Core Insights - U.S. stocks experienced a rally in Q3, supported by the Federal Reserve's interest rate cut and steady economic data, with the Russell Midcap® Growth Index increasing by 2.78% [3][17] - The Wasatch U.S. Select Fund underperformed, declining by -1.93%, primarily due to concentrated holdings in stocks that faced slower revenue growth [3][4][17] Fund Performance Analysis - The Fund's performance was negatively impacted by a few concentrated stock holdings that reported slower revenue growth, leading to significant declines in their stock prices [4][6] - The investment strategy focuses on high-quality, long-duration growth companies, which faced headwinds as low-quality stocks gained favor in the market [7] Key Detractors - BellRing Brands, Inc. (BRBR) was the largest detractor, with concerns over competition in the protein shake category; however, the long-term outlook remains positive due to category growth potential [8] - Shift4 Payments, Inc. (FOUR) faced stock price declines despite solid organic revenue growth, attributed to macroeconomic concerns and investor sentiment following its acquisition of Global Blue [9] - Inspire Medical Systems, Inc. (INSP) was sold during the quarter after management downgraded guidance due to delays in product rollout, raising execution concerns [10] Top Contributors - Medpace Holdings, Inc. (MEDP) was the top contributor, with strong revenue and earnings growth, raising full-year guidance despite a slowdown in biotech funding [11] - Fabrinet (FN) benefited from strong product adoption, particularly in data centers linked to AI, although the investment is not solely based on AI themes [12] - Nova Ltd. (NVMI) also contributed positively, with a strong track record in semiconductor manufacturing, benefiting from increasing complexity in the industry [13] Future Outlook - The Fund remains committed to its investment philosophy, focusing on high-quality growth companies despite recent underperformance [14] - The fundamentals of the companies within the Fund are encouraging, with strong earnings growth expected to drive return potential over a three- to five-year horizon [15]

Core Insights - Wolf Hill Capital Management significantly reduced its stake in Shift4 Payments by selling 788,852 shares, resulting in an estimated change of $73.33 million based on quarterly average pricing [2][3] - Shift4 Payments shares were priced at $72.26 as of November 13, 2025, reflecting a 29% decline over the past year, underperforming the S&P 500 by 40 percentage points [3][4] Company Overview - Shift4 Payments is a leading provider of integrated payment and commerce technology, offering a diversified suite of products for businesses across multiple verticals [5] - The company generates revenue primarily through transaction processing fees, software subscriptions, and value-added services for merchants [7] - As of November 13, 2025, Shift4 Payments has a market capitalization of $6.43 billion and reported revenue of $3.88 billion with a net income of $194.80 million [4] Operational Performance - In the latest quarter, Shift4 Payments reported a 26% increase in payment volume and a 21% increase in operating cash flow [10] - The company is the number one payment provider for the hospitality and sports & entertainment verticals in the U.S. and has become the number two player in the U.S. restaurant industry [10] Competitive Position - Shift4 Payments operates in 75 countries and continues to acquire complementary businesses, positioning itself as a growth stock trading at 14 times forward earnings [11] - The company's competitive edge lies in its end-to-end technology stack, robust integrations, and focus on security and operational efficiency for merchants [8]

Core Insights - TQI's Asymmetric Ideas Series has generated an average return of approximately 133% since its launch in April 2023, with 9 picks resulting in multi-bagger outcomes [1] - Shift4 Payments, Inc. (FOUR) stock increased from the $60s to the $120s between May 2024 and early 2025, attributed to strong business performance [1] - TQI aims to simplify and enhance the investing experience for all investors through various resources, including premium equity research reports and model portfolios [1] Company Overview - TQI was established in July 2022 with a mission to make investing simple, enjoyable, and profitable [1] - The organization provides access to proprietary software tools and group chats, catering to different stages of the investor lifecycle [1] Performance Metrics - As of November 11, 2025, TQI's Asymmetric Ideas Series has made 31 picks, showcasing significant returns [1] - The performance of Shift4 Payments, Inc. is highlighted as a key success story within TQI's investment strategy [1]

Core Insights - TQI's Asymmetric Ideas Series has generated an average return of approximately 133% since its launch in April 2023, with 31 picks, including 9 multi-bagger outcomes [1] - Shift4 Payments, Inc. (FOUR) stock increased from the $60s to the $120s by early 2025, attributed to strong business performance [1] - TQI aims to simplify and enhance the investing experience through premium equity research, model portfolios, proprietary software tools, and community engagement [1] Company Overview - TQI was established in July 2022 with a mission to make investing simple, enjoyable, and profitable for all investors [1] - The company publishes premium equity research reports on Seeking Alpha and offers various features tailored to different investor needs [1] Performance Metrics - The Asymmetric Ideas Series has seen significant success, with a notable average return and multiple high-performing picks [1] - Shift4 Payments has demonstrated robust business performance, contributing to its stock price appreciation [1]

