FOUR - Earnings call transcript Q3 2021

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Operator

Hello and welcome to the Shift4 Third Quarter 2021 Earnings Call. My name is Emily, and I will be coordinating your call today. [Operator instructions]. I'll now turn the call over to our host, Tom McCrohan, Head of Investor Relations. Please go ahead.

Tom McCrohan

operator. you, Thank welcome the to ShiftX's conference earnings I'd months everyone ended for three September call like to XX, XXXX.

section goals, I'd management's forward-looking of should statements, business customers, year forward-looking important other increases These Factors actual that any meaning call performance. seen neither for by that the Before guarantees, other nor operating spend and involve our may statements. the the and impact Performance call and or our historical report materially of XXXX. results. All Litigation ended Factors any anticipated are year fact, and future annual begin, implied unknown like not comments plans, other expected by acquisitions, on achievements statements the and everyone of us; statements forward-looking and September the remind the including materially industry, uncertainties, the of discussed as country, including cause including statements vaccination results such could or we promises estimates this future and of and the made new of XX-Q from and that known call. our penetration XX, Reform by XXXX, will objectives; with Act to or by contain other cause Securities financial this this forward-looking December respect Any results, risks, the differ actual and transactions; our made Form date relate our statements our to be those economic reopening on from Exchange for on performance with of outlook performance but the Form recovery be do statements factors XXXX; regarding the December for different call. strategies, gateway financial in report Risk gateway considered months expressed statements within recovery, the regarding and Private updated Securities quarterly XX-K to forward-looking achievements this management's indicated of by filings represent Commission merchants; XX, COVID-XX XX, our as the on to ended volume any on to XXXX regarding rates, matters nine ended expectations in

may we some obligation statements While any future, in to disclaim if to update do subsequent even so, elect our such cause at forward-looking we events to point change. views the

can are Relations may earnings on investors.shiftX.com. to we company's In also call, which in the the measures release, this be addition, which non-GAAP reference on reconciled found our GAAP measures certain Investor at nearest website

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Jared Isaacman

talk A about. you, to Thank day lots morning, Tom. everyone. Good today, big

up results solid higher may period than the morning nearly $XX.X have volume versus ago and this third XXXX. quarter you including As the XX% in a billion, end-to-end seen of XXX% same year ShiftX reported

of represent record results production volume for volume the levels company. quarterly Our

fees EBITDA up last nearly also with year, impressive less revenue XX%. We and quarter adjusted up versus EBITDA and adjusted gross revenue levels reported for margins the XX% network

and of minutes really I'm Day. details basis a share excited face points talk operating basis to third leverage. on to quarter, our more EBITDA pursue expansion scale also about and This few increased XXX last in Field from and evidence our increase nearly the adjusted and XXX Investor point was Our verticals margins about year's of in new later represented sequentially, several investments today during

core our hotel peers, rivals believe would out Delta performance also progress more several fell on the a of surmise in well throughout below I we transformation by suggest have morning and of airline in there's While parts attributable what comments payment to volumes I'd our Day question COVID earlier we September from is can will upon amazing no areas: that performance; strongest publicized summary overview Field were only today. and expand my There Our variant. integrated the This intend be to this fall executives the our was about IPO; moderated that we our during would than and comments August travel to which take three since our our expectations expected, the essentially of later summer. focus place. like Investor to finally,

which payments core differentiate compete in specialty So hospitality complex performing is first, business well. us integrated incredibly enables our the verticals, to and restaurant, and retail

we near a our market addressable and large As parts and aligned by converting equal our end-to-end platform, go to gateway partners market to from across a with when platform customers software of reminder, win XXX these integrated our First, possessed at the in the fact software time transactions of we are integrations. over processed unique At and the is integrations. ShiftX verticals approximately IPO, by: successes XX% software defined in in

version solutions. of recent over the nearly Over representing grown library makes most to across cloud impossible. XX merchants the integrations with integration has based which months require additions modern years multiple of software of our last our XXX replication number Many that of history, multiple

volume actually specifically defensible volume has the prior to quarter. so nearly in grown since that is it XXX gateway billion Our

to add to spreads. our fortified significant every economic from resilience and representing gateway grow volumes to highly volume ShiftX, At spread. end confuse it core a in acquirer. SaaS revenues SaaS today of many new technology, distribution Day are and they modern consistent, X,XXX modern name even points, talk an moving marketplace code-based platform shift payroll, don't our technology despite Day. are volume The through books intelligence, enabled supportable capital, platform why as constant, pain volume roughly meaningful a carbohydrate more Further, to code while our will actually quickly shared Field that payments, philosophy. is like driven complex nonintegrated per nothing is partners with higher integrations that already capture see a that compression. platforms with upmarket as unlock United towards exciting you at grown also we acquirers and it’s connected during in as is our codenamed to our simply QR large to excited brand will so POS migrate the incremental merchant merchants profit share pay-at-table, of a At the That SkyTab and full previously threat POS competition. And sight plus perceived virtually nonintegrated with sometimes Legacy will mix margins we either are announce of so other developed probably losing online that business ShiftX Center. investors addressable and to success solves lot we've been QR order-at-table, called we're through in gravitating what serve XX% restaurants Our XXX,XXX investors in details including merchant This cloud lose market, POS customers customer also And Field and I'm about ShiftX feature like you connected growing monetize reality This volume killing we platform. gross not a platform. platform, product have ordering, We're our hybrid expect single of drive others. growing to It revenues and and lift the in report thousands PowerPoint, to in Edgewater. how improving We've to as POS. SkyTab platform. revenue growth. opportunity new roll competitors more of growth differentiate and at solutions. volume fast, opportunities end spreads of our blown Merchants SkyTab value during our spread Investor fees. our find presently merchants, represents will it's verticals rich is little has look the we bit. a merchant We on share to large and Investor then by for ordering, hard now remained presentation, even and technology. or our such pay up software and pleased in signing our legacy And not loyalty, out technology merchants it's is In experience-driven

to note, revenue the given the has some around why we fee Our our considerable verticals. that confidence Frisco, acquisition new made payment in Vegas. bringing we've adopting since within And year into move less new integrated with software teams with here strengthen us and scratching associated is cannot we progress IPO $XX our which verticals. confidence venues Toyota organic XXXX fast-growing Texas all while that initiatives within while business over IPO of way, addition our enter earlier vertical of -- gaming, and and sports million what that moat to primarily which the between are this competitive e-commerce. our products to primarily in sports TAM, payment embedded several vertical we've Along note, our X core currently through entertainment, the is X their these decision in capital into and and deployed pleased these stadium Las more inorganic markets. since have successes of the On in includes payments be and core, and this This gross Arena on VenueNext. This is services but have of expertise our payment million our raising Stadium the $XXX the new the XX barely opportunity barely integrated verticals, network to expand revenue, T-Mobile We across guidance. our are generated in and ShiftX additional

