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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________
FORM 10-Q
__________________________________________________
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 001-39313
__________________________________
SHIFT4 PAYMENTS, INC.
four-20220930_g1.jpg
(Exact name of registrant as specified in its charter)
__________________________________
Delaware84-3676340
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
2202 N. Irving Street
Allentown, Pennsylvania
18109
(Address of principal executive offices)(Zip Code)
(888) 276-2108
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per shareFOURThe New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x
As of October 31, 2022, there were 53,006,376 shares of the registrant’s Class A common stock, $0.0001 par value per share, outstanding, 25,829,016 shares of the registrant’s Class B common stock, $0.0001 par value per share, outstanding and 3,626,749 shares of the registrant’s Class C common stock, $0.0001 par value per share, outstanding.


SHIFT4 PAYMENTS, INC.
TABLE OF CONTENTS

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including, without limitation, statements relating to our future results of operations and financial position, business strategy and plans; objectives of management for future operations, including, among others, statements regarding expected growth, future capital expenditures and debt service obligations; remediation of material weaknesses; and the anticipated impact of COVID-19 on our business are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other similar expressions, though not all forward-looking statements can be identified by such terms or expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to the following:
the COVID-19 global pandemic has had and is expected to continue to have an adverse effect on our business and results of operations;
substantial and increasingly intense competition worldwide in the financial services, payments and payment technology industries may adversely affect our overall business and operations;
potential changes in the competitive landscape, including disintermediation from other participants in the payments chain, could harm our business;
our ability to anticipate and respond to changing industry trends and the needs and preferences of our merchants and consumers may adversely affect our competitiveness or the demand for our products and services;
because we rely on third-party vendors to provide products and services, we could be adversely impacted if they fail to fulfill their obligations;
acquisitions create certain risks and may adversely affect our business, financial condition or results of operations;
we may not be able to continue to expand our share of the existing payment processing markets or expand into new markets which would inhibit our ability to grow and increase our profitability;
our services and products must integrate with a variety of operating systems, software, device and web browsers, and our business may be materially and adversely affected if we are unable to ensure that our services interoperate with such operating systems, device, software and web browsers;
we depend, in part, on our merchant and software partner relationships and strategic partnerships with various institutions to operate and grow our business. If we are unable to maintain these relationships and partnerships, our business may be adversely affected;
our balance sheet includes significant amounts of goodwill and intangible assets. The impairment of a significant portion of these assets would negatively affect our business, financial condition or results of operations;
failure to comply with the U.S. Foreign Corrupt Practices Act (“FCPA”) anti-money laundering, economic and trade sanctions regulations, and similar laws could subject us to penalties and other adverse consequences;
our principal asset is our interest in Shift4 Payments, LLC, and, as a result, we depend on distributions from Shift4 Payments, LLC to pay our taxes and expenses, including payments under the Tax Receivable Agreement (“TRA”). Shift4 Payments, LLC’s ability to make such distributions may be subject to various limitations and restrictions;
our Founder (as defined herein) has significant influence over us, including control over decisions that require the approval of stockholders;
the potential impact of, and our ability to remediate, material weaknesses in our internal control over financial reporting;

3

the ongoing military action between Russia and Ukraine could adversely affect our business, financial condition and results of operations; and
those factors described in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2021, filed on November 8, 2022 (the “2021 Form 10-K/A”) and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q.
Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

4

PART I: FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)

SHIFT4 PAYMENTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)(in millions, except share and per share amounts)
September 30, 2022December 31, 2021
Assets  
Current assets  
Cash and cash equivalents$672.7 $1,231.5 
Accounts receivable, net of allowance for doubtful accounts of $14.7 in 2022 ($8.0 in 2021)
262.2 205.9 
Inventory5.9 3.5 
Prepaid expenses and other current assets (Note 11)19.9 12.7 
Total current assets960.7 1,453.6 
Noncurrent assets
Goodwill (Note 5)777.3 537.7 
Other intangible assets, net (Note 6)561.7 188.5 
Capitalized customer acquisition costs, net (Note 7)35.2 35.1 
Equipment for lease, net (Note 8)70.5 58.4 
Property, plant and equipment, net (Note 9)21.4 18.4 
Right-of-use assets (Note 14)16.7 18.5 
Investments in securities32.0 30.5 
Other noncurrent assets10.2 1.9 
Total noncurrent assets1,525.0 889.0 
Total assets$2,485.7 $2,342.6 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable$177.1 $121.1 
Accrued expenses and other current liabilities (Note 11)86.6 42.9 
Deferred revenue (Note 4)20.3 15.0 
Current lease liabilities (Note 14)4.6 4.8 
Total current liabilities288.6 183.8 
Noncurrent liabilities
Long-term debt (Note 10)1,739.8 1,738.5 
Deferred tax liability (Note 13)9.3 0.3 
Noncurrent lease liabilities (Note 14)15.9 17.9 
Other noncurrent liabilities11.3 2.4 
Total noncurrent liabilities1,776.3 1,759.1 
Total liabilities2,064.9 1,942.9 
Commitments and contingencies (Note 16)
Stockholders' equity (Note 17)
Preferred stock, $0.0001 par value, 20,000,000 shares authorized at September 30, 2022 and December 31, 2021, none issued and outstanding
  
