Shift4 Payments Q2 Volume Surges 42%, EBITDA View Raised

Shift4 Payments beat second-quarter estimates, pushing total payment volume to $40.2 billion and lifting its full-year profit forecast. Revenue rose 28% to $1.1 billion. Adjusted EBITDA climbed 30% to $186 million. Earnings per share of $0.87 topped the $0.82 consensus, according to data compiled by Bloomberg.

CEO Taylor Lauber said the company's integrated payments platform and international expansion are delivering results. "We delivered another strong quarter, and we're raising our full-year outlook," he said on the call with analysts.

Shift4 now expects full-year adjusted EBITDA of $800 million, up from a prior range of $770 million to $790 million. Revenue growth guidance was raised to 25% from 22%.

Lauber outlined a three-year target of $1 billion in adjusted EBITDA by 2029. That goal depends on continued expansion in Europe and new verticals including gaming and government payments, he said. European volumes rose more than 50% year over year. He added that the new verticals could add $10 billion to $15 billion in annual volume over the next few years.

On the call, analysts from Mizuho and UBS asked about competitive pressure from larger processors. Lauber said Shift4's integrated platform and focus on restaurant and hotel verticals give it advantages. He reiterated the company's appetite for "selective, accretive M&A" to fill product gaps.

CFO Christopher Cruz attributed the margin improvement to operating leverage and a shift toward higher-margin integrated payments. Adjusted EBITDA margin expanded 80 basis points to 16.8%. "We're investing for growth. We're also disciplined on cost," Cruz said.

Shift4 added 4,000 new software partners in the quarter, bringing the total to more than 20,000. Merchant services volume grew 40%, and the software and payments segment grew 35%. Free cash flow reached $180 million, up from $140 million a year earlier. Shift4 ended the quarter with $1.2 billion in cash and $3.4 billion in debt.

The stock rose 4.2% in regular trading Wednesday to close at $132.40 ahead of the print. Shares are up about 30% this year.

Shift4 will host its first Investor Day on Sept. 15. Lauber declined to discuss specific acquisition targets but said the company remains active in evaluating opportunities. At that event, management is expected to provide more detail on capital allocation and long-term strategy.