All right. We are going to kick it off here. Kicking us off for the third day of the conference is Chris Cruz, CFO of Shift4. Chris, thanks for joining us. Thanks for having us [Well]. I am really happy to be here. Great conference. Wouldn't miss it. I wanted to kick us off high level here. When you think about the story for Shift4, how are you thinking about the story of differentiation for the company? What do you think the major selling points to customers are? Yeah. It is a great way to think about us as we are coming into this year and really embracing this idea of who we are as the company that wants to help empower the experience economy. Whether that is shopping, dining, staying, or playing, across all of these different subverticals of the experience economy, we want to be the provider of payments integrated to commerce technology that helps power all of those experiences. Restaurants, hotels, lodging, resorts, stadiums, entertainment like Levi's Stadium here, where the 49ers play or where they hosted the Super Bowl. This is all the in-person payment experience that is super complex. It is very hard. It requires not just lines of code and payment platforms. You need to integrate into vast libraries of software that run revenue centers. You need to deliver on multiple payment modalities, cards, bank rails, ATMs, et cetera. You need to do it all with a real physical infrastructure in mind, so that when the dinner rush comes 7:00 o'clock Saturday night, you can actually go and break fix. You can actually keep the uptime. When something like the Super Bowl happens, you have the ability to provision all of that infrastructure, make it happen, because those in-person memories and moments that matter are the things that we want to keep that uptime on. We do all of that with I think, the revenue model that aligns with reliability. So the idea that it is almost like the original usage-based billing model, right? That is what payments bring to the table. If the uptime is there and the merchant is making money and collecting those payments, we are aligned with revenue. If it is down, we are down. I view that as the core things of what we do, what differentiates us, and how our value proposition resonates with these experience economy end markets. When you think about what that brings from a financial perspective, how does that inform how you communicate the growth algorithm to investors? Yeah. Coming into this year, it was really important to really help take this globally expanding, growing business, covering the experience economy as a whole, and trying to break it down into some of my own sort of understanding in financial formula in growth algorithm. We introduced the concept of the growth algorithm at the beginning of the year, cutting across two very important axes. The first of which is how our revenues are generated. So, our disaggregated revenue categories of payments-based revenue, our north star, three-fifths of the business, tax-free shopping, and subscription and other. Then we also look at the business through the lens of our geographies. The global expansion narrative of what we are after is a really important part of our growth algorithm. That is where we look at the Americas region versus worldwide as a whole. And those are two very important axes to look at the business. When you look at that growth algorithm. Essentially, a composition that calls for payments-based revenue to grow in the low 20s, that is like a mid-teens in the Americas and a high 20s, but outperforming in the worldwide region. A tax-free shopping growth algorithm that is calling for mid-single digits and a subscription and other that is calling for low double digits. That was for the year. When we look at that growth algorithm and you look at the H1 of the year, I will admit that it is a difficult thing to then turn into a framework for ongoing growth because you have something. For example, like worldwide payments-based revenue year to date, it has grown 50+ percent. How do I turn that into some sort of a framework for future growth? What I like to point people to is. It is important to understand that the H2 implied in our growth algorithm really does show you the building blocks of taking. You take the year to date, you take the full year outlook and you can see that our H2 kind of runs with a growth algorithm that would suggest nine to 13. So, high single digit, low double digit. I think that kind of a way of thinking about the building blocks of the business, that kind of growth algorithm is an important framework to appreciate and understand as you start to think about durable growth in the future. Yeah. No, that makes sense. Maybe just on the near term. At the most recent quarter, you took the full year guide down at the midpoint. The bulk of that revision came from FX and some of the continued travel disruptions out of the Middle East. So two parts. How much of the remaining guide would you characterize as de-risked at this point? Separately, on the broader spending environment is there anything to call out on same store sales dynamics that you are seeing as we sit here late in the quarter? Yeah. Let us unpack that. We revised the full year guidance at the second quarter earnings. Rightfully so, a little less than 200 basis points at the midpoint. On a constant currency basis, it actually is closer to 100 basis points in terms of the revision, when you play it through. Absolutely right. The two biggest drivers of that revision were