Shift4 Payments(FOUR) - 2024 Q3 - Quarterly Report

Financial Performance - Gross revenue for Q3 2024 reached $909.2 million, a 34.6% increase from$ 675.4 million in Q3 2023[14] - Net income attributable to Shift4 Payments, Inc. was $53.8 million in Q3 2024, compared to$ 32.6 million in Q3 2023, reflecting a 64.0% increase[14] - Comprehensive income attributable to Shift4 Payments, Inc. was $81.5 million in Q3 2024, up from$ 28.6 million in Q3 2023[15] - Income from operations for Q3 2024 was $80.4 million, a significant increase from$ 44.7 million in Q3 2023[14] - Basic net income per share for Class A was $0.78 in Q3 2024, compared to$ 0.56 in Q3 2023, representing a 39.3% increase[14] - Net income for the nine months ended September 30, 2024, was $155.2 million, compared to$ 103.7 million for the same period in 2023, representing a 49.8% increase[19] - Adjusted EBITDA for the nine months ended September 30, 2024, was $471.5 million, compared to$ 323.8 million in the prior year, reflecting improved operational performance[127] Assets and Liabilities - Total current assets increased to $2,094.6 million as of September 30, 2024, up from$ 1,153.3 million at December 31, 2023, representing an increase of 81.8%[13] - Total liabilities increased to $4,001.1 million from$ 2,519.4 million, reflecting a rise of 58.7%[13] - Long-term debt surged to $2,838.0 million, up from$ 1,750.2 million, indicating an increase of 62.1%[13] - Total assets reached $5,048.9 million, up from$ 3,387.8 million, representing a growth of 48.9%[13] - Cash and cash equivalents rose significantly to $1,426.4 million from$ 455.0 million, marking a growth of 213.5%[13] Equity and Stock - Total stockholders' equity attributable to Shift4 Payments, Inc. grew to $811.8 million from$ 653.3 million, a rise of 24.2%[13] - The company reported a total of 66,791,329 Class A shares outstanding for Q3 2024, an increase from 56,537,008 shares in Q3 2023[14] - The company authorized a new stock repurchase program in May 2024, allowing for the repurchase of up to $500 million of Class A common stock through December 31, 2025[83] - During the nine months ended September 30, 2024, the Company repurchased 528,888 shares for$ 35.9 million at an average price of $67.77 per share, leaving$ 464.1 million available under the repurchase program[83] Revenue Streams - Payments-based revenue of $806.8 million for the three months ended September 30, 2024, up from$ 626.9 million for the same period in 2023, representing a growth of 28.7%[47] - Total revenue for the nine months ended September 30, 2024, was $2,443.6 million, compared to$ 1,859.4 million for the same period in 2023, indicating an increase of about 31.3%[47] - Subscription and other revenues surged by $53.9 million, or 111%, primarily due to recent acquisitions and higher SaaS revenue from SkyTab solutions[106] Expenses and Costs - Total cost of sales for Q3 2024 was$ 641.9 million, up from $495.1 million in Q3 2023, indicating a 29.6% increase[14] - General and administrative expenses increased to$ 118.2 million in Q3 2024 from $76.3 million in Q3 2023, a rise of 55.0%[14] - Interest expense for Q3 2024 was$ 18.3 million, up from $8.0 million in Q3 2023, reflecting a 128.8% increase[14] - Depreciation and amortization expense increased by$ 31.9 million, or 29%, primarily from amortization of intangible assets from acquisitions[121] Acquisitions and Investments - The company acquired Credorax, Inc. d/b/a Finaro in the fourth quarter of 2023, expanding its payment processing services into Europe and the U.K.[25] - The Company acquired a majority stake in Vectron Systems AG for a total purchase consideration of $62.7 million, net of cash acquired, and as of September 30, 2024, owned approximately 75% of Vectron[36] - The acquisition of Revel Systems, Inc. was completed for$ 245.3 million, net of cash acquired, enhancing the Company's presence in the restaurant and retail markets[41] Tax and Compliance - The Company's effective tax rate was (135)% for the three months ended September 30, 2024, significantly different from the U.S. federal statutory income tax rate of 21% due to a discrete tax benefit of $283.8 million[73] - The Company has$ 7.5 million of uncertain tax positions recognized as of September 30, 2024, up from $4.7 million as of December 31, 2023[74] Cash Flow - Net cash provided by operating activities increased to$ 354.9 million from $283.0 million, reflecting a 25.3% growth year-over-year[19] - Net cash used in investing activities increased to$ 435.2 million for the nine months ended September 30, 2024, from $151.1 million in 2023, primarily due to a$ 269.6 million increase in cash paid for acquisitions[135] - Net cash provided by financing activities was $950.6 million for the nine months ended September 30, 2024, a significant increase from net cash used of$ 124.3 million in 2023[136] Legal and Regulatory Matters - The company has not established reserves for ongoing legal proceedings, as it cannot determine the probability of loss or estimate damages[81] - The consolidated actions against the Company allege violations of the Securities Exchange Act of 1934, with claims for unspecified damages[81] - The Company intends to defend against the legal claims vigorously, believing they are without merit[81]