STEP 8: REVENUE BREAKDOWN & GROWTH DRIVERS — SHIFT4 PAYMENTS (FOUR)

Date: February 26, 2026

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A. REVENUE BREAKDOWN BY TYPE

Payments-Based vs. Subscription Revenue

Metric	FY2024	FY2023	FY2022	YoY Growth (FY24)
Payments-based revenue	$2,990.1M	$2,386.0M	$1,857.1M	+25.3%
Subscription & other revenue	$340.5M	$178.8M	$136.5M	+90.4%
Total Gross Revenue	$3,330.6M	$2,564.8M	$1,993.6M	+29.9%

Revenue Mix Shift

Component	FY2022	FY2023	FY2024	Trend
Payments-based	93.2%	93.0%	89.8%	Declining share
Subscription & other	6.8%	7.0%	10.2%	Growing share

Key Trend: Subscription revenue nearly doubled in FY2024 (+90.4%), driven by SkyTab POS software subscriptions, Revel's cloud POS recurring revenue, and other SaaS products. This mix shift is highly favorable — subscription revenue carries higher margins and is more predictable.

Gross Revenue Less Network Fees (GRLNF) — Management's Preferred Metric

Metric	FY2024	FY2023	FY2022	YoY Growth (FY24)
Gross Revenue	$3,330.6M	$2,564.8M	$1,993.6M	+29.9%
Less: Network fees	($1,976.2M)	($1,624.4M)	N/A	+21.7%
GRLNF	$1,354.4M	$940.4M	N/A	+44.0%

GRLNF grew 44% vs gross revenue growth of 30% because Shift4 captured more value per transaction (higher take rate on the spread between gross revenue and interchange/network fees).

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B. REVENUE BREAKDOWN BY VERTICAL/END MARKET

Estimated Vertical Mix (FY2024)

Vertical	Revenue Contribution (est.)	Key Metrics
Restaurants (Table-Service)	~30-35%	~33% of US table-service restaurants use Shift4; SkyTab is dominant
Hotels/Hospitality	~25-30%	~40% of US hotel payment volume; integrated property management
Sports & Entertainment	~10-12%	50%+ of major league venues; SpotOn partnership in stadiums
Gaming/Casinos	~8-10%	Legacy gateway strength; integrated with casino management systems
Specialty Retail/E-Commerce	~8-10%	Growing via Finaro (cross-border) and gateway conversions
Other (Food & Beverage, QSR, etc.)	~10-15%	Fast-growing via SkyTab Express and partnership channels

Note: Shift4 does not formally disclose revenue by vertical. These estimates are derived from management commentary, investor presentations, and volume disclosures.

Vertical Growth Dynamics

Vertical	Growth Rate (est.)	Key Driver	Risk Level
Restaurants	15-20% organic	SkyTab adoption, gateway conversion	Low — dominant position
Hotels	20-25%	Property management integration, chain expansion	Low-Medium
Sports & Entertainment	25-30%	New venue wins, concession digitization	Low
Gaming	5-10%	Mature; steady gateway revenue	Low
E-Commerce/International	40-50%	Finaro, Global Blue, cross-border	Medium — newer market
Other/New Verticals	30-40%	SkyTab Express (QSR), Revel (multi-location)	Medium

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C. REVENUE BREAKDOWN BY GEOGRAPHY

Pre-Global Blue (FY2024)

Geography	Revenue (est.)	% of Total
United States	~$3,050M	~92%
Europe	~$180M	~5%
Rest of World	~$100M	~3%
Total	$3,330.6M	100%

Post-Global Blue (LTM Sep 2025, est.)

Geography	Revenue (est.)	% of Total
United States	~$3,200M	~82%
Europe	~$550M	~14%
Rest of World	~$130M	~3%
Total	~$3,878M	100%

Global Blue transforms Shift4's geographic profile. International revenue jumps from ~8% to ~18% of total, with further expansion expected as Shift4 cross-sells payment processing to Global Blue's merchant network across Europe and Asia.

Target Geographic Expansion

Region	Status	Revenue Opportunity
North America	Core market; dominant in hospitality	Organic growth 15-20%
Western Europe	Expanding via Vectron (Germany), Global Blue	High — €500B+ card payment market
Eastern Europe	Finaro provides gateway; early stage	Medium-term opportunity
Asia-Pacific	Global Blue has presence (Japan, Korea, Singapore)	Long-term; high-growth
Latin America	No meaningful presence	Not yet targeted

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D. GROWTH DRIVERS BY SEGMENT

1. SkyTab POS (Restaurants — Primary Growth Engine)

Metric	FY2022	FY2023	FY2024	FY2025E
SkyTab Installs (cumulative)	~15,000	~25,000	~35,000+	~50,000+
SkyTab Contribution to Revenue	~$200M	~$350M	~$550M (est.)	~$800M+ (est.)

