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    FOUR
    Earnings call· Mar 2026(Q1 FY26)

    Shift4 Payments Q1 FY26 earnings call FOUR

    May 7, 2026 Source

    Executive summary

    Shift4 Payments, Inc. Q1 FY26 — Durable Growth Amidst Macro Headwinds and Scaling International Expansion

    Shift4 Payments delivered resilient Q1 FY26 results, meeting or exceeding guidance despite macro headwinds and travel disruptions from the Middle East conflict. The company's diversified business model, particularly its scaling international expansion and strong competitive differentiation in the experience economy, drove significant growth in payments-based revenue. Management maintains its full-year outlook, acknowledging continued volatility while focusing on financial discipline and strategic investments in new geographies and product offerings.

    Highlights

    5

    • Gross revenue less network fees grew 49% year-over-year to $549 million, in line with guidance.

    • Adjusted EBITDA grew 39% year-over-year to $234 million, achieving a 43% margin, in line with guidance.

    • Adjusted free cash flow grew 26% year-over-year to $88 million, exceeding guidance.

    • Worldwide payments-based revenue less network fees (excluding Americas) grew 51% year-over-year, exceeding expectations.

    • Repurchased 5.5 million shares, contributing to a cumulative $600 million against a $1 billion authorization.

    Concerns

    4

    • Middle East conflict caused an estimated $4 million to $6 million headwind on tax-free shopping revenue less network fees in Q1.

    • Organic gross revenue less network fees grew 11%, with a drag of approximately 400 basis points from intentionally deprecated legacy revenue streams.

    • Full-year guidance remains unchanged, reflecting wider volatility of outcomes and a neutral outlook for same-store sales recovery in H2.

    • Q2 adjusted free cash flow guidance of $10 million reflects seasonality of the tax-free shopping business and Q1 timing benefits.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full Year 2026 Gross Revenue less Network Fees Growth
    26% to 31%
    high materiality
    Medium
    Full Year 2026 Guidance
    unchanged
    high materiality
    Medium
    Q2 2026 Gross Revenue less Network Fees
    $615 million
    high materiality
    High
    Q2 2026 Adjusted EBITDA
    $278 million
    high materiality
    High
    Q2 2026 Adjusted Free Cash Flow
    $10 million
    high materiality
    High
    Q2 2026 Gross Revenue
    $1.17 billion
    medium materiality
    High
    Pro forma net leverage
    not to exceed 3.75x
    high materiality
    High
    Net leverage deleveraging
    delever by approximately 0.5 turn per quarter
    high materiality
    High
    Adjusted EBITDA margin
    50%
    high materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Americas Payments-Based Revenue less Network Fees
    This region was largely unaffected by prior year M&A and delivered mid-teens growth despite modest same-store sales. It represents a mature market for Shift4.
    		—15%——
    Worldwide Payments-Based Revenue less Network Fees (excluding Americas)
    Exceeded expectations, demonstrating strong scaling of international expansion. Growth is primarily driven by location count rather than volume per merchant.
    		—51%——
    Tax-Free Shopping (TFS)
    Growth is on a pro forma year-over-year basis as the Global Blue acquisition was consummated in July 2025. Experienced headwinds of approximately $4 million to $6 million due to Middle East conflict travel disruptions.
    		—4%——

    Operational metrics

    17
    Gross Revenue less Network Fees
    $549 millionup 49% YoY
    Q1 FY26

    In line with guidance.

    Adjusted EBITDA
    $234 millionup 39% YoY
    Q1 FY26

    In line with guidance.

    Organic Gross Revenue less Network Fees Growth
    11%
    Q1 FY26

    Adjusting for acquisitions, with a drag from intentionally deprecated legacy revenue streams.

    Total Payments-Based Revenue less Network Fees
    $345 millionup 25% YoY
    Q1 FY26
    Subscription and Other Revenue Growth
    11%YoY
    Q1 FY26

    Exceeded annual growth algorithm variable provided last quarter, but expected to vary quarter-to-quarter.

    Volumes
    $56 billionup 24% YoY
    Q1 FY26

    Volume mix largely in line with expectations despite early quarter weather effects.

    Blended Spreads
    61
    Q1 FY26

    Achieved while delivering $56 billion in volumes.

    Non-GAAP EPS
    $0.97
    Q1 FY26
    Adjusted Free Cash Flow per Share
    $0.95
    Q1 FY26
    Adjusted Free Cash Flow Conversion from Non-GAAP EPS
    98%
    Q1 FY26
    Share Repurchases
    5.5 million shares
    Q1 FY26

    Part of a $1 billion share repurchase authorization announced two quarters ago.

    Pro forma net leverage
    3.7x
    Q1 FY26

    The company maintains a view not to exceed 3.75x on a sustained basis.

    Total Sales Resources
    over 700grown at about 18% a year
    current

    Includes direct sales and third-party distribution networks.

    Restaurant POS Active Merchant Count Growth
    over 40%YoY
    Q1 FY26

    More than half of active restaurant merchants use Shift4 Dine software.

    Gross Revenue less Network Fees CAGR
    over 35%
    since 2019

    Compound annual growth rate since 2019.

    Adjusted EBITDA CAGR
    38%
    since 2019

    Compound annual growth rate since 2019.

    Cumulative Equity Dilution
    less than 20%
    since 2019

    Achieved while growing revenues 8x and diversifying the business.

    Industry KPIs

    3
    MetricValueDetails
    Capital returns5.5 million sharesunits
    Payments volume gdv$56 billionUSD
    Net revenue yield take rate61bps

    Product announcements

    1
    ProductTypeDetails
    Shift4 Onelaunch

    Deals & partnerships

    1
    Global BlueAcquisition to expand international footprint and capabilities, particularly in tax-free shopping.

    Consummated in July 2025. Builds upon other international expansion efforts.

