Title

Presentation

Shift4 Payments, Inc. beats earnings expectations. Reported EPS is $1.07, expectations were $0.71.

Operator: Greetings. Welcome to the Shift4 Payments, Inc. First Quarter 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone today should require operator assistance, please press star zero from your telephone keypad. As a reminder, this conference is being recorded. Now my pleasure to introduce Tom McCrohan. Thank you, Tom. You may now begin your presentation.

Tom McCrohan: Thank you, operator, and good morning, everyone, and welcome to Shift4 Payments, Inc.’s first quarter 2025 earnings conference call. With me on the call today are Taylor Lauber, our President and Incoming CEO, 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, which can be accessed through our corporate Twitter account at Shift4. A 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 a result of certain risks, uncertainties, and many important factors. Additional information concerning those factors can be found in our most recent reports on Forms 10-K and 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 Taylor.

Taylor Lauber: Thanks, Tom, and good morning, everyone. We had another busy quarter, and it was great to see many of you at our recent Investor Day event in February. This morning, I’ll provide thoughts on our first quarter results, key priorities that give us confidence in the years ahead, and an update on our recently announced acquisition of Global Blue. I will then turn the call over to Nancy for a detailed review of our quarterly results and our upcoming guidance. Before providing the financial metrics, I wanted to provide some grounding on the growth drivers within the business which are especially important during times of economic uncertainty. We have strong product offerings across several large markets and are generally number one in each with the exception of restaurants where we are a strong number two.

We had world-class customers in each of these verticals, such as Aspen Hospitality, the Setai Hotels, Pittsburgh Pirates, Colorado Rockies, Formula One Miami Grand Prix, and the PGA Tour. We also refuse to leave our success to chance. As such, our M&A strategy has afforded us a massive collection of customers whereby we can cross-sell our services. The Boston Red Sox, Herberber Bakeries, and the Ace Hotel Toronto, are just three examples of this strategy in action. Although there are many more and we’ve highlighted a few of them in our materials, which you can find on our website. Interestingly, though, these recent wins will matter more in the years ahead as the largest contributor to our current performance is generally the wins of last year fully seasoning.

Those of you who can recall Jared reading what seemed like a yellow pages worth of wins from last year’s earnings calls are now seeing the fruits of that in our results. As such, we posted strong Q1 results that were largely in line with our expectations and are raising our full-year 2025 guidance to reflect our confidence in our ability to execute. Some highlights: Our volumes increased 35% year-over-year to $45 billion. Quarterly volumes were in line with our expectations, which were modestly impacted by the timing of leap year and the Easter holiday. We witnessed stable volume trends across all of our end markets and continue to monitor trends closely in light of the recently implemented trade policies. It should come as no surprise that we never count on an improving economy to drive our success.

Gross revenue less network fees increased 40% to $369 million. A combination of stable spreads and subscription and other revenue resulted in our net revenue growing faster than our volumes. We are unlocking significant value from our recent acquisitions, and I will provide some additional details on that topic in a few minutes. Adjusted EBITDA increased 38% to $169 million. We delivered 46% adjusted EBITDA margins which were modestly above our guidance of 45%. Nancy will comment on our forward margin profile a bit later during the call. And lastly, we delivered adjusted EPS of $1.07 per share. We are pleased with these results and are very excited to execute on our priorities for the balance of the year. I think it’s important to note that these priorities are not new, but rather a continuation of what has made us successful for the past 26 years.

Our first priority is to keep doing what’s made us so successful in the first place. In the US, we are focused on adding new merchants while simultaneously expanding our share of wallet. In restaurants, we continue signing up new merchants onto our Skytap offering and also introduced Skytap Air, our latest handheld device that’s going to be launching in the next few weeks. It’s something we’re quite proud of, and I’d encourage you all to take a look at our shareholder letter for some details on it. I gave a few examples of wins earlier, but the product is scaling nicely across a variety of environments. For example, we signed all US locations of Nando’s, a fast-growing quick-service chicken chain that is expanding quickly in North America with plans to reach over 500 US locations over time.

It is replicating its enormous success already in the United Kingdom and elsewhere. In hospitality, we continue to add net new hotels and resorts while simultaneously cross-selling our payments to hotels operating on our gateway. I mentioned Aspen Hospitality and the Setai Hotels earlier, but there are dozens of examples, ranging from boutiques like the Nantucket Hotel to large resorts such as Cooper in Charleston, South Carolina. In stadiums, we are keeping our eye on the ball, puck, etcetera, across all major professional leagues and are partnering with organizations beyond the four major sports leagues. To that end, I mentioned this earlier, we’ve signed the Formula One Miami Grand Prix and the PGA Tour, but also the Red Rocks Amphitheatre.

Our second priority is unlocking synergies from acquisitions such as Revel, Givex, and Eigen. Deals with each effectively following the Shift4 Payments, Inc. playbook to a T. Across just these three most recent acquisitions, we have already achieved more than $20 million in EBITDA synergies in the first quarter. Deals from many years ago also continue to bear fruit as I cited in some of the cross-sells that I mentioned earlier. As a reminder, our playbook is focused on identifying a unique capability critical to the commerce experience which we then bundle with our payment processing expertise. We are not buying a company simply to do the same thing as us and then drive cost synergies by removing overlaps. Instead, we unlock meaningful recurring payment revenue by bundling our own payment capabilities with the unique and scarce technology capability we now own.

Once we own this new capability and the talent involved in building it, we are inherently more competitive and win more new business in addition to the embedded cross-sell. Some examples of this in action are Revel, which we acquired in June of last year. Revel already has a robust payments cross-sell funnel with over 7,000 locations going live on Shift4 Payments, Inc. as of the Q1 close. Of note, many of these are chains, which was a segment of the restaurant market that was a unique strength of Revel. We have already incorporated many of these Revel capabilities into Skytab, which make it naturally more competitive in enterprise. We have also integrated the product teams from Eigen into Shift4 Payments, Inc. As a reminder, Eigen is a payment gateway we acquired in November of last year, with a presence in Canada and the United States.

We have already cross-sold payments to approximately 100 large Eigen Gateway-only customers and are making significant progress on combining the gateways into a single one and deleting the Eigen part. The talent that built Eigen now helps us execute on our platform roadmap much more quickly. It should come as no surprise that the gift and loyalty capabilities from Givex are in the process of being fully integrated into Skytab as our default offering. We have cross-sold payments to approximately 100 Givex merchants since we’ve officially launched our cross-sell efforts just in February. We will also delete a part as Givex gift and loyalty capability were far superior to our native offerings. As a reminder, we acquired Givex just a few months ago in November of last year.

