Shift4 Payments Aktie

My name is Dan Perlin. I head up the fintech practice here at RBC. And I am delighted to have our long-time friends from Shift4 joining us again today.

From the company, we have Chris Cruz, who's the company's Chief Financial Officer. So thank you so much for being here. Very much appreciate it.

Thanks for having us all.

Yes. I wanted to start a little bit with your journey because you've only been the CFO for a little over a year or so, but you've been affiliated with this company for over a decade in various facets. And so maybe 2 seconds on that, and then we'll dive into the philosophical view.

Sure, sure. And thanks again for having us. It's a phenomenal conference. Amazing to hear you say this is the 11th year. I've probably been coming here for, yes, almost 10 years and so it's great to see it. So thank you for having us.

For those that don't know, I took on the Chief Financial Officer role about 10 months ago coming from the Board of Directors, a seat that I had held for the company -- at the company for, as Dan had said, almost 10 years. I got involved in the business after leading a private equity control investment into the predecessor company back in 2016. And it was actually in May of 2016. So the 10-year anniversary just transpired.

And it is incredible just to sort of never would have imagined sitting here today sitting in this executive seat, but have the vantage point of, we'll say, the industry as a whole because in that role that I previously had, I've been investing in the payments space, in the fintech space for almost 2 decades. So -- and at a fund that had a global mandate. So the ability to understand fintech payments, its evolution over a multi-decade history is one that I think is a really important piece of context to have, especially when we are in the midst of changing times. That's probably piece one.

Piece two, the company has grown into something beyond my wildest dreams and is a business model that does actually, even as different as it looks today, reflects the origins right from the beginning when we made that investment back in 2016, the thesis was that payments and integrated software would come together and create really dynamic and disruptive unit economic models that would accrue to the benefit of a merchant in terms of lowest total cost of ownership and heavily disrupt the providers of monoline services, software only, payments only and so on and so forth.

And today, I think that thesis has not just proven out in our 4 walls at Shift4, but for a number of players that have been able to express that very well. But it's an interesting context to kind of go down memory lane and look at it, Dan, I think the last time probably we saw each other in person was like the Analyst Day. The Analyst Day event for Shift4's IPO at Pebble Beach back in like 2020.

And so it's -- but it's great. It's a great reflection, but it is an important context to have, especially in as dynamic of a time as we are right now, but it's a great seat.

Well, with that context, let's talk about some of the priorities that you brought, understanding that history and maybe your philosophy on how you're going to go about communicating that to investors.

Yes. So I was very fortunate to succeed a fantastic CFO, long-time friend and a member of our Board, again, Nancy Disman, who did an incredible job of building the foundation of a global finance organization. And so I definitely owe a lot of credit where credit is due in terms of all of that foundational building that she had done and that the finance team had done as a whole. So there wasn't as much to do in terms of just optimizing there. It was actually more about the fact that in July of last year, we closed on the acquisition of Global Blue, which meant an integration of a finance organization that had a global footprint and the systems and processes of that, which we are well through and we are solidly on fine footing on. And so that was a key priority.

And then the second of the key priorities was actually highly relevant to this room, which was to really try to create the bridge between the narrative of what we do at Shift4 with our strategies that are often viewed with a certain amount of complexity because they are disruptive and differentiated and take that narrative and try to bring it into a world of financial modeling, right? Just really, can you help us understand how to model this business, how to predict, how to unpack the variables. And that was like a key priority.

And I think that, that key priority has been expressed. Hopefully, folks have been able to appreciate that dynamic. when we established kind of our guide for the year and created a growth algorithm disclosure around it that allowed people to not only appreciate that tax-free shopping would be its own disaggregated revenue category, but that within payments, it's really a tale of 2 stories where we have a really great set of leadership inside of our integrated payment offerings in the Americas, growing at mid-teens.

And then we have this incredibly fast-growing international opportunity in front of us growing at high 20s, but in the first quarter grew 51% year-over-year. And being able to like unpack those parts, being able to understand how incremental free cash flow and seasonality of free cash flow might be different and then committing to EPS guidance I think those are all things that I was hoping to establish early in order to try to set the tone for investors that I think we're really seeking out the fundamentals of how do I model this business, how do I better understand it. And given my background, something that was a bit more natural to do. But beyond those 2 as like key priorities, it was kind of do no harm, support the company in a global growth, create kind of one global finance for Shift4 and let the team do their thing.

That's great. That's great. Well, I was on all those calls and the callbacks. And so I would tell you that there's a lot more clarity that was being brought and continues to be. So we'll talk about that, too.

As we take one step back before we dive into something deeper, it is important to help frame where Shift4 kind of sits inside of the payments ecosystem. I find oftentimes conversations with investors, they're all over the board as to where they want to compartmentalize you guys. How would you describe it, especially in the context of the experience economy that you talk about and then in-person payments, which is not as much a thing as e-commerce in a lot of people's minds.

Yes. It's a good question, the kind of the mapping exercise, and it's one that is constantly evolving. But one of the easiest ways that I start to think about where are we categorized relative to the space as a whole. And I'd like to start with the idea that if you made the strategic decision to be an integrated payments company to align your model of payments and connect it to software in everything you did, you are growing 2x the market, right? If the baseline of the market is a single-digit volume growth market, your strategic choice to be integrated and everything we do is integrated to software, you're a 2x grower to the market.

And if you chose to not just lean into that, but achieve leadership positions in select verticals in end markets that might be growing faster than that broad economy, a.k.a., the experience economy, we believe, grows fundamentally faster than the broader economy, you got anywhere from another turn of faster growth to plus. Hence, when we look at our business growing at kind of low double digits as a business as a whole, mid-teens in the Americas, we view that growth as 3x what the market growth is, and that's not an accident. That was very deliberate strategic decisions that we made going all the way back to the early 2010s. And so that's piece one.

Piece 2 of very deliberate strategic decisions was actually to not try to be an e-commerce leader, which was an incredibly contrarian viewpoint at the time in sort of that, again, that kind of like early 2010 time frame. And it was because when you looked at what the business was good at, what the core fundamental assets of operational provisioning of reverse logistics, service support, like those durable moats were things that we fundamentally believed in, and we were seeing how good the e-commerce tech stacks and ecosystems were. This is dating us all the way back to kind of like the early 2010s.

And so we leaned into that as a strategic imperative. -- hence, and very naturally, we ended up with our first major experience economy vertical was going to be restaurant.

But when you pull that thread further and you say, okay, so take what you're good inside of the restaurant space, where you've bundled software, hardware, services, data and payments, put that together, what are the other verticals that kind of resemble some of these same kind of attributes and might see the value proposition of this combined bundle might see value in that. And that's where very quickly, we realize, oh, it's hotels and hospitality. It's stadium entertainment, it's luxury retail. And I think for those that have followed us for a little while, they've seen other verticals that we've talked about within our shareholder letters, our materials that we believe are really great experience economy verticals, too. But this idea, this tie that binds that to be good at in-person payments, right, obviously, we are great at e-commerce payments as well. We're totally competent and capable at doing it. But when you think about what it means to be good at in-person payments and the moat that creates for you, I think you have to have a DNA that has like fundamentally grown up there.

And so relative to, I think, the broad ecosystem of what people think about when they think of like Stripe and Checkout and others, it's like for us, it's really important that people appreciate and contextualize that a big part of what we've strategically chosen to do is be absolutely excellent at in-person payments. But there's no such thing as being kind of single thread anymore. Every one of our customers is omnichannel by nature. It's just that the moat, the really -- the place where value proposition is appreciated and where I think margins are earned is because we're so good at in-person.

Yes. So let's tease this out for a second in the context of your ability to consistently grow above same-store sales growth, which is oftentimes like the pushback in some instances around the cyclicality of just payments businesses more broadly.

You have caught many waves early on, not the least of which was stadiums, which is probably the biggest upgrade cycle win that we've seen in a lot of companies over multiple years. But how do you balance those 2? And what's the message to investors around that context?

Yes. So I think one of our underappreciated assets in the business is certainly how strategically forward-looking the underlying like companies' drivers are. So -- and what do I mean by that? I mean that we have teams that either live inside of their product universe. They are kind of element members of our commercial team. And then there's our strategy team, which I have to give credit to as a whole, who all come together and within our operating model are constantly trying to push us to identify whether it's a vertical or whether it's a solution inside of our existing experience economy verticals, push us to identify those waves.

And the -- from there, we take that and we are either organically developing or we are unafraid to inorganically approach an expression that goes after that wave. And I think one of the things, though, that I think is very important about that type of approach is that you have to be proactive and willing to kind of watch a vertical, watch the technology and commerce changes in that vertical for many years.

So people think that luxury retail and tax-free shopping and Global Blue, one day we woke up and that's a great idea. Let's go talk about it. No, like we were monitoring that business and that industry solidly before COVID, right? It's a business that we had known well because when you think about being in restaurant, lodging, stadium, it's very obvious that retail is one of the largest TAMs.

But when you look at the retail tech stack, you would have been absolutely incorrect to try to roll up POS systems in retail because if you had done it in physical presence, you would have completely missed the wave of e-commerce as the tech stack that wins, and you didn't want to have to make that call. So when you unpack the retail ecosystem around the world and look for what's the killer application that will allow me to cross-sell and bundle payments, we came across TFS, tax-free shopping, VAT refunding and the idea that Global Blue was like an 80 market share global leader in it, which meant that we could be incredibly disruptive in a place that the incumbency advantage, the relative market share would probably be like durable to receive it, right?

So when you apply our strategy of disruptive cross-product bundling, payments on to pick that application, gateway, POS, tax-free shopping, gift card, it puts the customer base in what is, I'd say, a little bit of a disruptive dynamic, right? You put them through a little bit of a challenge in the moment. But if the base that you're selling into is a product where you are far and away the leader, then the resilience of the customer to accept that cross-product selling motion is incredibly high.

So I think that for us, the unsung hero is really patient strategy development to identify the other adjacencies inside of the experience economy that leverages our existing assets to go after, and we've just been doing that for many years now.

Yes. So that dovetails into the question around durability of your organic growth that you've put up thus far and the vision that you have going forward. You did 11%, I think, in the most recent quarter. How should investors think about that, both in terms of the ability to underwrite that for long-term periods, but also the sources of that?

Yes. So I would say, right now, this idea of being able to outgrow sort of the baseline of the payments growth market by like a 3x factor. So being like a low double digit versus a low single-digit type of a grower, it is -- it starts with the fact that if you unpacked and just said integrated -- and you could look at a large body of data, you could look at a lot of research from yourself and peers to see that the integrated payments market is a high single-digit grower, right? Once you start there, then the walk to durable organic being a premium to that because we are a leader in so many of our verticals, I just don't think that intuitively, that should be that hard of a walk to understand.

But what I think is harder to understand is in this year, we have sort of these 2 headwinds where Triple-S has not come back to the place that it has historically been. Triple-S has historically been for a long time series, low single-digit positive contributor to the book of business. We're not seeing that right now. We didn't see it in the fourth quarter. If anything, we saw it as negative.

So it's been, we'll say, a headwind to the relative growth historically. And then the second relative headwind to the growth historically has been that the post-COVID few years allowed companies, not just payments companies, not just ourselves, but go check your Netflix subscription, right? You've seen inflation that's allowed for pricing power across every industry, and that persisted for many years. And that created this low single-digit contributor.

So I kind of view right now where we're sitting as a premium to the integrated payments durable growth of high single digits. sitting here as like low double digits, that seems like a very fair baseline. But the reality is if Triple-S can come back and if pricing power as a result of an inflationary backdrop were to come back, I think you're going to see the ability to actually outperform that. But from a durability standpoint, importantly using that word, I think it is fine to just view us as a company that should be able to durably outperform the baseline of the market by 2 to 3 turns.

Yes. So in the spirit of that and the desire to have incremental transparency to help us map to those, you did release kind of the disaggregated revenue disclosure. You've talked about it a little bit interspersed in our discussion, but maybe you could talk about it more specifically. Why did you do it? What exactly did you do? And what are your expectations for that going forward?

Yes. So I think it was really important for people to appreciate that as payments investors, the tax-free shopping revenue bucket was going to be something that you needed to acclimate to. So the first of the starting places in the growth algorithm, as we call it, that we disclosed was to commit to the disaggregation of tax-free shopping, right?

That was, I think, a key question, which then allows for a more transparent view of a part of the business that is growing that we admittedly is growing slower than the base of payments. But there are so many strategic reasons beyond the tax-free shopping revenue base that made the Global acquisition so attractive.

But staying in line with this idea of what is in the growth algorithm, I would then move to payments-based revenue. That is the North Star of how us as a payments-born first kind of a company operates and thinks about what the important growth variable is, giving people visibility into payments-based revenue growth and then unpacking it in terms of here is the market that is largely unaffected by M&A as close to sort of an organic number before I give you an actual organic number is Americas payments-based revenue.

We've been in this market for 2 decades plus. And this is a market where all of our products are offered in live, and that's a market that's going to grow at mid-teens. And giving that, I think, disclosure was a really important one to help people like unpack how to model. And then they could then allow themselves to take a view on things like SSS and take a view on pricing above inflation, 2 very important variables that not only you could take a view on, but you can then also track in the marketplace through different data sets.

So then you get to the worldwide piece, which is give me some visibility into this fast-growing part of the business, which is where largely the Global Blue and the tax-free shopping cross-sell is going to live and help me be able to track that and model that and make sure that the revenue synergies that you talked about at the time of the transaction come through, they'll come through into that category. And that was really important to break apart.

And then separate from the growth algorithm components, we ultimately gave the organic disclosure just to help people underpin against what should be the way you think about underpinning a forward-looking multiple. Because if there's durability at a double-digit growth rate, then you would think and presume that, that should have some semblance to what underpins the underlying model -- multiple of growth on the business.

And then from there, we really tried to further unpack for folks how we view margin profile, how we view incremental free cash flow. And then like I said before, we landed on, we need to commit to giving an EPS guidance as well.

So I'd like -- I'd hope that it's, a, well received and that it creates some clarity at a time when the industry as a whole has probably not done itself many favors on creating skepticism because of the last couple of quarters of certain other peers is reporting.

Yes. I completely agree with that. So let's talk about the international opportunity. also in the context of moving into this new vertical of luxury retail. The biggest bastion of growth seems like the international market. This Global Blue acquisition opens you up to so many countries and licenses and regulatory frameworks that you would have otherwise not had. So maybe just speak to the, I would say, the strategic importance of it, but also this vertical, which is new.

It's hands down the most exciting part of the business right now. And you love all your children equally sort of thing. But it is hard to argue that when you think about the tax-free shopping cross-sell opportunity, which is where I'll start, this idea that we have an ability to cross-sell payments, dynamic currency conversion onto a tax-free shopping base, which already has a fantastic revenue model and do so without having to deprecate a legacy revenue stream this could translate and should translate into the best unit economics in the business. And even though I love my children equally, unit economics is how you like win my heart. And so I think that's going to ultimately be the thing that wins.

But I do think that the unit economic power of cross-selling, which we productize as Shift4 One is one of the most exciting initiatives. It's a big part to the revenue synergy component that we talked about in underwriting the transaction.

The lesser appreciated -- and that product is now live in 7 countries. Our target by the end of the year is to be live in 15 countries. And so we're hitting all of the operational milestones. But obviously, as we start to realize those revenue synergies, reporting out against them is going to be the key KPI.

But the unsung hero and I think the underappreciated part that you sort of astutely unpacked is that to bring a product like Shift4 One live in a European country, it's not just putting a product together, putting it into a device, shipping it out and then provisioning, servicing and supporting it. You actually have to build an entire payment infrastructure and a set of very unique capabilities onto your payment platform. And you have to do it again in every country that you open and you operate because the fiscalization is totally different. The underlying language dynamics are totally different, the way with which that you are going to integrate into local debit networks, local APMs are totally different.

If you go live with your in-person payment product in Germany and you don't have Girocard, the local debit network, you don't have a right to play. And same goes in France with Cartes Bancaires. And the same goes with almost every other country around the world outside of the United States. These local debit schemes and these local payment methods, they could be wallets, they could be any sorts of other thing. The integration to that is the hardest part. And it is what we would broadly call scheme management, but not the Visa, Mastercard schemes. It's the everyone else' schemes. But when you think about doing the work to make that happen for Shift4 One and its cross-sell, it means the work is already done for when stadium entertainment, Shift4 Venue wants to come in and go and serve FC Barcelona. It is ready for when the hotel product -- when our hotel integrated payment capabilities can come in and serve a number of hotel banners that we already serve in the Americas.

And it's how we're going to bring Shift4 Dine outside of just the U.K. and Germany and bring it across all these other countries. Basically, all of our battle-hardened products from the Americas can just fast follow. Once Shift4 One is laying the groundwork as kind of the first boat to land, everything else can come back in.

And so for us, that's like, I think, one of the most underappreciated aspects of why we did the transaction because it was going to be the forcing function to create a pan-regional in-person payment platform to be complementary to our Finaro kind of card-not-present capabilities that we already had in droves.

And I think the last thing within it was that you also didn't want to limp into the European market. I think there -- when we studied the strategy of American companies going into Europe, I think one of the telltale miscalculations was you could just bring all the Americans in and it was just going to work. And the practical reality is having all the infrastructure to do everything from hiring to having the IT and the systems, all of the localization of products to have teams that already had that because they're selling tax-free shopping and they were already selling DCC and certain payments was an absolute asset that we wanted to be well invested in, in order to bring all of our products all at once.

We don't like to do things slow. If we're going to disrupt the entire European banking market from payments, we want to go fast. We want to be disruptive, and that's our style.

So I'm going to give you 10 seconds that we're over, but since you have this unique lens and background as an investor in the company early on and kind of where you see it today operationally, what do you think are the biggest disconnects that the public market investors are missing?

I look at probably the biggest disconnect right now is the last time valuations and payments sort of sat in this kind of like call it, 6 to 8 time zone, and you probably can keep me honest on this, is like pre-GFC, right? You think about like the Heartland Payments like data breach type days, right?

And fundamentally, if you were to just kind of close your eyes and look at 2 moments in time, just look at the business model. You had a pretty commodity categorized as BPO and IT services type of an offering that realistically, when a payment is just attached to a Pin pad and is unintegrated, that's like a high teens to low 20s attrition rate, right?

You fast forward to today at payments when integrated to software has a completely different moat, completely different value proposition. You could throw value-added services, so many ways to grow the ARPU. And the core unit economic model has an attrition rate of like high single digit to low double digit.

So how the multiples can be the same makes no sense to me, right? And I feel like we're forgetting how to just intrinsically value a company. And I think that disconnect just -- it exists. But I also appreciate there are many other broad technical factors, right? The S&P 5 has never been as concentrated in 7 stocks in its history, right?

There's been a lot of kind of like SMid-cap to large cap rotation. And our sector hasn't done itself any favors in terms of like creating a little bit of skepticism because of some peers.

But put all that aside, just come back down to pure unit economics and intrinsic value math, and it doesn't make sense. But I think people will eventually come back to that.

Cool. Well, Chris, thank you so much for your time. It's been a great discussion. Looking forward to seeing you more often than 15 years from now.

Exactly. Exactly. I appreciate that.

Thank you so much for the rapid fire.

Thank you, everyone. I'm Scott Dworshak. I co-head our Fintech investment banking practice at JPMorgan, and we're pleased to introduce Chris Cruz, who is the CFO of Shift4. Chris joined the executive team in August 2025 after serving on the Board of Directors for almost a decade and was most recently the Lead Independent Director. Chris, thank you for joining us today. We're very excited to have you.

Thanks, Scott. Thanks for having us.

Shift4 today feels meaningfully different than it was when you guys went public in 2020. How do you think investors should frame what Shift4 ultimately becomes over the next 3 to 5 years?

Yes, gosh, it's a trip down memory lane type of a question to think about the world back in 2020, and my how things have changed. But as a context point and a reminder, so at the time of the IPO, you can think about the contrast of scale and diversification as probably the easiest way to summarize it. You think back to 2020, we were a restaurant's software integrated payments company with lodging on the comp. And that was where we were at and the idea of how this proposition of converging payments in software for the restaurant vertical could translate into the world of hospitality and lodging was a bit of a question mark.

You sort of fast forward to where we are today, and not only are we still a leader in Dine, AKA restaurants and stay, which is our hotels vertical as we call it. But we are also a leader within the verticals of play, stadiums and entertainment, and then most recently, shop entering the luxury retail vertical, all of which with the core proposition of bringing payments and software solutions into a single value proposition that is really resonating with each of these verticals, each of these end markets and it allows us to really build not just a good value proposition to kind of simplify the commerce for that merchant across shop, dine, stay and play but it also allows us to have a pretty dense unit economic model when we face these merchants and bundle together the concepts of software payments, value-added services in this sort.

And so I think when you step back and look at multiple verticals and market leadership, the most scaled we've ever been sort of setting kind of quarterly records on financial metrics, and then the most diversified geographically we've ever been, sort of we were in 1 country, we weren't yet serving multiple countries across Europe and Asia Pacific. Now we're in business in more than 75 countries around the world. So it's been a pretty phenomenal kind of like 5.5, 6-year journey.

It's incredible how big you guys have gotten. Maybe we could talk a little bit about the broader landscape. And it's important for investors to understand where you fit into the broader landscape. There's a lot of misconceptions about merchant acquirers, integrated payments players, back-end processors, where do you guys fit in the overall landscape? And what is the simple way for investors to grasp that?

Yes. It's a great question because we thrive within the overall concept that payments has complexity. Commerce has complexity. And unfortunately or fortunately, depending on how you view it, we actually run towards that complexity and try to build simplified commerce technology solutions for the hardest experience economy verticals. So what is experienced economy means? It means the places where in-person commerce like thrives in lodging environments like the one we're sitting in right now or where the Super Bowl is played at major stadiums entertainment or from some of the most demanding luxury retailers around the world. We run to that kind of an environment because marrying up in-person commerce and all of the software solutions that are needed to deliver a good in-person commerce experience, that solution set is something we then try to simplify for the merchant from a financial entertainment standpoint.

So this idea that you merchant can deliver the best solution of commerce for your customer, delivering all of the different suites of software or all of the different best-in-class technologies, some of which you may choose to build yourself. But in the end, you still want one accountable party to reconcile your money to settle it, to enable the money movement to happen in a totally compliant manner and in a reliable way from a scaled enterprise, and this marriage between complex commerce on one end, especially within the experience economy and the in-person world, and the simplicity of making all of that math, all of those payments and deliver into a single place, fully reconcilable, right, like we sort of thrive in that world.

And so to make all of that happen, you can get lost within all of the interoperability you have to create because there are a lot of parties that sit within ecosystem to make money movement happen. You multiply that out by a lot more parties when you have to integrate multiple revenue centers, respective suites of software. And then you multiply it out further when you start to acknowledge that consumers' demands for how they want to pay, don't just change and grow, the old method never goes away, right? We only stopped minting the penny like a couple of months ago. And so the concept that these payment modalities from the consumer continue to grow.

And yes, like in my home of like Miami, Florida, people pay with crypto at restaurants and we enable that. But this concept, the modalities continue to grow, the complexity stays kind of pretty prevalent, but the merchant's experience when it comes to the money, they want single point of reconciliation, kind of one hand to shake, one throat to choke, they want accountability. And regardless of what the next phases of evolution in commerce tech reveal, I think we are well positioned to continue to still be that player that already has that trust with the experienced economy makers.

That's fantastic. I think let's unpack the business a little bit and maybe we could talk about the verticals. You guys have expanded very methodically into 1, 2, 3, 4-plus verticals, and you guys crushed it, whether it's restaurants or hospitality or sports and entertainment. How do you think about when you're entering a new vertical, what you're looking for, any common strategic themes that underpin your expansion efforts into these new verticals?

Yes. It's, again, a good kind of memory jogger to think about pretty much since IPO. Every other year, we've been public. We've kind of announced ourselves as a leader within a new experienced economy vertical. So you sort of go back to the 2020 timeframe of being restaurants only. You then have lodging on the come after that, then stadium's entertainment and now we're kind of in the luxury retail space, and we'll expand from there. This idea, though, of how do you pick those verticals is a very deliberate decision that I think stands all the way back to kind of a deep appreciation and understanding of like what is going to create a point of difference within the payment space.

Like step 1 was actually in the early 2010s, simply acknowledging that we were about to go through a mega shift of payments and software converging into integrated single offerings. And if you successfully identified that trend in the early 2010s and went all in on that trend, you're sitting here today, growing at a rate that is at least 2x what the baseline of the payments market grows. We are a 100% software integrated payment. Every payment we touch is attached to a piece of software we own or a piece of software that a partner has that we're integrating our payment capabilities on to. But that was piece one is acknowledging that. Then our big piece of what is the criteria that differentiates it.

I hate to say it, but it's like hard commerce. It's where it's not a simple commoditized proposition that enables the payment flow to happen through even an integrated partner. For us, the more that the commerce environment that, that merchant is operating in, the more that, that commerce environment is actually multi-revenue center in nature, therefore, multiple software suite in nature or where the software that we're providing in the case of restaurant or in luxury retail like where those solutions actually drive the entire kind of multi-party commerce experiments, it might be driving workflows of wait staff of host staff of kitchen workers or it's actually driving the data movement between the merchant, the consumer and something like an airport customs authority, right?

Those kinds of environments are actually pretty complicated commerce environments and almost all of those environments have been largely in-person physical presence kind of component, which just makes it even harder, because now you're not just managing lines of code because lines of code could go anywhere, and it could be dominated by anyone, but you're actually managing an experience that requires a lot of digital meets physical in order for all of this value proposition to work.

Yes. Maybe we could kind of unpack the growth algorithm a little bit. You guys reported Q1 results a couple of weeks ago. There were some new metrics that you disclosed around organic growth. And how do you think about you have a lot of verticals you're international. How do you think about the growth algorithm with your customers and new logos and all of those things?

Yes, sure. So in the fourth quarter results and the introduction of the 2026 guidance, we introduced the concept of this growth algorithm just to help people appreciate a few different disclosures about the business. The first of which was to reinforce that there are 3 categories: disaggregated revenue categories that we want you to think about us as. One is our payments-based revenue which is our North Star. We think about payments based revenue as the way with which we -- the way with which we grow, it's the way we focus our revenue models towards. And that payments-based revenue is the largest makes up almost 3/5 of our revenue pool.

Inside of that payments-based revenue, you can split the business up into its 2 main geographies. Our Americas business which is the business -- which is the market that we've served for multiple decades. It's where our products are all the most mature and this year is pretty much entirely unaffected by prior year M&A annualization. So it's a very clean organic kind of geographic view of our most important revenue category. Then you have the worldwide region. And that worldwide region represents our fastest-growing kind of international markets where we're a challenger, we're a disruptor. We're bringing our battle hardened and tested products and solutions into a competitive backdrop where essentially we're looking to compete against unintegrated pin pads provided by banks.

It's kind of like going back in time relative to what we see in the Americas in terms of the software integrated payments team. And that market is growing incredibly fast for us. And you take a look at those 2 pieces of payments-based revenue and what we basically put to the growth algorithm is Americas will grow in the mid-teens and that the worldwide region will grow in sort of the high 20s. And in Q1, Americas grew 15% year-over-year and worldwide grew 51% year-over-year, and that's the largest part of our revenue. Then you talk about our tax-free shopping business, and we made a commitment within the disclosures to break that out as a disaggregated revenue category in order for folks to acclimate the movements in that business and acclimate to and understand that we were going to commit to that disclosure. And within tax-free shopping, what you see is a business that for this year, we sort of in the growth algorithm said, on a pro forma basis, call it, mid-single digits.

And I'll probably come back to at some point the impact on headwinds that, that category has faced. And then, of course, we have our last bucket of sub and other within our revenue growth algorithm, which we guided or provided growth outlook of like low single digits around and it grew about 10% in the first quarter.

So when you look at those categories, though, I think the important like net new disclosure that we added on top of that growth algorithm, was a view that in the first quarter, we also grew organically, putting aside kind of any effect of the last 4 quarters of M&A. And organically, we grew at a low double-digit rate as well. I think it's important to note that when you look at that growth algorithm, it's component parts, whether it's mid-teens in the Americas, a low double-digit kind of overall revenue growth or a low double-digit organic revenue growth, I should say, right. Our view is that, that is a 3x to the relative growth rate of the payments industry as a whole.

And the payments industry as a whole is still a good industry from the perspective of it has growth durability, it has elements of value, especially if people have a value proposition, strong pricing power, and I think it has demonstrated its ability to navigate a lot of these technological changes through a long duration of time. But for us to grow at sort of a multiple like a 3x of that industry growth is something that I think we're proud of.

That's impressive. I mean, obviously, growth has come down for the market in Americas and the fact that you're growing 3x in the mid-teens is actually really impressive. And maybe we could touch more on the durability of the growth profile that you mentioned. Which verticals are you seeing are outperforming? Maybe you think of customer cohorts in certain ways. What do you see that's really driving outsized growth?

Yes, sure. So we can walk through things through this kind of geographic lens, and we're always going to talk about payments based as the North Star. But when you look in the Americas, we have our power lanes. We basically look at our dynamic of dine, stay and play. So restaurants is dine, hotels is stay, stadiums and entertainment is play. Within those power lanes, you have all 3 verticals that are at or above the kind of Americas growth rate that we talk about. And it makes sense that that's where our strongest growth comes from because those are very carefully crafted value propositions.

We look at the restaurant environment. We've been in it for multiple decades. We've studied it deeply. We understand what the trials and tribulations are of restaurants of all sizes in table side dining, and we build propositions that fit those categories. We did the same in lodging, and we do the same in stadiums and entertainment. Just so happens, though, that in lodging stay and in stadium entertainment and play, we're the market leader by far.

And so I do think that the growth there being grounded in differentiated value propositions is hopefully justifiable to all and understandable by all, but those are growing kind of in line with or greater than the Americas growth rate. The standout within that is probably stadiums and entertainment, where we're in 3/4 of kind of the pro sports environment and are in a very kind of like favorable position where we can attach ticketing to all of those environments on top of the food and beverage and the retail and all of that in-person physical presence volume that we touch and flows through our software and payments, we are attaching ticketing solutions to that. And sometimes that can be the equivalent volume for a stadium and a sports team as all the F&B combined. And so there's a really nice outsized growth rate there.

Then when you step outside the Americas, the growth rate that we're incredibly excited about is this idea that worldwide kind of the growth algorithm we gave was the high 20s. And in the first quarter, it delivered a 51%. And for us, the worldwide green shoots that we're seeing is really exciting because we've been at the international markets for only 3 years. right? We were not in an international country providing payments and doing business before 2023.

And for us to be able to see these rates of growth for us to be able to see the green shoots across multiple of our products and offerings across multiple countries, this idea that international is working is very exciting for us, because we know the competitive dynamics in that landscape look like we're looking back in time in the Americas. We know that our battle-tested products and propositions in stadium entertainment in Shift4 Dine and the sort are competitively differentiated in the Americas and are going to be even more differentiated in these markets. So really excited to continue to build out those regions.

And then on top of all of that to then have this totally unique product of payments meets tax-free shopping meets currency conversion, what we call Shift4 One as a result of the tax-free shopping acquisition. When we look at that product in the market and know that we have kind of $100 billion of captive volume that we can go after within the countries that we already served in focusing on SMBs and tax-free like that's an incredibly exciting opportunity for our business. So there's a lot of places where we see sort of accretive growth areas, and they happen to be the places that we've allocated our capital resources to be differentiated and to be a leader.

Yes, it's amazing when you take a look at any individual spend and you look at the bucket of spend, whether it's eating out or travel or staying at a hotel, you guys are going after the biggest buckets of spend, and it's -- and it's the most complex bucket. So you guys are definitely getting into the big categories.

Maybe we could switch gears to capital allocation. Obviously, in this environment, a lot of companies are repurchasing shares, paying down debt. Some are looking at M&A opportunistically. How are you thinking about capital allocation, your framework in light of this market environment and how are you prioritizing different -- different...

Yes, sure. So our capital allocation framework has always been one that has been multifaceted and every dollar has to fight for the best allocation and earn its return. And our allocation strategy, historically, if you go way back in time to the beginnings of our restaurant days it was all about disrupting the concept that customer acquisition investment by essentially giving away the hardware, the software in exchange for the long-term reoccurring payments contract, that was the first allocation of capital we did. We know that playbook incredibly well.

Then you fast forward from that era and you look at how acquisitions actually accelerated our customer acquisition, we were able to acquire installed bases of legacy revenue streams, non-recurring revenue streams and successfully convert those into payments cross-sell. And so these acquisitions effectively were customer acquisition by another name, and we knew how to allocate that. So you put that arrow in the quiver. Then we find ourselves in an environment where we're a public company and given the owner's mentality that I think people can appreciate we have within the DNA across the management team, we look at trying to be as dilution-sensitive and dilution neutral as possible.

So capital allocation towards repurchases and thoughtfulness around that has always been inside kind of the framework. And then, of course, you invest in the resources, the technologies and the capabilities enhancements that are just going to make all of that kind of better and faster. That framework doesn't change, the environment changes, but the framework doesn't change. The way with which you analyze ROI and the way with which you're driven by the return on that invested capital, like it all in the end is like very easy to measure, and it all in the end, needs to, at some point, convert into the growth of free cash flow per share. And if it doesn't have that, then it's not justifying its allocation and we'll definitely look to allocate away from it.

The only other place that I would say is a bit different about the environment we're in now as it relates to capital allocation is that we're the most diversified we've ever been. So if we are looking at an environment like the fourth quarter or the second half of 2024, 2025, when same-store sales in the Americas were soft in a category like restaurant, or as folks look at varying degrees of competitive intensity or different kind of inflationary forces, the huge advantage we have is that we can be completely critical about where to allocate the dollar of capital, tech resources, people and money to the highest and most productive places, whether that's across verticals, across geographies and right now, it's really hard not to be super excited about the ability to allocate capital at the Shift4 One opportunity of cross-selling payments on top of tax-free shopping on top of currency conversion because the unit economic model of that is just going to be so sound.

But that's probably the only net new thing is that as we look at the kind of organic allocation of capital within our overall complex of Shift4 we do have these advantages to be able to react to whatever the geopolitical or the macro throws at us. And I think that, that's a really advantaged place to be.

Yes. And one thing that's really impressive, switching gears to your international expansion, it's a huge opportunity and it probably relates to capital allocation a little bit in investing dollars into expanding into Europe. What do you want investors to take away about your international expansion efforts and how you think about investing for growth in some of these really exciting markets where you're disrupting some legacy players there and having basically repeating the playbook that you did in the U.S. and just disrupting some of the old-school bank-led kind of payment providers.

Yes, I'd say this was not an overnight phenomenon. This is something that took years to really unpack the strategy around to study all of these markets, to study the verticals inside the given geographies and that we've chosen to enter. And I think the thoughtfulness around that set of strategic decisions to want to lean into experience economy verticals, in-person payments within these international regions because you're going to be differentiated in terms of the fact that integrated payments is just a much, much earlier inning theme in these markets is something that we are really careful and thoughtful about. I'd say the second thing that we were careful and thoughtful about was actually to not make the mistake that we've seen from other companies entering the European or international markets and be under invested.

This idea of experimenting inside of a region or thinking that you can just air drop your personnel and your way of doing things without really appreciating how much infrastructure is needed to be not just single country Europe but pan regionally in Europe and have density in Asia Pacific. These are not markets where you can be sheepish around how to invest to go after and compete with these legacy incumbent banks and legacy incumbent providers of payments. And I think that, that is something that was well developed in the strategy based on us looking at the failures of others. You can't limp your way into these markets. And to do so with a disruptive proposition of ours, also meant that the best assets to enter these markets through we're going to be market-leading assets, where the propositions were so durable where the market share that they're positioning from is so far and away the leader that it can endure the disruption that we bring on to it, right?

Those were some of the key critical variables. And in the case of something like Global Blue, it had the added advantage of having been, from our perspective, something that we had actually reviewed for multiple years, like we had known this company well before COVID and had seen its performance through it and had seen the grit and the durability, and I think that helped embolden us to overall view that as a really good kind of infrastructure asset from which to build this disruptive playbook on top of.

How is -- speaking of Global Blue, how is the integration going? Like it's a big acquisition, huge opportunity of untapped volume. How is it going so far?

Yes. So from an integration milestone standpoint, we're pleased with the pace of progress. For us, the operational milestones that I think are the most important and noteworthy begin with product. Everything begins with product. And in this case, this idea of a totally unique product that can deliver tax-free shopping, payment processing and currency solutions to even an SMB merchant with a very simple provision, almost self-service model is something that we're really proud of and had to get operationally live as step 1, and it was a key component of the integration road map.

The second key component of that from there is to actually get live, get live in countries, have the product, beta testing with customers. But getting live, it's a simple statement that we talk about, but to be live with this product in 7 countries means our payment platform is in-person payments, omni person -- like omnichannel payments ready in these countries. And by the end of the year, our target is to be live in 15 countries, which means payment capable, tax-free capable, currency solution capable and live.

And then the last piece to this integration is about scaling the go-to-market, which is the phase we're in now, in order to make sure that not just scaling operations, not just scaling product capability and not just scaling the payment platform, but you need the go-to-market to be completely ready to go. And the uniqueness about the European market and the Asia Pacific market is you can't assume go-to-market as ubiquitous. You have to appreciate those nuances and identify that, yes, there's a direct sales force, you can recruit and hire, but there's a lot of interesting partners whether they're value-added software resellers, whether they're the ISVs themselves, folks that don't even realize that the entire of the American market went through a huge software payment integration that are untapped and ready to become partners of ours. And so I do think that, that last piece is the big operational milestone in front of us.

Yes. Maybe we could switch to AI. It's been a big topic at this conference. Obviously, AI in the payment space and a regulated money movement space is a bit of a different conversation, right? Can you talk about the role that you're seeing AI play within Shift4?

Yes. So I'll start with kind of the operational sides within it, where we are seeing a lot of advancements, productivity, efficiency, whether that's within your -- certainly your product and technology dev organization. We work with all of the frontier model companies from an application and a usage standpoint. So [indiscernible] tend to be the applications there. And when you go from there into the world of operations, the ability to create efficiencies on onboarding, the ability to build efficiencies on service support with agents all of that is clearly defined efficiency gain.

You then stem that all the way into, but what are the product set features, where are you actually seeing product enhancement, things like conversational ordering, things like the ability to actually help bring a time to revenue of a merchant down in 2 days from what used to be weeks because I can take a picture of a menu, and it can now be preprogrammed live into a POS system. Those kinds of gains are very like real-time dynamic and seem to be uncovered every day. And so I think it's a pretty incredible time to have the sandboxes that we have across multiple verticals, multiple geographies to be probably like aggressive in the way with which we experiment.

At the same time, as has been talked endlessly at this conference and amongst others, you have to be, and it's the CFO and me having to say it, you have to be super disciplined about the ROI that's coming through on it. And we are aware within every token dashboard that I have that I analyzed, right? You're aware of when a model drops, you see it in the spike on consumption costs. And you're going to have a very kind of unbalanced usage set of characteristics that I think you also have to manage because just because a certain set of dev and engineering capability can now move 10x. If the rest of the throughput doesn't keep pace, then all you did was create a new bottleneck somewhere within your process flow.

So actually, this process engineering and the re-architecting -- re-architecting of how you think about things is equally important from a change management standpoint as it is the adoption of technology. And so we're seeing all of those kinds of underlying dynamics. And then maybe the thing that's the least talked about is the fact that we actually are a pretty scaled provider of payments meet software, we actually have integration marketplaces, where partners are proliferating. We are seeing new and emerging partners that are providing point solutions that a merchant can go into our marketplace and select and integrate into and we have data exchange between them, and that actually is proliferating again.

So it does seem like one of the big trends that AI is probably going to unlock within this is this potential proliferation of technology, this re-fragmentation of technology does seem to be one of the early trends that we're seeing. And we haven't really seen this level of kind of proliferation or fragmentation technology since like the zero interest rate environment, right, when money was free. And so I think that, that dynamic is something to watch.

Yes. Let's talk about the valuation environment, and you probably throw this back at me, but what do you think is going on with the public equity markets as it relates to this sector? And payments in general, obviously, the bigger companies have tripped over themselves and underperformed expectations. But what do you think the equity markets are under appreciating about Shift4 particularly?

Yes. Well, definitely, the question of what's going on in the market is something that I ought to throw in your direction. But Look, I do think that what we have is a time within sort of the tailwinds of software payment integration as a theme and how that was impacting the kinds of investors that were moving into fintech that may have been more pure-play tech. They moved in within a certain phase, and they seem to be moving out within a certain phase.

Now where they are hiding, it seems to be sort of unclear because it would seem like there is a lot of market cap concentration that's technically rising just to the top, right, just to the top of the S&P. But if I try to isolate down where do Shift4 sort of stand out within the noise of what's happening within the public backdrop? I do think it comes down to a lot of the fundamental dynamic of what is the durability of our growth algorithm and how does that compare to an industry that today is still a good industry but maybe requires a couple of quarters to kind of rebuild confidence within, right?

And so I come back to this idea that I think the industry of payments has had to go through a bit of a reshuffle in terms of the kinds of investors that are moving in and out of it. But when I look at the fundamentals of payments industry, you're talking about a valuation paradigm that we haven't seen since like the GFC. But you're talking about a unit economic model that is totally different because it's not just providing commodity payments that was classified as BPO and IT services. This is a kind of payment that's integrated into software unit economic models that have high single-digit attrition rates.

So the LTV, the free cash flow generation that comes through on it, they're far superior than where we were when the last time multiples were ever at this kind of pocket back in kind of the late 2000s. And so I do think that there is a little bit of a coming back to the intrinsics of why is this a good industry. And can it grow durably even if that growth rate is durably at like for the industry as a whole, sort of like a low single digit for us that have made the deliberate decision to be integrated payments and then to also have leadership propositions in an integrated payment world, that's how you grow 3x the underlying market dynamics. But it would help if the industry as a whole was able to kind of get through some of the rebuilding of trust that has -- that some of the -- that has transpired over the last couple of quarters.

Well, thank you, Chris. It's a pleasure hosting you and I appreciate the opportunity. And thank you, everybody, for attending.

Thanks very much.

All right.

Hello, and welcome, everyone, joining today's Shift4 Q1 2026 Earnings Call. [Operator Instructions] I will now turn the call over to Tom McCrohan. Please go ahead.

Everyone, and welcome to Shift4's First Quarter 2026 Earnings Conference Call. With me on the call today are Taylor Lauber, our CEO; and Christopher Cruz, our Chief Financial Officer. This call is being webcast on the Investor Relations section of our websit,e, which can be found at investors.shift4.com. Today's call is also being simulcast on X Spaces, which can be accessed through our corporate X account at Shift4.

Our quarterly shareholder letter, quarterly financial results and other materials related to our quarterly results have all been posted to our IR website. Our call and earnings materials today include forward-looking statements. These statements are not guarantees of future performance, and our 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, which can be found on the SEC's website and the Investor Relations section of our corporate website. For any non-GAAP financial information discussed on this call, the related GAAP measures and reconciliations are available in today's quarterly shareholder letter.

With that, let me turn the call over to Taylor. Taylor?

Thanks, Tom, and good morning, everyone. Thank you for joining us today. Before I get into the quarter, I want to take a moment to acknowledge what is happening in the world. Our thoughts are, first and foremost, with those in harm's way in the Middle East.

We are praying for a quick and peaceful resolution to the conflict. That context matters as we talk about our results today, not only because of the difficulties it presents, but because of how we performed despite an otherwise challenging market backdrop. With that said, there are 3 key messages that define our first quarter results.

First, our diversified business delivered durable and resilient growth in the face of a difficult environment. Second, our international expansion remains on track and continues to scale. And third, our competitive differentiation across our key experience economy verticals remains as strong as it's ever been. Let me start with Q1 results.

We performed in line with our previously provided guidance, including 32% year-over-year growth in gross revenues, 49% year-over-year growth in gross revenue less network fees, 39% year-over-year growth in adjusted EBITDA and 26% year-over-year growth in adjusted free cash flow. When adjusting for our acquisitions, our organic gross revenue less network fees grew 11%, and this was in spite of a drag of roughly 400 basis points from intentionally deprecated legacy revenue streams. We believe there is further room for expansion as we continue delivering our market-leading products to new geographies around the world.

