10-Q 1 four-10q_20210331.htm 10-Q four-10q_20210331.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter period ended March 31, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from       to       .

Commission file number 001-39313

 

 

SHIFT4 PAYMENTS, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

 

 

84-3676340

(State or other jurisdiction of incorporation or organization)

 

 

(I.R.S. Employer Identification No.)

2202 N. Irving Street

Allentown, Pennsylvania

 

 

18109

(Address of principal executive offices)

 

 

(Zip Code)

(Registrant’s telephone number, including area code): (888) 276-2108

 

N/A

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value per share

FOUR

The New York Stock Exchange

 

 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No

As of May 3, 2021, there were 43,159,603 shares of the registrant’s Class A common stock, $0.0001 par value per share, outstanding, 29,213,697 shares of the registrant’s Class B common stock, $0.0001 par value per share, outstanding and 8,550,989 shares of the registrant’s Class C common stock, $0.0001 par value per share, outstanding.

 

 

 

 

 


 

 

SHIFT4 PAYMENTS, INC.

TABLE OF CONTENTS

 

 

PART I. FINANCIAL INFORMATION

 

 

Item 1

Financial Statements (unaudited)

 

4

 

Condensed Consolidated Balance Sheets

 

5

 

Condensed Consolidated Statements of Operations

 

6

 

Condensed Consolidated Statements of Changes in Redeemable Preferred Units and Stockholders’ Equity/Members’ (Deficit)

 

7

 

Condensed Consolidated Statements of Cash Flows

 

8

 

Notes to Condensed Consolidated Financial Statements

 

9

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

29

Item 3

Quantitative and Qualitative Disclosures About Market Risk

 

41

Item 4

Controls and Procedures

 

41

 

 

 

 

 

PART II. OTHER INFORMATION

 

 

Item 1

Legal Proceedings

 

42

Item 1A

Risk Factors

 

42

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

 

42

Item 3

Defaults Upon Senior Securities

 

42

Item 4

Mine Safety Disclosures

 

42

Item 5

Other Information

 

42

Item 6

Exhibits

 

43

Signatures

 

 

44

 

 

2


Table of Contents

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report, including statements relating to our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding expected growth, future capital expenditures and debt service obligations, and the anticipated impact of the COVID-19 pandemic on our business, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

 

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential”, or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to the following:

 

 

the ongoing impact of the COVID-19 global pandemic on our business and results of operations;

 

substantial and increasingly intense competition worldwide in the financial services, payments and payment technology industries;

 

potential changes in the competitive landscape, including disintermediation from other participants in the payments chain;

 

our ability to anticipate and respond to changing industry trends and the needs and preferences of our merchants and consumers;

 

our reliance on third-party vendors to provide products and services;

 

risks associated with acquisitions;

 

our expansion of our share of the existing payment processing markets or into new markets;

 

integration and interoperability of our services and products with a variety of operating systems, software, device and web browsers;

 

dependence on our merchant and software partner relationships and strategic partnerships with various institutions to operate and grow our business;

 

impairment of significant amounts of goodwill and intangible assets on our balance sheet;

 

failure to comply with the U.S. Foreign Corrupt Practices Act, anti-money laundering, economic and trade sanctions regulations, and similar laws;

 

our dependence on our interest in Shift4 Payments, LLC to pay our taxes and expenses, including payments under the Tax Receivable Agreement, or TRA;

 

Shift4 Payments, LLC’s ability to make such distributions may be subject to various limitations and restrictions;

 

our Founder and Searchlight (each as defined herein) have significant influence over us, including control over decisions that require the approval of stockholders; and

 

those factors described in the sections titled “Risk Factors and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020 and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q.

 

Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.