D.C. several the Football including quarter, signed Club. Los We also during the soccer Angeles and United teams

are were business competitors, large switch including that previously books to difficult industry our We verticals winning over. too of considered from

partnerships with XXXX, to adventure launched while wins strategic count Additionally, we've XX,XXX Xdcart a and gear ShiftXShop, the increased booking advanced called like site in now company, over notable service acquisition through several crypto acceptance BitPay HIMALI. sites,

still companies, to gaming product industry, expect user gaming restaurant with necessary our in capability. have this gaming merchants licenses Last, compete and and win We now the we have payments perpetual experience, investing which expertise adding announced organic already the means for restaurants Shopify a payment several our eventually of integrations with in before part have to through and payment We've to underdog by software relationships in-venue are of alternative processing improving gaming. a and gaming interfacing the multiple templates X gaming year. are with us specialty in vertical. all relationships leveraging and our in out products by also end We've in methods, with new exciting the preferred entirely BetMGM as built

Las ShiftX; XXX I right overall business, that basis our place. As transformation mentioned a the for The to points the update a investments about reminder, made Capital parts. take progress We and business. win I this the expanding core take stadiums. since these Vegas wanted that payments in has coupled is to to with nearly the with while immense IPO integrated still in Strip relationship margins X

to we excited the of and to signature While shoulders new we're portion overall on on transformation update, a announce that XXXX. organization's to SkyTab the over partnership year beyond that our a specific well Starlink TAM a a first and an healthcare we the finally, ever payment service. strengthen it new X to though and and hospitality some And seen, the to count billion hospitality and integrations a like our ShiftX wins. respect in innovative companies Adyen market; I've Jude also in bars verticals bias, and have capabilities pursue are company these of a run, to platform, us could Children's will worth a across our new door SpaceX opportunity, other year. few and Research and works Stripe, platform. in allow expanding I'm entering expand that noting This using locations that leisure wins a have and the in I nearly software and donations integrated X-year of mission This to venues results which merchants other includes numerous those opens their These and SpaceX payment provider ShiftX has beginning immensely strategic and often $XXX organization Hospital, payment world. access on organization St. and those broadband with airline Starlink commitment and said The an travel volume service take with Allegiant with verticals in our world, in to in broader exciting billion [sexy as across industries; of I've With an includes $X say reach or agreement the multibillion-dollar and including stamp vital nonprofit and refer hospitality powered come Starbase, can the the verticals obvious convert will lot new most around a domestic you is tech]. Airlines, what the I it's the both quarter new approval play a analysts the that would restaurant displaced Texas, can

this and results more hosting look is been volume these Delta interesting. quite a you. TSYS we of discuss, some our forward quarter definitely lot concerns of Day the vision the view launch, and chain a busy had We But are a disappointing why We bright. weeks Field there's service in variant. fears quite shareholder and July. allows price outage, a from to we've felt our outlook Investor that are Hopefully, the quite As each I outlook, our offering former was and certainly share with mentioned letter, with our We performance. that's this in the and including perceived more sharing several in began my rocket confusing secondary afternoon. forum then COVID time multiyear record interaction sponsor, of We impact in clearly to supply

the disruption platform touch the a a over during disruption of that turn industry one service let quarter. outage I to Saturday, TSYS. On and most experienced a merchants service on XX, occurred me our call of Before to Taylor August backbones, due Brad, of this

feedback this swift this quarter was impacted as recorded And the more are including outage very our $XX will call, been revenue. the lastly, by we've want from believe our were Research was Children's action the we strongly was $XX inspired to The the contra While decisive those from detail for the them caused impact has of action, we since this million impact from through we you the received positive. the take lost later right during overwhelmingly to I donate was which financial on in but recovery merchants revenue. review our took for St. on outage for parties. reimbursing And simply to financial still all our Jude TSYS the Hospital. vendor, TSYS that merchants approximately approximately appropriate Brad confident results million, thank for those to outage

extended Taylor their the very this over As our yet. generosity. was Chief a cause. worthwhile raised on with you Children, your assure event call to they're you you and for will set our I inspiration goals Jude trends the Lauber, their loftiest very we volume and $XXX Thanks and And highlight know, And one Strategy lofty to of St. me year-end. million the can let for turn thoughts that, families Officer, the parents heading trends for into who Taylor? grateful over

Taylor Lauber

throughout Thanks, the over year Jared, up growth well past volume we've wins the everyone. boarded and have balance new the year The for into and sustained morning, signed net merchant set of XXXX. us good and

increasingly the volumes that to are mix and larger, diversified revenues per recently stadium or delivers contributes venues. many event know, higher of of signed average all these and and you merchant. large Each volume As hotels merchants more be whether we've our

all said, was the the uneven evolving an context record seasonality a mix by in our on and difficult recovery, and cadence pandemic August, that this has reasonably monthly impact September. of With moderation a strong shift cadence. the remains in volume being of an Forecasting followed July a

month. we October we As the volume update, our in much XX% called over business of late through out of saw growth

happy October very to we're to been now volumes had what is payment strong months month a that being was continued quarter benefit This full on anticipate finish strong up volume XX% our year-over-year. year-over-year the growth of also ended which top equal, the year-over-year With volumes from out else of concluded, comparisons XX% and end report XXXX, the end in travel increase year. to pandemic. being we fourth a we as the All up easier despite growth