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Summary of Shift4's Earnings Call Company Overview - **Company**: Shift4 Payments, a financial services and fintech company - **New CFO**: Chris Cruz, who has nearly a decade of experience on Shift4's board and a background in financial services [1][2] Key Highlights from the Quarter - **Performance**: Shift4 delivered results in line with expectations and affirmed medium-term guidance, aiming for an adjusted free cash flow exit rate of $1 billion by 2027 [3][4] - **Acquisition Integration**: The integration of Global Blue is ahead of schedule, with expectations for significant revenue growth in 2026 [4][5] - **Share Repurchase Program**: A $1 billion share repurchase program was authorized, doubling the previous program, indicating confidence in the company's valuation [5][6] Focus Areas for Upcoming Year 1. **Diversification and Scaling**: Shift4 aims to expand its market presence across six continents, particularly in Europe, while maintaining strong EBITDA margins [6][7] 2. **Cross-Selling Opportunities**: The company plans to leverage the Global Blue acquisition to enhance value creation through cross-selling [7][8] 3. **Market Leadership in Restaurants**: Shift4 sees significant growth potential in its SkyTab product, especially in international markets [8][9] Market Entry Strategy - **Disciplined Approach**: Shift4 employs a disciplined strategy for entering new markets, using its existing strengths in payment processing and market-leading positions in various sectors [10][11] - **Focus on Luxury Retail**: The company is targeting luxury retail markets, leveraging its Global Blue acquisition to enhance tax-free shopping experiences [12][13] Financial Metrics and Guidance - **Organic Growth**: Shift4 reported an 18% organic growth rate, with significant contributions from international markets and luxury retail [21][22] - **Adjusted Free Cash Flow**: The company aims for over 50% adjusted free cash flow conversion, with growth and deleveraging as key drivers [33][34] Global Blue Acquisition Insights - **Performance Variability**: Global Blue's performance showed a -11% sales in store metric in Asia-Pacific, primarily due to challenging comparisons from the previous year, while Europe saw a +13% growth [40][41] - **Long-Term Growth Potential**: The Global Blue business is expected to grow in the low to mid double digits, with significant opportunities for payment cross-sell [42][43] Macro Sensitivity and Market Dynamics - **Consumer Behavior**: Shift4's data indicates a bifurcated consumer market, with lower-end consumers pulling back while affluent consumers remain strong [17][18] - **Currency Impact**: The strength of the US dollar affects demand for luxury goods, with a preference for a strong dollar to drive international purchases [46][47] Capital Allocation Strategy - **Priorities**: Shift4's capital allocation focuses on customer acquisition, product enhancements, inorganic growth, and share repurchases, with a current emphasis on share buybacks due to attractive valuations [28][29] - **Leverage Management**: The company aims to maintain a net leverage ratio below 3.75 times, with plans for continued deleveraging [31][32] Conclusion - **Durability of Growth**: Shift4 emphasizes its ability to sustain high growth rates and aims to close the valuation gap by demonstrating consistent performance and strategic execution [39][40]

Group 1 - Shift4 Payments has gained attention due to Jared Isaacman's renewed nomination by President Trump to lead NASA, which has brought the company back into the spotlight after a period of low visibility [1][2] - The company, founded in 1999, provides payment processing solutions for various sectors including restaurants, hotels, and e-commerce, and has evolved into a significant player handling billions of transactions [3] - Despite the growing demand for digital payment solutions, Shift4 has faced challenges in gaining favor with Wall Street, with its stock down nearly 36% over the past year and approximately 40% in 2025 [4] Group 2 - Shift4 Payments is currently valued at nearly $6 billion, but its stock performance has been poor compared to the broader S&P 500 Index, which has increased by about 12.51% over the past year [4][5] - The stock recently hit a 52-week low of $62.55, and it is trading at a valuation of 1.8 times sales, significantly lower than the sector average of 3 times sales and its own five-year average of 2.4 times [5]

