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

Page 3 of 10

Taylor Lauber: Yes, sure. It’s suffice to say, I think we have these comments in November. We were not terribly optimistic around The Giving environment at the time and this is probably pre some of the other tough news in the crypto community. So, the contribution from The Giving Block largely came in the form of SaaS from the incremental customers they signed up it was not particularly meaningful. Although when you think about that customer base being double what it was bought it as The Giving environment starts to improve, the donation and should come very quickly thereafter. So, we’re quite constructive on that platform despite the troubles in the crypto community the lower donation volume. And I think we have commented in the same call in November that we expected the contribution of our international PSP to be less than 1% of our net revenue for the year.

And I think it’s landed but where we expected it to be. So, reasonably inconsequential in the quarter, although really, really strong technical capabilities.

Jared Isaacman: Yes, I think just to layer on that, pretty consistent with it is important I think for all investors to understand it is not uncommon for us at all to acquire assets that we think give us some unique right to win within a specific vertical and then just totally pivot the revenue model around payments. Great example of that is the VenueNext acquisition at the time we purchased it, I mean, fantastic software. I mean wasn’t a cash-generating business at all? Pivoted it from predominantly SaaS at that point and now being a real contributor from a volume perspective, which is driving a lot of the net revenue not to mention it’s opened up doors for ticketing opportunities as well. When you think about The Giving Block, I mean, right now, the overwhelming majority of the revenue that we take in from non-profits is coming from major non-profit brands like St. Jude and others that are giving us traditional card payment volume and many of which we were able to solicit from the 2,200 or so existing Giving Block customers with respect to the European PSP, we bought that asset to put volumes that we knew we had already with respect to some of our strategic customers into the European market.

So, I know it’s been a question we’ve been asked since the time of the IPO, what contributions are coming organically versus inorganically, it’s almost always organically and then some because you’re often times devastating the revenue model of the existing business you acquired to pivot towards our organic strategy. I think that holds with the deal of the bills that we actually did in 2022.

Timothy Chiodo: Perfect. Thanks a lot Jared and Taylor.

Operator: Thank you. Our next question comes from William Nance from Goldman Sachs. William, please go ahead.

William Nance: Hey guys. Good morning. Thanks for taking the question. Jared, I think the company benefited a lot from some of the aggressive actions you guys took distribution insourcing, the rolling out of SkyTab, Gateway Sunset, what’s kind of the big needle mover in your mind for 2023? What are the main two or three things that investors should be focused on to kind of track the next leg of growth this year?

Jared Isaacman: Yes. What an awesome question. So, I mean I think we set the table incredibly well through 2022. But actually, it also kind of matches off of the Investor Day we had in November of 2021, where we basically told our investors that we’re moving — we’re diversifying from outside of just restaurants and hotels into all these exciting new verticals, gaming, non-profit, sports entertainment, they were all e-commerce, international, they were all anchored off of like a significant merchant that was going to give us more than a foot in the door within those specific verticals. We moved into 2022 building on every one of those initiatives. We certainly saw — or at least were concerned enough that there would be a deteriorating economic climate in 2022 so much so that we decided to move a little bit faster on things like our Gateway Sunset initiative, rolling out SkyTab POS with a balanced direct and indirect distribution.

Page 3 of 10