~~See accompanying notes to unaudited condensed consolidated financial statements.~~

SHIFT4 PAYMENTS, INC.

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~(Unaudited) (in millions, except share and per share amounts)~~

Three months ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Gross revenue

$
351.0

$
141.8

$
590.3

$
341.2

Cost of sales

272.9

110.2

460.4

266.2

Gross profit

78.1

31.6

129.9

75.0

General and administrative expenses

51.7

88.3

105.2

109.4

Depreciation and amortization expense

15.5

10.4

30.9

20.9

Professional fees

3.5

1.2

9.7

2.9

Advertising and marketing expenses

2.5

0.8

22.6

2.1

Restructuring expenses (Note 4)

—

0.1

0.1

0.3

Other operating (income) expense, net (Note 3)

—

(12.4
)

—

(12.4
)
Total operating expenses

73.2

88.4

168.5

123.2

Income (loss) from operations

4.9

(56.8
)

(38.6
)

(48.2
)
Loss on extinguishment of debt (Note 10)

—

(7.1
)

(0.2
)

(7.1
)
Other income, net

—

0.2

—

0.1

Interest expense

(6.3
)

(11.7
)

(12.8
)

(25.0
)
Loss before income taxes

(1.4
)

(75.4
)

(51.6
)

(80.2
)
Income tax benefit (Note 13)

5.9

0.6

5.1

0.3

Net income (loss) (a)

4.5

(74.8
)

(46.5
)

(79.9
)
Net income (loss) attributable to noncontrolling interests (b)

1.3

(73.8
)

(16.9
)

(78.9
)
Net income (loss) attributable to Shift4 Payments, Inc. (c)

$
3.2

$
(1.0
)

$
(29.6
)

$
(1.0
)

Basic net income (loss) per share: (d)

Class A basic net income (loss) per share

$
0.06

$
(0.03
)

$
(0.56
)

$
(0.03
)
Basic weighted average common stock outstanding

46,297,553

19,002,563

44,492,680

19,002,563

Class C basic net income (loss) per share

$
0.06

$
(0.03
)

$
(0.56
)

$
(0.03
)
Basic weighted average common stock outstanding

8,151,747

20,139,163

9,075,667

20,139,163

Diluted net income (loss) per share: (d)

Class A diluted net income (loss) per share

$
0.05

$
(0.03
)

$
(0.56
)

$
(0.03
)
Diluted weighted average common stock outstanding

76,995,332

19,002,563

44,492,680

19,002,563

Class C diluted net income (loss) per share

$
0.05

$
(0.03
)

$
(0.56
)

$
(0.03
)
Diluted weighted average common stock outstanding

8,151,747

20,139,163

9,075,667

20,139,163

~~(a)~~

~~Net income (loss) is equal to comprehensive income (loss).~~

~~(b)~~

Net income (loss) attributable to noncontrolling interests is equal to comprehensive income (loss) attributable to noncontrolling interests, including the net loss for the period January 1, 2020 through June 4, 2020, the date the SEC declared effective the Company’s Registration Statement on Form S-1 filed in connection with its IPO.~~See Note 1 for more information.~~

~~(c)~~

~~Net income (loss) attributable to Shift4 Payments, Inc. is equal to comprehensive income (loss) attributable to Shift4 Payments, Inc.~~

~~(d)~~

For the three and six months ended June 30, 2020, represents basic and diluted net loss per share of Class A and Class C common stock and weighted average shares of Class A and Class C common stock outstanding for the period from June 5, 2020 through June 30, 2020, the period following the Reorganization Transactions and Shift4 Payments, Inc.'s initial public offering described in Note 1. See Note 21 for additional information on basic and diluted net income (loss) per share.

~~See accompanying notes to unaudited condensed consolidated financial statements.~~

~~Table of Contents~~

~~SHIFT4 PAYMENTS, INC.~~

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN ~~REDEEMABLE PREFERRED UNITS AND~~ STOCKHOLDERS’ ~~EQUITY/ MEMBERS’ (DEFICIT)~~

EQUITY

Class A
Common Stock

Class B
Common Stock

Class C
Common Stock

Additional

Shares

Amount

Shares

Amount

Shares

Amount

paid-in
capital

Retained
Deficit

Noncontrolling
Interests

Total
equity

Balances at December 31, 2020

39,737,950

$
—

30,625,857

$
—

10,188,852

$
—

$
738.3

$
(278.7
)

$
210.4

$
670.0

Net loss

—

—

—

—

—

—

—

(32.8
)

(18.2
)

(51.0
)
Cumulative effect of ASU 2020-06 adoption

—

—

—

—

—

—

(111.5
)

1.6

—

(109.9
)
Issuance of Class A common stock and fair value of equity-based compensation awards assumed in connection with VenueNext acquisition

325,127

—

—

—

—

—

13.5

—

12.8

26.3

Transfer from Founder of right associated with Inspiration4 seat

—

—

—

—

—

—

1.3

—

0.8

2.1

Exchange of shares held by Searchlight

2,000,000

—

(926,000
)

—

(1,074,000
)

—

6.3

—

(6.3
)

—

Equity-based compensation

—

—

—

—

—

—

14.0

—

—

14.0

Vesting of restricted stock units, net of tax withholding

46,503

—

—

—

—

—

(1.4
)

—

(1.0
)

(2.4
)
Balances at March 31, 2021

42,109,580

$
—

29,699,857

$
—

9,114,852

$
—

$
660.5

$
(309.9
)

$
198.5

$
549.1

Net income

—

—

—

—

—

—

—

3.2

1.3

4.5

Exchange of shares held by Searchlight

3,152,165

—

(1,459,453
)

—

(1,692,712
)

—

7.9

—

(7.9
)

—

Equity-based compensation

—

—

—

—

—

—

6.6

—

—

6.6

Vesting of restricted stock units, net of tax withholding

1,953,859

—

—

—

—

—

(73.7
)

—

(40.3
)

(114.0
)
Balances at June 30, 2021

47,215,604

$
—

28,240,404

$
—

7,422,140

$
—

$
601.3

$
(306.7
)

$
151.6

$
446.2


	Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional paid-in capital		Treasury Stock			Retained Deficit		Noncontrolling Interests		Total equity
	Shares	Amount		Shares	Amount		Shares	Amount				Shares	Amount
Balances at December 31, 2021	51,793,127	$	—	26,272,654	$	—	5,035,181	$	—	$	619.2	(378,475)	$	(21.1)	$	(325.3)	$	126.9	$	399.7
Net loss	—	—		—	—		—	—		—		—	—		(7.5)		(5.7)		(13.2)
Issuance of Class A common stock and fair value of equity-based compensation awards assumed in connection with The Giving Block acquisition	785,969	—		—	—		—	—		24.7		—	—		—		11.8		36.5
Repurchases of Class A common stock to treasury stock	—	—		—	—		—	—		4.5		(301,510)	(17.2)		—		(4.5)		(17.2)
Exchange of shares held by Continuing Equity Owners	732,524	—		—	—		(732,524)	—		—		—	—		—		—		—
Equity-based compensation	—	—		—	—		—	—		15.8		—	—		—		—		15.8
Vesting of restricted stock units, net of tax withholding	306,953	—		—	—		—	—		(4.6)		—	—		—		1.2		(3.4)


Balances at March 31, 2022	53,618,573	$	—	26,272,654	$	—	4,302,657	$	—	$	659.6	(679,985)	$	(38.3)	$	(332.8)	$	129.7	$	418.2


	Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional paid-in capital		Retained Deficit		Noncontrolling Interests		Total equity
	Shares	Amount		Shares	Amount		Shares	Amount
Balances at December 31, 2020	39,737,950	$	—	30,625,857	$	—	10,188,852	$	—	$	738.3	$	(278.7)	$	210.4	$	670.0
Net loss	—	—		—	—		—	—		—		(32.8)		(18.2)		(51.0)
Cumulative effect of ASU 2020-06 adoption	—	—		—	—		—	—		(111.5)		1.6		—		(109.9)
Issuance of Class A common stock and fair value of equity-based compensation awards assumed in connection with VenueNext acquisition	325,127	—		—	—		—	—		13.5		—		12.8		26.3
Transfer from Founder of right associated with Inspiration4 seat	—	—		—	—		—	—		1.3		—		0.8		2.1
Exchange of shares held by Searchlight	2,000,000	—		(926,000)	—		(1,074,000)	—		6.3		—		(6.3)		—
Equity-based compensation	—	—		—	—		—	—		14.0		—		—		14.0
Vesting of restricted stock units, net of tax withholding	46,503	—		—	—		—	—		(1.4)		—		(1.0)		(2.4)
Balances at March 31, 2021	42,109,580	$	—	29,699,857	$	—	9,114,852	$	—	$	660.5	$	(309.9)	$	198.5	$	549.1

See accompanying notes to unaudited condensed consolidated financial statements.

Redeemable
Preferred Units

Class A
Common Units

Class B
Common Units

Class A
Common Stock

Class B
Common Stock

Class C
Common Stock

Additional

Total

Units

Amount

Units

Amount

Units

Amount

Shares

Amount

Shares

Amount

Shares

Amount

paid-in
capital

Members'
Equity

Retained
Deficit

Noncontrolling
Interests

equity
(deficit)

Balances at December 31, 2019

430

$
43.0

100,000

$
—

1,010

$
0.3

—

$
—

—

$
—

—

$
—

$
—

$
149.2

$
(182.4
)
$
—

$
(32.9
)
Net loss prior to Reorganization Transactions, IPO and concurrent private placement

—

—

—

—

—

—

—

—

—

—

—

—

—

—

(5.1
)

—

(5.1
)
Capital distributions

—

—

—

—

—

—

—

—

—

—

—

—

—

(0.1
)

—

—

(0.1
)
Preferred return on redeemable preferred units

—

—

—

—

—

—

—

—

—

—

—

—

—

(1.2
)

—

—

(1.2
)
Balances at March 31, 2020

430

$
43.0

100,000

$
—

1,010

$
0.3

—

$
—

—

$
—

—

$
—

$
—

$
147.9

$
(187.5
)
$
—

$
(39.3
)
Net loss prior to Reorganization Transactions, IPO and concurrent private placement

—

—

—

—

—

—

—

—

—

—

—

—

—

—

(72.8
)

—

(72.8
)
Capital distributions

—

—

—

—

—

—

—

—

—

—

—

—

—

(0.4
)

—

—

(0.4
)
Preferred return on redeemable preferred units

—

—

—

—

—

—

—

—

—

—

—

—

—

(0.9
)

—

—

(0.9
)
Balances at June 4, 2020 prior to Reorganization Transactions, IPO and concurrent private placement

430

$
43.0

100,000

$
—

1,010

$
0.3

—

$
—

—

$
—

—

$
—

$
—

$
146.6

$
(260.3
)
$
—

$
(113.4
)
Reorganization transactions

(430
)

(43.0
)

(100,000
)

—

(1,010
)

(0.3
)

528,150

—

39,204,989

—

15,513,817

—

189.9

(146.6
)

—

—

43.0

Preferred dividends settled with LLC interests

—

—

—

—

—

—

—

—

—

—

—

—

2.3

—

—

—

2.3

Issuance of common stock in IPO and concurrent private placement

—

—

—

—

—

—

17,250,000

—

—

—

4,625,346.0

—

463.8

—

—

—

463.8

Allocation of equity to noncontrolling interests

—

—

—

—

—

—

—

—

—

—

—

—

(211.5
)

—

—

211.5

—

Issuance of common stock for change of control contingent liabilities

—

—

—

—

—

—

915,503

—

—

—

—

—

21.1

—

—

—

21.1

Issuance of restricted stock units for change of control contingent liabilities

—

—

—

—

—

—

—

—

—

—

-

—

2.1

—

—

—

2.1

Equity-based compensation

—

—

—

—

—

—

—

—

—

—

—

—

50.0

—

—

—

50.0

Net loss subsequent to Reorganization Transactions, IPO and concurrent private placement

—

—

—

—

—

—

—

—

—

—

—

—

—

—

(1.0
)

(1.0
)

(2.0
)
Balances at June 30, 2020

—

$
—

—

$
—

—

$
—

18,693,653

$
—

39,204,989

$
—

20,139,163

$
—

$
517.7

$
—

$
(261.3
)
$
210.5

$
466.9

~~See accompanying notes to unaudited condensed consolidated financial statements.~~

~~Supplemental cash flows information and noncash activities are further described in Note 22.~~

~~See accompanying notes to unaudited condensed consolidated financial statements.~~

Shift4 Payments, Inc., ~~“Shift4~~(“Shift4 Payments” ~~or “the~~) (“the Company”), was incorporated in Delaware on November 5, 2019 in order to carry on the business of Shift4 Payments, LLC and its consolidated subsidiaries.

The Company is a leading provider of integrated payment processing and technology solutions. Through the Shift4 Model, the Company offers software providers a single integration to an end-to-end payments offering, a powerful gateway and a robust suite of technology solutions (including cloud enablement, business intelligence, analytics, and mobile) to enhance the value of their software suites and simplify payment acceptance. The Company provides for its merchants a seamless customer experience at scale, rather than simply acting as one of multiple providers they rely on to operate their businesses. The Shift4 Model is built to serve a range of merchants from small-to-medium-sized businesses to large and complex enterprises across numerous verticals, including ~~lodging, leisure,~~food and beverage, hospitality, stadiums and arenas, gaming, specialty retail, non-profits and ~~food and beverage.~~eCommerce. This includes the Company’s ~~Harbortouch, Restaurant Manager, POSitouch, and Future POS brands,~~point of sale (“POS”) software offerings, as well as over ~~350~~425 additional software integrations in virtually every industry.

On June 4, 2020, the Securities and Exchange Commission (“SEC”) declared effective the Company’s Registration Statement on Form S-1 (File No. 333-238307), as amended, filed in connection with its Initial Public Offering (“IPO”) (the “Registration Statement”). The Company’s Class A common stock started trading on The New York Stock Exchange on June 5, 2020. On June 9, 2020, the Company completed its IPO of 17,250,000 shares of Class A common stock, including 2,250,000 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a price to the public of $23.00 per share. Upon completion of the IPO, the Company received net proceeds of approximately $362.6 million, after deducting underwriting discounts and commissions and offering expenses of approximately $34.2 million. Concurrently with the IPO, the Company also completed a $100.0 million private placement of 4,625,346 shares of Class C common stock to Rook Holdings Inc. (“Rook”), a corporation wholly-owned by the Company’s Founder and Chief Executive Officer. The total net proceeds from the IPO and concurrent private placement were approximately $462.6 million. Shift4 Payments, Inc. used the proceeds to purchase newly-issued limited liability company interests from Shift4 Payments, LLC (“LLC Interests”). Shift4 Payments, LLC used these amounts received from Shift4 Payments, Inc. to repay certain existing indebtedness and for general corporate purposes. See Note 10 for more information. In connection with the IPO, the Company completed certain reorganization transactions (“Reorganization Transactions”) as described in the Company’s Form 10-K for the year ended December 31, 2020 filed with the SEC on March 8, 2021 (“2020 Form 10-K”).

~~As a result of the revisions, "Retained Deficit" and "Total equity (deficit)” as of June 30, 2020 were revised from $(257.6) to $(261.3) and $470.6 to $466.9, respectively.~~

Table of ~~VenueNext’s membership interests. This acquisition enhances the Company’s presence~~Contents

SHIFT4 PAYMENTS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (in millions, except share, unit and capabilities in a number of large and growing verticals such as stadiums and arenas, while significantly expanding its total addressable market with entry into entertainment, universities, theme parks, airports, and other verticals. The purchase price included the following forms of consideration:

Cash

$
42.2

Shares of Class A common stock (a)

24.5

RSUs granted for fair value of equity-based compensation awards (b)

1.8

Total purchase consideration

68.5

Less: cash acquired

(1.6
)
Total purchase consideration, net of cash acquired

$
66.9

per unit amounts)


Cash	$	16.8
Shares of Class A common stock (a)	36.4
RSUs granted for fair value of equity-based compensation awards (b)	0.1
Contingent consideration (c)	57.8
Total purchase consideration	111.1
Less: cash acquired	(4.2)
Total purchase consideration, net of cash acquired	$	106.9

(a) Total purchase consideration includes ~~345,423~~785,969 shares of common stock. ~~As of June 30, 2021, 325,127 shares of common stock have been issued.~~

						(b)	The Company assumed all equity awards held by continuing employees. The portion of the fair value of the equity-based compensation awards associated with prior service of ~~VenueNext~~The Giving Block employees represents a component of the total consideration as presented above and was valued based on the fair value of ~~the VenueNext~~The Giving Block awards on ~~March 3, 2021,~~February 28, 2022, the acquisition date.
(c) The Company agreed to an earnout due to the former shareholders of The Giving Block in April 2023, calculated as a multiple of revenue earned by The Giving Block from March 1, 2022 to February 28, 2023, not to exceed $246.0 million. The earnout will be paid 75% in a combination of RSUs and shares of the Company’s Class A common stock and 25% in cash. The fair value of the earnout was included in the initial purchase consideration and will be revalued quarterly until the end of the earnout period as a fair value adjustment within “General and administrative expenses” in the Company’s unaudited Condensed Consolidated Statements of Operations. As of March 31, 2022, the fair value of the earnout included in the purchase consideration was $57.8 million, which is recognized in “Accrued expenses and other current liabilities” on the Company’s unaudited Condensed Consolidated Balance Sheets. In addition, a portion of the earnout due in April 2023 is considered post-acquisition compensation expense and will be accrued throughout the earnout period within “General and administrative expenses” on the Company’s unaudited Condensed Consolidated Statements of Operations. As of March 31, 2022, $1.4 million was included in “Accrued expenses and other current liabilities” on the Company’s unaudited Condensed Consolidated Balance Sheets.

