Company Profile
Founding of the company
Shift4 (ticker: FOUR) is an American payment processing company headquartered in Allentown, Pennsylvania. The company was founded in 1999 by Jared Isaacman, when he was 16 years old.
Founder
Founded by founder Jared Isaacman in his parents’ basement when he was 16, the company has been around for nearly 25 years. In 1999, he founded United Bank Card, a retail payment processing company (later renamed Harbortouch and Shift4 Payments).
In 2012, he co-founded the private air force Draken International to train pilots for the US military. He is also the sponsor and commander of the SpaceX spacecraft Inspiration 4. On September 12, he participated in the SpaceX “Polaris Dawn” commercial spacewalk mission, completing the first human spacewalk. Commercial spacewalk missions conducted by non-professional astronauts.
IPO
The company will be publicly listed on the New York Stock Exchange in 2020.
Focus field
Processing payments for over 200,000 businesses in the retail, hospitality, leisure and restaurant industries. Shift4 focuses on business solutions such as mobile payment software and hardware.
Business introduction
Solution
Shift4, established in 1999, is undoubtedly a good choice for medium- and medium-sized enterprise users. As a leading independent payment process support and technology solution provider, Shift4 mainly solves the challenges of payment collection and daily operations for enterprises, and assists enterprises as much as possible to provide agile solutions that reduce costs and increase efficiency.
By unifying multiple payment interfaces, Shift4 provides free EMV equipment for users to use, making it convenient for customers to complete payment actions through the same entrance and pay lower commissions.
Note: EMV is a payment technology standard suitable for debit and credit card transactions. It is a technical standard jointly initiated by Europay, MasterCard and Visa.
Revenue sources
Shift4’s profits mainly come from two aspects:
- Transaction fee income: When merchants use Shift4’s payment interface, Shift4 will charge a fixed proportion of handling fees.
- Subscription income: This part of the fee is a monthly payment model. Merchants subscribe to Shift4’s POS software system, BI tools, payment device management, etc. and pay Shift4.
Three product platforms
Shift4’s income is inseparable from Shift4’s three platforms: three business lines: payment platform, payment ecosystem, and POS solutions:
- Payment platform: It mainly carries out end-to-end secure payment through the front-end gateway, mainly ensuring the safety of consumers’ payment and the smooth collection of merchants. The design of the entire platform is based on the design of a payment platform that is integrated, reliable and secure. Now Shift4 has implemented multi-platform channel acquisition: it can accept transfers from Apple Pay, Google Pay, Alipay, WeChat Pay and other ports.
- Payment Ecosystem: Mainly by providing solutions for merchants’ mobile payment, marketing, and management needs, including mobile payment, business intelligence, internal and external supply chain/humanpower/sales management, etc., allowing small and medium-sized business owners to truly understand the daily operations of their stores. The Shift4Shop, BI tool Lighthouse, iPOS, mobile POS SkyTab, and supply chain management tools acquired by Shift4 all belong to this module. On the one hand, it expands Shift4’s payment merchant network, and on the other hand, it allows catering merchants to accept directly on the POS system. Takeaway platform orders facilitate financial settlement.
- Pos solution: It is a traditional project in the payment industry. Shift4 provides POS software and hardware systems for restaurants and hotels to facilitate full-process digital management of chain restaurants/hotels. Today, Shift4 has more than 7,000 partners, covering basically all merchants in North America. At the same time, in order for its partners to better serve customers,
Shift4 provides a wealth of toolboxes and module sets for partners to call, improving development efficiency and forming a benign ecological environment.
Business scale at the time of listing
Today, after 25 years of accumulation of experience, Shift4 has achieved the following business scale:
- Already has more than 200,000 customers.
- There are more than 7,000 sales partners.
- On average, more than 35 billion transactions of various types are completed every year.
- And achieved 350+ technology integrations.
First financial report after listing
The 2020 Q4 earnings conference call showed that Shift4 has achieved 21 consecutive years of profit growth. In the fourth quarter alone, end-to-end payment volume grew 12% year-on-year to $6.8 billion. Among them, channel content accounted for 63% of total revenue, a significant increase compared to 54% in Q4 2019.
Acquisitions
In November 2020, Shift4 announced the acquisition of e-commerce platform 3dcart. In January 2021, Shift4 rebranded the solution to Shift4Shop.
In March 2021, Shift4 announced the acquisition of VenueNext, a provider of point-of-sale and payment solutions for stadiums, arenas, and other entertainment venues.