Last but not least is executing on our near-term strategy while also thinking about the future. By taking what has made us successful for 26 years and replicating it all over the world, we can set ourselves up for success for decades to come. As we shared at our recent investor day, we are currently operating in six continents, up from only one less than two years ago. We recently unlocked Latin America and are already in the process of signing marquee enterprise clients in that region. In Europe, where tightly bundled software plus payment solutions are less common, we are making tremendous progress signing up restaurants, particularly in the UK, Ireland, and Germany. Our momentum has picked up significantly this year, and we’re now signing up over 1,000 restaurants a month internationally.

These are the priorities that I believe will ultimately enable us to deliver on our financial commitments we made to you all and to drive meaningful profitable growth over the medium term. Turning the call over to Nancy, I thought I’d provide a quick update on Global Blue. For those of you that possibly missed our February announcement, Global Blue is a market-leading payment platform supporting tens of thousands of luxury brands worldwide including Louis Vuitton, Hermes, Valentino, Fendi, Prada, Burberry, Cartier, and many, many more. Global Blue operates a two-sided payment network, with over 15 million consumers utilizing Global Blue’s quick and seamless mobile app when purchasing luxury goods at over 400,000 retail stores around the world.

When shopping abroad, consumers purchasing these luxury items are eligible for a VAT tax refund, which is facilitated by Global Blue. Global Blue also facilitates the option to convert purchases into the cardholder’s home currency, which is something known as dynamic currency conversion. The Global Blue business is an exceptional standalone business. The luxury VAT tax refund industry is proven to be highly resilient as affluent consumers wield substantial economic spending power, accounting for half of all consumer spending, and hold an estimated $1.3 trillion in excess savings. We have high confidence in unlocking $80 million of revenue synergies from this transaction by the end of 2027, primarily through bundling our embedded payment solution with Global Blue’s VAT tax refund and dynamic currency conversion capabilities.

We estimate the embedded payment cross opportunity alone to be over $500 billion. In addition, we continue to expect two of the world’s largest FinTech companies, Ant Financial and Tencent, to remain shareholders in the combined business, and both of these wallet providers have committed to collaborate with us on e-commerce opportunities around the world. We are on track for an early Q3 close subject to regulatory approval. As I mentioned in my shareholder letter, we have a track record of growing volumes during the most challenging of economic times. Since the company was founded, we have successfully grown our payment volumes every year including during COVID and the great financial crisis of 2008 and 2009. We have experienced five recessions in the past 26 years, and we have grown our payment volumes in every single one of them.

I hope that by understanding our strategies that I just highlighted, it becomes obvious to you all that in many ways, we welcome uncertainty. We thrive in times of uncertainty, and because it’s our operating model, product lines, unit economics, and enormous cross-sell funnel, all become more valuable when the future is uncertain. That’s not to say we operate with rose-colored glasses and in fact, it’s exactly the opposite. We operate out of an abundance of caution and a mindset of paranoia. We are never complacent and constantly finding ways to evolve. With that, I’ll turn the call over to Nancy who will outline our 2025 financial guidance, and key other stats for the quarter. Nancy?

Nancy Disman: Thank you, Taylor. We delivered another quarter of consistent and solid results. In line with our expectations, setting new first quarter records across all of our key performance indicators. Volume grew 35% year-over-year to $45 billion. Gross revenue less network fees grew 40% to $369 million, and adjusted EBITDA grew 38% to $169 million. Our Q1 adjusted EBITDA margins were 46%. We expect our margins to march higher as the year unfolds, and we unlock synergies from last year’s acquisitions. Excluding the drag from these recent acquisitions, adjusted EBITDA margins would have been 50%. We will also benefit from higher levels of operating leverage as the year progresses and we add incremental payment volumes from cross-selling and working through our existing backlog.

Our Q1 blended net spreads were 61 basis points in line with our guidance for spreads to remain stable with 2024’s exit rate. Importantly, spreads across our core business also remained stable and we still expect full-year 2025 spreads of approximately 60 basis points. Subscription and other revenue was $93 million in Q1, up 77% compared to the same period last year. The growth was once again driven by our success across SMB, Skytap, and further penetration from recently completed acquisitions. Sequential moderation from Q4 levels was as expected and due to ongoing deprecation of legacy revenue from recent acquisitions. Q1 organic gross revenue less network fee growth was in line with our expectations and we are on track for 20% plus organic revenue growth for the full year.

Our adjusted free cash flow in the quarter was $71 million representing 42% adjusted free cash flow conversion. As a reminder, during Q1, we made our first cash interest payment of $37 million on the debt we issued last August. These cash interest payments will occur semiannually in Q1 and Q3. For illustrative purposes, excluding this incremental interest payment, our adjusted free cash flow conversion rate for the quarter would have been 64%. We are on track to deliver over 50% adjusted FCF conversion for the full year. During the first quarter, we repurchased approximately 686,000 shares for $63 million, and month-to-date in April, we have deployed an additional $85 million of capital to repurchase approximately 1.1 million shares against our remaining available capacity.

You can find a complete reconciliation of our share in the back of our earnings materials. GAAP net income for the first quarter was $20 million and GAAP diluted EPS was $0.20 per share. Non-GAAP adjusted net income for the quarter was $99 million or $1.07 per share on a fully diluted basis. Beginning this quarter, we are now adding back acquired intangible amortization to non-GAAP net income and EPS in line with our industry peers. Our total indebtedness now has a weighted average cost of 3.4% and our net leverage at quarter end was We have a strong cash position with $1.2 billion positioned to pay down the $690 million of convertible debt maturing into Now turning to 2025 guidance. We are updating full-year financial guidance and introducing guidance as follows: For the full year, we are raising gross revenue less network fees, to between $1.66 billion and $1.73 billion, representing 23% to 28% growth.

We are raising adjusted EBITDA between $840 million and $865 million, representing 24% to 28% growth. For the second quarter, we expect gross revenue less network fees between $405 million and $415 million with adjusted EBITDA margins of approximately 50%. A few items to highlight as it pertains to our outlook for the rest of the year. As Taylor mentioned, we continue to see signs of stable consumer spending trends in Q1 were largely in line with what we saw exiting 2024 with a slight deceleration largely attributable to leap year and other seasonal factors. Since mid last year, we have seen fairly stable trends in same-store sales with some choppiness month to month within a very narrow span. We remain cautiously optimistic on the health of the consumer that our guidance and outlook does not rely on any improvement or recovery from current market conditions.

Reiterating what Taylor outlined, Shift4 Payments, Inc. has a proven track record of resiliency in uncertain times, and we are better equipped than ever to deliver strong results. With that, let me now turn the call back to Taylor. Taylor?