The following table summarizes the fair value assigned to the assets acquired and liabilities assumed at the acquisition date. These amounts reflect various preliminary fair value estimates and assumptions, and are subject to change within the measurement period as valuations are finalized. The primary areas of preliminary purchase price allocation subject to change relate to the valuation of contingent consideration, accounts receivable, accrued expenses, other current liabilities assumed and residual goodwill.

Accounts receivable

$
0.7

Prepaid expenses and other current assets

0.2

Inventory

0.2

Other intangible assets

18.5

Goodwill (a)

48.3

Accounts payable

(0.9
)
Deferred revenue

(0.1
)
Net assets acquired

$
66.9


Accounts receivable	$	0.1
Other intangible assets	26.0
Goodwill (a)	89.3
Deferred revenue	(2.1)
Deferred tax liability	(6.4)
Net assets acquired	$	106.9
(a)	Goodwill is not deductible for tax purposes.

~~During~~

In the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, the Company incurred expenses in connection with ~~the VenueNext~~The Giving Block acquisition of ~~$0.1 million and $1.1 million, respectively.~~$2.2 million. These expenses are included in “Professional fees” in the Company's unaudited Condensed Consolidated Statements of Operations.

~~Table of Contents~~

The fair values of intangible assets were estimated using inputs classified as Level 3 under the income approach using either the relief-from-royalty method (developed technology ~~trademarks~~ and trade ~~names)~~name), the with or without method (donor relationships) or the multi-period excess earnings method (customer relationships). The contingent liability arising from the expected earnout payment included in purchase consideration was measured on the acquisition date using a Monte Carlo simulation in a risk-neutral framework, calibrated to Management's revenue forecasts. The transaction was not taxable for income tax purposes. The weighted average life of developed technology, ~~trademarks and~~the trade ~~names,~~name, donor relationships and customer relationships is 108 years, 1015 years, 5 years and 1115 years, respectively. The goodwill arising from the acquisition largely ~~consists~~consisted of revenue synergies associated with a larger total addressable market and the ability to cross-sell existing customers, new customers and technology capabilities.

The ~~VenueNext~~Giving Block acquisition did not have a material impact on the Company’s unaudited condensed consolidated financial statements. Accordingly, revenue and expenses related to the acquisition and pro forma financial information have not been presented.

~~3dcart~~

Table of Contents

SHIFT4 PAYMENTS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (in millions, except share, unit and per unit amounts)

Postec

The Company completed the acquisition of ~~Infomart2000 Corp., doing business as 3dcart,~~Postec, Inc. (“Postec”) on ~~November 5, 2020,~~September 1, 2021, by acquiring 100% of its membership interests for ~~$39.9~~$14.3 million in cash, net of cash acquired, and approximately $19.2 million in shares of the Company’s Class A common stock. The purchase was funded with cash on hand. Since the acquisition, 3dcart has been rebranded as Shift4Shop to align the eCommerce offering with Shift4’s existing ecosystem of services. The acquisition expanded the Company’s omni-channel transaction capabilities and enabled Shift4Shop merchants to augment their eCommerce platform experience with the Company’s secure integrated payments solutions. In addition, the Company’s indirect sales distribution network is able to offer Shift4Shop’s turnkey eCommerce capabilities to the Company’s new and existing POS and payments customers. The primary areas of preliminary purchase price allocation subject to change relate to the valuation of accounts receivable, accrued expenses and other current liabilities assumed and residual goodwill.

~~Hospitality Technology Vendor~~

~~The Company completed the acquisition of a Hospitality Technology Vendor on October 16, 2020, by acquiring 100% of its membership interests for $9.9 million, net of cash~~ acquired. Subsequently, the total consideration was adjusted to $9.5 million during the measurement period due to a working capital adjustment of $0.4 million, which reduced goodwill. In the three months ended June 30, 2021, the Company made a measurement period adjustment of $(0.3) million to accounts receivable with a corresponding increase to goodwill to reflect the facts and circumstances in existence as of the effective date of the acquisition. The purchase was funded with cash on hand. This acquisition enables the boarding of the vendor’s customers on the Company’s end-to-end acquiring solution and empowers the Company’s distribution partners to sign the vendor’s customer accounts and leverage the combined expertise to handle all aspects of installation, service, and ~~support.The primary areas~~support, similar to the hospitality technology vendor acquired in October 2020.

Pending Finaro Acquisition

On March 1, 2022, the Company entered into a definitive agreement to acquire Credorax, Inc. d/b/a Finaro (“Finaro”) for approximately $200.0 million in cash on hand, $325.0 million in shares of ~~preliminary purchase price allocation~~the Company’s Class A common stock and a performance-based earnout of up to $50.0 million in the Company’s Class A common stock. Consummation of the merger is subject to ~~change relate~~regulatory approvals, which the Company expects to receive in the ~~valuation~~fourth quarter of ~~accounts receivable, accrued~~2022. Finaro is a cross-border eCommerce platform and bank specializing in solving complex payment problems for multi-national merchants that the Company believes will accelerate its growth in international markets. In the three months ended March 31, 2022, the Company incurred expenses ~~and other current liabilities assumed and residual goodwill.~~

in connection with the Finaro acquisition of $3.6 million. These expenses are included in “Professional fees” in the Company's unaudited Condensed Consolidated Statements of Operations.

3.	~~Revenue~~

3.Revenue

ASC 606: Revenue from Contracts with Customers

Under ASC 606, the Company has 3three separate performance obligations under its recurring software as a service agreements (“SaaS”) arrangements for point-of-sale systems provided to merchants: (1) point-of-sale software, (2) lease of hardware and (3) other support services. For the period January 1, 2019 through June 29, 2020, the hardware provided under the Company’s SaaS agreements was accounted for as a sales-type lease. Effective June 30, 2020, the Company modified the terms and conditions of its SaaS arrangements and updated its operational procedures. As a result, beginning June 30, 2020, hardware provided under the Company’s SaaS agreements is accounted for as an operating lease.~~See Note 8 for more information on equipment for lease.~~

Disaggregated Revenue

Based on similar operational characteristics, the Company’s revenue from contracts with customers is disaggregated as follows:


	Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
	2021		2020		2021		2020			2022		2021
Payments-based revenue	$	324.8	$	121.2	$	540.7	$	297.6	Payments-based revenue	$	371.5	$	215.9
Subscription and other revenues		26.2		20.6		49.6		43.6	Subscription and other revenues	30.4		23.4
Total	$	351.0	$	141.8	$	590.3	$	341.2	Total	$	401.9	$	239.3

Based on similar economic characteristics, the Company’s revenue from contracts with customers is disaggregated as follows:


	Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
	2021		2020		2021		2020			2022		2021
Over-time revenue	$	341.1	$	134.7	$	571.3	$	323.5	Over-time revenue	$	392.0	$	230.2
Point-in-time revenue		9.9		7.1		19.0		17.7	Point-in-time revenue	9.9		9.1
Total	$	351.0	$	141.8	$	590.3	$	341.2	Total	$	401.9	$	239.3

~~(a) Represents deal bonuses paid to merchants to obtain processing contracts.~~

~~(b) Includes prepayments related to information technology, rent, tradeshows~~

Fair value adjustments are recorded within “General and administrative expenses” ~~within~~in the Company's unaudited Condensed Consolidated Statements of Operations. There were 0no transfers into or out of Level 3 during the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~

The Company has operating leases ~~under noncancellable agreements which expire~~primarily for office space and equipment. The following amounts were recorded on ~~various dates through November 30, 2030.~~

the Company's unaudited Condensed Consolidated Balance Sheets relating to leases:

The Company has a service agreement with Jared Isaacman, the ~~Founder, including~~Company’s Chief Executive Officer and founder (“Founder”), including access to aircrafts and a property. Total expense for this service, which is included in “General and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations, was ~~$0.3 million and $0.5 million for the three and six months ended June 30, 2021, respectively, and $0.1 million and~~ $0.2 million for both the three ~~and six~~ months ended ~~June 30, 2020, respectively.~~March 31, 2022 and 2021. There were 0no amounts outstanding at ~~June 30, 2021~~March 31, 2022 or December 31, ~~2020. On May 31, 2020,~~2021.

~~The redeemable preferred units earned a preferred dividend, which could be paid in cash or preferred units at a rate of 10.50% per annum, compounded quarterly.~~

During the three and six months ended June 30, 2020, $0.9 million and $2.1 million, respectively, of preferred dividends were accrued and recognized as a reduction of “Members’ Deficit.” In connection with the Reorganization Transactions, the redeemable preferred units were converted into LLC Interests.

Shift4 Payments, Inc. is the sole managing member of Shift4 Payments, LLC, and consolidates the financial results of Shift4 Payments, LLC. The noncontrolling interests balance represents the economic interest in Shift4 Payments, LLC held by the Continuing Equity Owners. The following table summarizes the ownership of LLC Interests in Shift4 Payments, LLC:

The Continuing Equity Owners have the right to require the Company to redeem their LLC Interests for, at the option of the Company, determined solely by the Company’s independent directors, newly-issued shares of Class A common stock on a one-for-one basis or a cash payment equal to a volume weighted average market price of one share of Class A common stock for each LLC Interest redeemed. In connection with the exercise of the redemption or exchange of LLC Interests (1) the Continuing Equity Owners will be required to surrender a number of shares of Class B common stock registered in the name of such redeeming or exchanging Continuing Equity Owner (or its applicable affiliate), which the Company will cancel for no consideration on a one-for-one basis with the number of LLC Interests so redeemed or exchanged and (2) all redeeming members will surrender LLC Interests to Shift4 Payments, LLC for cancellation.

The grant date fair value of RSUs and PRSUs subject to continued service or those that vest immediately was determined based on the price of the Company’s Class A common stock on the grant date (or, in the case of the RSUs granted in connection with the IPO, the IPO price of $23.00 per share). The grant date fair value of the RSUs issued in connection with the IPO, that are not subject to continued service, was determined using the Finnerty discount for lack of marketability pricing model, taking into account the vesting provisions on the shares prior to June 2021.

On July 26, 2021, the Company issued an aggregate $632.5 million of convertible senior notes due 2027 (“2027 Convertible Notes”) to qualified institutional buyers in an offering exempt from registration under the Securities Act. The Company received net proceeds, after deducting initial purchasers’ discounts and estimated offering expenses, of approximately $617.6 million from the 2027 Convertible Notes offering. The net proceeds of the 2027 Notes Offering, together with cash on hand, will be used for general corporate purposes.

As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to:

•

“we,” “us,” “our,” the “Company,” “Shift4” and similar references refer: (1) following the consummation of the Reorganization Transactions, to Shift4 Payments, Inc., and, unless otherwise stated, all of its subsidiaries, including Shift4 Payments, LLC and, unless otherwise stated, all of its subsidiaries, and (2) prior to the completion of the Reorganization Transactions, to Shift4 Payments, LLC and, unless otherwise stated, all of its subsidiaries.

•“we,” “us,” “our,” the “Company,” “Shift4” and similar references refer to Shift4 Payments, Inc. and, unless otherwise stated, all of its subsidiaries.•

“Continuing Equity Owners” refers collectively to Searchlight, our Founder and their respective permitted transferees that own LLC Interests after the Reorganization Transactions and who may redeem at each of their options, in whole or in part from time to time, their LLC Interests for, at our election, cash or newly-issued shares of Shift4 Payments, Inc.’s Class A common stock.

•“Continuing Equity Owners” refers collectively to Searchlight, our Founder and their respective permitted transferees who may redeem at each of their options, in whole or in part from time to time, their LLC Interests for, at our election, cash or newly-issued shares of Shift4 Payments, Inc.’s Class A common stock.•

“LLC Interests” refers to the common units of Shift4 Payments, LLC, including those that we purchased directly from Shift4 Payments, LLC with the proceeds from our initial public offering (“IPO”) and the concurrent private placement and the common units of Shift4 Payments, LLC that we acquired from the Former Equity Owners in connection with the consummation of the Reorganization Transactions. See the section entitled “Initial public offering and concurrent private placement” below.

•“LLC Interests” refers to the common units of Shift4 Payments, LLC.•

~~“Founder” refers to Jared Isaacman, our Chief Executive Officer and the sole stockholder of Rook Holdings Inc. Our Founder is a Continuing Equity Owner and an owner of Class C common stock.~~

•“Founder” refers to Jared Isaacman, our Chief Executive Officer and the sole stockholder of Rook Holdings Inc. Our Founder is a Continuing Equity Owner and an owner of Class C common stock.•

“Former Equity Owner” refers to FPOS Holding Co., Inc. who exchanged its LLC Interests for shares of our Class A common stock in connection with the consummation of the Reorganization Transactions.

•“Rook” refers to Rook Holdings Inc., a Delaware corporation wholly-owned by our Founder and for which our Founder is the sole stockholder.•

“Reorganization Transactions” refer to certain organizational transactions that we effected in connection with our IPO in June 2020. See the section entitled “Reorganization Transactions” below.

•“Searchlight” refers to Searchlight Capital Partners, L.P., a Delaware limited partnership, and certain funds affiliated with Searchlight. Searchlight is a Continuing Equity Owner and an owner of Class C common stock.•

~~“Rook” refers to Rook Holdings Inc., a Delaware corporation wholly-owned by our Founder and for which our Founder is the sole stockholder.~~

•

“Searchlight” refers to Searchlight Capital Partners, L.P., a Delaware limited partnership, and certain funds affiliated with Searchlight. Searchlight is a Continuing Equity Owner and an owner of Class C common stock.

Overview

We are a leading independent provider of payment acceptance and payment processing and technology solutions in the United States based on total volume of payments processed. We have achieved our leadership position through decades of solving business and operational challenges facing our ~~customers.~~customers overall commerce needs. We distribute our services through our network of software partners (“ISVs”) and value-added resellers (“VARs”). For our software partners, we offer a single integration to an end-to-end payments offering, a proprietary gateway and a robust suite of technology solutions to enhance the value of their software and simplify payment acceptance. For our merchants, we provide a seamless, unified consumer experience as an alternative to relying on multiple providers to accept card-based payments, ~~and utilize technology in~~while providing the digital tools necessary to provide their ~~businesses.~~

end-customers a seamless commerce experience.

At the heart of our business is our payments ~~platform.~~platform. Our payments platform is a full suite of integrated payment products and services that can be used across multiple channels (in-store, online, mobile and ~~tablet- based)~~tablet-based) and industry verticals, including:

•

~~end-to-end payment processing for a broad range of payment types;~~

•end-to-end payment processing for a broad range of payment types;•

~~merchant acquiring;~~

•merchant acquiring;•

~~proprietary omni-channel gateway capable of multiple methods of mobile, contactless and QR code-based payments;~~

•proprietary omni-channel gateway capable of multiple methods of mobile, contactless and QR code-based payments;•

~~complementary software integrations;~~

•complementary software integrations;•

~~full eCommerce capabilities, including web-store design, hosting, shopping cart management and fulfillment integrations;~~

•full eCommerce capabilities, including web-store design, hosting, shopping cart management and fulfillment integrations;•

~~integrated and mobile POS solutions;~~

•integrated and mobile POS solutions;

•security and risk management solutions; and

•reporting and analytical tools.

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•

~~security and risk management solutions; and~~

•

~~reporting and analytical tools.~~

In addition, we offer innovative technology solutions that go beyond payment processing. Some of our solutions are developed in-house, such as business intelligence and POS software, while others are powered by our network of complementary third-party applications. Our focus on innovation combined with our product-driven culture enables us to create scalable technology solutions that benefit from an extensive library of intellectual property.

We have a partner-centric distribution approach. We market and sell our solutions through a diversified network of over 7,000 software partners, which consists of ISVs and VARs. ISVs are technology providers that develop commerce-enabling software suites with which they can bundle our payments platform. VARs are organizations that provide distribution support for ISVs and act as trusted and localized service providers to merchants by providing them with software and services. Together, our ISVs and VARs provide us immense distribution scale and provide our merchants with front-line service and support.

Our end-to-end payments offering combines our payments platform, including our proprietary gateway and breadth of software integrations, and our suite of technology solutions to create a compelling value proposition for our merchants. Our ~~end-to end~~end-to-end payment volume was ~~$11.8~~$13.4 billion and ~~$4.2~~$8.0 billion for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $19.8 billion and $10.4 billion for the six months ended June 30, 2021 and 2020,~~ respectively. This end-to-end payment volume contributed approximately ~~68%~~69% and ~~57%~~61% of gross revenue less network fees for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and 65% and 57% of gross revenue less network fees for the six months ended June 30, 2021 and 2020,~~ respectively.

Our merchants range from small to medium sized businesses (“SMBs”) to large ~~and complex~~ enterprises across numerous verticals including ~~lodging, leisure,~~food and beverage, hospitality, stadiums and arenas, gaming, specialty retail, non-profits and ~~food~~eCommerce.

Recent developments

Caring with Crypto

In March 2022, we announced the launch of the “Caring with Crypto” campaign to raise over $20.0 million for nonprofit organizations on The Giving Block, Inc.’s (“The Giving Block”) cryptocurrency (“crypto”) fundraising platform. Our Founder will personally match up to $10.0 million in crypto donations by existing and ~~beverage.~~

~~Revision~~new non-profit customers of ~~Previously Issued Financial Statements~~

The ~~accompanying Management’s Discussion and Analysis of Financial Condition and Results of Operations gives effect to the revision of our previously reported consolidated financial statements for~~Giving Block.