 

You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

 

3


Table of Contents

 

 

PART I: FINANCIAL INFORMATION

Item 1 Financial Statements (unaudited)

 

4


Table of Contents

 

 

SHIFT4 PAYMENTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) (in millions, except share and per share amounts)

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

844.9

 

 

$

927.8

 

Accounts receivable, net of allowance for doubtful accounts of $12.1 in 2021 ($5.7 in 2020) (Note 3)

 

 

127.9

 

 

 

92.7

 

Inventory

 

 

1.6

 

 

 

1.5

 

Prepaid expenses and other current assets (Note 11)

 

 

11.8

 

 

 

11.5

 

Total current assets

 

 

986.2

 

 

 

1,033.5

 

Noncurrent assets

 

 

 

 

 

 

 

 

Goodwill (Note 5)

 

 

525.0

 

 

 

477.0

 

Other intangible assets, net (Note 6)

 

 

194.0

 

 

 

186.3

 

Capitalized acquisition costs, net (Note 7)

 

 

31.3

 

 

 

30.2

 

Equipment for lease, net (Note 8)

 

 

41.0

 

 

 

36.6

 

Property, plant and equipment, net (Note 9)

 

 

14.5

 

 

 

15.1

 

Investments in securities (Note 1)

 

 

16.0

 

 

 

 

Other noncurrent assets

 

 

0.6

 

 

 

0.6

 

Total noncurrent assets

 

 

822.4

 

 

 

745.8

 

Total assets

 

$

1,808.6

 

 

$

1,779.3

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Current portion of debt (Note 10)

 

$

 

 

$

0.9

 

Accounts payable

 

 

87.5

 

 

 

60.6

 

Accrued expenses and other current liabilities (Note 11)

 

 

37.0

 

 

 

30.1

 

Deferred revenue (Note 3)

 

 

14.5

 

 

 

7.8

 

Total current liabilities

 

 

139.0

 

 

 

99.4

 

Noncurrent liabilities

 

 

 

 

 

 

 

 

Long-term debt (Note 10)

 

 

1,116.4

 

 

 

1,005.4

 

Deferred tax liability (Note 13)

 

 

2.7

 

 

 

2.8

 

Other noncurrent liabilities (Note 4)

 

 

1.4

 

 

 

1.7

 

Total noncurrent liabilities

 

 

1,120.5

 

 

 

1,009.9

 

Total liabilities

 

 

1,259.5

 

 

 

1,109.3

 

Commitments and contingencies (Note 16)

 

 

 

 

 

 

 

 

Stockholders' equity (Note 18)

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value, 20,000,000 shares authorized at March 31, 2021 and December 31, 2020, none issued and outstanding

 

 

 

 

 

 

Class A common stock, $0.0001 par value per share, 300,000,000 shares authorized, 42,109,580 and 39,737,950 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

 

 

 

 

 

 

Class B common stock, $0.0001 par value per share, 100,000,000 shares authorized, 29,699,857 and  30,625,857 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

 

 

 

 

 

 

Class C common stock, $0.0001 par value per share, 100,000,000 shares authorized, 9,114,852 and 10,188,852 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

660.5

 

 

 

738.3

 

Retained deficit

 

 

(309.9

)

 

 

(278.7

)

Total stockholders' equity attributable to Shift4 Payments, Inc.

 

 

350.6

 

 

 

459.6

 

Noncontrolling interests (Note 19)

 

 

198.5

 

 

 

210.4

 

Total stockholders' equity

 

 

549.1

 

 

 

670.0

 

Total liabilities and stockholders' equity

 

$

1,808.6

 

 

$

1,779.3

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

5


Table of Contents

 

SHIFT4 PAYMENTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited) (in millions, except share and per share amounts)

 

 

 

Three months ended March 31,

 

 

 

2021

 

 

2020

 

Gross revenue

 

$

239.3

 

 

$

199.4

 

Cost of sales

 

 

187.5

 

 

 

156.0

 

Gross profit

 

 

51.8

 

 

 

43.4

 

General and administrative expenses

 

 

53.5

 

 

 

21.1

 

Depreciation and amortization expense

 

 

15.4

 

 

 

10.5

 

Professional fees

 

 

6.2

 

 

 

1.7

 

Advertising and marketing expenses

 

 

20.1

 

 

 