Class A common stock, $0.0001 par value per share, 300,000,000 shares authorized, 53,006,376 and 51,793,127 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
  
Class B common stock, $0.0001 par value per share, 100,000,000 shares authorized, 25,829,016 and 26,272,654 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
  
Class C common stock, $0.0001 par value per share, 100,000,000 shares authorized, 3,626,749 and 5,035,181 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
  
Additional paid-in capital696.0 619.2 
Treasury stock, at cost; no shares and 378,475 shares at September 30, 2022 and December 31, 2021, respectively
 (21.1)
Accumulated other comprehensive loss(0.7) 
Retained deficit(392.8)(325.3)
Total stockholders' equity attributable to Shift4 Payments, Inc.302.5 272.8 
Noncontrolling interests (Note 18)118.3 126.9 
Total stockholders' equity420.8 399.7 
Total liabilities and stockholders' equity$2,485.7 $2,342.6 
 See accompanying notes to unaudited condensed consolidated financial statements.

5

SHIFT4 PAYMENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (in millions, except share and per share amounts)
Three Months Ended September 30,Nine Months Ended September 30,
202220212022 2021
Gross revenue (a)$547.3 $377.8 $1,455.9 $968.1 
Cost of sales (exclusive of depreciation and amortization expense shown separately below) (b)(411.6)(313.4)(1,129.8)(773.8)
General and administrative expenses(74.1)(48.1)(198.6)(153.1)
Revaluation of contingent liabilities (Note 12)36.9  37.2 (0.2)
Depreciation and amortization expense (c)(28.9)(15.0)(62.9)(45.9)
Professional fees(10.4)(3.3)(24.3)(13.0)
Advertising and marketing expenses(5.6)(3.5)(11.2)(26.1)
Restructuring expenses (Note 11)(0.1)(0.1)(0.2)(0.2)
Transaction-related expenses (Note 10)  (1.4) 
Income (loss) from operations53.5 (5.6)64.7 (44.2)
Loss on extinguishment of debt   (0.2)
Interest income3.5  4.9  
Other income, net 0.2 0.3 0.2 
Change in TRA liability (Note 13)(1.1) (1.1) 
Interest expense(8.3)(7.4)(24.6)(20.2)
Income (loss) before income taxes47.6 (12.8)44.2 (64.4)
Income tax (provision) benefit (Note 13)(1.2)(1.0)4.0 4.1 
Net income (loss)46.4 (13.8)48.2 (60.3)
Net income (loss) attributable to noncontrolling interests3.3 (4.6)2.3 (21.5)
Net income (loss) attributable to Shift4 Payments, Inc.$43.1 $(9.2)$45.9 $(38.8)
Basic net income (loss) per share:
Class A net income (loss) per share - basic$0.78 $(0.17)$0.82 $(0.72)
Class A weighted average common stock outstanding - basic51,502,825 49,692,599 51,804,935 46,251,576 
Class C net income (loss) per share - basic$0.78 $(0.17)$0.82 $(0.72)
Class C weighted average common stock outstanding - basic3,648,580 6,117,997 4,069,266 8,078,943 
Diluted net income (loss) per share:
Class A net income (loss) per share - diluted$0.57 $(0.17)$0.58 $(0.72)
Class A weighted average common stock outstanding - diluted77,801,346 49,692,599 78,479,541 46,251,576 
Class C net income (loss) per share - diluted$0.57 $(0.17)$0.58 $(0.72)
Class C weighted average common stock outstanding - diluted3,648,580 6,117,997 4,069,266 8,078,943 
See accompanying notes to unaudited condensed consolidated financial statements.
(a)For the three and nine months ended September 30, 2021, includes $22.4 million of payments to merchants associated with the TSYS outage, which are recorded as contra revenue and reflected as a reduction of “Gross revenue.” See Note 4 for more information.
(b)For the three and nine months ended September 30, 2021, includes $2.3 million of payments to partners associated with the TSYS outage. See Note 4 for more information.
(c)Depreciation and amortization expense includes depreciation of equipment under lease of $8.2 million and $22.6 million for the three and nine months ended September 30, 2022, respectively, and $5.8 million and $15.4 million for the three and nine months ended September 30, 2021, respectively.