Stock Repurchases

In the three ~~and six~~ months ended ~~June 30, 2020.~~March 31, 2022, we repurchased 301,510 shares of Common stock for $17.2 million, including commissions paid, at an average price paid of $56.78 per share, which is recorded as “Treasury stock” in the accompanying unaudited Condensed Consolidated Balance Sheets. As of March 31, 2022, approximately $61.8 million remained available for future purchases under the program. In April 2022, we repurchased 1,126,277 shares of Common stock for $61.3 million, including commissions paid, at an average price paid of $54.39 per share. See Note ~~1 in the notes~~17 to the accompanying unaudited condensed consolidated financial statements for more ~~information.~~

~~Recent acquisition~~

~~VenueNext~~

information and Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds.”

Acquisition

The Giving Block

On ~~March 3, 2021,~~February 28, 2022, we acquired ~~VenueNext Inc. (“VenueNext”),~~The Giving Block for $106.9 million of total purchase consideration, net of cash acquired. The Giving Block is a ~~leader~~cryptocurrency donation marketplace that the Company expects to accelerate its growth in integrated payments solutions in sporting arenas and event complexes, for $68.5 million in aggregate purchase consideration. We believe this acquisition enhances our presence and capabilities in a number of large and growing verticals such as stadiums and arenas, while significantly expanding our total addressable marketthe non-profit sector with ~~entry into entertainment, universities, theme parks, airports, and other verticals.~~significant cross-sell potential. See Note 2 ~~in the notes~~ to the accompanying unaudited condensed consolidated financial statements for more information.

~~Recent developments~~

~~Investments~~

Pending Acquisition

Finaro

On March 1, 2022, we entered into a definitive agreement to acquire Credorax, Inc. d/b/a Finaro (“Finaro”) for approximately $200.0 million in ~~securities~~

~~As of June 30, 2021, we invested $27.5~~cash on hand, $325.0 million in shares of ~~Space Exploration Technologies Corp.(“SpaceX”), which designs, manufactures,~~our Class A common stock and ~~launches advanced rockets, spacecraft and satellites and $2.0~~a performance-based earnout of up to $50.0 million in Sightline Payments, Inc. (“Sightline Payments”), a financial technology company that provides cashless, mobile, and omni-channel commerce solutions for the gaming, lottery, sports betting and other industries.

~~Convertible Notes Offering – 2027 Notes~~

~~On July 26, 2021, we issued an aggregate $632.5 million~~shares of convertible senior notes due 2027 (“2027 Convertible Notes”) to qualified institutional buyers in an offering exempt from registration under the Securities Act. We received net proceeds, after deducting initial purchasers’ discounts and estimated offering expenses, of approximately $617.6 million from the 2027 Convertible Notes offering. The net proceedsour Class A common stock. Consummation of the ~~2027 Notes Offering, together with cash on hand, will be used for general corporate purposes.~~

~~Reorganization Transactions~~

The historical results of operations discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are those of (1) Shift4 Payments, LLC and its consolidated subsidiaries for periods prior to the Reorganization Transactions on June 4, 2020 and (2) Shift4 Payments, Inc. and its consolidated subsidiaries for periods beginning on or following the Reorganization Transactions on June 4, 2020. The historical results of operations of Shift4 Payments, LLC prior to the completion of the Reorganization Transactions, including the IPO and concurrent private placement, do not reflect certain items that we expect will affect our results of operations and financial condition after giving effect to the Reorganization Transactions and the use of proceeds from the IPO and concurrent private placement.

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The Reorganization Transactions resulted in Shift4 Payments, Inc. becoming the sole managing member of Shift4 Payments, LLC. As the sole managing member of Shift4 Payments, LLC, we operate and control all of the business and affairs of Shift4 Payments, LLC. Accordingly, we consolidate the financial results of Shift4 Payments, LLC, and report a noncontrolling interest related to the interests in Shift4 Payments, LLC held by the Continuing Equity Owners on our consolidated financial statements.

~~After consummation of the IPO, Shift4 Payments, Inc. became~~merger is subject to U.S. federal, state and local income taxes with respect to our allocable share of any taxable income of Shift4 Payments, LLC and is taxed at the prevailing corporate tax rates. In addition to tax expenses, we also have and will continue to incur public company expenses related to our operations, plus payment obligations under the TRA, regulatory approvals, which we expect to ~~be significant. We intend~~receive in the fourth quarter of 2022. Finaro is a cross-border eCommerce platform and bank specializing in solving complex payment problems for ~~Shift4 Payments, LLC to make to make distributions to us~~multi-national merchants that we believe will accelerate our growth in ~~an amount sufficient to allow us to pay our tax obligations and operating expenses, including distributions to fund any payments due under~~international markets.

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COVID-19 Pandemic Update

While great progress has been made in the ~~TRA.~~

~~Initial public offering and concurrent private placement~~

In June 2020, we completed our IPO of 17,250,000 shares of Class A common stock, including 2,250,000 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a price to the public of $23.00 per share. Upon completion of the IPO, we received net proceeds of approximately $362.6 million, after deducting underwriting discounts and commissions and offering expenses of approximately $34.2 million. Concurrently with the IPO, we also completed a $100.0 million private placement of 4,625,346 shares of Class C common stock to Rook. The total net proceeds from the IPO and concurrent private placement were approximately $462.6 million. Shift4 Payments, Inc. used the total proceeds to purchase newly-issued LLC Interests, from Shift4 Payments, LLC. Shift4 Payments, LLC used these amounts received from Shift4 Payments, Inc. to repay certain existing indebtedness and for general corporate purposes.

~~Impact of the COVID-19 Pandemic~~

The unprecedented and rapid spread of COVID-19 as well as the shelter-in-place orders, promotion of social distancing measures, restrictions to businesses deemed non-essential, and travel restrictions implemented throughout the United States have significantly impacted the restaurant and hospitality industries – verticals in which we have predominantly focused on over the last decade.

In response to these developments, in 2020 we implemented measures to focus on the safety of our employees, including implementing remote working capabilities, and to support our merchants as they shifted to take-out and delivery operations, while at the same time seeking to mitigate the impact on our financial position and operations.

~~Our business was not significantly impacted by~~fight against the COVID-19 pandemic, ~~until~~ the ~~latter part~~pandemic remains a global challenge and continues to impact international travel and corporate travel patterns, both of ~~March 2020, at~~ which ~~time~~remain below pre-pandemic levels. The Omicron variant began to adversely impact our end-to-end payment volumes declined 70%. Since late March 2020 when shelter-in-place, social distancing, the closing of non-essential businesses and other restrictive measures were first put in place across the United States, we have seen a significant recovery in our end-to-end payment volumes despiteprocessing volumes in ~~certain merchant categories associated with international travel, corporate travel~~December 2021, but by full-month March 2022, end-to-end volumes had recovered and ~~stadium occupancy running lower than pre COVID-19 pandemic levels. End-to-end payment volumes for the second quarter of 2021 were approximately 180% higher than end-to-end payment~~exceeded volumes in the ~~second quarter of 2020~~prior year period. However, our financial performance could be adversely impacted by any local or government-imposed pandemic restrictions, although we are currently unable to predict the extent to which the COVID-19 pandemic may adversely impact our future business operations, financial performance and approximately 48% higher than the first quarter of 2021 as a result of merchants reopening their operations, new merchant onboarding and a growing number of gateway merchants converting to our end-to-end solution in 2021. While gross revenue and end-to-end payment volumes for the three and six months ended June 30, 2021 have exceeded those for the three and six months ended June 30, 2020, we will continue to evaluate the nature and extent of potential COVID-19-related impacts to our business, consolidated results of ~~operations,~~operations. For a further discussion of the risks, uncertainties and ~~liquidity. See~~ “~~Risk~~actions taken in response to COVID-19, see the sections entitled “Risk Factors” in Part I, Item ~~1A of~~1A. and “Human Capital” in Part I, Item 1. in our ~~2020~~2021 Form 10-K.

We believe we have sufficient liquidity to satisfy our cash needs for at least the next twelve months, however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during these uncertain times.

Factors impacting our business and results of operations

In general, our results of operations are impacted by factors such as adoption of software solutions that are integrated with our payment solutions, continued investment in our core capabilities, on-going pursuit of strategic acquisitions, and macro-level economic trends.

Increased adoption of software-integrated payments. We primarily generate revenue through fees assessed on end-to-end payment volume initiated through our integrated software partners. These fees include volume-based payments, ~~and~~ transaction fees and subscription fees for software and technology solutions. We expect to grow this volume by attracting new integrated software partners through our market-leading and innovative solutions. These integrated software partners have proven to be an effective and efficient way of acquiring new merchants and servicing these relationships.

Continued focus on ~~the sale of~~converting our gateway-only customers to our end-to-end payments ~~offering and resulting revenue mix shift.~~offering. ~~Our customers utilize our comprehensive solutions to solve a variety of business challenges.~~ Currently, a large percentage of our merchant base ~~uses~~relies only on our proprietary ~~gateway. As~~gateway technology solution to process card-based payments. However, as more of these gateway-only merchants choose to also adopt our end-to-end payment solutions, our revenue per merchant and merchant retention are expected to ~~increase.~~increase given the fees we generate on end-to-end payment processing services are significantly higher than the per transaction fees we earn on gateway-only services.

Mix of our merchant base. We continue to experience a shift to higher average revenue and higher average volume per merchant. The revenue and volume contribution of each merchant within our ~~merchant~~ portfolio is affected by several factors, including the amount of payment volume processed per merchant, the industry vertical in which the merchant operates, and the number of solutions implemented by the merchant. ~~As the~~The size and sophistication of our ~~merchants change,~~average merchant continues to increase and we may experience shifts in the average revenue per merchant and the weighted average pricing of the portfolio.

Ability to attract and retain software partners. A key pillar of our Shift4 Model is our partner-centric distribution approach. We work with our software partners who ~~are~~rely on our suite of payment-related technology solutions to simplify the commerce needs of their end clients. Our ability to attract and retain our software partners is essential for our future growth and our ability to ~~helping us grow and serve~~service our ~~merchant base. Maintaining~~existing base of merchants. To this end, it is critical we maintain our product leadership ~~and~~through continued investment in innovative technology solutions ~~is critical~~as a means to ensure we retain our current software partners while attracting ~~and retaining~~new software partners.

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Investment in product, distribution and operations. We make significant investments in both new product development and existing product ~~enhancement,~~enhancements, such as mobile point-of-sale, ~~and~~ cloud enablement for our software partners’ existing ~~systems.~~systems, and contactless payments, including QR code based mobile payment technologies. New product features and functionality are brought to market through varied distribution and promotional activities including collaborative efforts with industry leading software providers, trade shows, and customer conferences. Further, we will continue to invest in operational support in order to maintain service levels expected by our merchant customers. We believe these investments in product development and software integrations will lead to long-term growth and profitability.

For example, numerous new products and enhancements that we introduced continue to allow our merchants the ability to enhance the customer experience in a more dynamic commerce environment through contactless payment methods and QR code based mobile payment technologies.

Pursuit of strategic ~~acquisitions~~acquisitions.. From time to time, we may pursue acquisitions as part of our ongoing growth ~~strategy.~~strategy that includes adding complementary technology capabilities to service our base of customer and adding critical sales and support capabilities within a specific industry vertical or geography. While these acquisitions are intended to add long-term value, in the short term they may add redundant operating expenses or additional carrying costs until the underlying value is unlocked.

Economic conditions and resulting consumer spending trends. Changes in macro-level consumer spending trends, including as a result of the COVID-19 pandemic, could affect the amount of volumes processed on our platform, thus resulting in fluctuations toin our quarterly reported revenue. Our quarterly revenue ~~streams. Further,~~is also impacted by seasonal, consumer spending ~~habits are subject to seasonal fluctuations that could cause varied~~habit patterns, which historically have resulted in higher volumes and revenue ~~results across the~~being reported in our second and third fiscal quarters.

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Key financial definitions

The following briefly describes the components of revenue and expenses as presented in the accompanying unaudited ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~operations.~~

Operations.

Gross revenue consists primarily of payments-based revenue and subscription and other revenues:

Payments-based revenue includes fees for payment processing services and gateway services. Payment processing fees are primarily driven as a percentage of end-to-end payment volume. They may also have a fixed fee, a minimum monthly usage fee and a fee based on transactions. Gateway services, data encryption and tokenization fees are primarily driven by per transaction fees as well as monthly usage fees.

Subscription and other revenues include software as a service (“SaaS”) fees for point-of-sale systems and terminals provided to merchants and our Shift4Shop eCommerce platform. Point-of-sale and terminal SaaS fees are assessed based on the type and quantity of equipment deployed to the merchant. Shift4Shop SaaS fees are based on the eCommerce platform chosen by the merchant. SaaS fees also include statement fees, fees for our proprietary business intelligence software, annual fees, regulatory compliance fees and other miscellaneous services such as help desk support and warranties on equipment. Subscription and other revenues also includes revenue derived from software license sales, hardware sales, third party residuals and fees charged for technology support.

Cost of sales consists of interchange and processing fees, residual commissions, equipment and other costs of sales:

Interchange and processing fees represent payments to card issuing banks and assessments paid to card associations based on transaction processing volume. These also include fees incurred by third-parties for data transmission and settlement of funds, such as processors and sponsor banks.

Residual commissions represent monthly payments to ~~software partners.~~third-party resellers, including ISVs. These costs are typically based on a percentage of payment-based revenue.

Equipment represents our costs of devices that are purchased by the merchant.

Other costs of sales includes amortization of capitalized software development costs, capitalized software, acquired technology and capitalized customer acquisition costs. It also includes incentives and shipping and handling costs related to the delivery of devices, and through June 30, 2020, contains other contract fulfillment costs as well as equipment provided under our warranty program that is included with the monthly SaaS fee. Subsequent to June 30, 2020, other contract fulfilment costs and equipment under our warranty program included with the monthly SaaS fee are capitalized as equipment for lease.devices. Capitalized software development costs are amortized using the straight-line method on a product-by-product basis over the estimated useful life of the software. Capitalized software, acquired technology and capitalized acquisition costs are amortized on a straight-line basis in accordance with our accounting policies.

General and administrative expenses consist primarily of compensation, benefits and other expenses associated with corporate management, finance, human resources, shared services, information technology and other activities.

Depreciation and amortization expense consists of depreciation and amortization expenses related to merchant relationships, trademarks and trade names, residual commission buyouts, equipment, leasehold improvements, and other intangible assets and property, plant and equipment. We depreciate and amortize our assets on a straight-line basis in accordance with our accounting policies. Leasehold improvements are depreciated over the lesser of the estimated life of the leasehold improvement or the remaining lease term. Maintenance and repairs, which do not extend the useful life of the respective assets, are charged to expense as incurred. Intangible assets are amortized on a straight-line basis over their estimated useful lives which range from two years to twenty years.

Professional fees consists of costs incurred for accounting, tax, legal, and consulting services.

Advertising and marketing expenses relate to costs incurred to participate in industry tradeshows and dealer conferences, advertising initiatives to build brand awareness, and expenses to fulfill loyalty program rewards earned by software partners.

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Restructuring expenses relate to strategic initiatives we have taken that include, but are not limited to, severance or separation costs and other exit and disposal costs. These expenses are typically not reflective of our ongoing operations.

~~Other operating (income) expense, net~~

~~consists~~Transaction-related expenses relate to debt issuance or modification costs that are not capitalizable. These expenses are typically not reflective of ~~other operating items.~~our ongoing operations.

Loss on extinguishment of debt represents losses recorded for unamortized capitalized financing costs associated with debt prepayments.

Other income, net primarily consists of other non-operating items.

Interest expense consists of interest costs incurred on our borrowings and amortization of capitalized financing costs.

Income tax benefit (provision) represents federal, state and local taxes based on income in multiple domestic jurisdictions.

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Net ~~income (loss)~~loss attributable to noncontrolling interests arises from net ~~income (loss)~~loss from the non-owned portion of businesses where we have a controlling interest but less than 100% ownership. This represents the noncontrolling interests in Shift4 Payments, LLC and its consolidated subsidiaries, which is comprised of the ~~income (loss)~~loss allocated to Continuing Equity Owners as a result of their proportional ownership of LLC Interests.

Comparison of results for the three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~

The following table sets forth the consolidated statements of operations for the periods presented.

Three Months Ended June 30,

(in millions)

2021

2020

$ change

% change

Payments-based revenue

$
324.8

$
121.2

$
203.6

168.0
%
Subscription and other revenues

26.2

20.6

5.6

27.2
%
Total gross revenue

351.0

141.8

209.2

147.5
%
Less: network fees

214.7

74.4

140.3

188.6
%
Less: Other costs of sales

58.2

35.8

22.4

62.6
%
Gross profit

78.1

31.6

46.5

147.2
%
General and administrative expenses

51.7

88.3

(36.6
)

(41.4
%)
Depreciation and amortization expense

15.5

10.4

5.1

49.0
%
Professional fees

3.5

1.2

2.3

191.7
%
Advertising and marketing expenses

2.5

0.8

1.7

212.5
%
Restructuring expenses

—

0.1

(0.1
)

NM

Other operating (income) expense, net

—

(12.4
)

12.4

NM

Total operating expenses

73.2

88.4

(15.2
)

(17.2
%)
Income (loss) from operations

4.9

(56.8
)

61.7

(108.6
%)
Loss on extinguishment of debt

—

(7.1
)

7.1

NM

Other income, net

—

0.2

(0.2
)

NM

Interest expense

(6.3
)

(11.7
)

5.4

(46.2
%)
Loss before income taxes

(1.4
)

(75.4
)

74.0

(98.1
%)
Income tax benefit

5.9

0.6

5.3

NM

Net income (loss)

4.5

(74.8
)

$
79.3

(106.0
%)
Net income (loss) attributable to noncontrolling interests (a)

1.3

(73.8
)

75.1

(101.8
%)
Net income (loss) attributable to Shift4 Payments, Inc.