Financial Performance - Gross revenue for Q3 2025 reached $1,176.9 million, a 29.5% increase from $909.2 million in Q3 2024[21] - Net income attributable to Shift4 Payments, Inc. for Q3 2025 was $28.1 million, down 47.8% from $53.8 million in Q3 2024[21] - Comprehensive income attributable to Shift4 Payments, Inc. for the nine months ended September 30, 2025, was $154.1 million, compared to $120.1 million in the same period of 2024, reflecting a 28.3% increase[23] - Income from operations for Q3 2025 was $114.6 million, a 42.4% increase from $80.4 million in Q3 2024[21] - The company reported a loss on extinguishment of debt of $9.2 million in Q3 2025, compared to no loss in Q3 2024[21] - Interest income for Q3 2025 was $17.5 million, up 80.4% from $9.7 million in Q3 2024[21] - Basic net income per share for Class A in Q3 2025 was $0.19, down from $0.78 in Q3 2024[21] - For the nine months ended September 30, 2025, net income was $94.0 million, compared to $155.2 million for the same period in 2024, reflecting a decrease of 39.4%[27] Cash Flow and Liquidity - Operating cash flow for the nine months ended September 30, 2025, was $410.3 million, an increase from $369.3 million in 2024[27] - Total cash and cash equivalents at the end of the period were $1,709.7 million, compared to $1,595.4 million at the end of September 2024[27] - As of September 30, 2025, Shift4 Payments, Inc. held $126.9 million in cash, compared to $52.0 million as of December 31, 2024, indicating a significant increase in liquidity[32] - Cash and cash equivalents increased to $1,511.5 million as of September 30, 2025, up from $1,211.9 million as of December 31, 2024, reflecting a growth of approximately 24.8%[53] Acquisitions and Strategic Initiatives - Shift4 Payments completed the acquisition of Global Blue Group for $2.7 billion, enhancing its payment processing capabilities[28] - The total purchase consideration for the acquisition of Global Blue was $2,718.7 million, with a net total of $2,611.9 million after accounting for cash acquired[59] - The acquisition of Global Blue is expected to diversify the company's revenue streams significantly, leveraging its payments and technology platform[58] - The company completed the acquisition of Smartpay Holdings Limited for approximately $168 million USD, enhancing its strategic presence in Australia and New Zealand[163] - The company entered exclusive negotiations to acquire Worldline's North American subsidiaries, with the transaction expected to close in Q1 2026[162] Expenses and Costs - The cost of sales for Q3 2025 was $747.9 million, an increase of 16.5% from $641.9 million in Q3 2024[21] - General and administrative expenses increased to $188.4 million in Q3 2025, compared to $118.2 million in Q3 2024, marking a 59.3% increase[21] - The company reported depreciation and amortization expenses of $298.7 million for the nine months ended September 30, 2025, up from $213.1 million in 2024[27] - Total depreciation and amortization expense for the three months ended September 30, 2025, was $125.1 million, compared to $77.3 million for the same period in 2024, representing a 62% increase[74] Equity and Stockholder Information - As of September 30, 2025, total stockholders' equity stands at $2,204.0 million, with a retained deficit of $283.4 million[24] - The company repurchased and retired Class A common stock totaling $84.8 million during the reporting period[24] - The issuance of Series A Mandatory Convertible Preferred Stock generated $973.6 million, net of issuance costs[24] - The Company has authorized a new stock repurchase program to repurchase up to $1.0 billion of shares of its Class A common stock through December 31, 2026[129] Revenue Recognition - Shift4 Payments primarily earns revenue through volume-based payment and transaction fees, as well as subscription revenue for its software and technology solutions[44] - The company recognizes payments-based revenue upon authorization of a transaction, which includes interchange and payment network costs[46] - Subscription-based revenue is recognized over the period the fee covers, typically one year or less, reflecting the ongoing service provided to merchants[50] - The Company’s revenue recognition follows ASC 606, which requires recognizing revenue as performance obligations are satisfied[43] Debt and Financing - As of September 30, 2025, the total debt amounted to $4.719 billion, an increase from $2.841 billion as of December 31, 2024[11] - The Company issued an additional $550 million of 6.750% Senior Notes due 2032 in May 2025, bringing the total to $1.65 billion[90] - Future principal payments for the Company's debt are scheduled as follows: $692.5 million in 2025, $10 million in 2026, $642.5 million in 2027, and $3.426 billion thereafter[88] - The Company entered into a Settlement Line Credit Agreement in September 2024, which was amended in September 2025 to increase the available amount from $100 million to $125 million[102] Tax and Regulatory Matters - The Company's effective tax rate for the three months ended September 30, 2025, was 45%, compared to (135)% for the same period in 2024[115] - The Tax Receivable Agreement (TRA) liability was reported at $362.1 million as of September 30, 2025, slightly down from $365.5 million at the end of 2024[32] - The company plans to adopt ASU 2023-09 for income tax disclosures starting January 1, 2025, enhancing transparency in financial reporting[54] Other Comprehensive Income - The company experienced a comprehensive income of $84.7 million, driven by various factors including foreign currency adjustments[24] - Other comprehensive income for the period was recorded at $84.7 million[24]

