Shift4 Payments, Inc. (NYSE: FOUR)

Shift4’s Q2 2025 results demonstrated robust operational performance with gross revenue increasing 17% to $966.2 million. This growth was primarily driven by a 25% increase in payment volume to $50.1 billion, showcasing the company’s ability to scale its payment processing capabilities and expand its merchant base.

The gross revenue less network fees metric increased 29% to $413.4 million, indicating strong unit economics and the company’s ability to generate value from its growing volume. This metric excludes interchange and assessment fees, providing insight into Shift4’s core value proposition and pricing power with merchants.

Despite strong top-line growth, net income decreased to $41.1 million from $54.5 million in Q2 2024, primarily due to significantly higher interest expenses resulting from the company’s recent debt financing activities. Interest expense increased from $8.1 million to $39.4 million year-over-year, reflecting the cost of funding strategic acquisitions and growth initiatives.

However, Adjusted EBITDA grew 26% to $205.1 million, demonstrating the company’s strong underlying operational performance and ability to generate cash flow. This metric excludes non-cash and one-time items, providing a clearer view of the business’s core profitability and operational efficiency.

For the six-month period, gross revenue increased 18% to $1.8 billion with volume growth of 30% to $95.1 billion, indicating consistent momentum throughout the first half of 2025. The company’s ability to maintain strong growth rates while integrating acquisitions and expanding internationally positions it well for continued market share gains.

Payments-based revenue represented the majority of total revenue at $868.5 million, up 15% year-over-year. This growth was driven by the 25% increase in payment volume, though revenue growth lagged volume growth due to the company’s continued onboarding of larger merchants with lower unit pricing. This strategic shift toward larger enterprise clients provides more stable, long-term revenue streams despite lower per-transaction margins.

Subscription and other revenues showed strong growth of 37% to $97.7 million, primarily driven by higher SaaS revenue from Shift4’s SkyTab point-of-sale solutions and contributions from recent acquisitions including Eigen and Givex. This diversified revenue stream provides predictable, recurring income that complements the transaction-based payments revenue.

The company’s payment processing services include fees for gateway services, data encryption, tokenization, and alternative payment methods including cryptocurrency, gift cards, and stock donations. Additionally, international payments platform revenues and strategic enterprise merchant relationships contributed to the overall payments-based revenue growth.

Network fees increased proportionally with payment volume, representing the cost of interchange fees paid to card-issuing banks and assessments to card associations. Despite these costs, the gross revenue less network fees metric grew faster at 29%, indicating improving unit economics and the company’s pricing power in the market.

Looking at the six-month results, payments-based revenue increased 15% to $1.6 billion while subscription revenues grew 54% to $190.3 million, demonstrating consistent momentum across both core revenue streams and successful integration of acquired capabilities.

Shift4 completed several transformational acquisitions that significantly expanded its market presence and capabilities:

Global Blue Acquisition – $2.7 Billion

The most significant development was the completion of the $2.7 billion acquisition of Global Blue in July 2025. Global Blue is the world’s leading technology partner for tax-free shopping, serving over 500,000 merchants across 55+ countries. This acquisition provides:

• International Expansion: Immediate presence in European and global markets with established merchant relationships
• Tax-Free Shopping Leadership: Market-leading position in the growing tax-free shopping segment for international travelers
• Cross-Selling Opportunities: Ability to offer Shift4’s full suite of payment solutions to Global Blue’s merchant base
• Technology Integration: Enhanced data analytics and merchant intelligence capabilities

Recent Acquisitions Integration

• Eigen Payments: $115.0 million Canadian payment solutions provider strengthening retail, restaurant, and hospitality verticals
• Givex Corp: $127.8 million acquisition of global gift cards, loyalty programs, and POS solutions provider significantly expanding customer base
• Vectron Systems: German POS systems and cloud services provider enhancing European presence (75% ownership)

Pipeline Acquisitions

Smartpay Holdings Limited agreement signed in June 2025 for approximately NZ$296.4 million ($180 million USD), targeting Australia and New Zealand markets. Expected to close in Q4 2025, this acquisition will further strengthen Shift4’s Asia-Pacific presence and distribution capabilities.

The strategic acquisition program demonstrates Shift4’s commitment to global expansion and vertical market penetration. Management’s disciplined approach to M&A focuses on acquiring complementary technologies and established merchant relationships that can benefit from Shift4’s comprehensive payment infrastructure and scale.

Shift4 completed significant financing activities in Q2 2025 to fund its strategic acquisitions and growth initiatives:

Debt Financing

The company raised approximately $1.3 billion in new debt financing during Q2 2025:

• 2032 Senior Notes: Additional $550 million issued at 6.750%, bringing total to $1.65 billion
• 2033 Euro Notes: €680 million (~$798.5 million) at 5.500% to fund European expansion
• 2026 Senior Notes: Repaid $450 million in full during Q2 2025
• Term Loan Facility: $1.0 billion established in July 2025 for Global Blue acquisition

Equity Financing

$1.0 billion Series A Mandatory Convertible Preferred Stock was issued in May 2025 with the following features:

• 6.00% annual dividend rate payable quarterly
• Mandatory conversion to Class A Common Stock on May 1, 2028
• Listed on NYSE under ticker “FOUR.PRA”
• Proceeds used for Global Blue acquisition and general corporate purposes

Credit Facilities

The company expanded its credit facilities to $550 million revolving credit facility and established the $1.0 billion term loan facility, providing enhanced financial flexibility for working capital and strategic initiatives.