$
3.2

$
(1.0
)

$
4.2

NM

~~(a)~~

~~For the three months ended June 30, 2020, includes the period April 1, 2020 through~~ ~~June 4, 2020, the date the SEC declared effective our Registration Statement on Form S-1 filed in connection with our IPO.~~


	Three Months Ended March 31,
(in millions)	2022		2021	$ change			% change
Payments-based revenue	$	371.5			$	215.9		$	155.6	72.1	%
Subscription and other revenues	30.4				23.4			7.0		29.9	%
Total gross revenue	401.9				239.3			162.6		67.9	%
Less: network fees	253.1				141.8			111.3		78.5	%
Less: Other costs of sales	64.2				45.7			18.5		40.5	%
Gross profit	84.6				51.8			32.8		63.3	%
General and administrative expenses	66.2				53.5			12.7		23.7	%
Depreciation and amortization expense	17.3				15.4			1.9		12.3	%
Professional fees	8.7				6.2			2.5		40.3	%
Advertising and marketing expenses	2.7				20.1			(17.4)		(86.6)	%
Restructuring expenses	—				0.1			(0.1)		NM
Transaction-related expenses	1.4				—			1.4		NM
Total operating expenses	96.3				95.3			1.0		1.0	%
Loss from operations	(11.7)				(43.5)			31.8		(73.1)	%
Loss on extinguishment of debt	—				(0.2)			0.2		NM
Other income, net	0.2				—			0.2		NM
Interest expense	(7.9)				(6.5)			(1.4)		21.5	%
Loss before income taxes	(19.4)				(50.2)			30.8		(61.4)	%
Income tax benefit (provision)	6.2				(0.8)			7.0		NM
Net loss	(13.2)				(51.0)			37.8		(74.1)	%
Net loss attributable to noncontrolling interests	(5.7)				(18.2)			12.5		(68.7)	%
Net loss attributable to Shift4 Payments, Inc.	$	(7.5)			$	(32.8)		$	25.3	(77.1)	%

Gross ~~Revenue~~

revenue

Gross revenue was ~~$351.0~~$401.9 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$141.8~~$239.3 million for the three months ended ~~June 30, 2020,~~March 31, 2021, an increase of ~~$209.2~~$162.6 million or ~~147.5%~~67.9%. Gross revenue is comprised of payments-based revenue and subscription and other revenues.

Payments-based revenue was ~~$324.8~~$371.5 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$121.2~~$215.9 million for the three months ended ~~June 30, 2020,~~March 31, 2021, an increase of ~~$203.6~~$155.6 million or ~~168.0%~~72.1%. The increase in payments-based revenue iswas primarily driven by anthe increase in end-to-end payment volume of ~~$7.6~~$5.4 billion, or ~~approximately 180%~~68%, for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to the three months ended June 30, 2020. The COVID-19 pandemic impacted our end-to-end payment volumes beginning mid-March 2020 when shelter-in-place, social distancing, the closing of non-essential businesses and other restrictive measures were first put in place across the United States.

March 31, 2021.

Subscription and other revenues were ~~$26.2~~$30.4 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$20.6~~$23.4 million for the three months ended ~~June 30, 2020,~~March 31, 2021, an increase of ~~$5.6~~$7.0 million or ~~27.2%~~29.9%. The increase in subscription and other revenues is driven primarily by the ~~3dcart,~~ VenueNext, Postec and ~~hospitality technology vendor~~The Giving Block acquisitions, which collectively contributed ~~$5.9~~$6.0 million more to subscription and other revenues in the three months ended ~~June 30, 2021,~~March 31, 2022, compared to the three months ended ~~June 30, 2020.~~March 31, 2021. In addition, ~~we granted temporary fee waivers on certain products from~~

~~Table of Contents~~

March 2020 through June 2020 in an aggregate amount of $1.9 million as a result of the COVID-19 pandemic. This was offset by a decrease in hardware revenue of $1.2 million primarily due to hardware provided under our SaaS arrangements being accounted for as operating leases in the second quarter of 2021, whereby revenue is recognized monthly, compared to the second quarter of 2020, when it was recognized at the time of shipment.

~~Network Fees~~

~~Network fees were $214.7~~software license sales increased $0.7 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$74.4~~the three months ended March 31, 2021.

Table of Contents

Network fees

Network fees were $253.1 million for the three months ended ~~June 30, 2020,~~March 31, 2022, compared to $141.8 million for the three months ended March 31, 2021, an increase of ~~$140.3~~$111.3 million or ~~188.6%~~78.5%. This increase is correlated with the increase in end-to-end payment volume as described above.

Gross revenue less network fees was ~~$136.3~~$148.8 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$67.4~~$97.5 million for the three months ended ~~June 30, 2020,~~March 31, 2021, an increase of ~~$68.9~~$51.3 million or ~~102.2%~~52.6%. The increase in gross revenue less network fees iswas largely correlated with the increase in end-to-end payment volume. See “—Key performance indicators and non-GAAP measures” for a reconciliation of gross profit to gross revenue less network fees.

Other costs of sales

Other costs of sales was ~~$58.2~~$64.2 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$35.8~~$45.7 million for the three months ended ~~June 30, 2020,~~March 31, 2021, an increase of ~~$22.4~~$18.5 million, or ~~62.6%~~40.5%. This increase was primarily a result of:

•

~~higher residual commissions of $20.1 million driven by the growth in gross revenue less network fees;~~

•higher residual commissions, which increased other costs of sales $16.2 million, were driven by the growth in gross revenue less network fees;•

~~the 3dcart, VenueNext and hospitality technology vendor acquisitions which collectively contributed $4.6 million to other costs of sales in the three months ended June 30, 2021;~~

•higher variable costs associated with processing fees of $2.3 million;•

~~higher capitalized acquisition cost amortization of $1.6 million related to deal bonuses paid to VARs to obtain processing contracts; and,~~

•the VenueNext, Postec and The Giving Block acquisitions which collectively increased other cost of sales $1.8 million in the three months ended March 31, 2022;•

~~higher capitalized software development amortization of $0.6 million; partially offset by,~~

•higher capitalized acquisition cost amortization, which increased other costs of sales $1.2 million, related to deal bonuses paid to VARs to obtain processing contracts;•

the impact of modifying the terms and conditions of our SaaS arrangements and updating our operational procedures to account for our hardware as operating leases, which resulted in a decline of $6.5 million in costs of sales. Effective June 30, 2020, equipment leased to merchants is capitalized as a fixed asset, whereas, prior to June 30, 2020, these arrangements were accounted for as sales-type leases and expensed when deployed.

•higher equipment sales, which increased other costs of sales $0.6 million; and

•higher capitalized software development amortization, which increased other costs of sales $0.6 million; partially offset by

•higher than normal chargeback losses during the three months ended March 31, 2021 driven by the business failure of one merchant causing $5.2 million in estimated unrecoverable chargeback transactions.

Operating expenses

General and administrative expenses. General and administrative expenses were ~~$51.7~~$66.2 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$88.3~~$53.5 million for the three months ended ~~June 30, 2020,~~March 31, 2021, an increase of $12.7 million or 23.7%. The increase was primarily due to higher employee-related expenses of $6.4 million in the three months ended March 31, 2022, compared to the three months ended March 31, 2021, as a result of our continued growth and expansion, as well as higher equity-based compensation expense of $2.2 million in the three months ended March 31, 2022. In addition, the acquisitions of VenueNext, Postec and The Giving Block collectively increased general and administrative expenses $3.3 million in the three months ended March 31, 2022.

Depreciation and amortization expense. Depreciation and amortization expense was $17.3 million for the three months ended March 31, 2022, compared to $15.4 million for the three months ended March 31, 2021, an increase of $1.9 million or 12.3%. The increase was primarily due to higher deprecation for equipment under lease of $2.5 million in the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Professional fees. Professional fees were $8.7 million for the three months ended March 31, 2022, compared to $6.2 million for the three months ended March 31, 2021, an increase of $2.5 million or 40.3%. The increase was due to higher acquisition-related costs.

Advertising and marketing expenses. Advertising and marketing expenses were $2.7 million for the three months ended March 31, 2022, compared to $20.1 million for the three months ended March 31, 2021, a decrease of ~~$36.6~~$17.4 million or ~~41.4%~~86.6%. The decrease was primarily due to ~~lower equity-based compensation expense~~expenses in the three months ended March 31, 2021 related to the integration of ~~$49.9~~3dcart and its rebranding as Shift4Shop that were nonrecurring in nature. This was partially offset by the VenueNext, Postec and The Giving Block acquisitions, which collectively increased advertising and marketing expenses $0.5 million in the three months ended ~~June 30, 2021, compared to~~March 31, 2022.

Transaction-related expenses. Transaction-related expenses were $1.4 million for the three months ended ~~June 30, 2020, as~~March 31, 2022. These expenses are associated with a ~~result of compensation expense recognized~~consent solicitation for the 2026 Senior Notes in ~~the three months ended June 30, 2020 related to contractual change of control bonuses in connection with the IPO.~~March 2022. See Note 2010 in the notes to the accompanying unaudited condensed consolidated financial statements for more information on equity-based compensation and Note 12 in the notes to the accompanying unaudited condensed consolidated financial statements for more information on contingent liabilities. This was offset by higher employee-related expensesinformation.

Table of $10.0 million in the three months ended June 30, 2021, compared to the three months ended June 30, 2020, as a result of our continued growth and expansion. In addition, the recent acquisitions of VenueNext, 3dcart and a hospitality technology vendor collectively contributed $3.5 million in general and administrative expenses in the three months ended June 30, 2021.Contents

~~Depreciation and amortization expense.~~ ~~Depreciation and amortization~~

Interest expense

Interest expense was ~~$15.5~~$7.9 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$10.4~~$6.5 million for the three months ended ~~June 30, 2020,~~March 31, 2021, an increase of ~~$5.1~~$1.4 million or ~~49.0%~~21.5%. The increase was primarily due to hardware provided under our SaaS arrangements being accounted for as operating leases, effective June 30, 2020, while previously they were accounted for as sales-type leases. See Note 3 in the notes to the accompanying unaudited condensed consolidated financial statements for more information on the change to the terms and conditions of our SaaS arrangements.

~~Professional fees.~~ Professional fees were $3.5 million for the three months ended June 30, 2021, compared to $1.2 million for the three months ended June 30, 2020, an increase of $2.3 million or 191.7%. The increase was due to acquisition-related costs and increased fees related to requirements of operating as a public company.

~~Advertising and marketing.~~ Advertising and marketing expenses were $2.5 million for the three months ended June 30, 2021, compared to $0.8 million for the three months ended June 30, 2020, an increase of $1.7 million or 212.5%. The increase was partially due to expenses related to the integration of 3dcart and its rebranding as Shift4Shop. These expenses are anticipated to be nonrecurring in nature. In addition, the VenueNext, 3dcart and hospitality technology vendor acquisitions collectively contributed $0.7 million in advertising and marketing expenses in the three months ended June 30, 2021, as compared to the three months ended June 30, 2020.

~~Other operating (income) expense, net~~

Other operating (income) expense, net includes the impact of modifying the terms and conditions of our SaaS arrangements and updating our operational procedures. As a result, beginning June 30, 2020, hardware provided under our SaaS agreements is accounted for as an operating lease, whereas prior to June 30, 2020, these arrangements were accounted for as sales-type leases. An adjustment of $12.4 million was recorded in the three months ended June 30, 2020 to reflect the impact of the lease modifications.

~~Table of Contents~~

~~Loss on extinguishment of debt~~

In connection with the pre-payment of $59.8 million on the First Lien Term Loan Facility and the full repayment of $130.0 million on the Second Lien Term Loan Facility, we incurred a non-cash loss on extinguishment of debt of $7.1 million in the three months ended June 30, 2020 representing the unamortized capitalized financing costs associated with the debt prepayment. See Note 10 to the accompanying unaudited condensed consolidated financial statements for more information.

~~Interest expense~~

~~Interest expense was $6.3 million for the three months ended June 30, 2021, compared to $11.7 million for the three months ended June 30, 2020, a decrease of $5.4 million or 46.2%. This decrease~~ in interest expense was primarily due to the ~~pre-payments for the First Lien and Second Lien Term Loan Facilities and the repayment~~issuance of the Revolving Credit Facility, all of which were completed in June 2020, which impacted interest expense by approximately $4.2 million. In addition, the debt refinancing in October 2020 reduced the interest rate on our First Lien Term Loan Facility from 5.50% to 4.625% on the 2026Convertible Senior Notes ~~which reduced interest expense by $1.2 million for the three months ended June 30,~~due 2027 (“2027 Convertible Notes”) in July 2021.

Income tax benefit

(provision)

The effective tax rate for the three months ended ~~June 30, 2021~~March 31, 2022 was ~~(421.4)~~(32.0)%, compared to the effective tax rate for the three months ended ~~June 30, 2020~~March 31, 2021 of ~~(0.8)%~~1.6%.

The ~~2021 income~~effective tax ~~benefit~~rate for the three months ended March 31, 2022 was different than the U.S. federal statutory income tax rate of 21% primarily due to the loss allocated to the noncontrolling interest, ~~changes in~~ the full valuation ~~allowances~~allowance on Shift4 Payments, Inc. and VenueNext, Inc. in the United States, ~~the~~and a $6.4 million income tax ~~windfall~~benefit related to ~~vested equity-based compensation awards, and~~ the ~~near break-even loss before income taxes~~valuation allowance release due to acquired deferred tax liabilities from The Giving Block. The effective tax rate for the three months ended ~~June 30, 2021. The income tax benefit for the three months ended June 30, 2020~~March 31, 2021 was different than the U.S. federal statutory income tax rate of 21% primarily due to the loss allocated to the noncontrolling interest ~~changes in~~and the full valuation ~~allowances~~allowance on Shift4 Payments, Inc. and VenueNext, Inc. in the United ~~States and recording a tax benefit of $0.6 million for a net operating loss carryback at Shift4 Corporation which was allowed due to the CARES Act.~~

~~Net income (loss) attributable to noncontrolling interests~~

Net income (loss) attributable to noncontrolling interests of Shift4 Payments, LLC was $1.3 million for the three months ended June 30, 2021, compared to $(73.8) million for the three months ended June 30, 2020. The net loss incurred for the three months ended June 30, 2020 includes the net loss incurred prior to the Reorganization and prior to June 4, 2020, the date the SEC declared effective our Registration Statement on Form S-1 filed in connection with our IPO.

~~Table of Contents~~

~~Comparison of results for the six months ended June 30, 2021 and 2020~~

~~The following table sets forth the consolidated statements of operations for the periods presented.~~

Six Months Ended June 30,

(in millions)
2021

2020

$ change

% change

Payments-based revenue
$
540.7

$
297.6

$
243.1

81.7
%
Subscription and other revenues

49.6

43.6

6.0

13.8
%
Total gross revenue

590.3

341.2

249.1

73.0
%
Less: network fees

356.5

194.7

161.8

83.1
%
Less: Other costs of sales

103.9

71.5

32.4

45.3
%
Gross profit

129.9

75.0

54.9

73.2
%
General and administrative expenses

105.2

109.4

(4.2
)

(3.8
%)
Depreciation and amortization expense

30.9

20.9

10.0

47.8
%
Professional fees

9.7

2.9

6.8

234.5
%
Advertising and marketing expenses

22.6

2.1

20.5

NM

Restructuring expenses

0.1

0.3

(0.2
)

(66.7
%)
Other operating (income) expense, net

—

(12.4
)

12.4

NM

Total operating expenses

168.5

123.2

45.3

36.8
%
Loss from operations

(38.6
)

(48.2
)

9.6

(19.9
%)
Loss on extinguishment of debt

(0.2
)

(7.1
)

6.9

(97.2
%)
Other income, net

—

0.1

(0.1
)

NM

Interest expense

(12.8
)

(25.0
)

12.2

(48.8
%)
Loss before income taxes

(51.6
)

(80.2
)

28.6

(35.7
%)
Income tax benefit

5.1

0.3

4.8

NM

Net loss

(46.5
)

(79.9
)

$
33.4

(41.8
%)
Net loss attributable to noncontrolling interests (a)

(16.9
)

(78.9
)

62.0

(78.6
%)
Net loss attributable to Shift4 Payments, Inc.
$
(29.6
)

$
(1.0
)

$
(28.6
)

NM

States.

~~(a)~~

~~For the six months ended June 30, 2020, includes the net loss incurred prior to the Reorganization Transactions and prior to~~ ~~June 4, 2020, the date the SEC declared effective our Registration Statement on Form S-1 filed in connection with our IPO.~~

~~Gross Revenue~~

Gross revenue was $590.3 million for the six months ended June 30, 2021, compared to $341.2 million for the six months ended June 30, 2020, an increase of $249.1 million or 73.0%. Gross revenue is comprised of payments-based revenue and subscription and other revenues.

Payments-based revenue was $540.7 million for the six months ended June 30, 2021, compared to $297.6 million for the six months ended June 30, 2020, an increase of $243.1 million or 81.7%. The increase in payments-based revenue is primarily driven by an increase in end-to-end payment volume of $9.4 billion, or approximately 91%, for the six months ended June 30, 2021, compared to the six months ended June 30, 2020. The COVID-19 pandemic impacted our end-to-end payment volumes beginning mid-March 2020 when shelter-in-place, social distancing, the closing of non-essential businesses and other restrictive measures were first put in place across the United States.