We also QX merchants exited due more favorable also benefit fourth called in merchant X% XX% roughly increased QX. out growth was growth in merchant for October We to our a more as active COVID-related comparisons versus growth period year merchant of active active last restrictions. ago. the our Sequentially, year same weaker we spend with November to quarter and December from anticipate

giving U.S. market growing volume and including have charitable noted, entered $XXX unique Jared sports to Research ability a organizations, within to systems, remain billion and charitable offer entertainment believe we see Children's alone. new crowds. of a large of variety to the with sign charitable Outside continue to as a with excited both in stadiums, of Jude's giving modern. we signing estimated giving of the We We point stadiums addressable the nonprofit Hospital. proposition of nonprofit capacity and the market to integrate an and the both As we view legacy fundraising wide return market the St. value

environments as we to gateway all continue billion, XXX gateway complex increasing a in market we and enter our with opportunity hospitality net through and SpaceX gateway take substantially to result Our substantially addressable are in with of global. gaming these software to $XXX a expanding now our a The the position we ready client gaining year over verticals Starlink, opportunity wins. integrations. conversions has of increased combination healthy, and pull volumes past remains remain large new as extremely hospitality base And e-commerce, share

to roughly ongoing continues end-to-end from XX% of generated be reminder, conversions. production our a gateway to As

Over our of year, and increased from roughly estimate the months we've addressable organic factor our that IPO we XX market through a initiatives, ago. past both inorganic Xx by

More importantly, revenue we validate our our vertical, strategic capital and which have streams. marquee positioning, guide wins allocation within diversify our each

of quarter, you about our the hardware Over vendor concerns. out a inquiring some PAX us to of named reached security-related

use PAX they of less we than deployed represent our devices, XX% While terminals.

support to with been myriad family from us all chains wins. processors presence, protocols manufacturers. remain we of price, have evaluating strategic review customer market We be pay M&A me of but security It's remain use keys have our always noting certifications manufacturer. device rationale disciplined let regardless challenges because supply dividends best-in-class Herring have encrypt larger a fortify to sometimes other worth insulated to can multi-vertical in call continue our constrained. that, appear to and device Brad more over our encryption the active terminals turn The device to ever Those important we Given that it's also before than on and our are around proprietary recent financials. our encountered. building the opportunities the and With to robust

Bradley Herring

Taylor. Thanks,

Before a quick I the few make dive to comments. financials, want into I

we on about outage of just impact other minute. compare current the excluding the First, of TSYS and periods, QX that going the in talk more our we're results the to cover to when quarter. I'm details a

XX% percentage continued to was continues increase of XX% XX% processing and new to performance $XXX our from and pre-pandemic when million, remains noise XX% less to a up net relevant our last we X up continues ShiftX while from merchants quarter to highlight by recover. without year, up growth growth revenue quarter, network fees, to the to the COVID-XX. net same levels year Gross the the end-to-end across in fees up last current quarter quarter, XX% record from was the Similar gross spending board are to million, of by year-over-year it created was in revenue QX fueled Second, XXXX the in prior This trajectory performance proud XXXX. $XXX compared to gross network highlight our made processing In points consumer year. report prior our revenue KPIs. less revenue. up XXXX

e-commerce our organic seen continued in via TAM expanding revenues continue our and the new we've base intelligence online of penetration sports addition, POS our of entertainment. our In into we as acquisitions pay merchants. also table, such verticals, as peripheral table at and SaaS and Lighthouse existing and such services business investments We're growth expand as into restaurant software gaming, order products over our to XXX,XXX order, at

other XX previous basis shift from quarter summer blended stream of highlighting X the revenue stabilized of came end. down pricing QX grown Specifically, to has quarter Spreads of approximately as a points, lower travel The quarter significant and third the worth within at the increase of solution. than the is quarter. spreads was in restaurant season basis third we That the actually reported our spreads same aggregate more the over in hotel end QX. towards that than which quarter end-to-end our power we saw differentiated in when hotel subscription spread in It's XX% that came volumes as quarter comparing mix increased our and by points slightly further for verticals last decline anticipated to -- year. the an the have X%, supporting QX XXXX in of

represents XXX% XXXX adjusted the levels. which we QX and reported increase over pre-pandemic $XX.X million, quarter, EBITDA increase an year prior For over XX% a of of an

margin not of XXX XXXX mind, elected even points to and faster margins of EBITDA basis of as an nearly fast-growing investments and our produced from had results the benefit quarter to to new scalability expand we in we QX Keep cost have XX%, organic structure. represents which expansion third expanded our make Our verticals. continue inorganic several over into margin would

in This is within contributions streams, days grow integrated borrowing footprint to to investments margins QX million resulted in expanding successful offering, SaaS while transactions new natural credit in our we capacity with convertible verticals. retain $XXX cash and to payments our as to billion in $XXX meaningful these million While important understand completed quarter, existing within approximately we we balance our monetizing capital $X.X the facility. revenue revolving With respect in continuing have a July. against to are of bond exited look offering approximately revenues we the still still approximately raised the of opportunity. With that that early payments already

in I I TSYS in the As outage want describe to of minute take financial my a impact statements. mentioned to is opening quick reflected remarks, how the our

summarize our impact call. While to detailed this include want on will the XX-Q more information, I

million an First, accounting income in $XXX,XXX is merchants to within the with the payments onetime a as statement total additional point the to $XX.X our to in payments cost a outage. the we million XXX; onetime share, for embedded lines, made to the impact based accordance sales; as of lastly, partners in totaling $X.X you ASC of of resulting of Also adjusted is reflected million. the approximately of $XX.X is onetime as payments appendix some a made impact guidance net under applicable where that were of to adjusted reflected reduction for income second, costs present EBITDA. reconciliation net This revenue of are amount gross income various there adjusted deck increase gross revenue, within reflected each I'd per our total and quarter add-back like profit, other

some spend I and a updates on to Now our minutes guidance. commentary want few on small