• Free hardware placement model: Shift4 provides POS hardware at no upfront cost
• Revenue model: Payment processing spread + monthly SaaS subscription ($30-100/month)
• Lifetime value per install: ~$30-50K over 5-year merchant relationship
• Customer acquisition cost: ~$2-4K per install (hardware + installation)
• Payback period: ~6-12 months
• This is Shift4's most important competitive advantage and growth driver

2. Gateway Conversion (Legacy Merchants)

• Shift4 has ~200,000+ gateway-only merchants processing through third-party acquirers
• Converting these to end-to-end processing on Shift4's platform increases take rate by 3-5x
• Conversion rate: ~5-8% of gateway merchants per year
• This is a multi-year "hidden" revenue driver with minimal customer acquisition cost
• Estimated annual revenue uplift from conversions: $150-250M

3. Acquisition Integration (Revenue Synergies)

Acquisition	Revenue at Acquisition	Revenue Synergy (est.)	Timeline
Global Blue	~$500-600M	+$100-200M (cross-sell)	FY2026-2028
Revel	~$60-80M	+$30-50M (integrated payments)	FY2025-2026
Bambora NA	~$200-300M	+$50-100M (gateway conversion)	FY2026-2027
Vectron	~$30-40M	+$20-30M (payment processing upsell)	FY2025-2027

4. End-to-End Payment Volume Growth

Year	E2E Volume (est.)	YoY Growth
FY2022	~$100B	~+40%
FY2023	~$109B	~+9%
FY2024	~$165B	~+51%
FY2025E	~$210B	~+27%

Volume growth consistently outpaces revenue growth because larger merchants have lower per-transaction pricing (take rate compression). However, absolute dollar contribution per merchant is higher.

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E. CAGR ANALYSIS

Revenue CAGRs

Period	Total Revenue CAGR	Organic CAGR (est.)
FY2018-FY2024 (6 years)	34.5%	~20-22%
FY2020-FY2024 (4 years)	44.3%	~25-28%
FY2022-FY2024 (2 years)	29.3%	~22-25%
Consensus FY2024-FY2026E	~26.5%	~18-20%

Segment-Level Growth (FY2022-FY2024)

Segment	2-Year CAGR	Driver
Payments-based revenue	26.9%	Volume growth + new merchants
Subscription & other	57.9%	SkyTab SaaS, Revel, acquisitions
GRLNF	~44% (1yr only)	Mix shift + take rate

5-Year Forward CAGR Scenarios (FY2024-FY2029)

Scenario	Revenue CAGR	FY2029 Revenue	Drivers
Conservative	13%	$6,200M	Organic only, no new M&A
Base	20%	$8,300M	Organic + existing acquisition integration
Growth	25%	$10,000M+	Full Global Blue synergies + Bambora + further M&A

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F. KEY RISKS BY REVENUE SEGMENT

Segment	Risk	Severity	Mitigation
Restaurants	Market saturation (SkyTab penetration reaching ceiling)	Medium	Expanding to QSR, fast-casual, multi-location
Hotels	Recession sensitivity; travel slowdown	Medium	Long-term contracts; sticky integrations
Sports/Entertainment	Seasonal; venue consolidation	Low	Multi-year exclusive contracts
International	FX risk; regulatory complexity; integration	High	Diversification benefit; local teams via acquisitions
E-Commerce	Intense competition (Stripe, Adyen, Checkout.com)	High	Finaro provides gateway; not core focus
Subscription	Churn risk if SkyTab quality lags	Low-Medium	High switching costs; free hardware lock-in

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Step 8 complete. Proceeding to Step 9.

STEP 15: NEWS IMPACT AND ADJUSTMENTS — SHIFT4 PAYMENTS (FOUR)

Date: February 26, 2026

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A. Q4 2025 / FY2025 EARNINGS (Released Today, Feb 26, 2026)

Q4 2025 Results

Metric	Actual	YoY Growth	vs. Consensus
Gross Revenue	$1.19B	+34%	In-line
E2E Volume	$59B	+23%	Slight beat ($58.1B est.)
Adjusted EPS	$1.60	+19%	Beat by 5.3% ($1.52 est.)

FY2025 Full-Year Results

Metric	FY2025	FY2024	YoY Growth
Gross Revenue	~$4.20B	$3.33B	+26%
E2E Volume	~$207-210B	~$165B	+26-27%
GRLNF	~$1.98-2.02B	$1.35B	+46-49%
Adjusted EBITDA	~$970-985M	~$692M	+40-42%
Adjusted EPS	~$5.32	$3.03	+76%

FY2026 Guidance (THE DISAPPOINTMENT)

Metric	FY2026 Guidance	Consensus	Gap
Adjusted EPS	~$5.60 midpoint	$6.45	-13.2% miss
E2E Volume	~$240B	$255B	-5.9% light
Q1 2026 Revenue	~$547.5M	$1.13B	-51.6% (methodology change?)