6

SHIFT4 PAYMENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited) (in millions)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Net income (loss)$46.4 $(13.8)$48.2 $(60.3)
Other comprehensive loss
Unrealized loss on foreign currency translation adjustment, net of tax(0.5) (1.1) 
Total other comprehensive loss(0.5) (1.1) 
Comprehensive income (loss)45.9 (13.8)47.1 (60.3)
Comprehensive income (loss) attributable to noncontrolling interests3.1 (4.6)1.9 (21.5)
Comprehensive income (loss) attributable to Shift4 Payments, Inc.$42.8 $(9.2)$45.2 $(38.8)
See accompanying notes to unaudited condensed consolidated financial statements.

7

SHIFT4 PAYMENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited) (in millions, except share amounts)
 
Class A
Common Stock
Class B
Common Stock
Class C
Common Stock
Additional
Paid-In
Capital
Treasury Stock
Retained
Deficit
Accumulated Other Comprehensive Loss
Noncontrolling
Interests
Total
Equity
SharesAmountSharesAmountSharesAmountSharesAmount
Balances at December 31, 202151,793,127 $ 26,272,654 $ 5,035,181 $ $619.2 (378,475)$(21.1)$(325.3)$ $126.9 $399.7 
Net loss— — — — — — — — — (7.5)— (5.7)(13.2)
Issuance of Class A common stock and fair value of equity-based compensation awards assumed in connection with The Giving Block acquisition785,969 — — — — — 24.7 — — — — 11.8 36.5 
Repurchases of Class A common stock to treasury stock— — — — — — 4.5 (301,510)(17.2)— — (4.5)(17.2)
Exchange of shares held by Continuing Equity Owners732,524 — — — (732,524)— — — — — — — — 
Equity-based compensation— — — — — — 15.8 — — — — — 15.8 
Vesting of restricted stock units, net of tax withholding306,953 — — — — — (4.6)— — — — 1.2 (3.4)
Balances at March 31, 202253,618,573  26,272,654  4,302,657  659.6 (679,985)(38.3)(332.8) 129.7 418.2 
Net income— — — — — — — — — 10.3 — 4.7 15.0 
Issuance of Class A common stock17,287 — — — — — 0.4 — — — — 0.2 0.6 
Repurchases of Class A common stock to treasury stock— — — — — — 46.8 (3,585,681)(167.2)— — (46.8)(167.2)
Retirement of treasury stock(3,539,016)— — — — — (76.4)3,539,016 176.7 (100.3)— —  
Exchange of shares held by Continuing Equity Owners1,095,915 — (443,638)— (652,277)— 1.6 — — — — (1.6) 
Equity-based compensation— — — — — — 9.3 — — — — — 9.3 
Vesting of restricted stock units, net of tax withholding265,553 — — — — — (5.8)— — — — (2.1)(7.9)
Cumulative translation adjustment— — — — — — — — — — (0.4)(0.2)(0.6)
Balances at June 30, 202251,458,312  25,829,016  3,650,380  635.5 (726,650)(28.8)(422.8)(0.4)83.9 267.4 
Net income— — — — — — — — — 43.1 — 3.3 46.4 
Issuance of Class A common stock in connection with acquisitions and residual commission buyouts2,228,663 — — — — — 63.8 — — — — 31.4 95.2 
Retirement of treasury stock(726,650)— — — — — (15.7)726,650 28.8 (13.1)— —  
Exchange of shares held by Continuing Equity Owners23,631 — — — (23,631)— — — — — — — — 
Equity-based compensation— — — — — — 12.8 — — — — — 12.8 
Vesting of restricted stock units, net of tax withholding22,420 — — — — — (0.4)— — — — (0.1)(0.5)
Other comprehensive loss— — — — — — — — — — (0.3)(0.2)(0.5)
Balances at September 30, 202253,006,376 $ 25,829,016 $ 3,626,749 $ $696.0  $ $(392.8)$(0.7)$118.3 $420.8 








