprise domain expertise, to ensure our obligations to our customers are maintained and fulfilled effectively.
ITEM 1. BUSINESS Our Company We are a leading independent provider of software and payment processing solutions in the United States (“U.S.”) based on total volume of payments processed. We achieved our leadership position through decades of solving business and operational challenges facing our customers’ overall commerce needs.
ITEM 1. BUSINESS Our Company At Shift4, our mission is to boldly redefine commerce by simplifying complex payments ecosystems across the world. We are a leading independent provider of software and payment processing solutions in the United States (“U.S.”) based on total volume of payments processed.
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 independent software vendors (“ISVs”) and value-added resellers (“VARs”).
We distribute our services through a network of internal sales teams, as well as through our network of partners. Our partners are comprised of (1) independent software vendors (“ISVs”) and (2) value-added resellers (“VARs”).
Davis is a Managing Partner at Entrada Ventures, an early-stage venture capital firm investing in emerging, high growth enterprise and industrial technology companies. Ms. Davis spent over a decade in executive leadership at Alphabet, from pre-IPO to more recently. From 2017 until February 2022, Ms.
Davis is a Managing Partner at Entrada Ventures, a venture capital firm investing in high growth enterprise and industrial technology companies. Ms.
Our compelling value proposition enables our software partners to extend attractive pricing arrangements to our merchants. For merchants that subscribe to our end-to-end payments offering, our software partners can offer gateway and technology solutions as value-added features included in the price of our payments offering.
For merchants that subscribe to our end-to-end payments offering, our partners can offer gateway and technology solutions as value-added features included in the price of our payments offering. We believe that enabling our partners to provide a cost-effective and comprehensive bundle of solutions best supports their ability to sell our solutions and grow their businesses.
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.
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. Our partners rely on us to provide a seamless commerce experience, enterprise grade security, analytics, and compatibility with a wide network of other point of sale (“POS”) solutions.
Nancy Disman has served as Shift4 Payments, Inc.’s Chief Financial Officer since August 2022. Ms. Disman previously served as a member of the Board from June 2020 to August 2022. From November 2017 to August 2022, Ms. Disman was the Chief Financial Officer and Chief Administrative Officer of Intrado Corporation, a provider of cloud-based technology.
See “Recent Developments” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report. Nancy Disman has served as Shift4 Payments, Inc.’s Chief Financial Officer since August 2022. Ms. Disman previously served as a member of the Board from June 2020 to August 2022.
Disman was the Chief Financial Officer of TransFirst, a merchant account provider in the credit card processing industry, prior to its acquisition by TSYS. Ms. Disman has also served as a member of the Audit Committee of the Board of Managers of West Technology Group LLC since August 2022.
(“TSYS”), a global provider of payment solutions, and from June 2014 to March 2016, Ms. Disman was the Chief Financial Officer of TransFirst, a merchant account provider in the credit card processing industry, prior to its acquisition by TSYS. Ms.
Ms. Davis earned her MBA from Kellogg School of Management at Northwestern University, her J.D. from Northwestern University School of Law, and her B.A. from Princeton University’s School of Public & International Affairs. We believe Ms.
Davis earned her MBA from Kellogg School of Management at Northwestern University, her Juris Doctor from Northwestern University School of Law, and her Bachelor of Arts from Princeton University’s School of Public & International Affairs. Ms. Davis is certified in Cybersecurity Oversight by Carnegie Mellon’s Software Engineering Institute and the National Association of Corporate Directors. We believe Ms.
Our SkyTab POS offering helps our merchants scale their business and improve operational efficiency while reducing total cost of ownership relative to other competing solutions. • VenueNext – Our mobile-first technology solution provides stadium, theme park and entertainment venues with a frictionless commerce experience.
We believe our SkyTab POS offering helps our merchants scale their business and improve operational efficiency while reducing total cost of ownership relative to other competing solutions. • SkyTab Mobile – Our mobile payments offering, SkyTab Mobile, provides a complete feature set, including pay-at-the-table, order-at-the-table, delivery, customer feedback and email marketing, all of which are integrated with our proprietary gateway and Lighthouse .
We derive the majority of our revenue from fees paid by our merchants, which principally include a processing fee that is charged as a percentage of end-to-end payment volume or as a fee per transaction.
Our revenue is predominantly recurring due to the nature of our business model. The majority of our revenue is derived from processing fees, which are charged either as a percentage of end-to-end payment volume and/or as a fee per transaction. Additionally, we generate subscription revenue from licensing our POS software, business intelligence tools, payment device management, and other technology solutions.
Our network of software partners provides a consistent and extensive source of new merchant acquisition, with no single relationship accounting for more than 8% of our end-to-end volume for the year ended December 31, 2023. In addition, we leverage our Shift4 Model to create strategic and economic alignment with our partners to incentivize them to continue working with us.
Our network of VARs provide a consistent and extensive source of new merchant acquisition, with no single VAR accounting for more than 3% of our volume for the year ended December 31, 2024. Our compelling value proposition enables our partners to extend attractive pricing arrangements to our merchants.
If the U.S. and foreign patents currently issued to us are maintained until the end of their terms, they will expire between the year 2026 and the year 2042. The expiration of these patents is not reasonably likely to have a material adverse effect on our business, financial condition or results of operations.
We hold dozens of patents globally related to our proprietary payments technologies. The expiration of these patents is not reasonably likely to have a material adverse effect on our business, financial condition or results of operations. In addition, we own a portfolio of trademarks globally and have registered our primary trademarks, Shift4 Payments, Shift4, and SkyTab.
We believe we compete favorably with respect to all of these factors.
We believe we compete favorably with respect to all of these factors. Patents, Trademarks and Intellectual Property We rely on a combination of intellectual property rights, including patents, trademarks, copyrights, trade secrets and contractual rights to protect our proprietary software and our brands.
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Merchants are increasingly adopting numerous software solutions and new digital tools to operate their business and remain competitive. The complexity of conducting commerce across multiple channels, geographies and systems has created an enormous challenge for merchants.
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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.
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For example, a small business may use over a dozen disparate software systems to operate its business, manage interactions with its customers and accept payments. A large resort may operate an even greater number of software systems to enable online reservations, check-ins, restaurants, salon and spa, activities, parking and more.
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Merchants are often utilizing a variety of software and hardware tools to operate their businesses and stay competitive. However, the complexity of managing commerce across multiple channels, geographies, and systems with a variety of tools presents significant challenges. For example, a small business may rely on many disparate tools to manage operations, customer interactions, and payments.
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The scale and complexity of managing these software systems, often sourced from different providers, while seamlessly accepting payments, is a growing challenge for merchants of any size. Our software partners rely on us to provide a seamless commerce experience, enterprise grade security, analytics, and compatibility with a wide network of other point of sale (“POS”) solutions.
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A large resort might use an even broader array of tools to handle online reservations, check-ins, dining, spa services, activities, parking, and more. Coordinating numerous systems from different providers while ensuring seamless payment acceptance and a good customer experience is becoming a growing challenge for businesses of all sizes.
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At the heart of our business is our payments platform.
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We aim to simplify and enhance the commerce experience for merchants, enabling them to focus on growing their business rather than navigating a patchwork of fragmented tools.
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Our focus on innovation, combined with our product-driven culture, enables us to create scalable technology solutions that benefit from an extensive library of intellectual property. In addition, our merchant base is highly diversified with no single merchant representing more than 3% of end-to-end payment volume in recent years.
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By delivering an integrated solution that unites hardware, software and payment processing, we aim to reduce inefficiencies, improve operational clarity, and elevate the customer experience—empowering businesses to succeed in an increasingly competitive and complex economy. At the heart of our business is our payments platform.
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We also generate subscription revenue from licensing subscriptions to our POS software, business intelligence tools, payment device management and other technology solutions, for which we typically charge flat subscription fees on a monthly basis. Our revenue is generally recurring in nature because of the critical nature of the solutions we provide and the costs associated with changing providers.
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Our merchant base is diversified, with no single merchant accounting for more than 3% of our revenue in recent years. Our Shift4 Model Our mission is to enable commerce.
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We also benefit from a high degree of operating leverage given the combination of our highly scalable payments platform, strong customer unit economics, and relatively low variable costs after network fees. Our Shift4 Model Our mission is to enable commerce.
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This unique solution is relevant for merchants ranging from small and midsize businesses (“SMB”) to large enterprises and across numerous industry verticals. • SkyTab Venue ( formerly known as VenueNext) – O ur mobile-first technology solution provides stadium, theme park and entertainment venues with a frictionless commerce experience.
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This unique solution is relevant for merchants ranging from small and midsize businesses (“SMB”) to large enterprises and across numerous industry verticals. • The Giving Block – Our cryptocurrency donation marketplace allows donors to easily gift a variety of cryptocurrencies to over 2,000 charities. • Shift4Shop – Our turnkey eCommerce platform provides everything a merchant needs to build their business online.
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Growth Strategy Our recent growth has been fueled by a combination of focused strategic initiatives: Expanding End-to-End Payment Volume – We aim to accelerate growth by increasing the payment volume processed through our integrated platform across diverse verticals, including restaurants, hospitality, venues, specialty retail, and e-commerce.
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We believe that enabling our software partners to provide a cost-effective and comprehensive bundle of solutions best supports their ability to sell our solutions and grow their businesses. Finaro Acquisition We acquired Credorax, Inc. d/b/a Finaro (“Finaro”) on October 26, 2023.
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In addition to converting gateway customers to full end-to-end processing, we leverage over 550 unique software integrations to share data with merchants’ product suites and enhance the customer experience. We plan to continue expanding our proprietary software integrations, which we believe provides a competitive advantage in attracting and retaining merchants.
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Finaro’s principal activities consist of the provision of integrated acquiring and payment processing services to merchants located in Europe and the United Kingdom, through the development of software to be used for online payment processing and related activities. Finaro provides the acquiring services through Credorax Bank Limited, its licensed credit institution in Malta (the “Bank”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThus, we are at risk of shortage, price increases, tariffs, changes, delay, or discontinuation of key components, which could disrupt and materially and adversely affect our business. Many of the key components used to manufacture our products, such as our POS systems, come from limited sources of supply.
Biggest changeIf these card issuers discontinue this practice, our revenue and margins in these jurisdictions could be adversely affected. 34 Table of Contents Certain key components are procured from a limited number of suppliers. Thus, we are at risk of shortage, price increases, tariffs, changes, delay, or discontinuation of key components, which could disrupt and materially and adversely affect our business.
The impairment of a significant portion of these assets would negatively affect our business, financial condition or results of operations.” 23 Table of Contents In addition, to the extent we pursue acquisitions outside of the U.S., these potential acquisitions often involve additional or increased risks including: • managing geographically separated organizations, systems and facilities; • integrating personnel with diverse business backgrounds and organizational cultures; • complying with non-U.S. regulatory and other legal requirements; • addressing financial and other impacts to our business resulting from fluctuations in currency exchange rates and unit economics across multiple jurisdictions; • enforcing intellectual property rights outside of the U.S.; • difficulty entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these markets; and • general economic and political conditions.
The impairment of a significant portion of these assets would negatively affect our business, financial condition or results of operations.” In addition, to the extent we pursue transactions including acquisitions outside of the U.S., these potential transactions often involve additional or increased risks including: • managing geographically separated organizations, systems and facilities; • integrating personnel with diverse business backgrounds and organizational cultures; • complying with non-U.S. regulatory and other legal requirements; • addressing financial and other impacts to our business resulting from fluctuations in currency exchange rates and unit economics across multiple jurisdictions; • enforcing intellectual property rights outside of the U.S.; 23 Table of Contents • difficulty entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these markets; and • general economic and political conditions.
