Shift4 Payments - Q2 2023

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by. My name is Cherelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Shift4 second quarter, 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Tom McCrohan, Head of Investor Relations. Please go ahead.

Tom McCrohan (Head of Investor Relations)

Thank you, operator, good morning, everyone, and welcome to Shift4's second quarter 2023 earnings conference call. With me on the call today are Jared Isaacman, Shift4's Chief Executive Officer, Taylor Lauber, our President and Chief Strategy Officer, 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 Twitter Spaces, which can be accessed through our corporate Twitter account, @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 the result of certain risks, uncertainties, and many important factors.

Additional information concerning those factors is available in our most recent reports on Form 10-K and Form 10-Q, which you can find on the SEC's website in 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 Jared. Jared?

Jared Isaacman (CEO)

Hey, thanks, Tom. Good morning, everyone. We are pleased with our, our second quarter results, including how we position, how we're positioned heading into the back half of the year. For the quarter, we posted 59% end-to-end volume growth, driven by continued strength from our core of restaurants, hotels, specialty retail, along with an increasing contribution from our new verticals, especially in sports entertainment, ticketing, and our growing base of large enterprise accounts. In addition to Q2 performance, we're especially happy with the setup for the second half of the year, thanks to investments that began years ago, including international expansion along with July trends. To this end, we're raising our full year guidance across all our KPIs.

We feel very good about our year-to-date financial performance and remain on pace to deliver full-year results in excess of what we assumed at the start of the year. We're generating margin expansion as we demonstrate the scalability of the business by maintaining a relatively flat headcount, streamlining operations by taking out the parts, and adding incremental enterprise-related volume with no corresponding operational expenses. We're implementing new internal systems. We are leveraging AI and other productivity tools that will further streamline our operations and drive additional margin and free cash flow improvements in the years ahead. In addition to the profitability and free cash flow improvements, we continue to grow very quickly.

For the first half of 2023, we generated 30% growth in gross revenue, as well as gross revenue less network fees, in line with our medium-term targets established in the fall of 2021. The midpoint of our updated 2023 guidance implies that gross revenue, less network fee revenue growth, will average over 30% in the back half of the year as well, and especially in the fourth quarter, including strong visibility into enterprise and international opportunities. You know, as I've mentioned before, companies like Shift4 that are winning merchants and growing payment volume are doing so because they're adding value to the commerce experience well beyond just the credit card transaction. We add thousands of new customers every month. We're talking very busy restaurants, some of the nicest resorts in the country, demanding Major League stadiums, theme parks.

We got a Fortune 500 customer this, this quarter and more. In fact, I believe the customer logos that we are featuring this quarter in, in our earnings material are the most impressive list yet, and why we have so much visibility and confidence in the back half of the year. These customers didn't pick Shift4 because we were a penny less per transaction, but rather for how we enable a complete commerce experience and in turn, provide more value to our merchants. Consistent with past earnings, I'm going to provide some additional color on our core, which, as a reminder, consists mostly of restaurants and hotels, as well as our progress in new verticals and our global expansion initiative. Starting with our core, our core remains the primary engine of our growth.

As you can see from the various logos in our quarterly shareholder letter, we continue to gain market share in restaurants and hospitality. To be clear, we win a lot of net new customers, but we are also uniquely advantaged as we capture more wallet share by converting software and gateway merchants to our end-to-end offering. For example, net new wins this quarter include the Fontainebleau resort in Las Vegas, that is scheduled to open this upcoming fall, as well as the Virgin Hotels in Chicago, Dallas, Nashville, The Langham Hotel on Fifth Avenue in New York City. We also captured more wallet share by moving gateway customers like InTown Suites and Uptown Suites, which are two extended stay hotel brands, to our end-to-end platform.

We have always, we have always served a large and growing portion of the table service restaurants in this country, but we are especially proud of the growing momentum we're seeing with our new cloud-based POS solution, which is called SkyTab. This past quarter, we installed nearly 6,500 SkyTab POS systems, including installations at some large venues such as KC Live! in Kansas City, Texas Live! in Arlington, Texas. These are all net new customers, and we released a pretty cool sizzle reel on SkyTab last week, and I encourage you to take a look, skytab.com. There's been a lot of news this quarter regarding competitors potentially introducing new fees on their restaurant customers. More specifically, POS companies charging restaurant patrons directly for online orders.

We never considered implementing such fees. We also don't have to charge more given our margin and profitability profile. I will say the events over the last month have created unexpected opportunities and boosted demand for SkyTab that we are beginning to realize now. For those not familiar, our SkyTab restaurant offering has a much lower total cost of ownership and lower cost of acquisition versus our peers. For a typical restaurant processing $1.5 million of annualized volume, our solution is less than a third the cost of our primary competitor, including zero upfront costs. We believe restaurant operators are keenly focused on the total cost of ownership. As we've said many times, there is nothing technologically cosmic about ringing up a cheeseburger.

We don't depend on pricing power to grow our restaurant business, and if the total cost of ownership and trust matter, SkyTab is looking extremely favorable in this regard. This past quarter, we added thousands of new restaurant customers, including Clyde's Restaurant Group, which operates 11 restaurants in the Washington, D.C. area, including my personal favorite, the historic Old Ebbitt Grill, which is Washington, D.C.'s oldest saloon. To summarize, our core focus on restaurants and hotels remains a reliable engine of growth for Shift4, and will continue to deliver fantastic results as we win net new merchants and take share of a large addressable market, as well as gain more wallet share from those customers that move from our gateway and legacy software solutions.

Despite balanced growth coming approximately 50/50 between net new customer and customers and wallet share gains, we believe we remain a unique story in our ability to achieve growth targets without having to add a single new customer. Let's move on to new verticals. This past quarter, we added the Carolina Panthers, the Texas Rangers, Charlotte Hornets, St. Louis Blues, Toronto Blue Jays, Philadelphia Phillies, Purdue University, and the University of Maryland. These are just the ones we received approval to disclose, but we're having success across all professional sports, NFL, MLB, NHL, NBA, as well as college sports. We also renewed and expanded the scope of our agreement with the happiest place on Earth.