The performance we delivered this quarter in our payments-based revenue streams is a testimony to this. Total payments-based revenue less network fees grew 25% in Q1, with the Americas-based revenue less network fees growing 15% and worldwide payments-based revenue less network fees growing 51%. Our most mature Americas market is growing in the mid-teens, and our growth market grew over 50%. We were not immune to the unforeseen events in the Middle East as the conflict impacts inbound travel to Europe as well as many GCC countries.

Despite the travel disruptions in the Middle East conflict, we've delivered results above our guiding KPIs. I also want to address the same-store sales environment directly. We've been candid since Q3 of last year about the softer trends we were seeing amongst restaurant SMBs in the Americas. And as Chris will highlight in his remarks, the quarterly same-store sales trends in restaurants and lodging were slightly better than our expectations. However, our outlook for the full year remains fairly neutral, and our guidance reflects this. We are not forecasting a dramatic recovery in the back half of the year.

We are forecasting an annualizing over softer comps and modest normalization. We think that is honest, and we think that's right. The bottom line in our results, we delivered in line results with our guidance in a quarter that was more difficult than we've seen in a while. And our full year '26 guidance remains unchanged, calling for 26% to 31% gross revenue less network fee growth. The second message is one I'm genuinely excited to talk about because of the evidence is piling up.

Our international expansion is scaling meaningfully, measurably and on the time line we had previously described. We continue to add SMB merchants to our SkyTab POS offering across Europe and are now making meaningful progress in our newest product named Shift4 One. Shift4 One is in 7 countries, and we are on track to be in 15 with this product by the end of the year.

As a reminder, our Shift4 One product combines payments, dynamic currency conversion and tax-free shopping in a single device. This is a product we internally developed and it did not exist a year ago. This is the product that will help us unlock the meaningful revenue synergies within the SMB installed base of luxury retailers that are already tax-free shopping customers of Shift4.

Some early Shift4 One customers this quarter included [ Brightlink, Pharmacia Barcilla and LaSwash, ] but we have a long runway to go with over 70,000 SMB merchants that are prospective customers on this new product. The value proposition is strong, one device, eligibility detection at the point of payment, tax refund processing, dynamic currency conversion.

The early merchant adoption we're seeing confirms that when you walk in with this product, they understand the value immensely. In addition to Shift4 One, we're continue signing net new enterprise luxury retailers to our tax-free shopping offering, which over time, also becomes prospects for our payments offering. This quarter, we signed luxury retailers such as Stella McCartney, Massimo Dutti and 55 Croisette to name a few. The overall integration of Global Blue is on track, and we announced several Global Blue employees to key management roles during the quarter.

The acquisition of Global Blue provided local infrastructure, local talent and a pre-existing network in key markets where we previously had little to no footprint. It builds upon other international expansion efforts, most recently in the U.K. and Germany, where we quickly built material merchant density. The opportunity ahead remains larger than ever. The third message may be the most important strategically because I know there's persistent confusion why we win.

Let me try to cut through that as clearly as possible. We power the experience economy. Anywhere you shop, dine, stay or play, that is our territory. And the reason we diversified into each new vertical was not simply to cast a wider net, but where we saw the competitive landscape as narrow and where our capabilities were genuinely differentiated.

In almost all the verticals, we have diversified into competitors -- in restaurants, which we deem to be the most competitive of our markets, our SkyTab POS grew active merchant counts by over 40% year-over-year with more than half of our active restaurant merchants using our software are now on Shift4 Dine. We are rebranding SkyTab to Shift4 Dine and the logic behind that is simple. We have a much larger and more powerful brand in Shift4, and this is simply our Dine product.

In hotels, we continue to win excellent resort customers. We recently signed a 5-year renewal with Choice Hotels, signed New York's Palace Hotel as well as hotels in Greece and Canada. Our sports and entertainment capabilities remain unmatched. We are powering payments at the -- we were powering payments at the big game at Levi's Stadium in February. You'll also see us powering ticket sales in L.A. in 2028.

We signed 2 major soccer league teams in the quarter, including Inter Miami and Chicago Fire and 2 major baseball teams, the Houston Astros and the Chicago Cubs. In the U.S., we still have meaningful market share to capture, and we are enabling dynamic currency conversion broadly across our U.S. merchant base in advance of the World Cup later this year. We are heads down making sure DCC is live across our key venues that are hosting World Cup matches as well as hotels we service that fans will be staying in.

Before closing, I want to reiterate our approach to expenses. Our track record here is real and a differentiator, and AI has only made us better. It has helped us scale much more efficiently in new markets with fewer resources. We run a disciplined organization but always view room for improvement and have done a reasonably good job of delivering margins above peers throughout various economic cycles.

We do see a path back to 50% margins as we sufficiently scale our international operations, but we'll balance the growth opportunity appropriately. The discipline we have towards managing expenses has not changed. We continue to maintain a relentless focus on driving incremental operational improvements, headcount control and preserving our advantage in regards to minimizing customer acquisition costs relative to others in our industry.

Let me close by returning to the phrase I've used a number of times with this group because it continues to be true. We can grow meaningfully without finding a new customer, and we can drive meaningful margin and free cash flow improvement by continuing to do what we do well, which is integrate our business and to lead the parts. We have a demonstrated track record of winning despite uncertainty. We have a financial discipline, and we have a simplified corporate structure. We have a global footprint of over 75 countries that we did not have just a few years ago.

The macro environment remains dynamic, and we are not dismissing that, but the diversification of our business, the durability of our growth and the quality of the team we have assembled give me genuine confidence on the road ahead. In times of volatility, I think it's important to remind investors that we have grown gross revenue less network fees by a compound annual growth rate of over 35% and adjusted EBITDA by 38% since 2019.

Most importantly, this growth was achieved with relatively few dollars deployed when compared with our peer set. Cumulative equity dilution over that time period was just about 18%. I will repeat that. We grew revenues by 8x in 7 years, diversified the business, improved profitability and diluted equity holders by less than 20% I've said this before, and I genuinely mean it, we do our best work during times of uncertainty.

The deliberate and measured path we've been on diversifying our revenue streams, expanding into new geographies, deepening our product suite is exactly what allows us to perform reasonably well when the environment gets tough. We are not dependent on one market, one vertical or one macro tailwind. I encourage you all to read through our prepared materials for the additional details they provide.

And with that, let me turn it over to Chris.

Thanks, Taylor. Q1 2026 delivered record Q1 financial results, underpinned by a durable model, rapid integration and disciplined capital allocation. We continue to execute against our strategy to diversify both geographically and across multiple verticals in the experience economy, enhancing our resilience. These results were all achieved despite the travel disruptions stemming from the Middle East conflict.

Gross revenue less network fees, or GRLNF, of $549 million grew 49% year-over-year, in line with guidance. Adjusted EBITDA of $234 million grew 39% year-over-year, delivering a 43% margin, also in line with guidance. Adjusted free cash flow of $88 million grew 26% year-over-year, exceeding guidance and gross revenue of $1.12 billion exceeded as well.

Now let's unpack this further. Volumes grew 24% year-over-year to $56 billion, while delivering blended spreads at 61 basis points. The Q1 volume mix was largely in line with our expectations despite some early quarter weather effects impacting the restaurant industry in the Americas.

Turning next to the disaggregated categories that make up the Q1 GRLNF. Beginning with our North Star on growth, payments-based revenues less network fees was $345 million, growing 25% year-over-year. This category consists of an Americas region that grew 15% year-over-year, which was largely unaffected by prior year M&A and a worldwide, excluding Americas region that exceeded our expectations growing 51% year-over-year.

The next category of subscription and other grew 11% year-over-year. And although this exceeded the annual growth algorithm variable provided last quarter, we expect this category to vary quarter-to-quarter. Finally, the category of tax-free shopping or TFS, it grew 4% on a pro forma year-over-year basis. As a reminder, the TFS category was not in our financial results last year as it was part of the Global Blue acquisition consummated in July 2025. Hence, growth is being provided on a pro forma basis for context.

The TFS category experienced headwinds related to the conflict in the Middle East and its disruptive impact on global travel, especially for consumers from the GCC and parts of East Asia looking to travel into Europe. We estimate this impact as having been approximately $4 million to $6 million of headwind on the quarter. Overall, we are encouraged by the resilience of the business that this growth performance expresses.

Excluding the effect of acquisitions and divestitures, the organic GRLNF growth for Q1 was 11% on modest SSS. Adjusted EBITDA grew 39% to $234 million, delivering a 43% margin. As mentioned in our prior quarter call, our investments in international market expansion are reflected in our margin trajectory. And given the encouraging performance we continue to see in the worldwide regions and receptivity to our market-leading experience economy solutions, we intend to continue to invest here.

Non-GAAP EPS came in at $0.97. Adjusted free cash flow in the quarter was $88 million. And although it exceeded our guidance, it should be viewed as in line when taking into consideration seasonality and timing benefits from Q2. On a non-GAAP per share basis, this results in $0.95 of adjusted free cash flow per share or a 98% conversion from non-GAAP EPS. For the second quarter of 2026, we are introducing guidance as follows: GRLNF of $615 million, which embeds an approximate $20 million impact from travel disruption due to the Middle East conflict, adjusted EBITDA of $278 million and $10 million of adjusted free cash flow.

As a reminder, Q2 adjusted free cash flow reflects the seasonality of the TFS category, but the business also experienced some Q1 timing benefit that contributed to exceeding guidance. It's worth reiterating my comment from last quarter that the seasonality of the TFS business is such that the first half of the year is cash flow consumptive while the second half of the year is cash flow generative. When taken together with Q1, the first half is expected to come in line with initial guidance.

Additionally, gross revenue for the quarter is expected to be $1.17 billion. For the full year, we are leaving our guidance unchanged and note that this is meant to express the wider volatility of outcomes we are seeing even with part of the year complete. Some colors on the guidance. Throughout Q1 and into April, we saw largely stable consumer trends in the Americas with weather only impacting early in the quarter. This represents an acceleration in growth trends compared to what we were experiencing in Q4, particularly in restaurants and lodging, and it reinforces our neutral SSS full year outlook.

In TFS, we are not attempting to forecast a back half impact of continued travel disruptions. However, should conflict-inluenced travel disruptions continue, it would be reasonable to assume that the seasonally stronger Q3 would have a higher monthly headwind than the $4 million to $6 million per month experienced in March, and Q4 would be more in line with the monthly impact observed in March.

Last point on guidance. We acknowledge that the seasonality of the business is still something that investors are acclimating to. As such, we wanted to provide quarterly guidance for the back half of the year in our shareholder materials to help calibrate the quarterly cadence of the year, especially on adjusted free cash flow.

We reiterate that this quarterly guidance reflects the unchanged outlook on full year results and expresses the wider range of outcomes we think reflect the environment we are in. Now finally, on capital allocation. Every allocable dollar must compete for the best use and is subjected to rigorous process, while the output that guides us is return on invested capital and adjusted free cash flow per share.

In Q1, we repurchased 5.5 million shares, resulting in a cumulative $600 million of execution against the $1 billion share repurchase authorization announced 2 quarters ago. As such, we end the quarter with non-GAAP share count flat year-over-year. On capital structure in Q1, our term loan repricing took effect at the beginning of the quarter. Pro forma net leverage was 3.7x in the quarter, and we maintain our view that we do not intend to exceed 3.75 pro forma net leverage on a sustained basis.

Based on performance trajectory and guidance, the business would delever by approximately 0.5 turn per quarter, ending the year near our long-term average net leverage level in the low 3s. Before turning the call back to Taylor, I want to thank our fellow shareholders for continuing to work with me on our evolving investor engagement. We are not a culture that is ever satisfied. So we always appreciate the thoughts sparring challenge and engagement.

With that, let me now turn the call back to Taylor.

Thanks, Chris. And with that, operator, we can open the lines up for questions.

[Operator Instructions]. Our first question will come from Timothy Chiodo with UBS.

Great. Given distribution, always a big topic in the industry, but very topical with investors today, given some of your competitors are announcing large hires of direct sales teams and increasing the size of their direct sales teams, I thought this would be a good time just to take an opportunity to do a refresh on where Shift4 sits with its distribution approach.

A few years ago, you in-sourced a large sales team. I believe that you've been hiring more since then. In summary, I'm hoping you could recap the size of the direct sales team in the U.S. today as it stands, how the European build-out has gone? And then also a refresh on how things look in terms of the number of resellers, VARs, agents and any other kind of third-party distribution? And then I have a follow-up around rev share and income statement geography.

Yes, sure. So I'll hit that. And I think it is important to give context to the journey we've been on in the United States. Keep in mind, for the vast majority of our history, we were almost exclusively third-party distribution. As you mentioned, that was a combination of value-added resellers in local markets. It was traditional ISOs back in the day and increasingly ISV software providers that serve the experience economy alongside of us.

Today, you noted it well, we in-sourced a healthy portion of that distribution network, mostly in the bar category and have those folks working on direct sales. It's been about 2.5 years since that effort began. I'd say we're pretty mature and polished in our approach there, which is that we bring in regular direct sales classes. We've got density in most of the markets we'd like to have it in, say, for kind of a couple of spots in the country.

And despite that, the ISV distribution network remains strong. Keep in mind, if you want to sell software to a hotel, in many ways, even if you want to sell software to a restaurant, you're working with Shift4 because we get you into the environments you want to be in. Stadiums is another great example of that. We've got ISVs that want to be inside of stadiums, and we can help get them there given our presence in those stadiums. So the U.S. market is quite mature with regular sales teams rolling in and out. We've got roughly 300 salespeople that are full time at Shift4 in that regard.

And then international, we're beginning that journey all over again. So we've got awesome networks of third-party distribution. They're great because they scale quite cost effectively. We've got ISV relationships that we're expanding into. We mentioned a few in last quarter's call. And we're building a direct sales force to go after this huge opportunity that sits inside of Global Blue, the 70,000 SMBs that they service.

So all told, our total sales resources, I actually like blushing at this number because we -- the company was half the size is over 700 at the moment. And that's grown at about 18% a year. So Chris will talk about kind of the margin trade-offs of this, but we see the opportunity to be quite immense and we're investing in it quite meaningfully.

We've also, as you've seen in the past, acquired local VARs in markets like we did in the U.S. We envision that being able to happen throughout Europe once our sales markets have become more mature. But right now, it's about making sure we've got people who can talk to customers in just about every capacity.

And the last thing I'll say, and then I'll turn it over for your second question is we offer pretty significant advantages to ISVs who want to access the same markets as we do. Put yourself in the mind of a retail POS software company, we can offer them integrations for tax-free shopping so that the tax-free shopping experience is great for the merchants right out of the gates. Payments, as you'd expect, gift and loyalty, digital receipts.

We can offer a comprehensive suite that just 2 years ago would have been instead of a benefit to the ISV, it would have been quite a pain point that they need to integrate all these different companies. Today, we're having ISVs approach us saying, wait, I can just talk to you and deliver to my customer a complete commerce experience given all the capabilities you have under one roof.

On that second part, yes, sorry, that follow-up was really just around, Chris, if there's anything just to flag around income statement geography in terms of the sales salaries, the commissions and the payaways that go to the third parties. If you could just give a recap of where that all sits within the P&L, I think that would be helpful.

On that second part -- yes, sorry, that follow-up was really just around, Chris, if there's anything just to flag around income statement geography in terms of the sales salaries, the commissions and the payaways that go to the third parties. If you could just give a recap of where that all sits within the P&L, I think that would be helpful.

Yes, sure. So I think what you're alluding to is that when you look at indirect distribution, that's largely compensated through the form of residual commission. and residual commissions would flow through in the cost of sales line that's large in quarters past, why we've seen growth in that line of cost of sales.

And that is deliberate because when you think about the strategy of entering a market before you have the gross profit density in a given region, in a given country, it's prudent to have variable cost structure that can flex up and down as your density grows.

At some point in time, you hit a tipping point where you want to internalize that into more of a fixed cost operating expense base, which is geographically where the direct sales and the direct go-to-market expenses would live. They would live inside of the OpEx categories or the SG&A categories.

And so that trade-off between a variable cost structure when you're early in the maturity of a region and you're expanding and you don't yet have the full gross profit density sitting on top of that region that's the strategy at the start. And then eventually, as we've seen in Shift4's history, you internalize that cost structure at some point in time. And the economics of that are really attractive trade-offs once you get to those density levels.

We'll now move to Rayna Kumar with Oppenheimer.

Good results here. Could you elaborate more on how you quantify the Middle East conflict impact on your tax-free shopping business?

Sure. And thanks for the question, Rayna. I'll tackle that one. So it's an interesting nuance, right? Obviously, a very dynamic environment when you're trying to isolate and analyze the impact of travel disruptions that are resulting from the Middle East conflict on a business like tax-free shopping.

And for us, that analysis actually can be quite targeted and quite specific because a couple of ways to look at it. First, for context, what does it even mean to look at isolating populations that are most impacted? Well, we look at things through corridors in that product line.

And one of the most important corridors when thinking about this conflict is the GCC consumer traveling into Europe and the kind of Southeast Asian and East Asian parts consumer coming into Europe. And those 2 consumer corridors coming into Europe, which is the most important region that our merchants are based, those 2 corridors together kind of make up a little more than 20% of the European kind of volumes. When you look at those 2 corridors, you can then isolate the effect that passenger seat capacity from the airlines themselves has changed, has declined.

And when you actually use passenger seat capacity and regress it against volumes and sales, it's actually a fairly tight regression, a fairly high R squared and it becomes a good predictor over a long time series of data that we use to analyze these things. And so with that as context in terms of how we looked at the backwards of what therefore happened in March and looked at kind of the effect in March as having been sort of a $4 million to $6 million headwind on revenues -- on gross revenues less network fees equivalent, you can then take that same methodology and apply it forward.

You can look at how the seat capacity from the airlines themselves has actually changed on a forward basis and apply the same modeling, the same sensitivities, the same regression against it and be -- and have a view as to how that could impact the TFS business on a go-forward basis. And probably another important point to sort of say within that is that this seat capacity that has been changed by all of the airlines across these corridors that matter to us -- this is capacity that doesn't necessarily come back that quickly.

But within a span of kind of a 4- to 8-week time frame, we sort of see this business across any kind of travel disruption has been pretty resilient and coming back quite quickly. But the analysis, the framework, the sensitivity kind of all grounded within data sets that are very rich and deep and long. At the same time, they're informed by the forward capacity planning of the airlines themselves.

We'll now move to [ Dan Demir ] with Mizuho.

It's Dan Dolev here. Guys, great results. Really nice to see, well deserved. I wanted to ask about AI. I noticed some of the comments, Taylor. Can you maybe talk to us about how you deploy AI across the organization? And congrats again.

Yes, sure. Thanks very much. We do actually read the most commonly used phrases on earnings calls and try not to get too close to the center of the pack. By our analysis, AI was, I think, # 2 or 3. So glad to be able to talk about it, but also try to talk about the fundamentals of the business as well. It is foundational in terms of how we're thinking about how our business should run. I think that's just prudent in the current environment to force embracing of these tools. We look at it largely 2 ways.

Obviously, what can it do to help us speed up delivery of product. But I think where we're putting kind of more emphasis is how is every nonproduct or technology-oriented silo of our business thinking about how to embrace AI and really challenging them through the mindset of what are our top vendors, customer relationships, financial institution relationships and just thought leaders doing in their verticals. So our HR offsite will include presentations on using AI for the purpose of speeding up HR workflows.

Our legal offsite is right now going on. They've got representatives from the big law firms talking about how to use it. It's really speeding up production, which for us is critical. Our technology scale quite nicely, just given the nature of payment platforms and software, where it's tricky is adding many thousand SMBs a month in brand-new markets. And so we're able to go to market much more quickly. We're able to stand up support infrastructure. We're able to stand up a marketing and sales framework that works for that local market a lot faster.

And then I would just say just good corporate citizenship, regular dialogue with companies that we really admire teaching our teams and us teaching them how we've gotten the most benefit out of tools. So we've had former colleagues from Blackstone, friends from Goldman Sachs, soon to be Walmart, all kind of collaborating on how to make this transition as exciting as possible for employees.

I think there's a reluctance to embrace tools if you've been in a role for a long period of time. We're challenging that immensely. And that includes, obviously, a substantial amount of deployment of tools into thought leaders inside the company. So it's a super exciting time, but we by no means think we've got kind of the road map figured out. We're borrowing as much from companies we admire as we can. And that goes all the way through the AI vendors themselves.

We'll now move to Darrin Peller with Wolfe.

Good to see the resilience in the business despite all the macro. I just want to hone in on the 15% organic -- what's effectively organic strength you're seeing in the U.S. and North America. Can you just remind us on the building blocks? I mean I know there might be still some lingering cross-sells from deals you've done over the last several years.

But maybe thinking about the verticals and what's really driving that kind of strength from an organic standpoint in this market, which is obviously including, I think you guys have flat same-store sales, right? So just a revisit of the building blocks there and the sustainability would be great.

Yes. I'll let Chris hit the macro environment. I'll talk about kind of just what we're doing. tried to address this inside of both my letter this morning and the scripted remarks to just talk about the competitive framework in the United States. There's a lot of rhetoric. There is not a lot of changing of pole position with regard to the competitors we see in a buyer in our markets and how we face off compared to them.

So put this stat in the remarks, I think it would surprise most people, but it doesn't surprise us. Our restaurant point-of-sale product is -- location counts are up over 40% year-over-year. That's just one good example of a product that's getting a heck of a lot of adoption. I think it probably surprises the Street. It does not surprise us. We are consolidating the firepower of what historically was a lot of different distribution networks into a single product. It will have results.

And the quality of those merchants is rising throughout that time as well, which is really good to see. In the hospitality vertical, our competitive differentiation has not changed. And in fact, as we folded in tools like GX and currency conversion, our value proposition go to purchase gift cards at the largest hotel chain in the world and scroll down to the bottom of the page, and you'll see Shift4 powering that whole experience for them.

So that's just one -- another example of how these acquisitions can at times feel like cookie cutter, but in reality, we spend a lot of time thinking about how it rounds out the offering, and we spend a ton of time thinking about what our customers are buying away from us and can we deliver that under one roof. And obviously, something like gift cards is so inherent to the payment experience that when we own it as part of the offering, it's a better customer experience to work with 1 vendor than 2, and we're in rarefied air being able to do that.

Loyalty was an incredibly significant set of features inside of that same acquisition, and we haven't even begun to talk about that. But as competitors and companies we admire invest significantly in loyalty, you can get a sense that we were on that curve as well. I could go on and on, but our sports and entertainment wins, I think, have sort of become happenstance, but we alluded to a really nice ticketing win with regard to L.A. in 2028. That's an example of an extension.

I don't think people would have assumed is super natural in the sports and entertainment space. So everything is going quite well in the United States. I will say the significant amount of executive attention is focused on how do we replicate all of this and not over a 25-year time line, but over like a 2- or 3-year time line throughout the rest of the world.

Chris, anything you want to comment on with regard to the same-store sales environment?

Yes, sure. So yes, Darrin, and thanks for the question. You're right to provide the context that when you think about the Americas region within our payments-based revenue less network fees, kind of disaggregated categories, that Americas region is largely -- comes into this year largely unaffected by prior year M&A annualization.

So you end up with a very clean view on our most mature region, a region where we've been doing business for multiple decades and where all of our products are also mature, live battle-tested. So you take that region and for us to be able to deliver the mid-teens growth there, you're right to point out that, that wasn't really or supported by much in the way of SSS.

We saw like a modest positive on SSS, which is a better trend than what we saw exiting Q4 and certainly is better than what was embedded within guide, but it wasn't a meaningful -- meaningfully positive contributor to that growth rate. And it's important that we also think about what is the context beyond the absolute of that growth rate.

To us, we think that we're quite proud of the fact that, that means the region is probably punching at a greater than 3x relative growth to the baseline market, which is something that I think is probably even more important because then the SSS kind of neutralizes across all of the relative players and peers. But that's a bit of the comp.

Are you guys -- just a quick follow-up, and that's great to hear, by the way, guys. Just on the coming up World Cup, you feel good about getting DCC and all your products ready here for that?

Yes, we do. I mean we've got a big estate, and there's hundreds of software suites you could be connecting to us through. But the World Cup actually helps sort of minimize distraction factor because we want it in stadiums and we want it in the hotels around those stadiums. So we feel great about it.

We'll now move to Andrew Jeffrey with William Blair.

Taylor, I wonder if we could just sort of zoom out and think about sort of how Shift4 slots into the broader global payment processing landscape. You're a $200-plus billion sort of run rate processor in a $20-plus trillion market. Where do you think Shift4's 1 or 2 kind of really meaningful competitive advantages are as you think about becoming maybe the next trillion processors.

As we look around at a lot of much, much larger companies that are even growing faster than Shift4. And I'm just trying to get a sense of like where is this company 5 to 10 years from now? How do we get there in a very sort of succinct way? And from whom do you take share to achieve your bigger ambitions?

It's a great question. I'm glad you asked it because I think a lot of our sort of strategic moves in isolation can seem strange because I don't think people have a decent enough appreciation for what our core skill sets are. We made a decision as far back as 20 years ago that we were going to double down on the in-person economy.

That was actually, at the time, a very defensive play as the likes of Amazons and were coming up and Apple and Google were suddenly getting into the payment flow. So there was a deliberate decision made that we're going to focus on in-person experiences. Restaurants was the first vertical. And we learned a ton about what it means to get hardware, software and payments working together in the most demanding environments, which is like there is a customer at your bar, waiting to pay and you need to deliver all of those things together.

At the time, these technologies didn't work nearly as seamlessly as they do today. We've expanded that into basically any place you would physically pay for something where those advantages are quite material. So I think some of the larger players that are growing really nicely that you've mentioned are almost exclusively riding a wave of e-commerce. And that's not to belittle what they do. I think they do an excellent job at powering this transition from purchasing something in a store to purchasing something online. But we continue to find a lot of opportunity where humans will physically want to pay for something as the natural entry point for us.

Now it doesn't end there. You think about some of our largest relationships, we're facilitating massive amounts of e-commerce transactions, but they ultimately want to tie that back to a physical experience. So we see an edge there. We see our most innovative customers, groups like Alterra, creating this really seamless experience behind buying a SkiPass online and then using that throughout a bunch of physical experiences. We integrate to those experiences quite nicely, and we help drive that. Now what's nice about that is these verticals are not nearly as advanced throughout the rest of the world as they are here.

So our playbook is going to sound kind of uninteresting with regard to taking everything that's made us successful in powering the experience economy in the U.S. and bringing it to the rest of the world but that's awesome. We don't have to learn a ton of new things. We have to learn about local payment methods. We have to learn about certain tax coding in local geographies, but we know how to make all these technologies work together, and they don't work together in the rest of the world.

So we think we can continue to ride this wave. We think we are helping our merchants get from physical to digital. But at the end of the day, they want and their consumers want an in-person experience, and we are naturally provided -- well positioned to provide that. Now where is share coming from? It's generally coming from a fragmented network.

So it could be coming from software providers. It could be coming from legacy banks providing bank terminals. We're actually delivering a solution that sort of takes 5 or 6 vendors off the table in exchange for Shift4. And that's what we're seeing high demand for throughout Europe today. The tax-free shopping experience prior to our acquisition of Global Blue was when it worked its best was a handshake of 5 different highly competent vendors. Now it's one.

So hopefully, you can sense the enthusiasm. But I think the root of your question is the right one, which is how do you get confidence going into luxury retail? Well, that in-person experience is as demanding as setting up a local restaurant, meaning we need people in that location, on site to help work the merchant through their challenges and deliver the whole commerce experience, and we're uniquely positioned to do it.

Yes. I'll just add that the question almost takes me down like memory lane because when you think about the market environment in some of the worldwide region, the international markets, it's reminiscent of all of the things, all of the commerce challenges that we were solving in kind of the early and mid-2010s in the U.S. or the Americas market and bringing that kind of simplification of the many parties that you have to work with to deliver an in-person software integrated payment experience, that is literally straight out of the vault, straight out of the playbook of the Americas, literally probably in all of our strategy write-ups and memos and materials from the mid-2010s.

And so the idea of where that share is coming from, Taylor is exactly right. It's going to come from the point solution providers of each of those parts. whether that is a local bank that's providing stand-alone unintegrated pin pads and devices, whether that's a partner only, whether that's a point solution software vendor. It's the combination of all that we disrupted in the Americas that we're bringing into the worldwide markets. And it's why we're so excited about the growth there. And the growth there is actually, as we said, exceeding our expectations, and that's how we know international is working.

We'll now move to Dominic Ball with Rothschild & Co.

Great numbers on the quarter, particularly the international growth. Just a question a bit beyond the quarter. And Chris, I know we've discussed this previously. A lot of the -- or the majority of Shift4's growth going forward is international, but U.S. restaurants still remain an important part of the current merchant base.

Following commentary from DoorDash yesterday, alongside seeing DoorDash POS across San Francisco, Phoenix, New York, a formal launch of DoorDash POS is becoming more imminent and more of a kind of when rather than if. So when delivery platforms evolve from more of a partner -- from a partner to a peer, how do you think about the competitive responses available to Shift4?

I'm going to let Chris hit it, but I actually want to emphasize that I don't think that's well appreciated what this online delivery trend has looked like throughout the U.S., especially over the last kind of 6 years, like COVID did accelerate a lot of it for restaurants where like a meaningful portion of sales have gone to network-affected players. We do enable that through most of our software providers.

So Chris can talk about kind of how we think about competition in the space. But I think our restaurant growth is quite strong, and I don't think people realize these numbers also have a headwind of a lot of business going out of the physical location and going on to platforms like that. So it should speak even higher for our ability to get into restaurants and deliver them solutions.

But Chris, do you want to address the DoorDash question?

Yes, sure. It's an astute observation. And it really speaks to the dynamism of restaurant technology as a sector, as an environment. It's not too far into the past that you have to look to find some pretty innovative ideas from players within the ecosystem of restaurant, such as right down to the food service providers that essentially are kind of a short handful of players that are providing and supplying the food to pretty much all of America's restaurants.

At points in time in history, even they have had POS strategies because it's highly logical to get as close to the merchant environment and seeing the data of the flow-through and trajectory as possible. We value that data, many others within restaurant value that data.

And I think that's why our strategies have various points in time involved partnering with a lot of these players within deep integrations and DoorDash is no different. These integrations are actually quite valuable to us, valuable to them. And I think our strategy has never been as myopic to sort of look at all of these players and say, okay, this is a pie, a winner take all or this is like a way that we can actually work together, grow that pie and actually have an opportunity to see whether there are greater ways to value that data, greater ways to work together.

So I do think that these kinds of, we'll say, competitive shifts and dynamics, they're not new within the restaurant space. It's partially why within the various categories of the experience economies we serve, we actually like a lot of our other categories as well because the competitive dynamics are quite different. But within our most competitive area, the vertical that is restaurants, this dynamism isn't new. But at the same time, I think our model affords a very partner-centric approach where we're able to actually take advantage of some of these innovations and through a partner lens.

Yes, I'm going to just reattack it because I think it's such a fun question because you mentioned one company, you could have just as easily said AI. What can AI do to single vertical software. this is where the scars and triumphs of a 28-year-old business in the payments industry really inform our thinking. We have run vertical software for over 20 years.

And as a single vertical software provider in restaurants, you should always be paranoid about who's going to come up around you. We can define the barriers to entry as slightly harder or slightly easier, but there have been MICROSES, there have been Toast, there have been touch Bistros, there have been Rebels. There have been many companies that we've since bought because I think our paranoia about the value you deliver as a single-service software provider and the cost you pay to acquire customers is incredibly important to pay attention to.

So we respect the heck out of most of our competitors. But again, are we worried about somebody eating our lunch in a vertical that we've specialized in, in 20 years and grown despite some of the trends that you mentioned, not particularly today.

We'll now move to Craig Maurer with FT Partners.

Just 2 modeling questions for me. For Rest of World payments-based revenue growth, what was the growth on an FX-neutral basis? And just secondly, knowing that the subscription line is volatile and moves based on what legacy revenue streams are shut off, et cetera, how should we think about the quarterly cadence underpinning the mid-single-digit growth guide for the year?

Yes, sure. So on the first one, so the FX-neutral impact, it would have been basically relative to the 51% of growth that you would have seen in that payments-based kind of worldwide region, it would have had an almost 10-point kind of impact within the quarter.

Now that is, I think, isolated as a year-over-year factor in this quarter that I think will dissipate in forward-looking quarters, future quarters because if you remember, if you kind of look back to the euro-USD kind of cross the most -- the widest it was or the widest it is in this quarter relative to the -- looking at the forward curve would have been isolated into Q1.

But that said, I think from the perspective of the commentary, the worldwide region from a payments-based revenue less network fee standpoint, it still exceeded kind of our expectations and not isolating that variable. And then can you reiterate the second and third part of the question?

It was on the volatility of subscription and the other question...

Yes. Yes. Subscription and other volatility, I think we tried to flag that upfront. So we provided, as a reminder, the growth algorithm that we provided in Q4, it flagged that subscription and other would probably be in the low single-digit category in terms of disaggregated revenue category growth. and that it would be volatile quarter-to-quarter. So from that perspective, I think you have to continue to anticipate that things remain in line and that volatility will express itself through some of the coming quarters.

The only thing I think worth calling out on international, just to layer into what Chris mentioned is that our customer base internationally is a lot more homogeneous today in these early days than what you'd see in the United States. So adding multibillion-dollar non-U.S.-based enterprise customers is not yet a thing. We believe it can be a thing. We are on the same evolution we went through in the United States, which is kind of SMB, the small- to medium-sized hotels, the larger enterprise opportunities, which are groups of these merchants. So the majority of that volume growth that you're seeing there is coming -- is expressed as like almost a location count growth rather than a volume per merchant shift, if that makes sense.

We'll now move to Sanjay Sakhrani with KBW.

Chris, I was just wondering if you could just unpack the travel stuff a little bit more for me. Just want to make sure I understand sort of the trend line that you saw in the quarter and then going into April and maybe even early May and sort of what's baked in? Because I know you have that headwind in the second quarter, but like where would be the risks from here on out in terms of travel?

Right. So to reiterate the point, what we're isolating within travel disruption as a result of Middle East conflict is trying to isolate down into the corridors within the tax-free shopping category of the business.

And when we looked at those corridors, obviously, March would have been directly impacted passenger seat capacity effectively minimized to almost nil. And what we attempted to do was look at the forward capacity and the change in that -- in those flights across those corridors. So from the perspective of how we analyzed it, I don't need to reiterate what I had mentioned to Rayna, but that's what's baked in. And I think it's important to understand that, that is not any attempt to kind of forecast conflict.

I think it really is just trying to look at, well, what is the kind of combination of all of these airlines that have really put forward not just an outlook, but also have put forward an outlook that's now underpinned by how they would have deviated passenger flights -- sorry, passenger seat capacity by having deviated flights. They've sold tickets now against where those new flights are going to be. And so for the most part, this travel disruption dynamic, as we know it right now, it's fairly baked in, and it's not that easy to change because it's driven by passenger seat capacity outlooks.

And in general, when we've looked at these travel disruptions in the past, regardless of what the origin is, the tax-free shopping business has generally been able to rebound within a 4- to 8-week period, and that's also something that's reflected into our Q2. But by no means are we trying to forecast kind of an underlying continuation of travel disruption, let alone trying to forecast a duration around conflict.

I guess I'm just trying to make sure I understand like have there been any additional sort of impacts as we think about people canceling their travel plans and obviously, FIFA coming up, there's been some mixed numbers around that, too. I'm just curious if that sort of plays into some of the forecasts that you've made and embedded in the guidance.

So again, I'll let Chris comment, but I think it's -- I want to clarify this statement. A lot of the -- all of the commentary Chris made is very specific to Global Blue tax-free shopping. And there's a reason for that. That is not a consumer cohort that is very sensitive to economic activity. They tend to travel and spend a lot almost regardless of the economic conditions where you have disruptions in that business, you have disruptions because these people cannot travel or are reluctant to travel for one reason or another.

So it's actually much easier to kind of -- well, I shouldn't say it's easy, but it's easier than trying to predict how many people are going to choose to attend the World Cup and what are they going to spend on tickets. It is these people would have otherwise traveled, but they can't. And what we're careful to do is to give line of sight into how long we know they are unlikely to be traveling for, but also not try to predict award because that's a bit of a fool's errand. So we've got good visibility through Q2. Chris, I don't know if you want to characterize it, but I think that's kind of the extent of our great visibility into the conflict.

Yes. The only other thing I may add is just a little bit of color on some of the other interesting things that we saw. And again, these aren't meant to be sort of extrapolation points. But when you do have some of this travel disruption, part of the resilience of the tax-free shopping business is sort of the second derivative effects that maybe are a little less intuitive when -- unless you're deeply studied and understood the dynamics of the business.

But you have the disruption as a result of a conflict geopolitically. And what that actually created at least within this quarter was actually relative to forward outlooks like the U.S. dollar strengthened against the euro.

And what that actually ended up -- what we saw as a result of that was our most important corridor within tax-free shopping is actually the U.S. consumer coming to Europe and spending, and that actually outperformed in the quarter. So it created a bit of a counterpoint to the travel disruption and the conflict for the corridor that was GCC to Europe or Southeast Asia to Europe. It was a bit offset by actually strength and outperformance in U.S. to Europe, largely underpinned by purchasing power.

And so there are some of these elements in the business that are maybe second derivative effects. I don't know if that's getting at the heart of the question, Sanjay, but they, I think, are worth noting because it helps at least provide a little bit of color as to why the volatility of outcomes on both sides remain higher as a result of what we're seeing in the current environment.

Thank you. At this time, we've reached our allotted time for questions. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Guys, why don't we jump in again? Thank you, everyone, for joining us on Day 2 of the Wolfe FinTech Forum. Really happy to have Shift4 with us, a company that I'll never forget this IPO, and Chris remembers it as much as I do just given where he was at Searchlight at the time as an owner of it. But right in the middle of COVID, a company focused on restaurants and hotels coming public when everyone decided not to do anything but stay home. And it was an interesting time, but ended up being a very successful IPO and really has grown quite a bit since, and it's been a very successful company since.

And with that, we're really happy to have Chris with us. Thanks for joining us. You've been with us for many years, we were just saying, but on a different panel. So happy to have you on the operating role now as the CFO of Shift4.

Right. Thank you for having us. It's always fantastic to be here. This is just a must-attend event in my mind, and I'd like to keep The Street going for many years to come.

Let's start with just it's been, what, 4 months or so now since you've been in this role, right?

Almost 6.

Six, sorry. I mean when you think about the learnings you've had shifting from investor to operator, I mean, you've been on the Board, but help us understand what you're seeing that's different and what you're learning about the business that is worth sharing.

Yes. So for context, I've actually -- even though I'm new in the seat, not new to the company. I've been involved with Shift4 almost, well, for a decade now, 10 years running. 5 years representing the controlling private equity shareholder as a partner at a private equity fund, so 5 years of that life, where I wore a lot of hats in the company but never got the title recognition, and then 5 years after the IPO in 2020 as a Director.

And so I've had the vantage point of being able to see this business just do extraordinary things. I mean you're talking about the journey that, for all of the folks in this room have probably seen the 5 years of public life, it's incredible what the company has come through and where the company is now.

The things we do in 1 year is already like quite breathtaking. But from my vantage point, I actually have seen what is a north of 20x growth in EBITDA in 10 years. It's just a phenomenal growth machine, a compounder of value, and it's just been incredible to see it resiliently navigate through so many different episodes of life.

Your mic's been cutting out.

Oh, sorry. It's been amazing to see the business just evolve through so many resilient phases of life, not least of which COVID, as you described it. But even competing in a zero interest rate environment when money is free and everyone's idea is worth funding, that's something we lived through, too. So it's a pretty incredible business with a lot of durable moats. So excited to now be back into a front row seat.

Yes. No, it definitely has grown into a ton of new verticals over the time that we've watched it, and it's incredible to see really what's ahead of us with some of the deals you've done.

But just before we go into that, I mean, you recently reported fourth quarter, gave guidance for '26. Maybe just explain some of the puts and takes during the quarter and major assumptions that underpin the revenue and volume guidance for the year ahead of us first.

Yes, sure. So to start at the '26 guidance and sort of breaking it down a little bit into its parts, one of the things that we tried to introduce was really this concept of a growth algorithm, how to deconstruct the business into a few parts that are digestible, that are areas that people are trying to get acclimated to.

So one of the first parts of that is disaggregating within the revenue streams, within the gross revenue less network fee streams, disaggregating tax-free shopping, calling that out, breaking that out and then giving a pro forma growth outlook on that component of the business, separating away from our North Star, which is payments-based revenue.

And within that payments-based revenue, really trying to disaggregate for people an understanding of two distinct narratives: the Americas region, where our most mature market makes up the majority of the payments-based revenue and where all of our market-leading products are available and served and will not for 2026 have any noise from the annualization of M&A from the prior year. So a pretty clean view on the mature part of our business.

And you contrast that inside of payments-based revenue to the worldwide segment. Super fast-growing part of the business where we are disrupting what is effectively a competitive environment of bank terminals that are unintegrated from the perspective of payments, almost looking at it through the lens of integrated payments many, many years ago in the Americas is kind of the environment we see in Europe. And we're going to disrupt it with market-leading solutions that have been battle-tested in the Americas.

And so when you deconstruct all of those components within the pro forma and then subscription and other, a low single-digit growth outlook. You combine it all together, and that's the algorithm that we're trying to convey to folks and help them understand. Within actual variables that are probably worth calling out that we have called out, one of the biggest ones that's been topical for us for quite some time, especially in the second half of last year, was the same-store sales environment in the Americas in payments space.

And what we really tried to say about that same-store sales environment is that for this year, we're trying to give a neutral outlook, a flat same-store sales perspective. That's what's embedded into the guide. And historically, we probably would have had low single digits positive contribution embedded into the guide from same-store sales. If you go back through the history of same-store sales, it would have been a positive contributor in most years.

This year in the guide, we're modeling that or we're guiding that neutral, a slightly negative first half that continues off of the Q4 trends and then a moderately positive back half, which is just anniversarying on soft comp. That's one thing to think about there.

And then the other thing I'll call out as it relates to the tax-free shopping component of the guide, we're trying to be conservative around the variables that we know are already showing themselves as having some headwinds in front of them, things like Asian travel tourism tensions between Japan and China as well as some currency dynamics where the outlook on the U.S. dollar relative to the euro was a little soft. It's obviously strengthened since we've had the Middle East conflicts, the GCC conflicts.

But now we do still think that it is important for investors to understand that a strong U.S. dollar is net positive to the demand side of tax-free shopping far more so than the financial translation benefit of a weak U.S. dollar. So for us, when we see this U.S. dollar weakening outlook from the big money center banks, et cetera, in a forecast, we have to make sure that, that gets into the guide.

But then on top of all of that, we also just view that the first year you own a business, and this is a bit of my own philosophy from the many years of the seat that I used to sit in, the first year you own a business, you have to be conservative on it. It's just important. It's prudent. A lot of things can go bump. Obviously, the events in the Middle East are a great example of that.

Yes. I want to get into conservatism in guidance in a moment. But before I do, just given the view you have -- guys, Shift4 is probably the largest processor for hotels that I can think of in the world, certainly for stadiums around the world. Most of the stadiums we all go to, they're processing at this point, and you've grown that extremely well and restaurants. So you have a really good view of a lot of key sectors.

Experience economy, as we call it, yes.

I mean can you just give us a quick snapshot of what you're seeing happening now at hotels? And maybe is it a K-shaped economy -- or restaurants? Stadiums are probably pretty resilient, I would imagine.

Yes. I would say that when you actually look at where commerce is happening, you put it well, right? The experience economy verticals, where folks are actually going shopping, dining, staying, playing, those kinds of areas, that's where you're going to find a lot of our solutions. And what we see is definitely the continued trend of this concept of a K-shaped economy. We can see it in our data, but actually you can see it in a lot of data.