In 2022, Shift4 announced the acquisition of Finaro.
Focus on enterprise users
Differences from other well-known payment merchants
Payment providers that are familiar to most investors, such as Block and PayPal, target both business users and general consumers. However, Shift4 only provides payment for business users, especially small and medium-sized enterprises, and directly skips general consumer users.
Provide overall solutions
Simply put, Shift4 helps software partners and merchants better accept electronic payment forms such as cards, contactless payments and digital wallets. Shift4 sells primarily to software partners and merchants, both sales channels representing long-term growth opportunities.
The company offers a single integration of end-to-end payment products, proprietary gateways and a robust set of technology solutions to increase the value of its software and simplify payment acceptance. Software partners working with merchants need to ensure that their solutions are fully integrated with the multiple applications merchants use. Software integration is required to enable secure payment acceptance and support additional services required by merchants.
For merchants, Shift4 provides a unified consumer experience for accepting payments, rather than the traditional model where merchants use multiple providers. The company’s competitive advantage lies in its ability to provide a unified payments solution that allows merchants to have only one product partner across the entire ecosystem.
Enterprise-specific solutions
Shift4Shop
The e-commerce platform 3d eCommerce Platform (which has become today’s Shift4Shop) acquired through the acquisition of peers covers areas that it has never been involved in (art e-commerce, maternal and infant e-commerce, clothing e-commerce, etc.), which has brought Shift4 It accounted for 54% of the growth of online merchants, with the number of merchants increasing by approximately 8,000, greatly expanding its online payment channels and touch points in the field of self-service collection.
VenueNext
As a mature sports event platform, VenueNext undertakes ticket sales for well-known leagues such as NBA, MLB, NFL, NHL, etc., and also covers some large theme parks in the United States.
At the same time, through recent cooperation with the Las Vegas Raiders baseball team and ticket seller STAPLES Center, this territory is covering the full-link payment territory for sports consumers. This territory is expected to bring $2.5 billion to $3 billion in transaction volume to Shift4.
Competitors
The main competitors listed in Shift4’s S-1 prospectus when it went public include:
- Clover: the enterprise payments arm of Fiserv (ticker: FISV)
- Block (ticker:XYZ): Focuses on both small and medium-sized enterprises and general consumers, targeting well-known payment providers in the United States.
- Toast (ticker: TOST): A payment provider focused on hoteliers.
- Elavon, a unit of U.S. Bancorp (ticker: USB).
- Adyen (ticker: ADYYF): A payment provider focusing on medium and large enterprises.
- Lightspeed POS (ticker: LSPD)
Capital market performance
Market Cap
As of December 17, 2024, Shift4’s market value is US$9.32 billion, which is considered a small stock in the US stock market.
Price-to-Earnings Ratio
As of December 17, 2024, Shift4’s P/E ratio is 56.07 times.
Stock price performance
As of December 13, 2024, Shift4’s stock:
- From the beginning of 2024 to December 17, 2024, it rose by 41.07%.
- Since the company went public, it has risen by 208.56%.
Isaacman is a space fanatic
Isaacman to serve as NASA administrator
On December 5, 2024, President Trump nominated billionaire Jared Isaacman as the next administrator of the National Aeronautics and Space Administration (NASA). He will oversee NASA’s roughly $25 billion budget and a range of human and robotic space exploration programs, including the flagship Artemis program, which aims to return humans to the moon.
The appointment caused a sharp drop in stock prices
After the appointment was announced, Shift4’s stock price fell by more than 10% that day, as investors worried that Isaacman would not be able to focus on his work as CEO of Shift4, which would affect the company’s business. Wall Street also lowered the company’s stock price. Target.
Completed the first civilian space walk
Trump announced the nomination about three months after Isaacman and SpaceX engineer Sarah Gillis made history by completing the world’s first commercial spacewalk as part of SpaceX’s Polaris Dawn mission. “Mission, he and three crew members boarded the Crew Dragon to explore deep into space and completed the first civilian space walk mission in history.
Close ties with Musk
Isaacman is a close partner of tech tycoon Musk. SpaceX is one of NASA’s largest partners and frequently bids for the agency’s contracts. Musk was quick to congratulate Isaacman on social media.
Isaacman’s nomination could raise concerns that he would favor Musk’s SpaceX in terms of NASA policy and contracts. Isaacman has invested an undisclosed amount of his own money in two SpaceX missions, and the company he runs, Shift4 Payments, has provided SpaceX with $27.5 million in funding.
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