These incredible merchants are not picking us because our service costs $0.01 less per transaction, but because our technology powers the entire guest experience from parking, retail purchases at Fanatics, to the concession stands, to the VIP suites, and the in-mobile ordering, and it's obviously working well. It's also worth noting that our sports and entertainment wins typically start with mobile in-seat ordering and then evolve into concessions, merchandise, parking, but the big prize is ticketing. For example, this past quarter, we turned on SeatGeek ticketing for the Florida Panthers. It takes a long time to win and complete a ticketing integration, and I think most of you know, we already turned on SeatGeek and Paciolan, but we are really excited to announce that we've completed our Ticketmaster integration. That rounds out the big three, and this is a pretty big deal.

After investing in the vertical for nearly two years, and learning from a signature customer in St. Jude Children's Research Hospital, we have signed a number of non-profit organizations to our end-to-end platform this quarter, including the American Cancer Society, Cure Rare Disease, and The Health Wagon. Our pipeline of cross-sell opportunities remains very strong as The Giving Block continues to add new non-profits to their platform, and we continue to use this as an important pipeline for our end-to-end payments line. We also continue to build out key software and payment integrations with leading donation platforms like Donorbox, which currently serves over 50,000 organizations worldwide, and GivenGain, a crowdfunding platform for non-profits that helps raise funds for events like the upcoming Boston Marathon.

These wins represent the most material update since we entered the non-profit vertical, which, as a reminder, represents over $450 billion a year in payment donation volume. Our ownership of The Giving Block has also opened up opportunities outside the non-profit vertical. For example, we've helped several reputable crypto merchants with pay-in- and payout requirements. For now, this volume is being handled exclusively by Finaro, given their card-not-present expertise and international capabilities. We have learned that these merchants have been underserved and overcharged and received suboptimal approval rates. For example, we are finding that the Finaro approval rates are 8%-12% better than competitors for e-commerce transactions in this vertical. It further reinforces our decision in acquiring Finaro and their modern tech stack.

We're pleased with the results of our efforts thus far, and with respect to crypto merchants, we do intend to proceed slowly. We're learning a lot, and ideally, we'll meet the demand of this fast-growing and underserved market. In gaming, we've completed an integration with GAN, the number one end-to-end gaming platform for brick-and-mortar gaming operators. In sexy tech, we signed a multiyear agreement with a Fortune 500 software company to utilize our payments platform and enable their SMB merchants the ability to accept payments. Our partnership with Fanatics also continues to bring us new end-to-end volume. As Fanatics grows, so do we. Fanatics signed WWE, I think it's wrestling, and by virtue of our growing partnership with Fanatics, we will serve as WWE's in-venue payments provider for merchandising sales.

Our relationship with Fanatics has also contributed to us being awarded the payment processing business for in-venue merchandise sales for the Inter Miami Soccer Club, which is just in time for the massive spike in sales of number 10 Messi jerseys. They are additional venues and interesting opportunities that we are exploring with Fanatics as well. In a very short period of time, our new verticals and several strategic enterprise accounts are driving a meaningful portion of our growth and volume. The take rates are obviously very different when dealing with customers who process hundreds of millions, and in some cases, billions a year in volume. These are profitable relationships that require far less overhead, almost no hardware or growth CapEx, and are growing at much faster rates than our core markets. Let's turn to global expansion.

For 24 years now, Shift4 has been growing in the most competitive payments markets in the world. We've accumulated incredible customer relationships across restaurants, hotels, specialty retail, travel, gaming, non-profit, e-commerce, many of which have locations all over the world. It obviously took an agreement with a strategic merchant to finally kick off global expansion initiative that we see as key to fueling the next 24 years of growth at Shift4. As many of you know, we signed an agreement with the European payment platform, Finaro, in March of 2022, and we believe we're now on a path to close by the end of the current quarter. We are raising guidance to account for organic outperformance and visibility into second half year opportunities, especially in the fourth quarter.

Guidance also includes a Finaro contribution in the fourth quarter, but it's also important to note we would have been raising guidance regardless of the state of this transaction. It's also possible we could close prior to the end of the current quarter, which would serve as further upside to our already increased guidance. In addition to the important Finaro update, we've been moving on to the next chapters of our international expansion strategy. It's very important. We've organically expanded into several Eastern European countries, Canada, and into the Caribbean. We're very pleased with the progress and already have restaurants in Europe using SkyTab on the Finaro platform. Additionally, we've begun testing several hotel property management system integrations in Europe.

As mentioned above, we believe the bulk of our growth over the next few decades will come from taking the same products and services and integrations that made us successful in the USA and bringing them all over the world. To that end, international expansion remains our number one capital allocation priority, both in terms of our M&A pipeline and organic investment initiatives. It's important to emphasize that we are not flying blind here. We have the best customer possible to learn from, and we're going to follow them all over the world. I know I mentioned it last quarter, but despite how we sound on earnings calls, we really spend very little time on what is clearly working and almost all of our energy on what is broken.

We have a lot of parts to take out across our legacy gateway type connections, legacy POS software, and we're leaning into the Shift4 way so we can become a better, more efficient, and well-executing organization. Each day that goes by, we become a better business. With that, I will turn the call over to our President and Chief Strategy Officer, Taylor Lauber. Taylor?

Taylor Lauber (President and Chief Strategy Officer)

Thanks, Jared, and good morning, everyone. I'd like to provide an update on the operating environment, the status of Finaro, and then our capital allocation priorities for the remainder of this year. As Jared mentioned, our primary growth algorithm has been adding new merchants, coupled with the growing share of wallet within our existing install base. We have a unique software and technology assets that not only afford us the ability to attract net new merchants, but also convert existing customers to our end-to-end platform. The ability to gain share of wallet within our customers extends beyond our gateway, as we have tens of thousands of software customers and restaurants who are already integrated with us, but using others for payment processing, and the opportunity to add ticketing volumes to our sports and entertainment install base.

For the quarter, our end-to-end volumes trended slightly better than we expected, largely due to strength in hotels, volume at enterprise accounts continuing to ramp to their full capacity, and adding incremental ticketing volumes within sports and entertainment. We experienced the typical seasonal pattern heading into the summer holiday period, with a step-up in spending beginning Memorial Day weekend, that accelerated as vacations kicked into high gear in June through the July 4th weekend. We remain cautiously optimistic consumer spending will continue to remain resilient, although our guidance does, does contemplate continued moderation in restaurant spending. Spending at restaurants has moderated slightly, but not in excess of our early expectations. This moderation has been offset somewhat by better-than-expected trends in hotels, as Jared mentioned, sports and entertainment.