Taylor Lauber: Thanks, Nancy. Before turning it over to the operator for Q&A, I thought I’d provide a few thoughts regarding the forthcoming CEO transition. We are eagerly awaiting the US Senate to officially vote on Jared’s nomination to head NASA. And assuming approval, the board will execute a CEO transition plan where Jared will step down as CEO and from the board, and the board will vote on my appointment. You should all be aware that the Senate ethics committee did not require Jared to divest any of his Shift4 Payments, Inc. shares. Jared will remain the largest shareholder of Shift4 Payments, Inc., which was something we’re really excited about. Once the Senate votes on Jared’s NASA appointment, he will convert all of his B and C shares into Class A, relinquishing his super votes, and owning approximately 25% of the outstanding Class A shares.

Going forward, he’ll have the same one share, one vote privileges as all the other shareholders. And with that, I’ll turn it over to the operator for Q&A.

Operator: Thank you. We’ll now be conducting a question and answer session. Before pressing the star keys. One moment please while we poll for questions.

Taylor Lauber: Thank you. And our first question is from the line of Rayna Kumar with Oppenheimer. Please proceed with your question.

Rayna Kumar: Good morning, Taylor and Nancy. Thanks for taking my question and good results here. How would you describe the competitive environment in international markets that you’re targeting? Seems like there’s a lot of US-based payment companies that are focused on the same thing. What do you think gives Shift4 Payments, Inc. an edge here?

Taylor Lauber: Yeah. Thanks, Rayna, and it’s a great question. I’ll be honest, the international opportunity is something we identified as far back as kind of I don’t know, eight years ago. The phenomena we experience internationally is that it looks like the US did call it, fifteen, twenty years ago. And what I mean by that is you’ve got kind of three different industries all evolving in parallel to one another without much convergence. And what I mean by that is you have software companies, building software to support merchant environments. You have hardware companies to help, create the fulfillment experience, and then you’ve got, like, largely traditional banks fulfilling the payment experience. And none of them have done a lot to help these three things converge for the benefit of the merchant.

Now why we saw the opportunity is because it’s exactly the twenty years ago in the United States. That’s when they created the HarborTouch brand that bundled all these solutions together to make life easier for the merchant and eliminate you know, multiple vendors. So, you know, I can give you a a a long history on some of the technical reasons it’s taken this long to get here, but they really there’s no excuse for them existing. Today. So it’s not a surprise to us that if you have the right localized solutions, and that means, like, local settlements, accepting local payments methods, paired with good software, merchant are kinda clamoring for it. I think we gave the stat that about one in four of the merchants joining Shift4 Payments, Inc.

today are coming from outside the US. And it’s simply, you know, riding a wave that we saw twenty years ago in the United States. And and to be frank, that’s, like, only a handful of markets we’re actually addressing at the moment. The rest of the world, there’s a long way to go in this regard.

Rayna Kumar: Very helpful. Thank you.

Operator: Next question is from the line of Darrin Peller with Wolfe Research. Please proceed with your questions.

Darrin Peller: Guys, nice results here. Can we just touch a little further on you’re seeing in the market more broadly into April, what you’re seeing and what you’re including in the assumption for guidance given the conviction you had around your your guide here just really passing through the beat. And then just remind us. I mean, same-store sales generally, I know you don’t typically incorporate much in the way of same-store sales. As part of your outlook for volume, but maybe just remind us, if you don’t mind, the building blocks that give you the conviction in the outlook still despite what’s pretty uncertain macro times.

Taylor Lauber: Yeah. Sure. I’ll start with kind of the themes that we’re seeing, and then Nancy can talk to how that gets incorporated into our forward-looking views. But I I think it’s gonna be relatively undramatic, which is that what we’re seeing is more of the same. And by more of the same, I don’t just mean kind of beginning of this year continuing through. I mean, like, the last kind of twelve to eighteen months have looked very consistent. Across our merchant segment. And that is to say, you’ve had restaurants with very modest same-store sales compression. And I mean, like, you know, one percent and it’s usually bouncing between one percent and zero for over a year now. You got hotels that are generally bouncing somewhere between minus one and positive one or two.

And then you’ve got retail, which for us is a smaller segment of the business, but that that varies a little bit all within that same bound. So the fact that, you know, even with recent sort of a lot of political rhetoric going on recently, we’re not seeing meaningful change in consumer behavior, it suggests that that it’s it’s stayed the course from our perspective. But you alluded to this. We generally don’t spend a lot of time looking at same-store sales. We put some kind of information in our earnings materials because I I think the capital markets get a little bit ahead of themselves in terms of, you know, trying to predict things like consumer spending when in fact it’s immensely varied across categories. Even within restaurants, consumers tend to typically go out even in in difficult times.

They just spend a little less when doing so. So we put some some data points in the resiliency we’ve traditionally seen in the business, which is that sign-ups generally grow during tough times, if consumer spending is a little bit modest, but we’re not really seeing that. Nancy, if you wanna kind of elaborate on how we kind of build the the go-forward forecast with with the current outlook.

Nancy Disman: Yeah. And I and I’ll I I think Taylor captured it well, and and I I picked it up in my prepared remarks. But this the the one point I would emphasize is is the volume bridge that we’ve shared with you all and invest. Very little impact in any given year is from what we sign a year. Right? So we’re not dependent on kind of new grabs in the market and and and a win rate. So I think that’s, like, supplements what Taylor said. Like, the the in-year achievement of anything we find this year is the smallest component of any revenue bridge that we do. And so much of our embedded volume and the annualization of what we already signed is going to achieve and really inform the forecast for the rest of the year. So, again, any movement plus or minus one percent is really gonna have almost no impact on our forecast. Going forward.

Darrin Peller: Right. And that’s really helpful, guys. Just quick follow-up would just be where we are on the it was good to see the synergy update you guys provided, but to us, it’s still more of a cross-sell revenue opportunity that really drives your idiosyncratic ability to grow so well in various macro. So where are you on whether it’s Vectron or it’s Revel or others? Just just give us a quick update if you don’t mind on what you’re seeing the most momentum with in terms of, you know, obviously turning into revenue from what what you

Taylor Lauber: Yeah. Sure. This is like, it’s like choosing which child is my my favorite. I’m so I’m not gonna do it, but I will tell you that you know, we are at varying degrees of of kind of success in pulling the levers across each one largely because of when we started to work with the asset. So Revel, we mentioned this in the prepared remarks, really, really nice cross-sell of payments into that existing software base. You know, phase two of that plan is that those merchants over time migrate Skytab, but it’s been going really, really nicely and the the Revel team has been able to contribute meaningfully to our Skytab development pipeline. As you could imagine with kind of the number of customers we’re winning, the number of geography we’re trying to tackle, and simply the sheer breadth of customers we’re trying to serve within restaurants, the talent is incredibly important to us.