Subscription and other revenues were $49.6 million for the six months ended June 30, 2021, compared to $43.6 million for the six months ended June 30, 2020, an increase of $6.0 million or 13.8%. The increase is driven by the 3dcart, VenueNext and hospitality technology vendor acquisitions which collectively contributed $10.7 million more to subscription and other revenues in the six months ended June 30, 2021 compared to the six months ended June 30, 2020. This was offset by a decrease in hardware revenue of $2.8 million primarily due to hardware provided under our SaaS arrangements being accounted for as operating leases in the six months ended June 30, 2021, whereby revenue is recognized monthly, as compared to the six months ended June 30, 2020, when it was recognized at the time of shipment. In addition, software license revenue declined $0.7 million from the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.

~~Network Fees~~

Network fees were $356.5 million for the six months ended June 30, 2021, compared to $194.7 million for the six months ended June 30, 2020, an increase of $161.8 million or 83.1%. This increase is correlated with the increase in end-to-end payment volume as described above.

Gross revenue less network fees was $233.8 million for the six months ended June 30, 2021, compared to $146.5 million for the six months ended June 30, 2020, an increase of $87.3 million or 59.6%. The increase in gross revenue less network fees is largely correlated with the increase in end-to-end payment volume. See “—Key performance indicators and non-GAAP measures” for a reconciliation of gross profit to gross revenue less network fees.

~~Table of Contents~~

~~Other costs of sales~~

Other costs of sales was $103.9 million for the six months ended June 30, 2021, compared to $71.5 million for the six months ended June 30, 2020, an increase of $32.4 million, or 45.3%. This increase was primarily a result of:

•

~~higher residual commissions of $26.7 million driven by the growth in gross revenue less network fees;~~

•

higher than normal chargeback losses during the six months ended June 30, 2021 compared to the six months ended June 30, 2020 driven by the business failure of one merchant causing $5.5 million in estimated unrecoverable chargeback transactions in 2021;

•

~~the 3dcart, VenueNext and hospitality technology vendor acquisitions which collectively contributed $6.2 million to other costs of sales in the three months ended June 30, 2021;~~

•

~~higher capitalized software development amortization of $1.2 million; and,~~

•

~~higher capitalized acquisition cost amortization of $3.2 million related to deal bonuses paid to VARs to obtain processing contracts; partially offset by,~~

•

the impact of modifying the terms and conditions of our SaaS arrangements and updating our operational procedures to account for our hardware as operating leases, which resulted in a decline of $12.6 million in costs of sales. Effective June 30, 2020, equipment leased to merchants is capitalized as a fixed asset, whereas, prior to June 30, 2020, these arrangements were accounted for as sales-type leases and expensed when deployed.

~~Operating expenses~~

~~General and administrative expenses.~~ General and administrative expenses were $105.2 million for the six months ended June 30, 2021, compared to $109.4 million for the six months ended June 30, 2020, a decrease of $4.2 million or 3.8%. The decrease was due to lower equity-based compensation expense of $27.5 million in the six months ended June 30, 2021, compared to the six months ended June 30, 2020, as a result of compensation expense recognized in the six months ended June 30, 2020 related to contractual change of control bonuses in connection with the IPO. See Note 20 in the notes to the accompanying unaudited condensed consolidated financial statements for more information on equity-based compensation and Note 12 in the notes to the accompanying unaudited condensed consolidated financial statements for more information on contingent liabilities. This was offset by higher employee-related expenses of $12.2 million in the six months ended June 30, 2021, compared to the six months ended June 30, 2020, as a result of our continued growth and expansion. In addition, the recent acquisitions of VenueNext, 3dcart and a hospitality technology vendor collectively contributed $11.3 million in general and administrative expenses in the six months ended June 30, 2021.

~~Depreciation and amortization expense.~~ Depreciation and amortization expense was $30.9 million for the six months ended June 30, 2021, compared to $20.9 million for the six months ended June 30, 2020, an increase of $10.0 million or 47.8%. The increase was primarily due to hardware provided under our SaaS arrangements being accounted for as operating leases, effective June 30, 2020, while previously they were accounted for as sales-type leases. Depreciation expense incurred for the six months ended June 30, 2021 related to these operating leases was $9.6 million. See Note 3 in the notes to the accompanying unaudited condensed consolidated financial statements for more information on the change to the terms and conditions of our SaaS arrangements.

~~Professional fees.~~ Professional fees were $9.7 million for the six months ended June 30, 2021, compared to $2.9 million for the six months ended June 30, 2020, an increase of $6.8 million or 234.5%. The increase was due to acquisition-related costs and increased fees related to requirements of operating as a public company.

~~Advertising and marketing.~~ Advertising and marketing expenses were $22.6 million for the six months ended June 30, 2021, compared to $2.1 million for the six months ended June 30, 2020, an increase of $20.5 million. The increase was primarily due to expenses related to the integration of 3dcart and its rebranding as Shift4Shop. These expenses are anticipated to be nonrecurring in nature.

~~Other operating (income) expense, net~~

Other operating (income) expense, net includes the impact of modifying the terms and conditions of our SaaS arrangements and updating our operational procedures. As a result, beginning June 30, 2020, hardware provided under our SaaS agreements is accounted for as an operating lease, whereas prior to June 30, 2020, these arrangements were accounted for as sales-type leases. An adjustment of $12.4 million was recorded in the six months ended June 30, 2020 to reflect the impact of the lease modifications.

~~Loss on extinguishment of debt~~

A loss on extinguishment of debt, representing unamortized capitalized financing costs, of $0.2 million was incurred with the refinancing of the Revolving Credit Facility during the six months ended June 30, 2021. In connection with the pre-payment of $59.8 million on the First Lien Term Loan Facility and the full repayment of $130.0 million on the Second Lien Term Loan Facility, we incurred a non-cash loss on extinguishment of debt of $7.1 million during the six months ended June 30, 2020 representing the unamortized capitalized financing costs associated with the debt prepayment. See Note 10 to the accompanying unaudited condensed consolidated financial statements for more information.

~~Table of Contents~~

~~Interest expense~~

Interest expense was $12.8 million for the six months ended June 30, 2021, compared to $25.0 million for the six months ended June 30, 2020, a decrease of $12.2 million or 48.8%. This decrease in interest expense was primarily due to the pre-payments for the First Lien and Second Lien Term Loan Facilities and the repayment of the Revolving Credit Facility, all of which were completed in June 2020, which impacted interest expense by approximately $9.2 million. In addition, the debt refinancing in October 2020 reduced the interest rate on our First Lien Term Loan Facility from 5.50% to 4.625% on the 2026 Senior Notes, which reduced interest expense by $3.2 million.

~~Income tax benefit~~

~~The effective tax rate for the six months ended June 30, 2021 was (9.9)%, compared to the effective tax rate for the six months ended June 30, 2020 of (0.4)%.~~

The 2021 income tax benefit was different than the U.S. federal statutory income tax rate of 21% primarily due to the loss allocated to the noncontrolling interest, changes in the valuation allowances in the United States, and the tax windfall related to vested equity-based compensation awards. The income tax benefit for the six months ended June 30, 2020 was different than the U.S. federal statutory income tax rate of 21% primarily due to the loss allocated to the noncontrolling interest, changes in the valuation allowances in the United States and recording a tax benefit of $0.6 million for a net operating loss carryback at Shift4 Corporation which was allowed due to the CARES Act.

Net loss attributable to noncontrolling interests

Net loss attributable to noncontrolling interests of Shift4 Payments, LLC was ~~$(16.9)~~a loss of $5.7 million for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022, compared to ~~$(78.9)~~a loss of $18.2 million for the ~~six~~three months ended June 30, 2020. The net loss incurred for the six months ended June 30, 2020 includes the net loss incurred prior to the Reorganization and prior to June 4, 2020, the date the SEC declared effective our Registration Statement on Form S-1 filed in connection with our IPO.

March 31, 2021.

Key performance indicators and non-GAAP measures

The following table sets forth our key performance indicators and non-GAAP measures for the periods presented.


	Three Months Ended June 30,					Six Months Ended June 30,						Three Months Ended March 31,
(in millions)	2021		2020			2021		2020			(in millions)	2022		2021
End-to-end payment volume	$	11,833.9	$	4,240.0		$	19,820.7	$	10,386.1		End-to-end payment volume	$	13,420.9	$	7,986.8
Gross revenue less network fees		136.3		67.4			233.8		146.5		Gross revenue less network fees	148.8		97.5
EBITDA		30.6		(45.8	)		12.2		(19.7	)	EBITDA	17.6		(18.4)
Adjusted EBITDA		45.2		14.8			67.4		32.3		Adjusted EBITDA	44.3		22.2

End-to-end payment volume

End-to-end payment volume is defined as the total dollar amount of card payments that we authorize and settle on behalf of our ~~merchants.~~merchants plus total cryptocurrency amounts transacted, translated at the spot price to U.S. dollars. This volume does not include volume processed through our gateway-only merchants.

Gross revenue less network fees, EBITDA and Adjusted EBITDA

We use supplemental measures of our performance which are derived from our consolidated financial information but which are not presented in our consolidated financial statements prepared in accordance with GAAP. These non-GAAP financial measures include: gross revenue less network fees, which includes interchange and assessment fees; earnings before interest expense, income taxes, depreciation, and amortization (“EBITDA”); and Adjusted EBITDA. Gross revenue less network fees represents a key performance metric that management uses to measure changes in the mix and value derived from our customer base as we continue to execute our strategy to expand our reach to serve larger, complex merchants. Adjusted EBITDA is the primary financial performance measure used by management to evaluate its business and monitor results of operations. Adjusted EBITDA represents EBITDA further adjusted for certain non-cash and other nonrecurring items that management believes are not indicative of ongoing operations. These adjustments include acquisition, restructuring and integration costs, equity-based compensation expense and other nonrecurring items.

The financial impact of certain elements of these activities is often large relative to the Company's overall financial performance and can adversely affect the comparability of our operating results and investors' ability to analyze the business from period to period.

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We use non-GAAP financial measures to supplement financial information presented on a GAAP basis. We believe that excluding certain items from our GAAP results allows management to better understand our consolidated financial performance from period to period and better project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, we believe these non-GAAP financial measures provide our stakeholders with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period to period comparisons. There are limitations to the use of the non-GAAP financial measures presented in this ~~report.~~Quarterly Report on Form 10-Q. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

The non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for net income (loss) prepared in accordance with GAAP, and should be read only in conjunction with financial information presented on a GAAP

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basis. Reconciliations of gross revenue less network fees, EBITDA and Adjusted EBITDA to its most directly comparable GAAP financial measure are presented below. We encourage you to review the reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items.

Reconciliations of gross revenue less network fees, EBITDA and Adjusted EBITDA

The tables below provide reconciliations of gross profit to gross revenue less network fees and net ~~income (loss)~~loss on a consolidated basis for the periods presented to EBITDA and Adjusted EBITDA.

Gross revenue less network fees:


	Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
(in millions)	2021		2020		2021		2020		(in millions)	2022		2021
Gross profit	$	78.1	$	31.6	$	129.9	$	75.0	Gross profit	$	84.6	$	51.8
Add back: Other costs of sales		58.2	35.8			103.9	71.5		Add back: Other costs of sales	64.2		45.7
Gross revenue less network fees	$	136.3	$	67.4	$	233.8	$	146.5	Gross revenue less network fees	$	148.8	$	97.5

EBITDA and Adjusted EBITDA:

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

2021

2020

2021

2020

Net income (loss)

$
4.5

$
(74.8
)

$
(46.5
)

$
(79.9
)
Interest expense

6.3

11.7

12.8

25.0

Income tax benefit

(5.9
)

(0.6
)

(5.1
)

(0.3
)
Depreciation and amortization expense

25.7

17.9

51.0

35.5

EBITDA

30.6

(45.8
)

12.2

(19.7
)
Acquisition, restructuring and integration costs (a)

3.2

12.9

29.0

3.1

Equity-based compensation (b)

11.3

50.0

25.4

50.0

Impact of lease modifications (c)

—

(12.4
)

—

(12.4
)
Other nonrecurring items (d)

0.1

10.1

0.8

11.3

Adjusted EBITDA

$
45.2

$
14.8

$
67.4

$
32.3

~~(a)~~

For the three months ended June 30, 2021, consists primarily of $1.4 million of acquisition-related costs and $1.3 million of expenses related to the integration of 3dcart and its rebranding as Shift4Shop. For the three months ended June 30, 2020, consists primarily of change of control liabilities as a result of the IPO of $11.0 million and fair value adjustments to contingent liabilities of $1.5 million. For the six months ended June 30, 2021, consists primarily of expenses related to the integration of 3dcart and its rebranding as Shift4Shop of $20.4 million, $2.1 million of expense for the Inspiration4 seat and acquisition-related costs incurred of $4.3 million. For the six months ended June 30, 2020, consists primarily of change of control liabilities as a result of the IPO of $11.0 million offset by fair value adjustments to contingent liabilities of $(7.0) million and deferred compensation arrangements of $(2.1) million. See Note 12 in the notes to the accompanying unaudited condensed consolidated financial statements for more information on the contingent liability adjustments.

~~(b)~~

Represents equity-based compensation expense for RSUs, including employer taxes for vested RSUs. See Note 20 in the notes to the accompanying unaudited condensed consolidated financial statements for more information on equity-based compensation.


	Three Months Ended March 31,
(in millions)	2022		2021
Net loss	$	(13.2)	$	(51.0)
Interest expense	7.9		6.5
Income tax (benefit) provision	(6.2)		0.8
Depreciation and amortization expense	29.1		25.3
EBITDA	17.6		(18.4)
Acquisition, restructuring and integration costs (a)	7.8		25.8
Equity-based compensation (b)	17.1		14.1
Other nonrecurring items (c)	1.8		0.7
Adjusted EBITDA	$	44.3	$	22.2

(a) For the three months ended March 31, 2022, primarily consisted of $6.3 million of acquisition-related costs and $1.4 million of transaction-related expenses associated with a consent solicitation for the 2026 Senior Notes in March 2022. For the three months ended March 31, 2021, consists primarily of expenses related to the integration of 3dcart and its rebranding as Shift4Shop of $19.0 million, $2.1 million of expense for the Inspiration4 seat and the acquisition of VenueNext of $1.0 million.
(b) Represents equity-based compensation expense for RSUs, including employer taxes for vested RSUs. See Note 19 in the notes to the accompanying unaudited condensed consolidated financial statements for more information on equity-based compensation.
(c) For the three months ended March 31, 2022, consists primarily of $1.2 million of costs associated with an internal processing system disruption that required technical remediation and $0.4 million of costs associated with an early retirement initiative completed in the first quarter of 2022.

~~(c)~~

Effective June 30, 2020, we modified the terms and conditions of our SaaS arrangements and updated our operational procedures. As a result, beginning June 30, 2020, hardware provided under our SaaS agreements is accounted for as an operating lease, whereas prior to June 30, 2020, these arrangements were accounted for as sales-type leases. This adjustment represents the one-time cumulative impact of modifying the contracts effective June 30, 2020. Prior to amending the terms, the sales-type lease accounting treatment impacted EBITDA and adjusted EBITDA negatively by $4.0 million and $8.6 million for the three and six months ended June 30, 2020, respectively.

~~(d)~~

For the three and six months ended June 30, 2020, primarily consists of a $7.1 million loss on extinguishment of debt associated with the debt pre-payments and $1.6 million for temporary fee waivers granted on certain products from March 2020 through June 2020 as a result of the COVID-19 pandemic. See Note 10 in the notes to the accompanying unaudited condensed consolidated financial statements for more information on the loss on extinguishment of debt. For the three and six months ended June 30, 2020 includes $0.3 million and $0.8 million, respectively, of fees to the Continuing Equity Owners for consulting and managing services through the date of the IPO. These fees are not required to be paid subsequent to the IPO. See Note 15 to the accompanying unaudited condensed consolidated financial statements for more information about these related party transactions.

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Liquidity and capital resources

Overview

We have historically sourced our liquidity requirements primarily with cash flow from operations and, when needed, with borrowings under our Credit ~~Facilities.~~Facilities or equity transactions. The principal uses for liquidity have been debt service, capital expenditures (including research and development) and funds required to finance acquisitions. Given the impact the COVID-19 pandemic has had on the restaurant and hospitality industries, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure we can continue to ~~successfully~~ operate ~~until~~during these ~~industries fully recover.~~

uncertain times.

We do not intend to pay cash dividends on our Class A common stock in the foreseeable future. Shift4 Payments, Inc. is a holding company that does not conduct any business operations of its own. As a result, Shift4 Payments, Inc.’s ability to pay cash dividends on its common stock, if any, is dependent upon cash dividends and distributions and other transfers from Shift4 Payments, LLC. The amounts available to Shift4 Payments, Inc. to pay cash dividends are subject to the covenants and distribution restrictions in its subsidiaries’ agreements governing

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its indebtedness, including covenants in such agreements providing that the payments of dividends or other distributions are subject to annual limitations based on our market capitalization.

The following table sets forth summary cash flow information for the periods presented.

Six Months Ended June 30,

(in millions)

2021

2020

Net cash provided by operating activities

$
5.0

$
6.7

Net cash used in investing activities

(115.5
)

(16.7
)

Net cash (used in) provided by financing activities

(117.6
)

250.3

Change in cash and cash equivalents

$
(228.1
)

$
240.3


	Three Months Ended March 31,
(in millions)	2022		2021
Net cash provided by (used in) operating activities	$	37.1	$	(1.7)
Net cash used in investing activities	(43.9)		(77.5)
Net cash used in financing activities	(35.7)		(3.7)
Total	$	(42.5)	$	(82.9)

Operating activities

Net cash provided by (used in) operating activities consists of net loss adjusted for certain non-cash items and changes in other assets and liabilities.