One of the things often cite especially in lodging, because lodging in the U.S. is so perfectly segmented from a chain scale standpoint, that when you pull down data from a third-party provider, one of the well-known ones would be like STR, like S-T-R, right, you can see that the economy versus luxury same-store sales that they're reporting, occupancy stats and the sort, it's pretty clear. You don't have to ask for a proprietary look from anyone. It's pretty clear, the dynamics.

And then anecdotally, we obviously have the benefit of being able to talk to folks. And phrases that you'll hear is, it's not as if the economy end of that spectrum is soft or weak, and in some aspects, it doesn't exist. And so that would probably be trend one. Probably not that new news to folks, but it is consistent with some of the things we're seeing.

I'd say the other thing that we're seeing is that at least to the start of the year, things were looking pretty stable. Things are actually looking pretty positive in the Americas. And I would say the only thing to caveat around that was weather. But for weather, it would have been a really solidly positive quite start to the year.

Okay. That's helpful. Let's take it back to guidance for a minute. I mean, listen, last year, there were a couple of hiccups on the results versus the initial guide. Investors had thought there was conservatism. It turned out to being more in line at or sometimes even a little shy of it. How do we feel confident that right now you've built in the proper conservatism in the outlook that you just gave for the year ahead of us?

Yes. So I think, look, the way to probably think about some of the variables that you could look to that might be a bit different from prior year's guide, we talked about same-store sales as one. So I'm not going to belabor that point. But that is a low single-digit positive contributor to, we'll say, historical guides, historical points in time grounded on the fact that it has historically been flat.

Right. Now you're calling for flat.

Right now we're calling for flat. The other one I would probably call out is that historically, you also had the benefit of inflation-plus pricing environments that, if anyone was to look at their Netflix bill or anything that you have as an expenditure, over the last few years you probably got more, maybe in some instances, a lot more than inflation-plus from a pricing or an ARPU expansion or what have you.

I think the payments industry is no different. And so in some historical years, within the guide, you would have embedded something that looked a little more inflation-plus. And I think that's something that I've tried to call out by saying we're anticipating, and it's now going to age terribly, but we were anticipating a benign inflationary backdrop. A hard thing to say with $90 oil, but that is something that we were anticipating within the guide.

So I do think that those two variables would have been like low single-digit positive contributors unto themselves, each individually, so maybe an MSD kind of impact.

Okay. All right. So you probably did build in a mid-single-digit type level of conservatism in the outlook just based on macro factors.

Yes, I won't exactly phrase it that way, but I would say that those are the things that more tangibly you can call out as differences.

Depending on what the macro does. Okay. Let's shift to organic growth. Again, I mean, Shift4, as long as I've covered it has done an amazing job integrating assets that you acquire that really make perfect sense. But with that said, investors really are kind of hungry to know what the underlying organic profile looks like. Help us frame what you see as this year's organic profile and how that compares to last year.

Yes. I think that the growth algorithm introduction, depending on how you sort of cut and slice it, you're ultimately going to land on a place that suggests low double digits. So that LDD dynamic, it was very intentional in the way that we tried to break down the components of this growth algorithm so that you could see Americas payments-based, again, largest component of the payments-based revenues, that will largely be unaffected by the annualization of any prior year M&A. So mid-teens there. That's about as ex-M&A as it gets for an incredibly mature market and our largest part of our business.

The intention of breaking out a pro forma growth component of tax-free shopping allows you to get at the same concept, right? So this is ex the effect of some sort of an annualization noise. This is what that's doing. And then subscription and other, giving that as a low single digit. So you can basically isolate out the worldwide component of payments-based revenue because that will be very much affected by the annualization of the M&A of Global Blue, of Smartpay and look at the business as a whole and say, I have a pretty clear picture of what this business is doing excluding the effect of M&A.

And it's actually no different than, we'll say, the implied fourth quarter in terms of what was happening from a growth standpoint. And when you look at the year, when you look at the fourth quarter, even what should be implied by the first quarter's guide, LDD is the way to think about the business.

Okay. And just how does that compare to last year?

I would say in last year, and it does tie back a little bit to the components that we just described, so these two macro variables of inflation-plus and Triple S. But I think in last year, that would have been in the third quarter we had reported an 18% rebased growth. And then earlier in the year, when Triple S was actually positively contributing, we were seeing north of 20%.

Okay. Let's shift to free cash flow because as much as I think investors kind of expected more moderate growth expectations than prior Street numbers for top line, free cash was a little bit of a negative surprise to The Street when you came out with flat guidance effectively year-over-year. There were some inputs in that I think it's worth sharing and just reexplaining again.

But help us understand what informed that flat profile year-over-year. And then thinking about what you've talked about medium term for a minute, you talked about $1 billion exit run rate exiting '27 for free cash. Just where do you stand on that? And maybe put this year into context with that.

Yes, sure. So what did we talk about on free cash flow, let's start there. What we tried to give people visibility into is the free cash flow bridge and why year-over-year adjusted free cash flow is expected to be flat at $500 million as a guide point. The biggest component of this is the annualization of interest expense on one side as a year-over-year headwind to free cash flow.

And then the reduction in interest income is probably something that also people didn't necessarily pick up on. For context, we were carrying cash balances that were quite high last year. If you looked at the Q2, for example, Q2 earnings or Q2 10-Q, you would have seen a $3 billion cash balance sitting on the books at a time when interest income was actually generating quite a high rate. So you normalize for those two effects and that gets you the vast majority of the way in terms of the bridge that you need to model.

The second part of it then becomes this concept of the Global Blue, both timing of close and seasonality of the tax-free shopping business. So tax-free shopping is a seasonal business where in the first half of the year, it's free cash flow consumptive. So it does not generate much free cash flow. And then in the second half of the year, the working capital unwinds and it becomes very, very free cash flow generative. So in a year, it just looks like a free cash flow generative business in a conversion rate that isn't that far off from the broader businesses' overall conversion rate.

The issue is that we close on the business on July 3. So in 2025's numbers, you get the second half effect of the positive and you don't have the first half effect of the low consumption. So then I think when we came into this year, I would argue that, yes, as I rewind the clock, I think the communications could have been better such that a business that was public, that we had assumed -- in the business of retail which is obviously seasonal, we would have assumed that to be maybe less of a surprise. But the fact that it is now sort of, I hope, an understood fully transparent kind of part of the equation, I hope that's now fully out there.

And then the last part of the free cash flow piece is the component that is we are investing. So integrating the business this year of Global Blue is also about expanding pan-regionally across EMEA and APAC. As we do those things, we are investing. And that shows up in the free cash flow bridge. That shows up in a lot of forms of investments such as investments in go-to-market infrastructure, and we do call it out as well, investments in AI. And within that whole bridge, when you step back, the majority of it is the capital structure annualization. Then you have the effect of Global Blue and then you have the effect of international expansion.

So then the second part of your question, how does that now flow into the previous aspirational but achievable goal of a $1 billion exit run rate '27 figure that had been previously described? I would say that it is important for people to understand that the algorithm that you look at in '26 for free cash flow, that's what you should be focused on. That's what I'm focused on, right? I'm not here to provide an outlook in my first year as a CFO, in my first year in setting the guide. I think what people need to hear from me is '26.

They need to understand how do you model the growth algorithm of the business, how do you model free cash flow in the business. And I really want you to take away from it that in that bridge, the incremental free cash flow conversion is called out at 60%. That is the number to look at for modeling incremental free cash flow conversion. So you pick your sort of approach to adjusted EBITDA dollar growth, you convert that at 60%, and it would be hard to get to a significant expansion on overall adjusted free cash flow from the 42%, right?

You're going to grow probably single-digit percent points on the 42%, but the math of it is fully laid out. And so that's probably my #1 most important takeaway for people when they ask me about free cash flow because I'm not here to set some sort of a guide point beyond '26.

Okay, All right. I think we understand. All right. Just building off of what you're talking about with Global Blue, I mean, international expansion, it should provide for, I think, a nice cross-sell opportunity when you think of internationalization of business for even more than you've already done.

Yes, absolutely. I mean it is one of the most exciting parts of the business right now. And it's because you have to start with like the macro of the framework, the competitive framework, the industry structure in the markets that we're expanding into. We're going after unintegrated bank terminals and we're bringing solutions that win and have battle-tested, winning proven capabilities in the most competitive market in the world.

And that feels like the right place to therefore invest your incremental and marginal dollars. So when people ask, could you accelerate investment and really close the gap on the market leader on restaurants in the U.S.? I say I could. But I'll generate a heck of a higher return going after unintegrated bank terminals in the European market, where we're bringing battle-tested market-leading solutions. That's just a better utilization and allocation of capital.

But I think that it's an exciting place also because we just made an investment in a business that gives us day 1 pan-regional, full across-the-board European infrastructure and APAC infrastructure. But let's focus on Europe for a second. Global Blue, as much as the cross-sell is exciting, as much as the market-leading position within a very killer application within retail of tax-free shopping is all exciting, to us, one of the most underappreciated elements of the asset is day 1 pan-regional instant infrastructure in which to bring all of our products into, right?

That is something that, I think, is one of the most underappreciated aspects of the business. And you have to appreciate, too, that when we get the core product of Shift4 One, which is tax-free shopping, plus payments, plus currency solutions all into a single device out into the market targeting for 15 countries this year, right? When that gets out there, you have to appreciate the amount of payment platform development that also has to happen so that local payment methods, local wallets are all accepted.

All the operations, support, provisioning infrastructure had to be in place. All of that is totally usable for every other of our card-present solutions serving the experience economy. And oh, by the way, we have a lot of customers that are just waiting for us to turn the lights on that will follow us into the market.

Yes. It seems like a great -- I mean, look, when we think about Shift4 right now and going ahead, you have, let's call it, $250 billion of end-to-end volume. I mean you have $100 billion of volume you could attack just with Global Blue of SMBs out of the $500 billion that Global Blue has. That should make perfect sense, I think, for your solution that you can bring over on to your platform.

Yes, that's exactly right. And that's going to be the focus area. It's interesting because it's a business whose backbone was built on enterprise because serving the largest global luxury brands and having like an 80% market share doing it, they are excellent at that. The SMB DNA that Shift4 has to bring payment solutions, that actually end up becoming, as folks in this room will know, just a really good unit economic proposition in SMB.

Like when you do payments, SMB is a really powerful part of the economic segments. If you're doing tax-free shopping, enterprise is what keeps all the lights on and it's the best place to be because the volumes are so good. But for us, we actually are bringing an SMB-first DNA into a business that has been less focused on its SMBs. It has tens of thousands of SMBs because a small boutique in Milan does want to have and offer tax-free shopping, but they are not nearly as valuable to the Global Blue business, to the tax-free shopping business as pick your luxury global brand.

And so it's an interesting synergy that we bring to the table on just focus, on competency. An enterprise-first business meets an SMB-first business and we now have a product set that will make the unit economics of SMB super attractive when you put together tax-free shopping, plus payments, plus currency solutions. So we're going to go after that opportunity as the primary focus.

I mean has there been any evidence of success you could point to so far? How has it been going? And just what's the timeline on this? Because, again, this is, I think, probably one of the most important data points to get the stock working, is success with this integration.

Yes. Look, I think that being live in multiple countries with multiple merchants on a product that's never existed before is a huge proof point and it's a huge point of pride. And to be able to then set a target where you actually want to expand very quickly in opening multiple countries at once, which does mean not just this product but all of the payment infrastructure behind it, that is no small feat.

And from that perspective, essentially, when are you actually going to start seeing the realization of the $80 million of revenue synergies? And I think that, that remains on the pace that we guided to. And I think that it's on us to be able to prove that, that could be accelerated. But I'm not here to make a change right now around the previous guidance that was set around revenue synergies.

Just remind us the timing again.

Yes. So $80 million fully realized in the '27 time frame. So you'll actually see proof points in the year of '26. But ultimately, I'm not here to change the outlook on the overall.

And when we think about profitability of the company now, because, obviously, when you integrate assets, there could be some impact to margins and noise short term. I mean how do we think about overall margin profile of the core business, more of the mature assets, I guess, you could say? And just levers you can use to drive margin expansion over the medium term.

Yes. I'm glad you asked the question that way because it is a tale of two different markets, right? The idea that you have an Americas mature market where the margin profile is really attractive, that's embedded within the business. And then you have our expansion, and this is putting aside the Global Blue transaction. Just the expansion into any new region, any new market is going to come with a margin headwind because until you get the gross profit density in a country, you will have a lower margin profile.

Just the laws of physics of it. And that's what we're experiencing as we continue to expand abroad. So when you think about the EBITDA margins of the business overall, this idea that the guidance would suggest sort of a 47% EBITDA margin, that EBITDA margin profile does still have within it the expansion headwinds. And yes, it has a combination of the profile of Global Blue, which we had previously disclosed was a low 40s EBITDA margin business. But being in a new country, and in the case of Europe, multiple new countries, you have much lower margin profiles as you build up density.

So I do think that it is prudent to understand that there are puts and takes within where that EBITDA margin can go. And in some respects, the faster we're growing, the more we're growing inside of these expansion markets, the more you might see some of those margin headwinds. But we will do what we've done historically, which is try to find places to allocate capital and try to build up density more quickly, which then might allow us to potentially improve upon those margin profiles.

But I do think people need to understand that about this interplay of fast growth and expansion, what does it do to margins, versus if we can allocate capital, we might be able to improve margins.

Right. Okay. DCC, Dynamic Currency Conversion, has been an opportunity for you guys really more so now, especially in light of Global Blue having that offering you can utilize. Are you going to be ready to use that in the U.S. for the World Cup? I mean where are you on that opportunity? Because it seems like consumers coming into the U.S. should want to use it. We haven't historically seen it in the U.S. that much.

Yes. It's interesting because, I would say, in -- so DCC is our -- and I'll step back. And let's not even just call it DCC, like FX-based revenue or currency-based revenue products that we can bring to consumer to business payment environments is one of the most exciting things that is again an underappreciated component of what we acquired within Global Blue because, yes, it is an opportunity to cross-sell probably, first and foremost, our European base, right?

The idea that you can actually bring a DCC solution that's up and running and working, cross-sell it onto our European base, that is a really attractive revenue synergy opportunity. This idea of bringing it to the U.S., which for folks that have followed us for a while, we were actually developing our own developed DCC solution. When we acquired Global Blue, we were able to actually put that on pause and bring this solution in.

The adoption of DCC, the consumption of it isn't that prevalent in the U.S. because, for the most part, travelers understand that everything is indexed against to the dollar. So it's less about the opt-in and the usage of it. But where it becomes incredibly competitively important is that on the margin, there are hotels that when they run the RFP do say, do you provide DCC? And we've actually lost RFPs on the bags that we actually didn't. And that's why we were developing it to begin with.

So I would say it may not have as pronounced of an impact on, we'll say, the take rates or the adoption or the upticks. But I think competitively, if you are going to win things like the World Cup or other massive global events, you have to have it just to play. And that actually shows up in hotels and that actually shows up in other forms of international commerce that might be trying to come to the U.S.

So time-wise, by the World Cup?

You got it.

All right. I want to leave time for the audience for a couple of questions. So let me ask you a couple of quick ones. Just Bambora's, I think, around $80 billion volume opportunity to convert over, where are you on that? What's the timeline on that? Because again, I mean, that's something you've done well with gateway conversions before on.

And then when I think about all the other deals you've done, I mean, have you really integrated everything properly, whether it's Vectron or Givex or Eigen? It seems like a lot, and I just want to make sure you guys have done what you need to do on those deals before you move on to the next.

Yes. I like that question. It's like the question I would ask when I was on the Board. It's like, are we there yet? Are we realizing yet? So obviously the Bambora transaction just closed. But in the sign-to-close process, you get a lot of time to plan. We are really confident in the underlying ability to execute on gateway conversions. That is probably the most successful transaction type in terms of the payments cross-sell or the monetization of payments off of any other payment-adjacent product. So it's something we're very excited about and why you couldn't walk away, why we're excited about that deal.

The second part, though, this idea of integrating in general. I think the pace of progress that we have around integration continues to meet what our expectations are. As a culture that constantly preaches delete the parts, get flat, stay flat, we truly, truly integrate at an operational level, at a revenue model level. And from our perspective, the pace of those integrations is going as we would expect. That said, we have stated in the past that we do think, and we can analyze this, that there is a 200 to 300 basis point opportunity with some of our older acquisitions from a margin standpoint that could still probably be further optimized, further integrated. And that remains.

Okay. All right. Last question for me is just capital allocation. I mean I think you have a $500 million left in your current buyback off. And when we think about your use of capital going forward, just I'm curious to know if M&A is still going to be a big part of the story given how much you've already done and need to probably keep digesting. And so just help the audience know what your strategy is and your thought process is there.

Yes. I'll start by pointing to one of the things that's been an incredibly consistent part of what we've done is operate with a capital allocation framework that allows us to be very thoughtful about driving the best relative returns with capital across acquisitions, across organic investments into customer acquisition, across managing things like share repurchases and the sort.

And I don't think anything should be viewed as a change to the way with which we look at the capital allocation framework that we published and talked about for a long time and that it is a balancing act across all of those fronts.

Now to your question, though, when you sit in an environment that we've just been in and continue to be in where we're seeing quite a valuation change, a valuation paradigm shift for fintech as a sector as a whole, and certainly ourselves, it is hard not to ignore how compelling the opportunity of share repurchases continues to be. I don't think we shied away from it in the third quarter results when the share authorization was first announced. And I don't think that, that has changed in our tone. And so I do think that, that remains an important part of the capital allocation framework.

But meeting the high bar of relative return from an acquisition standpoint, there are things that are starting to show themselves as hitting that bar. They may not be large things but they are things that hit the bar and strategically advance and accelerate an existing priority, things like European card present distribution, tuck-ins and the sort. So I think that those are going to be things that we're always going to be balancing within the capital allocation framework.

Okay. We probably have time to take one question, if anyone has? Yes, Scott.

I guess, Chris, on the stadium opportunity, you guys have obviously shown a ton of success around adding new stadiums, really kind of capturing the market there. Just wondering if you could talk about sort of where the incremental opportunity is from here on stadiums, whether it is continuing to add new venues, expanding share of wallet, just that overall opportunity.

Yes. I'd say it's two fronts. Knowing that the time is tight, but one of the biggest and most exciting, which isn't necessarily something net new for an audience like this is there are a lot of revenue centers inside of stadiums and entertainment as an environment. And F&B and retail is where you're going to find us in the most prevalent.

But the ticketing opportunity can be a volume jump that is multiples of what is in F&B and retail. And sort of the opportunity for us to continue to get the payments volume of the ticketing side of the business, both season as well as event-by-event ticketing, that remains a huge opportunity of growth within sort of this land and expand of stadiums and entertainment.

And then the second one is we are the market leader on stadiums and entertainment with commerce technology solutions in one of the most competitive markets in the world in the Americas. We are just starting on everywhere else. And so the ability to bring that product globally into the EMEA region where we have our well-invested infrastructure, the APAC region, et cetera, that's a really exciting opportunity for the team.

Okay. All right, guys. I think we'll stop there. This is great, Chris. Thank you so much, guys.

Great. Thank you so much. Yes. Thanks, everyone.

All right. Let's hope this works. Good morning, everyone. All right. So this is just a quick overview video about us at Shift4.

[Presentation]

Okay. Awesome. Thank you for that, Chris.

So I wanted to jump in here. For those that are less familiar with the Shift4 story, I mean, can you just provide a quick overview of the company and including what differentiates you versus other payment processors?

Sure. And first off, thanks, Madison, for having us. Always a great event to be a part of. So Shift4 is a business that really, when I think about it in sort of the 10 years that I've been involved with the company, is really synonymous with this notion of integrated payments when payments comes together with software, wrapped with proprietary data solutions.

As that -- as those convergences have been transpiring within our industry over the last 10 years, Shift4 has really capitalized on being at the center of that. But separate in a way from that megatrend or that theme of payments meets software meets data, Shift4 has always been focused on the most demanding commerce environments.

So we talk about it there synonymously with the experience economy. What are we really saying? We're saying that it is not 3 lines of code that runs payments integrated to software in a place like we're sitting in right now. In a complex resort ecosystem environment, in merchant bases where there are tens of revenue centers, not just one point of checkout, in environments where you're talking about stadiums entertainment, just the complexity of cross-border dynamics, multi-currencies, multiple payment modalities, we run towards that challenge.

We look for the most demanding environments. And as a result of that, our experience economy vertical leadership has manifested in restaurants that are complex, manifest itself in being a leader in lodging, a leader in stadiums entertainment, and then most recently now, a leader within luxury retail, in particular, for those high affluent travel shoppers. And that's not where we intend to stop.

I think our model is to continue to leverage the scale that we have to identify all of the newer, harder, most demanding parts of the experience economy and announce leadership vertical after leadership vertical thereafter and do so all on the backs of this broad-based integrated payments meets data trend that's expanding globally. And so that's a little bit about us.

Okay. That's a helpful background. And then I wanted to ask about you specifically. You're relatively new to the CFO role but...

Where is this going?

Certainly not new to Shift4. I'd love to just hear about what attracted you to kind of take the CFO role? And what are some of your key priorities here as you get in the business?

Yes, sure. So it's going to sound like a bit of an academic answer because of like the framework that I've applied when I was making like my decision. But when you step back and look at where we are on the -- where we are in fintech, where we are in integrated payments, in the backdrop that we sit in right now from a market standpoint, I actually think that one of the best ways with which to express the growth of the industry and really the expression of that growth globally is through this company.

And so in my past life from allocating capital, investing capital on a direct basis, the idea that there are potentially huge advantages to do that through a business that already has a proven track record over a quarter century of having been able to identify areas to thematically invest behind within the experience economy in order to be able to bring their solutions to synergize those areas and to be able to like compound and build value there, that's definitely the most appealing part.

If you are already interested in understanding like that this is a megatrend that isn't just happening in the Americas, this notion of integrated payments meets software, meets data. This is a trend and a need that's happening all over the world. That's probably piece one.

I think piece two, the business is at a really interesting inflection in terms of like where it sits in the relative scale and size of the ecosystem that is integrated payments. Big enough and scaled enough to be able to expand borders, to expand globally with kind of like the bold ambition and pace that it always has had. At the same time, still small enough and nimble enough to be able to make bold decisions that allow it to more aggressively enter markets with speed, with disruption in mind and have those attributes.

So having that kind of dynamic of being both scaled enough but also nimble enough is a really rare attribute for a business that's trying to compete in an area that's going through, we'll say, this like this transformation and inflection at an industry level.

And then at a personal level, like I've known so much of the team, so much of the organization for almost 10 years, I've kind of worn every hat when the company was private within the context of wearing a lot of hats in that role. But then as the company has been public, playing every role on the Board, chairing committees, including audit, most recently a lead Independent Director.

And through that journey, it's hard not to kind of really make friends with the folks that you're working with. And it's a really special group where the culture of the company, even at the scale point that it's at, highly entrepreneurial, highly gritty and definitely a culture that wants to win. So all things that are a lot of fun to be around.

Awesome. And before we dive kind of in more detail of the business, I would love to get your thoughts on AI, just given what's going on in the market. Just would love to hear about where you see potential opportunity for AI, but also what risks you're assessing when it comes to AI?

Yes. I think you can start on when you're looking at such a generational change in technology, and technology is obviously something we in the company are around constantly, the idea of looking at it through the lens of, first, like what are the ways with which this technology is going to create disruption, going to create challenge, going to like approaching it through the lens of, okay, paranoia, right? Like that is one way to look at it.

And I think it's very easy for a lot of companies to almost get petrified by looking at things through that framework. In our world, I would say that the opportunity side is probably the most compelling because we are unafraid to adopt technology. That's just not ever been a problem within the DNA of the business. You can look at the track record across the last few years to know that change is the only constant in what we do.

And so for us, I think there's a lot less of that kind of petrified approach to it and a lot more of the opportunity side approach to it. Now the question is where and the question is pace. And because nothing comes for free, even though we're living in what seems like an early phase of abundance where access to AI technology is at almost like a limitless type of approach in cost, like token costs are rising in various parts of model consumption. And you have to be mindful of that, especially sitting in the seat that I sit in.

But put aside the fact that you know how to control costs around it, you'll be optimizing constantly. The area of opportunity to unlock margins, the area of opportunity to massively enhance products, the area of opportunity to produce products on much tighter cycles, faster features, faster time to market, those areas are like the scratch the surface areas.

And I think that we are going to see a lot of pace of change and a lot of opportunity as a result of it. The core question that I think you all need to ask is, is the company that I'm looking at, do they have the flexibility, the culture, the boldness to be able to embrace technology and change quick enough to be able to both capitalize on the opportunity and keep pace with competition around the adoption of these things.

And before we get into Global Blue, I did want to dive into 4Q a little bit, just a little bit of a clarification here. So there's been a lot of debate coming out of earnings around just the contribution from Global Blue and Smartpay in 4Q. You guys talked about 18% organic growth in 3Q. You talked about 23% growth for the year, excluding those businesses. So you gave enough detail to help investors kind of back into it. But can you just level set so everybody is on the same page around what kind of growth you saw specifically in 4Q, excluding the contributions around Global Blue and Smartpay?

Yes. No, it's a great question. And you're right, Madison. I think we provided the pieces. And I think it should be unambiguously clear that if you do the math on it, the quarter, excluding the contribution of acquisitions, is a low double-digit growth quarter. And I think we knew that going in, right? That fell entirely in line with the expectations of what we were looking at when we looked at the fourth quarter.

If you've been following the business or you sort of look at the historical financials on the business, that Q4 comp was a tough comp going in. It was always going to be the stack comp across 2 years. You're talking about a fourth quarter that was growing off of a mid-30s growth quarter in the prior year and -- which was already growing off of a mid-20s growth -- or high 20s growth quarter the year before.

So the 2-year stack comp we knew going in was going to be -- was always going to be challenging. The spread dynamic that we saw as a result of the enterprise positive mix shift, which obviously weighs on spreads, that definitely was a variable that impacted towards the -- definitely impacted towards the lower end of that kind of range of outcomes, but still solidly in line with the range of outcomes that we had guided to from a quarter standpoint.

And then, of course, the trends coming out of Q3 that we saw on SSS, which I think we were incredibly transparent on and incredibly clear on that if those trends persisted, we were going to land towards the lower end of that revenue range, which contributed to that kind of low double-digit outcome. And that happened, but we also had some weather events in December that kind of added to it.

When you take it all as a whole, I think everything fell still solidly in line with the range that we expected, which is why the full year spread range still ended up above 60 basis points and why the quarter's guide still ended up inside the range that we guided to.

And I think it's important, though, that once you take that as sort of, okay, this is what happened in the quarter ex the contribution of those businesses, and what I think is important is to then understand, but then how do I translate that into your go-forward guide. And I think that's where people are really getting confused around how to do that.

Yes, certainly. And we'll dive into that a little bit more here. But I did want to shift gears to Global Blue. That was the biggest acquisition in company history. You guys paid about $2.5 billion. The deal closed a few quarters ago. But can you just remind investors what exactly Global Blue does? And why was this such an attractive asset for FOUR to own?

Yes. So indulge me for a minute because I'm going to answer this in sort of a multi-parter because I think any time you think about how does Shift4 identify an acquisition, it has to be understood that it is always the product of a multiyear effort having tracked either the industry vertical that it sits in, the -- unpack the industry ecosystem, whether that's the software integrations, who are the competitors, what are the value propositions that either win, thrive and certainly lose in a given space.

Luxury retail, tax-free shopping, the things that make up the most important part of Global Blue, that, in our opinion, is a killer application within the world of retail, full stop. You can unpack all of the different commerce-enabling applications inside of retail, you can then narrow it down massively to who actually influences a payment transaction, like who was touching the payment transaction. And you will find a very short list of companies that have the definitive value proposition difference that Global Blue has.

With an 80 share, a 4x relative market share to the next competitor, a mission-critical component of a commerce enablement for anyone that's in luxury retail, working with all of the marquee brands and doing so globally, once you add that to your criteria set, it's one of one, unequivocally clear. And the reason we want that kind of a totally differentiated value proposition inside of retail is because there are a lot of undifferentiated retail applications.

Like if you had bought a retail point of sale, you're dead in the water. That's a terrible idea from an industry structure understanding perspective because you don't even know whether the in-store commerce experience is going to be the tech stack that wins for the omni commerce of that merchant, right? E-commerce being as prevalent as in-store presence, in-store commerce for a lot of retail merchants. So you could have gotten that tech stack completely wrong by making a bet one way or the other.

And importantly, POS doesn't have nearly the same level of influence over the payment transaction as it does in, let's say, restaurant, or even in stadiums and entertainment. So I think that's like the important for example, within how do you land at that place that says a tax-free shopping solution that is a one of one. Why is that -- why was that so important?

It's important to us because our model is about bundling off of that strength, right? It's about taking that tax-free shopping experience, which is one of one, which has the strength and relative market share, which has all the customer references, which already has kind of the pre-existing treasure trove of data, like a data asset on affluent travel shoppers that no one comes close to.

Once you have that, you're well moated to be able to then bring in the cross-sell of payments, of currency conversion, of gift card and be able to have a conversation with the most global marquee luxury brands to say, hey, we're probably not ready to be your processor today. But as you start to think about geographies that we're in, that maybe your preferred processor is not in, you're going to give us a shot.

And then as we start to think about unifying your experience across borders, you're going to give us a shot and maybe it'll start with us getting a 20 share of your overall payment volume, but we're always going to have a shot. And one day, when we're ready, you might give us the majority.

And I think that notion of being able to build off of that killer application is one of the most important components, the thing that I don't think people appreciate because they do understand the revenue synergies, the cross-sell capability, the way we talk about applying our model to tax-free shopping, the thing I don't think people understand about another attribute of Global Blue that we liked, it gave us day 1 instant pan-regional EMEA, APAC infrastructure from which to bring all of our battle-tested Americas market-leading solutions into the region instantly.

And it's a business that has like truly, truly global credentials with everyone from merchants and customers, but frankly, fiscal authorities is who they serve within this tri-party network. And that kind of credentialing from which you can bring your market-leading solutions in, I think that's a critical underappreciated asset.

Okay. That's very helpful overview. And then just on the 2026 tax-free shopping outlook, you guys are kind of targeting mid-single-digit growth here. Can you just help us unpack how much of that mid-single-digit growth is driven by kind of growth with existing customers versus signing new customers? And then has the growth algorithm of the business changed at all since you acquired them?

Yes. And just to be clear, it's mid-single-digit pro forma growth. Obviously, the annualization effect will have a much larger impact on growth of the business. The growth algorithm of that business has not changed at all. The growth algorithm of that business, at its core, separate and away from the synergies that we are going to employ as we continue to execute on the cross-sell of the all-in-one device and the all-in-one value proposition of TFS meets payments meets currency conversion.

Separate and away from that, the growth algorithm of the business has not changed. For the most part, the growth algorithm of that business is P times Q. It is a volume metric that they call sales in store times a spread metric, no different from the way we think about things in merchant acquiring.

Now the core components of that sales in store, I think we talk about quite a lot as having different drivers, different macro drivers that can impact things like demand for cross-border travel, demand for -- like demand that's impacted as a derivative of tourism between nations. And it is impacted by cross currency like a euro-USD cross. And so you have to like factor that in, which I think we talk quite a lot about.

But other than that, the core of that growth algorithm is you're growing with your customer base and the luxury backdrop is one that tends to have a really powerful amount of inflationary pricing built into its model. I think like a Hermes bag or a Chanel bag has probably outperformed most stocks. And I think that, that dynamic is kind of baked in within the industry.

But I do think that it's a very simple kind of a P times Q model. And when you have an 80 market share, market leader, a 4x relative market share, you're winning customers, but frankly, at this point, the logos you're winning aren't necessarily like the biggest contributors to driving the growth, you're already riding the right horses from a winners standpoint. And so you're really moving with just the components of that -- those broad trends.

Okay. And then I did want to shift back to the payments business. And kind of starting here in the Americas, you outlined a target again for 2026 for mid-teens growth. That should be a pretty clean number. I don't think there's really any M&A contribution there. But can you just talk about as we think about the mid-teens, like what are the key verticals that should contribute this year? And then given you guys do have a pretty strong presence here domestically, I mean, how much runway is left for you guys to kind of continue to take share and grow at these levels over more -- a longer period of time?

Yes, sure. So within our payments-based revenue, which is kind of the North Star within our disaggregated revenue bucket, we tried to lay out a growth algorithm in the latest shareholder materials, which is like a net new concept that allows you to see payments based deliberately separate from tax-free shopping, so as investors acclimate to that disaggregated revenue line.

But you look at payments based and what we try to do is break out the 2 distinct narratives of our Americas region, which will make up the majority of the revenue within payments based. You look at that Americas region, it's the mature market that we've been in for multiple decades. It's where all of our market-leading experience economy, commerce solutions are present and it's a market where in '26, it will be largely unaffected by the annualization of prior year M&A.

It's a clean figure. And that's why we wanted to show it to you. That's the mid-teens, and we think our outlook there is mid-teens growth in the North Star of payments-based revenue, and that's a separate contrast from the worldwide segment, which is growing off of a small base and growing at a really high rate, but is impacted by the annualization effect of M&A. And we wanted to make those points clear.

So your question on the Americas, mid-teens, which, for all intents and purposes, if you're looking at the relative growth rate of the baseline market, that's like a 2.5, 3x, north of 3x growth rate to the baseline of the market in the Americas. We think we have a ton of runway.

I mean the idea that you can look at a market that's probably our most mature, which is restaurant, and we acknowledge that we're not even the leader in it, right? So you then say, okay, let's look at the other areas you're in, whether that's lodging, whether that's stadiums entertainment, whether that's retail as a whole.

And that's without even us continuing our track record where since IPO, almost every other year, we've announced being a leader in a new vertical, and I don't think that we intend to stop that, right? That's something that is not even baked into the algorithm, that continues to provide that perspective of compounding growth that I think will continue to allow us to get into that market share in the Americas.

But one thing I do want to say before we kind of leave the Americas and this idea of the mid-teens. Like I think that it is important that people understand that even though we've broken out payments-based revenue in the mid-teens, it's not as if we don't acknowledge that when you look at the algorithm as a whole, that you can land yourself to a place that says, okay, this is on a blended basis, sort of a low double digits kind of a growth algorithm.

When I think about what's happening in sub and other or when I think about what's happening within TFS and I think that, that math is totally valid. I think that, that math is completely fine. And when you think about where we are coming off of in the fourth quarter as a low double digit, I think anybody that's thinking it's de-selling from there is also just way off on the math of Q1 because they're completely mismodeling the contribution from M&A in the first quarter, right?

There's seasonality within the business lines that would definitely make it inaccurate to model Global Blue flat Q4 to Q1. And so I just think that the path that we're trying to explain of Americas is a mid-teens business, blended with the other parts, I understand the low double-digit piece to it. But we're trying to give you those building blocks so that we can really be -- we can really understand how to model the business.

Yes, that's very helpful. And I know we're getting close to time. So I'm going to jump around a little bit, ask on free cash flow because that's very topical. So the guide that you have out there does imply that kind of free cash flow conversion will be down relative to 2025. You provided a really detailed bridge, so we don't have to kind of go through some of that. But just longer term, how can investors think about the reacceleration of free cash flow conversion? Do you think that kind of 50% plus number is still right on a normalized basis?

Yes. I would say the place to look is everything is about incrementals. So in that free cash flow bridge on -- I think it's like Page 13 in the shareholder materials, is the concept that, yes, there are components in the bridge, and I won't belabor them because we're running out of time. But the part that I would want people to focus on and take away is the call out of the incremental free cash flow that's converting at a 59% rate implied in the guide, a 60% rate in the Q1.

Like mathematically, asymptotically, that's where you should be driving forward growth to go, right? You can pick your number on the dollar growth that you think is going to be achievable within adjusted EBITDA. But when you convert it, you should be converting it at the incremental level.

And from there, when you actually think about that incremental free cash flow conversion, that's converting off of a largely fixed cost capital structure. So capital structure was probably one of the biggest variances in understanding in that free cash flow bridge.

We have an 82% fixed cost capital structure. And so growing off of that largely fixed cost capital structure means that those incremental free cash flow margins should be able to expand. And that's separate and away from the expansion in the operating leverage of the business as a whole. So I think that when you think about the modeling exercise of it, you got to be factoring in that that's asymptotically what you should be modeling towards.

Okay. And I'm sure we could fill another 30 minutes here, but unfortunately, we're out of time.

Good thing, I'm here all day.

Yes, exactly. Really appreciate you being here with us.

Yes, Madison, thanks very much.

Absolutely. Thank you.

Hello, and welcome to today's Shift4 Payments, Inc. Q4 2025 Earnings Conference Call. [Operator Instructions]

It is now my pleasure to turn the meeting over to Thomas McCrohan, EVP, Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone, and welcome to Shift4's Fourth Quarter 2025 Earnings Conference Call. With me on the call today are Taylor Lauber, our CEO; and Christopher Cruz, our Chief Financial Officer.

This call is being webcast on the Investor Relations section of our website, which can be found at investors.shift4.com. Today's call is also being simulcast on X Spaces, which can be accessed through our corporate X account at Shift4. Our quarterly shareholder letter, quarterly financial results and other materials related to our quarterly results have all been posted to our IR website.

Our call and earnings materials today include forward-looking statements. These statements are not guarantees of future performance, and our actual results could differ materially as a result of certain risks, uncertainties and many important factors. Additional information concerning those factors can be found in our most recent reports on Forms 10-K and 10-Q, which can be found on the SEC's website and the Investor Relations section of our corporate website.

For any non-GAAP financial information discussed on this call, the related GAAP measures and reconciliations are available in today's quarterly shareholder letter.

With that, let me call -- turn the call over to Taylor. Taylor?

Good morning. It's great to be speaking with you all. 2025 was yet another pivotal year for Shift4. We produced record results executed on transformative M&A, grew nicely and diversified the quality of our business. That's all while overcoming the occasional setback in more ways than one.

We also fundamentally strengthened our global footprint, our technology capabilities and organized our talent around our priorities that will continue to move the needle in 2026. As mentioned in my shareholder letter, the rapid expansion across multiple verticals has created confusion as to exactly why we win and who we compete with. This is understandable, but from our perspective, each vertical we serve is carefully selected based on the lessons we've learned over 28 years.

Contrary to popular belief, we are in these verticals because we view the competitive landscape as narrow and as such, typically have fewer -- one or fewer good competitors in each vertical.

To simplify things for everyone, I will succinctly say that we power the experience economy. We enable businesses to deliver the moments that matter and can be found anywhere, you shop, dine, stay or play. These experiences demand high availability and often in-person engagement and come with high expectations from both the guests and the merchant. What as little as 5 years ago, might have been Shift4 powering a night out at your local -- at your favorite local restaurant has evolved into us earning the responsibility to power some of the largest global resorts operating 24/7, championship matches and so much more.

In a world of constant innovation, especially digitally, the skill sets to power high-demand person experiences is increasingly valued.

Now to touch on some highlights for the quarter and the full year. We closed on the acquisition of Global Blue back in July, marking our entry into the luxury retail vertical. As a quick reminder, Global Blue is a market share leader of tax-free shopping capabilities to merchants selling luxury goods with the #1 market share globally and a 4x relative market share to their nearest competitor.

Global Blue's business remained resilient despite the weakening U.S. dollar and rising tensions between China and Japan. While a weaker U.S. dollar translates into higher prices for those traveling to Europe, having a business over-indexed to wealthy consumers remain the key benefit in this K-shaped economy.

The integration of Global Blue remains on track, including the timing of revenue synergies to begin being realized this year as expected. As you can see from our materials, we continue to add many new merchants and can increasingly be seen anywhere you shop, dine, stay or play with many of these wins a direct result of us successfully cross-selling payments.

We powered payments at the big game at Levi's Stadium in early February. So congrats to all you Seahawks Fans. And we are constantly renewing key merchants and recently signed a 5-year renewal with Choice Hotels. Some other key milestones. In Europe, we continue to add many thousands of new SkyTab POS merchants across the U.K., Ireland and Germany, ending the year with over 80,000 merchants outside of the Americas, which is before cross-selling any Global Blue merchants.

Canada is also a focus as we've only recently had full stack capabilities in the region, but inherited many world-class customer relationships from both the Eigen and Givex acquisitions. We enter the Australia and New Zealand markets and now have a substantive sales force via the acquisition of Smartpay. This progress translated into solid financial performance, including nearly $2 billion of total gross revenue less network fees, representing 46% year-over-year growth. And that's excluding -- when you exclude the contribution of Global Blue and Smartpay, we delivered roughly 23% year-over-year growth in gross revenue less network fees during 2025. $970 million of adjusted EBITDA, representing 49% adjusted EBITDA margins and $500 million of adjusted free cash flow. We are proud of both of our margins in light of ongoing investments we're making in both products and expansion.

We introduced an all-in-one payments, DCC and tax-free shopping terminal last year that we began piloting in several European countries. We also invested heavily in making our restaurants, sports and entertainment and other products suitable for the global stage.

I want to stress that our story is not a complicated one. We are experts in handling software, hardware and payments and demanding verticals and in the most competitive market in the world, the United States. We've grown from an SMB restaurant-oriented technology business to powering commerce across the experience economy, and our most meaningful growth has been as a public company for all to see.

We are now taking those lessons learned and our industry-leading products out into the world. One only needs to study our evolution in the U.S. to understand what we will be doing and less mature and often less competitive markets. Unlike our history in the U.S., we are aided by excellent beachheads provided to us by acquisition and already have a presence in over 75 countries around the world.

As we look to 2026, the macro environment remains dynamic, but we view the diversity of our end markets, our disciplined approach to customer acquisition and healthy operating margins as affording us a degree of resiliency and optionality relative to many of our peers.

In terms of priorities, I'm focused on the following: We only just begun delivering our all-in-one payment terminals throughout Europe. As mentioned previously, the Global Blue tax-free shopping product is unrivaled. And when combined with eligibility detection at the point of payment, adds meaningful utility to retailers of all sizes. We believe we can add many thousands of merchants as a result of this capability and are targeting 15 countries for launch in 2026.

Our go-to-market motion across these countries will allow us not just to win retail merchants but also deliver our restaurant, hotel and stadium products and replicate the vertical success we've had in the U.S.

While on the topic of the U.S., we still have plenty of market share to win across our key verticals and enabling DCC across our merchant base will be particularly valuable in anticipation of the World Cup this year and the Summer Olympics in 2028.

We continue to leverage our restaurant merchant estate to inform our road map for SkyTab, which has been growing nicely in both customer counts and volume per merchant. To better leverage the larger ship for brand and our presence in the broader experience economy, we will be rebranding SkyTab to Shift4 Dine later in the year.

Asia and the Middle East are also increasingly becoming important strategic markets for us, and in particular, Japan and the Kingdom of Saudi Arabia. These are large markets that align perfectly with our core competencies and it only offer one of our products today.

And lastly, our AI road map is extensive on both the operational and product fronts. We've partnered with XAI for broad-based adoption of CROC in virtually every area of our business. We've deployed AI assistance within our key products to help resolve inquiries more quickly and with less human intervention. These tools have recently been expanded to providing operational insights to our merchants as well.

We are building predictive models that analyze merchant signals to prevent churn before it happens while leveraging the vast trove of data we collect from customer interactions to identify and resolve customer pain points more rapidly than ever before.

On the productivity front, we've seen a doubling in our code production as a result of broader adoption of AI tools within our technology teams. And many of you know that Palantir has been powering our mission control platform for several years at this point. So none of this should be a big surprise.

Before I turn the call over to Chris, I want to summarize the simplification transaction announced earlier this year. We've successfully collapsed all B and C shares previously held by our founder into Class A common. As a result, Shift4 is no longer a controlled company under the NYSE rules. Going forward, Jared will own approximately 27% of our outstanding Class A shares with voting rights that are parpass to all other shareholders.

Additionally, Jared has agreed to transfer all future benefits of its tax receivable agreement to the company, permanently eliminating an estimated $440 million of future TRA payments. We believe these improvements to our governance and capital structure significantly broaden our appeal to the investment community.

In summary, 2026 marks a new chapter defined by a simplified corporate structure, improved disclosure and clear strategic focus. As we expand our footprint globally, we are laser-focused on execution, ensuring we deliver our immediate financial goals without sacrificing the balance that comes between growth and margins.