And it’s not to be overlooked. I think, you know, too often in our industry, people think about M&A as a talent reduction strategy. That is not how we approach M&A. We approach M&A with the purpose of kind of attracting good talent towards problems we were struggling to solve. You know, before the transaction began. So Revel’s doing really nicely in that regard. Vectron, I think you you’ve probably seen kinda the green shoots of this inside of our international growth statistics that we’ve shared. It took quite a while to kind of get, you know, that business where we wanted to be for some procedural reasons. We actually actually don’t control the business today. We expect to very, very shortly. But it’s contributing nicely to production today.

And then Eigen, it’s a playbook we knew extremely well. Right? A $30 billion plus hospital-oriented gateway, but we really didn’t close on it till November. So all of them are kind of at, like, the right stage of their evolution with maybe a modest concession being international has always taken longer than we expected. And we’re very mindful of that when you try to set go forward, expect. And it’s not that the playbook is misunderstood. It’s not that execution is is challenging. It just takes longer to kind of get operational control into affect the change we wanna we wanna affect.

Darrin Peller: Right. Alright. Thanks again, guys.

Operator: Our next question is from the line of Adam Fusch with Evercore ISI. Please proceed with your questions.

Adam Fusch: Thanks, guys. Good morning. Quick question for you, Taylor. Thanks for all the color here. On the 40% GR L and F, growth in the quarter, what was organic and inorganic? The way you guys define it? And then I have one quick follow-up.

Taylor Lauber: Yeah. Sure. And so I think Nancy alluded this. We generally don’t provide quarter to quarter mainly because acquisitions provide a lot of noise. There’s acquired revenue we’re parting ways with. There’s synergized revenue coming in very quickly. I will say, we set the expectation that for the year, organic revenue growth would be north of 20%. We are exactly on track with regard to that full-year metric.

Adam Fusch: Okay. Cool. And just one follow-up. Good to see some nice wins here in hotels and stadiums. I wanted to dig in a bit to the conversion figures on page sixteen of the deck. New wins are on the right side of the page and some relatively low but very early initial conversion numbers are in the middle. Does that imply that you’re still selling under different brands while also underlying MacBook?

Taylor Lauber: Generally, we don’t sell under multiple brands, and I think, I’d encourage folks to go back to Luke gave a really good kind of M&A walk through in our investor day to highlight the brands we acquired versus the brands we go to market with. So generally speaking, no. We don’t go to market over multiple brands. In certain cases where the product is well entrenched and we don’t have those capabilities like a Vectron in Germany. We are not selling Skytab in Germany today. We’re selling a Vectron product and hope to be able to introduce Skytab over time. So, no, generally speaking, it’s our payments bundled with, you know, it’s either Skytab, it’s either our payments platform, or it’s our stadium software that any of acquired merchants are being converted into when we when we buy the business.

And I I wouldn’t I wouldn’t sort of look at each one of those numbers as homogeneous. Right? So whether it’s a Revel customer converted over or a Givex customer, or an Eigen customer. They’re all very different in terms of size of merchant and the number of dollars and effective spread you get on all of them. So we’re very pleased with the pace of progress we made across all of them. I don’t wanna set the tone that we think this is kinda too slow or too fast. It feels all very adequate to us.

Adam Fusch: Okay. That’s why I was asking because the presentation at the analyst day was one thing, and then I saw all these marquee wins on the right, which was a little bit I just wanted to square that. So it seems like initially you’re still selling under those brands, but the goal longer term is to consolidate everything. You don’t have to do that. And then it makes the conversion easier. Is that the right playbook to think about?

Taylor Lauber: So in most cases, it’s actually go after the existing customer base. So it’s not even a selling against a brand. It’s bundling payment processing within the customer base that’s been acquired. When those sales teams are are going and finding new customers, they introduce exclusively Shift4 Payments, Inc. products. But again, it’s it’s not lost on us that the quickest and most immediate opportunity inside of an acquired business is generally, you know, the tens or hundreds of thousands of customers that are using just one piece of the payment solution and we can offer the rest.

Adam Fusch: Okay. Alright. Thanks. I’ll take this offline so I save time for other guys to ask questions. Thanks, guys. See you in a bit. Great.

Operator: The next question is coming from the line of Timothy Chiodo with UBS. Please proceed with your questions.

Timothy Chiodo: Great. Thank you very much. I wanted to touch on the backlog disclosure of the $35 billion. Up from the Q3 earnings that was a $33 billion number. Wanna talk a little bit about what’s implied in the guidance in terms of the in-year volumes that will come out of that. So I just wanted to see if our logic was accurate. We think about that $35 billion as most of it, able to be implemented this year, maybe not all because some of it requires waiting for a current contract to expire, maybe more on the ticketing side. But if you were roughly able to take maybe $25 to $30 billion of that and have it implemented this year and you think about a midyear convention, I can pretty quickly get to sort of a low to mid-teens billions of volume contribution for the in-year fiscal year 2025. Is that a rough way to think about it, or is there anything that you would guide us to maybe higher or lower any other nuance to call out? Thanks.

Taylor Lauber: Yeah. No. I think that’s I I think that’s the right way to think about it. Generally speaking, if you’re in our backlog, you either have been installed and we’re waiting for the annualization impact or you are highly likely to be installed over the course of the next twelve months. It’s the rare exception, although we’ve had some success in this regard of the multibillion-dollar enterprise that takes kind of longer than, I call it, nine-ish months to fully implement. Although we have named a few of those in the in the in the last few quarters, But, yes, I think that number is a number we have confidence coming in, you know, largely throughout the year. Although, keep in mind, those customers still have yet to annualize the next year. Right? So we still expect kind of the the lion’s share of of an implement to to annualize in the following year, if that makes sense.

Timothy Chiodo: Thank you, Taylor. Yeah. It makes a ton of sense. And the minor follow-up is, is it better to assume that ticketing is a meaningful portion of that $35 billion? Or if you could just put some context around some of the categories in there.

Taylor Lauber: I don’t think it’s a it’s a disproportionate portion by any stretch of the imagination. I think if you look at the past kind of handful of quarters worth of enterprise wins, you’ve got more than more than a few that are multibillion dollars just themselves. We obviously have have one ticketing. This will be a big year for seasonalizing ticketing. That’s for sure because we’ve activated a lot of ticketing customers in the in the last year. We had, you know, the contribution of of appetized customers, and those customers are seasonal are seasoning and will give us a full year in 2025. But I wouldn’t say it’s a disproportionate amount of the backlog.