one, just trying to adjust for the fact that FX volatility has moved quite a bit. When we set out the plan at the beginning of the year to where we are today, it is amazing to think that we were talking about a world where the US dollar was supposed to depreciate against the euro pretty meaningfully. I think Goldman and JPMorgan were debating by how much, because it all hinged on how many rate cuts were we going to have. Right. We are just in such a far cry from that. A large portion of that revision was just simply updating those FX. Then of course, the topic that we have been talking about quite a bit over the last couple of quarters, the Middle East conflict creating travel disruption, resulted in us finally revising guidance for H2 with Q3 and having now an impact embedded into the forecast. We were able to absorb the H1 of the year in conflict. We did not revise. Finally coming into what is now a bit more of a lasting duration of a conflict, we had to revise and include that into the Q3. We did not include anything into the Q4. For those that are trying to sensitize what a Q4 impact might be using the same framework that we have been using, which is a framework that looks at the forward forecast of flight capacity, flight availability and bookings you could size the fourth quarter roughly in line with what the second quarter impact was. I think that is something that we have been trying to be really transparent on to help people with the modeling. Got it. That makes sense. Another thing on the quarter was on free cash flow. I think this is really the guiding light for a lot of Shift4 investors. The acquisitions and capital structure have created some noise in free cash flow this year. Historically, you have talked about roughly a 60% flow-through of incremental EBITDA converting to free cash flow. Does that algorithm still hold going into next year, and are there any other puts and takes that we should be considering? Yes. I will stay at the kind of high level of how I think about that incremental free cash flow conversion algorithm without trying to provide any specific guidance around the following year. I think the answer is yes. The way to think about the algorithm of for a dollar change in EBITDA, the flow-through into free cash flow conversion, roughly speaking 60%, I think that formula, that framework should hold. It is important though to get the capital structure impact correct. That is separate and away from the fact that interest expense will have changed as a result of the term loan transaction, which pre-funded a 2027 convert maturity. If you can normalize for that and factor that into your models, you then go into next year and you actually have to now capture that in August of 2027, that convert, $633 million. That convert comes due, it matures. We will then take the excess cash on balance sheet that we've pre-funded. We are going to redeem and pay down that convert. So the $633 million that was earning interest income comes off the balance sheet, and the 50 basis point running cost on that convert also comes off. If you can get that part right into the model, you then have the formula hold, 60% incremental free cash flow conversion. Got it. Okay. That's very clear. Another point on free cash flow that's been very topical across the industry has been on hardware. I think for Shift4, this runs to the P&L mostly through D&A. It's more of a cash flow item. So I think it amounted to roughly $140 million over the last 12 months. As we think about what has been going on with memory costs, how should investors be thinking about the impact that this could have on free cash flow going forward? Yeah. So, it's a really topical one that I think we have been able to navigate really well as a procurement team, as an organization, as probably one of the more scaled purchasers of OEM-created payment-specific hardware. As one of the largest purchasers there, I think our purchasing scale has afforded us sort of a better weathering of this storm than others, it seems. I say that because despite the fact that there are larger payments companies than ours, many of them don't actually procure equipment through the same OEMs, the same scaled OEMs that manufacture payment devices. Some larger players actually component manufacture and then assemble themselves, which then exposes them to probably more spot rate dynamics of a market, versus us, who really gets the leverage being one of the largest buyers from some of the largest equipment manufacturers. Importantly though, we've also been able to weather the storm. I think, a bit better than others because not every new merchant win has the same amount of hardware across our portfolio. So we of course have a restaurant vertical where within that vertical you have POS systems, you have payment devices. We're in stadiums and entertainment environments that also have POS systems, payment devices. But on the other end of the spectrum, we do win our fair share of card-not-present. Where you wouldn't have hardware. We do have our fair share of luxury retail. We have a market-leading position in luxury retail or in hotel lodging, where you have a lot less of a ratio hardware to revenue than, we'll say, some of our competitors that might be talking more about hardware. So I do think those are two key distinctions. But between our purchasing scale and our ability to keep negotiating well and the composition of our revenue having more of a mix between revenue to hardware ratios, I think those are