Shift4 Payments, Inc. Q3 FY2025 earnings call

• Quarterly performance in line with Q3 guidance. - Organic growth of business excluding recent M&A at 18% year-over-year. - Global Blue integration on track, 3-in-1 payment terminal in beta. - Australian hotel payment wins with Accor. - Wins in Restaurants, Hospitality, Sports and Entertainment, Hertz, and nonprofits. - Acquisition of Bambora expected to close in Q1 2026. - Board authorized $1 billion stock repurchase program.

Gross revenue less network fees were $589 million, up 61% year-over-year, and adjusted EBITDA was $292 million, up 56% year-over-year. Excluding Global Blue, gross revenue less network fees grew 19% year-over-year, with organic growth (excluding recent M&A) at 18% year-over-year. Volume was ~$55 billion. Global Blue contributed $156 million to gross revenue less network fees and $68 million to EBITDA in Q3. Sales in Store at Global Blue were 5% above prior year, with Europe up 13% and Asia down 11% due to currency. Subscription and other revenue was $119 million in Q3, up 16% year-over-year.

• Full year 2025 volume expected to range from $207 billion to $210 billion, 26%-27% year-over-year growth. - Gross revenue less network fees expected to range from $1.98 billion to $2.02 billion, 46%-49% year-over-year growth. - Adjusted EBITDA expected to range from $970 million to $985 million, 43%-45% year-over-year growth. - Adjusted free cash flow conversion expectation at plus 50%. Guidance range narrowed with intentional shape considering macro and industry uncertainties.

• Macro and industry uncertainties impacting business outcomes. - Currency fluctuations affecting Global Blue and other international operations. - Volatility in same-store sales across verticals.

Q: Where is the company's primary focus right now? Are you edged down on integrating and cross-selling into the $1 trillion acquisition funnel? Or are you simultaneously investing heavily in net new product development?

A: Yes to both. Taking category-leading products and finding customers in capital efficient way, leveraging M&A assets for new geographies and customers.

Q: What are the implications of Jared getting nominated to NASA?

A: Likely to simplify company structure, he intends to remain largest shareholder, no expected change to previously disclosed plans.

Q: What are the implications of Bambora acquisition?

A: Gateway volume potential, ACH EFT component enhancement, fits capital allocation framework boxes, large expansion in customer acquisition potential, product and capabilities enhancement, disciplined approach to acquisitions.

Q: Implied Q4 end-to-end volume?

A: Roughly $57 billion to $60 billion, reasonable jumping off point to model 2026 volume expectations considering recency and business run rate shape.

Q: On organic growth and Q4 top line growth?

A: Organic growth of 18% in Q3 is in line with medium-term guidance, still within guidance range with caution due to same-store sales volatility.

Q: Global Blue trends and Q4 assumption?

A: Global Blue revenue grew ~19% year-over-year, Sales in Store in Asia turned positive in October, performance strong despite volatility, year-over-year growth of revenue was about 19%.

Q: What made up for shortfall and guidance philosophy?

A: Pleased with customer adds and international adds, same-store sales in Asia turned positive, guidance philosophy is to take in all right data sets for informed decisions, no dramatic changes to underlying frameworks but evolving based on recency of info.

Q: Pace of processing conversion in Global Blue?

A: Broad conversion opportunity from SMB to large enterprises, technology is low friction to switch, early success from assets, conversion opportunity beyond headline customers.

Q: Share buyback cadence and leverage?

A: Trading at attractive levels, consistent with lowest multiples, ample liquidity and access to capital, pro forma LTM net leverage at 3.2x, free cash flow generated needs reinvestment but relative attractiveness of shares is hard to ignore.

Q: Choppiness in Restaurant and Hotel verticals in Q3 and Q4?

A: Saw stabilizing trends then softening again, diversification helps with offsets, industry to industry volatility exists with both benefit and detriment.

Q: Organic growth calculation and Jared's shares?

A: Organic growth excludes acquisition impact from measurement periods, Jared doesn't intend to divest shares, will convert super voting shares to common, share class likely to collapse to single class.

Q: Merchant conversion progress from acquired merchants?

A: Customer adds across business are encouraging, fueled by M&A assets, cross-sell going well, customer adds ballast same-store sales anxiety.

Q: Volume and approach to 2026 modeling?

A: Volume exit rate is fine starting point, balanced caution in some verticals offset by diversification strength, same-store sales volatility is real, Global Blue's future contribution is significant.

Q: Competition and partnership with Oracle?

A: Competition in US relatively unchanged, industry chaos helps share gains, partner with Oracle constantly, handle complex environments with SMB-like experience.