Any of these factors could decrease the value of revenues and earnings we derive from our non-U.S. operations and adversely affect our business. 36 Table of Contents While our foreign exchange and international operating risks have historically been negligible, we have recently begun offering merchant acquiring and processing services in geographies outside of the U.S., including the European Union and United Kingdom, and we may increasingly be subject to said risks as we continue to pursue our international expansion efforts.
Any of these factors could decrease the value of revenues and earnings we derive from our non-U.S. operations and adversely affect our business. 36 Table of Contents While our foreign exchange and international operating risks have historically been negligible, we have recently begun offering merchant acquiring and processing services in geographies outside of the U.S., including Canada, the European Union and United Kingdom, and we may increasingly be subject to said risks as we continue to pursue our international expansion efforts.
We are also subject to U.S. and EU financial services regulations, a myriad of consumer protection laws, economic sanctions, laws and regulations, anticorruption laws, escheat regulations and privacy and information security regulations. Changes to legal rules and regulations, or interpretation or enforcement of them, could have a negative financial effect on us.
We are also subject to U.S., EU and UK financial services regulations, a myriad of consumer protection laws, economic sanctions, laws and regulations, anticorruption laws, escheat regulations and privacy and information security regulations. Changes to legal rules and regulations, or interpretation or enforcement of them, could have a negative financial effect on us.
We may become subject to additional European Union and United Kingdom financial regulatory requirements and we could become subject to risks associated with the ongoing uncertainty surrounding the future relationship between the United Kingdom and the European Union (including any resulting economic downturn) following the United Kingdom’s exit from the European Union (“Brexit”).
We may become subject to additional Canadian, European Union and United Kingdom financial regulatory requirements and we could become subject to risks associated with the ongoing uncertainty surrounding the future relationship between the United Kingdom and the European Union (including any resulting economic downturn) following the United Kingdom’s exit from the European Union (“Brexit”).
For example, in the U.S. and Canada we are dependent on our relationship with a single third-party processor for services such as merchant authorization, processing, risk and chargeback monitoring accounting and clearing and settlement for the transactions we service.
For example, in the U.S., EU, and Canada we are dependent on our relationship with a single third-party processor for services such as merchant authorization, processing, risk and chargeback monitoring accounting and clearing and settlement for the transactions we service.
We expect the competitive landscape will continue to change in a variety of ways, including: • rapid and significant changes in technology, resulting in new and innovative payment methods and programs that could place us at a competitive disadvantage and reduce the use of our products and services; • competitors, including non-integrated payment processors (such as Chase Paymentech, Elavon, FIS, Fiserv and Global Payments) and integrated payment providers (such as Adyen, Lightspeed POS, Shopify, Square and Toast), merchants, governments and/or other industry participants may develop products and services that compete with or replace our value-added products and services, including products and services that enable payment networks and banks to transact with consumers directly; • participants in the financial services, payments and payment technology industries may merge, create joint ventures, or form other business combinations that may strengthen their existing business services or create new payment services that compete with our services; and • new services and technologies that we develop may be impacted by industry-wide solutions and standards related to migration to EMV standards, including chip technology, tokenization and other safety and security technologies.
We expect the competitive landscape will continue to change in a variety of ways, including: • rapid and significant changes in technology, resulting in new and innovative payment methods and programs that could place us at a competitive disadvantage and reduce the use of our products and services; • competitors, including non-integrated payment processors (such as Chase Paymentech, Elavon, Worldpay, Fiserv and Global Payments) and integrated payment providers (such as Adyen, Lightspeed, Shopify, Square and Toast), merchants, governments and/or other industry participants may develop products and services that compete with or replace our value-added products and services, including products and services that enable payment networks and banks to transact with consumers directly; • participants in the financial services, payments and payment technology industries may merge, create joint ventures, or form other business combinations that may strengthen their existing business services or create new payment services that compete with our services; and • new services and technologies that we develop may be impacted by industry-wide solutions and standards related to migration to EMV standards, including chip technology, tokenization and other safety and security technologies.
We depend, in part, on our merchant and software partner relationships and strategic partnerships with various institutions to operate and grow our business. If we are unable to maintain these relationships and partnerships, our business may be adversely affected.
If we are unable to maintain these relationships and partnerships, our business may be adversely affected. We depend, in part, on our merchant and software partner relationships and partnerships with various institutions to operate and grow our business.
Further, labor is subject to external factors that are beyond our control, including our industry’s highly competitive market for skilled workers and leaders, inflation, workforce participation rates, and other macroeconomic uncertainties.
Labor is subject to external factors that are beyond our control, including our industry’s highly competitive market for skilled workers and leaders, inflation, workforce participation rates, and other macroeconomic uncertainties.
In addition, changes to laws, regulations and standards could affect our merchants and software partners and could result in material effects on the way we operate or the cost to operate our business. 39 Table of Contents In addition, the U.S. government has increased its scrutiny of a number of credit card practices, from which some of our merchants derive significant revenue.
In addition, changes to laws, regulations, executive orders, and standards could affect our merchants and software partners and could result in material effects on the way we operate or the cost to operate our business. 39 Table of Contents In addition, the U.S. government has increased its scrutiny of a number of credit card practices, from which some of our merchants derive significant revenue.
The effects of the CPRA and its implementing regulations, and uncertainties about the scope and applicability of exemptions that may apply to our business (including an exemption as to data that is subject to the GLBA), are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply.
The effects of the CCPA and its implementing regulations, and uncertainties about the scope and applicability of exemptions that may apply to our business (including an exemption as to data that is subject to the GLBA), are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply.
If these service providers do not perform adequately or experience a data security incident or fail to comply with applicable laws, rules and industry standards, if our relationships with these service providers were to change or terminate (or if they become willing or unable to provide services to us), it could disrupt our business and negatively affect our ability to provide services to clients.
If these service providers do not perform adequately or experience a data security incident or fail to comply with applicable laws, rules and industry standards, if our relationships with these service providers were to change or terminate (or if they become unwilling or unable to provide services to us), it could disrupt our business and negatively affect our ability to provide services to clients.
The Israel Defense Force (the “IDF”), the national military of Israel, is a conscripted military service, subject to certain exceptions. We conduct certain operations in Israel, where approximately 7% of our employees reside. A number of our employees are subject to military service in the IDF and have been, or may be, called to serve.
The Israel Defense Force (the “IDF”), the national military of Israel, is a conscripted military service, subject to certain exceptions. We conduct certain operations in Israel, where approximately 5% of our employees reside. A number of our employees are subject to military service in the IDF and have been, or may be, called to serve.
For example, in 2023 we were the target of frequent phishing and distributed denial-of-service attempts. If these attempts are successful, it could lead to the compromise of Confidential Information. While to date no incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.
For example, we have been the target of frequent phishing and distributed denial-of-service attempts. If these attempts are successful, it could lead to the compromise of Confidential Information. While to date no incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.
We expect to continue to consider acquisitions, dispositions, investments in joint ventures, partnerships, and other strategic alternatives that may enhance shareholder value. Our board of directors and management may from time to time be engaged in evaluating potential transactions and other strategic alternatives.
We expect to continue to consider acquisitions, dispositions, investments in joint ventures, partnerships, and other strategic alternatives that may enhance shareholder value. Our Board and management may from time to time be engaged in evaluating potential transactions and other strategic alternatives.
Breach of the GLBA can result in civil and/or criminal liability and sanctions by regulatory authorities and/or contractual liability. 26 Table of Contents Moreover, in the U.S., both the federal and various state governments have adopted or are considering, additional laws, guidelines or rules for the collection, distribution, use and storage of information collected from or about consumers or their devices.
Breach of the GLBA can result in civil and/or criminal liability and sanctions by regulatory authorities and/or contractual liability. Moreover, in the U.S., both the federal and various state governments have adopted or are considering, additional laws, guidelines or rules for the collection, distribution, use and storage of information collected from or about consumers or their devices.
For these and other reasons, we may not be able to realize a tax benefit from the use of our NOLs. 43 Table of Contents Risks related to the ownership of our Class A common stock Our Founder has significant influence over us, including control over decisions that require the approval of stockholders, including a change in control.
For these and other reasons, we may not be able to realize a tax benefit from the use of our NOLs. Risks related to the ownership of our Class A common stock Our Founder has significant influence over us, including control over decisions that require the approval of stockholders, including a change in control.
Moreover, we may fail to successfully identify appropriate acquisition candidates, enter new markets or industries, or integrate any acquisitions consummated in a relatively short amount of time and, as a result, may fail to realize the synergies, cost savings and other benefits expected from such acquisitions.
Moreover, we may fail to successfully identify appropriate strategic transactions, including acquisition candidates, enter new markets or industries, or integrate any acquisitions consummated in a relatively short amount of time and, as a result, may fail to realize the synergies, cost savings and other benefits expected from such acquisitions.
Additionally, the enactment of the CPRA is prompting a wave of similar legislative developments in other states in the U.S., which creates the potential for a patchwork of overlapping but different state laws.
Additionally, the enactment of the CCPA is prompting a wave of similar legislative developments in other states in the U.S., which creates the potential for a patchwork of overlapping but different state laws.
This could adversely affect our business, financial condition or results of operations. Our business is subject to the risk of natural disasters, adverse weather events and other catastrophic events, and to interruption by manmade problems such as terrorism. A significant natural disaster could have a material and adverse effect on our business.
This could adversely affect our business, financial condition or results of operations. 31 Table of Contents Our business is subject to the risk of natural disasters, adverse weather events and other catastrophic events, and to interruption by manmade problems such as terrorism. A significant natural disaster could have a material and adverse effect on our business.
The Inflation Reduction Act of 2022 imposed a 1% excise tax on the fair market value of stock redeemed or repurchased by publicly traded corporations on or after January 1, 2023, subject to certain exceptions (including an exception that allows netting the amount of stock redemptions or repurchases against certain new issuances of stock).
The Inflation Reduction Act of 2022 imposed a 1% excise tax on the fair market value of stock redeemed or repurchased by publicly traded corporations, subject to certain exceptions (including an exception that allows netting the amount of stock redemptions or repurchases against certain new issuances of stock).
We have certain responsibilities to payment networks and their member financial institutions for any failure, including the failure of our Associated Third Parties, to protect this Confidential Information. 24 Table of Contents We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of IT Systems and Confidential Information.
We have certain responsibilities to payment networks and their member financial institutions for any failure, including the failure of our Associated Third Parties, to protect this Confidential Information. We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of IT Systems and Confidential Information.
Even if such measures are not implemented and a virus or other disease does not spread significantly, the perceived risk of infection or health risk may adversely affect our business and results of operations. 31 Table of Contents Increased customer attrition could cause our financial results to decline.
Even if such measures are not implemented and a virus or other disease does not spread significantly, the perceived risk of infection or health risk may adversely affect our business and results of operations. Increased customer attrition could cause our financial results to decline.
If we fail to comply with regulations, requirements, prohibitions or other obligations applicable to us, we could face regulatory or other enforcement actions and potential fines and other consequences. Cryptocurrencies have in the past and may in the future experience periods of extreme price volatility.
If we fail to comply with regulations, requirements, prohibitions or other obligations applicable to us, we could face regulatory or other enforcement actions and potential fines and other consequences. 28 Table of Contents Cryptocurrencies have in the past and may in the future experience periods of extreme price volatility.
The CPRA provides for civil penalties for violations, as well as a private right of action for certain data breaches that is expected to increase data breach litigation.
The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that is expected to increase data breach litigation.
Any such excise tax would be our liability and could increase the amount of tax that we are required to pay. Our ability to use our net operating losses (“NOLs”) to offset future taxable income may be subject to certain limitations.
Any such excise tax would be our liability and could increase the amount of tax that we are required to pay. 43 Table of Contents Our ability to use our net operating losses (“NOLs”) to offset future taxable income may be subject to certain limitations.