For the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, net cash provided by operating activities of ~~$5.0~~$37.1 million was primarily a result of:

•net loss of $13.2 million, which is adjusted for non-cash expenses, including depreciation and amortization of $29.1 million, equity-based compensation of $16.9 million, deferred income taxes of $(6.3) million and provision for bad debts of $3.0 million; plus,

•changes in operating assets and liabilities of $5.4 million, which includes $4.8 million of additional funds deposited in our sponsor bank merchant settlement account to facilitate gross card transaction deposits for those customers we bill on a monthly, versus a daily basis.

For the three months ended March 31, 2021, net cash used in operating activities of $1.7 million was primarily a result of:

•net loss of $51.0 million, adjusted for non-cash expenses, including depreciation and amortization of $25.3 million, equity-based compensation of $14.0 million, provision for bad debts of $6.7 million and amortization of capitalized financing cost of $1.2 million; plus,

•changes in operating assets and liabilities of $1.5 million, which is primarily a result ~~of:~~

of $8.8 million of funds deposited in our sponsor bank merchant settlement account to facilitate gross card transaction deposits for those customers we bill on a monthly, versus a daily basis, partially offset by higher deferred revenue of $6.6 million primarily due to the timing of annual compliance fees billed to our merchants.•

net loss of $46.5 million adjusted for non-cash expenses, including depreciation and amortization of $51.0 million, equity-based compensation of $20.6 million, provision for bad debts of $8.1 million and amortization of capitalized financing costs of $2.4 million; plus,

•

changes in operating assets and liabilities of $(29.3) million, which is primarily a result of $24.1 million of additional funds deposited in our sponsor bank merchant settlement account to facilitate gross card transaction deposits for those customers we bill on a monthly, versus a daily basis.

~~For the six months ended June 30, 2020, cash provided by operating activities~~

Net cash used in investing activities was ~~$115.5~~$43.9 million for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$98.8~~$33.6 million compared to net cash used in investing activities of ~~$16.7~~$77.5 million for the ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021. This increase iswas primarily the result of:

•

~~the acquisition of VenueNext in March 2021 for $68.5 million in aggregate purchase consideration, including $40.6 million in cash, net of cash acquired of $1.6 million,~~

•the acquisition of The Giving Block in March 2022 for $106.9 million in aggregate purchase consideration, including $12.6 million in cash, net of cash acquired of $4.2 million;•

~~the investment in SpaceX of $27.5 million,~~

•higher capitalized software development costs of $4.4 million;•

~~$18.9~~ ~~million in purchases for equipment to be leased; and,~~

•higher residual commission buyouts of $3.8 million; partially offset by•

~~the investment in Sightline Payments of $2.0 million.~~

•the acquisition of VenueNext in March 2021 for $68.5 million in aggregate purchase consideration, including $40.6 million in cash, net of cash acquired of $1.6 million; and

•the investment in SpaceX of $16.0 million in the three months ended March 31, 2021.

Financing activities

Net cash used in financing activities was ~~$117.6~~$35.7 million for the ~~six~~three months ended ~~June 30, 2021, a decrease~~March 31, 2022, an increase of ~~$367.9~~$32.0 million, compared to net cash ~~provided by~~used in financing activities of ~~$250.3~~$3.7 million for the ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021. This ~~decrease~~increase was primarily the result of:

•

the IPO and concurrent private placement net proceeds of approximately $465.7 million after deducting underwriting discounts, commissions and offering costs paid in the six months ended June 30, 2020; and,

•payments for the repurchase of common stock of $18.7 million during the three months ended March 31, 2022;•

~~$116.3 million in employee taxes paid on vested RSUs during the six months ended June 30, 2021; partially offset by,~~

•

~~the partial repayment of the First Lien Term Loan Facility and full repayment of our Second Lien Term Loan Facility in the six months ended June 30, 2020, totaling $189.8 million.~~

~~Table~~•higher employee taxes paid on vested RSUs of ~~Contents~~$9.8 million during the three months ended March 31, 2022 compared to three months ended March 31, 2021; and

•payments associated with solicitation for the 2026 Senior Notes in March 2022 of $4.5 million.

Convertible Notes, Senior Notes and Credit Facilities

As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we had ~~$1,140.0~~$1,772.5 million total principal amount of debt outstanding, including $690.0 million of 2025 Convertible Notes, $632.5 million of 2027 Convertible Notes and $450.0 million of 2026 Senior ~~Notes and $690.0 million of 2025 Convertible Notes.~~

~~Senior Notes Offering – 2026 Notes~~

In October 2020, Shift4 Payments, LLC and Shift4 Payments Finance Sub, Inc. issued an aggregate principal amount of $450.0 million 4.625% Senior Notes due 2026 (“2026 Senior Notes”) in an offering to qualified institutional buyers exempt from registration under the Securities Act. We received net proceeds, after deducting initial purchasers’ discounts and estimated offering expenses, of approximately $442.8 million from the offering of the 2026 Senior Notes. The net proceeds of the 2026 Senior Notes offering, together with cash on hand, were used to repay all indebtedness outstanding under the First Lien Term Loan Facility. The 2026 Senior Notes will mature on November 1, 2026, and accrue interest at a rate of 4.625% per year. Interest on the 2026 Senior Notes is payable semi-annually in arrears on each May 1 and November 1, commencing on May 1, 2021.

~~Convertible Notes Offering – 2025 Notes~~

In December 2020, Shift4 Payments, Inc. issued an aggregate principal amount of $690.0 million of convertible senior notes due 2025 (“2025 Convertible Notes”) (and together with the 2026 Senior Notes, “the Notes”) in an offering to qualified institutional buyers exempt from registration under the Securities Act. We received net proceeds, after deducting initial purchasers’ discounts and estimated offering expenses, of approximately $673.6 million from the 2025 Convertible Notes Offering. The net proceeds of the 2025 Convertible Notes Offering, together with cash on hand, will be used for general corporate purposes. The 2025 Convertible Notes do not bear regular interest and will mature on December 15, 2025 unless earlier repurchased, redeemed or converted. The Company will settle conversions by paying in cash up to the principal amount of Notes with any excess to be paid or delivered, as the case may be, in cash or shares of Class A common stock or a combination of both at its election, based on the conversion rate. The conversion rate for the 2025 Convertible Notes will initially be 12.4262 shares of Class A common stock per $1,000 principal amount of 2025 Convertible Notes (equivalent to an initial conversion price of approximately $80.48 per share of Class A common stock), subject to adjustment upon the occurrence of specified events. None of the specified events for the conversion of the 2025 Convertible Notes occurred as of June 30, 2021. See Note 10 to the accompanying unaudited condensed consolidated financial statements for more ~~information.~~

~~Revolving Credit Facility~~

~~In October 2020,~~information about our debt.

On March 17, 2022, we announced the ~~Company fully repaid~~expiration of our Consent Solicitation Statement (the “Consent Solicitation Statement”), dated as of March 11, 2022, to amend the $650.0 million of aggregate principal amount of secured term loans comprised of first lien term loans of $520.0 million due November 30, 2024 (“First Lien Term Loan Facility”), using the proceeds fromindenture related to the 2026 Senior Notes. ~~The credit agreement~~In connection with the results of the Consent Solicitation Statement, we received the requisite consents to amend the indenture governing the ~~First Lien Term Loan Facility (“First Lien Credit Agreement”) included~~2026 Senior Notes and entered into a ~~revolving credit facility that had a borrowing capacity~~supplemental indenture to allow for the repurchase of ~~$90.0 million (“Revolving Credit Facility”), which previously matured on November 30, 2022.~~

~~Amended and Restated~~ capital stock as part of the Market Capitalization exception under the original indenture.

Revolving Credit Facility

On January 29, 2021, Shift4 Payments, LLC amended and restated its First Lien Credit Agreement and increased the borrowing capacity under the Revolving Credit Facility to $100.0 million. The Revolving Credit Facility matures on January 29, 2026 or, if greater than $150.0 million aggregate principal amount of Shift4 Payments, LLC’s 2025 Convertible Notes remains outstanding on September 15, 2025, on that date. The Revolving Credit Facility requires periodic interest payments until maturity.

Loans incurred under the Revolving Credit Facility bear interest at our option at either the LIBO rate plus a margin ranging from 3.00% to 3.50% per year or the alternate base rate (the highest of the Federal Funds rate plus 0.50%, or the prime rate announced from time to time in The Wall Street Journal) plus a margin ranging from 2.00% to 2.50% per year (“Applicable Rate”). The Applicable Rate varies depending on the Company’s total leverage ratio (as defined in the Credit Agreement). The alternate base rate and the LIBO rate are each subject to a zero percent floor. In addition, we are required to pay a commitment fee under the Revolving Credit Facility in respect of the unutilized commitments thereunder at a rate ranging from 0.25% per year to 0.50% per year, in each case based on the total leverage ratio. We are also subject to customary letter of credit and agency fees.

The Revolving Credit Facility has a borrowing capacity of $99.5 million, net of a $0.5 million letter of credit. As of ~~June 30, 2021,~~March 31, 2022, we had no outstanding borrowings under the Revolving Credit Facility.

~~Contractual obligations~~

~~There have been no~~

Stock repurchases

On December 16, 2021, our Board of Directors authorized the commencement of a stock repurchase program. The stock repurchase program authorizes us to repurchase up to $100.0 million of our Class A common stock, par value $0.0001 (“Common Stock”) and will expire on December 31, 2022.

In the first quarter of 2022, we repurchased 301,510 shares of Common stock for $17.2 million, including commissions paid, at an average price paid of $56.78 per share, which is recorded as “Treasury stock” on our unaudited Condensed Consolidated Balance Sheets. As of March 31, 2022, approximately $61.8 million remained available for future purchases under the program.

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In April 2022, we repurchased 1,126,277 shares of Common stock for $61.3 million, including commissions paid, at an average price paid of $54.39 per share. See Note 17 to the accompanying unaudited condensed consolidated financial statements for more information.

Cash requirements

Our material ~~changes to~~cash requirements include the following contractual obligations.

Debt

As of March 31, 2022, we had $1,772.5 million of fixed rate debt outstanding with maturities beginning in 2025. Future interest payments associated with the outstanding debt total $121.5 million with $24.0 million payable within twelve months.

Leases

As of March 31, 2022, we are obligated under non-cancellable operating leases for our ~~contractual obligations during~~premises, which expire through November 2030. Rent expense incurred under operating leases, which totaled $1.4 million for the ~~six~~three months ended ~~June 30, 2021 from those previously disclosed~~March 31, 2022, is included in “General and administrative expenses” in our ~~2020 Form 10-K.~~

~~Off-balance sheet arrangements~~

~~During the periods presented, we did not engage in any off-balance sheet financing activities.~~

~~Table~~accompanying unaudited condensed consolidated statements of ~~Contents~~operations.

Critical accounting ~~policies~~

estimates

Our discussion and analysis of our historical financial condition and results of operations for the periods described is based on our audited consolidated financial statements, and our accompanying unaudited condensed consolidated financial statements, each of which have been prepared in accordance with U.S. GAAP. The preparation of these historical financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions and judgments in certain circumstances that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Additionally, the full impact of the COVID-19 pandemic is unknown and cannot be reasonably estimated. However, we have made accounting estimates for our allowance for doubtful accounts, valuation of our contingent liabilities, other intangible assets and goodwill based on the facts and circumstances available as of the reporting date. Actual results may differ from these estimates under different assumptions or conditions.

We have provided a summary of our significant accounting policies in Note 1 in the notes to the accompanying unaudited condensed consolidated financial statements. The following critical accounting discussion pertains to accounting policies management believes are most critical to the portrayal of our historical financial condition and results of operations and that require significant, difficult, subjective or complex judgments. Other companies in similar businesses may use different estimation policies and methodologies, which may impact the comparability of our financial condition, results of operations and cash flows to those of other companies.

New accounting pronouncements

For information regarding new accounting pronouncements, and the impact of these pronouncements on our unaudited condensed consolidated financial statements, if any, refer to Note 1 in the notes to the accompanying unaudited condensed consolidated financial statements.

JOBS Act

~~We qualify~~

Prior to December 31, 2021, we were an emerging growth company (“EGC”) as ~~an EGC pursuant to the provisions of~~defined by the JOBS ~~Act, enacted on April 5, 2012. Section 102 of the~~Act. The JOBS Act provides that an EGC can take advantage of the extended transition period ~~provided in Section 7(a)(2)(B) of the Securities Act~~ for complying with new or revised accounting standards. ~~We are electing~~This allows an EGC to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We had elected to avail ourselves of this exemption prior to December 31, 2021, when we were an EGC, and as a result, our financial statements prior to that date may not have been comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards ~~and~~that are applicable to public companies. As of December 31, 2021, we are no longer an EGC.

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Subject to certain conditions, as ~~a result,~~an EGC we ~~may not comply with new or revised accounting standards~~also were able to rely on ~~the relevant dates on which adoption~~certain of such standards is required for non-EGCs. As a result, our consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

~~We are in~~ the ~~process of evaluating the benefits of relying on other~~ exemptions and reduced reporting requirements ~~provided by the JOBS Act. Subject to certain conditions set forth in~~of the JOBS Act, ~~if as~~including without limitation, from providing an ~~EGC we choose to rely on such exemptions, we may not be required to, among other things, (1) provide an auditor’s~~auditor's attestation report on our ~~systems~~system of internal ~~controls~~control over financial reporting pursuant to Section ~~404, (2) provide all~~404(b) of the ~~compensation disclosure~~Sarbanes-Oxley Act of 2002 and from complying with any requirement that may be ~~required of non-EGCs under~~adopted by the ~~Dodd-Frank Act, (3) comply with~~Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the ~~requirement of~~auditor's report providing additional information about the ~~PCAOB regarding the communication of critical~~ audit ~~matters in the auditor’s report on~~and the financial statements, ~~and (4) disclose certain executive compensation-related items such~~known as the ~~correlation between executive compensation~~auditor discussion and ~~performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation. These exemptions will apply until~~analysis. Because we no longer ~~meet the requirements of being an EGC. We will remain~~qualify as an EGC, ~~until the earlier of (a) the last day~~we are no longer able to take advantage of the ~~fiscal year (i) following~~extended transition period for the ~~fifth anniversary~~adoption of certain accounting standards or of the ~~completion~~reduced disclosure and other benefits available to EGCs, including our exemption from providing our auditor’s attestation on our system of our IPO, (ii) in which we have total annual gross revenue of at least $1.07 billion or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our prior second fiscal quarter, and (b) the date on which we have issued more than $1.07 billion in non-convertible debt during the prior three-year period. As of June 30, 2021, the market value of our common stock that is held by non-affiliates exceeds $700.0 million; therefore, as of December 31, 2021, we expect that we will cease to be an EGC.

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internal control over financial reporting.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our future income, cash flows and fair values relevant to financial instruments are subject to risks relating to interest rates.

As of ~~June 30, 2021,~~March 31, 2022, we had approximately ~~$1,140.0~~$1,772.5 million of fixed rate debt outstanding pursuant to the Notes, with a fair value of ~~$1,408.0~~$1,716.8 million, none of which was subject to an interest rate hedge. Since ~~the~~these Notes bear interest at fixed rates, they do not result in any financial statement risk associated with changes in interest rates. However, the fair value of ~~the~~these Notes fluctuates when interest rates change.

We also have a Revolving Credit Facility available to us with available borrowing capacity of $99.5 million, net of a $0.5 million letter of credit. We are obligated to pay interest on loans under the Revolving Credit Facility as well as other customary fees, including an upfront fee and an unused commitment fee based on our debt rating. Borrowings under the Revolving Credit Facility, if any, bear interest at floating rates. As a result, we are exposed to the risk related to fluctuations in interest rate to the extent of our borrowings. As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we had no amounts outstanding under the Revolving Credit Facility. See “Liquidity and capital resources” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 22. of this Quarterly Report on Form 10-Q and Note 10 in the notes to the accompanying unaudited condensed consolidated financial statements for more information.

ITEM 4. CONTROLS AND PROCEDURES

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of ~~June 30, 2021,~~March 31, 2022, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in ~~internal control~~Internal Control over ~~financial reporting~~

Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the ~~quarter~~three months ended ~~June 30, 2021~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are, from time to time, party to various claims and legal proceedings arising out of our ordinary course of business, but we do not believe that any of these existing claims or proceedings will have a material effect on our business, consolidated financial condition or results of operations.

ITEM 1A. RISK FACTORS

Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks described under the heading “Risk Factors” in Part I, Item 1A1A. of our ~~2020~~2021 Form 10-K, the other information in this Quarterly Report on Form 10-Q, including our unaudited condensed consolidated financial statements and the related notes, as well as our other public filings with the SEC, before deciding to invest in our Class A common stock. ~~There~~Other than as described below, there have been no material changes to the Company’s risk factors ~~since the 2020~~previously disclosed in our 2021 Form 10-K. The occurrence of any of the events described therein could harm our business, financial condition, results of operations, liquidity or prospects. In such an event, the market price of our Class A common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business.

Business risks

We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, cryptocurrency, and consumer protection laws across different markets where we conduct our business. Our actual or perceived failure to comply with such obligations could harm our business.

In the United States and other jurisdictions in which our services are used, we are subject to various privacy, data protection and information security, and consumer protection laws (including laws on disputed transactions) and related regulations. If we are found to have breached such laws or regulations in any such market, we may be subject to enforcement actions that require us to change our business practices in a manner which may negatively impact our revenue, as well as expose ourselves to litigation, fines, civil and/or criminal penalties and adverse publicity that could cause our customers to lose trust in us, negatively impacting our reputation and business in a manner that harms our financial position.