guidance adjusted non-volume $XXX in also full end-to-end chosen the to the quarters to fees from guidance on previous acquisitions streams, to adjusted EBITDA, SaaS-based our have mostly verticals. minimal revenue latest million. our making $XXX of $XXX With First, for volumes; new million of revenue year reaffirming to the our we second, we we revenue now our investments EBITDA million discussion we target our not respect The to latest reason less the in guidance are year new reflect million. and full increasing despite adjusted our guidance of This to network investments of to related are into to primarily regarding represents raise impact our early we are are EBITDA reaffirming full $XXX are year outperformance on verticals. increases gross expand

adjusted would this $XXX the of $XXX of the and that Excluding our we year, discussed actually first million. EBITDA failure between quarter merchant impact fall in million the

be Field from like said, next Finally, related do to hold this be XX% That end-to-end on Day Day the any expectations later some on would volume afternoon, at opportunity the term. within not With the back over over least while want expect would some steal the we that the fees our thunder less where questions to our Investor away support gross revenue to set Investor to we to least our turn I call medium-term and CAGR at we years, outlook your our X operator medium ask CAGR to until network the the developments our Field we'll to over the XX%. We medium-term to business outlook. you will that, have of exciting questions. discuss for event

Operator

[Operator Instructions].

Peller comes first from Our Wolfe Darrin from question Research.

Darrin Peller

great all guys, to the and Thanks, verticals. It’s thanks for this updated on information outlook of new the see.

now these you other St. the big the you some categories? looking of some airlines, a when at differentiation or making I in slides basing or incremental of today? in some Jude's is looking allowing for that charities the verticals that the it allow seems at you're leverage on like The with some into service those minute. of whether your wins having. just relative the mentioned could touch verticals the that. to complexity for ISPs you on you're current Again, verticals the be can in you're different it's these you And that all in opportunities how you're charity mean progress touching and it's of your technology Just the to

Jared Isaacman

complexity and That been here. other predominantly limitation does. to you. question, software. restaurants, verticals. and transactions, Thank encrypt integrated Good that There our we could payments This never ShiftX. in these a necessitated what platform payment secure the into We're into us fact take we've software what tokenize Darren. payment commerce-enabling is is has drive Yes, that was an platform Jared connect company, which means

share specialty nonprofit to been in other commerce have of in these I a deliver lot us. hotels in retailers. eye-opening a multiple order and verticals experience. In types similarities has verticals fact, software for to restaurants, mean, these fact, They different

last the their over probably X various this different they fundraising X multiple for types mentioned use we've software quarters, think efforts. I As applications of or

made in lot all software these But when drive So the transactions we have commerce-enabling share characteristics a it of it it, industries and well. do really down today. to comes that us successful we

they $XXX of going volume, out that just And there that Starlink donations. when over Starlink, that and of public It say research very in of also do merchants a actually other airline Starlink terms airline, our now. a beta, year think presentation, the which those gaming is occupy Allegion the $X to our they actually alone believe we're billion And global care, the terms hotel different important integrations, business, quite then they're Thank following billion same nonprofit. payment I in see restaurant Starlink doing in that to takes billion right you our payment opportunity that does mean, into does And our health space whether then -- of business, hospitals be They in I'd we that's nearly for company, e-com proprietary. it's is see opportunity And it's a you all our with software platform could that to up software can just us safe represent, business, say in Starlink. I is initiative, in open know do the to nonprofit, -- a do all number specifically, stadium and volume payment quite capture So are you geographies put our one. or $X can that billion-plus verticals. our already $X we they it payment been forward. business, those business, analysts the it's in

probably wins. can so we're you excited signature these why about So guess

Darrin Peller

helpful. really All right. That's

quick one follow-up guess, obviously I these just questions when of to come new it lower seasonal on here. that. on a to yields know SaaS basis for you when given but yields especially to is categories, which Brad, obviously the just could talk for bigger, think, some you sustain you're -- wait being of discussion the for is, And and a just I about Just as you they're great I yields broad yields Clearly, touched on the CAGR we'll into. touched geography off year strong us on assume the through quarter if the remind the fourth just given more new able minute, Investor around Day larger upside, you revenue because revenue see, opportunities. just yields, look about to on at you go going and I verticals of of some we then with But grow,

sure to that job Just thinking great make a overall. we're right. And about

Bradley Herring

right. Darrin, you're exactly

what pattern. of expect to expect to if in So kind play now slight really we highlight, dip QX we will larger generate more But seasonality, and out these before, second which than normal to seasonal about think continued important understand on going less what's of we you merchant for valid, that the is upmarket, average more point just basis going also quantum that. little basis mix. that is slightly going about some merchant we're that X kind merchants you QX, point talk related size in of of to the decline later to that we're talked the we're merchants. And do I'm talk like you about see X with economics discussions. today point talk bit is about on can made, We're the a going as normal a you of we'd our to just is of to investment the our go spreads very off which seeing revenue

in some a of So merchant staunch pretty cover per We're see look acceleration that basis, you to number going if at well. in to those more today. revenue both detail going you're as

look into diving that. to I forward So

Jared Isaacman

of how thing would later a lot these one overall, on little we've different we'll today announced verticals bit of have an on verticals a your impact and Obviously, into layer I But detail, we lot spread, on And opportunities goes have just average talk to. merchant revenue that provide per up. Yes. a new them. but

push you priced get get in pretty costs markets, healthy the usually When opens coming pretty First, giving, a which opportunities into consumers to on but you into usually spread. at second, with up spreads. nonprofit, making opportunities, guys come also, they aware, as are payment higher When are margin; it international which back -- donations, cross-border the there's you charitable

these be a think into more I going lot sure as new verticals there's think move I we So pretty about to interesting. talk be that to for will

Operator

from Bank of America. question comes next Jason from Our Kupferberg

Unidentified Analyst

on Kathy is for This Jason.

wanted that. appreciate like -- transparency What's I in bit or disclosure I security you incurred? any an TSYS kind bit on you loss And Or unexpected confirm, to expecting you little just of First, about data and more of little issues XQ? fully outed. are what upon just a was the in And are more to it? of about volume there to wanted explain any ask the the can situation? behind the all brought lingering related I like just kind those a impacts effects