two key distinctions that investors need to appreciate about why we are able to weather this storm perhaps a bit better than others. For the year, we stay on top of this topic very closely, and we are not making any revisions associated with memory for the year. Got it. Okay. That is very clear. Sticking with kind of balance sheet type topics. You are at 3.7x pro forma net leverage. You said the business should delever to low 3s by end of the year. You have also turned out a lot of your debt maturities to 2031 and pre-funded to 2027, as you just talked about. Where does leverage go from here? Is low 3s the right long-term operating zone? How do you think about the trade-off between deleveraging, the remaining share repurchase authorization, and I would also throw M&A in there as well. Yeah. So our capital allocation framework has remained totally consistent since the beginning and frankly, well, since the beginning of being public and well before that. My involvement with the company now is I think I just crossed over my 10 year anniversary of being involved with the business. As far back as I can remember, our capital allocation framework has stayed completely consistent. Three parts. The first of which is looking at capital allocation organically. For us, right now a lot of great opportunities. We are expanding international markets. That is organic opportunity to invest. We are investing in product and platform. I think our second quarter was a record quarter of investment within the product and platform from a technology standpoint. That is competing for capital allocation. You have our inorganic opportunities where today, relative to the recent history, we are finally starting to see private company valuations start to converge with the public. Said another way, we are starting to see more attractive opportunities in the pipeline. Our pipeline is a patient, proactive, long data database of pipeline where we will be monitoring opportunities for multiple years. Finally, when we start to see those valuations converge and attractive opportunities that could generate really high ROI start to show themselves, we get pretty excited. That is starting to compete for capital. As a public company, capital allocation towards minimizing the dilution, and trying to keep share repurchases in the forefront. That remains an opportunity. So we have got to balance all three of those while acknowledging the constraint of where we are on leverage. It is not an easy feat. It's definitely something that manifested itself in the second quarter where we actually had to be more conservative around share repurchases. We only ended up investing a little more than $20 million within share repurchases because we acknowledge it. We get it. That was a cash outflow or a low cash generation quarter. Now that we're in the back half of the year, much more cash generative quarters, we can look at this capital allocation framework and even though it has to all compete for the highest invest, kind of generated return for capital, we've got to balance this formula out. I would say that yes three and three quarters, not to exceed three and three quarters on a sustained basis. That's the message people should take away. If the business kind of runs on its own just through EBITDA growth and free cash flow generation, we could get to the low threes this year. But we are going to be opportunistic when looking at our framework and trying to balance out where are we going to generate high ROI with dollars deployed. Got it. It sounds like you have some flexibility by the end of the year. If you're already on the trajectory to low threes and you're kind of managing to kind of the mid high three range, it seems like there's flexibility to resume kind of more normal capital allocation going forward. Yeah, I think that's fair to say but I would say that the nice part about the model right now is because all three of those are competing for capital, like that is a high-class problem. It is a balancing act that we have to acknowledge, but I think I would view it through the lens of it being a pretty high-class problem right now. On the M&A side, how are you thinking about potential size? On the spectrum between tuck-in acquisitions and Global Blue, where are you thinking is the right use of capital there? Staying absolutely consistent on the messaging over the last few quarters. This is about tuck-ins. This is about investments that are going to accelerate existing strategic alternatives, enhance capabilities on the platform, expand distribution in the markets that we think we have a really unique right to win. Those are going to be the areas, nothing of the material size and scale certainly of an investment like a Global Blue. That is I think, the best way to think about it this year is a focus on tuck-ins. Sure. Okay. All right. Let's talk about organic growth. I think the organic growth disclosure has been a really helpful disclosure. It's given investors a common language to talk about the growth in the business. You've printed 11% for two quarters. Tax-free shopping rolls into organic starting in the third quarter. It sounds like the message is 9%-13% is the pro forma organic growth rate in the back half of the year. How should investors think about durable organic growth rate? Is it that 9%-13% range? How do you think about opportunities to accelerate that when they come? Yeah. So a few parts there. One, I appreciate you saying that people have appreciated the incremental disclosure around it. We're probably still one step to go, which is given the global nature of the business, introducing a constant currency concept within that probably is one more net helpful piece to the equation. Because for example, if you were to have looked at a constant currency basis for Q1 and Q2, you would have actually seen Q2 was about 145 basis point expansion in organic growth on a constant currency basis relative to Q1. So you would have seen about [9%-13%] in Q1 would have come to 10. 