Spreads in our core verticals remain stable. We've begun to annualize the impact of some of our new large customers, which slow spread compression. We anticipate that our blended spreads will average 65 basis points for the full year. We do see opportunity for upside through international, alternative payments, and other initiatives. Last quarter, we announced the acquisition of a restaurant POS partner of ours called Focus POS. Since closing just a few months ago, we've successfully converted 10% of their customers to our end-to-end platform. While discussing restaurants, as Jared mentioned, we've added nearly 6,500 SkyTab systems this past quarter. As some of you may know, a few competitors have attracted attention with a pricing controversy that we fundamentally disagree with.

We've recently launched a marketing promotion that is generating considerable interest and highlights our total cost of ownership advantages and the outsized value our products deliver to merchants. Importantly, with this campaign, our payback on customer acquisition cost is still within 18 months. We are confident this will attract increasing attention for the SkyTab brand. After more than 15 months since signing an acquisition agreement with Finaro, we believe we are on a path to closing by the end of this quarter, and as a result, we are updating our full year guidance to include a portion of the expected Finaro contribution. As a reminder, when we announced the deal, we estimated a full-year EBITDA contribution of $30 million, or a single quarter of roughly $7.5 million.

While we did not include revenue guidance, we did say that we anticipated Finaro to be a drag on margins as we executed against our integration plan. The upside of this prolonged regulatory review period is that we've been able to work in partnership against our largest deal objectives in the meantime, and as a result, the combined EBITDA margin profile is expected to be better than we originally anticipated. As Jared mentioned earlier, we have great visibility towards many growth opportunities, especially as we look into the fourth quarter. We are excited to move on to our next chapter in the Finaro story. We do have SkyTab POS systems in Europe using Finaro's processing platform, and have begun working on our product distribution and support strategy.

While we anticipate the typical seasonal increase in Q3 volumes relative to Q2, the timing of new integrations, commercial partners, and international opportunities will result in Q4 representing our strongest quarter. In terms of capital allocation priorities, we're pursuing several M&A opportunities that are largely focused on our international expansion. These range from adding restaurant distribution in Europe to accelerate the introduction of SkyTab POS, as well as several transformational opportunities that will extend our presence in other regions around the world. I would like to note that we view capital allocation as a core competency of Shift4. Our disciplined approach to capital deployment is a cornerstone of delivering shareholder value. Whether it be VenueNext, Focus POS, insourcing distribution, or even a small investment in SpaceX, all have served to grow shareholder value meaningfully.

Conversely, we raised capital when the markets afforded us the ability to do so attractively. As an example, our weighted cost of debt is currently 1.35%. We do not have any maturities until December of 2025. Our balance sheet, cash generation, and profitable growth have positioned us incredibly well for the current environment of uncertainty. We have the ability to move quickly in pursuit of businesses that possess capabilities that will enhance our offering and help us expand throughout the world. With that, I'd like to turn the call over to our CFO Nancy.

Nancy Disman (CFO)

Thanks, Taylor. Good morning, everyone. I'll first review our financial performance for the second quarter and then review our outlook for fiscal year 2023. As a result of our consistent execution, we delivered another quarter of impressive results, including quarterly records for volume and gross revenue less network fees. We continue to balance strong top-line growth with disciplined investments, as evidenced by the strength of our adjusted EBITDA margin and our adjusted free cash flow conversion. Second quarter volume grew 59% to $26.8 billion year-over-year. Q2 gross revenue grew 26% to $637 million, and gross revenue less network fees grew 25% to $228 million year-over-year.

Our quarterly results were driven by the continued strength of our high-growth core, momentum across our enterprise merchants, including new verticals and improved economics earned from our gateway customers. We also entered the year with higher unit economics within our restaurant channel due to our strategic decision to insource a large portion of our go-to-market distribution last year in connection with the launch of SkyTab. Second quarter gross profit was up 61% year-over-year to $159 million, and our gross profit margin was 70% for the quarter, representing over 1,500 basis points of improvement year-over-year. The blended spread for the second quarter was 65.3 basis points, driven by massive volume growth, including growth from enterprise merchants at lower but market-appropriate take rates.

As Taylor mentioned, we continue to expect our blended spreads to average around 65 basis points for full year 2023, with Q3 likely being the low point then a strong rebound in Q4 as more international volumes and APM opportunities are unlocked. I want to reiterate that the year-over-year spread compression is a function of rapid volume growth from our enterprise accounts. Spreads in our high-growth core, including restaurants and hotels, remain stable. In Q2, total general and administrative expenses increased 41% year-over-year to $82 million, primarily driven by headcount growth from the distribution, insourcing, and acquisitions we completed over the last 12 months. We are still fighting to finish the year with headcount flat to the start of the year.

On that note, towards the end of the second quarter, we reduced headcount by 150, in line with our overall talent upgrade initiative, which came with a $3.5 million one-time severance cost. We are also taking advantage of some of our outperformance to consolidate, upgrade, and expand our facilities, replace legacy internal systems with Salesforce and other AI-based applications that should further support our flat headcount goals. For the quarter, we reported adjusted EBITDA of $110 million, which is up 68% over the same quarter last year. The resulting adjusted EBITDA margin for the quarter was 48%, representing over 1,200 basis points of year-over-year expansion.

We remain highly committed to a disciplined approach to cost management while continuing to balance investments to support our growth, including international expansion, new vertical expansion, the SkyTab product launch, and ongoing talent upgrades across the organization. Additional opportunities to further improve margins are still on the horizon as we harness the productivity of AI tools, implement new internal systems, and continue to take out the parts across the business to further enhance the scalability. Our adjusted free cash flow in the quarter was $64 million, and our adjusted free cash flow conversion was nearly 59%, well above our current full year guidance of 55%+. It is worth noting that Q2 includes a semiannual interest payment of roughly $10.4 million, which can distort the quarter-to-quarter comparisons.

Then with respect to capital transactions, during the quarter, we repurchased approximately 1.5 million shares. We have cumulatively deployed over $300 million on buyback, purchasing 5.8 million of shares at an average price of $52 since our IPO. Of note, the cumulative dilution in share counts from our IPO has grown by less than 2% in over three years. As employees, we own over 36% of Shift4 and are very thoughtful about managing dilution. Our remaining buyback capacity is just over $150 million, and we will continue to be opportunistic in repurchases. You can see a complete reconciliation of our shares in the back of our earnings materials. Net income was $36.8 million for the second quarter.