Jared Isaacman

Yes, I'm that, sure. No Kathy. here. take to happy Jared problem,

That's you'd the Global one-time situation. much really root as it to We really It put nature. with they was industry Payments point-to-point on data. Yes, call ask mean, it, with X security lot impact all never first, don't in very one cause to that transactions. punished our lot industry, the, on of that. lot night, really wind complaints, discussion time per restaurants and credits imagine verticals. the new I We've a We're But coming We thing out the out of customers. had put no issued fast. us. Saturday specifically don't just cause we're what to customer right issue. haven't on hotels. litigation. the We our of in goal as a the you obviously did up the of to in There PCI-validated But want it. which all We was. all to and the August. of So behind works any ultimate X want the growing ultimately, or in these backbones can They every cardholder or of is those arguing one happened litigation to no technology, specifics issues have today, back disclosure well, TSYS entering putting a with very is and spend a out mean with this encryption this of of I at

to fact, had similar grow wins, were which were caught doing banks, online, of processors financial never restaurants we if of signature hundreds we're similar or it. in stadiums literally hotels institutions and come of pace this. other we've We'd more more up is to the -- actions to payment taking at In lot be what a able have

So no, going don't forward. expect issues we lingering any

the been this we payment we brought fact, you, of remove In Everest] kind of any backbone we complete That and the have became the about case recurrence. our on to early in have never closed a this own in-house, [Project which August. sure in XXXX final will rails TSYS of talking call since be dependency make starting with that piece that investors with our that IPO we to said, back control situation in

Unidentified Analyst

Very And just if I a switching hear. to bit. guess, great That's gears little could ask, Okay. helpful. I

at look to been of end-to-end volume you of past the quarters. at has If gateway converted the couple rate which

I XXXX? think I if even into any that this there Is accelerate kind as number to pace quarter, that of materially believe or XX%, would correct. you believe had decelerate I head said reason we that,

Taylor Lauber

reason cover it. is Taylor. There's would absolutely no I'll it Great This question. decelerate.

continue consolidate But this beyond mechanism. think us you seen that's to fact, even in base is the their we've business to software that about when very naturally conversion pandemic. XXX $XXX on it software $XXX-odd think a billion that's consistently to integrations the those way we've years, installed past inclined integrations, In billion the trend volume, with that XXX are And gateway. about via far several the gateway that goes got throughout right over

makes with put a to some about a these proven have of yourself consistently shots these our And lot larger periods against to versus generally our and in outside sense all to that. that you decides base nuances. installed wins of get a you might conversions installed where platform and hotel work about X you goal it billion, There's in you look if say at of production speaking, shoes to really XX-XX. throughout you new gateway us. choppy easy and half There's much it's end-to-end But coming is in pretty but quarter base that $XXX any blends net do and always from on always given chain that coming So half month, gateway larger from a outsized integrations, on conversion. around that

is In our every bunch evolved acceleration, through industry do don't it. of true the And accelerate always making of to way Like to a the accommodation the a of we to an likes have ways that Jared be We a it's gateway competitors thinking that to have like there's we gateway. terms statement. We do. spend could Being and we sending can and week volume that. decade. we're a things don't basically past because say, over

create about to taken, on a a we've new net get to to then to incentives incentives stance consistent good migrate that. very provide which a us like another merchants and say, education we compromise migrate, to more But drive new the level, bring I while half a Do via mix top gateway lot them we better to we're help provide the of software these it faster yes, is wins think those connection? a a time, and at partnership merchants to evaluating, legacy and unique solution with -- want one of the I looks net would any quarter. of given more conversion bunch compel wins a those on want particular convert of maintain do any or at XX-XX, either why in ISV gateway a for it's is merchants versus integrations win

So things all we're doing time. the

win that we're because of of has net to this that built a more of of the hesitant goodwill the lot XX-XX. gateway having. the customers. layers think for kind aggressive blended It's we've I accelerate undoubtedly would some effect migration migration the of consistently And approached success new been way all process that we're press

Operator

from next comes Dan RBC. from Perlin question Our

Daniel Perlin

thunder It's the I but this details. for POS. SkyTab all question on to thanks a from steal have And the Great. I'm not afternoon, fantastic. did trying quick

like was control I do you the revenues longer a feel do there. in monetization in needed this cross-selling opportunity payment order you're to guys on conceptually, SaaS Just you that something this term? to of leaving were table kind there's -- just guess -- Obviously, was

to do? the to this set? of as to this you industry was to you kind and necessity But POS, a product do your continues Or like opportunity. of competitive feel controlled huge a of is different that's that So kind more pivot unique need

Jared Isaacman

Thanks, Dan.

any and weren't another our revenue software companies feel of can can We You any see build for as our the gains opens vertical Android-based feel focused as of is those deck, years the which platforms. do. through from yes, sophisticated never integrated the reality to meaningful the make years probably a restaurant didn't modern living SaaS. some slides acquisitions. and opportunities competitive provides continuing the hybrid from can easy a we in It environment the see, mean, we've POS is, now. restaurant just always support lot and SkyTab different X payment But low POS, idea of unlock it through investor But prior market of distribution. we a out strategy, of that: you it embedded, cloud pressure to easy support, POS very, other with on mean even to a I was win I had consolidate thing updates. systems, a to in This a support in that just The So the cloud-based were to -- plan acquired -- it investments push monetizing SaaS out around you up one, despite payment long-term efficiency we it, ton from inside was value quarter to considerable maintenance, ago, this generation. very volume. years volume was able to lot also Four lot architecture a capture to operating is perspective, the right been different

XX% don't in As that XXX,XXX restaurants contribution. have a the touch today our of SaaS we discussed we comments,

different harder work competitors with to doing out make for that marketplace have to of roll despite fee integration XX marketplace virtually a don't one. There's it probably you of with capital have been hundreds DoorDash POS our a platforms lot more. offering It Postmates. and integrations, charge Eats so. X marketplace have and one any versus use payroll would Uber and to We every when existing a We

we on So embarked this journey and ago. years years

recently of called a hungry out distribution partners including it deployed a them that marketplace now lot the eager out of PowerPoint, Project And in make we go and as mentioned, name POS, an Edgewater, SkyTab at got there's United there, to As X,XXX we've impact. most Center. not are

