Shift4 Payments, Inc. (NYSE:FOUR) Q4 2022 Earnings Call Transcript

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A lot of the partners that we acquired insource have had portfolios of customers on many of our competitors, whether you call it like Heartland or Spot On. Some of them former dealers, so they already had what we refer to as kind of the low-hanging fruit list to be able to go out and knock on doors now that they were part of our team and sign up customers to SkyTab without any real marketing support. And that was part of the plan by design was to use the first two quarters, kind of burn down some of that low-hanging fruit dial in the process before kind of ramping marketing. I think as a result, you end up in like just a ridiculously low customer acquisition costs over the last couple of quarters, but really pleased with how things are coming along.

Great balance between our direct team and filling in the gaps with some authorized partners. And we’re really happy with the results of the product, some extraordinarily high-volume locations right now.

Dan Perlin: Thank you.

Operator: Thank you. Our next question comes from Timothy Chiodo from Credit Suisse. Timothy, please go ahead.

Timothy Chiodo: Hey, thank you. Good morning everyone. I want to talk a little bit about the ticketing opportunity. So, you have you have Ticket Socket. You recently got the Pacion integration, which opens up a lot of college sports and stadiums there. Maybe you could just expand upon what Pacion actually does for you in terms of the opportunity? And then also, if there’s any thoughts around the potential to integrate with Ticketmaster, which I believe remains the only large integration that you have yet to make.

Taylor Lauber: Hey Tim, I’ll cover that one. I don’t want to talk about any of the names specifically. We are trying to be pretty deliberate walking back from specific customer names, specific partnering. But the way you should think about a ticketing opportunity, the way investors should is, it’s an integration of a software platform that lots of other merchants use. So, pick any of those names that you mentioned, getting an integration to the platform means that you’re now technically capable of serving a TAM that is substantially wider than the day before you completed that integration. And so, having the integration means that you can light up a customer that’s using it very, very quickly, but the integration is what takes a lot of time to get done.

So, we announced kind of our foray in the sports and entertainment in a meaningful way with the acquisition of VenueNext in March 2021. We started to win full stack stadiums and start to have ticketing conversations throughout the end of 2021 and into 2022. We’ve kind of completed the bulk of that ticketing integration work and now it’s much faster for us to light up customers, much in the same way we can line up a customer who’s using a hotel property management software integration that we already have. And obviously, being able to deliver for that in the really high demand environment of their stadium, there’s some confidence that we can handle their ticketing volume as well. So, you should think about each integration as an instant way to expand our TAM and that the volume comes much faster as a result of having the integration.

It’s basically a customer saying yes and signing an agreement that allows you to serve them.

Timothy Chiodo: Excellent. Really helpful. And congratulations on those integrations. The quick follow-up is around inorganic contributions. I realize they’re small from the European TSB a little bit from The Giving Block, but could you just recap what was included in Q4 that was inorganic and the small portion that’s included for the 2023 guide for both volumes and revs?

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