    Risks & headwinds

    4
    Middle East conflict travel disruptionsQ1 FY26, Q2 FY26

    Estimated $4 million to $6 million headwind on tax-free shopping revenue less network fees in Q1. Expected $20 million impact on Q2 Gross Revenue less Network Fees.

    Mitigation: Historically, the tax-free shopping business has rebounded within 4-8 weeks of travel disruptions. Analysis is based on forward airline passenger seat capacity, which is fairly baked in.

    Softer same-store sales trends in restaurant SMBs and lodging in the AmericasFull Year 2026

    Slightly better than expectations in Q1, but full-year outlook remains fairly neutral, not forecasting a dramatic recovery in H2.

    Mitigation: Diversified business model, strong growth in other verticals (e.g., restaurant POS active merchant counts up over 40% YoY), and international expansion.

    Wider volatility of outcomes in the current environmentFull Year 2026

    Full-year guidance remains unchanged, reflecting this volatility.

    Mitigation: Diversification of business, durability of growth, financial discipline, and a global footprint across 75+ countries.

    Seasonality of the Tax-Free Shopping (TFS) businessAnnual

    First half of the year is cash flow consumptive, while the second half is cash flow generative.

    Mitigation: Provided quarterly guidance for the back half of the year in shareholder materials to help investors acclimate to the quarterly cadence, especially for adjusted free cash flow.

    What to watch in Q2 FY26

    5

    Middle East Conflict Impact on TFS

    Q2 FY26
    CurrentEstimated $4M-$6M headwind in Q1, $20M impact embedded in Q2 GRLNF guidance
    TargetActual Q2 impact aligns with guidance, signs of rebound

    Why it matters

    The conflict significantly impacts the high-margin tax-free shopping business, and its duration and severity directly affect revenue and profitability.

    For the second quarter of 2026, we are introducing guidance as follows: GRLNF of $615 million, which embeds an approximate $20 million impact from travel disruption due to the Middle East conflict

    Q&A highlights

    5

    Inquired about Shift4's current distribution approach, including the size of its direct sales team in the U.S., European build-out, and the number of resellers/VARs/agents, especially given competitors hiring large direct sales teams.

    Taylor Lauber explained the evolution from primarily third-party distribution to in-sourcing a direct sales team (approx. 300 full-time salespeople in the U.S.) while maintaining strong ISV networks. He noted international expansion is replicating this model, building direct sales for Global Blue's 70,000 SMBs and expanding ISV relationships. Total sales resources are over 700, growing at 18% annually. Chris Cruz clarified that indirect distribution is compensated via residual commissions (cost of sales), while direct sales are fixed costs (OpEx/SG&A), reflecting a strategic trade-off between variable and fixed cost structures based on market maturity.

    “all told, our total sales resources, I actually like blushing at this number because we -- the company was half the size is over 700 at the moment. And that's grown at about 18% a year.”

    asked by Timothy Chiodo · answered by David Lauber

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 Performance and Macro Environment

    Shift4 delivered Q1 results in line with guidance, demonstrating durable growth despite a challenging macro backdrop and unforeseen events in the Middle East. The company's diversified business model and competitive differentiation in the experience economy were key to its resilience. Management noted slightly better-than-expected same-store sales trends in restaurants and lodging but maintained a neutral full-year outlook, not forecasting a dramatic recovery in the second half.

    02

    Scaling International Expansion

    The company's international expansion is scaling meaningfully and on track. The Shift4 One product, combining payments, dynamic currency conversion, and tax-free shopping, is now in 7 countries and targets 15 by year-end. This product aims to unlock revenue synergies within Global Blue's SMB luxury retail installed base. New enterprise luxury retailers like Stella McCartney and Massimo Dutti were signed for tax-free shopping.

    03

    Competitive Differentiation in Experience Economy

    Shift4 emphasizes its focus on the in-person experience economy, powering payments where people shop, dine, stay, or play. The company's SkyTab POS (rebranded to Shift4 Dine) grew active merchant counts by over 40% year-over-year in restaurants. In hotels, it secured a 5-year renewal with Choice Hotels and signed new properties. Sports and entertainment capabilities were highlighted with new team signings (Inter Miami, Chicago Fire, Houston Astros, Chicago Cubs) and powering events like the big game at Levi's Stadium.

    04

    AI and Expense Management

    Shift4 leverages AI to scale more efficiently in new markets with fewer resources, speeding up product delivery and support infrastructure. The company maintains a disciplined approach to expense management, aiming for operational improvements, headcount control, and minimizing customer acquisition costs. This discipline is expected to help achieve a path back to 50% margins as international operations scale.

    05

    Strategic Growth and Financial Discipline

    Since 2019, Shift4 has grown gross revenue less network fees by over 35% CAGR and adjusted EBITDA by 38% CAGR, with cumulative equity dilution of less than 20%. This growth was achieved through diversification of revenue streams, expansion into new geographies, and deepening its product suite, allowing it to perform well even in tough environments. The company now has a global footprint in over 75 countries.

    06

    Impact of Middle East Conflict on Tax-Free Shopping

    The conflict in the Middle East created an estimated $4 million to $6 million headwind on the tax-free shopping (TFS) category in Q1, primarily impacting travel from GCC and East Asian consumers to Europe. The company uses passenger seat capacity data to model these impacts and expects a potential $20 million impact on Q2 GRLNF. Despite this, the TFS business has historically shown resilience, rebounding within 4-8 weeks of travel disruptions.

    AI-generated summary of the company’s earnings call. Not investment advice.