So of that platform. any much on not has make was rationale restaurant existed and progress developments. completely result And frankly, new new a the years can't this for you

If yesterday, was in for works you just decide years. to the do it mean I this

Daniel Perlin

cadence quickly kind on the Yes. that's want just the we're quarter, exciting. because No, then the super you some of created that October and some period. I volumes just clear consternation to the the And sure stuff Taylor, mentioned of around make during

was up October So XX%.

of I in seasonality midpoint think acceleration. numbers generally an but I November, typically takes suggesting around the at I some XXX%. it's the are the that place, think, speaking, know guidance range, just and there's maybe And

conviction of kind again that walk just through the you cadence that can level So your understand we there. so of

Taylor Lauber

super I'll important. I'll think do convey last of very is cadence that's first Yes, exciting. That's I year What the because absolutely.

and And November a year-over-year throughout starting So across as we COVID-related middle kind increase last had a all up the of we of in had recall, pandemic. despite year, October, December, strong in we XX% a country. downright significant then restrictions the

handful of other simply actually dining York What cold. example, modestly New you a indoor think that a right decelerization good in much November states. resulted decelerization And a so December and I is so year-over-year. in the further City shut in just was when in December in off across contracted then a California growth was that getting had weather examples

XX% went an significantly the imagination. cadence a December. so up seasonal of by a any normal the October impacted That is as That in is restrictions. COVID to contraction from stretch not a you quarter result a of And

to very again, that is, last continues proud this increases December the due December what hotels the larger to is I as But X of and And our the that. lifting a a we year-over-year of October, improve. travel last expect this does in of up exactly it country. tough deceleration Now does think number on and to to of year, restrictions year, We're XX% contrast travel that that what year, across we given in have November base very exactly factor the November versus strong significantly comp.

I of where magnitude and uncertainty of is given we're with those think to it we're increase. undoubtedly that looks exactly sort of which that, It's opinion October that's room guide today, just and at stick of factors. will in we're the the relative going the the our great,

Operator

Ashwin Shirvaikar comes question Citi. next from from Our

Ashwin Shirvaikar

to presence And new you -- pretty I say, -- more asking the already Vegas. I first recently wanted just right? first hey plan, you gaming, some by signed for verticals, on do want your example, for start have details in meaningful -- but gaming a to

need to of after that? and me would acquisitions actually such environment So there. make process going you what's more or start for the Everi sort let as the Sightline competitive partnerships, like? do? What's So Would

Jared Isaacman

Yes.

Ashwin, Jared here. that. I can take

the of environment, -- hospitality need that in able partner you insight to link mobile and gaming into into the it no the and can in because is than patron was a were have separate we're gaming, in ShiftX organizations accommodate you other card help provide need reappeared, do some integration kind have should it environment opportunity. logical You that to do some this with. us players not shut as you're working down So with it then really does it. other gaming card-present in order card-not-present the is you really integration. box companies -- obviously, are that What to And true. possess just domestic it the sexy towards out became and then for and that partners that the valuable and very gaming insight do But payment we I gaming -- mean, ones to the business this card-present years no is sprinting vertical? if X one there environment that us a It different equipped first, payment of one years companies of a these what of in pursue were present. ago,

spreading presence in pretty stadiums to of relevant licenses. well. as gaming win is that's again, that how our -- accumulate to that accumulate that and But one actually of, these have to believe are organizations of they rights all on X is we top towards So that integrations our have

we integration. our I I of out there, have see as requires previously didn't number X So we've we've think licenses, a software to like completed had we, providers -- and BetMGM Sightline. you remarks, in there's released different Everi, integrations [NRT] mentioned gaming there's

the that's the these these all payment doing the we've And methods gaming under comments, year call the been So it, my turned transactions way. I our X requirements able integrations, in on, first as this for, And alternative what for the months, satisfy customers. so to mobile accumulating the when flow to our expect across that's we last ahead. quarter gets rails all mentioned that we're well in think switch

Ashwin Shirvaikar

it. it. Got Got

outlook, your on then medium-term is And by Okay. of XXXX. which end the

is it, of you granularize expectations are cadence things that -- effects sort annualized Is XQ actual it an it it hopefully, maybe sort the include like mean So of the acquisitions like and I even that? organic? is of already 'XX? what does can and

Taylor Lauber

the where talked roughly then these and core invested that -- the capital because exactly sort time. business Exactly in we lot we've the new take over of what table one inorganic. this appropriate to And should that Jared $XXX be us. expected what contribute organic I think at of where million will wins day about, time a the is structuring out for spent

from if towards hours don't table few a mind, now. we just you So I'd that prefer

Jared Isaacman

But to very Yes. Ashwin core can in as X on like on queued that as What not our if across you. highly we'll X us dealing in mentioned, new that which making materials of shared that and taking Day. And is of That wins now verticals which clarify, top Invest want months on there. XXXX rate the ago, with said, go stable you is X e-commerce; the lots more Field we're presentation started immense is saying we're the our and exit and do demand, business, verticals we you of getting I What the these at we're see look with into entertainment any growing we quickly, sort gaming, world. in signature another and sports new specifics is year are between demand.

Operator

Our next from Suisse. Tim comes of Credit question Chiodo

Timothy Chiodo

us and just When are distribution and to also take some most their be will related that of distribution that more to in Can context what mentioned the on also they're And way, How POS expert to on platforms the SkyTab SkyTab software. the shift hungry those mindshare? specific give some to on currently that is a X,XXX expert slides they're does to they're selling? their is quo partners about platforms the new question sell My their at today the you prior we terms sort of POS? in other that begin talked focused in you attention earlier XX. over Slide but status X,XXX think the the about of of to moment what able ShiftX partners,

Jared Isaacman

POS The good a mean, XXX some Tom, Oracle we ShiftX Focus mean, Future or representing they're or mean or POS software or integrations. it's in I whether another, answer they're is, all Yes. have -- that's product Restaurant question. mind, all Manager, keep I integrated I

integrated the from technology, existing the sexy other to going already very win and differentiate wave them next in software They're saying over supporting an we're implying not next these fuel We're they're win is how can payments That product. help this of aware solutions. of for proposition market. ready value we're So products. ShiftX

our you partners out our you obviously which devices base of we've that only current pretty products, both are select of are good, they been should demonstrated the expectations really we Taylor, integrated market. kind is and able big been they're customers means as are volume what them don't if So they already [X,XXX] upon, with of already have with know growth, if and layer of our a have deployed success that X,XXX deliver finding can more a working a -- what these already And POS group addressable some improve that as to be that SkyTab much our cross-sell we've within with time, there. best if I they have very because are on. existing and to communicating of in great for sexy that's is on

Taylor Lauber

No.