Basic earnings per Class A and Class C share was $0.43, diluted earnings per Class A and Class C share was $0.62. Adjusted net income for the quarter was $63.4 million, or $0.74 per A and C share on a diluted basis, based on 85.7 million average fully diluted shares outstanding. We are exiting the quarter with just over $725 million of cash, $1.75 billion of debt, and $100 million undrawn on our credit facility. Our net leverage at quarter end was approximately 2.8x. Excluding the buyback, we would have ended the quarter at 2.5x net leverage, which reinforces the rapid deleveraging capability of the business and the capital deployment flexibility our cash flow generation affords us.

Our strong balance sheet and free cash flow profile will continue to allow us to invest in the business, pursue our strategic priorities, and opportunistically repurchase shares. Turning to full year 2023 guidance, we are increasing the low end of the range for all four of the KPIs and the high end of the range for volumes, gross revenue less network fees, and adjusted EBITDA. Our updated guidance for 2023 includes total end-to-end volumes of $108 billion-$114 billion, representing 51%-59% year-over-year growth. Gross revenues of $2.6 billion-$2.7 billion, representing 30%-35% year-over-year growth.

Gross revenue less network fees of $945 million-$980 million, representing 30%-35% year-over-year growth, and adjusted EBITDA of $435 million-$460 million, representing 50%-59% year-over-year growth. We anticipate adjusted EBITDA margins to continue to expand to over 650 basis points at the midpoint of our guidance ranges, up from our initial assumption of 50 basis points, and adjusted free cash flow to be at least $240 million, up from initial guidance of $200 million. It is important to note that as the year progresses, we remain cautious about the macro environment and have reflected this in the entirety of our guidance ranges.

The low and high estimates represent identified and quantified strategic initiatives, such as the Finaro acquisition, that cannot be precisely timed. Should these move more quickly, we expect financial impact sooner. Similar to last year, when you saw a sudden increase in activity as a result of all the work in our new verticals, you can expect some step function change and a heavier weighting to Q4 as we execute on our strategic plan. With that, let me now turn the call back to Jared.

Jared Isaacman (CEO)

Thank you, Nancy. Before opening up the call to your questions, I first wanted to thank those that tuned in to our inaugural simulcast via Twitter Spaces. I don't think we, I don't think we had it perfectly dialed in this morning, but we'll get that right going into going into the next quarter. I did want to respond to a question that was submitted via social media. Our question comes from Krishna Mohammed from Toronto, Canada, who's been an investor in Shift4 since our IPO. The question was: what do you believe is the most challenging aspect in growing the company to the levels of a Stripe or an Adyen of the world, and what is the path to get there? It's, it's a great question.

Look, you know, look, our biggest challenge right now also represents our biggest opportunity, which, which certainly is taking the same products and software integrations that has made us successful in the U.S. over the last 24 years and bring them into markets all over the world. And probably the most challenging part of that is card-present processing capabilities. I mean, Shift4's strength, unlike those names of Stripe and Adyen, actually come from processing transactions face-to-face in venues, which is so much harder to do on a global level than doing card-not-present processing. Really, what we're after has not been achieved yet, not even by those two great companies that you referenced in, in your, in your question. That, again, it represents, you know, the biggest challenge.

It's also what we're most excited about because it represents the biggest opportunity. Thanks, Krishna, for that. Operator, we are ready to take questions.

Operator (participant)

At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We will pause just for a moment to compile the Q&A roster. Your first question comes from the line of Darrin Peller with Wolfe Research. You may go ahead.

Darrin Peller (Managing Director)

Guys, hey, thanks, guys. Nice job on the quarter. I want to just very quickly clarify the guidance raise came from a combination, it looks like, of organic and Finaro obviously being included for the quarter. Just if you could help, you know, break that apart and just let us know what's, what's contributing from what?

I, I guess the bigger question for me is just the magnitude of upside to EBITDA continues to impress. When we break down, you know, whether it's gateway pricing or it's just operating leverage, and just how much visibility you have on that front to continue that trajectory, it'd be great to hear. Thanks, guys.

Jared Isaacman (CEO)

Yeah. Hey, thanks, Darrin. Jared here. Copy on the first question. I think we fully anticipated that. You know, let's just talk about Finaro and guidance. There, you know, there was a positive development, you know, in the last, in the last couple weeks that gave us a lot of confidence on our ability to bring that transaction to a close, potentially, you know, rather soon, although we said by the end of the quarter. Given that consideration, it just felt prudent at this time to provide, you know, appropriate guidance, so we're not revisiting this conversation with everyone in a couple weeks.

You know, that said, we tried to be pretty clear that we included a good portion of Finaro in our fourth quarter, and that's meant to just give us a little wiggle room, 'cause it's still an international transaction here, right? I think if you kind of like break down the expectations that were originally set with the Finaro transaction, which Taylor reiterated on the call, you know, assume a good portion of that, what that leaves you with is a very healthy organic outperformance. That's the message everyone should be taking away from that transaction.

It's also like It's also important to, to put it out there so we can kind of move on to the next chapter, because it's been 15, 16 months, and we're doing an awful lot with international, and we expect to be talking about an awful lot more and, you know, kind of the, you know, you know, in, in the future ahead. Kind of moving on to the next portion of your question, which is, you know, just continued, you know, the continued strength and the profitability profile of the business with margin expansion, free cash flow, EBITDA growth. I mean, you know, we keep talking about these same themes of taking out the parts.

You know, we have a lot of, you know, for, for all, for, you know, any of the negatives that have ever been said about Shift4, "Oh, they got a lot of gateway connections. You know, they got a lot of legacy software." We agree. That's why we're taking out those parts. I mean, we supported, like, seven, eight different legacy software solutions, you know, two, three years ago. We've now concentrated our resources and consolidated our brand on one. Every quarter that goes by, we're gonna have more business, more resources on our cloud-based solution, less on our, our legacy solutions. We're doing the same thing on our gateway. You know, we rolled out AI tools that can program a, a restaurant POS menu in 30 minutes instead of five hours. It's, it's, it's what we said before.

Almost every enterprise customer that we're chasing down right now, you know, requires less overhead to support than the small restaurant customers of years ago. I mean, you know, I think we talked about the Carolina Panthers this quarter adding ticketing volume. We didn't have to hire anyone to do that. We didn't have to deploy any hardware devices. We didn't have to issue any signing bonuses. It's, it's like we said at the end of Q4 last year, literally every initiative that's underway in this organization right now is gonna lead to better margins and better free cash flow, and you're just seeing the results of it now, halfway through the year.