Total debt principal reached $3.8 billion as of June 30, 2025, with projected annualized interest expense of approximately $243 million including non-cash amortization. Despite increased leverage, the company maintains strong cash generation with $3.0 billion in cash and equivalents providing significant liquidity for operations and growth investments.

The financing strategy demonstrates management’s confidence in the business model’s cash generation capabilities and the strategic value of the Global Blue acquisition. The mix of debt and equity financing optimizes cost of capital while maintaining financial flexibility for future opportunities.

Shift4’s technology platform and operational capabilities demonstrated strong performance across key metrics:

Volume and Transaction Growth

• Payment volume of $50.1 billion in Q2, representing 25% year-over-year growth
• Six-month volume of $95.1 billion, up 30% from prior year period
• Continued onboarding of enterprise merchants with larger transaction volumes
• International payment platform contributing to volume growth

Technology Infrastructure

The company’s comprehensive payment ecosystem includes:

• Payment Processing: Gateway services, data encryption, and tokenization
• Point-of-Sale Solutions: SkyTab systems with integrated software and hardware
• Alternative Payments: Cryptocurrency, gift cards, and stock donation processing
• Business Intelligence: Proprietary software for merchant analytics and insights

Merchant Diversification

Shift4 serves hundreds of thousands of businesses across virtually every industry, from small local businesses to multinational enterprises. The diversified merchant base provides resilience and multiple growth vectors:

• Restaurant and hospitality sector leadership
• Retail and e-commerce capabilities
• Healthcare and specialty vertical expertise
• Enterprise and large merchant solutions

Operational Efficiency Metrics

Adjusted EBITDA margin improved to 21.2% in Q2 2025, demonstrating scalability of the platform. The company’s ability to grow volume faster than operating expenses indicates strong operational leverage and efficient technology infrastructure.

Cost management initiatives and integration of acquired companies contributed to margin expansion while maintaining investment in growth initiatives. The company continues to invest in R&D and technology enhancements to support future scale and merchant needs.

Shift4 has established itself as a leading independent payment processor with several key competitive advantages:

Market Leadership

• Leading independent provider of payment processing solutions in the U.S. based on total volume processed
• Billions of transactions processed annually for diverse merchant base
• Strong market position in restaurant, hospitality, and retail verticals
• Expanding international presence through strategic acquisitions

Technology Differentiation

The company’s end-to-end technology platform provides comprehensive solutions:

• Integrated Platform: Seamless payment processing with POS systems and business management tools
• Security Leadership: Advanced encryption, tokenization, and fraud prevention capabilities
• Scalability: Cloud-based infrastructure supporting merchants from small businesses to enterprises
• Innovation: Continuous development of new payment methods and merchant services

Distribution and Partner Network

• Established relationships with third-party distribution partners
• Direct sales capabilities for enterprise merchant acquisition
• Technology partnership ecosystem expanding market reach
• Global Blue acquisition adding international distribution channels

Financial Strength

Strong balance sheet and cash generation capabilities provide competitive advantages:

• $3.0 billion cash position enabling strategic investments and acquisitions
• Consistent free cash flow generation supporting growth initiatives
• Access to capital markets for financing strategic opportunities
• Disciplined capital allocation focused on high-return investments

The combination of technology leadership, market position, financial strength, and strategic acquisition capabilities positions Shift4 to continue gaining market share in the growing payments industry.

Shift4’s strategic direction focuses on several key growth initiatives that position the company for continued expansion:

Integration and Synergy Realization

The successful integration of Global Blue represents the company’s primary near-term focus. Management expects significant opportunities to:

• Cross-sell Shift4’s comprehensive payment solutions to Global Blue’s 500,000+ merchant network
• Expand tax-free shopping capabilities to new markets and merchant segments
• Leverage combined technology platforms for enhanced merchant value propositions
• Realize operational synergies and cost savings through platform consolidation

International Growth Strategy

With the Global Blue acquisition and pending Smartpay transaction, Shift4 is positioned for accelerated international expansion:

• European market leadership through Global Blue’s established presence
• Asia-Pacific expansion via Smartpay in Australia and New Zealand
• Technology platform localization for international regulatory compliance
• Strategic partnerships and additional acquisitions in key markets

Technology Platform Evolution

Continued investment in technology capabilities will drive competitive differentiation:

• Enhanced analytics and business intelligence for merchant insights
• Expanded alternative payment method capabilities including digital currencies
• Advanced fraud prevention and security technologies
• API and platform development for third-party integration

Financial Targets and Capital Allocation

Management’s capital allocation priorities include:

• Integration and optimization of recent acquisitions
• Organic growth investments in technology and sales capabilities
• Selective strategic acquisitions in target markets and verticals
• Maintaining strong balance sheet and liquidity position

The company’s strong financial position with $3.0 billion in cash provides flexibility to execute on strategic initiatives while maintaining investment in core business growth. Projected annualized interest expense of $243 million reflects the cost of ambitious growth strategy funded through recent financings.