And with that, I'll turn the call over to Chris.

Thanks, Taylor. 2025 was another record year for Shift4 across all financial metrics underpinned by strong execution, integration, capital allocation and continuing to achieve scale diversification, both geographically and across multiple verticals in the experience economy.

We delivered record results with full year gross revenue of $4.18 billion, above the high end of the range we provided last quarter, volume of $209 billion, again, near the high end of last quarter's guided range, blended spreads came in at 61 basis points, exceeding our guidance of above 60 basis points. Gross revenue less network fees or GRLNF of $1.98 billion, representing 46% growth year-over-year. Adjusted EBITDA of $970 million, representing 43% growth year-over-year at a 49% margin and adjusted free cash flow of $500 million, which exceeded our guided adjusted free cash flow conversion range by 150 basis points.

Now let's move on to our quarterly performance and then shift to 2026 guidance and close with our capital allocation framework. For fourth quarter results, gross revenue increased 34% year-over-year to $1.189 billion. Volumes grew 23% year-over-year to $59 billion towards the higher end of guidance range.

Q4 volume mix was influenced by a few enterprise go-lives with strong seasonal volumes. Blended spreads came in at 57 basis points, influenced by the aforementioned few enterprise go-lives with strong seasonal volumes such as the Alterra Ikon Pass. This enterprise volume outperformance has an inverse mix shift impact on our blended spreads. That said, our full year 2025 blended spreads delivered in line with our previously communicated guidance of greater than 60 basis points, and we anticipate blended spreads to continue above 60 basis points for the full year in 2026 as well.

GRLNF grew 51% to $610 million, which was towards the lower end of our guidance range as the aforementioned outperformance in enterprise did not offset the continuation of Q3's same-store sales trends, particularly amongst SMEs in the Americas region, which were further impacted by late Q4 weather events.

Going forward, we will disaggregate our revenue into three categories: one, payments base revenue reported on a gross basis, S.So, it's noteworthy to back out [indiscernible] to arrive at the relative contribution to GRLNS; two, tax-free shopping revenue; and three, subscription and other revenue.

We have consciously chosen to report these three disaggregated revenue categories in order to let investors focus on our North Star growth in payments in -- growth in payments-based revenue and clearly break out the tax-free shopping revenue for transparency as investors acclimate to the performance of this line of business.

Adjusted EBITDA grew 48% to $304 million, delivering a 50% margin. Non-GAAP EPS came in at $1.60. Our adjusted free cash flow in the quarter was a record $171 million, representing year-over-year growth of 28% and free cash flow conversion from adjusted EBITDA was 56%. On a non-GAAP per share basis, this results in $1.76 of adjusted free cash flow per share.

As of year-end, our net leverage pro forma for the full year effect of Gold Blue was 3.4x and and includes the effects of our November activity of repaying the 2025 convertible notes issuing incremental euro-denominated senior notes under our existing 2033 indenture and repricing our term loan generating 50 basis points of run rate savings.

Our leverage guidance remains unchanged, with a view that the business should not exceed [ 3 to 3.75 ] net leverage on a sustained basis.

We are introducing the following guidance ranges. Volume of $240 billion to $260 million, representing 15% to 24% year-over-year growth, we are anticipating stable spreads in 2026, remaining above 60 basis points for the full year. GRLNF range of $2.5 billion to $2.6 billion, representing 26% to 31% year-over-year growth and to help you model our trajectory to 2026, we are introducing a growth algorithm bridge, provide further transparency on the disaggregated GRLNF growth categories.

As mentioned, we're reporting disaggregated revenue across three categories: payments-based revenue, tax-free shopping and subscription and other.

Within our payments-based revenue less network fees, we think it noteworthy to appreciate the difference between our two geographic regions. Of one the Americas and two, the worldwide region, excluding Americas.

For the Americas market, this is our most mature region where all of our market-leading experienced economy commerce solutions are present. And is a market wherein 2026, there will be minimal impact from prior year M&A annualization. In this region, we expect payments-based revenue less network fees to deliver mid-teens percentage growth. We view this growth rate as being more than 3x the baseline growth of the comparable market.

The worldwide, excluding Americas REIT market, is our faster-growing market where multiple high-growth themes exist. Such as: one, bringing our market-leading solutions, proven in the competitive Americas market into the region; two, disrupting a largely unintegrated bank-distributed card present market with our proven bundled value proposition that we pioneered decades ago; and three, the region is benefiting from our excess capital allocation through the acquisition of Global Blue and Smartpay, which provide both their attractive business attributes, but also serve as the infrastructure accelerate from which we will deploy our market-leading solutions into the region.

In this region, we are expecting high 20 percentage growth. On tax-free shopping, we expect mid-single-digit pro forma growth. We are cautious going into 2026 with a few headwinds that include a weakening outlook on the U.S. dollar relative to the euro, albeit with diverging views across major banks as well as cross-border travel tension in Asia.

Additionally, it's noteworthy that the business delivered low double-digit growth last year on the high end of its medium-term outlook range disclosed when Global Blue was an independent public company. And thus is growing over a strong comparable period.

On subscription and other, we expect low single-digit growth with quarterly fluctuation as we anticipate less impact from applying our carrots and sticks against acquisitions than in prior years, while continuing to prioritize growth in our core payments based revenue.

When you sum these parts, it builds to our guidance range of $2.5 billion to $2.6 billion in GRLNF. We are guiding an adjusted EBITDA range of $1.165 billion to $1.215 billion, representing 20% to 25% year-over-year growth and representing margins of approximately 47%. We are introducing a non-GAAP EPS guidance range of $5.50 to $5.70.

Our EPS range assumes an effective tax rate of 26%. We are guiding adjusted free cash flow of $490 million to $510 million. We anticipate free cash flow conversion to moderate in 2026 and average approximately 42% as a result of three factors: one, the annualization of interest expense; two, lower interest income due to relative cash balances; and three, Global Blue related impacts, such as integration investments and the impact of Global Blue seasonality are our year-over-year results, given the timing of the close in the second half of '25.

If you isolate the incremental flow-through of adjusted free cash flow, the implied conversion is expected to be 59%. And overall, this guidance includes the close of Bambora because we expect it to take place in the next couple of days.

And now for Q1 quarterly guidance. For the upcoming first quarter of 2026, we are introducing guidance as follows: GRLNF of $548 million, adjusted EBITDA of $233 million and adjusted free cash flow of $70 million. Additionally, gross revenue for the quarter is expected to be $1.05 billion.

Our shareholder letter materials provide a detailed bridge on these various components to our guidance to help you model these specific impacts.

Consistent with our commentary in Q3 earnings, as we looked at our capital allocation options in Q4, we found the most attractive risk-adjusted return was repurchasing our own stock. Between Q4 and year-to-date Q1, we have repurchased 7.7 million shares and now have a remaining $500 million against the $1 billion share repurchase authorization recently announced.

In light of the current market environment and the continued opportunity it presents for share repurchases, we think it more appropriate to base the previously stated goal of $1 billion of exit rate Q4 2027 adjusted free cash flow to being viewed on a per share basis through the lens of a long-term owner of the business.

Last, on capital allocation. As mentioned, we repurchased a total of 7.7 million shares, of which 4.3 million shares were repurchased during the fourth quarter and the remaining 3.4 million shares were repurchased during Q1 of this year. We have $500 million remaining under our existing authorization.

As a reminder, we allocate capital on a comparative assessment basis of our four priorities: customer acquisition, product investment, acquisitions and share repurchases. We've utilized buybacks recently due to the clear relative value. And while our valuation remains attractive, we are mindful of the associated relative value balance and net leverage ratios.

Our focus in 2026 will be to continue employing our balanced approach to capital allocation using this relative framework. That said, this quarter, we want to provide investors with insight into our capital efficiency. In our view, the textbook financial formula for value creation is driving sustainable positive spread of return on invested capital or ROIC greater than weighted average cost of capital, or WACC.

A couple of key takeaways from this. One, we have a historical track record of value creation. Throughout 2023 and 2024, our ROIC averaged approximately 13%, consistently exceeding the midpoint of our WACC range by 300 to 400 basis points. This demonstrates that our historical acquisition strategy has been accretive not just to top line but to shareholder value.

All of this while deepening our durable competitive advantages, scaling and diversifying the business as a whole.

Second takeaway. We have been able to maintain this value creation spread across the investment cycle. Even in historical periods of invested capital expansions in our history, we have maintained a positive ROIC over WACC spread, and expect this to continue. Our track record shows that we have been here before and experienced the integration phase of an investment with ROIC experiencing short-term dilution followed by very high incremental returns.

Now before turning the call back to Taylor, I want to sincerely thank our fellow shareholders, the broader management team and especially the finance organization for supporting a seamless transition. I'm energized by the momentum we've built and look forward to the year ahead.

And with that, let me now turn the call back to Taylor.

Thanks, Chris. And with that, operator, we're ready for questions.

[Operator Instructions] Our first question will come from Darrin Peller with Wolfe Research.

Let me just first start with a question on guidance, and then I'm going to shift to a question on free cash, if that's okay, as a follow-up. But just on guidance. When we look at the outlook you're giving now, and I understand, Chris, you probably tried to build an element of safety and conservatism given the macro uncertainty. So maybe just touch on how you built it up? What the organic assumptions were embedded in it for overall organic revenue growth rates? And how we should think about the potential cross-sell integration in there for the year ahead of us?

Yes. Thanks for that, Darrin. So to to kind of unpack the pieces. I think one of the things that we definitely wanted to provide some visibility into is the GRLNF growth algorithm. To give a sense for how some of the parts in our three disaggregated revenue categories are expected to behave in the year -- in the 2026 guide.

And so to look at that piece within the bridge in the materials is probably a place I'll reference and cite everyone toward. And within that, you can see that you've got the payments-based revenue piece, split out between kind of the new disaggregation of giving visibility into our two geographic regions of Americas versus the worldwide ex Americas. Then we give our tax-free shopping, which is obviously a new disaggregated revenue disclosure that we'll be providing and give that in -- on a pro forma basis, is expecting that to be on the mid-single digit and then, of course, some another.

But maybe the incremental piece that you're asking within what inside of these guidance points might be a bit more related to some of the macro that you're asking about. Did I hear that within your question?

Well, I'm trying to understand really, if you think you've built in a layer of effectively conservatism around macro or even your own bottoms-up assumptions, just given the results last year have been a little challenging versus your prior guide. And so, I'm curious to hear where you build that in. And then again, I understand your subsegments, but as a company-wide, I think we're coming to about a low to mid-teens organic revenue growth rate. I'm curious if that's about right?

Yes. So let me -- so when I think about what is inside of the guide, obviously, you're right to point out that last year had a little bit of a volatile macro backdrop and maybe more specifically within the world of same-store sales in the Americas, so inside of the payments-based revenue piece. And then within sales in store, which is kind of the equivalent of the volume metric in the tax-free shopping, both had exhibited volatility. But the one that probably you're hinting at is the volatility that was the result of the Triple S, mainly in the Americas, amongst SMBs, for example, within restaurants, lodging and retail.

Within that, I think what we're looking at in the start of the year is really a tale of kind of like two halves. In the first half of the year, we're anticipating that there's a continuation of the kind of exit rate trends that we were seeing within the Triple S. And that seems to be holding up even though we had what looks like a little bit of a continuation of softer trends in January, February was looking strong, but you have to offset some of that with weather events.

But I think in total, you end up with a place that says, that the first half of the year assume similar trends to what you were seeing coming out of the end of the year. And then in the back half, an assumption that there will be an anniversary over some softer comps, and you see some positive rebound.

Overall, though, I think the outlook for the year is a fairly neutral view, which is admittedly a couple of points lower, like low single-digit points lower than what might have existed in years past as we were laying out kind of Triple S impact within an overall outlook for the year.

Then I'll take the other opportunity to just say that one of the other variables that we're sort of trying to get our heads around is the concept, is the FX variable and how that impacts the tax-free shopping business. I think we alluded to it a couple of times that the outlook on a weakening USD relative to euro, although has maybe a benefit on financial translation it has a more negative benefit on demand.

And so within tax-free shopping. So if there is a continued sort of weakening within USD relative to expectations against the euro, which right now, there's a pretty divergent view even amongst the major banks as to what that weakening looks like. To the extent that, that is a headwind relative to expectations and you could have -- you could have some pressures there, but we're anticipating what sort of in the consensus.

Okay. Just a quick follow-up on free cash. If I understand it right, the interest expense, interest income changes given the combination of buybacks and cash available for interest income and the integration costs are causing free cash to be roughly flat. Was there -- if you could help quantify those variables? And then anything on chip costs or memory costs potentially impacting the free cash guidance this year? I just want to make sure we're still on track for the exit rate of $27 to be the $1 billion range you guys have indicated.

Yes. Thanks, Darrin. So let me unpack three parts. So first, the quantification around each of the components in the building blocks of the free cash flow variance. What we tried to do was provide people in the materials with a bridge page that gives a view on the kind of the year-over-year outlook and guidance around free cash flow. And what you see on that bridge page is -- or in material is the effect of each of kind of the components, the largest of which you pointed out well, right, the annualization of the capital structure, the annualization of the interest expense, that's the largest component there.

And then the second largest component is just a reduction in year-over-year interest income as our cash balances on a year-over-year basis are -- because of the variance in the cash balance. As a reminder, like, for example, in Q2 ended our cash balance was sort of artificially high at $3 billion as we are preparing for the close of the Global Blue transaction.

So those are your two biggest components within the bridge and then we highlight integration and investment expenses, et cetera, and other parts related to Global Blue. But the one thing I would highlight within the bridge is that the incremental flow-through of free cash flow is probably the place that absent those interest expense and integration investment type expenses, Absent those things, the incremental flow-through on adjusted free cash flow is still running at a high -- like a 59% kind of 60% free cash flow conversion rate.

And so I point people to the bridge to just understand the sizing of that. And then the second part of your question in the free cash flow related to -- sorry, can you just repeat?

It was just whether chips, higher memory costs are impacting...

Yes, thanks for that. So from our perspective, even though we are seeing sort of the back end of inflation and maybe trade-related activity start to kind of abate within some of these cost components, and there are still other factors separate and away from that, that might be impacting hardware costs. Just namely within the supply chain of how payment devices are manufactured and the landscape, the competitive landscape of that within like payment terminals and devices. But for the most part, within our free cash flow, and within our P&L, we're not anticipating like a material change such that anything was noteworthy to call out as it relates to those types of costs.

A component that might be different than what you might hear from others. It's just that within how we manage inventory policy, how we flow that all through within our P&L versus our cash flow, those variances and differences to others that exist, might be some of the explanation as to why we're not seeing it in the same way others are.

Our next question comes from Dan Dolev with Mizuho.

Great job here. Really appreciate it. Chris, I know you were asked before about the assumptions for 2026. But can you maybe just elaborate a little deeper on the exact macro assumptions and how you kind of frame the low end and the high end of the guide when it comes to your macro assumptions, I think that would be really helpful. And great job.

Yes, sure. Thanks for that, Dan. So look, I'd say if I was to break out -- if I were to categorize the macro into three parts, there's probably one thinking about the impact of Triple-S within really more specifically our Americas and largely impacting SMBs. So think of that as kind of restaurant, lodging, retail. Then there's two, I would say, it's the FX component that impacts the tax-free shopping disaggregated revenue line. And then the third is sort of also impacting tax-free, but it would be kind of just a geopolitical or we'll say, like tensions that we're seeing in some of the markets. So I'll just go back in each of the three and unpack.

So, on the Triple-S, what we were anticipating and what we already talked about was this idea that we have an assumption of a fairly neutral year on Triple-S, which relative to years past, might be kind of low single-digit points below, what might have been the trends that we were seeing within the macro. And so that's definitely a point of difference.

And that variable certainly is one of the variables that impacts kind of the low to high within the range. I would say, second, embedded within that, even though it's less about the macro effects of Triple-S, we have seen some volatility in the weather both in Q4 and most recently within Feb. But those all kind of play into the same Triple-S variable.

Within FX, I already alluded to it, but it is worth a reminder because I think it is clarifying for some that even thought about, we'll call it, 1/4 of our revenue to size it are non-U.S. dollar denominated. And therefore, there's a view that a weakening USD has a financial translation benefit. It actually has a greater headwind because of its impact on the tax-free shopping demand.

So to the extent there is a weaker USD relative to the euro as for example, on that cross we are going to have a lighter demand or a negative on the demand side of tax-free shopping between those markets. And so that's something that we're monitoring and we're watching, in particular, because, as I already said, if you go and look at bank forecast, there's a pretty divergent view as to the extent of the USD-euro cross right now.

And then the last thing I would just point out, and again, sort of touching more on the Asia segment within -- or the Asian market within tax-free shopping, we are seeing the effect of kind of tourism tension. As for example, passenger seats are down at like almost 30% between China and Japan, and that will have an effect. And so that's just another of the macro variables we're watching.

Maybe the last thing I would just say, though, is that a variable that seems to be having less of an effect on the volatility of the P&L is probably the inflationary variable. That does seem like one that is a little more benign, and that's what we're anticipating.

Our next question will come from Timothy Chiodo with UBS.

I want to see if we could dig in a little bit to the fiscal 2026 guide around the spread staying relatively stable and that 60 bps or potentially slightly higher range. I'm assuming that some of that is related to dynamic currency conversion, which I gather has been going well. And I want to see if you could talk a little bit about that assumption in terms of supporting the spread and maybe any of the contributions from either Smartpay or we already have with the Global Blue acquiring business and those spreads? Maybe there's some mix shift factors as well, but really just any of the underlying drivers of the spread staying stable, at least on an overall fiscal year basis? And then a quick follow-up.

Yes, sure, Tim. I'll hit the first part of that and then Chris can layer on. Q4 was slightly anomalous in terms of how it spreads represented itself. So if you recall even back to our last call, we were relatively cautious on the same-store sales volatility we were seeing, particularly in SMB and particularly in restaurants. Those are our highest spread categories from a merchant perspective.

Offsetting that was some really nice volume from the enterprise activation. So volume performing okay with spread a little lower than expected. That's somewhat anomalous and especially as you hear how kind Chris is forecasting the business, it's kind of a muted view on the same-store sales progress in all those categories throughout the rest of the year. That's one thing that Q4 is slightly anomalous at the year ahead, I think forecasting a more normalized trend even on kind of these lower same-store sales comps that we're seeing. So that's one thing.

Separately, you've heard us talk about this as well, but the real early success we're seeing in Global Blue and it really our international expansion more broadly is in that SMB space where you do expect to earn towards the higher end of your spread averages. So it's not to say we're forecasting a decline in enterprise or anything like that. The reality is, though, when you enter these new markets, the quickest merchants to adopt your solution are at the lower end and that the medium and large merchants come in over the course of the year to 2 years ahead.

We tried to illustrate this in our materials. We have 80,000 merchants outside the U.S. The vast majority of those are SMBs, which generate a higher spread. So I think the spread mix is going to be somewhat predictable largely because we're forecasting kind of the average quality of our merchants to be pretty predictable.

Yes, I can just add on to, probably the best way to think about starting from Q4 and looking at that 57 basis points blended spread figure, if you normalize out quite literally three enterprise merchants, you actually end up in the greater than 60 blended spread territory. And the activity there have -- are largely seasonal in nature, but one was actually the benefit of a somewhat unexpected large volume allocation away from a competitor.

And so when you have those kind of timing -- those kind of seasonal jumps coupled with the sort of an unexpected positive you end up with that Q4 spread dynamic, which was a couple of basis points below the 60.

When you forecast the business though across all of the different fronts and you factor in the mix shift dynamics slightly towards SMB from a growth standpoint that Taylor alluded to, you get to the place that allows us to guide to the blended spreads remaining stable at north of 60.

Excellent. So it sounds like DCC might not be too large of a component there, but a quick follow-up on DCC. Last quarter, you gave a really helpful disclosure in terms of the contribution to net payments revenue from DCC. Is it fair to assume that in Q4 there was directionally in that same ballpark, I believe last quarter, it was around $11.5 million.

I was just going to -- sorry, one thing I was going to say though, Tim, was that, when we talk about the blended spreads across the product, I don't want there to be a takeaway that it doesn't include a positive benefit from like FX-based -- FX-based spread revenues such as DTC or other types of products like DCC that are also FX-based. There definitely is a benefit that comes through. And so you're right to point it out as a positive. It's definitely been one of the the nice components of having acquired a business like Global Blue, where we now have that capability and competency in-house and are able to kind of bring that into the value proposition and the bundle facing merchants. So I just want to clarify that as a starting point.

Maybe just to illustrate how we're rolling out DCC and it's embedded in our offering internationally. So the blended spread of those merchants would include the benefit of a DCC product, but they're coming in as a net new merchant. So it's not really changing the spread of an existing customer meaningfully outside of the U.S. In the U.S., and this is really no change to the expectations we've set as far back as announcing the transaction. We really want DCC live as product kind of broadly based in the U.S. prior to the World Cup, that's where we see significant benefit.

So in the back half is where you could see spreads on existing customers increasing as a result of the benefit of DCC. But I want to be really specific, it's a new product forecasting the relative adoption kind of tricky. It's not widely used in the United States, although you can obviously be pretty optimistic about it when you think about a big international event like the World Cup, and we're focused on making sure, it's live in our hotels and stadiums.

Yes, that's what I was getting at, partially in terms of the U.S. cross sell. So it sounds like a good opportunity.

Our next question will come from Will Nance of Goldman Sachs.

I wanted to circle back on the free cash flow and come back to the bridge that you guys provided. So, I think we get most of the moving pieces around interest expense and cash balances. Could you speak to the $30 million of integration and investment spending? How long do you expect that to persist? And if we think about the flow-through of free cash flow kind of excluding some of these items, being at 60%, like is it possible we could be north of 60% into 2027 as the integration spend winds down?

Yes. I'll break down, not necessarily in whole dollar terms, but a significant portion of that $30 million is what I would consider in-year integration expense one time. There is a portion where we anticipate building sales teams. And as you know, like when we build sales teams in different geographies around the world, they don't pay for themselves in the first year, they take kind of 1 to 2 years to pay for themselves. So I don't think a significant portion of that line would be recurring, but all of the line would be paying for itself to the extent we hit our sales objectives.

This is something we challenge ourselves on pretty constantly. will, you know probably better than most that our preference is to deploy capital and buy small payments organizations that have a proven track record of selling in one geography or another, and we've executed against that pretty successfully in places like Germany.

At the U.K., we anticipate launching in 15 countries with our all-in-one payment product, and it's just impractical to assume that you can find that many interesting M&A opportunities across those countries. So the forecast skews a little bit more towards an organic build than we probably prefer it takes a little longer, and it costs you to your point, this capital upfront.

But in the absence of kind of finding a great sales team locally that we can partner with or we can buy. This is like -- we're not going to ignore the opportunity simply because it requires some fixed cost.

Yes. And Will, maybe just to add, in terms of where you might see some of that line show up within the financials is actually in the form of probably the the CAC and the EUL lines within cash flow statement or you'll probably end up seeing some of that. And the reason for that is that we probably expect that when we're newer in a market we'd like to be more aggressive around some of the incentification as you kind of prime the pump in entering the market with a differentiated totally new offering and you want to get the potential partners very excited to work with us and embrace the value proposition. So that's just a little bit of extra color on that.

Helpful. Okay. So it sounds like a good portion of that should kind of run off into 2027. And then just a follow-up. You're talking about the kind of organic versus inorganic trade-off. How are you guys feeling about just capacity to do further M&A, particularly given the lower level of free cash flow this year? You thinking about $0.5 billion of free cash flow against $4.5 billion of debt. Just what is sort of leverage capacity today? And is the thought to take a pause on M&A this year as you digest the several large deals from last year?

Yes. Thanks for the question. I'll address kind of the strategic bench, and then Chris can reiterate his comments on leverage ratios and everything else. We have a team dedicated to looking at opportunities. So to say pause or any. It's not really how it works. We get introduced the opportunities, and we evaluate them and we challenge ourselves as to whether those opportunities make sense. And then there is a relative balance of capital. Of course, we think about leverage ratios and how stretched we are, we think about buybacks on a relative basis with those opportunities in front of us. So we evaluate all those things constantly.

And Chris can talk about where he is the hammer to say stop. I will say though, in a year like this, we are very focused on smaller, very strategically aligned M&A. So less likely to do something kind of far afield from what we do. But if we can buy a small payment sales team in a particular country, we will do that. Why? Because you're traditionally paying a relatively low multiple, even inside of multiples we trade at today. You're acquiring a team that's got a proven track record of adding customers.

You're emboldening that team with your own product and inevitably, they're bringing some batch of customers with them that are quick and easy cross-sell. So we want to reserve the right to do that. I think if we did it, you find that the capital trade-offs are well worth it because it's an upfront and a lot of the timing associated with building is slower.

Just by way of example, we did this in the U.K. and within a couple of months, we're adding 1,000 merchants a month. Now that sounds impressive. But if you look at the quality of the organization we acquired, that was a very small organization, call it, 50 people. Their sales prowess was proven, we were able to invest in that confidently. So we'll continue to look. I don't know that these would never be things that hit the radar of kind of an earnings call, but I'd love to buy a small successful team in Spain or Italy or France as opposed to building from scratch.

Yes. The only thing I would probably add to that is that, well, I really like the line of questioning because it connects to concept that I think people have been able that -- have been constantly asking us about, which is how we allocate capital in order to drive or accelerate kind of the strategic initiatives.

Your first line of question asking about the integration expenses and us talking about in many respects, growth CapEx, that's going to be inside of our free cash flow bridge. To then follow that up with the ask about how we might be allocating capital in order to maybe acquire distribution assets that further accelerate this international expansion and the launch of brand-new products that are completely differentiated.

I mean they're exactly in the line of how we think. The capital that we have to allocate at all points, do we view it as a scarce resource regardless of whether we have ample leverage capacity, ample liquidity, ample excess cash flow generation. At all points in time, it all still has a cost.

And a relative ability to generate a return. So I don't think that there is much of a change philosophically regardless of where we are because we value the capital so highly. And -- but I do like line of thinking because it really does underscore this core point that we can allocate the capital dollars at initiatives like growth CapEx or we can allocate the dollars at initiatives that acquire us and accelerate into capabilities like distribution in an emerging market.

Our next question will come from Dominic Ball with Rothschild & Co Redburn.

super clear on the guidance. So looking slightly beyond the quarter and the guidance, many investors are trying to understand what integration success with Global Blue looks like from here. It's harder to see, obviously, from the outside. So -- and Global Blue is such a critical part of the equity story of Shift4. So can you tell us a little bit more about internally what it looks like, any key metrics and when you think you'll start to approach Global Blue retail merchants for that cross-sell opportunity as well?

Yes. Thank you for the great question. I'll start by saying it's already happening. So we have line merchants in multiple countries. We're betting in more. We've got, as I said, the ambition of having kind of being live, so to speak, in 15 countries. Those are companies that Global Blue is already in today, but we don't have a payments offering.

To give you a sense of how we view success internally, it's the ability to add several thousand merchants upon towards the back half of this year. Now these are smaller merchants admittedly. And I think the root of your question is important because traditionally, the investors look at volume as the key metric. We don't view that as the key metric internally on the cross-sell.

If you look across Global Blue's customer base, it ranges from the LVMHs of the world at the highest end representing them and others representing like 80% of the volume. And then there's a really long tail of SMBs, the hypothetical scared Scar boutique at Bellagio, Italy, representing 70,000 customers. Those customers are getting this highly differentiated product in our all-in-one terminal that delivers eligibility detection as if you were in the highest quality you may saw in in Paris. And so this is the product that's being released most quickly.

This is the product that we're investing in local sales teams. And I think it's no surprise, just go to our job postings, and you'll see job postings basically everywhere throughout Europe, looking for sales reps around this product. And quite frankly, it's where Global Blue is a stand-alone business was least equipped. They didn't have a sales force focused on this small -- this really long tail of SMB.

So we're building out that sales force. Internally, we've got this kind of mantra that one -- it's our dedicated Shift4 professionals that go into a local country sit in a local Global Blue office and help them build out this capability. And once they have 100 or so merchants under their belt, they pass it off to the regional manager. So we're already seeing the early signs of that success in a handful of countries today, but we want to be doing it in 15 countries. And so we have this internal kind of merchant count focus. And we don't have a volume priority. We just say we know what great payments businesses throughout Europe can produce on a merchant-by-merchant basis, we see a lot of that data internally, and we know that several thousand merchants a month very reasonable outcome, and that's before you have a lead list like your 70,000 Global Blue customers.

So we're very pleased with the internal progress of that. And then separate and distinct from that is visibility, and I mentioned it earlier, so I won't belabor it. to cross-sell DCC into our U.S. base of customers. But in Europe specifically, it is an SMB-oriented sale. It's an all-in-one terminal that is displacing a bank terminal, but with a lot more feature and functionality and to drive higher TFS adoption.

As you'd expect, when you walk into a merchant with this product, it adds a heck of a lot of value they adopt it quickly. And we expect, by the way, equal proportion of kind of net new wins and cross-selling existing global good customers as a result of that.

Yes, that's great to hear. And just one more, if that's okay. I mean the future growth of Shift4, as you mentioned, seems very much more international, but a good minority of your existing sort of stock, shall we say, are still in the U.S. and SMBs. A lot of your direct peers in the restaurant space are stepping up when it comes to the direct sales force. It seems like you're now, as you mentioned, rebranded SkyTab as well. Would you follow your peers in terms of a larger direct sales force or more rely on the more traditional Shift4 route when it comes to gateway M&A-driven growth, et cetera?

It's a great question. We have been scaling our sales force, our direct sales force, but in a pretty deliberate and measured way. We have kind of a higher bar for capital allocation around the SMB space, especially in our more mature markets than our peers. So like the idea of chasing them is not a good example. It's actually our head of marketing was challenging me around the SkyTab brand and what we could do to elevate it. And I was very candid with him to say, if we look at what our peers spend on sales and marketing, we're not going to come close to that.

But the Shift4 brand is a much larger, much more powerful, much more visible one. And so why should we have two different products when we could leverage the Shift4 brand and our presence in the many tens of thousands of restaurants that we're already in. So it's a relatively simplistic move to simplify the the product names to lead the part, but I think it will have some meaningful value. And it's just a sign that we have a very, very disciplined approach to customer acquisition cost.

We spend far less than our peers, and this still help us. It's a good step to gain incremental progress. We are adding direct sales people to the tune that you mentioned, but with the capital discipline that I think really differentiates us, like we will not chase the capital curve around customer acquisition costs that some of our peers doing. And yes, will still grow nice.

Our next question will come from Dan Perlin with RBC Capital Markets.

I wanted to just touch on maybe the backlog for a second. I think you're implying like $32 billion embedded in the guide. That's down a bit from the 35% last quarter. And so the question really is just have we reached a point now where like the burn rate is greater than maybe the net new signings? I know last quarter, you installed $6 billion and you signed $6 billion. So just trying to kind of work through that framework a little bit.

Yes. It's still kind of a relatively new disclosure for us as we think about the backlog. And it's a relatively new form of measurement for us. I would say it shouldn't be that much of a surprise for a slight step down when you consider the other comments made by Chris that we experienced more enterprise volume in the quarter than necessarily expected. And there are chunky enterprises, whether it be Alterra Ikon Pass is a multibillion-dollar opportunity and a handful of others. So we didn't view this as a change in kind of our relative progress. Keep in mind, most of our SMB opportunity never hits that backlog. But we did see a little bit of I would call enterprise volume that was faster than we anticipated in Q4.

Yes. That puts kind of staying on that same vein, if you think about the end-to-end volume guide, it's a pretty reasonable band that you guys put out for 15% to 24%. And -- it sounds like this year, it's totally more towards SMB versus maybe some of the enterprise that we've seen in the past. And so the question is really just how does that impact the visibility that you might have in terms of forecasting that line item? Or does that not really matter?

Just to clarify that one, Dan, when you say you're referring to the Americas versus the worldwide when you talk about when you set those two numbers?

I was really talking about -- I was really talking about total end-to-end volume kind of total volume that you guys are kind of calling out $240 million to $260 billion. And then it sounded like in the way you guys were describing maybe that book of business as you're thinking about it, it sounds like tilting a little more towards SMB this year as opposed to more enterprise maybe in the years past. Is there more visibility that you have or less visibility because it's SMB and so it's trickier. I guess the point is if you have a large implementation for enterprise clients, usually, you have those in queue exactly the time lines. SMB can be a little more spotty. So I'm just wondering if that increases or makes it harder to forecast that line.

Well, in those me why we kind of travel around the world because there are nuances to this. In the Americas, our SMB forecasts are pretty reliable. I mean, again, this is a 28-year-old business. our SMB presence has never dwindled. The change that you saw in the business over the last few years is that Enterprise was entering the mix for the first time. And the relative contribution of enterprise has matured. So again, talking about just kind of the Americas for a second, it's a relatively mature business.

Our SMB progress is quite easy to predict. And in the enterprise, to your point, longer lead time, better visibility. And the mix of SMB to enterprises more mature there.

Now when you go outside of the U.S., the SKU is heavily skewed towards SMB. And this isn't because we're strategically limited in any way. This is the reality that SMBs make decisions quickly, same day. The higher you go up in the spectrum, the longer they they take to make decisions.

So if you follow our shareholder letters over the course of the past couple of years, we only just began internationally a couple of years ago, a lot of SMB-oriented wins sort of the green shoots of larger hotel groups and things like that. Those are just starting to play through in this year, but again, still heavily SMBs speed.

There's one area of guesswork, it is how many SME merchants can we add internationally over the course of the year. We are anticipating an acceleration there. But to give you a sense for how we predict it, we have a pretty wide swath of data, we act as a payment service provider for large PSPs. So we know what SMB production can look like in good, bad and in different scenarios throughout Europe.

And we believe several thousand merchants a month is a very achievable result on top of kind of the 1,000 plus that we've been executing on relatively recently. So I would say yes, you're believing that we can execute against that cross-sell plan and that build out of that sales force. But the numbers that we have are quite grounded and I think a reasonable reality.

Thank you. This concludes our Q&A session and also brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect. Thank you.

All right, everyone. Thank you for joining us. My name is Michael Wolfe. I'm the Managing Director here at ICR. So welcome to the ICR Conference. And we're thrilled not only to have you today, but to welcome the Chief Executive Officer of Shift4, Mr. Taylor Lauber here. Taylor, welcome.

Thanks for having me.

Thank you. So for the benefit of the room, I know many of you may be familiar with Shift4, but for those who aren't, it's a fairly complex business -- is the best way to put it. So let's start with the absolute basics. So what is Shift4? And what specifically do you provide to your customers on a big picture level?

Yes, sure. So Shift4 powers the commerce behind all the great experiences in your life. And so if that's hard to find a tangible value to, it's because whether it's that great family vacation, whether it's buying a luxury good for a loved one, whether it is watching your team in the Super Bowl or just that night out with friends that lasted way longer than it should have, Shift4 powers the commerce behind all of those in-person experiences that you know and love.

Now we've been doing this for 27 years. And so as you can imagine, the technology landscape has evolved tremendously throughout that time frame. So what used to be something as simple as a payment terminal on a countertop 27 years ago has evolved into everywhere you pay for something at the New York Yankees. Imagine buying your ticket online, going to the event, parking, beer in the stands, jersey for a loved one, the Steakhouse at the end of the game, all of that is something that Shift4 connects to and delivers an experience to the New York Yankees and to the fan that is cohesive throughout that environment.

So you're talking about a lot of different verticals here. You're talking about restaurants, hotels, venues, luxury retail. Is there a thread that runs through each of these businesses in each of these verticals that makes it unique to Shift4?

Yes. It is -- you're physically there, in most cases. So as a business that 20 years ago was trying to figure out how we evolve in commerce, we focused on environments where people are going to be physically there and paying for something. So we actually don't spend as much time on vertical applications as you might think despite the fact that we have about 1/3 of the table service restaurants in the United States as customers. We have 40% of the hotels in the United States and 75% of the stadiums in every sports league in the United States use Shift4.

But by focusing on that in-person experience and embracing the complexity that a lot of our merchants have to deal with and bringing as many pieces under one roof, we found that the solution really has no upper bound. Again, I think the Yankees is a good example, but so is the Wynn Casino Resort in Las Vegas, where it's multiple resorts, thousands of places to pay, managing that used to involve a lot of different technological providers. Shift4 can do virtually all of that under one roof.

So it's in essence, "proverbial" one-stop shop for that.

Correct.

Okay. Good. Now some of you in the room may be aware that the co-founder of the company, Jared Isaacman recently stepped away to go lead the charge at NASA. As you've taken the reins here, we're introducing everybody to Shift4, but I think we want to introduce you as well. What's going to stay the same under Shift4 under your leadership? And what do you expect to change?

Sure. So I want to spend a little bit on kind of my vantage point inside the business because I think it informs the answer to the question. I worked in Jared's parents’ basement when he founded the company, and we were teenagers. I was the idiot that left and went to college. So he told me not to. He told me this opportunity was better, and I didn't trust him. And for about 18 years, I said no to rejoining the business. I had a career on Wall Street that I really liked. And quite frankly, I was skeptical of this emerging industry that seemed to have a lot more luck than skill inside of it. And so if you put yourself back at what was going on in the late '90s, early 2000s, getting a business to accept electronic payments was innovative enough. We were getting sent credit cards in the mail to our attention as 16-year-olds, and yet most businesses hadn't yet had the capability to accept them.

So there was this gold rush of payments acceptance in our industry that made a lot of companies really successful, and it became hard to differentiate skill from luck. Now I got proven wrong basically every one of those 18 years because Jared and the team kept winning. And they kept winning despite the rapid pace of innovation that was going on in the industry. So I'd say, in short, we don't want too much to change. This is a business that for 27 years, has generally predicted the big changes in technology innovation and where we needed to be to continue to serve merchants who care a heck of a lot more about the software that helps run their business than the payment processing at the other end of it.

So we don't want to change that ambition. I think the fact that our founder, his second job in his history, apart from running this company is running NASA is a pretty good example of the ambition that lives inside of our organization. We generally try not to put too many constraints on ourselves. Now what has to change? A lot has to change. We are a company that is in 75 countries that we weren't in 2 years ago. So the growth at the company is tremendous. We have 6,000 employees. That's more than double what we had probably 18 months ago. So the growth is tremendous. We're operating in dozens and dozens of new markets around the world. We have to have an organizational structure that can pursue that effectively. But the ambition can't change at all because that's really been the hallmark of what we've done.

Yes. So that's changed, but there's also consistency of change...

Of course. And he's our largest shareholder. So despite his new role, he still owns 25% of the company. I think if we took a radical departure from his ambition, it wouldn't necessarily be fun.

No. But at the same time, I'm trying to picture this. You assume the reins for the company and you -- the co-founder of 27 years leaves. And you immediately make the decision to go to your Board and request that you buy a $2.5 billion tax-free shopping business in Europe. Okay. That's kind of a bold move. So that business, Global Blue is now under Shift4. Tell me a little bit about the decision to do that, how that process went and how the combination is going?

Yes, sure. Well, so one of our mottos inside the company is boldly forward. So we do try to think in as forward-thinking a capacity as possible. But this one was a lot more logical than I think you'd expect. We constantly look at the value chain that our customers deal with and the complexities inside of it and say, what are the pieces that they really care about, what are the pieces that they don't care about? What are kind of the commodities that to them feel like paying a utility bill, but actually might have a lot of monetary value to them from the vendor's perspective. And what's our role to play? And in retail, we struggled for quite a while at what our point of difference would be in the retail vertical.

It is a fiercely competitive environment. The software providers that serve retail are incredibly fragmented and the retail service model has varied all over the world. And so as we said, what technology could we bring to the table that a retailer really cares about, this tax-free shopping piece really stood out. So for those that aren't familiar with it, in countries where there's generally a high VAT tax, most of these countries will offer a refund if the traveler is from a foreign country and bringing that good outside the country. So it's incredibly prevalent at the Hermes and the Louis Vuitton’s of the world in Paris that you're going to buy this handbag. And when you leave the country, you're going to go through a process and get several thousand dollars off the purchase price.

It's immensely valuable to these large luxury retailers to have the ability to deliver this. And there's kind of only 2 companies in the world that do that at scale with Global Blue having a roughly 85% market share. So for us, as students of commerce and really trying to understand how to make the complex easy for big merchants, this piece of providing tax-free shopping services for the largest luxury retailers in the world is immensely valuable, and it's very scarce. There's only, again, 2 of them. So we pursued the acquisition for on and off 6 years. At one point, it was too big. At another point, it was too expensive. And fortunately, we grew to the point where $2.5 billion wasn't quite as much as it used to be. And just everything aligned.

So while our founder happened to be leaving, our Board wasn't surprised that this opportunity that we talked about on and off for 6 years became available. And what's interesting about it is, it's a phenomenal business. So yes, we buy it with the ambition that we're going to add payment processing services to all of these customers. We're going to give them a better solution. The reality is the Global Blue business was growing kind of high teens, 20% even without us. So it puts us in a new vertical. It puts us in a lot of different geographies, but with a playbook that our Board understands perfectly well.

So in essence, it's a bold move, but one that actually fits neatly, at least the Board saw this as a way to expand within the commerce space without rocking the boat.

Yes. And what I'd say is it's very typical of Shift4 in that when we announced the transaction, we found ourselves explaining to all of our largest shareholders what this business does and how it's connected with commerce -- and yet at the same time, the head of most of the international payments businesses around the world were calling us, asking us, hey, what do you intend to do with this combination of these 2 things. So from an industry perspective, everyone kind of understood pretty quickly, this is a really interesting and important business. And from an investor perspective, we're going to educate on why these 2 things work so well together.

Yes, it makes sense. And obviously, we're speaking to an investor audience today. You mentioned brands like the Yankees and the Wynn hotels. Why should investors -- what should they take note of in terms of the types of clients and customers that you're serving? Is there anything, again, uniquely shifted for about working with entities like those?

Yes. Well, I'd start by saying there was a strategic bent going back as far as 20 years that if you can download a piece of software on an iPad and run your business, we want to be as far from that competitively as possible because there will be new pieces of software popping up all the time, and we don't want to compete in a hand-to-hand combat basis with whatever might pop up when the barriers to entry are download an app and run your business. What we want to do is we want to fulfill that same experience for merchants that are going to have 70, 100, 1,000 revenue centers, all managed by lots of different software because when you can connect all those things together for the benefit of some of the merchants that you mentioned, the air is very thin from a competitive standpoint.

So I think not to call out those 2 customers specifically, but you could use them or any other example. The reality for them is that when they needed a commerce solution for their environment, there was kind of only 2 phone calls that could be made ourselves and one incumbent and different, by the way, because one stadiums and the other is resort hotels, but that's where we try to position ourselves that we have technical solutions that are table stakes for the merchants that we serve like tax-free shopping and luxury retail. And at best, there's one other phone call you can make because despite the fact that they are really demanding and complex customers to serve, the competitive era is quite thin. And we know very distinctly how to differentiate ourselves from that one competitor.

Speaking of differentiation, I've noticed and maybe you can tell me whether it's true or not, I've noticed that the Shift4 name has become a bit more visible at retail actually. Is that a deliberate brand strategy? Is there some thought behind that? Or am I imagining it?

No, it is a deliberate strategy. And for those P&L focused in the room, please don't get concerned. But we are investing heavily in the brand experience. So one thing that I would have critiqued us on over the years is that generally speaking, if we were part of the commerce solution, we didn't care what name was on the screen. We didn't care what name was on the hardware. It was about delivering a solution to customers. And yet we are and have a footprint that's far bigger than what most people would expect because we generally live under the covers in a payments experience.

I think that's a shame. I think the fact that we are in 50% of the Power 4 Colleges from a payment experience and all of the stadiums that I mentioned, all the restaurants and all the hotels and luxury retail, the brand should be front and center because that brand will give the confidence to the next customer to sign up. So we are trying to tell a more cohesive everything Shift4 story and get the brand out there front and center. It doesn't mean a dramatic departure from kind of our marketing spend and everything like that, but making sure that where you pay, you understand that this is a Shift4 experience is something that's really important to me.