5% Or so in Q2. So I think that's something that folks should expect us to evolve into. When you think about your point about the implied H2 reported growth of 9%-13%, it is important to appreciate that for example, in Q3, we've got a guide out there for 10% reported growth. Organic would therefore be high single digits. It will be just underneath the reported number. That will end up converging over time, certainly as Global Blue becomes organic. Smartpay becomes in the third quarter. Smartpay becomes organic in the fourth quarter. As those all roll in, you end up in a range where reported high single digit to low double digit. Organic should be just a little under that. Yeah. I do think that in general, this kind of consistency around high single digit growth to low double digit growth. That is what has been showing up within the numbers, both organically and even on parts of the reported basis, what we point to within the growth algorithm in the H2 implied, and I think that is the right framing. Got it. Okay. All right. Very helpful. One thing that came out of the quarter in the 10-Q, I think you disclosed a roughly $300 million acquisition for an account-to-account platform. It was $140 million up front. The balance is contingent consideration. Presumably, that is not in guidance. So, you can clarify that bigger picture, if you can provide any more information on it and maybe how you think about how much that could add inorganically once it is closed. Yeah. So, clarify that point for sure. Not in the guidance. That is a transaction that after we signed it, we were expected to have call it 90 days between signing and closing for the close process. The account-to-account opportunity is a really unique one. It is a very interesting one. It is something that we have been pursuing for multiple years. I will start with first part. The topic that comes up, or question comes up a lot is the decisions around the disclosure of it. I will start with wanting to clarify that when we were approaching the earnings and talking through the best way to disclose, we knew we had disclosure around subsequent events, but it was a decision between all of the parties involved that a key commercial discussion and negotiation was happening for the business, that it would be in the best interest to not shine a spotlight on it in such a large forum. We absolutely are committed to talking about why we are excited about the business. The thesis of it, the minute we get to the close of it. Happily, the negotiation that really brought this into the forefront is going well. So we are happy about that. But it was an important decision that we had to make, hence the disclosure choice that we had. Account-to-account is interesting because when we talk about being a payments company within different payment modalities, it is very easy to think solely about cards. I think that actually is a very We are a business that was born in the Americas. It tends to be Americentric, that the cards culture here is really strong and prevalent. But there are many other payment modalities that, especially in other countries around the world are the lion's share of volume. Bank rails tends to be an area. In our Bambora acquisition, we were able to obtain an ACH capability an integrated ACH capability that we were already building, but we were able to acquire. That gave a bank-to-bank kind of capability. But think of that as B2B, a corporate bank-to-bank capability. A2A is basically the consumer-to-business side of bank-to-bank as a rail. It tends to be for things like for categories and for categories where a payment card may not be as well suited. So think of a large ticket transaction where you might exceed a card limit. You might exceed an authorization limit. You are likely to see a high rate of a failed transaction. That is where an account-to-account a bank transfer may actually make sense. Those can happen in high ticket environments like high ticket luxury, ticketing, where there is a one-time purchase that may be outside the norms of the spending patterns for that cardholder. Or even making a deposit on a special night out in a restaurant for a private room. Yeah. Those kinds of spikes in cardholder behavior tend to trip an authorization rate, in which case a user or a consumer may want to start to go to an account-to-account. Or they might be topping up a wallet of some sort. So having all of these different payment modalities in our platform just help us round out the total value proposition to a merchant and allow us to take off the table any one-off things that the platform may have otherwise been missing, therefore the merchant may have a reason to look elsewhere. Dynamic currency conversion was one. We took that off the table. ACH was one. We took that off the table. A2A was one of the last ones we needed. Great. Makes a ton of sense. All right. I wanted to maybe zoom out a bit. A lot of financial-oriented questions. Let's talk a little bit about the business