As part of our business, we collect personal information, also referred to as personal data, and other potentially sensitive and/or regulated data from our consumers and the merchants we work with. Laws and regulations in the United States restrict how personal information is collected, processed, stored, transferred. used and disclosed, as well as set standards for its security, implement notice requirements regarding privacy practices, and provide individuals with certain rights regarding the use, disclosure and sale of their protected personal information. For example, the Federal Trade Commission (“FTC”) and many state attorneys general are interpreting federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of data. Such standards require us to publish statements that describe how we handle personal data and choices individuals may have about the way we handle their personal data. If such information that we publish is considered untrue or inaccurate, we may be subject to government claims of unfair or deceptive trade practices, which could lead to significant liabilities and consequences. Moreover, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal data secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the FTC Act. State consumer protection laws provide similar causes of action for unfair or deceptive practices. Some states, such as California and Massachusetts, have passed specific laws mandating reasonable security measures for the handling of consumer data. Further, privacy advocates and industry groups have regularly proposed and sometimes approved, and may propose and approve in the future, self-regulatory standards with which we must legally comply or that contractually apply to us.

The Gramm-Leach-Bliley Act (“GLBA”) regulates, among other things, the use of non-public personal information of consumers that is held by financial institutions. We are subject to various GLBA provisions, including rules relating to the use or disclosure of the underlying data and rules relating to the physical, administrative and technological protection of non-public personal financial information. Breach of the GLBA can result in civil and/or criminal liability and sanctions by regulatory authorities.

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Several foreign jurisdictions, including the EU and the United Kingdom, have laws and regulations which are more restrictive in certain respects than those in the United States. We are also subject to data privacy and security laws in foreign jurisdictions which have laws and regulations which are more restrictive in certain respects than the United States. For example, in the European Economic Area (“EEA”), we are subject to the General Data Protection Regulation 2016/679 (“GDPR”) and in the United Kingdom, we are subject to the United Kingdom data protection regime consisting primarily of the UK General Data Protection Regulation and the UK Data Protection Act 2018, in each case in relation to our collection, control, processing, sharing, disclosure and other use of data relating to an identifiable living individual (personal data). The GDPR, and national implementing legislation in EEA member states, and the United Kingdom regime, impose a strict data protection compliance regime including: providing detailed disclosures about how personal data is collected and processed (in a concise, intelligible and easily accessible form); demonstrating that an appropriate legal basis is in place or otherwise exists to justify data processing activities; granting rights for data subjects in regard to their personal data (including data access rights, the right to be “forgotten” and the right to data portability); introducing the obligation to notify data protection regulators or supervisory authorities (and in certain cases, affected individuals) of significant data breaches; defining pseudonymized (i.e., key-coded) data; imposing limitations on retention of personal data; maintaining a record of data processing; and complying with the principal of accountability and the obligation to demonstrate compliance through policies, procedures, training and audit.

We are also subject to European Union and United Kingdom rules with respect to cross-border transfers of personal data out of the EEA and the United Kingdom, respectively. Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal data from the EEA and the United Kingdom to the United States. Most recently, on July 16, 2020, the Court of Justice of the European Union (“CJEU”) invalidated the EU-US Privacy Shield Framework (“Privacy Shield”) under which personal data could be transferred from the EEA to US entities who had self-certified under the Privacy Shield scheme.

While the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, and potential alternative to the Privacy Shield), it made clear that reliance on them alone may not necessarily be sufficient in all circumstances. Use of the standard contractual clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals and additional measures and/or contractual provisions may need to be put in place.

We have previously relied on our own Privacy Shield certification and our relevant customers’ and partners’ Privacy Shield certifications for the purposes of transferring personal data from the EEA to the U.S. in compliance with the GDPR’s data export conditions. These recent developments will require us to review and amend the legal mechanisms by which we make and/ or receive personal data transfers to/ in the U.S., including updating agreements to put in place standard contractual clauses. The developments also create uncertainty and increase the risk around our international operations. European court and regulatory decisions subsequent to the CJEU decision of July 16, 2020 have taken a restrictive approach to international data transfers. For example, the Austrian and the French data protection supervisory authorities, as well as the European Data Protection Supervisor, have recently ruled that use of Google Analytics by European website operators involves the unlawful transfer of personal data to the United States; a number of other EU supervisory authorities are expected to take a similar approach which may impact other business tools that we use. As the enforcement landscape further develops, and supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, we could suffer additional costs, complaints and/or regulatory investigations or fines, have to stop using certain tools and vendors and make other operational changes, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

We are also subject to evolving EU and UK privacy laws on cookies, tracking technologies and e-marketing. In the EU and the UK under national laws derived from the ePrivacy Directive, informed consent is required for the placement of a cookie or similar technologies on a user’s device and for direct electronic marketing. The GDPR also imposes conditions on obtaining valid consent for cookies, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology. The current national laws that implement the ePrivacy Directive are highly likely to be replaced across the EU (but not directly in the UK) by an EU regulation known as the ePrivacy Regulation which will significantly increase fines for non-compliance.

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In the United States, both the federal and various state governments have adopted or are considering, laws, guidelines or rules for the collection, distribution, use and storage of information collected from or about consumers or their devices. For example, California enacted the California Consumer Privacy Act (“CCPA”), which became enforceable by the California Attorney General on July 1, 2020, and requires new disclosures to California consumers, imposes new rules for collecting or using information about minors, and affords consumers new abilities to opt out of certain disclosures of personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The effects of the CCPA, its implementing regulations, and uncertainties about the scope and applicability of exemptions that may apply to our business, are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply. Additionally, the California Privacy Rights Act (“CPRA”), recently passed in California. The CPRA significantly amends the CCPA, and imposes additional data protection obligations on covered companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data. It also creates a new California data protection agency specifically tasked to enforce the law, which would likely result in increased regulatory scrutiny of California businesses in the areas of data protection and security. The substantive requirements for businesses subject to the CPRA will go into effect on January 1, 2023, and become enforceable on July 1, 2023. In addition, Virginia and Colorado have enacted the Consumer Data Protection Act (“VCDPA”) and the Colorado Data privacy Act (“CDPA”), respectively, which will go into effect in 2023 and will impose obligations similar to or more stringent than those we may face under other data protection laws.

Restrictions on the collection, use, sharing or disclosure of personal information or additional requirements and liability for security and data integrity could require us to modify our solutions and features, possibly in a material manner, could limit our ability to develop new services and features and could subject us to increased compliance obligations and regulatory scrutiny. Non-compliance with data protection and privacy requirements may result in regulatory fines (which for certain breaches of the GDPR (“UK GDPR”) are up to the greater of €20/£17.5 or 4% of total global annual turnover), regulatory investigations, reputational damage, orders to cease/change our processing of our data, enforcement notices, and/ or assessment notices (for a compulsory audit). We may also face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm.

Furthermore, our current and planned cryptocurrency offerings could subject us to additional regulations, licensing requirements, or other obligations. The rapidly evolving regulatory landscape with respect to cryptocurrency may subject us to inquiries or investigations from regulators and governmental authorities, require us to make product changes, restrict or discontinue product offerings, and implement additional and potentially costly controls. If we fail to comply with regulations, requirements, prohibitions or other obligations applicable to us, we could face regulatory or other enforcement actions and potential fines and other consequences.

In addition, financial and third party risks related to our cryptocurrency offerings, such as inappropriate access to or theft or destruction of cryptocurrency assets held by our custodian, insufficient insurance coverage by the custodian to reimburse us for all such losses, the custodian’s failure to maintain effective controls over the custody and settlement services provided to us, the custodian’s inability to purchase or liquidate cryptocurrency holdings, and defaults on financial or performance obligations by counterparty financial institutions, could materially and adversely affect our financial performance and significantly harm our business.

General Risk Factors

The ongoing military action between Russia and Ukraine could adversely affect our business, financial condition and results of operations.

On February 24, 2022, Russian military forces launched a military action in Ukraine, and sustained conflict and disruption in the region is likely. Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase in cyberattacks and espionage.

Russia’s recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military action against Ukraine have led to an unprecedented expansion of sanction programs imposed by the United States, the European Union, the UK, Canada, Switzerland, Japan and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic, including, among others:

•blocking sanctions against some of the largest state-owned and private Russian financial institutions (and their subsequent removal from the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, payment system) and certain Russian businesses, some of which have significant financial and trade ties to the European Union;

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•blocking sanctions against Russian and Belarusian individuals, including the Russian President, other politicians and those with government connections or involved in Russian military activities; and

•blocking of Russia’s foreign currency reserves as well as expansion of sectoral sanctions and export and trade restrictions, limitations on investments and access to capital markets and bans on various Russian imports.

In retaliation against new international sanctions and as part of measures to stabilize and support the volatile Russian financial and currency markets, the Russian authorities also imposed significant currency control measures aimed at restricting the outflow of foreign currency and capital from Russia, imposed various restrictions on transacting with non-Russian parties, banned exports of various products and other economic and financial restrictions. The situation is rapidly evolving as a result of the conflict in Ukraine, and the United States, the European Union, the UK and other countries may implement additional sanctions, export controls or other measures against Russia, Belarus and other countries, regions, officials, individuals or industries in the respective territories. Such sanctions and other measures, as well as the existing and potential further responses from Russia or other countries to such sanctions, tensions and military actions, could adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations.

We are actively monitoring the situation in Ukraine and assessing its impact on our business, including our business partners and customers. To date we have not experienced any material interruptions in our infrastructure, supplies, technology systems or networks needed to support our operations. We have no way to predict the progress or outcome of the conflict in Ukraine or its impacts in Ukraine, Russia or Belarus as the conflict, and any resulting government reactions, are rapidly developing and beyond our control. The extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and our business for an unknown period of time. Any of the above mentioned factors could affect our business, financial condition and results of operations. Any such disruptions may also magnify the impact of other risks described in our 2021 Form 10-K.

We are exposed to fluctuations in inflation, which could negatively affect our business, financial condition and results of operations.

The United States has recently experienced historically high levels of inflation. According to the U.S. Department of Labor, the annual inflation rate for the United States was approximately 7.0% for 2021. If the inflation rate continues to increase, it will likely affect our expenses, including, but not limited to, employee compensation expenses, increased costs for supplies, In the event inflation continues to increase, we may seek to increase the sales prices of our products and services in order to maintain satisfactory margins. Any attempts to offset cost increases with price increases may result in reduced sales, increase customer dissatisfaction or otherwise harm our reputation. Moreover, to the extent inflation results in rising interest rates and has other adverse effects on the market, it may adversely affect our business, financial condition and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~

The following indicates our purchases of Class A common stock during the three months ended March 31, 2022.


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)	Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (in millions)
January 1-31, 2022	245,700	$	56.48	624,175	$	65.0
February 1-28, 2022	—	—		624,175	65.0
March 1-31, 2022	55,810	58.11		679,985	61.8
Total	301,510

(a) On December 16, 2021, the Company announced that its board of directors had initiated a stock repurchase program pursuant to which the Company may repurchase up to $100.0 million of shares of its Class A common stock through December 31, 2022. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases depending on market conditions and corporate needs. Open market repurchases will be structured to occur within the pricing and volume requirements of Rule 10b-18 of the Exchange Act. The Company may also, from time to time, enter into Rule 10b5-1 of the Exchange Act plans to facilitate repurchases of its shares under this authorization. The exact number of shares to be repurchased by the Company is not guaranteed and the program may be suspended, modified, or discontinued at any time at the Company’s discretion and without prior notice.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

~~Table of Contents~~

ITEM 6. EXHIBITS

The following is a list of exhibits filed as part of this Quarterly Report on Form 10-Q.

INDEX TO EXHIBITS

Incorporated by Reference

Filed/Furnished

Herewith

Incorporated by Reference

Exhibit

Number

Exhibit Description

Form

File No.

Exhibit

Filing

Date

Exhibit

Number

Exhibit Description

Form

File No.

Exhibit

Filing

Date

Filed/Furnished

Herewith

3.1

Amended and Restated Certificate of Incorporation of Shift4 Payments, Inc.

S-8

333-239042

4.1

06/09/2020

3.1

Amended and Restated Certificate of Incorporation of Shift4 Payments, Inc.

S-8

333-239042

4.1

06/09/2020

3.2

Amended and Restated By-Laws of Shift4Payments, Inc.

S-8

333-239042

4.2

06/09/2020

3.2

Amended and Restated By-Laws of Shift4Payments, Inc.

S-8

333-239042

4.2

06/09/2020

4.1

Specimen Stock Certificate evidencing the shares of Class A common stock.

S-1/A

333-238307

4.1

06/01/2020

4.1

Specimen Stock Certificate evidencing the shares of Class A common stock.

S-1/A

333-238307

4.1

06/01/2020

4.2

Indenture, by and among Shift4 Payments, LLC, Shift4 Payments Finance Sub, Inc. the subsidiary guarantors named therein and U.S. Bank National Association, as trustee, dated October 29, 2020 (and Form of Global Note).

8-K

001-39313

4.1

10/29/2020

4.3

Indenture, dated as of July 26, 2021, between Shift4 Payments, Inc. and U.S. Bank National Association, as trustee (and Form of Global Note)

8-K

001-39313

4.1

07/27/2021

4.3

Indenture, dated as of December 7, 2020, between Shift4 Payments, Inc. and U.S. Bank National Association, as trustee (and Form of Global Note).

8-K

001-39313

4.1

12/07/2020

10.1

Employment Letter between Shift4 Payments, Inc. and Sarah Goldsmith-Grover.

10-Q

001-39313

10.2

05/07/2021

4.4

Indenture, dated as of July 26, 2021, between Shift4 Payments, Inc. and U.S. Bank National Association, as trustee (and Form of Global Note).

8-K

001-39313

4.1

07/26/2021

4.5

Fourth Supplemental Indenture dated March 30, 2021, 4.625% Senior Notes due 202 6.

10.1***

Merger Agreement by and among Credorax Inc., Shift4 Payments, LLC, Shift4 (BVI) Limited, Krieg Merger Sub Limited, and the other parties thereto, dated as of March 1, 2022.

31.1

Certification of Registrant’s Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

31.1

Certification of Registrant’s Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Registrant’s Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Registrant’s Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Registrant’s Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Registrant’s Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of Registrant’s Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of Registrant’s Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

Inline XBRL Instance Document.

101.INS

Inline XBRL Instance Document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104*

Cover Page Interactive Data File (formatting as Inline XBRL and contained in Exhibit 101)

~~Delaware~~	~~84-3676340~~
Delaware		84-3676340
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
2202 N. Irving Street Allentown, Pennsylvania			18109
(Address of principal executive offices)			(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class ACommon Stock, $0.0001 par value per share	FOUR	The New York Stock Exchange


Large accelerated filer	☐ x	Accelerated filer	☐ o
Non-accelerated filer	☒ o	Smaller reporting company	☐ o
Emerging growth company	☒ o


	PART I. FINANCIAL INFORMATION
Item 1	Financial Statements ~~(unaudited~~(unaudited))	4 5
	Condensed Consolidated Balance Sheets	4 5
	Condensed Consolidated Statements of Operations	5 6
	Condensed Consolidated Statements of Changes in ~~Redeemable Preferred Units and~~ Stockholders’ ~~Equity/Members’ (Deficit)~~Equity	6 7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3	Quantitative and Qualitative Disclosures About Market Risk	43 40
Item 4	Controls and Procedures	43 40

	PART II. OTHER INFORMATION
Item 1	Legal Proceedings	44 41
Item 1A	Risk Factors	44 41
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3	Defaults Upon Senior Securities	44
Item 4	Mine Safety Disclosures	44 45
Item 5	Other Information	44 45
Item 6	Exhibits	45
Signatures		46 47


	March 31, 2022		December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	1,189.0	$	1,231.5
Accounts receivable, net of allowance for doubtful accounts of $9.5 in 2022 ($8.0 in 2021)	223.0		205.9
Inventory	2.9		3.5
Contract assets (Note 3)	0.3		0.3
Prepaid expenses and other current assets (Note 11)	12.9		12.4
Total current assets	1,428.1		1,453.6
Noncurrent assets
Goodwill (Note 5)	627.0		537.7
Other intangible assets, net (Note 6)	213.0		188.5
Capitalized acquisition costs, net (Note 7)	35.3		35.1
Equipment for lease, net (Note 8)	60.0		58.4
Property, plant and equipment, net (Note 9)	18.1		18.4
Right of use assets (Note 14)	17.0		18.5
Investments in securities	32.0		30.5

Other noncurrent assets	1.6		1.9
Total noncurrent assets	1,004.0		889.0
Total assets	$	2,432.1	$	2,342.6
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	137.3	$	121.1
Accrued expenses and other current liabilities (Note 11)	95.2		42.9
Deferred revenue (Note 3)	21.9		15.0
Current lease liabilities (Note 14)	4.4		4.8
Total current liabilities	258.8		183.8
Noncurrent liabilities
Long-term debt (Note 10)	1,735.9		1,738.5
Deferred tax liability (Note 13)	0.4		0.3
Noncurrent lease liabilities (Note 14)	16.6		17.9
Other noncurrent liabilities	2.2		2.4
Total noncurrent liabilities	1,755.1		1,759.1
Total liabilities	2,013.9		1,942.9
Commitments and contingencies (Note 16)	0		0
Stockholders' equity (Note 17)
Preferred stock, $0.0001 par value, 20,000,000 shares authorized at March 31, 2022 and December 31, 2021, NaN issued and outstanding	—		—
Class A common stock, $0.0001 par value per share, 300,000,000 shares authorized, 53,618,573 and 51,793,127 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	—		—
Class B common stock, $0.0001 par value per share, 100,000,000 shares authorized, 26,272,654 shares issued and outstanding at both March 31, 2022 and December 31, 2021	—		—
Class C common stock, $0.0001 par value per share, 100,000,000 shares authorized, 4,302,657 and 5,035,181 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	—		—
Additional paid-in capital	659.6		619.2
Treasury stock, at cost; 679,985 shares and 378,475 shares repurchased at March 31, 2022 and December 31, 2021, respectively	(38.3)		(21.1)
Retained deficit	(332.8)		(325.3)

Total stockholders' equity attributable to Shift4 Payments, Inc.	288.5		272.8
Noncontrolling interests (Note 18)	129.7		126.9
Total stockholders' equity	418.2		399.7
Total liabilities and stockholders' equity	$	2,432.1	$	2,342.6
See accompanying notes to unaudited condensed consolidated financial statements.

