Shift4 Payments, Inc. Q4 FY2024 earnings call

• Q4 results were strong with records across major KPIs including end-to-end volumes, gross revenue less network fees, adjusted EBITDA, and adjusted free cash flow. The back half represented 57% of full year gross revenue less network fees with Q4 alone contributing 30%.
• Highlights from the quarter: In restaurants, surpassed initial 2024 SkyTab system installation goal, signed signature wins globally. In hospitality, added Alterra Mountain Resorts, renewed with Great Wolf Lodge, signed new hotels. In sports and entertainment, entered into agreements for House of Blues, cross-sold ticketing, powered College Football National Championship. Unified commerce: consolidated card-not-present efforts, had record quarter/year serving non-profits on unified commerce platform with Q4 year-over-year volumes up 660% and calendar year up 319%. Announced equipping merchants to accept crypto payments, with integration with SkyTab wrapping up this month. International: launched in new countries, processing across LatAm, expecting to launch additional countries, and acquisition of Global Blue announced.
• Acquisition of Global Blue: Approximately $2.5 billion all-cash transaction, Global Blue is a market-leading payment platform supporting luxury brands, estimated $80 million of revenue synergies by end of 2027, expect to close in second half of 2025, pro forma net leverage expected to be ~3.6 times upon closing and delever to ~3.3 times by end of year.

In Q4 2024, end-to-end payment volumes increased 49% year-over-year to $47.9 billion. Gross revenue less network fees increased 50% to $405 million. Adjusted EBITDA increased 51% to $205.9 million, and adjusted free cash flow increased 78% to $134 million. Organic gross revenue less network fee growth for the full quarter 2024 was 26%. Q4 blended net spreads were 60 basis points. Q4 adjusted EBITDA margins were 51% and 50% for the full year. Excluding a nearly 270 basis point drag from recent acquisitions, full year adjusted EBITDA margins were 53%. Subscription and other revenue was $115 million in Q4, up 100% compared to the same period last year. Adjusted free cash flow in the quarter was $134 million, bringing full year adjusted free cash flow to $399 million, up 46% from a year ago. Q4 adjusted free cash flow conversion was 65%, bringing full year to 59%.

• 2025 volume between $200 billion and $220 billion, representing 21% to 33% year-over-year growth.
• 2025 gross revenue less network fees between $1.65 billion and $1.72 billion, representing 22% to 27% growth.
• 2025 adjusted EBITDA between $830 million and $855 million, representing 23% to 26% growth.
• 2025 adjusted free cash flow conversion greater than 50%.
• Q1 2025 shaping up in line with expectations for volume and revenue, anticipate adjusted EBITDA margins of approximately 45% as Q1 is a seasonal low point for margins, and absorbing some drag from lower margin M&A completed in 2024 but expect mitigation by year-end.

Actual results could differ materially as a result of certain risks, uncertainties and many important factors. Additional information concerning those factors is available in our most recent reports on Forms 10-K and 10-Q.

Q: Will there be time for questions at the conclusion of prepared remarks?

A: We are hosting our Investor Day event today in Las Vegas. And as a result, we unfortunately do not have time to entertain any questions at the conclusion of our prepared remarks.