We cannot guarantee that we will be able to successfully continue such expansion efforts due to our lack of experience in such markets 29 Table of Contents and the multitude of risks associated with global operations, or that we will be able to obtain appropriate regulatory approval.
We cannot guarantee that we will be able to successfully continue such expansion efforts due to our lack of experience in such markets and the multitude of risks associated with global operations, or that we will be able to obtain appropriate regulatory approval.
Failure to comply with, or changes in, laws, regulations and enforcement activities may adversely affect the products, services and markets in which we operate.
Failure to comply with, or changes in, laws, regulations, executive orders and enforcement activities may adversely affect the products, services and markets in which we operate.
We experience pressure to make commitments relating to ESG matters that affect us, including the design and implementation of specific risk mitigation strategic initiatives relating to ESG. If we are not effective in addressing environmental, social and other sustainability matters affecting our business, or setting and meeting relevant sustainability goals, our reputation and financial results may suffer.
We experience pressure to make commitments relating to sustainability and ESG matters that affect us, including the design and implementation of specific risk mitigation strategic initiatives relating to ESG. If we are not effective in addressing such matters affecting our business, or setting and meeting relevant sustainability goals, our reputation and financial results may suffer.
These trends could include: • declining economies and the pace of economic recovery can change consumer spending behaviors, on which the majority of our revenue is dependent; • low levels of consumer and business confidence typically associated with recessionary environments, and those markets experiencing relatively high unemployment, may result in decreased spending by cardholders; • budgetary concerns in the U.S. and other countries around the world could affect the U.S. and other sovereign credit ratings, which could impact consumer confidence and spending; • financial institutions may restrict credit lines to cardholders or limit the issuance of new cards to mitigate cardholder credit concerns; • uncertainty and volatility in the performance of our merchants’ businesses, particularly SMBs, may make estimates of our revenues and financial performance less predictable; • cardholders or merchants may decrease spending for value-added services we market and sell; • government intervention, including the effect of laws, regulations and government investments in our merchants, may have potential negative effects on our business and our relationships with our merchants or otherwise alter their strategic direction away from our products and services; and • political tensions resulting in economic instability, such as due to wars in the Middle East and Eastern Europe and the related response, including sanctions or other restrictive actions, by the U.S. and/or other countries. 20 Table of Contents In addition, the banking industry remains subject to consolidation, regardless of overall economic conditions.
These trends could include: • declining economies and the pace of economic recovery can change consumer spending behaviors, on which the majority of our revenue is dependent; • low levels of consumer and business confidence typically associated with recessionary environments, and those markets experiencing relatively high unemployment, may result in decreased spending by cardholders; • budgetary concerns in the U.S. and other countries around the world could affect the U.S. and other sovereign credit ratings, which could impact consumer confidence and spending; • financial institutions may restrict credit lines to cardholders or limit the issuance of new cards to mitigate cardholder credit concerns; • uncertainty and volatility in the performance of our merchants’ businesses, particularly SMBs, may make estimates of our revenues and financial performance less predictable; • cardholders or merchants may decrease spending for value-added services we market and sell; • government intervention, including the effect of laws, tariffs, regulations and government investments in our merchants, may have potential negative effects on our business and our relationships with our merchants or otherwise alter their strategic direction away from our products and services; and • political tensions resulting in economic instability, such as due to wars in the Middle East and Eastern Europe and the related response, including sanctions or other restrictive actions, by the U.S. and/or other countries.
In addition, our banking operations in Malta and the European Union expose us to said risks. We may seek to reduce our exposure to fluctuations in foreign currency exchange rates through the use of hedging agreements.
In addition, our financial services operations in Malta and the European Union expose us to said risks. We may seek to reduce our exposure to fluctuations in foreign currency exchange rates through the use of hedging agreements.
We expect to consider from time to time further strategic opportunities that may involve acquisitions, dispositions, investments in joint ventures, partnerships, and other strategic alternatives that may enhance shareholder value, any of which may result in the use of a significant amount of management resources or significant costs, and we may not be able to fully realize the potential benefit of such transactions.
See also “Risks Related to the Transactions.” We expect to consider from time to time further strategic opportunities that may involve acquisitions, dispositions, investments in joint ventures, partnerships, and other strategic alternatives that may enhance shareholder value, any of which may result in the use of a significant amount of management resources or significant costs, and we may not be able to fully realize the potential benefit of such transactions.
These risks include valuation (determining a fair price for the business or assets), integration (managing the process of integrating the acquired business’ people, products, technology and other assets to extract the value and synergies projected to be realized in connection with the acquisition), regulation (obtaining regulatory or other government approvals that may be necessary to complete the acquisition) and due diligence (including identifying risks to the prospects of the business, including undisclosed or unknown liabilities or restrictions to be assumed in the acquisition).
These risks include valuation (determining a fair price for the business or assets), integration (managing the process of integrating the acquired business’ people, products, technology and other assets to extract the value and synergies projected to be realized in connection with the acquisition), regulation (obtaining regulatory or other government approvals that may be necessary to complete the acquisition and becoming subject to additional or new ongoing regulatory requirements) and due diligence (including identifying risks to the prospects of the business, including undisclosed or unknown liabilities or restrictions to be assumed in the acquisition).
The diversion of management’s attention and any delays or difficulties encountered in connection with acquisitions and their integration could adversely affect our business, financial condition or results of operations.
The diversion of management’s attention and any delays or difficulties encountered in connection with strategic transactions and their integration could adversely affect our business, financial condition or results of operations.
We are a holding company and at December 31, 2023 have no material assets other than our ownership of LLC Interests, cash of $3.6 million and the aggregate principal amount of $690.0 million of 2025 Convertible Notes and $632.5 million of 2027 Convertible Notes that are held by Shift4 Payments, Inc. directly.
We are a holding company and at December 31, 2024 have no material assets other than our ownership of LLC Interests, cash of $52.0 million and the aggregate principal amount of $690.0 million of 2025 Convertible Notes and $632.5 million of 2027 Convertible Notes that are held by Shift4 Payments, Inc. directly.
The loss of merchant or software partner relationships could adversely affect our business, financial condition or results of operations. We rely on our sponsor bank to provide sponsorship to card and other payment networks and treasury services.
The loss of merchant or software partner relationships could adversely affect our business, financial condition or results of operations. We rely on our sponsor bank to provide sponsorship to card and other payment networks and treasury services in the U.S. and Canada.
As a result of our prior acquisitions, a significant portion of our total assets consists of intangible assets (including goodwill). Goodwill and intangible assets, net of amortization, together accounted for approximately 56% and 53% of the total assets on our balance sheet as of December 31, 2023 and 2022, respectively.
As a result of our prior acquisitions, a significant portion of our total assets consists of intangible assets (including goodwill). Goodwill and intangible assets, net of amortization, together accounted for approximately 47% and 56% of the total assets on our balance sheet as of December 31, 2024 and 2023, respectively.
Our substantial indebtedness could have adverse consequences, including: • increasing our vulnerability to adverse economic, industry or competitive developments; • requiring a substantial portion of cash flow from operations to be dedicated to the payments on our indebtedness, reducing our ability to use cash flow to fund our operations, capital expenditures and future business opportunities; • making it more difficult for us to satisfy our obligations with respect to our indebtedness, including restrictive covenants and borrowing conditions, which could result in an event of default under the agreements governing such indebtedness; • restricting us from making strategic acquisitions or causing us to make nonstrategic divestitures; • making it more difficult for us to obtain network sponsorship and clearing services from financial institutions or to obtain or retain other business with financial institutions; • limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and • limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting. 35 Table of Contents Successful execution of our business strategy is dependent in part upon our ability to manage our capital structure to reduce or maintain low interest expense and enhance free cash flow generation.
Our substantial indebtedness could have adverse consequences, including: • increasing our vulnerability to adverse economic, industry or competitive developments; • requiring a substantial portion of cash flow from operations to be dedicated to the payments on our indebtedness, reducing our ability to use cash flow to fund our operations, capital expenditures and future business opportunities; • making it more difficult for us to satisfy our obligations with respect to our indebtedness, including restrictive covenants and borrowing conditions, which could result in an event of default under the agreements governing such indebtedness; 35 Table of Contents • restricting us from making strategic acquisitions or causing us to make nonstrategic divestitures; • making it more difficult for us to obtain network sponsorship and clearing services from financial institutions or to obtain or retain other business with financial institutions; • limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and • limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.
If we redeem or repurchase shares of our stock in the future, we could be subject to a newly enacted excise tax.
If we redeem or repurchase shares of our stock in the future, we could be subject to excise tax.
As we expand into new markets, we are subject to additional risks associated with our international operations, including compliance with and changes in foreign governmental policies. We have begun offering merchant acquiring and processing services in geographies outside of the U.S., including the European Union and United Kingdom.
As we expand into new markets, we are subject to additional risks associated with our international operations, including compliance with and changes in foreign regulations and governmental policies. We have begun offering merchant acquiring and processing services in geographies outside of the U.S., including Canada, the European Union and United Kingdom, where we are directly subject to financial regulatory requirements.
We have implemented policies, procedures, systems, and controls designed to identify and address potentially impermissible transactions under such laws and regulations; however, there can be no assurance that all of our employees, consultants and agents, including those that may be based in or from countries where practices that violate U.S. or other laws may be customary, will not take actions in violation of our policies, for which we may be ultimately responsible.
We have implemented policies, procedures, systems, and controls designed to promote compliance with such laws and regulations; however, there can be no assurance that all of our employees, consultants and agents, including those that may be based in or from countries where practices that violate U.S. or other laws may be customary, will not take actions in violation of our policies, for which we may be ultimately responsible.
The Federal Reserve has capped debit interchange rates for card issuers operating in the U.S. with assets of $10 billion or more at the sum of $0.21 per transaction and an ad valorem component of 5 basis points to reflect a portion of the card issuer’s fraud losses plus, for qualifying card issuers, an additional $0.01 per transaction in debit interchange for fraud prevention costs.
While subject to new proposed rulemaking issued by the Federal Reserve in late 2023, the Federal Reserve has capped debit interchange rates for card issuers operating in the U.S. with assets of $10 billion or more at the sum of $0.21 per transaction and an ad valorem component of 5 basis points to reflect a portion of the card issuer’s fraud losses plus, for qualifying card issuers, an additional $0.01 per transaction in debit interchange for fraud prevention costs.
Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE. Our status as a controlled company could make our Class A common stock less attractive to some investors or otherwise harm our stock price.
Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE. Our status as a controlled company could make our Class A common stock less attractive to some investors or otherwise harm our stock price. In December 2024, President Donald Trump nominated Mr.
To the extent the wars in Ukraine or Israel may adversely affect our business as discussed above, it may also have the effect of heightening many of the other risks described herein.
To the extent the wars in Europe or the Middle East may adversely affect our business as discussed above, it may also have the effect of heightening many of the other risks described herein.
The failure of our third-party vendors to perform their obligations and provide the products and services we obtain from them in a timely manner for any reason could adversely affect our operations and profitability due to, among other consequences: • loss of revenues; • loss of merchants and software partners; • loss of merchant and cardholder data; • fines imposed by payment networks; • harm to our business or reputation and brand resulting from negative publicity and loss of trust; • exposure to fraud losses or other liabilities; • additional operating and development costs; or • diversion of management, technical, and other resources. 22 Table of Contents Acquisitions create certain risks and may adversely affect our business, financial condition or results of operations.
The failure of our third-party vendors to perform their obligations and provide the products and services we obtain from them in a timely manner for any reason could adversely affect our operations and profitability due to, among other consequences: • loss of revenues; • loss of merchants and software partners; • loss of merchant and cardholder data; • fines imposed by payment networks; • enforcement action by regulators; • harm to our business or reputation and brand resulting from negative publicity and loss of trust; • exposure to fraud losses or other liabilities; • additional operating and development costs; or • diversion of management, technical, and other resources.
