The spike was primarily driven by a combination of **net income**, **non-cash adjustments**, and **working capital changes**. Specifically, the company reported a **net income of $38.5 million** in Q4 2022, added significant **non-cash adjustments** (including **$33.6 million in depreciation and amortization** and **$20.9 million in equity-based compensation expense**), and experienced **positive working capital changes** due mainly to no longer having funds held in the sponsor bank merchant settlement account.  **[0001794669-23-000002_ex991q4.htm:15]** **[0001794669-23-000002_ex991q4.htm:10]** **[0001794669-23-000002_ex991q4.htm:11]** **[0001794669-23-000006_four-20221231.htm:104]** 

What drove the spike in operating cash flow in Q4 2022?

The operating cash flow surged because the company turned around its profitability—from a **net loss in FY 2021** to a **net income in FY 2022**—and benefitted from several key factors. These included increases in **depreciation and amortization**, **higher equity-based compensation**, and a **positive revaluation of contingent liabilities**. Additionally, a significant positive impact from **improved working capital management** (not holding funds in its sponsor bank settlement account, which reversed a prior negative effect) also played a crucial role in the dramatic jump in cash flows.  **[0001794669-23-000002_ex991q4.htm:11]** **[0001794669-23-000006_four-20221231.htm:104]** 

How did operating cash flow surge from FY 2021 to FY 2022?

In **Q4 2022**, the accounts receivable jumped to a positive value because the company received all the funds previously deposited to cover an overdraft in its sponsor bank merchant settlement account. This one-time receipt significantly boosted the accounts receivable balance, reflecting that specific event rather than a typical operational change.  **[0001794669-23-000002_ex991q4.htm:15]** 

Why did accounts receivable jump to a positive value in Q4 2022?

The significant increase in acquisition outflows in Q2 2023 was primarily driven by **the strategic acquisition of Focus POS Systems by Shift4 Payments, Inc.** The payment of **$45.2 million** for this acquisition, net of cash acquired, was a key factor, as the move aimed to enhance Shift4’s suite of software and payment processing solutions and to strengthen its distribution network.  **[0001794669-23-000019_four-20230630.htm:40]** **[0001794669-23-000019_four-20230630.htm:13]** 

What caused the significant increase in acquisition outflows in Q2 2023?

Deferred income taxes swung negative in Q1 2023 because the reported deferred tax benefit decreased from **$6.3 million** in Q1 2022 to a benefit of **$5.6 million** in Q1 2023. However, the documents do not provide a definitive explanation for this change and only suggest that factors such as variations in taxable income, changes in tax laws, or adjustments in deferred tax assets and liabilities could have played a role.  **[0001794669-23-000008_ex991q1.htm:10]** **[0001794669-23-000011_four-20230331.htm:7]** **[0001794669-23-000011_four-20230331.htm:46]** 

Why did deferred income taxes swing negative in Q1 2023?

d3b5062331e5be0af55f3f3c2a7dff0a5de81701fe9be9674133b76038ba189a

The sharp downturn in **Income (loss) before income taxes** in Q3 2024 was primarily driven by a **significant increase in the TRA liability by $287.9 million** and **higher interest expenses**, which rose from **$(8.0) million** in Q3 2023 to **$(18.3) million** in Q3 2024. These adverse factors overshadowed positive contributions from improved operating income and unrealized investment gains, while the considerable income tax benefit recorded was related to a non-recurring valuation allowance release and did not directly impact the pre-tax income figure.  **[0001794669-24-000031_ex991q3.htm:16]** **[0001794669-24-000033_four-20240930.htm:38]** 

What caused the sharp downturn in Income (loss) before income taxes in Q3 2024?

The **income tax benefit** surged to **$280.50 million** in Q3 2024 primarily due to the **release of a previously recorded valuation allowance against certain deferred tax assets in the U.S.** This release resulted in a **substantial non-recurring tax benefit**, which reversed the prior period's tax expense observed in Q3 2023.  **[0001794669-24-000033_four-20240930.htm:38]** **[0001794669-24-000033_four-20240930.htm:40]** 

Why did the Income tax benefit surge to 280.50 in Q3 2024?

The **Class A EPS for Q4 2023** was notably low because the company’s net income dropped significantly—from **$29.2 million in Q4 2022 to $13.7 million in Q4 2023**—and was adversely affected by several expense factors. Specifically, the company incurred an **impairment of $18.6 million** in intangible assets, had **higher depreciation and amortization expenses** (increasing from **$33.6 million to $42.6 million**), and saw **general and administrative expenses rise** from **$68.6 million to $85.2 million**. Furthermore, the **weighted average shares outstanding increased from 53.8 million to 62.2 million**, which diluted the earnings per share further.  **[0001794669-24-000004_ex991q4.htm:13]** 

Why was Class A EPS so low in Q4 2023?