Timothy Chiodo: Thanks. It helped a ton. Thank you, Taylor.

Operator: The next questions are from the line Jason Kupferberg with Bank of America. Please proceed with your questions.

Jason Kupferberg: Hey. This is mostly trying on for Jason. Thanks for taking my question. I want to ask about international as well. I know it’s still kind of early days, but can you provide any color on the current revenue split between US and international and where you see that mix evolving by the end of the year? And also just given the number of countries you’re in now, which market out there the US is your largest in terms of revenue contribution? Thanks.

Taylor Lauber: Yeah. Sure. I’ll I know we have some disclosures around international revenue contribution, which is largely the largely comes in the form of e-commerce business that is seasoned for a little bit plus all these sites we’re adding. I’ll say and I made this comment in my prepared remarks. The contribution of merchants added in year tends to be less significant because they give you, you know, by definition on average about half a year’s worth of revenue. So we’re not expecting a a meaningful contribution, although we do think this is a meaningful priority for the business so that, you know, three to five years from now, we’re cap we have sufficiently kind of planted the flags to capitalize on this software plus payments convergent that’s going on in the rest of the world.

There’s kind of, two flavors it’s taking on at the moment. There’s enterprise customers that we’re enabling in lots of different geographies, I mentioned this stat recently, but I I I think I I love to repeat it because I think it just speaks to the speed within which we can operate when we have conviction that Shift4 Payments, Inc. We were in one country, like eighteen to twenty months ago, and now we’re facilitating payments in over fifty. For certain customers. That’s one element, enterprise customer enablement all over the world. And then the other is SMB product plus software plus payments bundling that we’re delivering in a handful of markets that we think are really right for that and expanding know, the markets much more methodically.

We have a joke called beer drinking countries before wine drinking, but I think it helps allude to the markets we’re operating in and kind of an elegant way, which is, like, UK, Ireland, and Germany are all really for us at the moment. And then we expect to expand into those wine drinking countries, Italy, Spain, France, when products are better localized for them.

Jason Kupferberg: Okay. Cool. Thank you.

Operator: Our next question is from the line of Andrew Hart with BTIG. Proceed with your question.

Andrew Hart: Thanks for the question, and nice results. Taylor, it’s great to hear how consumer spending is holding up okay. I guess, can you talk to us a bit about how growth is balanced between net new and cross-sell? But then I guess, if we think about a scenario where macro does become a bit more challenged, how much harder can you press on the cross-sell funnel thinking about kind of a stick versus carrot approach here?

Taylor Lauber: Yeah. Sure. I’d love to tell you that there’s, like, a a scale we have in the in the back office and that we we we’ve waited according to net new wins or cross-sell when it’s most important for us. The reality is it just simply doesn’t work that way. M&A tends to give us a very quick access to lots of customer customers that in in all honesty would likely not answer the phone if a payments company or a software company were calling them with a solution, they’d likely just say, hey, we’re content and and there’s no reason to look at this right now. So M&A gives us access to a wide swath of customers that is in incredibly valuable at all times. It also gives us capabilities that when bundled tightly and we get to delete all these parts and deliver a single cohesive solution, makes us more competitive on a net new basis.

I would say in the most in the most normal of times, meaning modest economic growth, not a ton of uncertain you tend to have a mix of about half and half where lots of customers are joining us off the street, but there’s also this cross-sell. When times get tough, people answer the phone far less frequently, and we try to give evidence to this on on a resiliency page we put in our earnings materials. And the cross-sell becomes invaluable. These customers are only gonna listen to the vendors they’re already working with. They’re actively looking for ways consolidate, make life simpler, save money, etcetera. So, again, I wanna be very specific. We are not predicting the economic environment ahead. We feel quite content with our ability to operate in a variety of economic environments, including those that are less rosy from a consumer spending standpoint.

It’s that cross-sell funnel that to your point, does become more valuable when times get tough. But it contributes, as do net new wins, very consistently when times are are less tough.

Andrew Hart: That’s helpful. Thanks. And then next year, the commentary on spreads expect to be consistent around sixty basis points for the year. I guess, if you look at the chart on page six, it looks like there’s actually, you know, some expansion in the restaurant vertical. I guess, Is that related to Skytap success or any details you can share there?

Nancy Disman: Yeah. I think it’s a little bit of everything. We’ve got, Skytap success. We’ve got just the mix based on size of merchants, which will always blend into that spread and really a lot of stability around that legacy base that we keep talking about. So I think it’s really the combination of all three that has allowed us to kinda maintain an in-shop spreads in that category.

Andrew Hart: Thanks so much and nice results again.

Operator: Our next question is from the line of Andrew Jeffrey with William Blair. Please proceed with your questions.

Andrew Jeffrey: Hi. Appreciate you taking the question today. Taylor, I wanted to see if we could drill down a little bit on Global Blue recognizing that the deal hasn’t closed. I guess a couple of questions. One, you know, one of the things we’ve heard from investors is just or questions around sort of the the goodness of fit the existing business as well as your confidence in the ability to cross-sell into that big five hundred plus billion dollars or captive volume base. And and more pointedly perhaps, the eighty million in run rate synergies by twenty seven feels like it’s related to a or or assumes a relatively low proportion or percentage of that addressable volume is monetized. Could you talk to both of those things?

Taylor Lauber: Yeah. Sure. And I I can understand kind of the the juxtaposition there and the questions it raises among investors. Maybe just to help clarify the set of capabilities that Global Blue possesses are extremely rare. For the merchant verticals they serve and they’re very valuable. And so we see a tremendous opportunity in owning that set of capabilities and, again, having just a much wider offering with a lot of components that very few people possess being able to deliver it into merchant categories. With that being said, it is a phenomenal standalone business, and we actually don’t need to count on much in the way of revenue synergies for it to be an incredible pro forma to Shift4 Payments, Inc. So what we delivered to the street in terms of expectations are you can actually you can forecast a modest degree of deceleration in their core business and replace that with incredibly modest cross-sell synergies and still feel really good about the combined business.

So that’s the those are kind of the facts. Right? You can feel good about our ability to execute against this business and that the capabilities are exceptionally rare, and the merchants they serve would highly unlikely ever answer the phone if someone called them. To try to approach them with a net new solution, and now we have this incredible foot in the door. That’s really, really valuable. It also underpins all of our international expansion. I I would think maybe the subtext to all of this is we wouldn’t deploy the kind of capital we did, which is the largest transaction in our history, without having incredibly high conviction that we can do better. Than that set of circumstances that I laid out. So I think you should look at the dollars we deployed as kind of our conviction in the team.