Changes to laws, regulations and standards, including interpretation and enforcement of such laws, regulations and standards could increase the cost of doing business or otherwise change how or where we want to do business.
New and changing laws, regulations, executive orders, and standards, including interpretation and enforcement of such laws, regulations, executive orders, and standards could increase the cost of doing business or otherwise change how or where we want to do business.
We may also be subject to lawsuits or other proceedings for purportedly fraudulent or unauthorized transactions, including lawsuits and other proceedings arising out of the actual or alleged theft of our consumers’ credit, debit or payment card information if the security of our third-party card payment processors is breached.We rely upon third-party service providers to provide payment transaction processing services.
We may also be subject to lawsuits or other proceedings for purportedly fraudulent or unauthorized transactions, including lawsuits and other proceedings arising out of the actual or alleged theft of our consumers’ credit, debit or payment card information if the security of our third-party card payment processors is breached.
As of December 31, 2023, Jared Isaacman, our Founder and Chief Executive Officer, controls, in the aggregate, approximately 80.0% of the voting power represented by all our outstanding classes of stock. Our Class B common stock and Class C common stock each have ten votes per share, and our Class A common stock has one vote per share.
As of December 31, 2024, Jared Isaacman, our Founder and Chief Executive Officer, controlled, in the aggregate, approximately 76.1% of the voting power represented by all our outstanding classes of stock. Our Class B common stock and Class C common stock each have ten votes per share, and our Class A common stock has one vote per share.
Furthermore, Rook has entered into margin loan agreements to repay and replace an existing margin loan for a lower amount pursuant to which, in addition to other collateral, it has pledged LLC Interests and shares of the Company’s Class A and Class B common stock (collectively, “Rook Units”) to secure a margin loan.
Furthermore, Rook has entered into margin loan agreements pursuant to which, in addition to other collateral, it has pledged LLC Interests and shares of the Company’s Class A and Class B common stock (collectively, “Rook Units”) to secure a margin loan.
The GDPR also imposes conditions on obtaining valid consent for cookies, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology. Recent European court and regulator decisions are driving increased attention to cookies and tracking technologies.
The GDPR also imposes conditions on obtaining valid consent for cookies, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology. Recent European court and regulator decisions are driving increased attention to cookies and tracking technologies requiring a strict opt-in to all but essential use cases.
For example, a prolonged conflict in Ukraine or Israel may result in increased inflation, escalating energy prices and constrained availability, and thus increasing costs, of raw materials. We will continue to monitor this fluid situation and develop contingency plans as necessary to address any disruptions to our business operations as they develop.
For example, prolonged conflicts in Europe or the Middle East may result in increased inflation, escalating energy prices and constrained availability, and thus increasing costs, of raw materials. We will continue to monitor this fluid situation and develop contingency plans as necessary to address any disruptions to our business operations as they develop.
In addition, we must develop, maintain and, as necessary, implement appropriate succession plans to assure we have the necessary human resources, including senior leadership, capable of maintaining continuity in our business. For instance, we are highly dependent on the expertise of our Founder and Chief Executive Officer, Jared Isaacman.
In addition, we must develop, maintain and, as necessary, implement appropriate succession plans to assure we have the necessary human resources, including senior leadership, capable of maintaining continuity in our business. For instance, we have been highly dependent on the expertise of our Founder and Chief Executive Officer, Jared Isaacman. In December 2024, President Donald Trump nominated Mr.
The actual increase in tax basis, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, including the timing of redemptions by the Continuing Equity Owners, the price of shares of our Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, the amount of gain recognized by such holders of LLC Interests, the amount and timing of the taxable income allocated to us or otherwise generated by us in the future, the portion of our payments under the TRA constituting imputed interest and the federal and state tax rates then applicable. 41 Table of Contents Our organizational structure, including the TRA, confers certain benefits upon the Continuing Equity Owners and the Blocker Shareholders that will not benefit holders of our Class A common stock to the same extent that it will benefit the Continuing Equity Owners and the Blocker Shareholders.
The actual increase in tax basis, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, including the timing of redemptions by the Continuing Equity Owners, the price of shares of our Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, the amount of gain recognized by such holders of LLC Interests, the amount and timing of the taxable income allocated to us or otherwise generated by us in the future, the portion of our payments under the TRA constituting imputed interest and the federal and state tax rates then applicable.
We are exposed to fluctuations in inflation, which could negatively affect our business, financial condition and results of operations. The U.S. has experienced historically high levels of inflation. According to the U.S. Department of Labor, the annual inflation rate for the U.S. was 3.4% for the twelve months ended December 31, 2023.
We are exposed to fluctuations in inflation, which could negatively affect our business, financial condition and results of operations. The U.S. experienced historically high levels of inflation from 2021 through 2023. According to the U.S. Department of Labor, the annual inflation rate for the U.S. was 2.9% for the twelve months ended December 31, 2024.
Additionally, any fluctuation in the credit rating of us or our subsidiaries may impact our ability to access debt markets in the future or increase our cost of future debt which could have a material adverse effect on our operations and financial condition, which in return may adversely affect the trading price of shares of our Class A common stock. 46 Table of Contents Short sellers of our stock may be manipulative and may drive down the market price of our common stock.
Additionally, any fluctuation in the credit rating of us or our subsidiaries may impact our ability to access debt markets in the future or increase our cost of future debt which could have a material adverse effect on our operations and financial condition, which in return may adversely affect the trading price of shares of our Class A common stock.
In addition, we have opted out of Section 203 of the General Corporation Law of the State of Delaware (“DGCL”), but our amended and restated certificate of incorporation provides that engaging in any of a broad range of business combinations with any “interested” stockholder (any stockholder with 15% or more of our voting stock) for a period of three years following the date on which the stockholder became an “interested” stockholder is prohibited, subject to certain exceptions.
As a result, our stockholders may be limited in their ability to obtain a premium for their shares. 45 Table of Contents In addition, we have opted out of Section 203 of the General Corporation Law of the State of Delaware (“DGCL”), but our amended and restated certificate of incorporation provides that engaging in any of a broad range of business combinations with any “interested” stockholder (any stockholder with 15% or more of our voting stock) for a period of three years following the date on which the stockholder became an “interested” stockholder is prohibited, subject to certain exceptions.
As of December 31, 2023, we had $1,772.5 million total principal amount of debt outstanding, including $690.0 million of 0.00% Convertible Senior Notes due 2025 (“2025 Convertible Notes”), $632.5 million of 0.50% Convertible Senior Notes due 2027 (“2027 Convertible Notes”) and $450.0 million of 4.625% Senior Notes due 2026 (“2026 Senior Notes” and together with the 2025 Convertible Notes and 2027 Convertible Notes, the “Notes”).
As of December 31, 2024, we had $2,872.5 million total principal amount of debt outstanding, including $1,100.0 million of 6.750% Senior Notes due 2032 (“2032 Senior Notes”), $690.0 million of 0.00% Convertible Senior Notes due 2025 (“2025 Convertible Notes”), $632.5 million of 0.50% Convertible Senior Notes due 2027 (“2027 Convertible Notes”) and $450.0 million of 4.625% Senior Notes due 2026 (“2026 Senior Notes” and together with the 2032 Senior Notes, 2025 Convertible Notes and 2027 Convertible Notes, the “Notes”).
We market and sell our products and services to, among others, SMBs. To continue to grow our revenue, we must add merchants, sell additional services to existing merchants and encourage existing merchants to continue doing business with us.
To continue to grow our revenue, we must add merchants, sell additional services to existing merchants and encourage existing merchants to continue doing business with us.
In addition, from time to time, there may be changes in our management team that may be disruptive to our business. If our senior leadership and management team, including any new hires that we make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business could be harmed.
If our senior leadership and management team, including any new hires that we make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business could be harmed.
If the inflation rate remains elevated or continues to increase, it will likely affect our expenses, including, but not limited to, increased employee compensation expenses and costs for supplies. In the event inflation remains elevated or continues to increase, we may seek to increase the sales prices of our products and services in order to maintain satisfactory margins.
While inflation has decreased in 2024, if the inflation rate increases again, it will likely affect our expenses, including, but not limited to, increased employee compensation expenses and costs for supplies. In the event inflation increases, we may seek to increase the sales prices of our products and services in order to maintain satisfactory margins.
For example, California enacted the CPRA in 2020, which requires new disclosures to California residents, imposes new rules for collecting or using information about California residents, and affords California residents new rights with respect to their personal information, including rights to opt out of certain disclosures of personal information.
For example, the CCPA requires specific disclosures to California residents, imposes rules for collecting or using information about California residents, and affords California residents rights with respect to their personal information, including rights to opt out of certain disclosures of personal information.
For example, since the CPRA went into to effect, comprehensive privacy statutes that share similarities with the CPRA are now in effect and enforceable in Virginia, Colorado, Connecticut, and Utah, and will soon be enforceable in several other states as well.
For example, since the CCPA went into effect, comprehensive privacy statutes that share similarities with the CCPA are now in effect and enforceable in numerous states and will soon be enforceable in several other states as well.
From time to time, we are subject to claims, individual and class action lawsuits, arbitration proceedings, government and regulatory investigations, inquiries, actions or requests, and other proceedings alleging violations of laws, rules, and regulations with respect to intellectual property, privacy, data protection, information security, consumer protection, fraud, accessibility, securities, tax, labor and employment, commercial disputes, services, charitable fundraising, contract disputes, escheatment of unclaimed or abandoned property, product liability and other matters.
From time to time, we have been and may continue to be subject to claims, individual and class action lawsuits, arbitration proceedings, government and regulatory investigations, inquiries, actions or requests, and other proceedings that have alleged or could in the future allege violations of laws, rules, and regulations with respect to intellectual property, privacy, data protection, information security, consumer protection, fraud, accessibility, securities and reporting requirements, tax, labor and employment, commercial disputes, services, charitable fundraising, contract disputes, escheatment of unclaimed or abandoned property, product liability and other matters.
We are also contractually required to comply with anti-money laundering laws and regulations, including the Bank Secrecy Act, as amended by the BSA. Among other things, the BSA requires subject entities to develop and implement risk-based anti-money laundering programs, report large cash transactions and suspicious activity, and maintain transaction records.
We are also contractually required to comply with anti-money laundering laws and regulations, including the Bank Secrecy Act, as amended by the BSA. Among other things, the BSA requires the development and implementation of risk-based anti-money laundering programs, reporting large cash transactions and suspicious activity, and maintaining transaction records.
For example, we maintain proprietary and exclusive integrations with certain software partners. If we fail to maintain these relationships, or if our software partners or other strategic partners fail to maintain their brands or decrease the size of their branded networks, our business may be adversely affected.
If we fail to maintain these relationships, or if our software partners or other strategic partners fail to maintain their brands or decrease the size of their branded networks, our business may be adversely affected.
In the event our agreement with our third-party processor is terminated, or if upon its expiration we are unable to renew the contract on terms favorable to us, or at all, it may be difficult for us to replace these services, which may adversely affect our operations and profitability.
In the event our agreement with our third-party processor is terminated, or if upon its expiration we are unable to renew the contract on terms favorable to us, or at all, it may be difficult for us to replace these services, which may adversely affect our operations and profitability. 22 Table of Contents We also rely on third parties for specific software and devices used in providing our products and services.
These antitakeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares.
These antitakeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders.
The increasing focus on environmental, social and governance practices (“ESG”) could increase our costs, harm our reputation and adversely impact our financial results. There has been increasing public focus by investors, customers environmental activists, the media and governmental and nongovernmental organizations on a variety of environmental, social and other sustainability matters.