Darrin Peller (Managing Director)

Progress to go. I guess my, my quick follow-up would just be: There's so many areas that you're growing your volume and outperforming, and I guess if you could just help us understand the breakdown again of, you know, again, whether it's gateway conversion or same-store sales, or last year's anniversary of big clients or even new business now. Any sense in directional terms of what drove the most or, you know, maybe rank it in some form? Thanks, guys.

Jared Isaacman (CEO)

Yeah, I mean, just high level, and then I certainly open it up to Nancy or Taylor to fill in the blanks. But, you know, I, I, I highlighted in my script, like, this past quarter was another 50/50 event, you know, and that's. It's an approximation.

You know, if you just look at the reference wins, you know, all the Virgin Hotels were, were net new wins in this quarter. You know, obviously, Fontainebleau was a net new win. I think last quarter, you know, there were two other, you know, big reg, you know, big spherical Vegas resorts that we talked about. Those were just constructed. Like, you're getting half that's coming from net new. Almost all of our SkyTab is, is net new. I mean, we, we have no active upgrade campaign for our legacy customers right now on that. You've got a lot of net new, but then you also have InTown Suites, you know, that's 200 locations. It's, it's still, I'd say, 50/50.

I, I mean, maybe 'cause we have so many new verticals, it's never represented a gateway conversion, it'll trend more to net new over time. I don't know. Taylor?

Taylor Lauber (President and Chief Strategy Officer)

Yeah. When you talk about customers joining, you know, the stats Jared gave are, are perfect, but it gets a little bit murkier when you think about volume growth because you do have, you know, really big customers annualizing over the course of the last year. You have a strong ability to gain share of wallet in places like stadiums. Now, we mentioned this, you know, multiple times throughout our scripted remarks, but, adding on ticketing to existing stadium customers, of which we have a lot, is, you know, going to be a big driver of growth now that we have all of the requisite ticketing integrations, you know, completed. The volume growth can get a little murky, but, you know, what we focus on is adding customers. That's really what drives the business.

When you've got the right customers and you focus on your integrations, share of wallet grows beyond that, as long as you're delivering for good customers who are growing. Hopefully, that gives you enough color. Maybe just one thing to add on, we've foreshadowed this at the beginning of the year, restaurant volumes moderate slightly. Hotels have been a bright spot. I think we mentioned probably with you, Darrin, in an investor meeting a few months ago, that we were pleasantly surprised by hotel volumes. A little bit more pessimistic than most, I think, at the beginning of the year. They've continued to shine. People are out and traveling.

Darrin Peller (Managing Director)

That's great. Sounds like broad-based strength, guys. Thanks again.

Operator (participant)

Your next question comes from the line of Will Nance with Goldman Sachs. Your line is now open.

Will Nance (VP)

Hey, guys. Good morning. Appreciate you taking the questions. Hopefully, you can hear me. I wanted to ask a question on sort of the cadence in the back half of the year, Q2, Q3, Q4. You know, I, I heard several comments throughout the script that, you know, some of the, some of the growth this year will be back half weighted. It sounds like that's more kind of incremental growth in the fourth quarter, and that kind of weakness in the third quarter. Maybe you could just help us think, you know, sequentially from second to third, what are your kind of expectations, and, you know, how are you thinking about the ramp into fourth?

Nancy Disman (CFO)

Yeah, I, I think that's the, the way you heard it is exactly right. You know, very similar to last year, we've got a couple of big irons in the fire that are kind of step function, and so we, we're kind of doing our best to kind of schedule when we expect to see those ramps, especially on the international and kind of some of the APM and, and, and exciting things we've got going on there. They're, they're just a little bit pushed. You know, I think in our probably early guidance, we thought maybe we'd, we'd see those a little bit, bit sooner. So guide kind of put some caution in there, and we, we've kind of backloaded those a little bit more than maybe when we started, started out the year at our, our original guide point. So that's really the message.

It's, it's not that something is, is really falling out of Q3, it's just kind of a step function of when some of that kind of higher take rate volume and some, some other new vertical initiatives are going to be kicking in.

Taylor Lauber (President and Chief Strategy Officer)

This is important, Will. For investors and analysts who followed us for a long time, Q3 is traditionally the strongest quarter for the business. All of these new initiatives ballast out the business in a really nice way and sort of create a slightly different seasonal profile. You saw this last year, as Nancy mentioned, with Q4 delivering, I think, stronger than expectations. It's largely because we're adding on all these new verticals that we've been talking about for two years now, and they just kind of fire on different cylinders. It's great for the overall kind of visibility into the year. We just want to caution that, you know, Q4 will represent a stronger quarter relative to a full year picture than it has in prior years.

Will Nance (VP)

Got it. That's helpful. Just a, as a follow-up, the SkyTab, 6,500 locations installed in the second quarter. Jared, I know you're not a subscriber to kind of location counts overall, but it is a pretty robust number and pretty on par with, you know, the large competitor that you guys are referring to. Maybe you could just talk about the cadence there. Like, is that a kind of a sustainable level of location growth? Maybe just talk through any issues of comparability with some of your peers.

Jared Isaacman (CEO)

Yeah, I mean, you know, first of all, we've, we've tried to be very specific at not, and not getting into the location count game. Like, I, I, I think even, you know, previous, you know, expectation set is that we are very content being, you know, second place at the end of the year with respect to, to locations if we're targeting more upmarket, higher take rate customers, and nothing's changed in that regard. Other than I'd say, look, demand is good. You know, demand is really good right now. Whatever, you know, data that we've shared thus far was obviously prior to any marketing campaigns or incentives that we've made available, which has only boosted demand. You know, I, I think we have pretty, we're, we're, we've always been incredibly confident in our, in our product in this vertical right now.

We have awesome distribution, and we have decades of experience chasing down restaurants. As I mentioned before, like, there's nothing cosmic about ringing up a cheeseburger. I don't think you can necessarily compare the products in that space to, you know, some of the most sophisticated, like, AI systems in the world. It's a cloud-based solution, rings up a cheeseburger, drives operational efficiencies in a restaurant. We know a lot about it, built a good product for it, and it's good distribution. We expect to have very healthy demand throughout the year. I think Again, we won't be in the location count, count game every, every quarter, but we'll try and give you some updates from time to time so you know that it's working.