Shift4's Q4 2023 net income decline was driven by several factors. **One key factor** was an **impairment charge of $18.6 million** on intangible assets when the company halted development on in-process software projects after its acquisition of Finaro.  **[0001794669-24-000004_ex991q4.htm:13]** **[FOUR_3375183_7]**  **Additionally**, **general and administrative expenses increased by 24%** to **$85.2 million**, driven by investments in talent and operational scalability.  **[0001794669-24-000004_ex991q4.htm:13]** **[FOUR_3375183_7]**  **Other contributors** included some enterprise deals delaying their go-live dates—such as with the VAI Hotel and a major resort—which affected revenue recognition, a decline in gateway revenue due to the initiated migration to higher-margin services, and **higher depreciation and amortization expenses** rising to **$42.6 million** from **$33.6 million** in the previous year, partly due to the integration of acquired businesses like Finaro and Appetize.  **[0001794669-24-000004_ex991q4.htm:13]** **[FOUR_3375183_7]** **[FOUR_3375183_1]** 

What led to the decline in Net income attributable to Shift4 Payments in Q4 2023?

The significant rise in Income from operations in Q3 2024 was primarily driven by **revenue growth**, **improved gross profit**, **controlled cost growth**, and a **lower revaluation of contingent liabilities**. Specifically, gross revenue increased by **$233.8 million** due to a **29% rise in payments-based revenue** and a **111% increase in subscription and other revenues**. Additionally, gross profit improved because of higher revenue and better operational efficiency. Despite increases in operating expenses such as general and administrative expenses, depreciation and amortization, and other costs of sales, these were effectively managed. Finally, the expense associated with the revaluation of contingent liabilities was significantly lower, reducing the operational drag compared to the previous year.  **[0001794669-24-000031_ex991q3.htm:7]** **[0001794669-24-000033_four-20240930.htm:39]** 

What factors contributed to the significant rise in Income from operations in Q3 2024?

ac440120bebdd8b5022054edf0992281a79521663a2830b698d8a1ade0a7338b

The lower level of **Cash and cash equivalents** in Q2 2024, at **$205.0 million**, was primarily the result of significant outflows during the period. The company experienced heavy use of cash in investing activities, including a major **acquisition cost of $301.4 million** and **capital expenditures of $81.4 million**, which together contributed to **$381.5 million** used in investing. Additionally, there were substantial cash outflows in financing activities—**repurchases of common stock**, **payments for restricted stock units**, and a **net change in bank deposits**—totaling **$100.8 million** used. Other factors, such as reduced settlement assets and negative effects from exchange rate changes, also contributed to the lower cash position. These factors, although partially offset by **$172.8 million** in operating cash inflows, led to the relatively low cash and cash equivalents observed in Q2 2024.  **[0001794669-24-000023_ex991q2.htm:20]** **[0001794669-24-000026_four-20240630.htm:51]** **[0001794669-24-000026_four-20240630.htm:10]** 

Why was Cash and cash equivalents so low in Q2 2024?

The surge in **Cash and cash equivalents** in Q3 2024 was primarily driven by a mix of financing and operational factors. Notably, the company issued **$1.1 billion in bonds**, expanded its revolving credit facility to **$450 million**, and implemented a new **$100 million settlement line** with Citizens that eliminated the need for previously required cash collateral.  **[FOUR_3407793_10]**  Additionally, strong operational performance contributed **$182.1 million** in net cash provided by operating activities, and the elimination of **$84.4 million** in restricted cash further bolstered the cash balance.  **[0001794669-24-000031_ex991q3.htm:15]** **[0001794669-24-000031_ex991q3.htm:17]** **[0001794669-24-000031_ex991q3.htm:20]** **[FOUR_3407793_10]** 

What caused Cash and cash equivalents to surge in Q3 2024?

The notable increase in total assets in Q3 2024 was primarily driven by several factors. **Cash and cash equivalents** rose from **$455.0 million** at the end of 2023 to **$1,426.4 million** in Q3 2024—this increase was fueled by strong operating cash flows and financing activities, including the issuance of **$1.1 billion in bonds** and an expanded revolving credit facility.  **[0001794669-24-000031_ex991q3.htm:15]** **[0001794669-24-000033_four-20240930.htm:3]** **[FOUR_3407793_10]**  In addition, **goodwill** increased from **$1,111.3 million** to **$1,324.0 million**, largely due to acquisitions such as the purchase of Givex.  **[0001794669-24-000031_ex991q3.htm:15]** **[0001794669-24-000033_four-20240930.htm:3]** **[FOUR_3407793_5]**  The company also saw a significant rise in **deferred tax assets** to **$370.9 million**, reflecting improvements in profitability. Moreover, **investments in securities** grew from **$62.2 million** to **$78.9 million**, and adjustments in **residual commission buyouts and intangible assets** (with intangible assets and buyouts moving to **$672.1 million** and **$167.3 million** respectively) contributed to the sizeable asset growth.  **[0001794669-24-000031_ex991q3.htm:15]** **[0001794669-24-000033_four-20240930.htm:3]** 

What drove the notable increase in Total assets in Q3 2024?