And you should look at the expectations we set financially as even a a really modest to to poor against our game plan yields a pretty damn good result.

Andrew Jeffrey: Okay. And and just specifically on the the revenue synergies, any implications for for sort of the percent of of Global Blue volume that you’re converting? Or or I how do you come to that number, I guess, might be the

Taylor Lauber: Yeah. Sure. So we segmented their customer base and we basically took the largest customers and said, assume we win less than ten percent. Across that merchant population and in some cases, you know, less than you know, four or three percent. In other cases, we said, like, their SMB population, we think we can do, you know, don’t know, a a third very, very comfortably, and and that’s still a modest expectation. So hopefully, you know, you’re calibrating. We’ve traditionally done a really good job of cross-selling into into these businesses. We’re not trying to set an expectation for ourselves inside of this. We’re simply saying below average execution, against the Shift4 Payments, Inc. playbook, against this world-class base of customers yields a result like eighty million that could even account for some softness in luxury retail, which we have no reason to believe.

We just you know, like to be conservative in that regard. So, again, very modest conversion expectations across that base set to the street. But I think the dollars deployed means that we think we can do better than that.

Andrew Jeffrey: Okay. Thanks. Thank you.

Operator: Our next question is from the line of Andrew Bosch with Wells Fargo. Please proceed with your question.

Andrew Bosch: Hey. Thanks for taking the question and nice set of results here. Just wanted to to double click on the software and other revenue line. It downticks slightly in the first quarter relative to the fourth quarter. I’d assume some of that is attributable to deleting the parts, but if you can give us a sense on on where that line kind of trends through the remainder of the year would be super helpful.

Nancy Disman: Sure. And and you really hit on it in your question. You know, when when you look at kind of that detail, it’s it is from blowing up the legacy models. And from a guidance perspective to give you some idea, we will still see growth as the year goes on, but it will be decelerating if our plans kinda hold with slowing up legacy models. You know, we’re definitely going in on some of these new deals. With a little bit more of a stick approach than it took us on the gateway. So I I I would say that’s what you should expect over over the course of this year if everything trends the way that we anticipate.

Andrew Bosch: Got it. And then just my follow-up would be on the EBITDA side. Getting some questions this morning. Know, is it the right idea to tick up the the the guidance in amid the macro, albeit you know, your ability to navigate the macros is is obviously better than most. But maybe if you could just give us a sense on, like, what manifested in the quarter to kinda give you that added confidence?

Taylor Lauber: Yeah. Sure. I I would say the quarter played out, you know, largely within our own expectations. And you know, despite kind of the the ton of noise we’re hearing on a macroeconomic basis, We’re seeing very little impact to consumer spending. So it would seem imprudent not to kind of continue to forecast the business on the pace that we have that that’s not to say we haven’t kind of thought through the impact of tariffs and we haven’t thought through the impact of kind of tariffs within our merchant base, you know, on a merchant by merchant analyticals. We point of view. We spend a lot of time on this. We’re just not seeing it in the data, and I understand that that can be confusing because there’s lots of different data points we see out there. But generally speaking, know, day-to-day spending across our merchant population and throughout kind of spring break and everything else looks exactly as we would have expected.

Nancy Disman: Yeah. And I I would just ask that, you know, we we continue to be incredibly focused on expense management. So our our state flat kind of culture within the company is is still going very strong, and we have a really detailed line of sight to the synergies that are left to be realized within the within the acquisitions we completed last year. So that certainly informs EBITDA. As we look ahead for the rest of the year.

Andrew Bosch: Great. Thanks, Andy.

Operator: Thank you. Our next question is from the line of Dominic Ball with Redburn Atlantic. Please proceed with your questions.

Dominic Ball: Hello, Taylor, Nancy, Tom. So that Shift4 Payments, Inc. expands international. Is there any material difference in take rate versus US merchants? We’re just trying to understand the path to sort of reaching your sixty bips. Net take rate or blended spread target by year-end. And you also expanded to US enterprise merchants, while a little bit lower take rate. And then just a quick second one there. For international growth, has there been any challenges in terms of, like, educating the local sales partners in the international markets that maybe are not used to selling integrated software and payments. Thank you.

Taylor Lauber: Yeah. It’s a great question. And I’ll say spread’s very sort of very much country by country. So we would expect in international markets, and this will kind of allude to the second part of your question, that you’re you’re kind of you have to ascribe value to multiple pieces of the chain all at once because merchants have traditionally had to buy each one of these things individually. Said differently, you might have a little bit more on software, a little bit less on payment volume, The reality is you’re selling a bundled product, so you’re not you you you don’t care as the delivery of that product, but merchants are kind of more attuned to look at one line versus another. And so to your point, yes, you have to educate the market.

You have to educate the market on at at the enterprise level, by the way, we are first doing this in hotels, you know, six years ago. It was this isn’t just the conversation with the CFO about payment spreads. It’s also a conversation with the CTO. About the gateway and the implementation costs of of connecting all this software in your environment and the hardware implementation etcetera. So, yeah, there’s there’s certainly education that has to be done. Although the value prop is is screaming very loudly to these salespeople that they can win a heck of a lot more when they’re delivering these types of solutions. So know, this is a little bit before both your and my time with Shift4 Payments, Inc., but twenty years ago, Jared was introducing the payments ISO community to this software called HarborTouch and explaining that we’ll take care of the technical aspects of the sale, but if you can introduce this product to a merchant, you’re gonna attract higher quality merchants.

They’re gonna stick around with you longer. They’re gonna ascribe a heck of a lot more value to it than they would a payment terminal alone. So education’s a part of it, but I think the early kinda green shoots of that are, you know, thousand plus merchants a month, in particular geographies very, very quickly. So it’s it’s something that we’re used to, and it’s something that we predicted the market would the markets would embrace.

Dominic Ball: Awesome. That’s great to hear. And if I can maybe just ask a quick one on the Skytab Air, which sounds super interesting for Russia. I mean, how do you guys see this position versus maybe other, you know, major competitors out there? And do you see this as a material sort of driver in terms of new restaurant wins? Will it help in maybe less churn? And is it gonna be charged direct or bundled within payments?

Taylor Lauber: Yeah. Sure. So we consider this an extension or or Keep in mind, these HarborTouch examples I’ve cited a few times on this call, they go back to the mid-2000s. And that’s really when our presence in restaurant technology began. So we’re very proud of Skytab Air. We think restaurant operators are gonna love it. It is by no means the first wireless handheld we’ve introduced, into the restaurant environment. It’s a new form factor. It’s sleeker. It’s easier. It’s battery lasts longer. It charges faster. It’s got more POS functionality in it. It’s got a lot more cellular redundancy than previous versions. So we’re incredibly excited about it. We think it’ll keep us winning at the pace that we’re winning at. I will say though, international markets tend to favor the handheld more so than the workstation.

