Sunday , July 14, 2024

With Appetize and Finaro on Board, Shift4 Plots Expansion in the U.S. and Europe

Having closed on two key acquisitions, the big processor Shift4 Payments Inc. is looking to expand its business in Canada and Europe and build on its new beachhead in sports arenas, top management said early Tuesday.

With its $100-million deal last fall to acquire Appetize Technologies Inc. from SpotOn Transact LLC, Shift4 plans a wide expansion of its existing business in processing for tickets and amenities at sports stadiums. It’s racing now to equip many of these arenas in time for Major League Baseball’s opening day in April.  Overall, “we have hundreds of stadiums we have to move over,” chief executive Jared Isaacman said during a conference call to discuss Shift4’s fourth-quarter results.

The migration will be a big win for the company’s SkyTab hospitality system, which competes with a slew of high-tech restaurant and hospitality point-of-sale technologies. For the year ahead, Shift4’s goal is to reach 30,000 total restaurant installations in the U.S. market alone, with another 10,000 planned for Canada and Europe. “These are net new targets,” Isaacman told equity analysts on the call.

Isaacman: “We have hundreds of stadiums we have to move over.”

Shift4 isn’t thinking small about SkyTab’s new potential. Oracle Corp.’s Micros, whose specialty is large enterprise restaurants and hotels, is a competitive target, executives said on the call. “Yes, absolutely, SkyTab has the ability to compete in that swim lane,” noted Taylor Lauber, Shift4’s president and chief strategy officer, who also spoke on the call. Isaacman cited economics as a lever to persuade large enterprises. SkyTab, he said, offers “the lowest cost of ownership of any restaurant POS system.”

In Europe, the company’s recent $525-million acquisition of the processor Finaro is expected to serve as a crucial beachhead for Shift4 in a new geography. The closing of that deal ended months of frustration for Shift4 as the event was delayed multiple times. But now Finaro is expected to pay dividends as Shift4 builds its overseas business. Meanwhile, mergers and acquisitions like this “continue to bring in new talent,” said Lauber.

Shift4 continues to work to migrate clients from its gateway service to its end-to-end payments platform, which offers higher margins. This has been a long-term project, but Lauber conceded Shift4 is still processing $120 billion in annual volume on its gateway, compared to $109 billion in end-to-end volume in 2023. The company is targeting end-to-end volume of $160 billion for 2024.

For the quarter, Shift4 posted a 33% increase in gross revenue, to $705.4 million. For the year, revenue grew 29% to $2.56 billion. Net income for the quarter fell by half, to $19.2 million, but rose 42% on the year, to $122.9 million.

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