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Shift4 Payments, Inc. - Q1 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2026. Shift4 Payments, Inc. is a leading independent provider of software and payment processing solutions in the U.S. and a global leader in tax-free shopping (TFS) following the acquisition of Global Blue in late 2025. During the quarter, the Company completed the acquisition of Bambora (Worldline's North American subsidiaries) and executed "Simplification Transactions" to collapse its Up-C structure, eliminating the Tax Receivable Agreement (TRA) liability associated with Rook Holdings.

Key Financial Metrics

Note: Net income attributable to common stockholders reflects a $16 million preferred dividend accrual.

Material Changes vs. Prior Period

• Revenue Growth: Gross revenue increased 32% ($273 million) year-over-year, driven by a 21% increase in payments-based revenue (due to volume growth and acquisitions) and the inclusion of $102 million in TFS revenue from Global Blue.
• Profitability: While GAAP net income declined to $12 million from $20 million, Adjusted EBITDA grew 39% to $234 million. The decline in GAAP net income was primarily due to increased interest expense ($65 million vs. $29 million) and preferred dividends.
• Acquisitions: Completed the acquisition of Bambora for approximately $92 million in cash on March 2, 2026. Bambora serves over 140,000 merchants in the U.S. and Canada.
• Capital Structure: Executed the "Simplification Transactions" in February 2026, converting Rook's LLC interests and Class B/C stock to Class A common stock. This eliminated the TRA liability of approximately $120 million attributable to Rook and removed a stockholder with majority voting power.
• Share Repurchases: Repurchased 5.5 million shares of Class A common stock for $295 million under the November 2025 program.

Guidance, Outlook, and Risks

Management Commentary: Management highlighted the strategic benefits of the Simplification Transactions, including the elimination of future TRA payments and voting control complexities. The Company continues to focus on expanding its merchant base and geographic footprint through acquisitions like Bambora and Global Blue.

Liquidity: As of March 31, 2026, the Company held $473 million in cash and cash equivalents, with an additional $450 million in settlement assets. The Revolving Credit Facility has $550 million in available capacity. Management believes cash flows will be sufficient to fund operations and debt service for the next 12 months.

Risks and Contingencies:

• Foreign Currency: Approximately 27% of revenue was denominated in foreign currencies. The Company uses Euro-denominated notes as a net investment hedge for its Global Blue subsidiary.
• Debt Obligations: Significant debt maturities include $643 million in 2027 (Convertible Notes) and substantial principal payments thereafter. Interest expense is elevated due to recent financings.
• Regulatory: Ongoing monitoring of global minimum tax frameworks (Pillar Two) and potential impacts on income tax expense.

Investor Verification Checklist

• Preferred Dividends: Verify the impact of the $16 million preferred dividend accrual on net income available to common shareholders.
• TRA Liability Reduction: Confirm the accounting treatment and future cash flow implications of the $120 million TRA liability reduction from the Simplification Transactions.
• Bambora Integration: Monitor the integration progress and revenue contribution of the Bambora acquisition in subsequent quarters.
• Debt Covenants: Review compliance with financial covenants, particularly given the high leverage and interest expense environment.
• Share Count: Note the significant increase in Class A shares outstanding due to the Up-C collapse and the concurrent share repurchase activity.