It’s just the nature of it. It’ll traditionally be priced as, you know, per software device per month and it does cost less than the workstation, generally speaking. So we expect it to have a lot of receptivity, but international, it’s probably you know, my my guess would be the the international restaurants picking more wireless and and fewer workstations in their implementation than in the US.

Dominic Ball: Great. Thank you, everyone.

Operator: Our next question is come from the line of Matt O’Neil with Feet Partners. Please proceed with your questions.

Matt O’Neil: Yeah. Hi. Thanks for taking the questions. Just curious, I recognize the Global Blue deal is by no means closed yet nor contemplated in the guide, but I think given some of the, the changes or eliminations of guidance from airlines and and some other macro dynamics. Wondering if you could just give us a view on kind of how how the Global Blue business is faring, you know, in Q1 and maybe into into April.

Taylor Lauber: Yeah. Sure. So keep in mind, it is a business dependent on international travel, but it’s pretty well diversified. Inside of that. Meaning that when one country when travel from one country weekends, it tends to favor another country, that fills the gap. So, not not huge not huge changes in the way they’re thinking about the business. Inside of Global Blue, and I think there’s some international travel trends that look know, reasonably promising through the summer. I will say FX rates play a a a quicker impact on their business. Meaning that if one one FX rate pair changes meaningfully, it does change the way the consumer in the store thinks about how much they’re willing to spend, typically to the benefit of another FX pair somewhere inside the business.

And then there’s some offsetting effects given the fact that they’ve got, you know, their own dynamic currency conversion product that that operates somewhat differently vis a vis those. So this is evidenced, by the way, by the fact that they’ve had kind of a multi-year history of some some recently large shocks to the business, whether it was the UK leaving, whether it was the Russian traveler, kind of of sidelined, or whether it was the Chinese traveler not spending as much as they would in historic periods. Global Blue kinda grew throughout all of that. So we feel good about the business, but these are certainly trends we’re trying to get our arms around as we prepare to take ownership of the business. It will largely manifest itself in, you know, will the US traveler spend less time traveling abroad and therefore more time traveling domestic and how does that play through?

And or will the Asian traveler kinda fill that gap or not? These are kinda questions we’re asking ourselves, but you know, Jacques and the team have run that business exceptionally well through much bigger shocks than what we’re seeing today. And so we feel really good about

Matt O’Neil: Thanks, Taylor. And maybe a quick follow-up for Nancy. I believe you had alluded to this at recent conferences, but the the timing of interest expense on the the billion plus in new notes. So we we saw that in Q1 here, and I believe that’s a semiannual. So now it’s it’s a one Q, three Q dynamic. Is that is that right, Nancy?

Nancy Disman: Yes. That’s exactly right.

Matt O’Neil: Great. Thanks so much. Appreciate it.

Operator: Our next question is from the line of Jamie Friedman with Susquehanna International. Please proceed with your question.

Jamie Friedman: Hi. Good morning. And you look smart and retrospect the way you structured the guidance. I think that needs to be said. So I had two questions. I’ll just ask them upfront. Taylor, I realized you said in your earlier response that you don’t have a scale in the backroom to weigh the contribution of the funnel. Looking at page fifteen, though, when you when you look at the nine hundred billion between the one point four trillion of total funnel and the five hundred billion of cross-sell, I’m just wondering, can you help share how you think about that layering into the three-year guide? Was there anything contemplated about the conversion funnel in the three years? And then my second one just to ask upfront. Any callouts about Canada? Because a couple of your competitors and peers are discussing Canada macro. Thank you both.

Taylor Lauber: Yeah. Sure. Canada seems to be a controversial place these days, although I’m not I’m not sure why. It’s been a it’s been a solid contributor for us. Keep in mind, you had us first developing our payments capabilities in Canada at the beginning of last year, and then we acquired Givex and Eigen both with meaningful merchant populations there. So it’s it’s been a good contributor for us. Obviously, the contribution of Canada’s accelerating, but I think that’s a byproduct of us not really being in the market. So we don’t spend any time thinking about kind of average merchant locations spend or spreads or anything else. We’re simply trying to sign up the customers. That are trying to give us the business. In terms of thinking about the contribution, the eighty million dollars of revenue synergies that we called out at announcement of Global Blue, that is explicitly within our three-year expectations.

Although, it also contemplates, and not because we’re smart about this, we just think it’s prudent, it contemplates some slowdown in their standalone business as as a result of as a result of us just not being you know, good enough to predict it. So, yes, we contemplate the eighty million of revenue synergies from the business. I will say I think that’s conservative, although I think it also assumes some volatility in their end markets which is just prudent. We’re a new steward of this business, and so I think it’s important. To set that expectation. In terms of the rest, I mean this very sincerely. We don’t think about them on an individual basis. What we do when we acquire one of these businesses now is we simply say, restaurant. Okay. What is the value proposition we can deliver to a restaurant?

And I don’t really care whether that restaurant came from Eigen or Givex or Revel, etcetera. Similarly with hotels, now with with luxury retail and commerce. I I think know, the investment community quite frankly just gets itself too wrapped up in predicting an individual success rate against every single deal versus looking at the big picture and saying, wow. Even something like Shift4 Payments, Inc. that they acquired back in 2017 is still contributing gateway wins. That means the strategy works, and, the obsession over, was this a new net new or was this a gateway win? I think it’s a little just overdone given the fact that our cross-sell funnel is so big that if there were never a net new win, we do just just fine and vice versa if there were nothing but net new wins.

You know, we would be doing just fine.

Jamie Friedman: Thank you.

Operator: Our next question is from the line of Jeff Cantwell with Seaport Research.

Jeff Cantwell: Hey. Thanks for squeezing me in. Yeah. I had a couple of follow-ups. First quick question on your guidance for gross revenue less network fees, using the midpoint. You raised the full year to 25% to 26%. So my question is, what’s changed in terms of how you guys are thinking about growth for the full year by vertical amongst restaurants, hotels, and entertainment, etcetera? Because the guidance raised for the full year implies you’re staying confident despite the macro uncertainty here. So I wanted to get a sense of where you’re seeing more strength amongst the different verticals you think about how you see your revenue playing out over the course of the year. I was hoping maybe under

Taylor Lauber: We’re not predicting any real change in the economic health of our subverticals that we serve. We obviously have increasing confidence on the international contribution of the business. We’re just signing up lots of customers there. I will say where I think kind of the street has it wrong is like a a disruption to international travel or international travel becoming more expensive is not a bad thing for the Shift4 Payments, Inc. business. We saw this, by the way, in the pandemic where international travel was basically prohibited. And what happens? Everyone traveled more domestically. And so the imbalance of of foreign travelers coming coming in was was ballasted by domestic travelers not leaving the country.