1.3

 

Restructuring expenses (Note 4)

 

 

0.1

 

 

 

0.2

 

Total operating expenses

 

 

95.3

 

 

 

34.8

 

(Loss) income from operations

 

 

(43.5

)

 

 

8.6

 

Loss on extinguishment of debt (Note 10)

 

 

(0.2

)

 

 

 

Other income, net

 

 

 

 

 

(0.1

)

Interest expense

 

 

(6.5

)

 

 

(13.3

)

Loss before income taxes

 

 

(50.2

)

 

 

(4.8

)

Income tax provision (Note 13)

 

 

(0.8

)

 

 

(0.3

)

Net loss (1)

 

 

(51.0

)

 

 

(5.1

)

Net loss attributable to noncontrolling interests (2)

 

 

(18.2

)

 

 

(5.1

)

Net loss attributable to Shift4 Payments, Inc. (3)

 

$

(32.8

)

 

$

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share:

 

 

 

 

 

 

 

 

Class A net loss per share

 

$

(0.62

)

 

 

 

 

Weighted average common stock outstanding

 

 

42,667,754

 

 

 

 

 

Class C net loss per share

 

$

(0.62

)

 

 

 

 

Weighted average common stock outstanding

 

 

10,009,852

 

 

 

 

 

 

(1)

Net loss is equal to comprehensive loss.

(2)

Net loss attributable to noncontrolling interests is equal to comprehensive loss attributable to noncontrolling interests, including the net loss for the period January 1, 2020 through March 31, 2020, which is prior to June 4, 2020, the date the SEC declared effective the Company’s Registration Statement on Form S-1 filed in connection with its IPO. See Note 1 for more information.

(3)

Net loss attributable to Shift4 Payments, Inc. is equal to comprehensive loss attributable to Shift4 Payments, Inc.

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

6


Table of Contents

 

 

SHIFT4 PAYMENTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE PREFERRED UNITS AND STOCKHOLDERS’ EQUITY/ MEMBERS’ (DEFICIT)  

(Unaudited) (in millions, except units and shares)

 

 

 

Class A

Common Stock

 

 

 

Class B

Common Stock

 

 

Class C

Common Stock

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

paid-in

capital

 

 

Retained

Deficit

 

 

Noncontrolling

Interests

 

 

Total

equity

 

Balances at December 31, 2020

 

 

39,737,950

 

 

$

 

 

 

 

30,625,857

 

 

$

 

 

 

10,188,852

 

 

$

 

 

$

738.3

 

 

$

(278.7

)

 

$

210.4

 

 

$

670.0

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(32.8

)

 

 

(18.2

)

 

 

(51.0

)

Cumulative effect of ASU 2020-06 adoption

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(111.5

)

 

 

1.6

 

 

 

 

 

 

(109.9

)

Issuance of Class A common stock and fair value of equity-based compensation awards assumed in connection with VenueNext acquisition

 

 

325,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13.5

 

 

 

 

 

 

12.8

 

 

 

26.3

 

Transfer from Founder of right associated with Inspiration4 seat

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.3

 

 

 

 

 

 

0.8

 

 

 

2.1

 

Exchange of shares held by Searchlight

 

 

2,000,000

 

 

 

 

 

 

 

(926,000

)

 

 

 

 

 

(1,074,000

)

 

 

 

 

 

6.3

 

 

 

 

 

 

(6.3

)

 

 

 

Equity-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14.0

 

 

 

 

 

 

 

 

 

14.0

 

Vesting of restricted stock units, net of tax withholding

 

 

46,503

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.4

)

 

 

 

 

 

(1.0

)

 

 

(2.4

)

Balances at March 31, 2021

 

 

42,109,580

 

 

$

 

 

 

 

29,699,857

 

 

$

 

 

 

9,114,852

 

 

$

 

 

$

660.5

 

 

$

(309.9

)

 

$

198.5

 

 

$

549.1

 

 

 

 

 

 

Redeemable Preferred

Units

 

 

 

Class A Common Units

 