8

SHIFT4 PAYMENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited) (in millions, except share amounts)
Class A
Common Stock
Class B
Common Stock
Class C
Common Stock
Additional
Paid-In
Capital
Retained
Deficit
Noncontrolling
Interests
Total
Equity
SharesAmountSharesAmountSharesAmount
Balances at December 31, 202039,737,950 $ 30,625,857 $ 10,188,852 $ $738.3 $(278.7)$210.4 $670.0 
Net loss— — — — — — — (32.8)(18.2)(51.0)
Cumulative effect of ASU 2020-06 adoption— — — — — — (111.5)1.6 — (109.9)
Issuance of Class A common stock and fair value of equity-based compensation awards assumed in connection with VenueNext acquisition325,127 — — — — — 13.5 — 12.8 26.3 
Transfer from Founder of right associated with Inspiration4 seat— — — — — — 1.3 — 0.8 2.1 
Exchange of shares held by Searchlight2,000,000 — (926,000)— (1,074,000)— 6.3 — (6.3) 
Equity-based compensation— — — — — — 14.0 — — 14.0 
Vesting of restricted stock units, net of tax withholding46,503 — — — — — (1.4)— (1.0)(2.4)
Balances at March 31, 202142,109,580  29,699,857  9,114,852  660.5 (309.9)198.5 549.1 
Net income— — — — — — — 3.2 1.3 4.5 
Exchange of shares held by Searchlight3,152,165 — (1,459,453)— (1,692,712)— 7.9 — (7.9) 
Equity-based compensation— — — — — — 6.6 — — 6.6 
Vesting of restricted stock units, net of tax withholding1,953,859 — — — — — (73.7)— (40.3)(114.0)
Balances at June 30, 202147,215,604  28,240,404  7,422,140  601.3 (306.7)151.6 446.2 
Net loss— — — — — — — (9.2)(4.6)(13.8)
Issuance of Class A common stock and fair value of equity-based compensation awards assumed in connection with VenueNext acquisition16,797 — — — — — — — — — 
Exchange of shares held by Searchlight4,250,000 — (1,967,750)— (2,282,250)— 9.0 — (9.0) 
Equity-based compensation— — — — — — 6.4 — — 6.4 
Vesting of restricted stock units, net of tax withholding26,207 — — — — — (2.4)— (1.0)(3.4)
Balances at September 30, 202151,508,608 $ 26,272,654 $ 5,139,890 $ $614.3 $(315.9)$137.0 $435.4 
See accompanying notes to unaudited condensed consolidated financial statements.



9

SHIFT4 PAYMENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (in millions)
Nine Months Ended September 30,
2022 2021
Operating activitiesAs Restated
Net income (loss)$48.2 $(60.3)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization101.6 76.8 
Amortization of capitalized financing costs6.0 4.1 
Loss on extinguishment of debt 0.2 
Deferred income taxes(4.4)(4.3)
Provision for bad debts5.8 10.3 
Revaluation of contingent liabilities(37.2)0.2 
Change in TRA liability1.1  
Equity-based compensation expense38.4 26.9 
Other noncash items0.9 1.0 
Change in operating assets and liabilities
Accounts receivable(58.1)(98.0)
Prepaid expenses and other assets(4.6)(1.4)
Inventory3.1 2.9 
Capitalized customer acquisition costs(19.4)(19.3)
Accounts payable44.2 59.1 
Accrued expenses and other current liabilities8.3 5.3 
Right-of-use assets and lease liabilities, net(0.4) 
Deferred revenue2.4 2.8 
Net cash provided by operating activities135.9 6.3 
Investing activities
Residual commission buyouts(268.2)(4.4)
Acquisitions, net of cash acquired(135.2)(54.2)
Acquisition of equipment to be leased(39.6)(35.3)
Capitalized software development costs(31.7)(13.0)
Investments in securities(1.5)(29.5)
Acquisition of property, plant and equipment(6.8)(6.3)
Net cash used in investing activities(483.0)(142.7)
Financing activities
Proceeds from long-term debt 632.5 
Repurchases of Class A common stock to treasury stock(185.9) 
Payments for withholding tax related to vesting of restricted stock units(20.6)(119.7)
Deferred financing costs(