Taylor Lauber (President and Chief Strategy Officer)

You know, Will, just the one thing I want to add on to that is, you know, our merchant ads is not at all a surprise to us, from where we sit in the business. I think it can be a little bit of a surprise externally because we're corralling those ads around a single brand in SkyTab. Keep in mind, we've been operating, as Jared mentioned, multiple restaurant point-of-sale brands for a long period of time. Our ads have been, you know, very strong and steady. I think we've. You know, last published stat was over 50% volume growth in restaurants over a, you know, a multi-year tenure that included a pandemic.

You know, I, I think the world's just getting around to seeing a, a consistent brand in the marketplace from Shift4, but under the hood, we've been delivering this restaurant, you know, merchant ad cadence for, for quite a while.

Will Nance (VP)

Got it. Really impressive. Appreciate you taking the questions.

Operator (participant)

Your next question comes from the line of Tim Chiodo with Credit Suisse. Your line is now open.

Tim Chiodo (Managing Director)

Great. Thank you. I want to dig into the ticketing. The Ticketmaster announcement, now you have Ticketmaster, Paciolan, and SeatGeek. I want to talk about how differentiated this is. Maybe you could just talk about if anyone else even has this kind of setup when you go into a stadium or a team, and you have the concessions, you have the restaurant, and now you have the ticketing. You can fully provide to them, literally payments across all of their main venues, if you will. If you could just talk about if anyone else is in that ballpark or how differentiated that is. And then a minor, just modeling follow-up on that, is there any kind of a revenue share that goes back to the, what is effectively the ISV in terms of the Ticketmasters, the Paciolan, and the SeatGeeks? Thank you.

Jared Isaacman (CEO)

Yeah. Hey, Tim. Thanks, thanks for that question. Of course, we, we, we always believe that it's a very robust, competitive, you know, landscape, especially with respect to sports and entertainment. We do believe we've been investing very healthy into a category-leading product that's only gotten better, especially with respect to all three of those ticketing integrations. I can't speak to what anyone else out there has, but, you know, you can, you can see the logos every quarter. Like, we're doing a great job there winning. Ticketing is huge. I think we, we really prioritized that, like, you know, a couple of years ago. I mean, we knew, we knew in-seat mobile ordering was going to be big, but it's not the lion's share of the volume.

You know, using that as kind of the, the, the foot in the door to get what is the prize, which is, which is ticketing volume, was a, I think, like a really smart tactic a few years ago. And it's paying out very well now. Having all three ticketing integration is pretty important. In terms of the rev share to the ISVs, my understanding is deal-by-deal based. It's, I think, deal by deal, team by team. But, you know, ticketing in general is several times that in terms of from a volume contribution perspective than the actual stadium itself, and the take rates are better, you know, probably by several times as well. Even with the revenue share, it's still like, it's still, it's still a nice contribution to the business.

Especially since, like, again, there's no corresponding OpEx associated, no growth CapEx associated with it. It just kind of flows through.

Tim Chiodo (Managing Director)

Excellent. Thank you, Jared.

Operator (participant)

Your next question comes from the line of Dan Perlin with RBC. Your line is now open.

Dan Perlin (Managing Director)

Thanks. Good morning. I, I wanted to go back to the commentary around adding distribution in Europe. My question, I guess, is really, can you just maybe flush out what that specifically means? I mean, are you thinking about there's, there's distribution assets there that you're already tethered to that you want to buy in, similar to what you've done with insourcing? Or, or is this kind of a, you know, kind of a footprint grab in a country? I'm just trying to understand, when you talk about capital allocation to distribution in Europe, what, what that flavor really looks like.

Jared Isaacman (CEO)

That's, like, a really great question, Dan. It varies based on product and service, right? Just the same way it does here in the U.S. We have 550+ software integrations that all have, these are, these are some of the largest software companies in the world. They all have their own support infrastructure. They have their own distribution arms, in which case, simply making available an end-to-end payment solution to them with that integration in Europe, the same as we do in the U.S., is really straightforward. We don't, we don't have to, we don't really have to buy anything in that regard. That's just organic investments, and that's what we're doing when I said in my prepared remarks, like, we are, we are working through our, our, our hotel property management system integrations right now in Europe.

This is your MICROS, Agilysys, your Microsoft, these type of integration providers. In which case, again, very little we have to do in Europe because those ISVs themselves possess all the infrastructure and distribution capabilities. With respect to SkyTab, that's a different story, right? That's our product, just like, you know, VenueNext or our, or our sports entertainment product is our product. In that regard, we are looking at a lot of different, different paths to, you know, distributing SkyTab in Europe and then providing, you know, local service and support, which is pretty important. That is a very high priority for us now that the product is, in fact, processing transactions at restaurants in Europe. I mean, it. Europe, as I think many of you know, like, we spent a lot of time there of late.

It's, it's, it is, you know, from an integrated payments perspective, at least 10 years behind the U.S. This is a lot of opportunity. I mean, there's a, there's going to be an, a really interesting land grab I think is coming up, and it's why it's a, it's a high priority for us to kind of open up a, open up a new front there with respect to our restaurant POS product.

Dan Perlin (Managing Director)

Awesome. Can I just ask a follow-up on that? You mentioned MICROS. They used to have a lot of, oh, they still do have a lot of hotel PM systems out in Europe. I'm wondering, is there a parlay for SkyTab to be put into those hotels through restaurants and things of that nature? Is that just a natural extension for you, or is that, is that not as contemplated today? Thank you.

Jared Isaacman (CEO)

I, I mean, I, I have to believe that Shift4 processes payments that originate from MICROS systems more so than anyone else in the world, and I would say by like maybe even an order of magnitude. From our perspective, we have immense expertise with that product. And if the merchant is very happy using MICROS in Europe and want to process across our rails or using OPERA, their property management, the MICROS property management system in Europe, across our rails, that's, that's very enticing to us. No reason necessarily to rock the boat, boat by replacing it with SkyTab itself, which is kind of our philosophy in the U.S. for, you know, restaurant customers like, you know, TAO, Hakkasan, all use MICROS in the U.S. very, you know, very well with Shift4.

That said, look, the, the whole restaurant market in Europe right now is basically using, you know, non-integrated terminals. I mean, even if they have an old Windows-based POS system, they're, they're using this, like, wireless handheld device to bring to the table. It's not integrated at all. Like, that's what we're talking about in terms of prime opportunity to hit with, you know, hit with SkyTab. In many respects, we're spending a lot of time in Europe. It really does, you know, look like, you know, look like how it did in the U.S., you know, right at the early days of Mercury Payments, call it, you know, like 10, 10, 15 years ago, and that's going to create an awful lot of opportunity for a payments company that really knows integrated payments well.