 

Class B Common Units

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Units

 

 

Amount

 

 

 

Units

 

 

Amount

 

 

Units

 

 

Amount

 

 

Members' Equity

 

 

Retained Deficit

 

 

equity

(deficit)

 

Balances at December 31, 2019

 

 

430

 

 

$

43.0

 

 

 

 

100,000

 

 

$

 

 

 

1,010

 

 

$

0.3

 

 

$

149.2

 

 

$

(182.4

)

 

$

(32.9

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5.1

)

 

 

(5.1

)

Capital distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.1

)

 

 

 

 

 

(0.1

)

Preferred return on redeemable preferred units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.2

)

 

 

 

 

 

(1.2

)

Balances at March 31, 2020

 

 

430

 

 

$

43.0

 

 

 

 

100,000

 

 

$

 

 

 

1,010

 

 

$

0.3

 

 

$

147.9

 

 

$

(187.5

)

 

$

(39.3

)

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

7


Table of Contents

 

 

SHIFT4 PAYMENTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (in millions)

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(51.0

)

 

$

(5.1

)

Adjustment to reconcile net loss to net cash provided by operating activities

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

25.3

 

 

 

17.6

 

Amortization of capitalized financing costs

 

 

1.2

 

 

 

1.1

 

Loss on extinguishment of debt

 

 

0.2

 

 

 

 

Deferred income taxes

 

 

(0.1

)

 

 

(0.6

)

Provision for bad debts

 

 

6.7

 

 

 

1.6

 

Revaluation of contingent liabilities

 

 

0.2

 

 

 

(8.5

)

Equity-based compensation expense

 

 

14.0

 

 

 

 

Other noncash items

 

 

0.3

 

 

 

 

Change in operating assets and liabilities

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(40.7

)

 

 

9.6

 

Contract assets

 

 

 

 

 

(0.3

)

Prepaid expenses and other current assets

 

 

1.1

 

 

 

(3.2

)

Inventory

 

 

0.1

 

 

 

(0.3

)

Accounts payable

 

 

28.0

 

 

 

(4.7

)

Accrued expenses and other current liabilities

 

 

6.4

 

 

 

(2.2

)

Deferred revenue

 

 

6.6

 

 

 

4.7

 

Net cash (used in) provided by operating activities

 

 

(1.7

)

 

 

9.7

 

Investing activities

 

 

 

 

 

 

 

 

Acquisitions, net of cash acquired

 

 

(40.6

)

 

 

 

Investments in securities

 

 

(16.0

)

 

 

 

Residual commission buyouts

 

 

(0.8

)

 

 

(0.4

)

Acquisition of property, plant and equipment

 

 

(0.7

)

 

 

(1.4

)

Capitalized software development costs

 

 

(3.6

)

 

 

(2.2

)

Customer acquisition costs

 

 

(5.4

)

 

 

(5.6

)

Acquisition of equipment to be leased

 

 

(10.4

)

 

 

 

Net cash used in investing activities

 

 

(77.5

)

 

 

(9.6

)

Financing activities

 

 

 

 

 

 

 

 

Proceeds from revolving line of credit

 

 

 

 

 

68.5

 

Repayment of debt

 

 

(0.9

)

 

 

 

Repayment of revolving line of credit

 

 

 

 

 

(1.3

)

Payments on contingent liabilities

 

 

 

 

 

(0.7

)

Deferred financing costs

 

 

(0.4

)

 

 

 

Capital distributions

 

 

 

 

 

(0.1

)

Payments for withholding tax related to vesting of restricted stock units

 

 

(2.4

)

 

 

 

Net cash (used in) provided by financing activities

 

 

(3.7

)

 

 

66.4

 

Change in cash and cash equivalents

 

 

(82.9

)

 

 

66.5

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

927.8

 

 

 

3.7

 

End of period

 

$

844.9

 

 

$

70.2

 

 

Supplemental cash flows information and noncash activities are further described in Note 22.

See accompanying notes to unaudited condensed consolidated financial statements.