Stock Reaction

• Pre-earnings: $58.31 (Feb 24 close)
• Post-earnings: $56.40 (down 1.7% intraday) → pre-market Feb 26 saw $52.85 (-7.9%)
• Current trading range: ~$52-57

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B. KEY NEWS DEVELOPMENTS (Last 6 Months)

1. Global Blue Acquisition Completed (July 2025)

• Enterprise value: ~$2.5B
• Financed by: $1.9B in new debt + cash
• Impact: Adds ~$500-600M annual revenue; European tax-free shopping and DCC
• Integration status: On track; Q3 2025 was first full quarter of consolidation
• Model adjustment: Already incorporated in LTM revenue ($3,878M) and Step 1 debt figures ($4,771M)

2. CEO Transition — Isaacman to Lauber (December 2025)

• Jared Isaacman confirmed as NASA Administrator
• Taylor Lauber (former President/COO) appointed CEO and Chairman
• Isaacman retains ~2.33% economic interest (post-dual-class collapse)
• Previously owned ~25.9% through Class B/C shares
• Model adjustment: Increased execution risk premium; captured in WACC beta

3. Dual-Class Share Collapse (February 2026)

• All Class B and C shares converted to Class A
• Super-voting rights eliminated
• Company no longer a "controlled company"
• TRA liability of ~$440M eliminated
• Model adjustment: Positive for governance; reduces equity risk premium

4. Bambora North America Acquisition (Pending, Q1 2026 Expected)

• Acquiring Bambora's North American business from Worldline
• Terms not disclosed; estimated ~$200-300M
• Adds Canadian payment processing scale
• Model adjustment: Not yet in model; will add revenue when completed

5. $1B Share Buyback Program (Active)

• Authorized Q3 2025; replacing prior $500M program
• ~$296M executed TTM through Sep 2025
• At current prices (~$56), each $100M buyback retires ~1.8M shares (2% of diluted)
• Model adjustment: Supports per-share value; particularly accretive at current depressed prices

6. Michael Burry's Bearish Thesis (Published 2025)

• Published 8,000-word bearish analysis arguing payments companies show "minimal organic growth"
• Said he'd consider FOUR at $30/share
• Status of his position unclear (held as #2 pick entering 2025)
• Model adjustment: Adds to bearish narrative pressure; contributes to short interest

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C. ADJUSTMENTS TO MODEL AND NARRATIVE

Revenue Adjustments (Based on FY2025 Actuals + FY2026 Guidance)

Metric	Previous (Step 1)	Updated	Change
FY2025 Revenue	$4,290M (consensus)	~$4,200M (actual)	-$90M (-2.1%)
FY2026 Revenue	$5,330M	~$4,800-5,000M (guidance implies lower growth)	-$330 to -$530M
FY2025 Adj. EBITDA	$858M (20% margin)	~$975M (23.2% margin)	+$117M (+13.6%)
FY2026 Adj. EPS	$6.62 (consensus)	~$5.60 (guidance midpoint)	-$1.02 (-15.4%)

Key Takeaways for Model

1. FY2025 EBITDA came in ABOVE model — $975M vs $858M. Margins are expanding faster than projected (23.2% vs 20.0% assumed). This is a significant positive surprise.

2. FY2026 growth is decelerating more than expected. Volume guidance of ~$240B implies +15% growth (vs +26-27% in FY2025). This could reflect:

   • Organic deceleration as the base grows
   • Conservative sandbagging (historical pattern: initial guidance 15-22% below actual)
   • Or genuine slowing if acquisition integration is harder

3. The "organic vs inorganic" debate intensifies. Organic GRLNF growth has decelerated from ~52% (FY2021) to ~18% (FY2025). If organic growth falls to ~12-15% in FY2026, the bull thesis relies more heavily on acquisition synergies.

4. The $1B FCF target by end of 2027 was reaffirmed. This is a key confidence signal — management believes the business can generate $1B+ annual free cash flow within 2 years.

Updated Scenario Probabilities (Post-Earnings)

Scenario	Pre-Earnings Prob.	Post-Earnings Prob.	Rationale
Extreme Bear	10%	10%	Unchanged — macro risk still present
Conservative	25%	30%	+5pp — FY2026 guidance miss raises execution concern
Base	45%	40%	-5pp — Lower near-term growth reduces confidence
Growth	20%	20%	Unchanged — margins surprised positively

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D. FINAL THESIS IMPACT

Net Assessment: Modestly Negative Near-Term, Neutral Long-Term

• The FY2025 results were strong (EBITDA beat, EPS beat)
• But FY2026 guidance was the first meaningful miss in Shift4's public history
• The guidance could be conservative (historical pattern suggests 15-20% upside to initial guidance)
• However, the break from the "beat-and-raise" pattern is concerning
• Margin expansion (23.2% adj. EBITDA margin) partially offsets slower revenue growth
• The $1B FCF target by 2027 provides a valuation anchor

Model Update Required: Reduce FY2026 revenue assumption by ~$300M and increase EBITDA margins by ~2-3pp. Net effect on intrinsic value is roughly neutral (lower revenue offset by higher margins).

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Step 15 complete. Proceeding to Step 16.