The increasing focus on sustainability and environmental, social and governance practices (“ESG”) could increase our costs, harm our reputation and adversely impact our financial results. There has been increasing public focus by investors, customers, regulators, legislators, the media and other stakeholders on a variety of sustainability and ESG matters, including diversity initiatives.
The impact of the Russian invasion of Ukraine and the Israel-Hamas war on the global economy, energy supplies and raw materials is uncertain, but may prove to negatively impact our business and operations. The short and long-term implications of Russia’s invasion of Ukraine and the Israel-Hamas war are difficult to predict at this time.
The impact of war, including in Europe and the Middle East, on the global economy, energy supplies and raw materials is uncertain, but may prove to negatively impact our business and operations. The short and long-term implications of war, including in Europe and the Middle East, are difficult to predict at this time.
In the future, we may also issue securities in connection with investments, acquisitions or capital raising activities. In particular, the number of shares of our Class A common stock issued in connection with an investment or acquisition, or to raise additional equity capital, could constitute a material portion of our then-outstanding shares of our Class A common stock.
In particular, the number of shares of our Class A common stock issued in connection with an investment or acquisition, or to raise additional equity capital, could constitute a material portion of our then-outstanding shares of our Class A common stock.
In addition to the COVID-19 pandemic, our business could be adversely affected by the outbreak of any other widespread health epidemic or pandemic, including arising from RSV or various strains of avian flu or swine flu, such as H1N1, particularly if located in the U.S.
Health concerns arising from the outbreak of an epidemic or pandemic may have an adverse effect on our business. Our business could be adversely affected by the outbreak of an epidemic or pandemic, including arising from COVID-19, RSV or various strains of avian flu or swine flu, such as H1N1, particularly if located in the U.S.
If consumers and businesses do not continue to use credit, debit or prepaid cards as a payment mechanism for their transactions or if there is a change in the mix of payments between cash, alternative currencies and technologies, credit, debit and prepaid cards, or the corresponding methodologies used for each, which is adverse to us, it could have a material adverse effect on our business, financial condition and results of operations. 33 Table of Contents Our failure to address the operational, compliance and regulatory risks associated with our payment methods or practices could damage our reputation and brand and may cause our business and results of operations to suffer.
If consumers and businesses do not continue to use credit, debit or prepaid cards as a payment mechanism for their transactions or if there is a change in the mix of payments between cash, alternative currencies and technologies, credit, debit and prepaid cards, or the corresponding methodologies used for each, which is adverse to us, it could have a material adverse effect on our business, financial condition and results of operations.
In these situations, our obligations under the TRA could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. There can be no assurance that we will be able to fund or finance our obligations under the TRA.
In these situations, our obligations under the TRA could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control.
In April 2023, short seller Blue Orca Capital issued a short report on us, resulting in an 8.7% decrease in the price of our Class A common stock on the day the short report was issued. Subsequently, numerous lawsuits were filed against us, against which we are vigorously defending ourselves.
In April 2023, short seller Blue Orca Capital issued a short report on us, resulting in a decrease in the price of our Class A common stock on the day the short report was issued. Subsequently, numerous lawsuits were filed against us, which the court dismissed with prejudice.
As the regulatory guidance and enforcement landscape in relation to data transfers continue to develop, we could suffer additional costs, complaints and/or regulatory investigations or fines; we may have to stop using certain tools and vendors and make other operational changes; we may have to implement revised standard contractual clauses for existing intragroup, customer and vendor arrangements within required time frames; and/or it could otherwise affect the manner in which we provide our services, and could adversely affect our business, operations and financial condition. 27 Table of Contents We are also subject to evolving EU and UK privacy laws on cookies, tracking technologies and e-marketing.
As the regulatory guidance and enforcement landscape in relation to data transfers continue to develop, we could suffer additional costs, complaints and/or regulatory investigations or fines; we may have to stop using certain tools and vendors and make other operational changes; we may have to implement alternative data transfer mechanisms under the GDPR and/or take additional compliance and operational measures; and/or it could otherwise affect the manner in which we provide our services, and could adversely affect our business, operations and financial condition. 27 Table of Contents We are also subject to evolving laws on cookies, tracking technologies and e-marketing.
In times of economic distress, various financial institutions in the markets we serve have been acquired or merged with and into other financial institutions, including those with which we partner.
In addition, the banking industry remains subject to consolidation, regardless of overall economic conditions. In times of economic distress, various financial institutions in the markets we serve have been acquired or merged with and into other financial institutions, including those with which we partner.
Internal Revenue Service, or another tax authority may challenge all or part of the tax basis increases or other tax benefits we claim, as well as other related tax positions we take, and a court could sustain such challenge.
Payments under the TRA will be based on the tax reporting positions that we determine, and the U.S. Internal Revenue Service, or another tax authority may challenge all or part of the tax basis increases or other tax benefits we claim, as well as other related tax positions we take, and a court could sustain such challenge.
In addition, in the U.S. and certain other jurisdictions, certain cryptocurrencies may be securities and subject to the securities laws of the relevant jurisdictions. If we fail to comply with any relevant laws, regulations or prohibitions that may be applicable to us, we could face regulatory or other enforcement actions and potential fines or other consequences.
If we fail to comply with any relevant laws, regulations or prohibitions that may be applicable to us, we could face regulatory or other enforcement actions and potential fines or other consequences.
Furthermore, any negative publicity or perceptions involving the Company or our employees, brands, products, vendors, spokespersons or marketing and other partners may negatively impact our reputation and adversely impact our ability to compete effectively and could adversely affect our business, financial condition or results of operations. 19 Table of Contents Potential changes in the competitive landscape, including disintermediation from other participants in the payments chain, could harm our business.
Furthermore, any negative publicity or perceptions involving the Company or our employees, brands, products, vendors, spokespersons or marketing and other partners may negatively impact our reputation and adversely impact our ability to compete effectively and could adversely affect our business, financial condition or results of operations.
We continue to monitor any adverse impact that the outbreak of the war in Ukraine, the subsequent institution of sanctions against Russia by the U.S. and several European and Asian countries, and the Israel-Hamas war may have on the global economy in general, on our business and operations and on the businesses and operations of our suppliers and other third parties with which we conduct business.
We continue to monitor any adverse impact that the outbreak of the wars and the subsequent institution of sanctions may have on the global economy in general, on our business and operations and on the businesses and operations of our suppliers and other third parties with which we conduct business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+3 added−1 removed5 unchanged
Biggest changeThese standards, along with other industry benchmarks, such as the PCI DSS, are used as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business, but this does not imply that we meet any particular technical standards, specifications, or requirements at all times. 47 Table of Contents Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Biggest changeThese standards, along with other industry benchmarks, such as the PCI DSS, are used as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business, but this does not imply that we meet any particular technical standards, specifications, or requirements at all times.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our internal and customer facing IT Systems and Confidential Information.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program designed to protect the confidentiality, integrity, and availability of our internal and customer facing IT Systems and Confidential Information.
As part of our enterprise risk assessment function, which is led by our General Counsel and Vice President of Internal Audit, we have implemented processes to assess, identify and manage the material risks facing the Company, including from cyber threats.
As part of our enterprise risk assessment function, which is led by our General Counsel and Vice President of Internal Audit, we have implemented processes designed to assess, identify and manage the material risks facing the Company, including from cybersecurity risks.
Key elements of our cybersecurity risk management program include, but are not limited to the following: • risk assessments designed to help identify material cybersecurity risks to our IT Systems and information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • designing products and services built with security tools; • cybersecurity awareness training, including internal phishing tests of our employees, contractors, consultants, or any third-parties who will have access to our IT Systems, information, products, services, or our broader enterprise IT environment; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers, suppliers, and vendors based on their criticality and risk profile.
Key elements of our cybersecurity risk management program include, but are not limited to the following: • risk assessments designed to help identify material cybersecurity risks to our IT Systems and Confidential Information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • designing products and services with cybersecurity in mind; • cybersecurity awareness training, including internal phishing tests of our employees, contractors, consultants, or any third-parties who will have access to our IT Systems, information, products, services, or our broader enterprise IT environment; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers, suppliers, and vendors based on their criticality and risk profile.
The full Board also receives briefings from management on our cyber risk management program. Our management team, including the Director of Enterprise Security & Compliance, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises our internal cybersecurity personnel.
The full Board also receives briefings from management on our cyber risk management program. Our management team, including the VP of Enterprise Security & Compliance and Director of Enterprise Security & Compliance, is responsible for assessing and managing our material risks from cybersecurity threats.
Our management team stays informed about and monitors efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
Our management team’s collective experience includes a diverse background in fintech and other industries, with decades of experience in various aspects of cybersecurity. 48 Table of Contents Our management team stays informed about and monitors efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
Removed
Our management team’s collective experience includes a diverse background in fintech and other industries, with decades of experience in various aspects of cybersecurity.
Added
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Added
The team has primary responsibility for our overall cybersecurity risk management program and supervises our internal cybersecurity personnel.
Added
In addition, our VP of Enterprise Security & Compliance and Director of Enterprise Security & Compliance brings extensive expertise in risk assessment and management, regulatory compliance (including PCI DSS, GDPR, and the Sarbanes-Oxley Act), incident response, data protection and privacy, security monitoring and threat intelligence, and the implementation of advanced security technologies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our facilities are adequate for our needs and believe that we should be able to renew any of our leases or secure similar property without an adverse impact on our operations. 48 Table of Contents
Biggest changeFor leases that are scheduled to expire during the next 12 months, we may negotiate new lease agreements, renew existing lease agreements or use alternate facilities. We believe that our facilities are adequate for our needs and believe that we should be able to renew any of our leases or secure similar property without an adverse impact on our operations.
Removed
For leases that are scheduled to expire during the next 12 months, we may negotiate new lease agreements, renew existing lease agreements or use alternate facilities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeJune 4, 2020 June 30, 2020 December 31, 2020 June 30, 2021 December 31, 2021 June 30, 2022 December 31, 2022 June 30, 2023 December 31, 2023 Shift4 Payments, Inc. $ 100.00 $ 154.35 $ 327.83 $ 407.48 $ 251.87 $ 143.74 $ 243.17 $ 295.26 $ 323.22 S&P 500 Index $ 100.00 $ 99.61 $ 120.68 $ 138.08 $ 153.14 $ 121.62 $ 123.36 $ 142.99 $ 153.26 S&P Information Technology $ 100.00 $ 106.08 $ 132.09 $ 149.57 $ 176.15 $ 128.16 $ 125.23 $ 177.90 $ 195.85
Biggest changeJune 4, 2020 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 Shift4 Payments, Inc. $ 100.00 $ 327.83 $ 251.87 $ 243.17 $ 323.22 $ 451.22 S&P 500 Index $ 100.00 $ 120.68 $ 153.14 $ 123.36 $ 153.26 $ 188.98 S&P Information Technology $ 100.00 $ 132.09 $ 176.15 $ 125.23 $ 195.85 $ 265.74
The stock performance graph and table assume an initial investment of $100 on June 5, 2020. The performance graph and table are not intended to be indicative of future performance.
The stock performance graph and table assume an initial investment of $100 on June 5, 2020. 50 Table of Contents The performance graph and table are not intended to be indicative of future performance.
Because many of our shares of Class A common stock are held by brokers and institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our Class A common stock represented by these record holders.