Okay. That makes sense. Going back to Global Blue, but just your acquisition strategy in general. You bought a lot of companies over the years. Tell me a little bit about your philosophy of when to buy versus when to build and why purchasing companies actually improves your competitive position. You've clearly made that decision over the years. Tell me a little bit about how that decision-making process works.

Sure. I'll start by saying the payment platform that we run is connected to over 1,200 pieces of software. So if we think about buying a piece of software in the stadium space, the actual technical aspects of managing an extra integration on top of 1,200 are very little. And our company is built to know how to do that. So whether we own it or whether we're partnered with it, we manage 1,200-plus software relationships at any given time. We do not get deterred when there's an interesting software asset that we could own if we could control our own destiny as a result of it. But I'd say more importantly, the ability to access customers who are using 5 or 6 different solutions to make commerce work via M&A has something we've been uniquely good at. And so you can contrast us to any of our competitors in any of the verticals we serve, and you'll see that we grow as fast as any of them. But the real differentiation is that the capital intensity of that growth is far lower.

So in certain examples, we generally spend about 1/3 of what our largest and best competitor spends to acquire a customer in the restaurant vertical. It's not to say we don't invest in organic sales capabilities. We obviously do that. And we win lots of customers like the ones that you've mentioned. But if we can buy a sales team that has proven to be successful in a particular geography and then enable that team with our products, it's just a lot easier to bet on success.

I was speaking to an investor recently who said, I liken your strategy a lot to Netflix. And what I mean by that is, why should I care whether you make a movie and produce the entire thing yourselves or if you go to Cannes and you buy one. Intuitively, I think you're going to be much lower risk buying the movie that's already been produced now that you've seen it as long as you pay the right price than making one from scratch. We tend to skew towards that. But make no mistake, we've got industry-leading products in a bunch of different categories that we've built ourselves where there wasn't a solution to buy.

The Netflix of commerce solutions is that what we're going with.

For now.

Okay. We'll see how that goes. Okay. Good. Thinking about some of the things you've said over the last year and thinking globally for a moment, especially with Global Blue still so fresh. You've said that many markets are still doing business like the U.S. did, I mean, upwards of 15 to 20 years ago. So when you think about accelerating this kind of technology adoption and the shift toward these types of solutions, what makes Shift4 uniquely positioned to take advantage of those shifts? And how do we empower them in essence, if the world is somewhat behind?

I'll start by saying we were the first to do it, and that is largely how all commerce is conducted in the United States today. So a little bit of a provocative statement, but let's sort of break this down for you all. 15, 20 years ago in the United States, there were 3 cottage industries. It was payment processing, largely driven by bank relationships and highly undifferentiated terminals that sat on a countertop. There were software companies that were emerging, trying to solve vertically specific problems for one customer or another. And then there were hardware companies that tried to kind of make it all work.

And our founder said, there's absolutely no reason these should be 3 different industries. The software works better when it's on hardware that's purpose-built for it. The payments work better when they're tightly coupled with the software, and there's no longer a misunderstanding between what was purchased and how much money hit the bank account. And so 20 years ago, we were combining these industries and delivering a cohesive product, and that's what drew the early stages of our growth. Now today, every software company goes to market in this strategy. So obviously, it was a highly valuable strategy. Interestingly, when you go to markets around the world, it still looks like the U.S. 20 years ago. As you mentioned, you can go to some of the most established economies in the world.

I'll pick a pub in London as an example, and there's still a countertop terminal, largely unconnected to the software and they punch in what you owe. If that seems inefficient, it is. And if you ask the hardware and software and payments companies why it works that way, they give you the same examples or same answers that we heard 20 years ago in the United States. So I don't want to say this is even that bold. This is just something that we know will change. We know that for the same reasons a small restaurant uses more software today than a large hotel did 10 years ago, that businesses around the world are going to embrace software. It simply makes their lives easier and helps them to conduct more commerce. And we're going to shepherd that at the expense of kind of a lot of these incumbent industries that aren't delivering more innovation or a better solution.

Yes. Any particular verticals internationally that you think are worthy of more focus than others?

Well, our products obviously lend themselves to restaurants, to hotels, to retail. And so we're going to lean on those first. And I would start -- I would say this is likely to mimic the success we had in the United States, which is it starts with small merchants because they get the highest ROI on this innovation. And then over time, we deliver into the larger and larger merchants throughout the rest of the year.

Which is exactly what's happened here.

Yes.

Okay. So that path has followed. Now we can't -- as you know, we can't specifically talk about financials here. Let's expand a little bit more on vision and your specific vision for the company. Anything you can share about how you're -- everything that you've discussed today, obviously, is thinking a little bit about the future, but expand a little bit more about what people can expect without talking too much about financials.

Yes, sure. So what I would start with is our playbook is quite mature. We understand how to combine technologies up to the most complex merchants in the world. That is not a vertically specific strategy. We weren't in a single hotel when I joined the company 8 years ago, and we're in 40% of the hotels in the United States, and yet very few outside the United States. The growth opportunities there are tremendous. We weren't in a single stadium probably 4 years ago. And now we're in 75% of the stadiums in the United States, and sports is not a U.S.-focused phenomenon. It exists all over the world. So this playbook of studying commerce, finding the most valuable pieces and doesn't really matter. You build, you buy or you partner, whatever it takes to deliver the best solution will bring us undoubtedly into more verticals and most certainly into a lot more geographies. And now how does this flywheel sustain itself?

We weren't in a single country outside the United States in any form of consequence up until 2 years ago. So if we've been able to replicate this playbook over and over again across different verticals and grow the quality of merchant tremendously and the quality of the business the way we have in the last 10 years, imagine now that we have a physical presence in 75 countries around the world that we didn't have 2 years ago. That will undoubtedly drive lots more growth. And quite frankly, I think the market conditions, I'm going to set aside economic growth for a second. I think the market conditions in a lot of these places are much better, meaning merchants are generally using antiquated solutions that are undifferentiated and are begging for the kind of playbook that we have, which is combining them with solutions that actually help them run their business.

So in the couple of minutes that we have remaining here and at the risk of sounding repetitive based on what you just said, if you could leave investors with one thought that you want to make sure they understand about what the future of Shift4 will look like? What would it be? I know that's a lot of pressure in 2 minutes, but...

No, I think it's relatively easy. This is an industry that's under an immense amount of skepticism. Payment processors have generally done a bad job of educating investors on how they win. They would tell you stories like if this giant company and that giant company mash together and save merchants a fraction of penny that merchants will see value in that. And what has happened since all those merchants have slowly and sometimes more quickly migrated to solutions that they actually -- that actually help them run their business. So why do the Shopify and the Toast and the Shift4 and the Squares exist? It's because we're delivering a heck of a lot of value.

And the legacy payment processors struggle to adapt to that and struggle to deliver value and therefore, are competing on price. We have the ability not only to deliver value substantially in all these large verticals that I mentioned, but a playbook that helps us expand in an incredibly capital-efficient way. So yes, we've acquired companies, but our margins have generally grown towards 50% on EBITDA. That shows you how innovative -- or I'm sorry, how capital effective it can be when you're really focused on finding customers at the lowest cost possible and delivering them a solution that they traditionally would have used 3 or 4 vendors for. And that's, again, largely been a U.S. story. And now we've got incredibly the rest of the world to go conquer.

Yes. Very, very exciting times ahead, no doubt. All right. Thank you very much, everybody. I appreciate your time. And hopefully, you'll have an opportunity to speak to Taylor at breakout sessions and such. But thank you for your time.

Thank you very much.

Thank you for attending.

Alright. Welcome, everyone. We're really glad to be joined here by the team from Shift4. So Chris Cruz, the recently named CFO and long-time investor in Shift4. We've known Chris for many years now through various industry events, our NAPA conference, ETA and some industry events. So we were just really happy to see Chris named to the CFO position, and we're really pleased to have him here with us on stage. Thank you, Chris.

Thank you, Tim. Thanks, everyone, at UBS, for having us. Really excited to be here.

All right. And also a special thanks to Tom McCrohan. Tom, Head of IR for Shift4, works very closely with our team and also made the trip out here to Arizona. So again, we appreciate you both making time in your busy schedules to travel out here to be a part of our conference many years in a row now. So thank you to Shift4.

All right. Well, we've got a great list of topics to get through, and we're going to start off just addressing some of the recent macro that's been called out by the Shift4 team. Chris and Taylor and team talked about a little bit of volatility, right, some weeks up, some weeks down. And Chris, we just put a little bit of context around that and maybe talk a little bit about how investors should be thinking about some of the Q4 guidance metrics?

Sure. I think what you're alluding to is on our third quarter earnings call, we made reference to a couple of data points that we were seeing within our really broad data set. So as a scaled payments company that has really great vertical leadership within areas like restaurant and hotel, we have the privileged position of seeing a lot of interesting data.

And something that was coming in as a question was what were the recent trends around that data. And one of those trends was that in the domestic restaurant, domestic lodging categories, we were seeing kind of week-over-week -- sorry, week rolling 7-day year-over-year trends that were, call it, plus 1% to minus 4%. For context, we're used to seeing those trends at the, call it, plus/minus 1% to 2%. So a narrower band is what we're used to seeing, and the range was slightly more downside biased. And we wanted to call that out because it has had an impact on the same-store variable within those verticals in the base.

At the same time, we're really proud of the fact that from a vertical diversification standpoint, we are seeing the leadership position we have in stadiums entertainment, the leadership position we have now in luxury retail and in other verticals more broadly, it gives us a vantage point that allows us to see not only those trends, but trends as a whole that I think are quite interesting in our business and certainly have been interesting to investors, topic of a lot of conversation.

All right. Great. Well, thank you. That's a great way to recap. Maybe you could talk a little bit about now we're a little deeper into the quarter and really what that means around that range that was provided for Q4 GMV.

Yes. So the -- let's start with the trends. I mean they remain consistent in terms of what we had previously discussed and disclosed. And from that standpoint, we remain with a more cautious tone within it. But as it relates to the guidance itself, what we had talked about, really no change in sort of our thinking around it, consistent with the way we had felt in the quarter.

All right. Sounds great. Thank you, Chris. Let's move on to the Shift4 Way. So this past year, we've seen Shift4 do more of the type of activity that would very much be aligned with the Shift4 Way. So you've been making some acquisitions and really executing on some of the prior ones, Vectron, VenueNext, Revel, Appetize and many more add to that list, which we like to say is they add to your cross-sell Rolodex and Global Blue, Bambora, SmartPay, the list just continues to go on. Maybe you could talk a little bit about some of these specifically and how this will feed into kind of next year's cross-sell funnel.

Absolutely. Well, actually, it's where you ended that question is exactly the most exciting part about the acquisitions that we make because from our perspective, topping the funnel or adding to this cross-sell potential that we have is one of the most attractive part in what we believe is our unique model. The ability to deploy capital in order to obtain a unique and differentiated access to customer acquisition and expanding our markets is, I think, one of the most important things that we do in order to differentiate ourselves and drive a better return of capital outcome right at the unit economic level of customer acquisition.

We could deploy capital in a lot of different distribution channels, distribution methods. You could put money into a Google AdWords campaign. For us, this idea of being disciplined on the acquisition of a business that has an installed base and a state, a cross-sell potential in its funnel that we can then, through that acquisition, have differentiated and low and disciplined cost of capital to really convert and acquire the customer.

To us, it's really quite a distinction in our unit economic model and one that historically has driven high returns on capital over time. Bucket one, that's why in our kind of strategic priorities around acquisition capital allocation, we talk about the cross-sell funnel as like one of the most important priorities.

The second priority within it, though, that comes is often capabilities enhancements. So even though most of these acquisition thesis are justifiable on their own from the perspective of the funnel, they often come with interesting capabilities enhancements. What is the capabilities enhancement? In the case of Bambora, as we announced in the third quarter, the bringing on of a payment modality like EFT ACH in North America, that's a competency, a capability that we didn't have before. In the case of Global Blue, we often talk about the tax-free shopping, the entry into the luxury retail category. What we don't talk a lot about is that they brought a proprietary dynamic currency conversion capability. That DCC capability is not only an interesting product in and of itself, but it's something we can cross-sell back into our base. So this idea that capabilities come over and above these incredibly interesting cross-sell funnel opportunities to expand that is something that is an important part of what we underwrite within our models.

And then the third from that is simply market expansion. So the opportunity to expand into a geographic region or densify a geographic region. We announced the closing of SmartPay in the Australia, New Zealand region. That created a lot of density for us in a country that we were emerging and growing our share within.

In the case of Bambora, that's giving us more North America, which really is about in Canada, building some density there as well. So three big buckets, the idea of expanding funnel, the idea of capabilities enhancements and the idea of market expansion, those are all the ways with which we think about excitement within these underwritten acquisitions.

Excellent. Thank you Chris. A minor follow-up before we get into some of the vertical mix. But related to that cross-sell funnel shifting over to end-to-end volume, would you say that there's any change maybe in the composition of that as we head into next year as we think about kind of higher-yielding merchants versus lower yielding in terms of their merchant size?

Yes. No, it's a great question. And it is -- it's an astute observation. Our business is, one, when you go to the history of the company, we were really a business that was born SMB in the history of the business, really born one vertical where we -- our first vertical of real strength and leadership is restaurant -- was restaurant. We were born SMB there. And then for those of us that have followed the story over the years, we went from one vertical market leader to becoming now a vertical market leader in 4 verticals.

Restaurant, we add hospitality, you add stadiums and entertainment and now luxury retail. The interesting thing within that mix is verticals 2 and 3 are good examples of places where our mix started to shift towards enterprise. So over the last few years, you would have heard the story in our narrative and you would have seen it in the numbers that our volumes were growing faster than our spreads. And that was because of this mix shift towards enterprise.

But now you can fast forward to Global Blue as a good example of an area where our most exciting opportunity within that business to cross-sell is within the SMB. It's not contrary to popular belief, it's not necessarily in the enterprise side. It's actually about the opportunity in SMB. To contextualize it, there's a $500 billion sort of cross-sell funnel type opportunity within -- for payments within Global Blue. $100 billion of it is the SMB component.

And so when you think about, well, what does that mean over time within the narrative? Well, if you follow the history, born SMB single vertical, adding leadership in verticals that tend to be enterprise, mix shifting towards enterprise, there is a scenario here, not trying to do any sort of guides around this or anything, but there is a scenario here where we may see mix shift that is different than this historical trajectory.

Excellent. That's really helpful context. Thank you, Chris. All right. So I think you hit a little bit on the SMB versus the enterprise evolution over the years and how that could look a little bit for next year. Maybe we just touch on that point of yields, maybe we can do that more from a vertical view and also U.S. versus international. Just any high-level comments you could make around directional take rates. I mean, obviously, we know restaurants a little higher, hotel a little bit lower? And then maybe you could expand upon that across the other verticals?

Yes. The take rate to volume question is something that if you're a student of the payment space, and I've been investing in the payment space or around the payment space for almost 2 decades now, like there's this very popular chart that's always shown to you when you first start studying payments, it's 3 pyramids that show you that volume is really a -- like you have this inverted pyramid that shows you that volume, the most amount of the payment volume sits with enterprise, the least amount sits with SMB. But then right beside it is an inverted pyramid that shows you from a revenue standpoint, AKA translating that into spread, the revenues and the spreads are the smallest in enterprise and then they're the largest within SMB.

And that dynamic is really something that I think is important to understand because when you start to think about verticals, what we see is that a vertical like stadiums entertainment, a vertical like lodging even, they tend to be more enterprise skewed. And then within our base of unified commerce, you have very, very large enterprises that run everything from technology and telecom to public sector and nonprofit in a variety of other areas.

And so depending on that mix of the business from a vertical standpoint, you actually can triangulate a little bit to an enterprise versus SMB mix in restaurant, more SMB and in what could be luxury retail probably to be more SMB.

Thank you, Chris. And on U.S. versus international, we understand there's a little obvious changes on the gross level, but when we get down to the net take rate level?

Yes. So it's interesting because I think there's a prevailing view that take rates in international markets relative to the U.S. are lower. And actually, what we've uncovered is when you're bringing a value proposition of bundled integrated payments, software mixed with the proposition that we bring of software service support, hardware mixed with the bundled payment offering, that whole collection together is delivering value that actually is translating into a monetization of spread that isn't that dissimilar to what we're seeing in the U.S.

And that, I think, is yet another surprise that no matter where you are, solving complex payment problems through an integrated solution and delivering this, call it, one hand to shake kind of an approach, it really does have monetization power.

All right, Chris, that's really helpful. All right. We're going to move on to SkyTab. So SkyTab clearly well covered at the Investor Day. But let's do just a little bit of a kind of a recap and refresh on SkyTab. Just starting with a little bit of what's the ideal or average restaurant size? Or what's the real target market for SkyTab? And then more specifically in terms of the competitors, I mean, how much is it up against a Toast, Clover, SpotOn, MICROS, NCR, who are the most predominantly viewed competitors that you go up to against head-to-head?

Yes. I think we often talk about with a healthy respect Toast as within the restaurant space. I don't think that should surprise anyone that we sort of view them as the market leader. At the same time, I'd be remiss if we didn't mention that seeing Micros, AK, Oracle in a lot of hospitality restaurants that are tied to hospitality environments or enterprise restaurants themselves, that's fairly common, too.

I don't know where your dining patterns are. But if you took a look behind the wait station or the bar, you probably see those systems as being pretty prevalent. And that's really where I would say we see our offerings play and where -- and you could define the category that way. It's really about table side dining, and it's really about the caliber of restaurant that you would see a Toast or a MICROS in.

Now I think there are some unique differences though as well, which is to say each of those parties has their own subcategories. I think it's too easy to paint with a broad brush that restaurants or restaurants. The reality is table service restaurants, table service dining and the complexity of what a POS does in table service is very distinct and different from what it does in QSR.

And when you think about a Toast, for example, you might see them straddle that world of table side and QSR. In a world of Square, you don't see Square in table side, but you might see them more in something that is a mix of restaurant to retail, right? You might see that category. So it is important to understand, I think, those distinctions when you're doing your market mapping of competition because not all of those categories are ubiquitously served by a single POS.

Excellent. Thank you, Chris. A minor follow-up to that. So clearly, when you're selling a modern point of sale with a software component to it along with end-to-end payments volume, there is a total cost, which can be split across either SaaS fees or payments revenue. It's kind of your choice on how you want to do that.

Clearly, Shift4 has gone a little bit more towards the payments means of monetization. But when you're pitching to a restaurant and you're talking about the total cost that they're going to pay, how would you compare the SkyTab offering to some of those major competitors that you just mentioned?

Yes. I think we undoubtedly believe that we have like lowest total cost of ownership to a restaurant merchant. And it's important not just from an upfront standpoint. It's also about the over time, the idea that there isn't going to be a nickel and diming around peripherals, right? Our uptime is your uptime. Our North Star on the most important part of the revenue model is the transactional component of monetizing payments.

If I take that out of the jargon for this room, it really means that if you're online, if you're uptime, if you're actually delivering revenue to yourself as a merchant, that's the only way we're also going to receive revenue. And so from that standpoint, I think we're very well aligned. So there isn't an upfront to buy multiple POS stations at $5,000 a pop. And then every time a peripheral changes or a handheld changes or this that or the other, there aren't charges for those things from that perspective. We're really about trying to align ourselves to the uptime and deliver the lowest total cost of ownership.

Excellent. All right. Chris, we're going to move on to another great topic, which is stadiums and events. So at the time of the IPO, there was the one stadium, there was the Raider stadium, and now there's a whole bunch. And every shareholder letter has a bunch more in it. It seems like there's a press release every few weeks. Part of winning those, we know, has to do with some of the ability for Shift4 to process payments across, again, in that multi-software environment.

One of those environments is the ticketing environment. The integrations that you've done with Ticketmaster, SeatGeek, Paciolan and Ticket Socket, the list goes on. Talk a little bit about how that's helping you sell to the stadiums. Clearly, it's been working quite well. And maybe you could give us a brief update directionally on where you think your market share sits?

Yes. It's a great nuance because you can look at the stadiums and entertainment environment, you can look at the logos that we talk about. And we often make mention of 3/4 of sports -- of professional sports venues are likely using our software. And this is really what we're talking about in the context of SkyTab venue and what does that really mean? That really means the in-venue experience around things like F&B and retail. What does it often not mean? It often does not mean the ticketing piece yet, which has been one of the fastest-growing areas for us because even though we had the market-leading solution in SkyTab venue, delivering the software that allowed for an integrated payment experience inside the venue, we did not, at the early phase, have the payment integrations for the aforementioned ticketing vendors.

Building that integration library, so to speak, to the ticketing players was a piece in the deal objectives and the road map that we had to do. Well we got that done. And once that did get done, you started to see a very nice attach rate coming through as it relates to ticketing. An important component is on a relative volume basis, in some venues, ticketing relative to F&B volume, it can be 1:1. But in some venues, you can see a 6:1 relative volume differential in the ticketing side relative to what is transacted inside of the 4 walls of the venue.

And so the ticketing opportunity is very exciting, and we are not at anywhere close to the same market share in ticketing as we are within the inside the venue experience of integrated payment and SkyTab venue POS. So that's still a nice growth driver within that business and something that we're obviously very excited about. It's also really important to note, just to underscore it, though, that it's easy for us to say we are a leader within a vertical, and that's the end of the story.

I think this nuance that there are more opportunities because -- to get volume across different revenue centers even once you've landed. So a lot of our verticals do still have land and expand potential even after the market share is determined.

All right. Excellent. What we're going to do with the time remaining, we're going to hit a couple of financial topics, and then Chris was kind enough to say that he'd be happy to take a few questions from the audience. So if you'd like to, I'll bring the microphone around to you. Let's hit a couple of these quickly on a couple of financial items. So the stock repurchase program. So you talked about a $1 billion repurchase program. I wonder if you could just expand upon that a little bit. What gave you the confidence and kind of put that in context of some of your leverage levels, et cetera?

Yes. I think for one, it's actually just been a recurring component of the business to evaluate from a Board standpoint to evaluate the share repurchase authorization. If you look at the history of the company since public over the 5 years, we've gone from a no authorization to a $250 million authorization, doubling it to a $500 million authorization and then the most recent announcement, which is a $1 billion authorization that will go all the way through to the end of '26.

In the ordinary course, the third quarter was the natural time for the Board to evaluate the share reauthorization since the prior one or the most recent one was supposed to expire at the end of the year. Now it happened to coincide with things that seem to happen within our industry and within our own valuation that makes executing against that share repurchase authorization actually more of a priority than it may have otherwise been, which is to say we view at present that the valuation underlying the shares seems like an attractive place to allocate capital and something we talked about on the call for context.

This valuation level for share of share repurchases would actually be below and lower than the lowest we've acquired shares in historical repurchase authorizations.

Excellent. Another $1 billion number, which is your guidance to reach that as exiting this guidance period in terms of your run rate for free cash flow. So you recently reiterated that. Maybe you could expand upon that target?

Yes. I mean it's one of those points of -- I think I did get asked the question around at one point, if there was one KPI that mattered to you in terms of getting to know you, what is it? And at the end of the day, like free cash -- like cash is king, right? Like adjusted free cash flow as a metric is an important North Star. And it's one that I think at the end of the day is what we should be measured on. The $1 billion adjusted free cash flow target as an exit rate to the 2027, the end of our medium-term guide is what we've had as a target, and it is something that we are very focused on.

Excellent. All right. Well, actually, why don't we wrap with one last and then we'll go to the audience. So the medium-term framework, right? So the 3 scenarios that you laid out. Maybe you could just talk a little bit about now we're close to 1 year past, how you're tracking against those? What kind of confidence you have in the medium-term outlook?

Yes. So no difference in the way we talked about this at the third quarter call. I mean, I think one of the things that we did talk about was within these 3 medium-term outlook cases, we have the case that we phrase is sit on our hands, which is a high-teens case. We then have a case of sit on our hands or high teens, but then you add in the acquisition of Global Blue, which we announced at the time of the Investor Day.

And then if we continue to deploy capital in a manner that's similar to what we've done in the past, we have this third case, which is a case that we feel strongly about because we actually have been able to announce things like Bambora, announce things like the closing of SmartPay, good places to have invested capital in places that we think will generate really attractive returns from.

When you look at those three cases, I think from across the board, we view ourselves as having conviction around those cases. We even gave a kind of a pull forward of the medium-term guidance, a pull forward of an update to the medium-term guidance by disclosing an organic growth figure in the third quarter of year-over-year organic growth of 18%. That actually, in our minds, is a tracker method against the sit on our hands case, and we think it compares favorably. So in summary, I think we feel good about where we're tracking on our medium-term outlook.

That's great, Chris. Thank you so much. And we did leave a few minutes. In case anyone in the audience would like to ask a question, please just raise your hand, and I'll bring you the microphone. Here we go.

Chris. A lot of your competitors are talking about making larger investments within direct sales force. Can you just remind us what your distribution philosophy is? And especially as you buy and acquire these assets, I'm sure they come with their own distribution. How do you synthesize those together and create one organization that's working towards the same direction?

Sure. I'm going to start with a quick clarifier on your question. The phrasing of a lot of our competitors really speaks to one vertical where we're a leader, which is probably, I'm assuming the restaurants vertical. Because when you actually look at our other 3 verticals of leadership, stadiums and entertainment, lodging and now luxury retail, our competitive set within those verticals is much more benign. And it's areas that we are very strong market leaders within.

So if I was to isolate on just the restaurant vertical and take your question of what is essentially the distribution or we'll say, distribution method point of difference. We talk a lot about the idea that within a vertical, we can take an inorganic approach of acquiring a business that has funnel capability or funnel expansion opportunity, capabilities enhancements and it opens up markets.

Once we have that position of an acquisition that gives us those things, within that acquisition, we now have a very unique seat with which to cross-sell our payments capability into. And we might do that with a depreciation of the existing revenue streams, whether they're software, whether they are other fees in exchange for what we believe to be a much stronger form of revenue in payments.

This idea of cross-sell being a component of how we win from a distribution standpoint because we're selling through the position of incumbency and giving more value in integrated payments and likely upgrading the solutions that they're utilizing, that to us is one point of difference. It's not to say we don't use the other methods of distribution as well. We do. We absolutely have a very strong distribution motion that allows us to go out and win in the open market within these industry-leading verticals but at the same time, everything should be adjudicated on relative return for a unit economic dollar deployed, right?

The relative CAC in the cross-sell is superior in our minds to the open market. So when you think about your question of if competitive intensity rises, how does that impact?

Well, actually, it would just tell me that on a relative basis, it's likely that the variance between my unit economic returns and my cross-sell to what's available in the open market probably got even better.

Well said, Chris. Thank you. I think we have time for one more, if anyone would like to jump in. Here we go.

Chris. You guys have done a lot of acquisitions. You talked about how the pipeline for gateway volumes is currently as big as it's ever been. Something that Shift4 has talked about historically is kind of using the carrot and the stick of kind of harvesting that over time. Can you maybe talk about whether this current gateway volume as big as it is, is time to maybe go back to that carrot and stick strategy? Or is there more kind of farming of the top of funnel that you're looking at?

Sure. So let me one clarifier. When we talk about the funnel, we're not just talking about gateway. We're talking about the variations of funnel that come from anything from gateway to point of sale to gift loyalty to tax-free shopping, right? These are all various products that have a unique ability to influence the procurement of payments. That's what makes them really attractive to us because our North Star is about the payments.

From that position, you have to do a very important analysis of what's going to work best within a gateway cross-sell versus a tax-free cross-sell versus a POS cross-sell because they are not created equal and different strategies and depends on the market you're in, like different strategies are going to work well in different permutations of market meets vertical.

So I think if your question is, will you utilize more Carat, more stick? To me, it's a nuanced question that you have to unpack by the situation. But we are utilizing kind of all of the variables that are inside of our playbook, and we have a lot of data to tell us and guide us into what playbook to use at a given time.

Excellent. I want to say again, thank you to Tom and to Chris for being here, a big part of our conference many years in a row. So thanks, guys. It was a pleasure doing this with you, Chris.

Awesome. Thank you very much.

All right. Quick picture and then we're going to go.

All right. Thanks for indulging me on that one.

No, we got to put it up. We're honored that his first fireside chat as CFO, Shift4's new CFO, Chris Cruz, is joining us. Before taking the CFO role, Chris served for nearly a decade on Shift4's Board, following his role at Searchlight Capital Partners majority investment in Shift4. He also brings a deep experience across financial services and fintech. So thank you for joining us.

Yes. Thank you. Thank you for that introduction.

So I must say you hit the ground running on your first inaugural earnings call. I think you did a good job of providing a foundation on how you see the path forward and how you plan to evolve the messaging process. Perhaps for the benefit of the audience, you can give a highlight of the quarter and then what your primary focus areas are for the upcoming year?

Sure. Well, first off, thank you for having me. Like you said, it's always nice to get this -- the first of my fireside chats under the belt. So thank you. I'd say that the highlights for the quarter from our perspective was that we were able to deliver in line kind of the idea that we'll continue to do what we say and have always said that we will do. It was a quarter where we actually pulled forward our update about our medium-term guidance and helped highlight for people that we are in line with the medium-term guidance and that our medium-term guidance outlook remains intact, of which there are many metrics within that medium-term guidance.

But one that's very near and dear to my heart is the potential ability to get to being ahead around the adjusted free cash flow exit rate of $1 billion by 2027. That at the end, I'm a cash is king kind of guy, and I'm intrinsics in that way. But I think that the idea that we were able to affirm around those things and that we continue to do what we say and have said we will do, that's highlight number one. We gave an outlook that I think also was in a narrower range, a guidance that's in line with what we said we would do from a full year guide perspective. And that number two is, I think, something that we're proud of.

I think the third thing that we're really proud of is that the integration around Global Blue, an acquisition that I'm sure we'll talk about and that is a really exciting one for us, is ahead of schedule around a number of the integration fronts and that 2026 for us with Global Blue should be a really exciting one where we finally start to realize some of the value creation on the revenue side of that business. But those are 3 things that come to mind for me as far as important takeaways.

And then I'd be remiss if I didn't say that we also, in this quarter, announced that our Board had authorized a $1 billion share repurchase program, which is about double the size of our prior share repurchase program. So $1 billion relative to what was $500 million expiring at the end of this year.

And that, as capital allocation-minded people, we are eager to kind of execute against that authorization because right now, we're seeing our shares sort of trade lower on a multiple basis than the lowest we've ever procured them in the past. So it's a good balance to the overall equation of what we see organically, of what we see inorganically and then also just how we think about capital allocation in the overall picture of our framework. So those were a few of the highlights.

Wonderful. And as we think about the primary focus areas for this upcoming year, what are they?

Yes. The primary focus area for us is continue this exercise of diversifying and scaling. So I think one of the things that we're really proud of is that without subjecting anyone to a J-curve or an investment curve that might manifest itself through EBITDA margin degradation, we have been able to expand to now covering 6 continents. We're in many geographic new markets, namely in Europe. The underlying product set that we have, we were already leaders in restaurant, lodging, stadiums, entertainment, but to add this luxury retail vertical to it and now have 4 market-leading products, that kind of diversification to us is something we're really proud of. And it's going to remain a focus is really being able to continue fortifying around that diversification. That's one.

Two, I alluded to it, but the opportunity to cross-sell and really start to harvest the value creation from the Global Blue acquisition, that's a really critical and huge value driver this coming year. I would say number three, within that is we look at our market-leading position within restaurants, and there is a lot of opportunity with our SkyTab product set, not only domestically, but we're seeing a huge growth internationally, where the demand for integrated payments, especially for that SMB, it remains unsatiated. And so the opportunity set there is really exciting.

Those are a couple of the kind of focus areas, but I don't think we're going to stay away from our core knitting as well of continuing to find really attractive opportunities to deploy capital on either capabilities enhancements or what we call funnel toppers as a nomenclature that had been used in the past, but ways with which we can be really efficient at growing the customer acquisition opportunity in our way.

Okay. Just taking your products into new markets, can you just talk about sort of what that entails and the message you want investors to walk away regarding this theme?

Yes. So I would say that what we view as an efficient and also disciplined approach to new market entry, and let's use Europe as an example, where we have new markets that are opening for us. Take a market like Germany. What we have there is a place where off of our payment processing capabilities across Europe as a licensed direct member of the card networks and the card schemes, we have the ability to process payments baseline. From there, we then added the layer of using our market-leading position in restaurants, to enter that market with product #1.

So -- but what don't we have in a market like Germany? We don't yet have the market position on lodging that we benefit from in the U.S. market. We certainly don't yet have Bayern Munich as a football club, soccer, American soccer club, and that stadium, where our stadiums and entertainment software and solutions, which you would find in almost 3/4 of the stadiums in America, that's not there. And happily, our luxury shopping -- luxury retail experience from Global Blue, it is there, but it isn't yet in the format of cross-sold with DCC solutions and integrated with our payment product.

So what I would take away is when you look at any of the markets we're expanding into, how many of our market-leading products are present. And when those market-leading products become present, can they get to the levels that we experience from a market share standpoint in one of the most competitive markets in the world in the United States.

And if you can answer that question and believe in that as an underlying pillar of growth, you'll be able to understand why we're so excited about this, right? And it's not just about one trick pony of restaurants or lodging, right? We're looking at expanding. And we've been able to expand to create market-leading positions in verticals, and we don't intend to stop.

We're really judicious about tearing down an industry structure within a vertical, trying to find the most important component that might influence the payment processing cross-sell within that industry and then going after the assets, either organically or inorganically that are going to make that vertical make sense for us.

So notably, we didn't buy a retail POS company, right? That was not what our industry research told us was the teardown way to approach retail. But to have a business that represents an 80% share of tax-free shopping to the most incredible luxury -- global luxury retail brands in the world and then from that position of strength, serves tens of thousands of other SMBs to facilitate a luxury retail tax-free shopping experience, that's unique. That's interesting. And that is embedded deeply within the POS integrated flow and within the payments integrated flow.

So for us, when we did our industry teardown work as it related to specialty retail, we tore it down from specialty to luxury to find that very specific area that was going to be unique, non-commoditized. So that's what I mean -- that's what I'd like people to take away from is think about these market entries and think about our market-leading products in these markets and put that equation together as our organic right to win from a growth standpoint.

So do you think that there's been going to be more of such deals? Do you have to spend money to sort of now grow that business organically? Like how should we think about the path forward in terms of that?

I would say right now, the funnel is obviously a north of $1 trillion funnel for us in terms of payment conversion opportunity. It's the largest it's ever been. Global Blue alone is a $500 billion opportunity, of which 20% of it is SMB. And that $100 billion relative to where we sit today from a volume opportunity is massive in and of itself. So I would say right now, execution is really at the forefront of mind. And if embedded within that question is, do you still see an interesting set of opportunities inorganically to deploy capital? I would look no further than the announcement we made in the quarter.

The ability to carve out a business of a gateway that has $90 billion of volume that we refer to as Bambora, that is right down the fairway of what we do and only deploying $80 million of capital against other capital allocation announcements we've made, such as our $1 billion share repurchase authorization. I hope that you take away from it that we're approaching this with our playbook, but we're also not losing sight of what is the most efficient way to deploy the capital.

So yes, I think there will always be these opportunistic places to make inorganic investments and continue to expand our funnel, but we have plenty to get through with our north of $1 trillion opportunity.

Perfect. I want to touch on something you talked about during earnings. Obviously, as you spoke to, you guys have a pretty diverse platform now across many different industry verticals, but a big one is restaurant and hospitality, and you did talk about choppiness in that market, right? Could you just talk a little bit more about what's driving that? And it seems like it's gone up and down even over the course of the last month or so. So maybe you could just unpack that a little bit and maybe pinpoint sort of what you think is driving that?

Sure. So what we -- we'll start with the context -- what we talked about in the quarter was as a company that has the benefit of very large data assets, we get to see how spending is moving through huge parts of the economy and with very interesting cohorts of people -- of consumers. So we get to see the best Western off the highway, and we get to see the affluent American that can travel to Europe and buy luxury goods. And that concept of seeing the bifurcation is a very unique position to be in.

And when we married what we were seeing in our data, which was a slightly downward skewed set of same-store sales numbers, I think on the call, we talked about it within restaurant and lodging as being a plus 1% same-store sales to a minus 4%, and that's relative to historically, we tend to see things a little more stable at a plus/minus 1% to 2% within the same-store sales end markets. When that started to show itself, we then married it with the appended third-party data that we were seeing from other sources and then triangulating it with the qualitative that we were hearing from everyone from Chipotle to JetBlue to the Fed.

And this narrative of there's a bifurcated consumer, it would seem like the consumer at the low and middle end is starting to pull back. We are seeing elements of that within our own data sets, and it created a cautious tone. Now at the same time, I don't think that should surprise anyone. And in terms of the variables that we can control, we will act on those. So if we know that there's a slightly defensive posture within our same-store sales in some of our end markets, it just means you're allocating capital to the end markets that are less affected, and it means that you're going to emphasize customer acquisition discipline in the places that have more certainty.

What does that translate into? It translates into us having a really high conviction around adjusted EBITDA and certainly around free cash flow conversion. So that's a little bit of what we're seeing and what we're responding to.

Okay. You affirmed your full year guidance with a narrowed range and pointed to the volatility as the basis for the wider range on volumes versus the other guidance KPIs. Does the updated guidance entirely reflect this tempered expectation?

Yes. Our view is that I would have loved to have -- I and we would have loved to have had a narrower range in terms of the low to high on the volume. But I think as we looked at the data and we were looking at some of the volatility of that data, we just thought it was the right message to send that there's a real intentionality to the shape of this and that there is more volatility.

Okay. Good to hear. I think that investors appreciate the disclosures around organic growth, especially the ones in the third quarter. And you talked about that it was tracking to sort of the 18% organic growth. Could you maybe decompose the organic growth into the core building blocks such as market growth, share gains in core verticals and then international exposure?

Sure, sure. So we -- I'll say directionally, right, we don't really deconstruct the building blocks. But I think it's fair to say that right now, in terms of the same-store number that we have disclosed, where we talk a bit about what are the trends we're seeing and how that in our -- in markets like domestic lodging and domestic restaurant, that has been more muted. Where we're seeing huge growth is this new market entry, bearing the benefits of the new market entry and expansion into international markets, that's where we're seeing a massive amount of growth.

I think there's a few data points that all the way down to how many of our SkyTab products are we installing within international markets, those numbers to us are real pride points, 1,300 in the quarter as it relates to our SkyTab counts in terms of new wins is something we talk about.

So when you deconstruct these 2 parts of domestic volumes versus international volumes, I think it's fair to say that we are seeing a really pronounced growth within the international markets. That said, we're also seeing it when you deconstruct some of the underlying verticals. Our luxury retail tax-free shopping business on its own grew 19%. And so those are examples where when you kind of look at the component parts, you'd be hard-pressed to find something in our business that is growing -- that is not growing at double-digit rates, even when you sort of break out the sum of the parts.

Got it. I want to move to like guidance philosophy because it's something you talked about. And you mentioned that there's no change to the guidance philosophy at this point, but you left the door open for there to be a change. So maybe you could talk about how this guidance philosophy could evolve as we move into 2026?

It's a great question, and it's one that as somebody that's been sitting on what I call a bit of a listening tour with investors, with analysts, I clearly appreciate at this point in time why it's such an important topic. And so I want to say 2 things within that topic. One, totally reinforce what you said. There's no intended change in the quarter that we just had, no intended change to anything philosophical. It was a very specific and intentional approach not to change that philosophy.

But in '26, especially now as I enter my 12th week in the seat, and we are deep and steep into developing what is a '26 plan that has a lot of interesting value creation levers within it. I think the idea of trying to be more, we'll say, of a guide philosophy that needs to be acknowledging that there needs -- there could be a revisit to that guidance philosophy, I think that's important.

I say that though, and I also acknowledge that having had a 10-year front row seat to this business alongside a really incredible management team that has benefited from a philosophy that manages the business by setting bold expectations. And even if it means that when you shoot for the moon, you land on a star or maybe the better terminology now, you shoot for Mars and you land on the moon, like if that philosophy has led to a massive amount of growth from a basement start-up to where we are today, you don't want to dramatically change and hurt the culture that approaches things with bold ambitious targets.

So there is this balancing act of a company and its culture and how it sets its targets and how it tries to hit those bold and ambitious targets, and then also acknowledging that there are market dynamics that might favor a different approach to guidance. So in the listening that I'm doing, acknowledging those 2 bookends, it wouldn't shock me if we find ourselves somewhere in between.

That makes sense. I won't push you on that more because I know you don't want to give guidance.

There's plenty of time to talk more about this between now and February.

No, I could, but I won't. Okay. Maybe you could talk about capital priorities going forward post the Global Blue acquisition. Obviously, you guys announced a big share buyback program. There's deleveraging, organic growth, inorganic growth. Maybe just prioritize sort of how you guys are looking at it right now?

Sure. So our capital allocation framework, we've talked about it many times, 4 big component parts: number one, invest in customer acquisition; number two, invest in product and capabilities enhancements; number three, inorganic growth; and number four, more of the share repurchase approach to capital allocation. Unambiguously, share repurchase right now, I think, is the most compelling on a relative value basis to things we see. But nothing is ever absolute. You don't ever approach this 4-part capital allocation model and say, hey, if there's a great opportunity to tuck in a gateway conversion at a really attractive value, you don't say no to that. The market gives you that opportunity when it wants to give you that opportunity.

Expanding into international markets, which really is an investment in customer acquisition by another name, right, going into these new places in order to be able to bring market-leading solutions, you don't stop doing that because you think the valuation in your shares is interesting. So I would say right now, we are firing on all 4 cylinders where we did make an announcement in the third quarter about Bambora, where we continue to invest. If you looked at our cap software to revenue, it's only risen over time. So we don't underinvest in technology. We don't underinvest in platform. We don't have catch-up CapEx dynamics.

And if you look at customer acquisition, we approach things with a mentality that our funnel is the widest it's ever been. We're in the most markets we've ever been, and we need to bring these market-leading solutions into those geographic regions. So we are going to do all 4, but it is really hard for me not -- it's really hard for me right now to ignore where we sit within our repurchase opportunity.

And can we just talk about how quickly you could expand the $1 billion? Like what's the time line?

I think of it as investing as opposed to spending, just to kind of put that finer point on it.

Deploy. All right. Okay.

Deploying, that might be another good term. But I would say Look, there's -- we don't want to guide to a pace. We don't want to guide around exactly what we're doing within it. I think the easy way to describe it right now is, since the valuation is below the lowest we've ever acquired the stock, and I hope all of the ways with which we've been conveying it would suggest that we want to be actively executing against this.

When you think about a couple of the other things that I said on the call, we today are sitting at an LTM pro forma net leverage of 3.2x. Generally, as a general matter, as a guidance matter, we do not want to have leverage be sustainably above 3.75x. So if you thought about a 0.5x, right? If you thought about what that means, that alone, that's $0.5 billion. And so you sort of have a few things out there that could give some visibility into what is in our capacity.

But at the same time, too, we are going to be looking at the continued valuation and be opportunistic there. And we're going to look at not necessarily wanting to always have a bit of a measured approach within this because historically, we've repurchased shares almost every quarter. It's really important to us as having an owner's mentality to be as absolutely dilution neutral as we can be. So dilution neutral to SBC, dilution neutral to other areas. I mean, we are looking at EPS and free cash flow per share as important metrics for any one of us that is thinking with an owner -- a long-term owner's mentality.

Great. I want to touch on free cash flow. You've guided to 50% plus adjusted free cash flow conversion. What are the primary levers that drive this metric higher towards your long-term goal of $1 billion?

Sure. So I would say absolute growth is going to be the #1 biggest driver for us. We have a business that this year will do almost $0.5 billion of adjusted free cash flow. And in the quarter we just announced, obviously, sitting north of $140 million and quite proud of our ability to continue free cash flow conversion even at a high 40s rate at a time when our interest expense is really still coming -- is at the highest level it's been, right, from the perspective that our capital structure today is the capital structure that accommodated the closure of the Global Blue transaction on July 3.

So when you think about where we sit from an interest expense standpoint, we are -- and thinking about the seasonality of interest expense, Q3 of this year might be the highest interest expense you would expect to see. So when you think about how many points of free cash flow conversion that impacts, if you go year-over-year, we had like an 8-point swing in free cash flow conversion on simply interest expense alone.