and maybe start with Shift4 Venue, and the experience economy. I think this has been a big point of framing that the team has leaned into recently about Shift4's exposure across multiple dimensions for the experience economy. We just had the World Cup, great showcase for your leverage for that theme. How does the positioning around the experience economy impact the way that you think about the resilience of the business and sort of the long-term growth prospects of the company? Yeah, no, it's a great question. We like to think of it as when you step back and look at some of the bigger trends, trying to zoom out to the trends level, it is clear that there is a growth and a demand for experiences over goods, and that trend continues. Experiences in our world is also nicely aligned to the fact that it tends to be very in-person, right? It tends to be in the real world. It tends to require all of the physicality of provisioning of payments and commerce solutions that help make that moment happen. We like to think of it too that our technology, especially in a place like a sports and entertainment venue. Our technology is actually the last technology that the consumer is probably interfacing with, sitting in their seat, ordering ahead, or they're a season ticket holder. So they might actually be using a wallet that's provisioned by us. That's the last interface between consumer to technology in the venue. But we're also the last piece of technology that a sales associate or an employee is likely interfacing with before they face the consumer too. So the technology that exists that we're providing, whether it's payments or POS tends to actually be that last piece of touch point where technology now meets a person, either an employee or an actual consumer. We think that's really powerful because when you think about crafting future experiences around commerce, around payments, unifying them together with things like loyalty, unifying them together with accessing the proprietary data assets we have on fans, on luxury shoppers, there's a lot that we are able to innovate with our merchants as a result of it. We like knowing that we're in the conversation with some of the most innovative experience makers. It's the folks that are right at the forefront of the resort hotel ecosystem, right at the forefront of stadium entertainment, at the forefront of luxury retail, like categories that we think are unparalleled in their desire to deliver the best experiences within shop, dine, stay, and play. That knowledge base and us being able to then cross-pollinate the ideas that we have with each of these categories, each of these experience makers, I think also gives us a pretty unique differentiation. Okay. Let's talk about luxury retail a bit. I think this is one of the biggest swings at the Shift4 playbook that you guys have taken. Born out of the Global Blue acquisition, this is your way of integrating that platform with Shift4's payments platform. Can you walk through what that sales motion looks like and talk about how your visibility into the $80 million of revenue synergies from that deal has changed and what are your latest views on timing? Yeah. Shift4 One is a really exciting product for us because it brings together a few of the things that we've been strategically and tactically putting together to be differentiated in a massive category of retail, luxury retail in particular, and give us the entry pan-regionally into Europe, again, with a fundamental point of difference. Because when you take tax-free shopping combined with payments and combined with currency solutions like DCC, it's really that tax-free shopping piece that is one of one, right? That is a 75%- 80% market share leading value proposition that is very difficult to displace because that's a system that is integrating merchants to fiscal authorities, to customs authorities at airport checkout, and housing that data in order to deliver a pretty unique experience of money movement and payment. When you take that piece of uniqueness and then you actually then say, "Well, by the way this tax-free shopping experience works best when the payments are integrated," because a card that gets swiped with a foreign BIN range, a foreign bank, can automatically detect whether that person should be eligible for a tax-free shopping rebate. So the integration makes sense to you as the merchant, makes sense to your consumer for a better experience. We're going to displace an unintegrated bank device that is probably provided by a local bank that's not investing nearly as much in commerce technology, and we're going to match the rate. We can do all of that and have incremental revenues. You add currency solutions on top of that, which again is actually a unique product because the merchant can actually make money off of that solution too. When you combine it all together, the value proposition is very compelling to the merchant not just for themselves economically, but because it is better for their consumer. Right. It is incredibly compelling to us because when you stack all of that ARPU together, tax-free shopping, currency solutions, payments, and pull that together, that actually gives us the ability to certainly have that ARPU built, create the best unit economics in the business, but it also gives us quite a lot to be able to maybe invest back into the customer. So where I said match the rate, well, we could actually consider having some amount of a strategy to go after the market