Because many of our share s of Class A common stock are held by brokers and institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our Class A common stock represented by these record holders.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Issuer Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2023 through October 31, 2023 — — — $ 153.2 November 1, 2023 through November 30, 2023 148,311 $ 57.66 148,311 144.7 December 1, 2023 through December 31, 2023 — — — N/A Total 148,311 (a) On May 3, 2023, our Board authorized a stock repurchase program (the “May 2023 Program”), pursuant to which we were authorized to repurchase up to $250.0 million of shares of our Class A common stock through December 31, 2023.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Issuer Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2024 through October 31, 2024 — — — $ 464.1 November 1, 2024 through November 30, 2024 8,800 $ 113.16 8,800 463.1 December 1, 2024 through December 31, 2024 1,067,800 102.06 1,067,800 354.1 Total 1,076,600 (a) In, May 2024, our Board authorized a stock repurchase program (the “May 2024 Program”), pursuant to which we were authorized to repurchase up to $500.0 million of shares of our Class A common stock through December 31, 2025.
Any such determination will also depend upon our business prospects, results of operations, financial condition, cash requirements and availability and other factors that our Board may deem relevant. 50 Table of Contents Stock Performance Graph The following graph and table compare the total shareholder return from June 5, 2020, the date on which our Class A common shares commenced trading on the New York Stock Exchange, NYSE, through December 31, 2023 of (i) our Class A common shares, (ii) the Standard and Poor’s 500 Stock Index (“S&P 500 Index”), and (iii) the Standard and Poor’s 500 Information Technology Index (“S&P Information Technology”).
Stock Performance Graph The following graph and table compare the total shareholder return from June 5, 2020, the date on which our Class A common shares commenced trading on the New York Stock Exchange, NYSE, through December 31, 2024 of (i) our Class A common shares, (ii) the Standard and Poor’s 500 Stock Index (“S&P 500 Index”), and (iii) the Standard and Poor’s 500 Information Technology Index (“S&P Information Technology”).
Holders As of February 21, 2024 , there were 345 holders of record of our Class A common stock, 4 holders of record of our Class B common stock and 3 holders of recor d of our Class C common stock.
Holders As of February 12, 2025 , there were 213 holders of record of our Class A common stock, four holders of record of our Class B common stock and three holders of record of our Class C common stock.
Recent Sales of Unregistered Securities There were no unregistered equity securities sold fro m January 1, 2023 to December 31, 2023, other than as previously disclosed in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
Recent Sales of Unregistered Securities There were no unregistered equity securities sold fro m January 1, 2024 to December 31, 2024.
Added
Any such determination will also depend upon our business prospects, results of operations, financial condition, cash requirements and availability and other factors that our Board may deem relevant.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, (in millions) 2023 2022 $ Change Change in TRA liability $ (3.4) $ (1.7) $ (1.7) 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. 57 Table of Contents Year Ended December 31, (in millions) 2023 2022 $ Change Interest expense $ (32.1) $ (32.5) $ 0.4 Interest expense remained consistent for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Biggest changeThe 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. 59 Table of Contents Year Ended December 31, (in millions) 2024 2023 $ Change Change in TRA liability $ (289.0) $ (3.4) $ (285.6) 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.
Advertising and marketing expenses relate to costs incurred to participate in industry tradeshows and dealer conferences, advertising initiatives to build brand awareness, and expenses to fulfill loyalty program rewards earned by software partners. Interest income primarily consists of interest income earned on our cash and cash equivalents. Other (expense) income, net primarily consists of other non-operating items.
Advertising and marketing expenses relate to costs incurred to participate in industry tradeshows and dealer conferences, advertising initiatives to build brand awareness, and expenses to fulfill loyalty program rewards earned by software partners. Interest income primarily consists of interest income earned on our cash and cash equivalents. Other income (expense), net primarily consists of other non-operating items.
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.
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.
We believe that our cash and cash equivalents and future cash flow from operations will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next twelve months and into the foreseeable future based on our current operating plan.
Cash Requirements We believe that our cash and cash equivalents and future cash flow from operations will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next twelve months and into the foreseeable future based on our current operating plan.
Residual commissions represent monthly payments to third-party distribution partners. These costs are typically based on a percentage of payment-based revenue. Equipment represents our costs of devices that are sold to merchants. Other costs of sales includes amortization of internally developed capitalized software development costs, purchased capitalized software, acquired technology and capitalized customer acquisition costs.
Residual commissions represent monthly payments to third-party distribution partners. These costs are typically based on a percentage of payments-based revenue. Equipment represents our costs of devices that are sold to merchants. Other costs of sales includes amortization of internally developed capitalized software development costs, purchased capitalized software, acquired technology and capitalized customer acquisition costs.
The amounts to be recorded for both the deferred tax assets and the liability for our obligations under the TRA will be estimated at the time of any purchase or redemption as a reduction to shareholders’ equity, and the effects of changes in any of our estimates after this date will be included in net income (loss).
The amounts to be recorded for both the deferred tax assets and the liability for our obligations under the TRA will be estimated at the time of any purchase or redemption as a reduction to shareholders’ equity, and the effects of changes in any of our estimates after this date will be included in net income.
This includes transactional gains and losses related to foreign currency. Unrealized gain on investments in securities represents adjustments to the fair value of our investments in securities. Change in TRA liability represents adjustments to the Tax Receivable Agreement (“TRA”) liability. Interest expense consists of interest costs incurred on our borrowings and amortization of capitalized financing costs.
This includes transactional gains and losses related to foreign currency. Gain on investments in securities represents adjustments to the fair value of our investments in securities. Change in TRA liability represents adjustments to the Tax Receivable Agreement (“TRA”) liability. Interest expense consists of interest costs incurred on our borrowings and amortization of capitalized financing costs.
Income tax benefit (expense) represents federal, state, local and foreign income taxes. 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.
Income tax benefit (expense) represents federal, state, local and foreign income taxes. 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.
Similarly, the effect of subsequent changes in the enacted tax rates will be included in net income (loss). Judgement is required in assessing the future tax consequences of events that have been recognized in Shift4 Payments, Inc.’s financial statements.
Similarly, the effect of subsequent changes in the enacted tax rates will be included in net income. Judgement is required in assessing the future tax consequences of events that have been recognized in Shift4 Payments, Inc.’s financial statements.
Gross revenue less network fees represents a key performance metric that management uses to measure changes in the mix and value derived from our customer base as we continue to execute our strategy to expand our reach to serve larger, complex merchants. 58 Table of Contents Adjusted EBITDA is the primary financial performance measure used by management to evaluate its business and monitor results of operations.
Gross revenue less network fees represents a key performance metric that management uses to measure changes in the mix and value derived from our customer base as we continue to execute our strategy to expand our reach to serve larger, complex merchants. 60 Table of Contents 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.
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.
Factors Impacting Our Business and Results of Operations In general, our results of operations are impacted by factors such as the adoption of software solutions that are integrated with our payment solutions, continued investment in our core capabilities, ongoing pursuit of strategic acquisitions, and macro-level economic trends. 52 Table of Contents Increased adoption of software-integrated payments .
Factors Impacting Our Business and Results of Operations In general, our results of operations are impacted by factors such as the adoption of software solutions that are integrated with our payment solutions, continued investment in our core capabilities, ongoing pursuit of strategic acquisitions, and macro-level economic trends. 54 Table of Contents Increased adoption of software-integrated payments .
Year Ended December 31, (in millions) 2023 2022 $ Change Impairment of intangible assets $ (18.6) $ — $ (18.6) The non-cash impairment of intangible assets was $18.6 million for the year ended December 31, 2023. During the fourth quarter of 2023, in conjunction with the acquisition of Finaro, we ceased development on several in-process software development projects.
Year Ended December 31, (in millions) 2024 2023 $ Change Impairment of intangible assets $ — $ (18.6) $ 18.6 The non-cash impairment of intangible assets was $18.6 million for the year ended December 31, 2023. During the fourth quarter of 2023, in conjunction with the acquisition of Finaro, we ceased development on several in-process software development projects.
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.
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.
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.
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.
A discussion regarding our financial condition and results of operation for the year ended December 31, 2023 compared to the year ended December 31, 2022 is presented below.
A discussion regarding our financial condition and results of operation for the year ended December 31, 2024 compared to the year ended December 31, 2023 is presented below.
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.
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.
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. 53 Table of Contents Subscription and other revenues include software as a service (“SaaS”) fees for POS systems and terminals provided to merchants.
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. 55 Table of Contents Subscription and other revenues include software as a service (“SaaS”) fees for POS systems and terminals provided to merchants.
As of December 31, 2023, we recognized a $5.1 million TRA liability after concluding it was probable that, based on estimates of future taxable income, we will realize tax benefits associated with the TRA.
As of December 31, 2024, we recognized a $365.5 million TRA liability after concluding it was probable that, based on estimates of future taxable income, we will realize tax benefits associated with the TRA.
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.
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.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021 is included under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 1, 2023.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 is included under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024.
None of the specified events for the conversion of the 2025 Convertible Notes occurred as of December 31, 2023. Senior Notes – 2026 Notes 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.
None of the specified events for the conversion of the 2025 Convertible Notes occurred as of December 31, 2024. Senior Notes – 2026 Notes 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.
In addition to tax expenses, we will also make payments under the TRA, which may be material in the future.
In addition to tax expenses, we will also make payments under the TRA, which are expected to be material in the future.
Convertible Notes, Senior Notes and Revolving Credit Facility 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. 61 Table of Contents Convertible Notes – 2027 Notes In July 2021, Shift4 Payments, Inc. issued an aggregate principal amount of $632.5 million of 2027 Convertible Notes to qualified institutional buyers in an offering exempt from registration under the Securities Act.
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. 63 Table of Contents Convertible Notes – 2025 Notes In December 2020, Shift4 Payments, Inc. issued an aggregate principal amount of $690.0 million of 2025 Convertible Notes, to qualified institutional buyers in an offering exempt from registration under the Securities Act.
The amounts available to Shift4 Payments, Inc. to pay cash dividends are subject to the covenants and distribution restrictions in its subsidiaries’ agreements governing its indebtedness, including covenants in such agreements providing that the payments of dividends or other distributions are subject to annual limitations based on our market capitalization. 60 Table of Contents The following table sets forth summary cash flow information for the periods presented: Year Ended December 31, (in millions) 2023 2022 Net cash provided by operating activities $ 388.3 $ 275.4 Net cash used in investing activities (301.9) (516.8) Net cash used in financing activities (152.2) (214.6) Effect of exchange rate changes on cash and cash equivalents 11.1 1.0 Change in cash and cash equivalents $ (54.7) $ (455.0) Operating activities Net cash provided by operating activities consists of net income (loss) adjusted for certain non-cash items and changes in other assets and liabilities.
The amounts available to Shift4 Payments, Inc. to pay cash dividends are subject to the covenants and distribution restrictions in its subsidiaries’ agreements governing its indebtedness, including covenants in such agreements providing that the payments of dividends or other distributions are subject to annual limitations based on our market capitalization. 62 Table of Contents The following table sets forth summary cash flow information for the periods presented: Year Ended December 31, (in millions) 2024 2023 Net cash provided by operating activities $ 500.3 $ 346.0 Net cash used in investing activities (691.1) (301.9) Net cash provided by (used in) financing activities 929.2 (109.9) Effect of exchange rate changes on cash and cash equivalents and restricted cash (21.6) 11.1 Change in cash and cash equivalents and restricted cash $ 716.8 $ (54.7) Operating activities Net cash provided by operating activities consists of net income adjusted for certain non-cash items and changes in other assets and liabilities.
GAAP to non-GAAP gross revenues less network fees. 59 Table of Contents EBITDA and Adjusted EBITDA: Year Ended December 31, (in millions) 2023 2022 Net income $ 122.9 $ 86.7 Interest expense 32.1 32.5 Interest income (31.9) (10.8) Income tax expense (benefit) (3.4) 0.2 Depreciation and amortization 214.6 149.1 EBITDA 334.3 257.7 Acquisition, restructuring and integration costs (a) 28.3 28.2 Revaluation of contingent liabilities (b) 23.1 (36.6) Impairment of intangible assets (c) 18.6 — Unrealized gain on investments in securities (d) (12.2) (15.1) Change in TRA liability (e) 3.4 1.7 Equity-based compensation (f) 59.1 50.4 Foreign exchange and other nonrecurring items (g) 5.3 3.4 Adjusted EBITDA $ 459.9 $ 289.7 (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.