So you look at our pace of deleveraging or you look at our growth outlook, and I imagine that by the time we get to exit rate '27, one of the biggest step function changes within free cash flow conversion would simply be the mathematical reduction in interest.

Now if we find ourselves with interesting opportunities to deploy that capital, let's say, inorganically, we're certainly only going to do it with free cash flow accretion. We're going to have an eye towards free cash flow accretion in mind. So what does that mean? Well, again, hold us to the standard of what you've just seen. Q3 was the closure of a large acquisition and taking on capital structure that now had a higher cash interest expense. On a year-over-year basis, we still grew adjusted free cash flow dollars.

So I think we are disciplined in how we think about cash flow accretion. And I think whether you want to assume we are deleveraging and put that into the model or whether you want to look at our historical track record of having deployed capital and still be able to be accretive to free cash flow generation, I think both of those things kind of fit within the model.

But for simple math, if you model it out and just say, I'm going to run the business out from here, I'm not going to assume deployments. What you will see in your model is that you're going to see a large step function change in free cash flow conversion points simply from deleveraging. And then you add the growth on top of that, and you'll end up with a conversion metric that I think is very achievable.

Okay. Great. I want to kind of summarize all of these lines of questionings into the stock. Okay, right, which is I think the game plan for you to get stock -- for the firm to get the stock back on track is number one, obviously, refining the messaging and ensuring that the targets are aligned with sort of how the Street is thinking about it.

You want the Street to sort of understand what you guys are doing in terms of expanding and growing the business, especially internationally, where there's been a lot of movement, especially with Global Blue and sort of questioning of what that acquisition brings and how that -- and I have a line of questioning on Global Blue, but I want to make sure this point is hit.

And then obviously, capital management and putting your money where your mouth is and buying back stock. Like is there anything I'm missing?

Well, those are your statements, but I would say that I think those are all important value drivers for sure. I think we do believe, though, that a big thing that's missed about our business is just fundamental durability of growth. I genuinely believe that we have demonstrated our ability to consistently grow the business at high rates this idea that we put out a medium-term guidance that has -- I don't necessarily love the terminology, but sit on our hands case of high teens with Global Blue, mid-20s and then north of that, if we continue to deploy capital and do what we've historically done, find attractive ways to generate returns on capital deployed. If we do all of that, we should be a business that can grow in the mid- to high 20s according to those medium-term guides.

But even if you said, okay, all you're going to do is your organic case of being a high teens growing business, I struggle with the model folks are building that would somehow suggest there's any data points that would suggest we're doing something less. And if we are that, then I would say this question mark around durability of growth, which from my investor lens, should manifest itself in a growth-adjusted multiple greater than 1, because it has durability and it has visibility would tell you that our underlying valuation multiple is either wrong or that there's huge question marks that we really have to help close the gap on around durability of growth. But between those 2, that's probably the only other one I'd add.

Yes. Good. That's very clear. But maybe we can just dig a little bit deeper into because I do think Global Blue is a really instrumental part of the story on a go-forward basis, as you indicated. Maybe you could just talk about sort of your -- the early read on Global Blue. You've had some choppiness in Asia Pacific, for example. Was that sort of unforeseen? Or is that just normal course of business?

I would say it was foreseeable, but modeling it was difficult because of the absolute magnitude of the numbers. So for the context point around this, Global Blue has measures there, we'll call it, GMV or volume metric in what's called sales in-store. That sales in-store metric within Asia Pacific, so within the Asia Pacific region was a minus 11% for the quarter. And the European region, which is the majority of the business, was a plus 13%. That translated into a global sales in store of a plus 5%.

So let's unpack the minus 11%. Within Asia Pacific, you're talking about the Japan market. Within the Japan market, what you're really talking about is an issue where Japan was anniversary-ing a comp that was north of 100% -- and so it's less about was it foreseeable that it was going to be off that 100% comp? Yes. Modeling that was really, really difficult.

And when we were starting to see certain weeks that were performing off plan, we got a little bit nervous and started to think about, well, what about this is understood? And what about this should be understood more transparently to our constituents. And I think that's where the Asia Pacific story really narrows. Now everything is normalized, and now we are back to -- we've anniversaried that heightened level of comp set, and now we're at a place where we're seeing a very stable business, but isolated.

So then let's bring it back, though. Where does that fit within the larger scheme of things in terms of what we're trying to drive value creation around -- to us, Yes, that was an event that happened. But the biggest value creation for us is about the payment cross-sell. The business still grew 19% revenues year-over-year. The business still grew global sales at a 5% variable. So yes, it has its anomalies within its portfolio, but it's still a good business. And our biggest opportunity is to go and tackle a $500 billion cross-sell, $100 billion of which is SMB, where in the end, we are displacing an unintegrated bank processor. That is something we've had a great deal of success doing in the markets where we're already leaders.

Perfect. And that 19% that you mentioned, how do you think it sort of tracks into 2026 and long term?

Yes. So, again, I don't want to give guidance around how we view any one subcomponent of the business or especially for the Global Blue business. But I would say that the idea of Global Blue having been a public company before and having had medium-term outlook in the past is something that I think is a relevant data point, right? I think in the past, as a public company, they've provided medium-term outlooks themselves that were kind of in the low to mid-double digits of growth. And I think that's relevant. I think structurally, the business has that ability.

I think what's fundamentally missing from all of that is the Shift4 component of delivering on a conversion opportunity that's led through a real product point of difference. And when I say that, I mean, we're talking about today a tax-free shopping experience that, for the most part, is not as deeply integrated into a point-of-sale system and certainly is not integrated into the payment processing flow in a way that one would expect.

When you go into the enterprise of a Louis Vuitton, you will feel and see an experience that's totally integrated. But in the vast majority of the business, the tens of thousands of SMBs in Europe, that's not the version of the experience you see. That is a complex payment checkout with a bad sales associate experience and a bad consumer experience. And this is our jam. I mean simplify payment complexity. That is what we do. So that's the part of the business that I think is missing from that guidance -- that would have been missing from that historical stand-alone Global Blue public company guidance.

So as we think about the next 12 months, what can we expect in terms of progression against those goals?

So I think the big thing you're going to hear a lot about from us is the underlying progress of, first, getting out of beta and actually being live and starting to have real wins of customers that are using what we're going to refer to as this 3-in-1 payment experience where you can do payments, dynamic currency conversion and tax-free shopping all in a single device, even at an SMB, that's a really important milestone.

Once you get out of that milestone, it's about the go-lives, and it's about the progress that we're making with the for lack of a better term, the logo wins, the cover pages, the things that we have done to demonstrate our continued momentum in all of our other verticals, that's what you should start to see. Baltimore Ravens gets now supplemented by a luxury retail page that starts to show those wins. And it should manifest itself in our gross revenue less network fees numbers. All of the KPIs, it should manifest itself there. And as it comes through in '26, all of it then becomes really important anniversary-ing in building blocks as it becomes full year effected for '27.

Got it. How macro sensitive is Global Blue's business?

So I would say as a stand-alone business that is exposed to, we'll say, an upper income individual that has the means to travel for luxury goods, it has certainly its sensitivities. Those sensitivities seem to be quite durable right now and are a very interesting portfolio balance to other sensitivities that we at Shift4 have. That's statement one.

I'd say statement two, the elasticity of demand for that consumer is affected by things like the relative FX. And this is something that we tried to talk about within our shareholder materials because I think it was lost on some people. A soft U.S. dollar relative to the euro might have a positive effect on financial translation within our statements, but we are not rooting for that by any stretch of the imagination. Strong U.S. dollar to power the demand of that consumer to go abroad and purchase those goods and transact in those tax-free shopping ways, that far outweighs any financial translation benefit that we have.

So even though there were questions in the quarter about what was the benefit of financial translation, we look at it more as it was a detriment because it chilled and cooled demand. We're now seeing the reversion of that or we're seeing actually an improvement of that right now.

So I would say that, that's the other variable that we pay attention to. And if we thought we were a big data business, Global Blue's data assets are insane. I mean the ability to understand ticket level POS integrations to consumers across cohorts. I mean they are excellent at it. They're so good at their data set, data analysis, data assets, regressing impacts of FX, they actually are a really important consultant constituent to the luxury brands themselves. The brands pay for the data.

All right. I have one more before I see if anyone in the audience has questions. The 5% same-store sales number that you gave.

The sales in-store, yes.

In-store. Like what's a good growth rate for that business in terms of same-store sales on a go-forward basis?

So I'm not a luxury retail expert yet. But when you look at the underlying driver of luxury retail and the inflationary model that's baked into it, it's pretty enviable what they are allowed to do in terms of embedded inflation into core average selling prices. It's well north of a mid-single digit. That variable is structural within luxury.

What I don't have as an offset, which is more going to move, not as a durable movement, but rather it will move in a cycle is that, that demand that I just talked about can be affected by both FX and it can be affected by, we'll say, the perceptions of wealth effect that the high net worth is feeling.

So I think of take the luxury retail number of structural inflation in sales and then we'll say, offset it by some of these other, we'll say, macro drivers. And I think you're probably a little bit north of where they delivered this quarter.

Got it. Perfect. I'm sorry, we've run out of time audience, but thank you, Chris. Really appreciate it.

All right. Thank you. Appreciate it.

Greetings, and welcome to the Shift4 Q3 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

On today's call, we have Taylor Lauber, CEO; and Christopher N. Cruz, CFO. It is now my pleasure to introduce your host, Tom McCrohan, Head of Investor Relations. Thank you, Tom. You may begin.

Thank you, operator, and good morning, everyone, and welcome to Shift4's Third Quarter 2025 Earnings Conference Call. With me on the call today are Taylor Lauber, our CEO; and Chris Cruz, our Chief Financial Officer. This call is being webcast on the Investor Relations section of our website, which can be found at investors.shift4.com. .

Today's call is also being simulcast on X Spaces, which can be accessed through our corporate X account at Shift4. Our quarterly shareholder letter, quarterly financial results and other materials related to our quarterly results have all been posted to our IR website. Our call and earnings materials today include forward-looking statements. These statements are not guarantees of future performance, and our 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, which you can find on the SEC's website and the Investor Relations section of our corporate website. For any non-GAAP financial information discussed on this call, the related GAAP measures and reconciliations are available in today's quarterly shareholder letter.

With that, let me turn the call over to Taylor. Taylor?

Good morning, everyone. Thanks for joining the call. Starting with our quarterly performance, we delivered results in line with our Q3 guidance. Gross revenue less network fees were $589 million, and adjusted EBITDA was $292 million. Each of these was up 61% and 56%, respectively. When excluding the impact of Global Blue, gross revenue less network fees grew 19% year-over-year. You will find in our shareholder letter that we also highlight the organic growth of the business, that is to say excluding the impact of recent M&A. Chris will go into more detail here, but that growth was 18% year-over-year.

Volumes were in line with our expectations at roughly $55 billion. Each of these growth scenarios can be compared with the medium-term guidance we set forth in our Investor Day in February, and we've also done so in our shareholder letter. You will note that the high teens sit on our hands case compares favorably with 19% delivered in this quarter, while the inclusion of Global Blue obviously brings things notably higher. Furthermore, we continue to find attractive capital allocation opportunities, which supports our most likely case of 30%-plus gross revenue less network fee growth over the medium term. Chris will walk you through our adjusted free cash flow, but while early, we're also feeling ahead of pace for our $1 billion target.

Some notable puts and takes in the quarter. Our blended spreads on payment volume were stable at 62 basis points, and we expect them to remain so through the end of the year. Tax-free shopping had some tough comparables, particularly in Asia as a result of a particularly weak Japanese yen last summer. Sales in store were negative 11% in Asia during Q3, but recovered throughout the quarter and were positive in October. Separately, in the U.S., the last 2 weeks of September and the subsequent weeks of October presented more same-store sales volatility than we've seen in prior periods. While not consistent across verticals, same-store sales have generally skewed negative to our expectations. To put a finer point on it, we saw same-store sales, whether that be restaurants or hospitality, range from positive 1% to negative 4% with meaningful volatility week to week.

While not immune from the broader economy, our deliberate and balanced transformation over the past several years does mean we are more diversified and scale, both geographically and by industry than at any point in our history. We also continue to add lots of high-quality customers, as I mentioned above. And we continue to complement our growth with massive payments cross-sell funnel, which becomes increasingly attractive during times of economic uncertainty. The competitive landscape has been a topic of serious debate among investors throughout the last few months.

While I can imagine it's tricky to aggregate all of the various data, we would like to reiterate that the competitive landscape from our perspective has been unchanged for quite some time. We are the #1 in hotels in the U.S. We are the #1 in stadiums, and we are the #2 in restaurants but with a large TAM and a clear differentiation in both our strategy and product focus. We are only just beginning to bring these products all over the world where there isn't a clear market leader for any of these verticals. Global Blue also puts us as an undisputed category leader in luxury retail global.

And with regard to Global Blue, this is our first quarter since closing the transaction in early July. This business brings both an industry-leading product for luxury retail and also an extensive two-sided network consisting of the best luxury brands around the globe and the high net worth shoppers that frequent them. They are also deeply embedded in the commerce experience at the store, presenting natural synergies for payments. Sales in store at Global Blue were 5% above the prior year, with Europe growing 13% and Asia being negative 11% for the reasons that I mentioned earlier. We're reasonably happy with these results considering the negative impact currency has played throughout the year. These results are also before any synergies from business combination. You will find the detailed summary of Global Blue's performance, in our shareholder letter.

And from an integration perspective, we are on track with previously discussed plants. Our 3-in-1 payment terminal for payments, currency conversion and VAT refund eligibility detection is in beta. We also highlighted several Australian hotel payment wins in our shareholder letter distributed this morning. Of note, all the hotels mentioned are owned by Accor, the largest hotel operator in Australia and New Zealand and also a very large hotel operator globally.

The Australian hotel wins represent an early proof point to our strategy to take our industry-leading products into new geographies and markets around the world is working. In restaurants, we're proud to welcome Nobu, but also signed thousands of other restaurants this quarter across Canada, the U.K., Ireland and Germany and with our international production improving to over 1,300 merchants signed each month. In hospitality, we won Hyatt Vacation Club and will power payments for their over 20 resort properties around the globe. In Sports and Entertainment, we signed the Cincinnati Bengals, Clemson University, North Carolina, State Rocket University and Syracuse University, that 1 was for you, Jordan.

Lastly, we'd like to point out the opportunities that can seem unique, but are a function of the platform effect of constantly adding integrations relevant for our other customers. To that end, we signed Hertz and will power payments across 60 of Hertz rental car locations. Our presence in nonprofits continues to grow as well, evidenced by the dozens of nonprofits attracted to our platform each quarter as well as the and off-ramp services for many crypto and Stablecoin platforms such as Stellar and Plasma.

As has been the case each quarter, these are just a few of what we've highlighted in our materials, even a smaller fraction of what we've actually onboarded. We are delivering these impressive wins while relentlessly streamlining our operations. And in that regard, as many of you know, we take the leading the parts very seriously in our M&A and integration approach. We made multiple small divestitures, most notably acardo, which is a couponing business owned by Vectron for $34 million.

These sales remove noncore business lines and help keep our laser focus on revenue synergy opportunities. We also closed SmartPay this week. As previously mentioned, this provides us with an existing and proven distribution channel to sign restaurants, hotels and stadiums in Australia and New Zealand. By equipping a proven team with industry-leading products like we have, we can be highly confident in the success of their go-to-market.

The combination of these 2 events are roughly neutral, meaning the divestitures and the acquisition of SmartPay and their contribution to the remainder of the year, but both were important operational milestones. Lastly, we agreed to acquire Bambora, otherwise known as Worldline North America. While I'm sure many of you would like to see us slow down, the opportunity presented by a $90 billion payment gateway was something we would not ignore. A core competency of our business and team is to constantly seek out interesting technologies, great customers and excellent talent.

Those of you who know our track record of executing on gateway conversions and other synergies can appreciate why this makes so much sense. We expect that transaction to close in Q1 of '26 and are encouraged by our pipeline of opportunities. I wouldn't be able to discuss capital allocation without the notable dislocation in our own valuation despite the continued performance and numerous opportunities we see ahead.

In short, our own equity is one of the more attractive opportunities we see. And with expanding cash flows and accelerated deleveraging, we simply can't ignore it. To that end, our Board has authorized the new $1 billion stock repurchase program, which is the largest in our history. We will be implementing a plan to purchase at what we view as highly attractive levels right away.

And with that, I'll turn it over to Chris for his first earnings call. Welcome aboard.

Thank you, Taylor. We delivered another quarter of consistent results that set new third quarter records across all of our key performance indicators. Volume grew 26% year-over-year to $55 billion. Gross revenue less network fees grew 61% to $589 million. Adjusted EBITDA grew 56% to $292 million, and our adjusted free cash flow conversion was 48%, resulting in $141 million of adjusted free cash flow. Our Q3 adjusted EBITDA margins continued to deliver in line with our expectations of approximately 50% in spite of the continued expansion investments we are making to become the most diversified and scaled that the business has ever been in its history.

Double-clicking on our revenue categories. Our Q3 blended net spreads remained stable at 62 basis points, and we continue to expect full year spreads to be stronger than the 60 basis points previously communicated. This stability extends across our verticals of restaurants, hospitality and unified commerce. Subscription and other revenue was $119 million in Q3, up 16% compared to the same period last year. The growth continues to come from our market-leading vertical software solutions. However, as solid as this growth continues to be, we remain focused on deleting the parts and deprecating legacy revenue streams from acquired companies in favor of what we believe to be higher quality of revenue. This dedication to strategy will continue to influence year-over-year growth rates.

As Taylor mentioned in his remarks about the medium-term guidance update, Q3 organic growth for gross revenue less network fees was 18% Organic year-over-year growth of 18% compares the performance of the base business by removing newly acquired revenue from both the Q3 2024 period and the Q3 2025 period. It's also worth noting that these disclosures related to updates about our medium-term guidance would have been done next quarter at year-end. But based on recent industry events, we wanted to be proactive about pulling forward these disclosures, including that of organic growth for you all.

Since the third quarter of 2022, we have grown gross revenue less network fees by 3x, expanded adjusted EBITDA margins by 600 basis points and achieved the balanced transformation of becoming a more diversified and globally scaled provider of software integrated payments. Through continued execution on cross-sell value creation and our delete the parts approach, we expect to maintain disciplined focus on margins and benefit from the operating leverage in our business. An example of the Shift4 playbook at work is the deleting of legacy parts through divestitures.

Additionally, and although early, we are encouraged by the potential of AI applications to enhance our operating leverage across operations and product development while enhancing our own ability to drive decisions informed by our large data assets. As it relates to Global Blue, we wanted to provide a more clear breakout this quarter given its new inclusion in results. Global Blue contributed $156 million to gross revenue less network fees and $68 million to EBITDA, which were in line with our overall expectations despite headwinds faced by the business in the Asia Pacific market.

Additionally, the subcomponents of Global Blue, consisting of: one, tax-free shopping, acquiring and dynamic currency conversion will be reported within payments-based revenue, while the post-purchase solutions subcomponent will be reported in subscription and other. As you can appreciate, we expect these breakouts to be less relevant over time as we cross-sell products to customers and bring on customers using multiple products.

Our adjusted free cash flow in the quarter was a record $141 million, which modestly exceeded our expectations given our third quarter, along with our first quarter, are the higher cash interest expense periods in the year. As you get to know me more, it should come as no surprise that I believe that the ultimate measure of business durability is compounding growth in free cash flow per share. So I'm particularly enthused by the progress of this metric, especially as a jumping off point towards our medium-term guidance goal of exiting 2027 with $1 billion of run rate adjusted free cash flow. GAAP net income for the third quarter was approximately $33 million, resulting in diluted EPS of $0.17 per share.

Non-GAAP net income for the quarter was approximately $148 million, resulting in a non-GAAP EPS of $1.47 per share. Note that the latter EPS metric uses our non-GAAP share count of 100.7 million shares, which increases share count by 10 million shares to treat the mandatory convertible preferred on an as-converted basis. On debt capital structure, we are in the enviable position of being efficiently tranched with all debt trading above par, resulting in access to attractive cost of capital in multiple deep markets.

As of Q3, our net leverage pro forma for the full year effect of Global Blue was 3.2x, with notable deleveraging achieved quarter-over-quarter that resulted in our newly issued term loan already stepping down by 25 basis points of cost. I will take this opportunity to make clear that our leverage guidance remains unchanged with a view that the business should not seek -- should not exceed 3.75x net leverage on a sustained basis.

With the company's current share repurchase authorization coming up for expiration at year-end, the Board has authorized a new share repurchase program of $1 billion through year-end 2026. This authorization level is the largest in the company's history and comes at a time when we have ample liquidity and access to capital to execute upon it.

As a reminder, our capital allocation framework judiciously assesses relative value across 4 areas: one, customer acquisition; two, product investment; three, acquisitions and investments; and four, share repurchases. As we evaluate how the current market backdrop compares to historical periods of share repurchase execution, we think it notable that valuation multiples at present would be comparable to the lowest we have executed repurchases in the past.

Further, as stated before, the company is the most diversified and scaled it has ever been in history and is generating record results across all key performance metrics. At the same time, the business is delivering growing levels of adjusted free cash flow that continue to require reinvestment. Although we believe that any 1 of our 4 categories of capital allocation opportunities would generate accretive returns, it is hard for us to ignore the relative attractiveness of the trading level of our common shares on an absolute basis, but particularly on a growth-adjusted basis.

As someone that has invested in this business multiple times over the past decade, I am eager to make immediate progress against this new $1 billion authorization to enhance long-term shareholder value. Now for guidance. For full year 2025, we are reaffirming guidance within a narrowed range. We now expect volume to range from $207 billion to $210 billion, representing 26% to 27% year-over-year growth. For gross revenue less network fees, we now expect the range to be $1.98 billion to $2.02 billion, representing 46% to 49% year-over-year growth. And for adjusted EBITDA, we now expect the range to be $970 million to $985 million, representing 43% to 45% year-over-year growth. We are affirming our adjusted free cash flow conversion expectation of plus 50%.

Within this guidance, our view on Global Blue's contribution remains unchanged as the business does have a seasonally higher calendar third quarter versus its fourth quarter. Also, we wanted to point out that even though these are now narrower ranges to our prior guidance, there is an intentional shape to the relative ranges. The implied fourth quarter range in volume is approximately 5% from low to high, while the same range in gross revenue less network fees is slightly less and in adjusted EBITDA, this range is 4%.

The intent here is that we believe a wider range of outcomes is prudent based on the uncertainty we are observing in macro and industry conditions. While at the same time, for a metric like adjusted EBITDA, there is more in our control and demonstrates our commitment to execution. In summary, after taking into consideration an essentially neutral impact from the acquisition of SmartPay and the offsetting reduction from noncore divestitures, our full year 2025 guidance is reaffirmed within a narrowed range.

One last item. In response to inquiries about gross revenue, recall that we do not formally guide this metric. However, we expect a gross revenue range of $4.09 billion to $4.15 billion for the full year.

Before passing back to Taylor, I did want to take a moment to express my sincere gratitude to my CFO, predecessor and now Board member, Nancy Disman, for the transition support, mentorship and fantastic finance foundation she has established. You will be missed by the team, but I'm certainly thankful to continue to have you on Speed Dial.

With that, let me now turn the call back to Taylor.

Thanks, Chris. Before we go to Q&A, some of you may have seen the exciting news that our Founder and Chairman, Jared, has been nominated to run NASA. Again, we're going to be updating you as things progress. But just to be clear, we don't expect really anything is going to change from our previously disclosed plans. He intends to remain the largest shareholder of the business. And so we wish him well, and we're really excited for the road ahead.

With that, we're going to turn it over to Q&A. But Tom, I think you had a question we were going to address from X.

Yes. So the question from X this quarter comes from Dor Bard. And his question is, where is the company's primary focus right now? Are you edge down on integrating and cross-selling into the $1 trillion acquisition funnel? Or are you simultaneously investing heavily in net new product development?

Yes, it's a great question. And the answer to both of those is yes. So hopefully, you can sense the theme for this quarter is a reminder of what we always do, which is that we take our category-leading products and we find as many customers as possible to get those in the hands of in as capital efficient of a way as possible. And so whether that is leveraging capabilities like the sales force that SmartPay brings us into Australia or the distribution network and existing customer base that Vectron gives us in Germany, taking our products into these new geographies with an embedded right to win like an established sales force or an existing customer base is always a significant priority for the business.

And with that, operator, if you wouldn't mind opening the line up to Q&A.

[Operator Instructions] Our first question comes from the line of Dan Dolev with Mizuho.

Great results, Taylor, and congrats on the new CFO role. My question is for you, Taylor. What are the implications of Jared getting nominated to NASA? I think a lot of people are interested in that and great results again.

Yes, sure. Thanks for the question. Good to hear from you. Well, first of all, it's great for the country. The ambition that we've seen inside our walls for 26 years really has always deserved a bigger stage. So I think it's a phenomenal thing for the country. Now with regard to the company specifically, it's likely to simplify our structure quite meaningfully. So if you recall from the ethics agreement that he executed back earlier in the year, he is not required to divest the stock, but he will be relinquishing the super votes associated with his shares.

So it likely means to collapse down to a single share class, which I know a lot of investors will appreciate and simplifying our TRA structure. So I want to reiterate, he intends to remain the largest shareholder of the business. This is something he feels passionately about, but I think it will simplify our share structure when it's completed.

Our next question comes from the line of Timothy Chiodo with UBS.

Again, Chris, good to be working with you here. I want to hit 2 things. First one on Bambora and then if you don't mind, a brief follow-up around Q4 end-to-end volumes. So on Bambora, let's hit that one first. So $90 billion of gateway opportunity. And I just think back to the time of the IPO and the gateway opportunity back then was $200 billion, and it seems so large. And here we go adding another $90 billion. So I was just hoping you could add a little bit more context around that $90 billion and what's in there in terms of verticals and how other parts of Shift4 and some of the learnings from prior gateway conversions might help to make this gateway conversion a very successful one. And then I'll follow up on the numbers after.

Sounds great. I'll hit this one. And you hit the nail on the head, Tim, which is this is textbook Shift4. It is a good technology product with a really captive base of customers and $90-odd billion of volume. Now as also is the case, the volume varies from some of the other verticals we serve. There's some business services in there. There's a few different flavors. So it's probably inappropriate to take one gateway and apply it to the next and apply it to the next. But we feel really strongly that this asset, the sticky customers, many of which have been on it for 20-plus years, will benefit from a consolidated payment solution. This has not been a huge priority for that business for a period of time.

On top of that, there's a lot of transparency in this one, which I think behooves us all given the skepticism around M&A in our industry. It is widely understood what Ingenico had paid for that business years ago and what we're paying for it now, which is fractions -- significant fractions of that. It is clearly telegraphed by Worldline what the contribution of the business is, and then we get to take that and enact a bunch of revenue synergies. Now there are also some capabilities. It's like one of the larger ACH providers in the country. So there's some capabilities we're going to get from it as well and more talent, which we always need more of. So very textbook shift forward and something we literally train ourselves to be on the lookout for opportunities like this all the time.

Yes. And one, thanks, Tim, for the congrats. But on Bambora, the other thing that I think is a really interesting way to frame the attractiveness of it is to look at how many of the capital allocation framework boxes it checks on its own. I mean in and of itself, you can think about the gateway volume potential as a large expansion in customer acquisition potential. You can look at the ACH EFT component as product and capabilities enhancement. And then, of course, in and of itself, I think it's a continued reflection of a disciplined approach to making acquisitions and investments. So that's just one other thing that I think is worth noting and is something I'm enthusiastic about with that transaction.

Excellent. And the minor -- the numbers follow-up. So implied for Q4 in terms of the end-to-end volume, you mentioned a range there. But on an absolute dollar basis, it's roughly $57 billion to $60 billion. And just clarifying, there's roughly -- I think it's slightly less than $1 billion or so a quarter in there from Global Blue acquiring business, and then there's another something in that range, maybe slightly less than $1 billion as well from the couple of months of SmartPay. But when we add up those numbers on an absolute basis, is it reasonable for investors to think about taking that $57 million to $60 million, annualizing it or multiplying by 4, adding on some conversion, some new production, thinking about same-store sales and churn, but reasonable jumping off point to model out 2026 end-to-end volume expectations.

Yes. I think from the perspective of is that -- is it reflective of a jumping off point, putting aside kind of like minor nuances and seasonality that's changing a little bit in the business, I think it actually is a reasonable jumping off point, reflective of kind of the run rate shape of the business. So I think you articulated it well.

Our next question comes from the line of Jason Kupferberg with Wells Fargo.

Thanks for all the new disclosures. And I wanted to just start on organic growth. I know you were 18% there in Q3, obviously, very consistent with the medium-term Investor Day target. But I think we were trending a bit above that in the first half of the year. Maybe you can clarify that. And then just give us a view on Q4 organic top line growth, just trying to piece together how the current year is coming together because I know we've been targeting 20% plus from a full year perspective.

Thanks. So I think the -- so one thing I just wanted to clarify off the top, and hopefully, it didn't get lost in sort of the prepared remarks was that some of the disclosures really are as a result of an update to the medium-term guidance, which we would have realistically planned for the year-end. But we, given industry events, decided it was prudent to be proactive and pull some of these things forward. And so I just wanted to make sure I reiterated that point.

Look, I think on the organic growth, the idea that we have a growth that's on a gross revenue less network fee basis in line with our -- I think the way we've articulated it in the past is the sit on our hands case would signal the consistency of the business. From that perspective, I think we're sort of in line with what we had guided to as far as that case and that medium-term guidance.

Yes. And just with regard to the full year, I think -- and Chris characterized this well in his remarks, there is caution. Our ranges give us an outcome of greater than 20% down to below that. And I think that's just prudent. The same-store sales environment has been quite volatile. And I don't mean that as persistently negative or anything else. tried to characterize that in my prepared remarks as well. So yes, it's still within our guidance range, but we want to be prudent. We want to give, obviously, the in-quarter disclosure as well.

Okay. No, that's helpful. And then just a follow-up on Global Blue. Those slides were really helpful Al. I think you had the volumes up 5% in Q3. Just curious how that's been trending quarter-to-date, what you've assumed for Q4 there? And then anything you can tell us just in terms of what the year-over-year Global Blue growth was in GRL&F as well as adjusted EBITDA. I know you gave us, obviously, the Q3 '25 actuals.

Yes, sure. So I'll start with the performance of the business has been strong despite volatility. So that's really encouraging. And Chris can keep you honest here, but the year-over-year growth of their revenue was about 19%. So a phenomenal business. I think we tried to point this out at the time of the acquisition. In terms of the sales in store, which is the tax-free shopping segment of their business, what you saw was a combination of reasonable strength in Europe.

Now keep in mind, Europe generates more revenue per sale in store than Asia, but also a pretty significant headwind in Asia. So there were a confluence of factors back in the summer of '24 that made Chinese shopping in Japan particularly strong. And so comping that was going to be quite difficult, and that's why you have that negative. So the blend of 5 is something we're reasonably content with. Also keep in mind, and we tried to just kind of illustrate this. When the dollar depreciates and the Chinese currency depreciates, that is really hard on the business because the shoppers spend less. And so while there's a little bit of translation benefit, it is not a positive for the business when the dollar depreciates.

I wanted to clarify that point as well. So awesome business dealing with volatility in their end markets and dealing with it quite nicely and growing strong on a year-over-year basis before we enact any synergies, which is phenomenal.

Our next question comes from the line of Darrin Peller with Wolfe Research.

I know there were some headwinds in the quarter, whether it be the discussion you had around the currency dynamics in Global Blue or same-store sales you called out or even some faster conversions of software, yet you came in roughly in line with your guide. And so maybe just help us understand what you saw that made up for that shortfall and if those trends are sustainable going forward or outperformance trends. And then, Chris, first of all, congrats again. But when I think about guidance, there's been a few quarters of volatility around your guide. So just help us understand your philosophy to build up from a guide standpoint going forward, what we should think about from a conservatism, how you think about it that way versus being more in line or anything else you can provide?

Yes. So I'll start with that, and then Chris can hit the guidance philosophy. With regard to things that we were pleased with during the quarter, customer adds is something we're particularly pleased with. The pace of international adds is something we're particularly pleased with. So the shopping trends that I mentioned in reaction to Jason's call was something we were particularly leery of.

Quite frankly, predicting where that would land was almost a fool's errand given how strong the success was of Chinese shopping in Japan back in the '24 period. So -- but maybe just to balance it out, and I made this comment in my prepared remarks, growth in CIS in Asia has grown to positive again on a year-over-year basis in the most recent month of October. So things are going well on that front. It remains somewhat tricky to predict where travelers are going to shop, and there are significant countries and weightings to that. So we're going to continue to get better at that. But Chris, do you want to hit the...

Yes. Well, actually, I'll just add on to one point around that is in some of the variables that we saw through the quarter that were changing, I think Taylor in his prepared remarks highlighted the note that if you were to look at some of the week-to-week trends that we were seeing within same-store sales in some of our verticals, you could end up seeing like a plus 1% to a minus 4%. And those kinds of volatile -- that kind of volatility was something that we were trying to react to throughout the quarter.

You add to that the topic that we've now talked about a couple of times already around balancing out European strength for Global Blue sales in store in the tax-free segment, offset by what looked like a pretty tough headwind in Asia Pacific. And you just had a few moving parts that I think warranted caution going into that period. At the same time, the backdrop was one where certainly from a macro data, certainly from an industry data, from data points we were seeing throughout, it was enough to want to make sure that we were expressing caution. So a lot of data points to take in.

At the same time, I think we have the most data we've ever had as far as being able to try to inform our decisions around it. So I think that's a positive. Maybe to the second part of your question, Darrin, one, thanks for the congrats. And two, so look, on guidance philosophy, it's a nuanced topic, I'm sure, and especially one that I think will need some evolution over time as I get more comfortable in the seat. The first thing I would say, though, is that from a philosophy standpoint, there really isn't an intent to change the underlying philosophies. I think the frameworks that we use, the way we inform it with data, the underlying approach to the most important drivers within the business.

I mean those are things that I think are pretty foundational, not looking to make dramatic changes. I think as we look at this set of macro backdrop, it is just something that from my perspective, we want to make sure that we're taking in all of the right data assets and that we're making the right -- the most informed decision as possible based on the recency of the information. But certainly something that I think will be an evolving topic. And so feel free to keep asking.

Our next question comes from the line of Andrew Jeffrey with Truist Securities.

Well, so we'll update that. It's been William Blair for about 1.5 years. But Chris, welcome. Look forward to working with you. I want to say that my wife and I happily contributed to Global Blue's third quarter revenue growth. A question on the pace of processing conversion in that business. It's a big opportunity. I think you said somewhere around $550 billion. Can you just update us on your right to win, how you see payment processing cutover or conversion sort of playing out?

And what you -- I guess, competitively, there's one sort of callout processor, I think, today for a lot of those Global Blue merchants. How do you sort of manage those relationships, recognizing that the VAT refund business is such a high-value product for merchants?

Yes, sure. I'm going to actually cover this one. It's a great question. But I think it's really important to distinguish between the headline customers that everyone knows and the breadth of the Global Blue business. So certainly, in downtown Paris, everyone knows the Louis Vuittons of the world. But the reality is you can just as easily go to a village on like Como in Italy and nearly every merchant is using Global Blue. And these are SMBs. So we see a breadth of conversion opportunity from SMB all the way up to the largest of the enterprises.

And if history is a guide, the earliest success comes from all those -- it is incredibly low friction to switch from an existing bank terminal into what from a product perspective is going to be pretty revolutionary, which is the terminal that they're used to, but it also does currency conversion and it automatically detects that the shopper is eligible. So to the extent you were traveling in Europe and you encountered a store where they didn't present you with the tax-free option, that's likely because the cashier just didn't know or didn't think to ask. And yet our technology is going to sort of prompt that just like it does in the largest enterprise environments that Global Blue has built so successfully.

So from a competitive landscape, we see an opportunity to win business from a ton of local banks in that SMB spread. We can win it reasonably quickly. And then, again, history being a guide, enterprises take longer and take more time -- quite frankly, I think you're probably referencing Adyen. They're a phenomenal company. We admire them a lot, and they serve these enterprises quite well. We're an important piece to the commerce puzzle in that environment. And so we want to make sure the technology works incredibly well for those customers. But the conversion opportunity goes far beyond the logos that you see.

And if you think what we're really good at is we're really good at getting that mom-and-pop store, a much better technology solution that, quite frankly, is much stickier and harder to leave. And owning all these pieces, we can do that in a way that traditionally has only existed for the largest enterprises.

Okay. That's helpful. And just as a follow-up on SkyTab and sort of the growth in your software revenue, recognizing the divestiture of some legacy software. Can that accelerate? Do you expect that to accelerate? Sort of does it grow in concert with Global Blue volume conversion? Or how do we sort of dimensionalize the software contribution going forward?

Yes. I think we've -- this is Chris here. I think we've articulated this in the past as acknowledging that the idea that we have a North Star model that really emphasizes what we view as highest quality of revenue will come from payment processing. From that perspective, I think we are not shy about the statement that we will look to deprecate kind of like deprecate the legacy revenue streams, deprecate software revenue streams in favor of the higher quality of revenue. And so I think from that perspective, -- even though our subscription and other was an attractive growth, it grew nicely over -- in the quarter for sure. It's an area that I think will be an area that will be -- will continue to be an impact on like adverse growth in the future.

Yes. Just to pull it back to philosophy here, we prioritize payment volume as the primary source of monetization. We deliver a heck of a lot of technology to these merchants. carefully weighing the fixed and variable costs that a merchant pays for our product is, I think, something we spend a lot of time on. Most of our competitors have significantly higher fixed costs, which really manifest themselves in that subscription and other revenue stream. So we tend to lean more towards payments even if the technology solution being delivered has a lot of software embedded into it.

And to Chris' point, there is -- as a byproduct of this acquisition history, there is always some legacy revenue that we're deprecating. So I completely acknowledge this is probably one of the harder lines to model inside the business. But generally, anything we're doing is in pursuit of that payments revenue growth.

Our next question comes from the line of Sanjay Sakhrani with KBW.

I guess the share buyback announcement and authorization was a pretty strong statement. Maybe Taylor and Chris, you guys can talk about sort of the cadence of how you expect to take advantage of it. I know you talked, Chris, a little bit about the leverage constraints and stuff. So maybe you could just speak to those as well. And I think it's the right thing to do given where the valuation is. So I would love some color on that.

Yes. I'll start with this one. There's been times in our history where we weigh an attractive M&A pipeline against evaluation in our equity, and it's a tough decision. In this case, and Chris will comment on our leverage profile, and that comes into this a little bit, but this one isn't a tough decision. So we are trading at levels that we were trading at in December of 2020, and yet there's 12x the EBITDA in the business and accelerating free cash flow and deleveraging at an accelerating pace as well. So the obvious thing to do here is to buy as much of our equity as we're going to be permitted to buy within reasonable price ranges.

But to Chris' point, executing at current levels is consistent with the lowest price we've paid for our equity. And we've been pretty aggressive with buybacks. I think M&A kind of gets the headlines, but -- we've repurchased, I don't know, 12% to 15% of the company in the 5 years that we've been public. This presents an opportunity to do even more than that at the lowest multiples we've seen in the company's history. So incredibly excited to be able to deploy capital into such an obvious opportunity. Chris, do you want to hit the leverage?

Yes, sure. So I think I made reference to the fact that on sort of a pro forma LTM basis, we're at 3.2x net leverage. I think the perspective that we have around having ample cash on hand, we have ample liquidity. We are approaching $0.5 billion in adjusted free cash flow generation. So there's probably not been a period in history where the company has had sort of the, we'll call it, availability to capital, but also access to capital across the multiple deep markets. So you take that into consideration, you take into consideration that the free cash flow generated needs to get reinvested -- and it's not to say -- and I hope this was clear. It's not to say that we don't think that there are attractive areas within all areas of our 4-part capital allocation framework. But right now, it is really hard to ignore the relative attractiveness of where we're trading today.

Yes, that's a good point. These dollars are not coming at the expense of a missed product development opportunity or integration priority or quite frankly, M&A opportunity, but there's more of them than I think many expected at this point, and the equity is certainly lower. So we have to act on it.

Great. And just to follow up on some of the choppiness that you've seen in the restaurant and hotel verticals in the third quarter. Could you maybe just explain what you've seen thus far into the fourth quarter and if that's persisted. And I know, Chris, you kind of talked about weighing that as you provided your refreshed outlook. But just how we should think about that? Because like when we look at like cross-border volumes and such, I know it's sort of an overarching number. So it's not specific to your verticals or such. But like how should we think about that as we move through the rest of the year?

Yes. Look, I would love to be able to know with precision exactly what the rest of the year is ultimately going to look like. But from a recency data, again, we are -- we benefit from being able to see data in a near real-time manner. But from a recency data, here's a for example. I think coming out of the -- coming towards the end of the quarter, we were actually starting to see what looked like stabilizing trends in restaurants, and it created some encouraging signs off of a quarter that had seen some downward skewed negative volatility. But of late, we're starting to see a little bit of a softening again in some of those trends. That would be a for example.

Now happily, I just want to underscore because it's an interesting contrast to what you had brought up this idea of cross-border. I think prior to us being as diversified as we are right now, that comment, the impact that cross-border is looking more positive, restaurant might have some softness, that would have been an irrelevant comment a couple of quarters ago. But now actually, from the diversification standpoint, I really think it's important not to lose sight of the fact that because of the positioning of the business, because of the balanced transformation that we've been able to achieve, we actually do have these puts and takes, these offsets. So I think in the grand scheme of things, we do have acknowledged uncertainty in certain areas, but actually some enthusiasm in some other areas.

Yes. I would call you back to the revenue diversification that we highlighted in our shareholder letter. And if it's -- I don't know if this is going to be helpful or further confusing you, but we see all the data points you do about United Airlines having their strongest weeks in their history and Chipotle, no one is buying the burritos. Like we see both of those. And we see them manifest in many ways inside of the cohorts inside of our business, which is Global Blue has got strong shopping and same-store sales in your average restaurant are bouncing week-to-week, but skewed towards that negative volatility.

It's confusing, but quite frankly, the scale and diversification of our business is awesome at this point relative to our history. So for us, there are data points that help inform future investment and all these other things and help us, quite frankly, put chips where we think verticals are going to be the most successful over a period of time. But yes, that industry to industry volatility absolutely exists. We're getting both benefit and detriment from that. And this bifurcated consumer, I think, is a real thing.

Our next question comes from the line of Adam Frisch with Evercore ISI.

It's Adam Frisch. Chris, congrats on the role and great job getting out of the gate pretty hot here this morning. The organic number is really interesting, very welcomed as well. I think you said the number excluded the deals done in both of the third quarters. But is that to say that this quarter included contributions from deals completed in the quarters in between? So maybe just a little color here on the calculation would be great. And then I have a quick follow-up as well.

Thanks for the clarifier. Absolutely not. Yes. No, it's meant to be clean of acquisitions for the periods.

So the 18% does not include any acquisition impact at all from the prior quarters or I guess, from the prior 4 quarters?

Yes. It's the best way to look at the base business, right, which is if you did not have M&A in either of the measurement periods, what would have happened in that base business is great.

Okay. Okay. Cool. Welcome that very much. And then second, as a follow-up, assuming Jared gets confirmed, I'm getting a bunch of inbounds this morning from investors about whether his shares would create a liquidity event and how that would be handled. So I wanted to give you a chance to address that on this call before it takes on a life of its own potentially.

Yes, yes. No, I completely appreciate that, and I addressed this right before the Q&A started. His ethics letter from the first go round is publicly available, not required to divest his shares. and doesn't intend to. intends to remain the largest shareholder of the business. So we don't anticipate anything there. And in fact, I just want to say he does anticipate converting his shares from the super voting shares down to common.

So I think the share class will likely collapse into a single share class and be much easier to understand from the investor standpoint and quite frankly, open us up to pools of capital that don't invest in multi-share class companies today. So from the company standpoint, it's frustrating not to see them in the halls on a daily basis, but the corporate structure gets a lot cleaner.