Dan Perlin (Managing Director)

Excellent. Thank you.

Operator (participant)

Your next question comes from the line of Rayna Kumar. Your line is now open.

Rayna Kumar (Managing Director and Fintech Equity Research Analyst)

Good morning, Jared and team. Nice results here. I find slide seven particularly interesting, where you're comparing SkyTab pricing versus competitor pricing. Do you see this as an opportunity to nudge pricing up some and still remain below competitor pricing? Then, I'll just ask my follow-up upfront. You highlighted that competitor fee increase in the quarter that most of us have, have, have noted. Did you see a notable uptick in SkyTab sales as a result?

Jared Isaacman (CEO)

Raina, hey, thanks for the questions. Jared, Jared, I definitely open up to everyone. I, I'd say, like, first, in terms of, are there pricing opportunities? I mean, that's the farthest from our mind right now. You know, we, as Taylor mentioned, even with this new incentive, where we're offering, you know, $5,000 to basically throw out your old system and pay the merchant, you know, $1 for every online order for, I think, the first, you know, 90 days, we're still inside of an 18-month payback period. We believe that, you know, there's, you know, trust has been broken, you know, with restaurant customers over the last couple of months. This is, this is shaky ground. This isn't the time, really, to, you know, consider leaning in from a pricing perspective.

You know, this is the time to, to take share. That's, like, entirely what we're, we're focused on, right now. I mean, this is the advantage we have. Like, we've been doing restaurants and payments for a really long time in a profitable way. you know, we don't have to, you know, price our way to, to profitability. That is, that is the farthest thing from our mind at this, at this point in time. What I would say, in terms of, like, demand, the results from this quarter, were really, prior to any, any noise that was in the industry from, like, a, a competitive environment. I mean, most of that noise happened in early July after the quarter had ended. What I will say is, like, there is a lot of demand now.

You know, there's, there's definitely, like I said, some trust been broken. We've got a promotion out there that I think is gonna be, I think is gonna be pretty enticing. You know, we're expecting good results from it. It's more what you'll see in the second half of the year than what you saw in this last quarter.

Rayna Kumar (Managing Director and Fintech Equity Research Analyst)

Great. Thank you.

Operator (participant)

Your next question comes from the line of Jason Kupferberg from Bank of America. You may now go ahead.

Jason Kupferberg (Senior Equity Research Analyst)

Hey, thanks, guys. I just wanted to come back on the full year guidance and the increase that's related to Finaro. You talked about the EBITDA piece a bit. I think it's pretty clear you raised EBITDA guidance, even ex-Finaro, materially, but wanted to hone in, I guess, on the volume side. I think going back to when you originally announced Finaro, you were talking about $15 billion of volume, if I'm not mistaken. You know, if we take a quarter of that, it's almost $4 billion. You raise the intent volume guidance by $4 billion. Just trying to parse out what's truly organic in the intent volume raise versus Finaro. Thanks.

Taylor Lauber (President and Chief Strategy Officer)

Yeah. A few sort of disclaimer comments on that. You know, we, we've never given any seasonality profile of Finaro, so I don't want anyone to just divide everything by four. It's a very different business than Shift4. With that being said, the, the volume guidance raise does include, obviously, a, a volume contribution from the organic business. You know, all of the ticketing growth that we talked about, a handful of enterprise customers that are activating, all that we expect kind of in the third and into the fourth quarter. There is both. I want to caution, we're kinda deliberate in not giving, like, quarterly level financials of a business. And that, I think, is prudent, especially because we signed it 15 months ago.

While we included a portion of the of Q4, you can't simply divide the year by four.

Jared Isaacman (CEO)

Yeah. I mean, also, just to reinforce that point, I mean, we said we included a portion of Finaro in the fourth quarter. You know, I think it's pretty healthy fair to say that a haircut was applied. The volume growth trends in Shift4 over, I mean, you look back at however many quarters you want, are, are pretty strong. Nothing's changing about that going into the second half of the year.

Jason Kupferberg (Senior Equity Research Analyst)

Yep. Seems like there's a lot of underlying momentum. For my follow-up, I wanted to ask about the M&A pipeline. Taylor, I know you talked about it. It sounds like it's maybe getting even fuller, and just wanted to take your temperature on what you're seeing in terms of valuations. I think you mentioned there was even some potential transformational opportunities in that pipeline, and, you know, in theory, how high of a leverage ratio would you be comfortable with if the right large deal came along?

Taylor Lauber (President and Chief Strategy Officer)

Well, I'll start by saying I don't get to pick our, our leverage ratio. That's Nancy's territory. I'll let her comment on that. I will say, you know, this has been an increasing march, since, you know, really the beginning of, of this year, maybe even the end of last year, towards, I think, a more, a more rationalized seller, right? We all know what the, the SPAC craze did to private company seller expectations, right? Even if deals didn't get done, and a heck of a lot of deals did get done, seller expectations were elevated to, you know, in our views, completely irrational levels.

What you have now is a operating environment that, despite some uncertainty, is a lot more predictable, and a capital markets environment that I think is, you know, much more predictable for, you know, business operators to think about what the next three to five years is gonna look like. We are an incredibly safe pair of hands for those operators. We're also inclined, which I think is somewhat unique, to use equity to align partners, which is, you know, not something many companies at valuations like we, we feel ours is, are, are willing to do. We will give equity like we did in the case of Finaro, and then go buy it back in the street to align the right shareholders to the objectives we want.

The number of conversations we're having are increasingly increasing, and they're more productive, I think is the most important part, where people are seeing a combined vision. Keep in mind, though, when we sort of planted the seed for international, your opportunity set is gonna grow naturally, right? There are just tons of businesses all over the world doing really interesting things on the international front. Now, with, you know, the completion of Finaro, we've got a real proof point, and, quite frankly, some champions are willing to tell the story about what it means to partner with us on this journey, and that helps, you know, grow the pipeline as well.

Nancy Disman (CFO)

Yeah, I would just tack on to that. You know, we'll always say we don't have a target leverage, but certainly want to keep it well south of, you know, that 4x. I think you would see us plus up if we know that we could quickly synergize. Like Taylor said, there's a lot of good, good opportunities out there where we know we could quickly delever. You've seen us do that, and that would, that would be part of the thesis going forward.