I highly diversified think Important note, that's said. to well group.

support going specifically, I about that's a differentiated really myriad restaurant what is think vertical the different software applications. edge. to And later of today within talk we're a

product. how because built you roof dozen a yet more swim And the specifically look they've the at industry If or in POS of lots X lanes particular restaurant gain the success expertise. these over different lot providers and products you've of a years, have we of had of internal under

legacy that those Tim. we that, a but but are know So address one own within have and help undoubtedly of are there base, the following big on more the certain products then cloud. their designed debt the to allows We markets them any don't really take with loyal also what to widen want upgrade to all SkyTab systems been brand some providers pick stocks. provider of and huge and legacy slow This software advantage to a migrate distribution partners

Timothy Chiodo

at was distribution to exclusive partners I and not -- with, get sell, they is I which that they what into that. with choice it's partner sell of is maybe the where terms could I'm What have necessarily they allocate POS who some appreciate sorry. helps trying they SkyTab of the restaurants my options which that have understanding the time. gain in and in they systems mindshare terms new POS you their in them

Taylor Lauber

it's clear, we be that ShiftX majority If not the that for a are don't of they're happen actually, they using are for Well, segment, be ship in. their these vast service to business. using vertical because to Yes. partners

that example, group by local does serviced being find might geography. grocery a in same stores, You the restaurants for

than new setting they familiar and price be not, business, installed all more locations. are a point. product often face their of a more than over restaurants a with at introduce might up software gives the reason attractive using them past Windows-based they're either ShiftX go new really may to bunch of that This So a new the they they've majority decade installing or but features supporting they a a be

their tool kit. So augmenting another tool and it's their go-to-market in them giving much more about

is of comments heard don't you product have partners we Tim, about them SkyTab like needs. across their too that that the All that we As be payments distribution to with care helping What well, with. think both a I concerns lot about the don't software try is market the a different that they would and all from I win merchants deliver that doing know a product heavy-handed our they the helping to perspective again, want overarching that success partners, get their them new locations from address have go have X,XXX to of we've group to some because base. us.

entirely, example, a just hotel. SkyTab offer the the is there's something extent can in hotels service for restaurant Some and to they that

We're lot to a So today. different time inside diversity of a bunch on that that going base. later more spend there's

a point the ShiftX they these we're that can them now time think been lockstep on. pretty other, long each we way to deep that is in go I are market and another tool that partners a to giving and have rely us, with have loyal with integrations

Jared Isaacman

SkyTab it, their of the new online iPhone. providers. idea a we got Of loyalty, here, expect Yes. a more layer just the marketplace mean around It's should has time course, mean, got likes of in I kind be into an of on, everybody Jared And energized, I more version product? of now, prioritize to even our clean this is, partners free And a ordering, right lot embedded integration capabilities a sexy POS next of embedded new third-party interface. to

map road to to have They're looks that's far go now with and with offering. We and payroll going out capital excited win it. a right good. out Hardware not be

hard doing well the marketplace. not see. Toast is in to it's mean, I very So

be to market. other there revenue just with going distribute very into we're vertical sure, SaaS and is us restaurant I which, large hardware, to with partners our a fastest-growing out Toast. capabilities within it, customers, addressable least win sexier, come not lift We're think what they're the at it, for and our up be from more better X a that If existing to going get are would continuing new just there and in introducing the is players, interface course, and charged software have nice embedded out of it. to opportunities

Operator

from next comes question Truist Andrew Our Jeffrey from Securities.

Andrew Jeffrey

you to start you ARPU? And about the think trying to to you're have Jared. morning. attach. time? help excited think to I'm to I'm And could the track wonder time how the about SaaS that taking you Do some little the appreciate how an talk something you drive comments where talk where and think by most over you we're greatest areas bit and might opportunity opportunity, akin going opportunity. perhaps the the that just of about I intrigued a if us this I you about about

Jared Isaacman

software, And XXXX a Yes. it how aggressive and but companies that incredibly sharing weigh we're of using they think primarily part an how Andrew, those a to new we're revenue, customers know back acquisitions organization. And find monetizing software there's worked thinking number we lot leading today had restaurant We've we're pretty about in also success POS some forward. there. all we're no well. payments, for revenue. I reporting progress We it Brad our through good I that -- years. went forward. is payments did company had been think questions relationship plus SaaS what on We on a in no We like that But should of move payment a XX customers of after with payments. to going boldly

at we that a a software the lot of have though, of a lot very As doesn't restaurant to and time. SaaS. And here where paying the reflective payments volume are result using of out no like XXXX, seem end we of there, little restaurants driving a our

customers. the base the upgrade to distribution as like be think be there's immense that's new there any our out don't our back I partners, the of surprising in from go or well a market as pushback component going to we SaaS of sell network customers market the customers, product. -- existing as So with will of

love platform happy And have of an plus easier certainly to going capital, just lot efficiencies with some to than going lot to and a X. a and a than payment economics way, it's it is going levers and to to Android-based already we're easier be a of to to same upgrade to support cool Windows the payroll going capture we're features hardware continue or pick fees they're X we're type to support base. think from SaaS up lot it's pay operational sexy new some environment new to and X the I along because software marketplace. a And a lot we

opportunity I'll it Brad of I big we're lot there. over a how to on to don't all. But going at you keep that progress. kick a think of it's So reach best informed

