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

Date: February 26, 2026

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

Q4 2025 Results

FY2025 Full-Year Results

FY2026 Guidance (THE DISAPPOINTMENT)

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

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

C. ADJUSTMENTS TO MODEL AND NARRATIVE

Revenue Adjustments (Based on FY2025 Actuals + FY2026 Guidance)

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)

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).

Step 15 complete. Proceeding to Step 16.