☒
x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐
o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	June 30,			December 31,
	2021			2020
Assets
Current assets
Cash and cash equivalents	$	699.7		$	927.8
Accounts receivable, net of allowance for doubtful accounts of $12.8 in 2021 ($5.7 in 2020) (Note 3)		177.2			92.7
Inventory		1.6			1.5
Prepaid expenses and other current assets (Note 11)		14.8			11.5
Total current assets		893.3			1,033.5
Noncurrent assets
Goodwill (Note 5)		525.2			477.0
Other intangible assets, net (Note 6)		185.1			186.3
Capitalized acquisition costs, net (Note 7)		32.8			30.2
Equipment for lease, net (Note 8)		47.2			36.6
Property, plant and equipment, net (Note 9)		17.5			15.1
Investments in securities (Note 1)		29.5			—
Other noncurrent assets		0.5			0.6
Total noncurrent assets		837.8			745.8
Total assets	$	1,731.1		$	1,779.3
Liabilities and Stockholders' Equity
Current liabilities
Current portion of debt (Note 10)	$	—		$	0.9
Accounts payable		116.4			60.6
Accrued expenses and other current liabilities (Note 11)		36.2			30.1
Deferred revenue (Note 3)		12.0			7.8
Total current liabilities		164.6			99.4
Noncurrent liabilities
Long-term debt (Note 10)		1,117.6			1,005.4
Deferred tax liability (Note 13)		0.6			2.8
Other noncurrent liabilities (Note 4)		2.1			1.7
Total noncurrent liabilities		1,120.3			1,009.9
Total liabilities		1,284.9			1,109.3
Commitments and contingencies (Note 16)
Stockholders' equity (Note 18)
Preferred stock, $0.0001 par value, 20,000,000 shares authorized at June 30, 2021 and December 31, 2020, NaN issued and outstanding		—			—
Class A common stock, $0.0001 par value per share, 300,000,000 shares authorized, 47,215,604 and 39,737,950 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		—			—
Class B common stock, $0.0001 par value per share, 100,000,000 shares authorized, 28,240,404 and 30,625,857 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		—			—
Class C common stock, $0.0001 par value per share, 100,000,000 shares authorized, 7,422,140 and 10,188,852 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		—			—
Additional paid-in capital		601.3			738.3
Retained deficit		(306.7	)		(278.7	)
Total stockholders' equity attributable to Shift4 Payments, Inc.		294.6			459.6
Noncontrolling interests (Note 19)		151.6			210.4
Total stockholders' equity		446.2			670.0
Total liabilities and stockholders' equity	$	1,731.1		$	1,779.3

	Redeemable Preferred Units						Class A Common Units					Class B Common Units						Class A Common Stock				Class B Common Stock				Class C Common Stock				Additional												Total
	Units			Amount			Units			Amount		Units			Amount			Shares		Amount		Shares		Amount		Shares		Amount		paid-in capital			Members' Equity			Retained Deficit			Noncontrolling Interests			equity (deficit)
Balances at December 31, 2019		430		$	43.0			100,000		$	—		1,010		$	0.3			—	$	—		—	$	—		—	$	—	$	—		$	149.2		$	(182.4	)	$	—		$	(32.9	)
Net loss prior to Reorganization Transactions, IPO and concurrent private placement		—			—			—			—		—			—			—		—		—		—		—		—		—			—			(5.1	)		—			(5.1	)
Capital distributions		—			—			—			—		—			—			—		—		—		—		—		—		—			(0.1	)		—			—			(0.1	)
Preferred return on redeemable preferred units		—			—			—			—		—			—			—		—		—		—		—		—		—			(1.2	)		—			—			(1.2	)
Balances at March 31, 2020		430		$	43.0			100,000		$	—		1,010		$	0.3			—	$	—		—	$	—		—	$	—	$	—		$	147.9		$	(187.5	)	$	—		$	(39.3	)
Net loss prior to Reorganization Transactions, IPO and concurrent private placement		—			—			—			—		—			—			—		—		—		—		—		—		—			—			(72.8	)		—			(72.8	)
Capital distributions		—			—			—			—		—			—			—		—		—		—		—		—		—			(0.4	)		—			—			(0.4	)
Preferred return on redeemable preferred units		—			—			—			—		—			—			—		—		—		—		—		—		—			(0.9	)		—			—			(0.9	)
Balances at June 4, 2020 prior to Reorganization Transactions, IPO and concurrent private placement		430		$	43.0			100,000		$	—		1,010		$	0.3			—	$	—		—	$	—		—	$	—	$	—		$	146.6		$	(260.3	)	$	—		$	(113.4	)
Reorganization transactions		(430	)		(43.0	)		(100,000	)		—		(1,010	)		(0.3	)		528,150		—		39,204,989		—		15,513,817		—		189.9			(146.6	)		—			—			43.0
Preferred dividends settled with LLC interests		—			—			—			—		—			—			—		—		—		—		—		—		2.3			—			—			—			2.3
Issuance of common stock in IPO and concurrent private placement		—			—			—			—		—			—			17,250,000		—		—		—		4,625,346.0		—		463.8			—			—			—			463.8
Allocation of equity to noncontrolling interests		—			—			—			—		—			—			—		—		—		—		—		—		(211.5	)		—			—			211.5			—
Issuance of common stock for change of control contingent liabilities		—			—			—			—		—			—			915,503		—		—		—		—		—		21.1			—			—			—			21.1
Issuance of restricted stock units for change of control contingent liabilities		—			—			—			—		—			—			—		—		—		—		-		—		2.1			—			—			—			2.1
Equity-based compensation		—			—			—			—		—			—			—		—		—		—		—		—		50.0			—			—			—			50.0
Net loss subsequent to Reorganization Transactions, IPO and concurrent private placement		—			—			—			—		—			—			—		—		—		—		—		—		—			—			(1.0	)		(1.0	)		(2.0	)
Balances at June 30, 2020		—		$	—			—		$	—		—		$	—			18,693,653	$	—		39,204,989	$	—		20,139,163	$	—	$	517.7		$	—		$	(261.3	)	$	210.5		$	466.9

	For the three months ended June 30, 2020									For the six months ended June 30, 2020
Consolidated Statement of Operations	As previously reported			Adjustment			As revised			As previously reported			Adjustment			As revised
Cost of sales	$	109.5		$	0.7		$	110.2		$	264.4		$	1.8		$	266.2
Gross profit		32.3			(0.7	)		31.6			76.8			(1.8	)		75.0
General and administrative expenses		89.2			(0.9	)		88.3			111.5			(2.1	)		109.4
Total operating expenses		89.3			(0.9	)		88.4			125.3			(2.1	)		123.2
Income (loss) from operations		(57.0	)		0.2			(56.8	)		(48.5	)		0.3			(48.2	)
Loss before income taxes		(75.6	)		0.2			(75.4	)		(80.5	)		0.3			(80.2	)
Net loss ^(a)		(75.0	)		0.2			(74.8	)		(80.2	)		0.3			(79.9	)
Basic and diluted net loss per share - Class A and Class C		(0.03	)		—			(0.03	)		(0.03	)		—			(0.03	)

Cash	$	42.2
Shares of Class A common stock (a)		24.5
RSUs granted for fair value of equity-based compensation awards (b)		1.8
Total purchase consideration		68.5
Less: cash acquired		(1.6	)
Total purchase consideration, net of cash acquired	$	66.9


	March 31, 2022		December 31, 2021
Contract assets, net - beginning of period	$	0.3	$	—
Less: Contract assets, net - beginning of the period, current	(0.3)		—
Contract assets, net - beginning of period, noncurrent	—		—
Contract assets, net - end of period	0.3		0.3
Less: Contract assets, net - end of the period, current	(0.3)		(0.3)
Contract assets, net - end of period, noncurrent	$	0.3	$	—


	March 31, 2022		March 31, 2021
Beginning balance	$	8.0	$	5.7
Additions to expense (a)	3.0		6.7
Write-offs, net of recoveries and other adjustments	(1.5)		(0.3)
Ending balance	$	9.5	$	12.1

(a) For the three months ended March 31, 2021, includes a $5.2 million allowance on chargebacks from a single merchant, which is included in “Cost of Sales” on the unaudited Condensed Consolidated Statements of Operations.


Balance at December 31, 2020	$	2.9
Severance payments		(0.8	)
Accretion of interest (a)		0.1
Balance at June 30, 2021	$	2.2

	~~(a)~~	~~Accretion of interest is included within “Restructuring expenses” in the unaudited Condensed Consolidated Statements of Operations.~~
Balance at December 31, 2021			$	1.5
Severance payments			(0.4)

Balance at March 31, 2022			$	1.1

Balance at December 31, 2020	$	477.0
VenueNext acquisition (Note 2)		48.3
Hospitality Technology Vendor measurement period adjustment (Note 2)		(0.1	)
Balance at June 30, 2021	$	525.2

6.
Balance at December 31, 2021~~Other Intangible Assets, Net~~	$	537.7
The Giving Block Acquisition (Note 2)	89.3
Balance at March 31, 2022	$	627.0


	Weighted Average	June 30, 2021							Weighted Average Amortization Period (in years)	March 31, 2022
	Amortization Period (in years)	Carrying Value		Accumulated Amortization		Net Carrying Value			Weighted Average Amortization Period (in years)	Carrying Value		Accumulated Amortization		Net Carrying Value
Merchant relationships	8		193.3	$	119.9	$	73.4	Merchant relationships	8	$	214.1	$	140.8	$	73.3
Acquired technology	9		113.1		48.5		64.6	Acquired technology	9	116.2		58.2		58.0
Trademarks and trade names	17		21.0		3.8		17.2	Trademarks and trade names	17	29.3		4.1		25.2
Capitalized software development costs	4		33.0		8.7		24.3	Capitalized software development costs	4	51.7		10.8		40.9
Residual commission buyouts (a)	3		21.1		15.5		5.6	Residual commission buyouts (a)	3	23.6		8.0		15.6

Total intangible assets		$	381.5	$	196.4	$	185.1	Total intangible assets		$	434.9	$	221.9	$	213.0

	Weighted Average	December 31, 2020
	Amortization Period (in years)	Carrying Value		Accumulated Amortization		Net Carrying Value
Merchant relationships	8	$	185.8	$	106.5	$	79.3
Acquired technology	9		105.1		42.2		62.9
Trademarks and trade names	9		57.4		39.1		18.3
Noncompete agreements	2		3.9		3.9		—
Capitalized software development costs	4		25.1		5.8		19.3
Leasehold interest	2		0.1		0.1		—
Residual commission buyouts (a)	3		20.0		13.5		6.5
Total intangible assets		$	397.4	$	211.1	$	186.3

2021 (remaining six months)	$	26.6
2022		40.5

2022 (remaining nine months)			2022 (remaining nine months)	$	37.5
2023		27.6	2023	41.6
2024		23.0	2024	36.4
2025		21.8	2025	27.1
2026			2026	20.9
Thereafter		45.6	Thereafter	49.5
Total	$	185.1	Total	$	213.0


	Weighted Average	June 30, 2021							Weighted Average Depreciation Period (in years)	March 31, 2022
	Depreciation Period (in years)	Carrying Value		Accumulated Depreciation		Net Carrying Value			Weighted Average Depreciation Period (in years)	Carrying Value		Accumulated Depreciation		Net Carrying Value
Equipment under lease	3	$	54.1	$	14.0	$	40.1	Equipment under lease	3	$	79.4	$	29.6	$	49.8
Equipment held for lease (a)	N/A		7.1		—		7.1	Equipment held for lease (a)	N/A	10.2		—		10.2
Total equipment for lease		$	61.2	$	14.0	$	47.2	Total equipment for lease		$	89.6	$	29.6	$	60.0


	Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
	2021		2020		2021		2020			2022		2021
Depreciation and amortization expense	$	1.0	$	0.9	$	1.8	$	1.9	Depreciation and amortization expense	$	1.0	$	0.8
Cost of sales		0.4		0.4		0.8		0.8	Cost of sales	0.3		0.4
Total depreciation expense	$	1.4	$	1.3	$	2.6	$	2.7	Total depreciation expense	$	1.3	$	1.2


	March 31, 2022		December 31, 2021
Principal outstanding	$	690.0	$	690.0
Unamortized debt issuance costs	(12.2)		(13.0)
Net carrying value	$	677.8	$	677.0


	March 31, 2022		December 31, 2021
Weighted average remaining in lease term (in years):	5.5		5.6

Weighted average discount rate	3.2	%	3.2	%

	LLC Interests							Ownership percentage
	Shift4 Payments, Inc.		Continuing Equity Owners			Total		Shift4 Payments, Inc.			Continuing Equity Owners			Total
Balances at December 31, 2020		49,926,802		30,625,857			80,552,659		62.0	%		38.0	%		100.0	%
Issuance of LLC units		2,325,489		—			2,325,489		1.0	%		(1.0	%)		—
Redemption of LLC units		2,385,453		(2,385,453	)		—		2.9	%		(2.9	%)		—
Balances at June 30, 2021		54,637,744		28,240,404			82,878,148		65.9	%		34.1	%		100.0	%


	Six Months Ended June 30, 2021						Three Months Ended March 31, 2022
	Number of RSUs			Weighted Average Grant Date Fair Value			Number of RSUs	Weighted Average Grant Date Fair Value
Unvested balance at beginning of period		4,840,508		$	24.35	Unvested balance at beginning of period	2,402,694	$	43.28
Granted (a)		163,265		$	74.80	Granted (a)	491,639	45.86
Vested		(3,240,146	)	$	22.74	Vested	(53,647)	57.99
Forfeited or cancelled		(6,715	)	$	42.10	Forfeited or cancelled	(184,011)	43.03
Unvested balance at end of period		1,756,912		$	31.90	Unvested balance at end of period	2,656,675	$	45.24

(a) Includes 157,330 RSUs not subject to continued service, which vested immediately in March 2022 and 16,422 RSUs issued in connection with The Giving Block acquisition, of which 9,347 RSUs vest in equal installments in December 2022, 2023 and 2024 and 7,075 RSUs which are not subject to continued service, and vested immediately in March 2022.						(a) Includes 157,330 RSUs not subject to continued service, which vested immediately in March 2022 and 16,422 RSUs issued in connection with The Giving Block acquisition, of which 9,347 RSUs vest in equal installments in December 2022, 2023 and 2024 and 7,075 RSUs which are not subject to continued service, and vested immediately in March 2022.

	Three Months Ended June 30,			Six Months Ended June 30,			June 5, 2020 through
	2021			2021			June 30, 2020
Net income (loss)	$	4.5		$	(46.5	)	$	(2.1	)
Less: Net income (loss) attributable to noncontrolling interests		1.3			(16.9	)		(1.1	)
Net income (loss) attributable to Shift4 Payments, Inc.	$	3.2		$	(29.6	)	$	(1.0	)
Adjustment to net income (loss) attributable to common stockholders		—			(0.3	)		(0.1	)
Net income (loss) attributable to common stockholders - basic	$	3.2		$	(29.9	)	$	(1.1	)

Numerator - allocation of net income (loss) attributable to common stockholders:
Net income (loss) allocated to Class A common stock - basic	$	2.7		$	(24.8	)	$	(0.5	)
Reallocation of net income attributable to common stockholders from assumed conversion of LLC interests and assumed vesting of RSUs		1.4			—			—
Net income (loss) allocated to Class A common stock - diluted	$	4.1		$	(24.8	)	$	(0.5	)

Net income (loss) allocated to Class C common stock - basic	$	0.5		$	(5.1	)	$	(0.6	)
Reallocation of net income attributable to common stockholders from assumed conversion of LLC interests and assumed vesting of RSUs		(0.1	)		—			—
Net income (loss) allocated to Class C common stock - diluted	$	0.4		$	(5.1	)	$	(0.6	)

Denominator:
Weighted average shares of Class A common stock outstanding - basic		46,297,553			44,492,680			19,002,563
Effect of dilutive securities:
LLC Interests		28,869,471			—			—
RSUs		1,726,595			—			—
Convertible notes		101,713			—			—
Weighted average shares of Class A common stock outstanding - diluted		76,995,332			44,492,680			19,002,563

Weighted average shares of Class C common stock outstanding - basic and diluted		8,151,747			9,075,667			20,139,163

Net income (loss) per share - Basic:
Class A common stock	$	0.06		$	(0.56	)	$	(0.03	)
Class C common stock	$	0.06		$	(0.56	)	$	(0.03	)
Net income (loss) per share - Diluted:
Class A Common Stock	$	0.05		$	(0.56	)	$	(0.03	)
Class C Common Stock	$	0.05		$	(0.56	)	$	(0.03	)


	Three months ended		Six months ended		June 5, 2020 through			Three Months Ended March 31,
	June 30, 2021		June 30, 2021		June 30, 2020			2022	2021
LLC Interests that convert into potential Class A common shares		—		28,240,404		39,204,989	LLC Interests that convert into potential Class A common shares	26,272,654	29,699,857
RSUs and performance RSUs - employee		—		1,742,656		2,177,628	RSUs and performance RSUs - employee	2,643,733	2,363,289
RSUs - non-employee directors		—		10,244		52,660	RSUs - non-employee directors	12,942	38,819
2025 Convertible Notes		—		50,856		—
Total		—		30,044,160		41,435,277	Total	28,929,329	32,101,965