Jared Isaacman (CEO)

Yeah, the thing to keep in mind there, because I think a lot of people look at leverage ratios and say, what's the impending cost of debt on, or what's the cost of debt that's been taken on to, to maintain that leverage ratio? Our cost of debt is 1.35%. Our nearest maturity, as I mentioned in the script, is December of 25. We, we've got cash on the balance sheet that we can deploy that can test a leverage ratio, but at a very, very reasonable cost with a, an extensive maturity. As Nancy mentioned, we're not going to do something, even on just a blended ratio, that the public markets would seem unpalatable.

We actually view capital allocation and M&A as a core competency, and so we always need to preserve some dry powder. You know, our, our cost of debt factors into how we think about, you know, the cash we use in an M&A transaction as well. Our cost of debt is, like, pretty, pretty best in class right now.

Jason Kupferberg (Senior Equity Research Analyst)

Makes sense. Good stuff. Thanks.

Operator (participant)

Your next question comes from the line of Ashwin Shirvaikar from Citibank. You may now go ahead.

Ashwin Shirvaikar (Managing Director)

Thanks. A good quarter, guys. I wanted to ask about, yeah, the point you made in your shareholder letter about expense discipline and maintaining flat headcount and, and so on. So the scalability of those, of those efforts, because I think you've said that for a few quarters now. The given the pace of growth, to what extent, should we expect scalability to, to continue? Maybe you could provide more information about the Phoenix AI initiative as well.

Jared Isaacman (CEO)

Sure, Ashwin. Yeah, thanks for the question. I, I mean, I, I try to be, you know, like, brutally honest about this in Q4, as I could, which is, you know, we grew an awful lot during the pandemic, as, you know, as you know. What a, what a terrible environment to hire people in. You know, tons of remote hiring all over the place and, you know, nobody, despite what they said, had, like, their internal HR and hiring systems and learning and development education systems super dialed in. You know, what that, what that results in is, like, a super inefficient, you know, pool of talent. Like, you know, nobody was going to be as, you know, as productive as if, as if they were under a, a single roof.

I would say, during the pandemic, when you had, like, all that euphoria and craziness from a hiring perspective, you know, Shift4 probably wasn't the first choice, you know, for a lot of, lot of people looking to get into fintech and payments. Just being grounded in that reality at the end of last year, it was like, okay, you know, we're, we're back. We're putting investments in internal systems, like, we're bringing people back into our offices, and, like, now is the time to demonstrate the scalability of the business.

If we brought on talent that, you know, is underperforming expectations there or not aligned, you know, with our strategic priorities, then let's, you know, let's move on in a nice way and bring in people that are difference makers that we couldn't get, you know, in 2020 and 2021 during all that, that madness. That's exactly what we're doing now. You know, we spent, you know, the first, you know, quarter and a half, if you will, like, evaluating, you know, you know, our talent and making investments in internal systems like Project Phoenix, which is like full up overhaul and replacement of many internal systems. We're adding Salesforce. We are using AI for like, like I said, efficiency and productivity means. Then we are upgrading talent.

Once we have some of the talent that can better contribute to our strategic priorities, we're again, moving on very nicely from those that, that aren't. You know, Nancy mentioned about 150 people at the end of the second quarter, and we're going to keep doing that throughout this year. Like, we're going to fight like hell, you know, to end the year with the same headcount that we began and be a much, like, better and stronger company. If the growth profile continues the way we, we certainly expect it to, and we do achieve even being remotely in the ZIP code of that flat headcount, then, you know, the results from a margin expansion perspective should be, you know, pretty, pretty strong.

Hey, operator, I think we have time for one more question. Oh, sorry. Did you have a follow-up, Ashwin? Did we lose you, Ashwin? Operator, are you there?

Operator (participant)

Yes, I'm here. I was telling Ashwin I'm not sure if he had a follow-up, but I can return him to the queue if you like.

Jared Isaacman (CEO)

Please. Sorry, Ashwin, are you still there? Ashwin? Operator, why don't we just take one final question?

Operator (participant)

Okay. With that being said, your next question will come from the line of Andrew Jeffrey with Truist Securities. The line is now open.

Andrew Jeffrey (Managing Director)

Good morning. Appreciate you squeezing me in. Jared, SkyTab POS is super exciting, given what's happening at the point of sale. Can you just comment on ultimately how scalable you see this solution being? I know you have a very important partnership with MICROS, as you highlighted again today, but it just feels like you have this incredible opportunity to perhaps go upmarket with your own integrated point-of-sale solution. I wonder if that's something that over time becomes a vision for this company.

Jared Isaacman (CEO)

Yeah, thank, thanks for the question. I mean, look, SkyTab, I mean, in terms of the products that we've built, that we expect demand to exist for all over the world, I mean, our restaurant POS product solution and our sports and entertainment solution are kind of the tip of the spear. We're expecting a lot from both those products, again, you know, all over the world. In terms of where we're gonna focus, I mean, we've said this many times, like, you never wanna be, you know, in a market where you can download an app on an iPad and run your business. Like, that's, you know, Square territory, PayPal, Clover. Like, we're not gonna be anywhere near that. We're gonna be in the opposite end of the spectrum, where, like, nobody wants to be, the most complicated and demanding customers.

We absolutely have SkyTab going in those locations. For example, the live locations we highlighted, I think they have hundreds of systems in, in certain locations. Like, they do a ton of volume. We have them at, you know, United Center and in a lot of stadium restaurants. You know, the product itself is being battle tested, you know, in some really, really awesome locations, and I think, like, the next priority is to take it all over the world. There are so many, there are so many elements to that roadmap, that focus around enterprise menu management capabilities.

I mean, if you, you know, you go on our website and you look at our logos, you know, there's some that we, we don't talk about that have been customers for, like, 20, 25 years, that have thousands of locations in this country. Like, we learn a lot from customers like that and what they require. That's all part of the roadmap for, for SkyTab. In terms of opportunity, yeah, we like it, and we especially like it because we think it's a competitive environment of like, you know, two or three. That's always a good place to be in.

Andrew Jeffrey (Managing Director)

All right. I appreciate it. I'll leave it at that.

Operator (participant)

I will now turn the call.

Jared Isaacman (CEO)

Sorry.

Operator (participant)

I will now turn the call back over to Jared Isaacman for closing remarks.

Jared Isaacman (CEO)

Yeah. No, I, so look, I really appreciate everyone, everybody joining the call today. We had some good questions, and I'm sure we'll be chatting with many of you throughout the, the next couple days, and hope you're all having a great summer. Take care.

Operator (participant)

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.