Yes. And then just -- since we're on the topic, to reiterate a point that also Taylor brought up earlier was the idea that beyond the share class structure potentially changing and collapsing to simplified, you also have what in the last go around, we had talked about the concept that the tax structuring would also attempt to simplify to the ups.

Great. Okay. Cool. And then just maybe one last one. The merchant conversion progress from prior acquisitions, any color there that you can provide? There were some disclosures in prior quarters, I didn't say anything this quarter. So maybe just a little bit there on what you're -- on how you're progressing there from the acquired merchants.

Yes, absolutely. Happy to provide color. And this isn't an intentful omission. It's the simple fact that our earnings shareholder letter was, I think, 190 megabytes when I tried to download the public version this morning. not anywhere. So the cross-sell is going quite well. I think that's probably best evidenced by simply the customer adds that I mentioned earlier in response to what I think was probably Darrin's question. So customer adds across the board, whether that be in Germany, whether it be in the U.K., whether it be in Canada, all of those are fueled in some way. buy an M&A asset, whether that's a small sales team or an embedded base of restaurant customers in Germany or gateway hotel customers in Canada.

So the customer adds are really, really encouraging across the business. It's quite frankly, what helps ballast that same-store sales anxiety that we see in the core base of the business. So it's going well across all of them. This is muscle memory for our business. So if you recall, what happens when we acquire a company is all of the customers inside of that become part of a sales funnel that our team is chipping away at on a daily basis. So the fact that an acquisition occurred doesn't really mean much to the average business development professional inside of Shift4. It just means they've got a lot more customers in their call queue to execute against or in their campaign. So it's going well across the board, quite frankly.

Our next question comes from the line of Will Nance with Goldman Sachs.

I wanted to follow up, I think, on Tim's earlier question on the volume approach it a slightly different way. Just look at the kind of low 20s exit rate on volume with a little bit of inorganic contribution, it's kind of roughly in line with where the Street is expecting volume growth in 2026. So I was wondering if you could just talk about the puts and takes off of that run rate and just kind of what would lead you to kind of accelerate or decelerate into next year and just things that we should be keeping in mind as it relates to modeling out to 2026.

Yes, sure. Thanks, Will. I would say probably in line with a similar kind of commentary here, and maybe Taylor will have a slightly different nuance to it. But from my perspective, again, it's hard for me to ignore sort of from a recency standpoint, data that we're seeing. And so I'd say there is some -- there's a degree of balanced caution within some of the verticals, offset by, obviously, what we're seeing is the diversification effect where we are also seeing some recent strength in other areas like in cross-border, like in luxury.

So I would say that the exit rate, which is kind of where Tim's question was at, that annualizes kind of the fourth quarter. I think that's a fine starting point, but we gave the ranges on volume really from a '25 standpoint for a region. And I think that, that range, again, the intentionality of the shape of that range where the volume range is the widest relative to something more in our control like an adjusted EBITDA, that range is widest because of wanting to acknowledge that there's a complex macro backdrop.

Yes. If I had to barbell the 2 items probably most front and center is we say this volatility of same-store sales is quite real, like it looks bad 1 week and it looks okay the next. It's very confusing, and you want to be cautious about what that could look like over a sustained period of time. Maybe on the other end of the barbell, you've got Global Blue, which is really contributing nothing of substance to that payments growth rate and a massive customer base, lots of geographies, et cetera. So those are kind of -- that's a cylinder that's not firing of any consequence yet and yet will be significantly in 2026.

Got it. Appreciate that. And that was going to be my second question. Just on some of these logo wins, you had the earlier question. I get it's early and some of the ones on the page are kind of more enterprise in nature. But wondering if you could just speak to the sales process that led to some of these wins.

And Taylor, I know you've been doing a lot of traveling over the past couple of months. As you spend time with the Global Blue team, how are you thinking about evolving the go-to-market so that when we see some of the wins on these pages, I'm thinking back to when you put the hospitality wins and we'd see something indicating it was a gateway conversion. Like how do we think -- how are you thinking about potentially starting to work payments into the selling process of some of these new wins, maybe not some of the logos that we're seeing on the page, but into some of the more SMB sales?

Yes. It's an awesome question, and I'll sort of contrast the 2 businesses for you because this is exactly what we're spending a ton of time on right now. Global Blue is a phenomenal business focused on the highest end of the enterprise, solving the most complex problems and never losing a single customer in that process. They serve the enterprise customer exceptionally well, and they're kind of built to do that, where if I were to criticize and say there's areas that we can bring strength to the table, it's the service of the really long tail of SMB customers that don't have the best coverage model.

They adopt Global Blue because it's a product that the consumer demands and has a lot of traction, and they want to be able to provide that to the shoppers. So it's that -- it's the Village of Bellagio, where it's in Lake Como, right, where there's tons of little mom-and-pop merchants that offer the service to. So the skill set we're trying to bring to the organization is how do you efficiently serve thousands of SMBs across Europe and the rest of the world. And I think we've got unique skills to bring to that. The skills they are bringing to us are how do you serve the largest and most demanding enterprises within luxury retail. So we're both learning a lot from each other in that regard.

And then the only thing I would say is -- and by the way, we're having conversations with every flavor of customer, right? So we're having conversations with SMBs. Those are quick. It's -- yes, this sounds great. I'll do it. And then we're having conversations with their largest enterprise customers, and they're saying, "Hey, can you help us with this unique problem we have today? So I'm really encouraged across the board. But the laws of physics are simply those big customers take longer to get those conversations done than the small customers. So I think that's going to be the bulk of the focus.

Yes. And I'll add that when you start to look at that customer stratification, it's at a unit economic level, very logical that if you are providing a TFS product to the longer tail of SMBs the gross profit and revenue density isn't necessarily there to provide the technology and quality of service that you would want if you add to the equation the cross-sell of services that now turn the gross profits and the unit economic model into one that looks a lot more like the SMB that we serve. It makes a ton of sense to be providing all of the service levels, all the support, really starting to elevate the significance of that SMB customer within that segment is -- or within that business is exactly like the benefits of the cross-sell.

Yes. And sorry to belabor the answer. I think it's really important, though, where we're going to have to spend a lot of time with you all and -- the Street is what's the volume pull-through of this. because to be clear, I think the enterprise customers offer the highest volume opportunity at the lowest spread, but these SMB customers are the inverse of that. And we are quite content with the volume growth that looks lower and a spread that's stable to growing because that's a fast win cycle.

To be clear, all of it is an opportunity, but I think volume growth relative to net revenue growth is something that has undulated inside the business as we skew from time to time more towards enterprise, more towards SMB, et cetera. So that's where we're going to owe you the updates, but my prediction is early success in SMB and what's going to feed the funnel 2, 3, 5 years from now, it's going to be that enterprise base.

[Operator Instructions] Our last question comes from the line of Dominic Ball with Rothschild.

Great to hear about Global Blue. On competition, we've seen some turbulence with one of your legacy acquirer peers. Does this present an opportunity to accelerate share gains in the U.S.? And on the enterprise side, we've seen Oracle Payments extend their offering powered by Adyen, but it doesn't seem like it's going to be exclusive going forward. So how do you view that development? And could this open up further partnership opportunities with Micros?

Yes. Awesome question, and congrats on the call, by the way. I think you were the long one. In terms of competition in the United States, I really do want to foot stop this point from my prepared remarks. It's relatively unchanged for our lines of business, which is in restaurants, we tend to focus on table service. This is not where you see the Clovers and the Squares of the world. We do see Toast. And I know Toast has got wider ambitions to do far more than just table service. But in our kind of slice of the world that is restaurants in the United States, competition is relatively unchanged. Toast is a great company.

We're winning and growing quite nicely in that regard. And we don't see significant pressure from others. Quite frankly, any, let's say, industry chaos tends to be helpful to the extent that big companies are struggling. It will help us, by the way, just as much on the enterprise sale as it will on the SMB sale to have a company that's sort of struggling to redefine its image. Now to go to your point with regard to Oracle, I think they've always had this ambition to try to deliver a simplistic product to their customer base that embeds software payments, et cetera. That's very, very hard to do with the products they serve.

And so much -- take yourself out of a point-of-sale system that they sell and put yourself into any other software. It's very enterprise grade and requires a lot of pieces. And this is where Shift4 has found unique success. It's taking what is an otherwise very complicated solution to implement that merchants are dependent on and stitch together all the parts to get it done and do it in a way that feels like an SMB experience where our team comes in, connect all the dots regardless of the complexity.

Again, Yankee Stadium, probably a good example of trying to make an SMB experience delivered in some of the most complex environments. So we don't see really any issue. We partner with Oracle constantly in the hotel vertical as we have to, to support them. We also activate a lot of restaurants. and we'll be there to the extent any customer needs to help.

Operator?

Thank you. At this time, I'd like to pass the call back to management for any closing remarks.

Yes. Thanks to everyone for dialing in this morning and also for the great questions. I look forward to catching up with you all individually as the weeks and quarter progresses.

Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

All right. We're going to kick off here. We're very pleased to have Taylor Lauber, CEO of Shift4 with us today. Taylor stepped into that role as CEO, who was previously President and Chief Strategy Officer, I think most people know from his time there, he has been integral to the company for many, many years. And Taylor congrats on being here your first time in the role.

Thank you.

I think last year, Jared, was literally in space and you guys were unable to come. So we're glad you could make it. All right. So look, I think you have been instrumental in driving the strategy of the company for some time. As you think about how you would like to impact the company, what do you think is going to change with you as CEO? And what's top of mind for you?

Yes. It's a great question. I think what's important to understand is that our founder is still the largest shareholder in the business. And so like strategic priorities don't change much at all. And in fact, if we thought the business had to change strategic priorities, I wouldn't be the right person to affect that anyway because Jared and I have been really in sync with one another around what we think is the right way to grow the business and what we think our differentiation is going to be.

What I will say is we're a fundamentally different business than we were a year ago and certainly than we were 3 years ago. I look back to our IPO, and we were a 600-person business with a nice presence in restaurants, this really nice ability to go win in hotels. Fast forward to today, we're, I think, 12x bigger on an EBITDA basis, 25x bigger on a free cash flow basis and 6,000 people, 65% of which are not in the United States. With not only those same rights to win in restaurants and hotels, now stadiums and now luxury retail, among many other things.

So the business has evolved, and we have to evolve to be able to make sure that these 6,000 people know what's going to move the needle. And in fact, that's been kind of the most interesting, I think, growth challenge as we've seen in the business is what moves the needle is a very fundamentally different thing than 2 or 3 years ago. And you want to make sure every employee understands that so that they're spending the time in the right areas.

Got it. Okay. Sticking on the topic of new management, you announced that current Board member, Chris Cruz, will be taking over as CFO following Nancy's retirement from her role and her return to the Board. Can you address just the why now aspect of the question? But then bigger picture, just talk about any ongoing priorities or potential shifts with Chris coming into the role of CFO.

Yes, sure. So Nancy joined us just over 3 years ago, stepped down from the Board to join as CFO. And she was pretty adamant that it was going to be a 3-year stint and that we gave her this really ambitious list of objectives to achieve. And to her credit, she achieved every one of them. And the only out of ambiguity in it was Jared's potential departure from the business. And to her credit, she said, I can give you as much time as you need. And I said we're about to embark on the biggest M&A transaction we've done in our history. And can I get another 3 years? And she said...

What have you done for...

You can get a lot of my time, and I do not want to part ways with this company. I want to be actively involved, but I want to be actively involved as a Board member. And so we obviously had to respect that. And Chris, to his credit, he's like twice as smart as me because I told, no -- I told Jared, no, 18 years in a row when he asked me to join the business. Chris only told him, no, like 10 years in a row. And yet I think Jared and the team have proved both of us wrong in the amount of growth and opportunity they've been able to create.

So what we get in Chris is somewhat unique. He used to own 60% of the business as a private equity owner of the business. He has been with us that entire past decade. and quite frankly, stayed on the Board long after they divested their share. And so he brings, I think, among many other things, a really unique appreciation for the hustle. And there's a lot of hustle involved in kind of what we're about to accomplish. And so we're thrilled to have him. And quite frankly, incredibly thrilled to have kind of Nancy's tutelage through not just the transition. She's a full-time employee through year-end, but also the next several years as a Board member.

Got it. Okay. I wanted to go into one of the topics that came up a lot post earnings. So I guess one thing that I think you've signaled quite clearly starting at the Investor Day is a change in the guidance philosophy and kind of seeking to kind of overpromise or -- the opposite, underpromise and overdeliver.

Given all the moving pieces this year, right, so an Investor Day in the middle of 1Q, a trade war throughout 2Q and a transformational deal, it's been tough to actually test the guidance philosophy. So what is kind of the message to shareholders who are wondering if the approach to guidance and kind of the conservatism that you're looking to achieve has actually changed?

So it's an awesome question. I'd say I'd root it in what we have the most conviction in, which is when we set kind of our medium-term guidance, we feel really strongly about our ability to achieve that. And I think we tried to dimensionalize that in our Investor Day, which is we'll tell you what we think the business would do if we never reinvested another dollar. We'll tell you what we think the inclusion of Global Blue will be. And then we'll tell you this most likely case, which is that historically, we've been able to reinvest our free cash flow and sustain higher levels of growth as a result of that. We feel incredibly highly convicted in that.

With that being said, we have -- as we think about guidance, we have typically volume that we guide towards for the full year. We have gross revenue less network fees and then we have EBITDA. And the thing we have most control over is generally the profitability of the business. Also revenue is something we have pretty good line of sight into. And volume can be tricky. We have this interesting mix of SMB and enterprise that's hitting at the same time.

I don't know that we've done ourselves a huge favor to not guide volume quarter-to-quarter because we certainly have a good insight into a quarter's worth of volume. And I think that's where some of the disconnect has happened is a quarter like last quarter where we fell right within the range of what we felt comfortable would be -- where our volumes would be and yet the Street was slightly off from that. So I think we can do certainly a better job at dimensionalizing the level of control and also giving shorter-term insights into what we think is going on.

Yes. No, that makes sense. I would just tie in the last 2 questions together. I think the last couple of years, I think the company starting from the top is very focused on the volume and revenue targets that you laid out in 2021. The company achieved those. I think Nancy, to our credit, did a great job steering items like EBITDA and free cash flow. As you think about kind of new CFO incoming, how do you think about the construction of the guide? Who sets the guide internally, who's kind of involved?

Yes. Ultimately, this is going to be a lot of Chris' responsibility, which is that -- he's the closest to the financial picture of the business, the forecast of the business. It's our job to make sure that we're setting up -- meaning my job to make sure we're setting up the business for growth, not in the next quarter or 2, but 3 to 5 years from now and that we're planting seeds because those seeds are what drive that needle-moving performance in the outer years.

So Chris is going to have a really loud voice in the guidance philosophy of the company. We're somewhat constrained by the fact that we've been public for 5 years, and there's expectations that our existing shareholders have about what we're going to do. But ultimately, this sits with Chris, and I want to give him time to approach it. I will say as a private equity investor, he is very focused on profitability per share. I mean that is just the nature of how they think about the world.

As we talked with Jared about his potential departure from the business, profitability per share is obviously what he cared the most about as an owner. I want to give Chris some latitude because he's new in the seat, but that is at the end of the day, what an owner of the business cares the most about. We want to give good insight because that's been an incredible KPI that we, quite frankly, haven't talked about.

Got it. Yes. No, that makes sense. All right. So sticking with the topic of the most recent quarter. I think as you mentioned, revenue came in roughly in line and then the moving pieces above that were take rate a little bit higher, volumes a little bit lower, at least than what the Street had been expecting. You called out some timing shifts on the enterprise volume side, so offset by strength on the SMB side. So can you maybe just talk about some of the moving pieces and then how you're feeling about visibility on kind of go-lives for some of the larger, chunkier clients in the pipeline?

Yes. I want to try to demystify this as best as I can, and I can't say we've gotten it perfect. But what I will say is we had a 17-year history of boarding a pretty ubiquitous type of customer. I jokingly refer to that as the Bar and Grill in Boise, Idaho. We had a singular product. We had a singular go-to-market and the average customer looked pretty consistent.

And then from our IPO forward, we were presented with really interesting opportunities, and I mentioned that in hotels, stadiums and a handful of other kind of emerging verticals where the average customer was meaningfully bigger than that Bar and Grill in Boise, Idaho. And I remember back in -- I think it was Q3 of '22, we surprised investors with meaningfully higher volume growth at lower spread because this enterprise opportunity began to manifest itself.

Where we find ourselves today is the book is much more balanced than that. So I actually don't subscribe the idea that enterprise has slowed down in a meaningful way. There's always go-lives that maybe supposed to go this month or went next month or something like that. But in reality, we have a robust SMB opportunity. Outside the U.S., the majority of what's boarding today is in SMB. And then we've got an enterprise opportunity. It's just a little more mature than it was 3 years ago. And it's the combination of these things that I think we could do a better job of illustrating the contribution because we started the year with high conviction in spreads, which kind of definitionally means we feel pretty comfortable about the way the book is going to manifest itself, and that's played out.

Yes. Got it. All right. And then just on the other side, on the SMB side, it's very clear from the quarter that the SMB onboarding seem to be outperforming. The commentary on spreads for the remainder of the year was pretty upbeat. And it seems like, in particular, you've seen some traction on the international front. So maybe just update us on what you're seeing on the SMB footprint today and particularly on the international trajectory.

Yes, sure. So I'll start with the premise that whether it's a recent M&A transaction where we see a lot of cross-sell opportunity or it's a new market that we're entering for the first time, SMBs are always the first to adopt the value proposition. And it's not uniquely valuable to SMBs. It's the reality that if you're a single decision maker in a small business, you can sign a piece of paper today and we can implement you tomorrow. If you're signing up in the U.K., your payment device shows up the next day by way of example.

So SMBs are the quickest to adopt the value proposition, whether it's in a new country or it's as a result of a recent M&A transaction. And then as time goes by, you have the ability to go win medium-sized merchants. And then I think if the gateway acquisitions of years past are any indication, after a handful of years, you can win the largest of the enterprise opportunities inside of them.

So in a year where we've just completed a lot of M&A, we've seen good traction within the SMBs, and in a year where we've started to hit stride internationally, you're seeing a lot of SMB activity. Again, I don't think it's a commentary on our ability to win enterprise. I think it's the relative maturity of a handful of different strategies that are going on right now.

Got it. Okay. So sticking with the international footprint, I was wondering if you could talk specifically about Vectron. I know it's an extended closing process. I think you now have full control over that asset. What are the day 1 changes that you're making to the organization? And any updated thoughts on rough time lines for bringing SkyTab to that market?

Yes, sure. So just to level set, Vectron is a restaurant point-of-sale business. We really got to know well in Germany. They had about 65,000 restaurants using their point-of-sale platform, very few of which had ever adopted payments as an integrated solution, most of them using a bank terminal off to the side. And really interestingly, they had this awesome reseller network of about 300 value-added resellers that found the customers, installed the customers, service them.

Why is that valuable to us? Because I don't speak German. And we want to be in these markets, an embedded and trusted reseller network who knows where the customers are is going to be our fastest time to market. So we agreed to pursue Vectron. We ended up acquiring about 75% of the shares and then went through a procedural process to gain operational control of the business. I think this is one area if we're being self-critical, the timing around international acquisitions is something that took -- they have taken longer than we would have anticipated, and it took until about June of this past year to gain operational control of Vectron.

What does it mean? It means all the employees are part of our system. They were never part of our system before that. They look at all the same screens we look at. The value proposition can be clearly pushed around what this means. It was important to us and important procedurally that Vectron ran the way it kind of always had up until we were able to get control of the business. So today, several hundred merchants a month are joining our payments value proposition, but not -- we don't have an urgency to push SkyTab in a market where there's 65,000 customers already using a piece of software that they like.

And so we will make sure SkyTab is ready for any of those customers that want to migrate to an Android-based solution over the years. But right now, it's really about making sure their existing customers have an integrated payments experience and that they're really happy with it. And then over time, we'll just make sure they've got the right product for the next evolution.

And what about the opportunity with the resellers? Do you think net new business in Germany could start to be deployed on SkyTab over some period of time?

This is such a fascinating thing with resellers because the immediate opportunity is all of their existing customers, but they've never run their business that way. They run their business by adding new customers all the time. And so it's actually an interesting mix of new customers they add where they attach payments and software right at the start of the value proposition, right at the start, and then existing customers where they add on payments to them.

And we would expect just instinctually, it's easier to go after your existing customer, but that's not what salespeople do for a living. So right now, it's a healthy mix of both. And that's great because it keeps the cross-sell funnel full for a long period of time.

Got it. All right. And then sticking with SkyTab, this is the company's primary POS platform. How should we be measuring your progress on growing the SkyTab footprint, both here and abroad?

I'll tell you how we measure it. We measure it at 2 different levels. We look at the penetration rate of the product, and then we look at the KPIs within the merchants that they're installing. And by that measure, everything looks great, meaning the existing customer using it is bigger on average than it was a year ago. The retention rate is higher than it was a year ago, and the satisfaction rate is higher than it was a year ago.

One misconception I think investors could have is that we mandate that every one of our customers be on SkyTab, and we simply don't. To this day, more restaurants are using another product than are using SkyTab because we only started to say SkyTab is the product you're going to sell just 3 years ago. So we're very happy with the customer level adoption of it. We are not insistent that a restaurant switch to it. Quite frankly, it doesn't change our economics much if they switch to it. So if they're happy, we're happy.

And then in the case where they become unhappy with an older piece of software, they want to upgrade the hardware technology in their ecosystem, we offer SkyTab there. But it's a very small percentage of the customers that use SkyTab or upgrades. We still push it as our net new product offering. And I think Vectron, which you highlighted is a good example of that. There's no reason to disrupt 65,000 restaurants because we want a different software suite. It's capital intensive and it creates friction, but we'll make sure it's available for them should they want to use it.

Got it. Yes. So just to be clear on that, on the Vectron side, like are you allowing those resellers to continue to sell the legacy Vectron product for net new purposes?

100%, yes.

Yes. Got it. All right. You also -- I mean, to stick with this topic of the back book, it sounds like there hasn't historically been a lot of conversions from Harbortouch, Focus POS, POSitouch. How do you think about this idea of kind of mining the back book over time versus kind of continuing to cash flow, what I assume is a pretty profitable customer base?

Yes. It's all about what's satisfaction of the customer and what do they think is going to drive the best guest experience for them. And so we certainly are there to the extent they say, I'm looking at -- I want to upgrade or I want something that's Android-based or I want a better integration to, I don't know, DoorDash or REITs or something like that. We offer SkyTab on those terms. But in reality, I think we -- SkyTab is much more about making sure our sales force can win the incremental customer today.

It's a tough debate because there's a lot of operational efficiency in having every customer on a common piece of software. But there's some capital trade-offs to doing that in a rushed fashion. And so we look every day and we say, what's the likelihood that this customer is going to continue to be happy on that product? And what mechanisms do we have to make sure that to the extent they want to look at something new, SkyTab is the first product that they look at. We're very happy with, I think, the relative mix of that strategy today.

Got it. Okay. So let's talk about Global Blue, transformatively large acquisition, largest in the company's history. Can you just level set on what are you expecting for the business? I think you said high single digits previously. I know there's been a little bit of focus on some of the disclosures they put out prior to the deal, seeing some very strong growth in kind of local currency terms. So maybe just talk through your expectations and maybe talk through some of the puts and takes from kind of gyrations in the macro year-to-date.

Yes, sure. So first of all, it's an amazing business. I think ignore kind of the niche of commerce that they serve, which is they help a traveler abroad get a tax refund for purchasing what's generally a luxury good. They have a really strong market share in that. They've grown it quite steadily vis-a-vis their competition. So they are embedded and a critical component of the European and Asian locations for the best retailers.

This is a door opener for us to talk to these awesome customers about the rest of their commerce ecosystem. And so what we liked about the business is they had a demonstrated track record of gaining share against a relatively limited field of competition. We actually got to witness because we've spent over 5 years looking at it, we got to witness how the business would behave in pretty existentially scary scenarios, whether that's a pandemic, whether it's a large shopper base encountering economic duress, whether it's the U.K., which I think was their largest country at the time, simply saying we don't allow this anymore.

I mean we have to watch the business and the resiliency of that business through some pretty interesting shocks. And what did you see? You saw they steadily won share. They had far more control over their own destiny than we expected. And they have an ability to grow inside of their customers that is incredibly unique, which is that if I can make this process easier and I can make it more digital, more refunds occur and therefore, my merchants make more money, we make more money and the consumer gets a better experience.

All of that attracted us to the business in an undeniable way. And to your point, kind of attracted us to the business to the conviction level of we will do the largest transaction in our history by an order of magnitude. Isolating them as a stand-alone business, short-term, certainly, they benefit from currency fluctuation and they get detrimented by it and there's ebbs and flows, but they would tell you in the medium term that they thought they could grow the business kind of 12% to 14% pretty consistently over several years.

And they would do that through a combination of luxury market growth, countries that are net adding this as a benefit and customers. And then lastly, that digitization concept. We felt really convicted in kind of 3 of those, the ones that were in our control. And then what we felt a little uneasy about was how do we know what luxury markets growth is going to do. And yet when you sort of say, but we can bring a lot of synergies to this business. Their currency conversion product, we can instantly enable all of our customers for once the work is done, we can actually cross-sell a lot of their customers on payments, you can get conviction that the luxury market doesn't have to grow for it to be an awesome grower, or if the luxury market does grow, it an even better grower than that.

Yes. No, that makes sense. Okay. And then I guess, getting to the exciting part on the synergies. You -- I think you outlined a fairly conservative approach you took to deriving the synergies that you expect from the deal. But I think it would be helpful to just go through them again. What's going to be your approach to realizing those synergies, having those conversations with merchants? And kind of where do you expect the synergies to come from initially?

Yes. So it's a great question. Keep in mind, the secondary of the 2 products, but they are a category leader in it of currency conversion, offering that to the consumer at the point of sale. We've never offered to any of our customers ever before. And yet we support 40% of the hotels in the country. We support a lot of these environments where it's a pretty common product.

And so in that regard, it was obvious to us that if we own this business, we can like kill 5 birds in our product development pipeline by enabling that inside of our own merchant base. It's table stakes if you're going to Europe, merchants demand it at the point you're installing. And in America, it's a real nice to have, and we now get to enable all of our merchants with it. So on the currency conversion side, we get to take what would have been a partnership and suddenly, we own a best-in-class provider in that regard.

And then on the tax-free side, these are merchants that every one of them is hobbling together a payment solution. Some work better than others. And we can now deliver all of that under one roof. And in the best circumstances, that means we can offer immediate eligibility detection. So the retailer is not guessing that you're eligible for this, you paid and the software recognizes you as eligible for this refund, and it drives the cashier through the experience. Business owners love it because that cashier might not otherwise know to do this.

And now that you've integrated the products really, really tightly, the consumer is going to get money back that they didn't realize they could get back. The cashier is going to drive revenue back to your business and incremental spend that they didn't have before. So we think by owning all these value -- these components of the commerce chain, we can actually just create a better experience. That's been evidenced by the likes of LVMH and their best largest, most global customers that demanded a lot of this efficiency, and we can bring it all the way down to the SMB, who quite frankly, has a pretty disjointed experience today and can get a lot better through a single vendor.

Makes a lot of sense. All right. One minor modeling point, I've made a note to ask this. Could you just remind us on the geography of Global Blue? How should we expect those revenues to show up in the income statement?

Yes, sure. So I'll start by saying the next few quarters are pretty easy. We have a regulatory obligation to report them as a stand-alone business for the next few quarters. So no mysteries there. Outside of that, they are denominated in U.S. dollars with about 2/3 of their revenue coming from euro-denominated activity and 1/3 coming from Asia activity. So it is a business that is more susceptible to currency fluctuation than others we've had in the past, ultimately translated back to U.S. dollars. It is a little bit more susceptible to geopolitical events. Obviously, people have to want to travel for this to be a product that has adoption through it. But in terms of the contribution, I would think about 1/3 of our total business in geographies we haven't been in before, which is really exciting.

Got it. Okay. Great. All right. And then just in the absence of disclosing kind of quarterly organic growth, how would you encourage investors to gauge the organic growth of the business? And then how are you thinking about organic growth disclosures over time?

I'm going to channel my predecessor and get a little cynical for a second because there's this debate, are we phenomenal capital allocators who find excellent businesses and pay really low prices for them? Or do we buy really old agent businesses and extract the ton of synergies out of them? And the reality is we're pretty good at both of those things.

And the way it manifests itself is we have a sales funnel that is always incredibly large, meaning we could double, triple, quadruple the business without finding a new customer. And Global Blue obviously makes sure that funnel is incredibly full. And then separately, we have go-to-markets that are pretty unique in the verticals that we aim to serve. And the combination of those things represents itself in times like this, 20% plus organic growth, but also a really interesting opportunity to synergize businesses.

And I think this is not as manifested. So I think investors love to focus on the revenue growth as the metric that they want to look at. The reality is our margins despite having done a lot of M&A, even in very recent terms, our margins have expanded the whole time. That's where you get the -- that's where you can notice the benefit of delivering a really good synergized product in the face of M&A because we don't buy 50% margin businesses. And yet even though you're getting this low-margin business, the synergies are realized pretty quickly.

Yes. Makes sense. All right. Just on the stadium side, you've obviously made a lot of progress in the vertical. Just where do you stand now in terms of market share? And then bigger picture, when we think about the payment flows at stadiums, how do you measure market -- how do you measure wallet share? And then if you could just update us how much of the ticketing opportunity have we actually seen come through the numbers?

Yes, sure. So I'll start by saying I won't comment on our market share. That's for good reasons. We have a lot of it. And we have a lot of it across every league in the United States. So we found adoption across MLS, NHL, NBA, NFL and most recently, a lot of adoption in Major League Baseball. We've also found the product has tons of applicability in kind of the broader theme of entertainment. So you'll find us in those theme parks and increasingly in the stadium, Zoos and everything else.

So the TAM is a bit larger than we would have anticipated for the product itself. What we would have said is that we thought the U.S. stadium opportunity, meaning in-venue commerce is probably a high single-digit billions payment volume opportunity. And that when you can attach ticketing, it's like 3x to 5x of that. Today, if I were to look at kind of a month's worth of volume today, ticketing and in-venue are about the same. And so what's the opportunity? The opportunity is that ticketing should be 3x to 5x. What it is, and we can still win more stadiums.

Got it. All right. I'm going to try to speed run through the last vertical here. On hospitality, I think the hospitality, the footprint is sort of a hidden gem of the company, really strong competitive dynamics. You're one of the biggest providers in the industry. I think one flip side of that is high market share, digitized end market. The growth tailwinds are naturally a bit lower or so you would think. But is that right? Do you feel like there's more to go get in the U.S. hospitality space? And then you could talk about the opportunity to take your U.S. footprint abroad.

Yes, sure. So I'll start by saying we believe we have about 40% of the hotels in the United States on our platform. We've got 1.5 more to go for every one that we have. So the opportunity inside the United States is tremendous. Recent examples of kind of how far that can go, Alterra Mountain Resorts, where we're doing all of their resorts plus a really strong opportunity in their e-commerce volume where they sell their season tickets to their mountains. The Wynn Casino Resort in Las Vegas is an example of how far this can go, and that was a win, no pun intended off the street, like a new customer joining us for the first time.

So the opportunity inside the United States is still quite robust, but the maturity of the market outside the United States is very, very, very far behind. Your average hotel is still using a bank terminal. And so our value proposition should resonate incredibly nicely. And to the extent it's the same software company selling into those hotels and some of the same brands that exist inside the United States, our value prop is already well known. So it's a big area of focus for us. And we actually don't need to distract ourselves with either one to win. These are completely independent teams pursuing the opportunities, all with the payment platform that we have, which is we're integrated to the 1,200 most popularly used pieces of software for hotel.

Got it. All right. I have here a question 15. What is Jared up to? I think we can see in the Form 4s what his thoughts are on the stock. But maybe if you could talk a little bit about his involvement in the company and where his focuses are on a day-to-day basis.

Yes, sure. So it's fun. He -- we have several hours a week where we work with Jared on different initiatives. So he's talked about things being really important to him are the capital allocation philosophy of the business, where is the next dollar spent and why, is something he's just really passionate about, the success of SkyTab as a product and then international expansion and making sure that we don't repeat the same mistakes that we made over the last 20 years building this in the United States.

And taking those early days lessons learned and applying them to new markets is something that he's been really instrumental with. So we talk regularly every few days around these big topics. He's my largest shareholder. I need him like thrilled and happy and low stress. And so I like to use him very sparingly. He's -- interestingly, he's still on all of our distribution lists. So if you do something stupid, you still see the missile on occasion from Jared hit the inbox. So like what are you talking about?

But I think this opportunity that he had with government forced us to really focus on the priorities and what's he great at and make sure he gets to do just that, and that's what he enjoys. And what's all the other stuff that comes with a 6,000-person company that, quite frankly, can distract Jared from what he wants to do.

So you're right, largest shareholder, very much our North Star in terms of how we think about driving value for him and can certainly help us from repeating mistakes that he's learned over the last 26 years running the business, but also deserves the opportunity to like be on a bigger stage. I don't know when he's in the White House, that feels like an appropriate setting for kind of the ambition he's taken on and the amount of -- the level of problems I think he could be applied to. So I think we found a decent mix for today.

Got it. In the last minute here, I just wanted to hit on capital allocation. You've been very clear more M&A is likely to continue. In the near term, like are we expecting a digestion period post Global Blue? Is it full steam ahead? And then maybe just a more tactical question. And your long-term targets around the most likely case, what's a reasonable amount to include from year-to-year?

It's a great question, and it's easier to answer that question, which is that over a sustained period of time, what do we think you could reliably reinvest into the business and maintain really nice growth rates as a percentage of that. So when we laid out our most likely case, we contemplated about $200 million a year in redeployment into M&A opportunities that either give us access to new markets or give us cross-sell or something like that.

The reason I say it's the easy question is because it's not up to us when we buy things. And I know that sounds strange, but we have an incredibly rigid philosophy in what we're willing to pay and the demands we expect and what, quite frankly, synergies we can bring to a business. This has manifested itself very cleanly in the fact that we bought 6 businesses over the last 18 months, many of which we have looked at for 5-plus years.

We've got some of our best investment banking advisers in the room here at Goldman. And they know how picky we are in working through these philosophies. And what I would tell you is when an objective -- when a deal meets our growth objectives and our price objectives, you kind of have to do it. So you'd sooner integrate slower and know you've got it than move faster. All this to say, I think the last couple of years, we saw a really robust opportunity, who's to say what the next few years look like, but we're in 50 new countries that we weren't in before. So the opportunity set is certainly not shrinking.

Great. Well, I think with that, we're out of time. Taylor, thanks for doing this. Really great to see you, and I appreciate the conversation.

Thank you.

Okay. Thank you, Mike, and thank you all for joining us today. I'm delighted to be hosting this fireside with the management of Shift4. We've got Tom and Taylor.

And I was reminiscing that we had hosted a similar fireside last year with Jared. I looked through the questions from last year, because I save everything, and it's amazing how dynamic the company is because a lot of those questions, although some of them are evergreen and durable, there's been a lot of changes, and consequently, we updated them over the course of the last couple of days.

And so in terms of the format for this one, like I said, this is a fireside, so I'm going to be asking the questions and Taylor and Tom will give us the answers. And if there is room at the end, which there may not be because we got a lot of ground to cover, we'll try and get yours in.

Now folks, I'm on the Bloomberg, if you have questions, hit me there, send me an e-mail. But I think you'll see these are fairly comprehensive what we -- we've got a lot of people in this fireside, I'm very excited about that. And consequently, I hope you find this valuable. So Taylor and Tom, welcome.

I'm going to start off with a kind of open-ended kickoff question. But what have you found investors been focusing on in your conversations since reporting earnings last week?

Yes, sure. Thanks for having me, by the way. This is always a fun event to attend. And thanks for everyone who is dialed in.

A lot of themes coming through the quarter, not indifferent from other quarters. There's tons of initiatives underway and a lot of investor clarity to provide around what's working, what's not working, and just simply the combination of the business with Global Blue, which was something that just closed in early July, and what the impact of that would have on our financials.

So I would say the big themes across investor conversations are payment volumes and what does the average customer of Shift4 look like today versus years prior. What's the relative success of each one of these initiatives? We are very unique to have both an incredible enterprise and SMB opportunity inside the business. And I think that explaining that to investors is something that we've spent a bunch of time doing, which is we can win both and the impact of both obviously represents different rates of growth for volume, different revenue growth, et cetera. So just giving clarity around that.

And then lastly, international expansion as a theme. This has been a theme for us for several years now, and hopefully investors are starting to appreciate that these pieces that we've talked about as far back as 4 years ago publicly have now largely come into place and we're able to execute against that strategic vision that we had. But the pace of execution and the relative contribution of different countries is certainly a big theme as well.

Sorry, I think you might be on mute.

I type really loud, so I tend to mute myself. In terms of the CFO transition, can you touch on the CFO transition? As that seemed to catch some of us by surprise; Nancy is very talented. Chris Cruz is well known in this ZIP code, but I just want to make sure that everybody knows what he's about and why it is that you're making that change.

Yes, of course. So you're right, Nancy is incredible and she's been a driving force behind kind of the company's success, both before she was CFO, as a Board Member, and will continue to be as a Board Member after her tenure as CFO. One thing that she was adamant about, even before she signed up for the role, was that she wanted to contribute 3 years at the company in a full-time capacity and believed that she could accomplish her really long list of objectives inside of that 3 years. And to her credit, she did exactly that.

So as her tenure was coming up, her 3-year agreement was coming close to its expiration, she said, "I'm happy to stay in a capacity to help through the transition with Jared and all that stuff. But fundamentally, I want to take a step back from the company and be involved as a Board Member and not in the full-time race." So we just certainly tried to keep her around for another 3 years. She politely said, "I'll give you some level of flexibility because I want to stay close to this, but I don't have another 3 years in me."

Chris is a little bit of a different story because we've wanted Chris in the company in almost any capacity for a very long time. So for those less familiar, Chris invested in the company about a decade ago. Him and his firm bought a 60% share of the business and provided tremendous guidance throughout some of the most formative years of our growth and, quite frankly, stayed on our Board as an Audit Committee Member long past Searchlight's divestment in the company. So we've had him around forever. Obviously, if we had to lose Nancy, this was like a really safe pair of hands.

And a lesser-known kind of fun fact is that Chris and Nancy actually know each other long before Chris knew Shift4 or Nancy knew Shift4. So there's a ton of continuity between the 2 relationships. And that's important to us. I mean you kind of talked about the, or you alluded to, the number of things we've gotten done in a year. It's a fast-paced company with tons of initiatives going on. And trying to get a stranger up the curve comes at a significant cost. And so we're thrilled that Chris can kind of step into the seat, bring a lot of continuity given his relationship with Nancy.

Nancy can continue to give us advice. By the way, she'll be an employee through yearend, so this will not be an abrupt transition in any way. And it will all be the same kind of cast of characters just contributing at different levels. So I think the continuity will be there, but I also think we're going to get some fun insights with Chris and all of his brain power.

All right. The Shift4 Way. So in terms of guidance, should we anticipate any potential changes in the overall guidance philosophy or methodology with Nancy leaving?

No, I wouldn't say that. I will say that the company evolves. And you've been kind of right alongside of us as we've evolved, not having an international business by way of example, not having a sports and entertainment business, and suddenly we're, just short years later, one of the largest in the space.

So I think we'll continue to refine at the pace within which we have. So nothing stays static inside the business. We have to help people with disclosures. Like the contribution of Global Blue, for example, is a big theme in the back half of this year. But philosophically, this is largely the same group of people contributing in different capacities than they have in the past.

Okay. So apropos of Global Blue, with that closing on July 3, you highlighted on the earnings call that you're now tracking towards that third scenario of the guidance. So for those of you who weren't at the Analyst Day or didn't -- the company set forth the structure, which I think was quite intuitive, maybe if you could revisit what that was. And then that third scenario calls for a 30% CAGR and growth in the gross revenue network fees and adjusted EBITDA. So maybe if you can give us some context as to why you set the structure that you did and why it is that now you're messaging the higher end.

Yes, sure. So it's been a common theme with investors that they want to kind of break down the parts of the business and understand the relative contribution. And M&A can make that difficult for investors to do. So at our Investor Day, we tried to lay out 3 scenarios that we think about when we're planning ahead for the business.

First is sit on our hands. And it's kind of a joke internally because that's not what we've ever done for 26 years. But certainly happy to portray the results of that or the expected results of that for investors, which is we have this massive base of customers, over $1 trillion, that we can go cross-sell payment volume into. And we also have product-leading -- leading products across restaurants, hotels, stadiums, now specialty retail.

And so the sit on our hands case is let's continue to win with those products in those verticals and let's continue to cross-sell the base we have, but not add to it in any way and not reinvest the capital. We laugh about it because that is the last thing we would ever do as a management team, is not think about how to reinvest the capital and keep our growth funnel as full as it could possibly be. But there you go, high teens is what we think is a reasonable 3-year CAGR for sitting on our hands.

We also wanted to illustrate the impact of Global Blue, that's somewhat formulaic because Global Blue was a public company. They had their own forecasts and guidance set out to the Street. And adding Global Blue to that standalone mix would create kind of a mid-20s CAGR.

And then the last one, which we deemed most likely, is, of course, you do those things because that's the way the business has been operated. But you also reinvest capital and seek out opportunities that we've done a pretty good job of pursuing over the years. For example, we announced a small tuck-in acquisition in Australia that gives us a sales force on top of a bunch of infrastructure that we already have. It's a very obvious thing to do when you have this infrastructure and this plumbing to go add a bunch of salespeople on top of it. And if M&A is an attractive return-on-capital way to inherit that sales force, all the better.

So the most likely case, which you illustrated there, is kind of a 30% CAGR on our gross revenue less network fees. And it's simply a result of pursuing the base that we've already set up for ourselves over the last few years, the inclusion of Global Blue's capabilities which gives us really large vertical access and geography expansion, and then lastly, reinvest a modest portion of that capital into opportunities as they present themselves.

Okay. And then in terms of the additional capital deployed in future M&A, can you help unpack that? Yes. And the methodology you guys set forth at the Analyst Day was really fascinating. But yes, if you could talk about how the approach to investing that capital.

Yes. I want to be really specific in the description here because I think investors can sometimes get confused about how M&A works in our industry. We have an incredibly disciplined model whereby our price structure and how we underwrite the returns from an acquisition, how we intend to integrate that business, what revenue streams we want to delete from that business are all really, really rigid.

And as a result of that, we don't often get to pick when we do M&A because we simply have a basket of companies we think are very interesting and a price model that we think makes sense for us and it's kind of take-it or leave-it up to the seller if they're willing to pursue that and whether they kind of buy into our vision. So in many ways, M&A isn't up to us. If it fits our model, we're going to pursue it within some modest, reasonable amount of leverage and we feel compelled to, if it sits between us and a really interesting growth opportunity like what we've just described in Australia.

So as we look at outer years, it's imperfect. We modeled out hypothetical $200 million a year, which we think is a reasonable amount that you could deploy against opportunities. But I'll say it's certainly lumpy. You'll have opportunities like we saw in 2024 where 5 businesses that we had previously looked at many years prior all came to fruition at terms that we were pretty consistent on over those last 5 years, and then other times where cycles get great and people's expectations are high and there's not much of interest to us.

I actually asked Tom and our investment banking teams to go back and look at our deployment of capital against the M&A cycle. And it's actually kind of interesting, the hot years for M&A, we did virtually nothing. And the slow years for M&A, we did a ton, which is what you should hope for from a capital allocator. So I'd say we hope we can deploy a modest amount every year, maintain a leverage ratio that delevers despite that deployment of capital, but add capabilities selectively around the world or in verticals that we think we've got a differentiated right to win.

And I'm just doing this from the Analyst Day slides, but the total capital invested from that vantage point was $2.7 billion. This is a 5-year return chart. 4.6x return on EBITDA, 6.4x return on free cash flow and a 16% free cash flow yield. So that's -- the system certainly seems to be working.