So I I think it’s it’s certainly too early to tell what the medium and long-term impacts of some of the tariffs commentary and implementation gonna be, but we don’t see any immediate trends across our business that we haven’t seen over the past eighteen months. And there’s no one vertical that’s, like, incredibly robust and or impacted by what’s been going on.

Jeff Cantwell: Got it. Got it. And another follow-up just on Global Blue on Matt’s question. Maybe could you elaborate a little bit about the level of confidence you have in terms of the outlook for Global Blue related revenue? Just given all the macro uncertainty. There anything about Global Blue you’re feeling more cautious on? And maybe on the flip side, feel yourselves becoming more positive about versus back when you gave us your initial thoughts on Global Blue back to the investor Investor Day. Thinking about certain corridors for travel, like China into Europe, even maybe inbound into China. There could be potential upside there. Just curious if we can walk us through how you view Global Blue and the puts and takes there, given obviously much has changed with respect to macro since you last spoke with us. Thanks.

Taylor Lauber: Yeah. More time we spend with the team, there’s, like, a ton of cultural alignment between how the team at Global Blue thinks about running their business how we’ve traditionally run Shift4 Payments, Inc., which is there are things within their control and there are things outside of their control. We can’t control how many diners visit a restaurant. We can certainly control how many restaurants we sign up. And they feel, by the way, the same way about international travel versus enhancing the product experience. So the emphasis on their business over the past kind of five years has been a incredible focus on digitizing the consumer experience so that more refunds happen because of easier to affect a refund. And the the results of that strategic approach has been that the business has ballasted some of the largest shocks you could contemplate, whether it was the UK leaving the bat or, you know, the the Russian travelers being sidelined or the Chinese travelers spending less and traveling less that I mentioned earlier.

So very much like ourselves, Global Blue is really, really good at knowing what they control and focusing exclusively on that. And the results of that are that in really tough times, they do a heck of a lot better than expected. I think we tried to give evidence in our earnings materials here that in really tough times, we thrive. Because signing up merchants is something we do really well. Predicting the day in, day out volume in a merchant is not something we actually, you know, spend a lot of time on. In that respect. So, culturally, I think they’re very aligned to, kinda how we think about win winning. You’re gonna win on customer sign-ups and product competitiveness. And I will say and this is kind of what compelled us to pursue acquiring the business very recently.

That there’s a heck of a lot more ballast inside of the business than anyone would guess. Looking from the outside in. Evidenced by their performance through some of these idiosyncratic shocks that they tend to just you know, plow through and do a good job and produce a good financial result despite that. So we’re incredibly excited. We hope that in early Q3, we will have a closing and we can march towards, like, a combined offering and a combined team. But we gotta let the the regulators do their thing.

Jeff Cantwell: K. Thanks very much. Have a good one.

Operator: Thank you. Our final question is from the line of Andrew Schmidt with Citi. Please proceed with your question.

Andrew Schmidt: Hi, Taylor. Hey, Nancy. Thanks for squeezing me in. Hoped down a little late here. Sorry if these have already been asked. But just first one, just on pricing. Just give us an update in terms of just the pricing environment, what you’re seeing across the segments. And then the corollary to that question is, if we do see obviously, there’s more economic uncertainty out there. What’s your expectation the enterprise side? Sometimes you see some belt tightening when these contracts come up for renewal and things like that. Just curious get your thoughts on Thanks so much.

Taylor Lauber: Yeah. Sure. I’ll put enterprise aside because I think they’re very consistent in how they operate. They demand a heck of a lot of value for the the from their vendors. And we endeavor to deliver that. So when we enter engage with an enterprise merchant, it’s typically, you know, on a new basis, it’s like no. Don’t look at your payments invoice. Look at, like, the six or seven other invoices that are involved in the experience, and that will all come to you in the form of a take rate we think is attractive and one throat to choke via our delivery model and you know, you’re gonna eliminate a heck of a lot of administration and expense as a result of that. So putting enterprise aside where I think we’re priced competitively for what we’re delivering, but we’re delivering something that is of more value than most of our peers, In the SMB segment of the marketplace, keep in mind, we do try to have a more variable cost model for our merchants than a fixed cost model.

Our SaaS is very, very low compared to others in the industry. Our spreads are generally the same, if not, you know, a little bit above that. And that’s the trend we’ve lived with for twenty years. So there’s nothing new with regard to how we’re approaching the environment. I will say, and I think know, some competitors of ours made headlines a year or two ago with their pricing moves that know, when times get tough, pricing is something merchants focus on a lot. And our model, I think, serves us well in that regard. I won’t say that know, merchants are paying you know merchants are focused on price in a prudent way that they have been for the last few years, but I wouldn’t say it’s been an overwhelming portion of any of our discussions with merchants.

Andrew Schmidt: Got it. Super helpful. Thank you for that, Taylor. And then maybe just the the question on capital allocation. Taylor, coming to the sea. Obviously, you worked with Jared for some time. I’ve had a pretty successful M&A strategy, but any tweaks to that in terms of cadence, intensity, Just curious how you think about just balancing capital allocation here. Thanks.

Taylor Lauber: Yeah. No. I so Nancy alluded to buybacks. I think we couldn’t ignore the price of our equity in the past in the past few months. So buybacks became a larger portion of how we think about capital allocation. Ideally, we love to deploy capital into into R&D and into M&A targets that give us both capabilities that would otherwise take R&D and or customers to cross-sell into and sometimes geographies. We’ll lose a large transaction, so we’re focused on getting that one done. That’s not to say we’ve taken our eye off the ball on opportunities. And I think everyone should expect that when you have some something like Global Blue, suddenly it gives you a couple dozen more countries within which to think about M&A inside of. But, you know, we’re focused on getting Global Blue done. And and outside of that, no meaningful changes to to our capital allocation strategy.

Andrew Schmidt: Perfect. Thanks so much.

Operator: Thank you. At this time, I’d like to turn the floor back to Taylor Lauber for closing remarks.

Taylor Lauber: Thank you all for joining the call. Look forward to catching up with you all in the coming days and weeks. To go into the details of our quarter, which we’re very happy with. Bye.

Operator: This will conclude today’s conference. We disconnect your lines at this time. Thank you for your participation. Have a wonderful day.