The **spike in long-term debt in Q3 2024** was driven by **Shift4 Payments, Inc.'s issuance of $1,100.0 million in 6.750% Senior Notes due 2032**, which increased its debt from **approximately $1,750.2 million** at the end of 2023 to **$2,838.0 million** as of September 30, 2024. The company received net proceeds of around **$1,088.7 million** after deducting initial purchasers' discounts and estimated offering expenses.  **[0001794669-24-000031_ex991q3.htm:15]** **[0001794669-24-000033_four-20240930.htm:19]** **[FOUR_3407793_10]** 

Why did Long-term debt spike in Q3 2024?

08b47499042c472054002579b5826c9994edd60e18c144cc358472e73cecd77b

Net cash provided by operating activities [USD, millions]

Acquisitions, net of cash acquired [USD, millions]

Acquisition of equipment to be leased [USD, millions]

Acquisition of property, plant and equipment [USD, millions]

Residual commission buyouts [USD, millions]

Investments in securities [USD, millions]

Net cash used in investing activities [USD, millions]

Repurchases of Class A common stock [USD, millions]

Payments for withholding tax related to vesting of restricted stock units [USD, millions]

Payments on contingent liabilities [USD, millions]

Distributions to noncontrolling interests [USD, millions]

Net cash used in financing activities [USD, millions]

Effect of exchange rate changes on cash and cash equivalents and restricted cash [USD, millions]

Change in cash and cash equivalents and restricted cash [USD, millions]

Capitalized software development costs [USD, millions]

Cash and cash equivalents and restricted cash, beginning of period [USD, millions]

Cash and cash equivalents and restricted cash, end of period [USD, millions]

55d3de7b0293022a818add9283f7fd480526d5ac51fc80e73fd1b0f7fb430036

dba67bbc581825d40f5fa92c1a4e6dcd2165deb8b00e35249d6e770fdbb9a5d1

f034a5e776382048bf2aac147c61ed9914364c2a0127bf5e7a7a5be86dd04a93

Current Assets (USD, millions)

Cash and Cash Equivalents (USD, millions)

Accounts Receivable (USD, millions)

Inventory (USD, millions)

Non-Current Assets (USD, millions)

Property, Plant, and Equipment (PP&E) (USD, millions)

Goodwill (USD, millions)

Intangible Assets (USD, millions)

Current Liabilities (USD, millions)

Accounts Payable (USD, millions)

Short-term Debt (USD, millions)

Accrued Expenses (USD, millions)

Non-Current Liabilities (USD, millions)

Long-term Debt (USD, millions)

Lease Liabilities (USD, millions)

Deferred Tax Liabilities (USD, millions)

Shareholders' Equity (USD, millions)

Retained Earnings (USD, millions)

Common Stock (USD, millions)

Additional Paid-in Capital (USD, millions)

2b2614d34104c21103752a566f52e80f3ade5a9e0ac7b7fb847359f98c517471

Total Revenue (USD, millions)

Cost of Goods Sold (COGS) (USD, millions)

SG&A (USD, millions)

R&D (USD, millions)

D&A (USD, millions)

Interest Expense (USD, millions)

Operating Income (EBIT) (USD, millions)

Net Income (USD, millions)

EPS - Basic (USD/share)

EPS - Diluted (USD/share)

a8b5cfa6f13a415364b653531126f9468237c5dc28b0dbcabd919f889ad5c2f0

Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

b4e74b61d8afa45a601dd548440ba132c803458231cd8bb834e3e019ccbdc389

End-to-end payment volume (USD millions)

Increase in end-to-end payment volume (absolute) year-over-year (USD billions)

Increase in end-to-end payment volume (percentage) year-over-year (percentage)

d8132bb82af9f24c9802c895d26fdf5086509b8d908e2796931e8eba49bdc431

U.S.

International

Total Revenue

3303916333c99b5cfed4b3f9313fc13e392ce52ea6b74f504729bb8daf457d51

Payments-based revenue

Subscription and other

c547ee4832d48a54c418d05eef86aefadd92b34055dd1a2be57919cf05833880

Shift4 Payments (FOUR)

Financials