Now in terms of -- okay, so thank you for -- about Global Blue. Thank you for disclosing the expected GRLNF adjusted EBITDA financial contribution from Global Blue for the second half. Can you talk through your early read on how that's performing and what it will take to achieve those targets?

Yes. Of course. So Global is doing great. It's largely though, today, acting as the independent business it was a year ago. And so what does that mean? It means that they are winning lots of clients to their tax-free solutions business. This is the VAT refund business that they are a category leader in and they've been adding great customers and great capabilities around the world consistently. Similarly, their currency conversion business is growing nicely.

We gave ourselves, and I think this is just prudent given the size of the acquisition and given the slightly uncertain time lines around the regulatory review, we gave ourselves a year before we would expect meaningful synergies inside the business. And what do I mean by that? I mean the ability to kind of cross-sell our payments product to their merchant population, embed their currency conversion product across our merchant population.

We don't think it will take a year. We think we're going to hit the ground running really, really nicely inside of Q1 with a broad-based set of capabilities. But in terms of kind of keeping, I think, a reasonable and prudent set of expectations, externally, that's the right thing to do. Again, there's technical work that needs to be completed. And then obviously, we have to go to market with these great products.

And I think unlike some of the other acquisitions we've done in our past, this is an awesome business that's growing quite nicely, that's winning share without us. And so there's an element of do-no-harm that certainly comes in through the first several months of an acquisition. Let's make sure we all understand kind of the relative pace of execution, the big themes we're going after as a business and just the annoyances that come with M&A, which is like how do titles work, how does organizational structure work, et cetera. Let's get that right. Let's not distract from the success they're already having and let's set ourselves up really nicely in '26 for a set of capabilities that are going to be unrivaled.

And could you just repeat again, you said earlier the timing of when you anticipate the cross-selling opportunity?

Yes. So we've publicly said give us a year to put these capabilities in place. Now again, that was from when we started announcing the acquisition. There was an uncertain closing time line. We think we're going to be well within that and we think we're going to have an awesome set of capabilities to go demonstrate in the first quarter of next year. So we're really encouraged by that.

But again, I want to emphasize, this is a business that you don't sprint at the synergy opportunity, because that can come at the cost of execution. They're growing quite nicely as a standalone business. We want to make sure they continue to win, and we embed our philosophies and our product capabilities over a reasonable period of time.

Now I found it interesting that you made Jacques Stern, the CEO of Global Blue, the Head of Shift4 International. So what best practices do you expect that he'll bring to the organization?

He's an exceptional leader. And unlike the Shift4 business, they were an international business from the start, meaning that their organizational structures, their governance models and their go-to-market, their support models are all built through the lens of operating in 50 countries around the world. Shift4 was in one country for the majority of its history, and now we're in over 50 countries, but moving very fast to get there.

And so as Jacques and I got to know each other, it became obvious that the Global Blue governance structure would serve us well internationally. This means that in a country like Germany where we can sell basically every product under the Shift4 umbrella, our restaurant product, our hotel product, our sports and entertainment product, unified commerce, awesome retail capabilities with VAT refunds, et cetera, that should be under a German country head that gets to evaluate all these opportunities and pursue them based on what they see inside the market.

Prior to this acquisition, Shift4 internationally was kind of structured as a series of acquisitions that happened to be in one country or another. So Jacques brings 20 years of executive experience. I mean he was a CEO of Edenred prior to Global Blue. He was a C-suite member at Accor, the global hotel franchise. So positioning us for organizational success, and by the way, to bridge this cross-sell, because the cross-sell is a new concept to a lot of the Global Blue employees, is something that we thought really important.

Yes, makes sense. All right. So I was intrigued by the comments you made on the earnings call -- oh, actually, this goes back previously to the Analyst Day, about the functionality that will be built into the Global Blue terminal. So can you elaborate how that will work relative to what it looks like today? On the earnings call, you discussed producing a "single, all-in-one terminal that consolidates 5 or 6 things." What are those 5 or 6 things? And yes, so I think you elaborated currency conversion, tax receipt. Anyway, if you could unpack some of the features or functionality.

Yes, sure. Well, I'll start with just fundamentally what does the purchasing experience look like in these environments. This is what we do as a company. We really obsess over what the purchasing experience looks like in a number of technologies that are required to enable that experience. And so you obviously have a consumer coming in to buy what's typically a luxury retail item, high ticket. That store operator may or may not have an inventory system and an ISV that they rely on for running the retail operations of their store, they have payment hardware, they have a local bank relationship typically that actually accepts the funds, settles them.

If it's a tax-free eligible shopper, that's another set of technologies you need to bring to the mix, which is you want to capture their passport data, you want to capture their e-mail address. And you want to do all this in a seamless way as possible and in a way that doesn't offend this kind of luxury shopper. The best merchants in the world have been enabled by Global Blue to do this quite seamlessly. It recognizes at the point of payment that you are a foreigner and it tells the sales associate to get your e-mail address and just take as much friction out of the process as possible.

It works phenomenally in the largest retailers in the world and in countries that enable this tax-free process. However, if you're not the largest retailer in the world, the process can be more cumbersome. And Global Blue has had a ton of success just eliminating friction from the experience. We want to take that to another level. We want to take that local watch boutique in Switzerland or local perfume store in France and give them the kind of consumer engagement experience that they would have if they were Louis Vuitton in Paris.

And we can do that with a single device. So you're eliminating 1 or multiple bank terminals. You're eliminating a computer they might have to use to enable the TFS journey. You are helping them identify tax-free shoppers in a much less awkward way. It can identify simply at the point of payment that this person is not from this country and, therefore, eligible for money-back and might want to spend more in the store.

So the idea is just to enable as much of this on a single device as possible. And if it sounds novel, it's not at all different from what we've done with hotels, which is take the multitude of technologies required to make all that software and payments work inside of a large resort and just simplify it down to as few devices and as seamless an experience as possible.

So we know it's possible. We know we've got all the key ingredients to make sure that technology works well. And unlike previous implementations, there won't be handshakes from 1 vendor to another trying to make it all fit well. It will all be inside of Shift4, which as you can imagine, the retailer sees a lot of value in fewer hands to shake.

Ant and Tencent are strategic shareholders in Global Blue. What, if any, opportunity do you see to work together with them?

Absolutely. So we identified them as really important partners to Global Blue as a standalone business. Now how are they partners? They enable shoppers around the world with a lot of commerce technology. So whether that's the WeChat application or the Alipay+ family, wallet with tons of different local payment methods that are predominantly used by Asian consumers, enabling those payment methods around the world is a strategic priority of theirs, which is perfect because, for Global Blue, attracting shoppers from around the world and giving them a consumer experience that looks like they're buying something at home was a priority as well.

So to the point you mentioned, they were existing strategic shareholders in Global Blue. And as we work through the transaction, we wanted to have dialogue with them because they'd be important to us as well. And as you can imagine, the Global Blue story makes a ton of sense and there's a lot of opportunity for collaboration on a standalone basis, but now you can add in restaurants, hotels, stadiums all throughout North America and around the world and it just becomes that much more interesting for all the parties involved.

So we will be helping to enable their payment methods. And in -- no matter how complex the payment environment can be, it should feel like you're paying in the way you would pay at home for large swaths of consumers that are traveling around the world.

And just to clarify so there's no ambiguity, they're shareholders now on Shift4. I think you'd let off by saying -- yes, no worries.

Thank you for that, Tom. So something you touched on at the Analyst Day was the digitization opportunity in the Global Blue business process. So what I remember, do this from memory, describing was that business and business process and workflow could often be paper-based. For those of us who have experienced it, obviously, you can get a physical receipt; that can be cumbersome. So how should we be thinking about the digitization opportunity that that may accrue?

Yes, absolutely. So yes, I think if you're like me, you might have remembered a basket of receipts in your wallet as you're checking out on your honeymoon, and trying to figure out what to do with this hypothetical amount of money you can get back. Global Blue has already done a phenomenal job of this.

So when I talk about the concept of do-no-harm, they've done an excellent job making the process easier and far more digital where basically your passport and your e-mail address is enough in certain geographies to help enable that experience. And things like instant refunds, things like refunds after you've left the country, ways to just make the process more seamless, because you are eligible. This is kind of a regulatory construct. But it can be difficult to prove that you've left the country, to prove that you've left the country with the goods, et cetera.

So they've done a phenomenal job of making it more digital, embedding a lot of technology in the process, identifying shoppers at the point of sale that are eligible for this, as opposed to hoping that the salesperson figures that out. It can be difficult, if you're guessing on accents or based on the card presented, whether someone is eligible. So again, they've done an awesome job of this. And what we want to do is take what they've done and pull it as far down-market as possible, so that even a small local retailer can get the benefits of all that digitization.

What it means is it means refunds are easier to occur. More of them happen as a result of that. And consumers are more likely to shop as a result of this somewhat nebulous benefit becoming crystal-clear at the point of sale. "I am eligible, I've gotten this much back. I intend to spend more." Because people budget these things on the basis of what they're willing to spend, and then when they're eligible for more, they spend more. Again, they've done a phenomenal job of this. This is an embed opportunity that lives inside the business. And it's not just about more shopping occurring, it's about the likelihood of a refund being processed being higher because they made the experience more easy.

A couple more on Global Blue. We do have a couple that have been starting to come in. But in terms of how we should be thinking about the impact of currency, specifically the stronger euro, on Global Blues' -- that tax refund business?

Yes. So unfortunately, it's not as simple as a currency's strength or weakness is a benefit or a tailwind -- or a headwind to Global Blue. I'll take a couple of examples that we've seen the weakness in the U.S. dollar relative to kind of not just the euro but a basket of currencies. What that means inside of Global Blue is it means the U.S. shopper is spending less because their dollars don't go as far when they travel internationally. And yet there's a translation benefit from euro-denominated revenue being represented in U.S. dollars as we report our financials.

So there's a lot more puts and takes. Currency fluctuation is both a strength and a detriment. Now fortunately, Global Blue has a really diversified business and travelers come from all over the world. So we can take shocks like what we've seen to the U.S. dollar and it really hasn't had a meaningful impact on the expected performance of their business. It absolutely caused U.S. shoppers to spend a little less, but we got the tailwind benefit in the translation.

And then there's just lots of shoppers from around the world all with different currencies at the point of origination and at the point of spend. So it's certainly something we're going to have to continue to educate on. I think the early days have taught us that there's a heck of a lot of ballast that can withstand one shock or another to a particular currency. But it's not as simple as currency down is good or bad.

Okay. And then going back to what you were saying at the beginning about the Global Blue integration methodology, I mean, it is noticeably a larger transaction for you, more international. And investors are wondering what safeguards you may have meted to avoid some of the missteps that the industry has suffered in larger M&A transactions.

Yes. It's the absolute right area to focus, and that starts with a do-no-harm mentality, do an awesome business. It also starts with establishing what we think are the appropriate points of continuity for their entire team. So Jacques sticking around and helping us formalize our governance structures outside the United States is something that we see as very valuable.

And I'd say lastly, it's really important, especially for U.S. companies that are pursuing international acquisitions, to not take for granted the relative simplicity of doing business in the United States and how that might not be the case in different countries around the world. And so we have slightly different approaches to go-to market in the U.K. versus Germany, and then a different time line for places like Spain and Italy and France. Asia is a whole another set.

And I think just not taking for granted that you can activate large portions of the world instantly is something that's really, really prudent. Because we've learned that the thesis holds true, that the simplification we've been able to provide in the United States is very valuable to merchants all over the world and they really want it, but the time to execution is different in all these different markets.

We will be much faster to execute in Australia, for example, than we could be in certain parts of Europe. And I think it's important that management teams recognize that at the start and at the underwriting of these opportunities, as opposed to learning along the way that XYZ country takes you 6 months to get your legal entity set up.

So we've learned both in our own prudence and also from making mistakes along the way in terms of the time lines we set for ourselves that it can take a little longer. But none of that's changed our conviction that is these themes are huge. When you get the right pieces in place, you see thousands of merchants signing up in a month, that's like really, really encouraging. And we have to pursue them because this simplification will be demanded by merchants over time. And if we can lead the way, all the better.

All right. So zooming out a bit to the corporate level beyond Global Blue, what do you see as the priorities, Taylor, that the company needs to achieve at a high level not just for the remainder of the year, but sort of to achieve the mid-cycle guidance?

There aren't as many as it might sound like when we talk about everything that's going on in the company. Our road map for success is actually pretty simplistic and it's been that way for a very long period of time. That is we've got category-leading products. We are #1 in hotels, we're #2 in restaurants today, we're #1 in sports and entertainment. And we've got lots of opportunities in this field of unified commerce that is kind of one of the fastest-growing sections of the economy. Continue to execute against those products. Continue to build differentiation. And enable those products in lots more places around the world.

So that's like just a big theme. Continue to maintain and grow your market-leading positions across these large verticals and enable those capabilities to work in lots more geographies because history repeats itself, and the themes we see to simplify the payment environment in Europe or certain parts of Asia look exactly like they did in the U.S. 15 years ago. So just take what you're good at and repeat it is one piece, in as many places as possible.

The other is, I would say, make sure you have a point of difference. And all too often, you have companies expanding for the sake of expansion as opposed to thinking really carefully about what their point of difference is going to be. The example I would give is that we spent half a decade developing what would be our point of difference in retail. And it was not going to be that we would do it cheaper than our competitors. We needed a highly differentiated piece of technology that we knew was going to open the door to conversations with retailers, and Global Blue, obviously, gave us that.

And then lastly, making sure that you're focused on prudent capital allocation through this. One thing that I think investors can sometimes under-appreciate is that, when you're making these investments around the world, it comes with a completely different set of expectations for the J curve, if you will, on those dollars. And in order to be able to afford to do that thoughtfully and prudently, you need to be obsessing over how your dollar is spent and the return that you generate on it.

So said very simply, keep our products winning, expand internationally and allocate capital in a prudent way and don't compromise on that and you'll end up in the right spot, I think.

About your stadium presence, can you talk about the barriers to entry that you see and how the competition may be evolving?

Yes, sure. It's a highly attractive space, so there's always somebody trying to provide a solution into the environment. There are virtually none that can provide all of it under one roof the way that we can.

And so what does all of it mean? It means enabling point of sale for the largest category items inside of the business. It's typically food and beverage inside of a stadium. It's also connecting to all of the other commerce experiences that stadium wants to support, whether that's something as trivial as parking, all the way through to really cool night club and restaurant concepts inside the footprint of the stadium. You need to connect to all of those technologies to deliver a seamless experience for the fans.

And then, and this is really where our team specialized and what made us so interested in the VenueNext acquisition, it's deliver a fan-first mobile experience that is unparalleled. So the theme was pretty consistent that consumers were going to be bringing in better technology in their pockets into these stadiums than you could afford to deliver via CapEx. And by the way, they're going to refresh it more often too. So capitalize on the technology that your fans are bringing in and deliver an experience through that.

So we've done all that and, quite frankly, expanded far beyond the revenue of just this inside the stadium, into supporting purchases of tickets for teams, et cetera, all to give operators in these really complex environments as close to a single pane of glass as they can get around all of the revenue they collect.

It's been a tremendous experience. We, in the early days of the journey, had to kind of educate people that you no longer have to RFP this one piece of technology. We can do all of it and you can think about all of it under one roof. And the success has been tremendous. Lots more stadiums to go and certainly lots more revenue to capture across our relationships. So haven't slowed down.

But I wouldn't say the competitive environment has changed dramatically. You will always have a provider writing a check out of their name on the outside of a stadium, and that's just kind of the nature of the industry. But our growth rates continue. And quite frankly, the volume opportunity and challenges our merchants are asking us to solve continue to grow as well.

Okay. Maybe just a couple more. Can you also, in that same train of thought, discuss the ticketing opportunity?

Yes, sure. So what began as us solving the technical problems inside the stadium has evolved over the years into -- I collect revenue through lots of different pieces of software and lots of different methodologies, and I like as few deposits as possible and as easy reconciliation as possible.

And so about 3 years ago, we began integrating to a broad base of ticketing technology providers, so the Ticketmasters, the SeatGeeks, the Paciolans of the world. And so that as a fan, you could go buy your ticket to the team in the way you traditionally would. But as an operator, you're getting your financial reconciliations and your deposits and data around that all in a single ecosystem, which would be Shift4. So I can sort of simplify it down to, much in the same way we'll enable parking software to collect revenue outside the stadium, we'll enable any ticketing platform to make that revenue collection easier.

What's cool about it is that, oftentimes, there's like 3x to 5x what's spent inside the stadium being spent on tickets. So it took what was a reasonably narrow volume opportunity for us, which is sports and entertainment and theme parks in the United States, and what's spent in the park, and it's expanded it to all the money spent on the journey to get to that park, which is a significant multiplier in both a volume and revenue opportunity.

Okay. So for the last question, was wondering what Jared's involvement is with the company at this point. How is he spending his day-to-day?

So it's a great question. And his involvement was kind of forced to evolve over the first 6 months of the year as he was contemplating a transition into a different role in government. And what's funny is, as the year progressed, we found ourselves evolving our communications to, "Hey, we can only talk about the 3 or 4 things that really matter inside this business" because we only have an hour with each other this week and we really need to make as best use in that hour as possible.

I'm frustrated for the country in the outcome because I think he, quite frankly, he just deserves to contribute at a higher level than inside of Shift4. But the byproduct of what's happened is that he is focused exclusively on those 3 or 4 things that we think really matter, and he doesn't get distracted by the day-to-day that can pull you off-mission more often than not.

And so he's really focused on capital allocation. How are we spending our next dollar? He is, as the largest owner of the business, very focused on the per-share return of capital to investors and how we are able to generate that for him. SkyTab as a product and its evolution is something that he began many years ago and he wants to see through. And then international expansion, obviously, has the ability to take all these capabilities that we've done quite successfully in the United States and roll them out around the world. So it's really those 3 categories.

And in terms of involvement, it depends a little bit on mutual schedules, but it's usually several conversations a week and then meetings on a monthly or quarterly basis around big themes where we're getting a larger group together to talk with him and get some advice.

Okay. Well, we covered a lot of ground. Taylor, Tom, we are very grateful for your participation and your expertise. You explained the company industry strategy extremely well. And again, thank you for your participation and insights and leadership expressed at our conference.

Thanks so much for having us.

Thanks, Jamie.

Okay. Thanks, Tom.

Greetings. Welcome to Shift4 Second Quarter 2025 Earnings Conference Call. [Operator Instructions] please note, this conference is being recorded. I'll now turn the conference over to Thomas McCrohan, EVP, Investor Relations. Thank you. You may now begin.

Thank you, operator, and good morning, everyone, and welcome to Shift4's Second Quarter 2025 Earnings Conference Call. With me on the call today are Taylor Lauber, our CEO; and Nancy Disman, our Chief Financial Officer. This call is being webcast on the Investor Relations section of our website, which can be found at investors.shift4.com. Today's call is also being simulcast on X Spaces, formerly known as Twitter, which can be accessed through our corporate Twitter account at Shift4. Our quarterly shareholder letter, quarterly financial results and other materials related to our quarterly results have all been posted to our IR website.

Our call and earnings materials today include forward-looking statements. These statements are not guarantees of future performance, and our 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, which you can find on the SEC's website and the Investor Relations section of our corporate website. For any non-GAAP financial information discussed on this call, the related GAAP measures and reconciliations are available in today's quarterly shareholder letter. With that, let me turn the call over to Taylor.

Good morning, everyone. Thanks for joining the call. While I will hit our strong Q2 financial performance in a minute, these past few months are illustrative of so much more than that. The Shift4 team has accomplished more since our last earnings call than we have in entire years prior. More importantly, they've done it well and without compromising the day to day. I'm truly humbled to get to call myself, their colleague. Just to name a few of our accomplishments and wins this quarter, we successfully diversified our capital structure with a $3.3 billion capital raise in May, which provided both the funding for Global Blue and also retire near-term debt maturities.

We are beginning to hit our stride in several European markets where we can now sell a broad suite of products, be that restaurants, hotels, sports and entertainment, unified commerce, et cetera. We streamlined our onboarding systems, allowing us to board over 1,000 new merchants per month in Europe alone. And again, this is just the beginning. We signed a pending acquisition of Smartpay, which essentially lets us capitalize on our leading products in restaurants, hotels, sports and entertainment, by adding an incredible distribution network. Those who have followed previous acquisitions like Vectron know this playbook well. In Canada, we continue to expand our presence and win in the verticals we serve best. We are powering payments at the Canadian tennis open, which is currently underway in Toronto.

Jared moved into the role of Executive Chairman and myself, the CEO. This allows us to continue to execute on our mission with the benefit of our founder and largest shareholder remaining focused on the needle movers. Make no mistake, this is a loss for our country and for humanity more broadly, but a win for Shift4. The Global Blue acquisition closed in early July, and we welcomed Anton International and Tencent as strategic shareholders.

They each own a little less than 1% of our equity, but collaborate with our teams regularly on product capabilities in order to make payment complexity for our merchants and their consumers easier. All of this and much more was accomplished without taking our eye off the ball. Our financial results were in line with our expectations and marked by quarterly records across several of our KPIs. Some financial highlights for the quarter include 25% year-over-year growth in payment volumes to $50 billion. This is our first quarter generating over $50 billion in payment volumes. 29% year-over-year growth in gross revenue less network fees to $413 million, 26% year-over-year growth in adjusted EBITDA to $205 million and 49.6% adjusted EBITDA margins; 37% year-over-year growth in subscription and other revenues to $97.7 million also a Q2 record and blended spreads of 62.6 basis points versus 61.5 in Q2 of 2014, ahead of our full year guidance.

How is all this possible? Our algorithm is much simpler than I think many understand. We believe we are still very early in the convergence of payments and software, especially when it comes to international markets. We seek out technologies that will make us highly differentiated to merchants and gives an edge in large industry verticals. When we have an idea, we build, buy or partner quickly with conviction and with an intense focus on capital efficiency. This playbook began well over 20 years ago, but has been refined constantly. And today, we are #1 in hotels, #1 in sports and entertainment and #2 in restaurants.

For emphasis, we recently won the corner collection of hotels, the Golden Gate Hotel and Casino, Back Home, Springs, CamelBak, Capital Vacations, Pontevedra, Beach resorts and many more. We had a record quarter of SkyTab systems installed in restaurants, supported in small part by the European success that I mentioned earlier. We are well on track to meeting our goal of 45,000 SkyTab systems installed globally in 2025. SkyTab continues to deliver for our customers in some of the most intense environments including a futuristic diner and EV charging destination that recently opened in L.A. Our Sports and Entertainment business continues to put points on the board, adding food and beverage payments to the Cleveland Cavaliers in addition to ticket.

University of Kentucky, University of Arizona, the Glastonbury Festival, the Detroit Lions and many more entertainment venues recently joined Shift4. Perhaps most exciting of all, SkyTab venue is coming to Madison Square Garden, home with the New York Knicks and Rangers as well as Radio City Music Hall and the Beacon Theatre, a whole suite of New York institutions. We also quietly invest in capabilities for marquee customers that we think will have relevance in the future and set us up better to win.

BYD is an example of a new partner that is introducing our services to its dealerships in Latin America. Those of you at our Investor Day will recall us previewing some of these new and emerging capabilities back then. With the acquisition of Global Blue, we will accelerate our geographic expansion and dominance in these verticals. We will also gain scarce market-leading products in an entirely new vertical, which is luxury retail. I want to officially welcome the over 2,000 Global Blue colleagues located around the world to the Shift4 team. I cannot be more excited about this acquisition and the long-term implications for the combined company. Adding Global Blue's technology capabilities, the employee talent and the strong reputation with global retailers will accelerate our global expansion plans.

Combined, we will offer a truly differentiated right to win within the retail vertical. It's important to note that too often you've seen other companies first enter adjacent vertical only to later determine they lack a unique go-to-market offering. As we have hopefully demonstrated time and time again, that is not our approach. We first determine our unique differentiation before entering a new vertical, which helps us underwrite our success. Global Blue is very similar to our success in stadiums. I would argue not a single person on this call would have predicted our market position today in sports and entertainment 4 years ago when we announced the acquisition of VenueNext back in March of '21.

The acquisition of Global Blue is classic Shift4 just on a larger scale. We believe it is our responsibility to shareholders to continue delivering long-term value creation by executing on this algorithm even at a larger scale. Inclusive of the capital deployed to acquire Global Blue, we've invested about $5.4 billion of capital since our IPO back into the business across 3 major categories: customer acquisition, product investment and acquisitions. This $5.4 billion of capital has generated an associated annual EBITDA contribution of $890 million and free cash flow of $514 million.

We are investing capital back into the business that returns lower current trading levels or at roughly 6.1x EBITDA multiple and a 10% free cash flow yield, which compares to our current trading levels of about 15x EBITDA and a 6% free cash flow yield. Regarding the balance of the year, integrating Global Blue remains a key priority as well as continuing our international expansion and continuing to execute. Obviously, none of this would be possible without a stable of products that merchants see value in. And so we continue to invest meaningfully in SkyTab, SkyTab venue and our broader payment platform.

We now have over 1,200 integrations, up from about 350 just 5 years ago with European capabilities being a particular area of focus. Of note, I have already personally entertained productive conversations with a number of key global blue customers, both at the executive level and in physical stores. The early feedback from these conversations has only served to reinforce my conviction that this combination has created something unique in the fintech industry. Having witnessed our success in other verticals, it's hard to temper my enthusiasm for this new journey we're on.

Since hosting our Analyst Day back in February, it's also worth reminding everyone that we are now tracking towards the most likely medium-term guidance scenario. As you recall, we provided 3 guidance scenarios at our Analyst Day, sit on our hands, the combination of Global Blue and most likely, with that most likely scenario calling for 30% plus gross revenue less network fee growth and 30% EBITDA growth, all with the ultimate goal of exiting at a run rate of $1 billion in free cash flow. With the acquisition of Global Blue now behind us and the recent tuck-in acquisition in Australia and New Zealand, we are clearly tracking to deliver on the most likely objectives established this past February.

Before turning the call over to Nancy, I wanted to quickly provide an update on the May capital raise, given the number of 8-Ks we issued, was likely very difficult to keep up with. In short, the roughly $3.3 billion of capital raised in May was intentionally diversified across a combination of fixed and floating rate instruments, including our first euro-denominated debt offering, to align with our growing European presence and included preferred equity in the form of a $1 billion mandatory convertible instrument. On the mandatory converts, we issued 10 million shares of mandatory convertible notes at $100 a share. In essence, holders will receive approximately 10 million shares of Class A when the notes mature in May of 2028. And because they settle in shares, these notes are not -- are treated as equity and not as debt.

We also hold cash on hand for our December maturity and have already paid off our 2026 maturity, giving us lots of flexibility for the years ahead. We expect net leverage at year-end to be approximately 3.5x. Nancy will review some of the modeling related impacts to consider such as quarterly interest expense and what share count to use for the purposes of calculated non-GAAP adjusted EPS in a remarks shortly. With that, I'll turn the call over to Nandy.

Thank you, Taylor. We delivered another quarter of consistent and solid results in line with our expectations, setting new second quarter records across several of our key performance indicators. Volume grew 25% year-over-year to $50 billion. Gross revenue less network fees grew 29% to $413 million, and adjusted EBITDA grew 26% to $205 million. Our Q2 adjusted EBITDA margins were 50%. Excluding the drag from recent acquisitions, adjusted EBITDA margins would have been 53%. We expect to benefit from higher levels of operating leverage as the year progresses and we add incremental payment volumes from cross-selling and working through our existing backlog.

Since Q2 2022, we have grown adjusted EBITDA over 3x and expanded margins over 1,300 basis points, all while also deploying capital on acquisitions that were highly dilutive to the margin profile of the business. Through continued execution on cross-sell synergies and deleting the parts, we've maintained best-in-class margins of 50%. We will continue to follow the Shift4 playbook, delete legacy parts and continue to expand margins and repurpose resources towards future growth. Our Q2 blended net spreads were strong at 63 basis points, and we now expect full year spreads to be stronger than the 60 basis points we previously communicated, given in part to our international success. Spreads remain stable across our core business of restaurants, hospitality and specialty retail. Subscription and other revenue was $98 million in Q2, up 37% compared to the same period last year.

The growth was once again driven by our success across SMB, SkyTab and further penetration of the sports and entertainment vertical as well as contribution from recently completed acquisitions. Ongoing deprecation of legacy revenue from recent acquisitions will continue to influence year-over-year growth rates for the remainder of the year. Q2 organic gross revenue less network fee growth was in line with our expectations and we are on track for 20% plus organic revenue growth for the full year. Our adjusted free cash flow in the quarter was $118 million, representing 57% adjusted free cash flow conversion. Included in the $118 million is $9 million in prepaid interest we received in May from the recent issuance of 2032 notes, which will be included in the August semiannual interest payment.

This affects both Q2 and Q3 adjusted free cash flow but nets to 0 on a full year basis. We remain on track to deliver 50% plus free cash flow conversion for the full year. GAAP net income for the second quarter was $41 million and GAAP diluted EPS was $0.32 per share. Non-GAAP adjusted net income for the quarter was $109 million or $1.10 per share on a fully diluted basis. Of note, our non-GAAP share count now contains an additional 10 million shares related to the mandatory convertible preferred issued in the quarter, bringing our total share count for the quarter to 99.3 million shares. We had our most active quarter of financing activity since the IPO. In May, we raised $3.3 billion of total capital to fund the acquisition of Global Blue and to repurchase the outstanding 4.625% senior notes due in November 2026.

The $3.3 billion raise consisted of the following: $1.3 billion of senior notes, which was a combination of USD and euro-denominated notes, $1 billion of mandatory convertible preferred stock and $1 billion of floating rate Term Loan B, which closed on July 3 in conjunction with the Global Blue transaction. For adjusted free cash flow modeling purposes, you should now expect approximately $75 million of cash interest payments on debt in Q1 and Q3 and $40 million in Q2 and in Q4. Additionally, we upsized the capacity of our revolving credit facility from $450 million to $550 million.

During the second quarter, we opportunistically repurchased $85 million of common stock at an average of $74 per share. And as a reminder, the 2025 converts principle will be redeemed in Q4 with $690 million of cash on hand with any premium to be settled with common stock. We are well positioned to fuel our future growth. And as previously discussed at our Investor Day, we expect net leverage at year-end to be less than 3.5x. As indicated by our recent capital raise, which, as Taylor mentioned, was diversified across a combination of debt and epi instruments. We continue to prioritize maintaining low leverage to ensure financial stability and flexibility.

At the same time, we remain opportunistic in pursuing strategic M&A that aligns with our growth objectives and deliver long-term value. Now turning to guidance. We are updating 2025 financial guidance to include the contributions from Global Blue and introducing Q3 guidance. I want to just through the highlights of the guidance bridge as it pertains to our outlook for the rest of the year. First, we continue to expect organic gross revenue less network fees for the full year to grow north of 20%. We are modestly raising our gross revenue less network fee guidance by $5 million to a range of $1.665 billion to $1.735 billion, representing 23% to 28% growth before considering the impact of Global Blue.

On a stand-alone basis, we expect Global Blue's revenue in the back half of the year to be $334 million with adjusted EBITDA of $137 million. When translating these results to GAAP and Shift4 presentation of gross revenue less network fees, we expect Global Blue's contribution for the remainder of the year will be $300 million of gross revenue less network fees and $125 million of adjusted EBITDA. As a reminder, the revenue synergies we have previously highlighted will have no impact in 2025. You can refer to Page 18 of our shareholder letter for a complete bridge of Global Blue's expected contribution to Shift4.

The resulting full year consolidated guidance is a raise of gross revenue less network fees to a range of $1.965 billion and $2.035 billion, representing 45% to 50% growth and a raise of adjusted EBITDA to a range of $965 million and $990 million, representing 42% to 46% growth. For third quarter, we expect gross revenue less network fees of approximately $590 million and adjusted EBITDA of approximately $290 million. We expect the contribution from Global Blue to be split about 50-50 between Q3 and Q4. And finally, for clarity, this guidance does not include the impact of our previously announced acquisition of Smartpay.

Before I hand the call back to Taylor, I appreciate the opportunity to share a few brief remarks. It is a careful consideration that I made the difficult decision to retire from my role as CFO. It has been an extraordinary privilege to work alongside the Shift4 team during a remarkable period of growth and global expansion. To ensure a seamless transition to Chris, I will continue to serve as a strategic adviser through the end of the year. I'm also looking forward to rejoining the Board of Directors where I will remain fully committed to supporting Shift4's long-term strategy, execution and value creation for our shareholders.

With that, let me now turn the call back to Taylor.

Thank you, Nancy. It's been amazing to work alongside of you. The team and I really appreciate your efforts on these last few years and are excited to have you back on the board. Chris Cruise has joined us here on the call to have a chance to say hello, although many of you listening have already met him. Lastly, I'm sorry to end on a somber note, but I simply couldn't neglect to acknowledge the pain from colleagues at Blackstone, everyone at 345 Park Avenue are dealing with. The completely senseless nature of what happened is something I'm still coming to grips with. All I can say is that it should serve as a reminder to cherish time with your loved ones and work harder to make this world better. Thank you.

[Operator Instructions] Our first question comes from the line of Timothy Chiodo with UBS.

I want to hit on, if you don't mind. The first 1 is around international and Australia. And the second one, if you don't mind, I follow up, it's around the $200 billion to $220 billion in end-to-end volume guide. On the first one, so international, you've mentioned roughly 3,000 or more 3,000-plus SkyTab installs internationally per quarter, and you made the acquisition of Smartpay to further enter the Australian market. That market has been of investor interest. It looks like Toast is also entering into Australia. Maybe just talk a little bit about the Smartpay and the Australian market and what is attractive about that, that has both you and toast entering it roughly at the same time. And then we'll come back on the end-to-end volumes, if you don't mind.

Yes, sure. Thanks, Tim. It's a great question. I would say it starts with a market that for a company like us, really any American company is relatively easy to enter compared to some of the other more complex geographies, meeting language barriers are 0. Fiscalization of product is much more minimal than some of the more complicated countries in Europe, for example. So a product like SkyTab is pretty compatible out of the gate in a place like Australia.

This is lesser known, but Global Blue had a really impressive and emerging payments capability in Australia. They supported a few hundred hotels, for example with their own full stack payment processing platform. And so while we've been looking at Smartpay for a number of years, Global Blue gave us the conviction that, that plus Smartpay was a hell of a good idea. In fact, we were debating in our Board meeting how to prioritize these different things. And when you saw the 2 on the same page, it became obvious, you had to kind of pursue both of them. What it gives us is an awesome distribution capability. So the reason that we're having the kind of scaled success in Europe as quickly as we are is because we're taking products and know-how that we've matured in the United States over the past 2 decades, and we're applying them to markets that are ripe for those -- that consolidation of software and payments with established sales forces.

And so at the end of the day, we believe Smartpay will give us that established sales force, and we'll bring the products and capabilities to bear.

Excellent. That's really helpful. The item around the modeling or the $200 billion to $220 billion in end-to-end volume. I was hoping you could put some context around -- if any of the assumptions around implementation of the backlog might have changed at all implied in that $200 million to $220 million? And the other item being, we know that there was a small amount of acquiring volume that came over Global Blue and to what extent that volume is included in the $200 million to $220 million for the full year and then obviously, specifically in the second half.

I'll jump in a little and Taylor could always supplement. As you said, they had a small acquiring business, which we have included. It's well sub-$2 billion from that perspective. So think about that in relation to our overall guide. And really, we spent some time on the volume bridge. And you could see from a blended take rate perspective this quarter, which came in very strong. That's always going to move based on mix. We've talked about that if we moved our guide, it would be based on timing of some of our large enterprise deals getting accelerated or delayed, right?

So some of that, I think, is we would say this quarter is completely in line with our expectations. And we looked at the kind of breadth of the guide range and felt like even with the high end of that -- we still felt comfortable that it was the right range to stick with even a small amount of Global Blue acquiring coming in for the Australia business. So really feel great about the backlog sitting much where it was in Q1 just based on things coming in and out. But it's really that timing of enterprise go-lives that we can't completely control that is causing us to kind of stick with the guide range that we had.

The next question comes from the line of Will Nance from Goldman Sachs.

I'm wondering if you can talk about some of the European restaurant initiatives. You continue to talk about pace of SkyTab that systems installs across U.K. and Ireland as well as some of the veteran cross-sell. So you just talked upon about some of the benefits of entering a place like Australia, where the localization is not of intent. Wondering if you could talk about kind of where you stand on the German market? And then separately, just kind of what you're seeing out of the U.K. and Ireland from net adds and just remind us where you are on distribution in those markets.

Yes, sure. So all going kind of well and as expected. Maybe 1 thing that we neglected to mention is at formal control of the Vectron business was completed in Q2. So we're able to kind of pull some of the operational levers that we would not be -- we were not able to control. So production is ramping really nicely inside of that business. And what I think were kind of a handful of quarters, apologizing for the slower the slower pace than we had initially expected when we announced the transaction kind of well over a year ago.

So Vectron is going really nicely. Just to remind the audience, this is the idea of attaching payments to a really large basket and Boston established Vectron customers. And then over time, we can go back and sell SkyTab to this population. It's a market that requires more visualization requirements, more customization of the software for the local German market, we're able to do that. Vectron, also as a sales force that kind of extends beyond just Germany. So that sales force is ramping up as well, introducing our payments product to their established customers and any new customers that come across.

That's all going great. I'm really thrilled that the acquisition well over a year in the making, has kind of largely come to fruition at this point in time. Lord to talk through that process. In the U.K. and Ireland, it is a similar story, which is we have a large established group of salespeople now introducing the SkyTab product across a variety of merchants. And it's going incredibly well. The one thing I would say to kind of moderate expectations is that, generally speaking, these European businesses are a little smaller, although we are seeing spreads that are better than we originally modeled because investors are -- I'm sorry, merchants are embracing this kind of software integrated product in mass.

So the markets are contributing really nicely. We actually struggled early on to get our boarding capabilities ready to deal with the onslaught, but we are there now, and we're boarding kind of, as I mentioned, well over 1,000 merchants a month across the market.

Awesome. No, that's great. And then you hit a little bit on some of the spreads outperforming in European markets. Is that the primary reason why you're sounding a bit more constructive on spreads and just any other puts and takes across the business that are worth calling out as you think about pricing dynamics?

Yes, sure. So I think it's important to think about the evolution of our business, which is that at the time of our IPO, we have this really, really large gateway cross-sell opportunity. And every gateway customer was kind of meaningfully larger than the average customer in our book, and they're also adding capabilities like stadiums, enterprise, et cetera. What that meant was higher volume per merchant kind of every single month and a moderation in spreads down to kind of the 60 basis point level, which if you go back to the early calls, that's about where we predicted it would land.

As you start to expand internationally, you're boarding the same number of merchants you are globally, but you're also adding on merchants internationally that are a little bit smaller than that average cohort. So this is where volume moderates on a per merchant basis a little bit, but we underwrite every 1 of these transactions we do incredibly conservatively. And I think that's kind of showing itself in the spreads we're seeing from international customers, meaning they are willing to embrace a higher-cost product if you're delivering all this value of software plus payments plus hardware, all tightly integrated together.

So I think over time, this kind of volume per merchant will continue to evolve as we expand into new markets. But the spreads embedded in a software plus payments product are strong. They've historically been very strong in the United States. And as we teach kind of the rest of the world, the benefits you get from all this integration, I think they're willing to be a little more than a traditional bank term.

Our next question is from the line of Dominic Ball with Rothschild & Company.

So our question is, Shift4's been very good on execution on store small acquisitions, rolling out SkyTab, consolidated systems, removing brands. Global Blue does seem like quite a different asset. It's a lot larger consumer facing geographically distant. So what is the sort of integration strategy evolving for the steel and what safeguards have you implemented to avoid the sort of strategic missteps that we see from others in the industry when scaling into transformation or M&A?

Yes. It's actually probably the question, right, as we embark on this journey. It's 2,000 employees. They're all located outside the United States. It's a large acquisition from a cultural perspective. I will say we learned a lot of lessons from our early international acquisitions, which is the pace of getting an acquisition closed. Always takes longer than you anticipated when you're dealing kind of cross-border in the regulatory environment there. Happy to report this deal closed kind of well within our expectations or at least the expectations we set for the Street, which is great.

And then if I were to pull you into kind of the 80 pager, we set the Board kind of rationalizing this transaction, the #1 deal objective was keep the current momentum that the Global Blue business has had for the last 5 years and don't disrupt that as a result of your kind of cross-sell ambitions. So what does that mean? It means we are as quick as we always have been to integrate functions like finance and legal and HR, but a little bit slower to kind of disrupt the day-to-day business model that exists inside the business. Jacques, who is the CEO of Global Blue, is now President of Shift4 International. Our non-U.S. functions will report into him to make sure he's building a consistent organizational structure that we can operate from and that their TFS business, which is like really, really dominant continues to win at the pace it's been winning at.

Over time, we're going to take the conversations that Global Blue naturally has with their cutters and introduce a much broader suite of payment products. But I think as we said kind of expectations around our Investor Day, we're going to take a little bit more time than we would in a smaller acquisition in the United States, for example.

No, that makes sense, and it's somewhat more central as well. When it comes to the $1 trillion in cross-sell, I believe $500 billion of that, let's say, half derived from Global Blue. We have a breakdown or cadence of where the rest comes from? And maybe how much of that do you sort of Triumph plan to migrate to ship for annually also what the targets are?

Yes, sure. So setting aside the $500 billion of Global Blue, which is comprised of global retailers, local boutiques, international department stores, et cetera. The remaining $500 billion is from a combination of different acquisitions that we've done, whether that be Givex, which was a really large gift card franchise, again, fulfilling a pretty small function of the overall payments value chain, but a critical and sticky 1 across really big merchants like Nike, for example, who work with Givex. Ian was not a trivial gateway with about $30 billion of payment volume flowing through that. So -- and then you've got still large contributors in the likes of Revel and other things.

So again, we sort of view the strategic imperative to be to keep that cross-sell funnel as full as possible. They all are on different cylinders. Small customers move faster than big customers, certain verticals move faster than others. Everyone has their own kind of purchasing cycle. But as long as we can keep that funnel really, really big, you've got an embedded base of customers to go talk to. I referenced in my scripted remarks, we had several Global Blue customers reach out to us proactively through their account management teams at Global Blue saying, everything shower saying about our payments stack and its complexity is correct. We would love to find ways to simplify this over time.

So again, our products are awesome. We are a category leader in hotels and restaurants and stadiums and now in global retail. So the product suite is incredibly strong. It's about introductions to customers. And those customers are so much more quick to answer the phone when you're already fulfilling a core function for them. So that's what the acquisition side of the coin kind of helps supplement inside of the business.

Our next questions are from the line of Darrin Peller with Wolfe Research.

Nancy, all the best with -- congrats on the announcement. And Chris, congrats as well. I just want to just based on the underlying trends in the business and maybe help us understand what you're seeing growing consumer standpoint in the underlying subsegments? And then even looking now into July and August, a little more color on that. And then maybe as a sort of attached to that, is what assumptions on the consumer and the underlying? I know same-store sales is only a minor contribution to your underlying growth, but just help us understand what you're embedding in the organic outlook of the business for the global beside for me.

Yes, sure. I'll talk about the consumer for a little bit, and then I'll pass it over to Nancy. I think the trends are largely as we've seen for a long time now. And I mean, like longer than a year, which is -- there's pressure undoubtedly, but it's very modest inside the restaurant vertical itself. I say this because restaurants have come off of really awesome years in the recovery of COVID and a modest single-digit same-store sales compression. I think we anticipated and an anticipated a year before it actually occurred.

So that's been a steady trend, no real meaningful difference from what we would have talked about in other earnings calls. It becomes more moderated as we look around the world because that trend does not exist everywhere, which is encouraging. Hotels are kind of flat, which, again, these are off of pretty awesome travel years. And I think if your Instagram feed looks saying like mine, everyone seems to be traveling Europe these days, which is encouraging for both our hotel business and for the Global Blue business.

So I would say consumer trends seem pretty stable. Our base of retail has grown quite a bit with the inclusion of Global Blue. So we'll start to get more insights into that over time. But nothing really surprising. Nancy, anything you want to add in?