Core Insights - Shift4 Payments' shares rose 5.3% after reporting third-quarter results that met Wall Street expectations, indicating strong growth in payment volume and revenue [1] - Payment volume increased by 25.7% year-on-year to $54.7 billion, surpassing analyst estimates, while gross revenue grew by 29.4% to $1.18 billion, aligning with forecasts [1] - Adjusted earnings per share reached $1.47, up from $1.04 in the same quarter last year, reinforcing investor confidence in the company's trajectory [1] Market Reaction - Following the initial surge, shares stabilized at $67.29, reflecting a modest increase of 0.2% from the previous close, suggesting a cautious market sentiment [2] - The stock has shown significant volatility, with 18 moves greater than 5% in the past year, indicating that while the recent news is considered meaningful, it may not fundamentally alter market perception [3] Competitive Landscape - The stock experienced a prior decline of 5.6% due to disappointing results from competitor Fiserv, which raised concerns about the overall sector and Shift4's performance [4] - Fiserv's negative outlook and revenue shortfall contributed to investor anxiety regarding Shift4's ability to meet its financial guidance, compounded by a strategic shift to slow down acquisitions [4] Performance Metrics - Shift4's stock has decreased by 37.9% year-to-date and is trading 46.5% below its 52-week high of $125.66, indicating significant market challenges [5] - An investment of $1,000 in Shift4 shares five years ago would now be valued at $1,235, reflecting modest long-term growth despite recent volatility [5]

Financial Data and Key Metrics Changes - Gross revenue less network fees reached $589 million, up 61% year over year, while adjusted EBITDA was $292 million, reflecting a 56% increase [3][14] - Excluding the impact of Global Blue, gross revenue less network fees grew 19% year over year, with organic growth at 18% [4][15] - Adjusted free cash flow was a record $141 million, with a conversion rate of 48% [18] Business Line Data and Key Metrics Changes - Subscription and other revenue was $119 million in Q3, up 16% compared to the same period last year, driven by market-leading vertical software solutions [15] - Blended spreads on payment volume remained stable at 62 basis points, with expectations for full-year spreads to exceed 60 basis points [14][15] Market Data and Key Metrics Changes - In Asia, same-store sales were negative 11% in Q3 but showed recovery in October [5] - Global Blue contributed $156 million to gross revenue less network fees and $68 million to EBITDA, despite headwinds in the Asia-Pacific market [17] Company Strategy and Development Direction - The company aims for 30% plus gross revenue less network fee growth over the medium term, supported by attractive capital allocation opportunities [4] - The acquisition of Bambora, a $90 billion payment gateway, is expected to enhance customer acquisition and product capabilities [12][37] - The company is focused on deleting non-core business lines and enhancing revenue quality through strategic divestitures [11][15] Management's Comments on Operating Environment and Future Outlook - Management noted volatility in same-store sales, particularly in the restaurant and hospitality sectors, but emphasized the company's diversified and scaled operations [5][6] - The competitive landscape remains unchanged, with the company holding leading positions in various verticals [6][7] - Management expressed optimism about the potential of AI applications to enhance operational leverage and decision-making [17] Other Important Information - The board authorized a new $1 billion stock repurchase program, the largest in the company's history, to take advantage of current valuation levels [13][20] - The company reaffirmed its full-year 2025 guidance, expecting volume to range from $207 billion to $210 billion, representing 26%-27% year-over-year growth [22][23] Q&A Session Summary Question: What are the implications of Jared getting nominated to NASA? - Management indicated that it could simplify the company's structure and share class, with Jared remaining the largest shareholder [30] Question: Can you provide more context around the $90 billion gateway opportunity with Bambora? - Management highlighted the potential for revenue synergies and the importance of converting existing customers to a consolidated payment solution [33][36] Question: How does the company view organic growth moving forward? - Management confirmed that the 18% organic growth excludes acquisition impacts and aligns with medium-term guidance [41][80] Question: What is the company's philosophy on guidance? - Management emphasized a cautious approach to guidance, reflecting the current macroeconomic environment and industry volatility [51][56] Question: How does the company plan to utilize the new share buyback authorization? - Management stated that the current valuation presents an attractive opportunity for share repurchases without compromising other investment priorities [67][70]