GAAP to non-GAAP gross revenues less network fees. 61 Table of Contents EBITDA and Adjusted EBITDA: Year Ended December 31, (in millions) 2024 2023 Net income $ 294.5 $ 122.9 Interest expense 61.8 32.1 Interest income (33.7) (31.9) Income tax benefit (296.1) (3.4) Depreciation and amortization 296.6 214.6 EBITDA 323.1 334.3 Acquisition, restructuring and integration costs (a) 38.8 28.3 Revaluation of contingent liabilities (b) 4.0 23.1 Impairment of intangible assets — 18.6 Gain on investments in securities (c) (66.7) (12.2) Change in TRA liability (d) 289.0 3.4 Equity-based compensation (e) 67.9 59.1 Foreign exchange and other nonrecurring items (f) 21.3 5.3 Adjusted EBITDA $ 677.4 $ 459.9 (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.
Key Performance Indicators and Non-GAAP Measures The following table sets forth our key performance indicators and non-GAAP measures for the periods presented: Year Ended December 31, (in millions) 2023 2022 End-to-end payment volume $ 109,034.0 $ 71,587.7 Gross revenue less network fees 940.4 727.5 EBITDA 334.3 257.7 Adjusted EBITDA 459.9 289.7 End-to-end payment volume End-to-end payment volume is defined as the total dollar amount of payments that we deliver for settlement on behalf of our merchants.
Key Performance Indicators and Non-GAAP Measures The following table sets forth our key performance indicators and non-GAAP measures for the periods presented: Year Ended December 31, (in millions) 2024 2023 End-to-end payment volume $ 164,817.1 $ 109,034.0 Gross revenue less network fees 1,354.4 940.4 EBITDA 323.1 334.3 Adjusted EBITDA 677.4 459.9 End-to-end payment volume End-to-end payment volume is defined as the total dollar amount of payments that we deliver for settlement on behalf of our merchants.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
(d) See Note 12 to the accompanying consolidated financial statements for more information on the investments in non-marketable securities. (e) See Note 13 to the accompanying consolidated financial statements for more information on the TRA. (f) Consisted of equity-based compensation expense for RSUs, including employer taxes for vested RSUs.
(d) See Note 13 to the accompanying consolidated financial statements for more information on the TRA. (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.
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.
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.
GAAP related to the measurement and recognition of revenue requires us to make judgments and estimates. Complex agreements with nonstandard terms and conditions may require interpretation to determine the appropriate accounting. Specifically, the determination of whether we are a principal to a transaction or an agent can also require considerable judgment.
Complex agreements with nonstandard terms and conditions may require interpretation to determine the appropriate accounting. Specifically, the determination of whether we are a principal to a transaction or an agent can also require considerable judgment.
Other companies in similar businesses may use different estimation policies and methodologies, which may impact the comparability of our financial condition, results of operations and cash flows to those of other companies. 63 Table of Contents Revenue recognition Application of the accounting principles in U.S.
Other companies in similar businesses may use different estimation policies and methodologies, which may impact the comparability of our financial condition, results of operations and cash flows to those of other companies. Revenue recognition Application of the accounting principles in U.S. GAAP related to the measurement and recognition of revenue requires us to make judgments and estimates.
Gross revenue less network fees: Year Ended December 31, 2023 2022 (in millions) Gross revenue $ 2,564.8 $ 1,993.6 Less: Network fees (1,624.4) (1,266.1) Less: Other costs of sales (exclusive of depreciation of equipment under lease) (252.6) (257.3) 687.8 470.2 Less: Depreciation of equipment under lease (35.3) (28.4) Gross profit (a) $ 652.5 $ 441.8 Gross profit (a) $ 652.5 $ 441.8 Add back: Other costs of sales 252.6 257.3 Add back: Depreciation of equipment under lease 35.3 28.4 Gross revenue less network fees $ 940.4 $ 727.5 (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.
Gross revenue less network fees: Year Ended December 31, 2024 2023 (in millions) Gross revenue $ 3,330.6 $ 2,564.8 Less: Network fees (1,976.2) (1,624.4) Less: Other costs of sales (exclusive of depreciation of equipment under lease) (381.3) (252.6) 973.1 687.8 Less: Depreciation of equipment under lease (54.4) (35.3) Gross profit (a) $ 918.7 $ 652.5 Gross profit (a) $ 918.7 $ 652.5 Add back: Other costs of sales 381.3 252.6 Add back: Depreciation of equipment under lease 54.4 35.3 Gross revenue less network fees $ 1,354.4 $ 940.4 (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.
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 Measures for a discussion and reconciliation of gross revenue less network fees.
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 Measures for a discussion and reconciliation of gross revenue less network fees.
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.
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.
Results of Operations Year ended December 31, 2023 compared to year ended December 31, 2022 Revenues (in millions) 55 Table of Contents Gross revenue increased by $571.2 million, or 29%. Gross revenue is comprised of payments-based revenue and subscription and other revenues.
Results of Operations Year ended December 31, 2024 compared to year ended December 31, 2023 Revenues (in millions) 57 Table of Contents Gross revenue increased by $765.8 million, or 30%. Gross revenue is comprised of payments-based revenue and subscription and other revenues.
It was determined that the intellectual property obtained in the Finaro transaction was better suited for the objectives of these projects. Year Ended December 31, (in millions) 2023 2022 $ Change Professional expenses $ (33.1) $ (33.3) $ 0.2 Professional expenses were comparable with the prior year. Professional expenses include expenses associated with acquisitions.
It was determined that the intellectual property obtained in the Finaro transaction was better suited for the objectives of these projects. Year Ended December 31, (in millions) 2024 2023 $ Change Professional expenses $ (41.4) $ (33.1) $ (8.3) Professional expenses included expenses associated with acquisitions.
We have provided a summary of our significant accounting policies in Note 1 to the accompanying consolidated financial statements. The following critical accounting discussion pertains to accounting policies management believes are most critical to the portrayal of our historical financial condition and results of operations and that require significant, difficult, subjective or complex judgments.
The following critical accounting discussion pertains to accounting policies management believes are most critical to the portrayal of our historical financial condition and results of operations and that require significant, difficult, subjective or complex judgments.
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.
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.
The original estimate of an asset’s useful life and the impact of an event or circumstance on either an asset’s useful life or carrying value involve significant judgment regarding estimates of the future cash flows associated with each asset. 64 Table of Contents Income taxes We entered into a TRA with Shift4 Payments, LLC and each of the Continuing Equity Owners and each of the Blocker Shareholders that will provide for the payment by Shift4 Payments, Inc. to the Continuing Equity Owners of 85% of the amount of certain tax benefits, if any, that Shift4 Payments Inc. actually realizes or in some circumstances is deemed to realize in its tax reporting, as a result of (1) the increases in our share of the tax basis of assets of Shift4 Payments, LLC resulting from any redemptions of LLC Interests from the Continuing Equity Owners, (2) our utilization of certain tax attributes of the Blocker Companies and certain Continuing Equity Owners and (3) certain other tax benefits related to us making payments under the TRA.
We entered into a TRA with Shift4 Payments, LLC and each of the Continuing Equity Owners and each of the Blocker Shareholders that will provide for the payment by Shift4 Payments, Inc. to the Continuing Equity Owners of 85% of the amount of certain tax benefits, if any, that Shift4 Payments Inc. actually realizes or in some circumstances is deemed to realize in its tax reporting, as a result of (1) the increases in our share of the tax basis of assets of Shift4 Payments, LLC resulting from any redemptions of LLC Interests from the Continuing Equity Owners, (2) our utilization of certain tax attributes of the Blocker Companies and certain Continuing Equity Owners and (3) certain other tax benefits related to us making payments under the TRA.
Operating Expenses Year Ended December 31, (in millions) 2023 2022 $ Change General and administrative expenses $ (329.3) $ (267.4) $ (61.9) The increase in general and administrative expenses is primarily due to expenses associated with our growth, which includes the impact of our recent acquisitions.
Operating Expenses Year Ended December 31, (in millions) 2024 2023 $ Change General and administrative expenses $ (459.5) $ (329.3) $ (130.2) 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.
Payments-based revenue increased by $528.9 million, or 28%, primarily due to: • 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. • 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.
Payments-based revenue increased by $604.1 million, or 25%, primarily due to: • 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. • 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.
GAAP requires management to make estimates, assumptions and judgments in certain circumstances that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis.
GAAP. The preparation of these historical financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions and judgments in certain circumstances that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods.
Cost of Sales Year Ended December 31, (in millions) 2023 2022 $ Change Network fees $ (1,624.4) $ (1,266.1) $ (358.3) The 28% increase in network fees was primarily due to the increase in payments-based revenue, which also increased 28%.
Cost of Sales Year Ended December 31, (in millions) 2024 2023 $ Change Network fees $ (1,976.2) $ (1,624.4) $ (351.8) The 22% increase in network fees was primarily due to the increase in payments-based revenue, which increased 25%.
We do not intend to pay cash dividends on our Class A common stock in the foreseeable future. Shift4 Payments, Inc. is a holding company that does not conduct any business operations of its own.
See “Pending Acquisitions—Debt Commitment Letter” for a description of our financing arrangements in connection with the Transaction Agreement described in that section. We do not intend to pay cash dividends on our Class A common stock in the foreseeable future. Shift4 Payments, Inc. is a holding company that does not conduct any business operations of its own.
For the year ended December 31, 2022, primarily consisted of $23.7 million of acquisition-related costs. (b) Consisted of fair value adjustments to contingent liabilities arising from acquisitions. (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.
For the year ended December 31, 2023, primarily consisted of $23.2 million of acquisition-related costs and $4.6 million of restructuring costs. (b) Consisted of fair value adjustments to contingent liabilities arising from acquisitions. (c) See Note 12 to the accompanying consolidated financial statements for more information on the investments in non-marketable securities.
Year Ended December 31, $ change (in millions) 2023 2022 Payments-based revenue $ 2,386.0 $ 1,857.1 $ 528.9 Subscription and other revenues 178.8 136.5 42.3 Gross revenue 2,564.8 1,993.6 571.2 Network fees (1,624.4) (1,266.1) (358.3) Other costs of sales (exclusive of certain depreciation and amortization expense shown separately below) (252.6) (257.3) 4.7 General and administrative expenses (329.3) (267.4) (61.9) Revaluation of contingent liabilities (23.1) 36.6 (59.7) Depreciation and amortization expense (a) (153.8) (96.5) (57.3) Impairment of intangible assets (18.6) — (18.6) Professional expenses (33.1) (33.3) 0.2 Advertising and marketing expenses (15.1) (14.9) (0.2) Income from operations 114.8 94.7 20.1 Interest income 31.9 10.8 21.1 Other (expense) income, net (3.9) 0.5 (4.4) Unrealized gain on investments in securities 12.2 15.1 (2.9) Change in TRA liability (3.4) (1.7) (1.7) Interest expense (32.1) (32.5) 0.4 Income before income taxes 119.5 86.9 32.6 Income tax benefit (expense) 3.4 (0.2) 3.6 Net income 122.9 86.7 36.2 Less: Net income attributable to noncontrolling interests 36.7 11.6 25.1 Net income attributable to Shift4 Payments, Inc. $ 86.2 $ 75.1 $ 11.1 (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.