share. It is a pretty compelling overall offering. Our go-to-market and selling motion with this solution today is about going country by country, building up go-to-market resources a mix of direct and indirect partner. You are going to see the direct build first and build fastest. That has been the experience that we have been seeing. That is because the partner channel, unlike in the U.S., where integrated payments has been able to teach partners. Partners being software companies themselves, or the distributors that sell the software and integrate it, AKA value-added resellers. In the U.S., those partner channels have had more than a decade to mature in becoming payments salespeople. That did not exist a decade ago. Those revenue streams and commissions to those types of partners, that was a foreign concept. In Europe, it is still a foreign concept. What we are seeing is mobilizing these channels and mobilizing these partners is something that is going to take some time, but we think it is a very worthwhile investment because we can just take the pattern recognition of everything we saw in the U.S., accelerate that timeframe to mobilizing these partners. But we know that if we are the first to be able to do it and really build the loyalty within that channel, it is an incredibly powerful channel. That is the investment we are making. As we move country by country, we start with direct, we then add the indirect. We acknowledge the indirect will take a little more time, but it's a very worthwhile investment because if you get it's a pretty fantastic asset. How do you think about the achievability of the 80 million through direct channels versus needing that extra push from the indirect side? The plan was always to have the combined power of a dense go-to-market model, where the revenue synergies are going to come from the combination of Shift4 One, DCC, the cross-selling motion of the variety of solutions that came out of Global Blue, moving through this now larger in scale go-to-market asset, spread out across the many countries that we'll be live in, and bringing some of those solutions live into the U.S. The combination of all of that is in motion. We haven't yet begun the reporting out against revenue synergies. That'll be in 2027. But what we can say is that we're hitting the progress milestones that we needed to hit on product, on go-to-market scaling, on countries live, which is a really important metric, and on being ready with payments platform capability that can actually deliver these in-person payment capabilities that we need to be live. We're hitting all of those milestones and feel good about it. Got it. Great. We got just about a minute left. Chris, I wanted to maybe get your thoughts on the stock as both an investor and CFO. The stock seems to be pricing at a much lower level of earnings and growth than what it has historically, and that seems disconnected from a lot of the energy that's coming out of the team from you, Taylor, and everyone. What do you think the market is telling you about the business, and what do you think the market is missing? Well, first I can say we can be very patient people. I've been involved in the business for 10 years, and you can go back to the S-1 of the company, take a look at fiscal 2018, fiscal 2019 financial stats, and you're going to see 30%- 40% CAGRs through time. We know that our playbook works. We know that the combination of doing what we do well, of cross-selling, of enabling payments and commerce technology to converge, and then allocating capital to create outsize through inorganic investment and other outsize rates of growth. We know that that formula works, and we're committed to it. We're excited about it. Even when you have the backdrop that you have of macro and markets and volatility as a result of all of that, we know that we can put our heads down and just execute our way through, and we know on the other side of this, we will be able to continue to compound at high rates of growth. The valuation, though is at times, something that simply means that in your capital allocation framework, you have to take a serious look at in some respects, the gift that the market is giving you. Right? There's a whole host of reasons that these things can happen. Industry specific, macro specific. At best, what we can do is play our playbook, execute to it, and allocate capital if we think it's attractive to something like share repurchases. That's what we have been doing. As an investor, I do think that it does seem like we're at a point in time, as someone that's studied the payment space for 20 + years as an investor, you can look at the multiples to growth ratio, and we're at the low point, right? We haven't seen this since GFC, right? The idea that I can take simple ratios like a PEG multiple, I can take simple ratios like adjusted EBITDA to growth rates over a multiple. That's simple math. I can look at it at a whole sector level and acknowledge that, wow this is not a sector that's supposed to be running at a 0.5 PEG. Right? That is for speculative junior gold, right? This is not that. I think payments has always been recurring revenue, durable, and certainly warrants a growth-adjusted multiple that reflects that kind of durability. I think we do know that we are at kind of an interesting point in time right now. Yeah, makes sense. Well, I think we will have to leave it there. Thank you for joining. It has been a great conversation. Yeah, awesome. Thank you for having me.