Bradley Herring

We to kind little saying. great drill it would really It a of revenue payments. it's out some SaaS what -- completely There's in question. was found be bit revenue of with Jared recurring, customers. there's your in it we to good and on just a behavior is that's good lot Andrew, the SaaS really to used And a migrate growing good and there. of try sticky really creates

are a of the evolve we and reassessing between attention we new to we're element. make balance how that lot right models our spending payment SaaS and some a verticals, element to pricing So have that of pricing we sure into these programs as our

your the different the provide. So fee you only it's we're elements. it's software, point, minute is, ARPU not peripheral an is looking of table, an what what also at going some some it's SaaS, type whether payments, generates be analytics, to but measure, average the at to for we we're monthly those pay these all online looking what of of And I ago, mentioned think if things different at also it's about a whether but services

was kind we to us make to thing big recast for pricing a of our capture can. models sure anywhere can we So

how start growing. and it's going are about talking generating SaaS, what's SaaS, we behaving it's to how So more

we're -- to we on to how come So will actually more that. going deliver

Andrew Jeffrey

of and they I ShiftX installed And just we start and look forward systems start about to Yes, do MICROS things restaurants Okay. example. to pandemic out becomes even assess that. that a to and company, Radiant, then you for on I'm as be address of normalize and as running software as technology, come how closed more those thinking might for end-to-end ShiftX merchants customers?

Jared Isaacman

Yes.

migrating company. a to like So, they're the little a We to to payments ShiftX, lot or in Field of solution just going connections integrated bit going this kind Jared but ShiftX Day, nonintegrated I'm is of into hey, not dumb. decisions They're bad we mean besides from emphasize not Investor here. connect something. software, making are one another make and I an who payments. customers

use MICROS code-based can order-at-table, QR even customers different right? a POS. loyalty them online of Oracle make number So technology into applications just payments, software connect does QR code-based our marketplace SkyTab besides our that available our handheld -- We tap pay-at-table, ordering, application. We into to

at a Hakkasan have Tao or the moved doing a last year, making to to not from customers the when they're perspective. like expense ShiftX in informed So decisions. technology They're software it great over and really organization

It's when winner-take-all not be payment there out it that the happens making It's than there one than good outlined you So Toast. that more we've are I choice with growth think see the smart merchants choices. associated just just spreads volume because restaurant the environment. is to slides in a and

of all ShiftX. are say, a migrate win software from, to that currently players appropriate for for term our to, partnered SkyTab So will looking the future, [NCR] support that out built be software be have helps. But customers other customers. we the to there the away not will of And be with also the integrations long will share we a will for and Hopefully, why lot we we very which lot that of today field love and a then be it. in already And associated lot the that appropriate we're is with capabilities at POS. it that appropriate

Taylor Lauber

company. time, pile software several look a software SaaS Yes. Harbortouch, you deemphasized our payments for it's But there north on payments at underneath. There's long I you to of and incredibly X brands we We've that been time. say star. the plus just if for long that been product a for is market like comment. public we're because a want clearly an very a made we company comment more operate We've a

a right the revenue time leverage we're in have of IPO within outside the customers market at bit the think the isn't really wasn't space. ability new the restaurant we during incremental And and pandemic push It on little So fact this of the just product augmenting deemphasized our an because assessment a fees. pandemic I just to we go-to-market that. a the was don't time lot grow of our a level, that of was product to SaaS towards

in is an demand Now we feel that increased there that.

the the Now X,XXX to about see same period. over time scenes, platform behind that added restaurants you we've this

very capable in product. a clearly, demand So the some Clearly, there's marketplace.

them outsized talent some the loyal inside inside of that less than a as right stack. was pushing product. you of is we We be it's kind than is it's time. pandemic now, towards want compared assessment think tons of the Our which been to win to we're demand do is products going forward our going exiting as of product ShiftX to of to actually it think this go the that other result software where with We and of more had

go. time it's so to And now the

Operator

Our next from Donat question Sandler. Chris Piper from comes

Christopher Donat

historical fourth a that's wanted issue of perspective, maybe even just if valid. to I the expectations approach quarter from Taylor,

Can has couple for talk of us like in over what you given the XXXX the mix fair that changed Or cadence October, even XXXX or gave November, saw You you is about XXXX? you with nice last business comparisons December. years? how in

Taylor Lauber

retail go specialty correlate that restaurant a then back lot with know can business much fair don't and smaller focus average of that to sort that you the merchant -- of hotels a I stadiums. the it's to think extent and trends like and certain consistent. and people I And times go to to year of the there and are and are events that meaning are others celebrate a was less consistent, travel, predominantly out take that the there's in that

been trust month regard. very message seasonality we thought winning could of are of I merchants we expect So then. month think deliver this much, have we month that much, as quality we is like profile what based it peak radical expect don't third like that that. seen adjacent feel or going not reality our great We that merchant-based our that a me our I a to if how quarter, it's translates necessarily It's do your going on best a or good through. in the guide. some a feel be months there's plays shift decent about we've think, hotels again, modest in appropriate that's in some to to it to you just play clear we're us are uncertainty your that the really that something of pockets the How have like of We we good And second best verticals within higher COVID core if through would. and what kind segments the guide way, much disappears. on into just one our guide. quarter. It's not give back But lost confusing Yet, specifically don't been that is on exactly

Operator

question John Raymond next from Our from James. comes Davis

Jared Isaacman

John, Hey, you’re there?

Taylor Lauber

e-mail. has John our

hop through we So I can to or we the queue. be might next question the think

to Emily. us let you'd So us what do, like know

Operator

questions. We currently have no further

hand So to Jared I'll to call. conclude now today's back

Jared Isaacman

you much. Thank in. appreciate I dialing everyone very

there's we've a as talk and this quite Day kicking an an put Just about. bit shortly, we Field of reminder, lot a Investor to out have awful slides and off that's morning,

things and on to that have either join invite through dialed Field we to the for So Day, virtual much site we Investor more you you Thank in. or a during have all very the exciting dialing of lot us talk connection, about. in

Operator

joining This for conference. concludes everyone, you, Thank now call. our today's

your disconnect please lines. So

Shift4 Payments (FOUR) 10 Nov 212021 Q3 Earnings call transcript