Year Ended December 31, $ change (in millions) 2024 2023 Payments-based revenue $ 2,990.1 $ 2,386.0 $ 604.1 Subscription and other revenues 340.5 178.8 161.7 Gross revenue 3,330.6 2,564.8 765.8 Network fees (1,976.2) (1,624.4) (351.8) Other costs of sales (exclusive of certain depreciation and amortization expense shown separately below) (381.3) (252.6) (128.7) General and administrative expenses (459.5) (329.3) (130.2) Revaluation of contingent liabilities (4.0) (23.1) 19.1 Depreciation and amortization expense (a) (199.5) (153.8) (45.7) Impairment of intangible assets — (18.6) 18.6 Professional expenses (41.4) (33.1) (8.3) Advertising and marketing expenses (21.7) (15.1) (6.6) Income from operations 247.0 114.8 132.2 Interest income 33.7 31.9 1.8 Other income (expense), net 1.8 (3.9) 5.7 Gain on investments in securities 66.7 12.2 54.5 Change in TRA liability (289.0) (3.4) (285.6) Interest expense (61.8) (32.1) (29.7) Income (loss) before income taxes (1.6) 119.5 (121.1) Income tax benefit 296.1 3.4 292.7 Net income 294.5 122.9 171.6 Less: Net income attributable to noncontrolling interests (64.9) (36.7) (28.2) Net income attributable to Shift4 Payments, Inc. $ 229.6 $ 86.2 $ 143.4 (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.
Contingent Liabilities As of December 31, 2023, the fair value of contingent liabilities to potentially be paid out in cash was $19.4 million, with $17.6 million payable within twelve months. As of December 31, 2023, the maximum amount of contingent liabilities to potentially be paid out in cash was $23.5 million, with $21.7 million payable within twelve months.
Contingent Liabilities As of December 31, 2024, the fair value of contingent liabilities to potentially be paid out in cash was $26.2 million, with $7.2 million payable within twelve months.
In addition, there was an impact from working capital items of $23.1 million. Investing activities 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.
Investing activities 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.
Year Ended December 31, (in millions) 2023 2022 $ Change Revaluation of contingent liabilities $ (23.1) $ 36.6 $ (59.7) 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. 56 Table of Contents Year Ended December 31, (in millions) 2023 2022 $ Change Depreciation and amortization expense $ (153.8) $ (96.5) $ (57.3) The increase in depreciation and amortization expense is primarily due to: • Higher residual commission buyout amortization due to the residual commission buyouts completed in 2022, • Increased equipment under lease associated with the growth of our SkyTab offering, and; • The amortization of new intangible assets as a result of our recent acquisitions.
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. 58 Table of Contents Year Ended December 31, (in millions) 2024 2023 $ Change Depreciation and amortization expense $ (199.5) $ (153.8) $ (45.7) 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.
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.
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.
Debt As of December 31, 2023, 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 $75.1 million, with $24.0 million payable within twelve months.
Our material cash requirements include the following contractual obligations: Debt As of December 31, 2024, we had $2,872.5 million of fixed rate debt principal outstanding with maturities beginning in 2025 with the $690.0 million of 2025 Convertible Notes. Future interest payments associated with the outstanding debt total $645.1 million, with $98.2 million payable within twelve months.
Recent Developments Stock Repurchases 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.
Stock repurchases In May 2024, the Board authorized a stock repurchase program (the “May 2024 Program”), pursuant to which we are authorized to repurchase up to $500.0 million of shares of our Class A common stock through December 31, 2025 . The May 2024 Program replaced our prior stock repurchase program from December 2023.
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. 54 Table of Contents Comparison of Results for the Year Ended December 31, 2023 and 2022 The following table sets forth the consolidated statements of operations for the periods presented.
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.
None of the specified events for the conversion of the 2027 Convertible Notes occurred as of December 31, 2023. Convertible Notes – 2025 Notes In December 2020, Shift4 Payments, Inc. issued an aggregate principal amount of $690.0 million of 2025 Convertible Notes, to qualified institutional buyers in an offering exempt from registration under the Securities Act.
Convertible Notes – 2027 Notes In July 2021, Shift4 Payments, Inc. issued an aggregate principal amount of $632.5 million of 2027 Convertible Notes to qualified institutional buyers in an offering exempt from registration under the Securities Act.
In the year ended December 31, 2023 , we repurcha sed 1,663,311 shares of Class A common stock for $105.4 million, including commissions paid, at an average price paid of $63.33 per share. The May 2023 Program expired on December 31, 2023.
During the year ended December 31, 2024 , we repurcha sed 1,605,488 shares of Class A common stock for $145.9 million, including commissions paid, at an average price paid of $90.83 per share. As of December 31, 2024, $354.1 million remains available under the May 2024 Program.
Impairment assessments We monitor conditions related to equipment for lease, property, plant and equipment, and intangible assets and test these assets for potential impairment whenever management concludes events or changes in circumstances, such as historical operating and/or cash flow losses of an asset group, indicate that the carrying amount may not be recoverable.
The contingent liability arising from the expected earnout payment included in purchase consideration is typically measured on the acquisition date using a fair value model such as a Monte Carlo simulation in a risk-neutral framework, calibrated to Management’s forecasts which are subject to significant judgment. 66 Table of Contents Impairment assessments We monitor conditions related to equipment for lease, property, plant and equipment, and intangible assets and test these assets for potential impairment whenever management concludes events or changes in circumstances, such as historical operating and/or cash flow losses of an asset group, indicate that the carrying amount may not be recoverable.
Year Ended December 31, (in millions) 2023 2022 $ Change Interest income $ 31.9 $ 10.8 $ 21.1 The increase in interest income is primarily due to a higher weighted average interest rate earned on our cash and cash equivalents.
Year Ended December 31, (in millions) 2024 2023 $ Change Interest income $ 33.7 $ 31.9 $ 1.8 The increase in interest income was primarily due to an increase in our average interest-earning cash balance.
Critical Accounting Estimates Our discussion and analysis of our historical financial condition and results of operations for the periods described is based on our audited consolidated financial statements which have been prepared in accordance with U.S. GAAP. The preparation of these historical financial statements in conformity with U.S.
As of December 31, 2024, the maximum amount of contingent liabilities to potentially be paid out in cash was $43.7 million, with $7.3 million payable within twelve months. 65 Table of Contents Critical Accounting Estimates Our discussion and analysis of our historical financial condition and results of operations for the periods described is based on our audited consolidated financial statements which have been prepared in accordance with U.S.
Financing activities 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.
Financing activities 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.
Year Ended December 31, (in millions) 2023 2022 $ Change Other costs of sales (exclusive of certain depreciation and amortization expense) $ (252.6) $ (257.3) $ 4.7 The decrease in other cost of sales is primarily due to: • Residual commissions decreased primarily due to residual commission buyouts completed in 2022. • This was partially offset by higher costs of sales attributable to our recent acquisitions and higher capitalized software development cost amortization.
Year Ended December 31, (in millions) 2024 2023 $ Change Other costs of sales (exclusive of certain depreciation and amortization expense) $ (381.3) $ (252.6) $ (128.7) The increase in other costs of sales was primarily driven by our recent acquisitions and incremental residual commissions associated with revenue growth.
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. Liquidity and Capital Resources Overview We have historically sourced our liquidity requirements with cash flow from operations and, when needed, with debt or equity financing.
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. Liquidity and Capital Resources Overview We have historically sourced our liquidity requirements primarily with cash flow from operations and, when needed, with debt or equity financing.
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.
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.
Loans incurred under the Revolving Credit Facility bear interest at our option at either the SOFR rate plus a margin ranging from 3.00% to 3.50% 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) plus a margin ranging from 2.00% to 2.50% per year (“Applicable Rate”).
The Company capitalized approximately $4.3 million of financing fees in connection with this refinancing. 64 Table of Contents Loans incurred under the Revolving Credit Facility bear interest a rate per annum equal to, at the Borrower’s option, either (i) a term SOFR based rate (subject to a 0.0% floor), plus a margin of 2.00% per annum, or (ii) an alternate base rate (equal to the highest of the Federal Funds Effective Rate plus 0.50%, the term SOFR rate for an interest period for one month (subject to a 0.0% floor) plus 1.00%, and the prime rate announced by the administrative agent from time to time), plus a margin of 1.00% per annum.
Year Ended December 31, (in millions) 2023 2022 $ Change Unrealized gain on investments in securities $ 12.2 $ 15.1 $ (2.9) 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.
Year Ended December 31, (in millions) 2024 2023 $ Change Gain on investments in securities $ 66.7 $ 12.2 $ 54.5 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.
Overview 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.
Overview At Shift4, our mission is to boldly redefine commerce by simplifying complex payments ecosystems across the world. 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.
See Note 19 to the accompanying consolidated financial statements for more information on equity-based compensation. (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.
(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.
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 ranging from 0.25% per year to 0.50% per year, in each case based on the total leverage ratio. We are also subject to customary letter of credit and agency fees.
The Revolving Credit Facility matures on September 5, 2029. The Credit Agreement requires periodic interest payments until maturity on any outstanding amounts borrowed. In addition, the Borrower is 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 annum.
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.
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.
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.
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.
Year Ended December 31, (in millions) 2023 2022 $ Change Income tax benefit (expense) $ 3.4 $ (0.2) $ 3.6 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%.
Year Ended December 31, (in millions) 2024 2023 $ Change Income tax benefit $ 296.1 $ 3.4 $ 292.7 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.
Amended and Restated Revolving Credit Facility 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 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.
Year Ended December 31, (in millions) 2023 2022 $ Change Advertising and marketing expenses $ (15.1) $ (14.9) $ (0.2) Advertising and marketing expenses generally remained consistent for the year ended December 31, 2023, compared to the year ended December 31, 2022.
The increase in professional expenses was primarily driven by higher acquisition-related costs as compared to the prior year period. Year Ended December 31, (in millions) 2024 2023 $ Change Advertising and marketing expenses $ (21.7) $ (15.1) $ (6.6) The increase in advertising and marketing expenses was primarily due to new sponsorship contracts.
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.
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.
Removed
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.
Added
Recent Developments Chief Executive Officer Succession Planning 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.
Removed
Recent Acquisitions Finaro On October 26, 2023, we acquired Finaro for $211.9 million of cash and 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.
Added
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.
Removed
Appetize 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.
Added
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed1 unchanged
Biggest changeSince these notes bear interest at fixed rates, they do not result in any financial statement risk associated with changes in interest rates. However, the fair value of these notes fluctuates when interest rates change. We also have a Revolving Credit Facility available to us with available borrowing capacity of $100.0 million.
Biggest changeSince these notes bear interest at fixed rates, they do not result in any financial statement risk associated with changes in interest rates. However, the fair value of these notes fluctuates when interest rates change. 67 Table of Contents We also have a Revolving Credit Facility available to us with available borrowing capacity of $450.0 million.
See “Liquidity and Capital Resources” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report and Note 11 to the accompanying consolidated financial statements for more information. 65 Table of Contents
See “Liquidity and Capital Resources” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report and Note 11 to the accompanying consolidated financial statements for more information. 68 Table of Contents
As a result, we are exposed to the risk related to fluctuations in interest rates to the extent of our borrowings. As of December 31, 2023 and 2022, we had no amounts outstanding under the Revolving Credit Facility.
As a result, we are exposed to the risk related to fluctuations in interest rates to the extent of our borrowings. As of December 31, 2024, we had no amounts outstanding under the Revolving Credit Facility.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our future income, cash flows and fair values relevant to financial instruments are subject to risks relating to interest rates. As of December 31, 2023, we had $1,772.5 million of fixed rate principal debt outstanding pursuant to the Notes with a fair value of $1,797.9 million.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our future income, cash flows and fair values relevant to financial instruments are subject to risks relating to interest rates. As of December 31, 2024, we had $2,872.5 million of fixed rate principal debt outstanding pursuant to the Notes with a fair value of $3,174.4 million.

Other FOUR 10-K year-over-year comparisons