 

8


Table of Contents

 

 

SHIFT4 PAYMENTS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (in millions, except share, unit, per unit and merchant count amounts)

1.

Organization, Basis of Presentation and Significant Accounting Policies

Organization

Shift4 Payments, Inc., or Shift4 Payments or the Company, was incorporated in Delaware on November 5, 2019 in order to carry on the business of Shift4 Payments, LLC and its consolidated subsidiaries.

The Company is a leading provider of integrated payment processing and technology solutions. Through the Shift4 Model, the Company offers software providers a single integration to an end-to-end payments offering, a powerful gateway and a robust suite of technology solutions (including cloud enablement, business intelligence, analytics, and mobile) to enhance the value of their software suites and simplify payment acceptance. The Company provides for its merchants a seamless customer experience at scale, rather than simply acting as one of multiple providers they rely on to operate their businesses. The Shift4 Model is built to serve a range of merchants from small-to-medium-sized businesses to large and complex enterprises across numerous verticals, including lodging, leisure, stadiums and arenas, and food and beverage. This includes the Company’s Harbortouch, Restaurant Manager, POSitouch, and Future POS brands, as well as over 350 additional software integrations in virtually every industry.

Initial Public Offering and Concurrent Private Placement

On June 4, 2020, the Securities and Exchange Commission, or the SEC, declared effective the Company’s Registration Statement on Form S-1 (File No. 333-238307), as amended, filed in connection with its Initial Public Offering, or IPO, or the Registration Statement. The Company’s Class A common stock started trading on The New York Stock Exchange on June 5, 2020. On June 9, 2020, the Company completed its IPO of 17,250,000 shares of Class A common stock, including 2,250,000 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a price to the public of $23.00 per share. Upon completion of the IPO, the Company received net proceeds of approximately $362.6 million, after deducting underwriting discounts and commissions and offering expenses of approximately $34.2 million. Concurrently with the IPO, the Company also completed a $100.0 million private placement of 4,625,346 shares of Class C common stock to Rook Holdings Inc., or Rook, a corporation wholly-owned by the Company’s Founder and Chief Executive Officer. The total net proceeds from the IPO and concurrent private placement were approximately $462.6 million. Shift4 Payments, Inc. used the proceeds to purchase newly-issued limited liability company interests from Shift4 Payments, LLC, or LLC Interests. Shift4 Payments, LLC used these amounts received from Shift4 Payments, Inc. to repay certain existing indebtedness and for general corporate purposes. See Note 10 for more information. In connection with the IPO, the Company completed certain reorganization transactions, or the Reorganization Transactions, as described in the Company’s Form 10-K for the year ended December 31, 2020 filed with the SEC on March 8, 2021, or the 2020 Form 10-K.  

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, and the applicable rules and regulations of the SEC for interim financial information. As such, these financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statements. The December 31, 2020 Condensed Consolidated Balance Sheet was derived from audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments consisting only of normal recurring adjustments necessary to state fairly the financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP applicable to interim periods. The results of operations for the interim periods presented are not necessarily indicative of results for the full year or future periods. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2020, as disclosed in the 2020 Form 10-K.  

The unaudited condensed consolidated financial statements include the accounts of Shift4 Payments, Inc. and its wholly-owned subsidiaries. Shift4 Payments, Inc. consolidates the financial results of Shift4 Payments, LLC, which is considered a variable interest entity, or VIE. Shift4 Payments, Inc. is the primary beneficiary and sole managing member of Shift4 Payments, LLC and has decision making authority that significantly affects the economic performance of the entity. As a result, the Company consolidates Shift4 Payments, LLC, and reports a noncontrolling interest representing the economic interest in Shift4 Payments, LLC held by certain affiliates of Searchlight Capital Partners, or Searchlight, and Rook (together, the Continuing Equity Owners).

As the Reorganization Transactions are considered transactions between entities under common control, the financial statement presentation for the periods prior to the IPO and Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. Prior to the Reorganization Transactions, Shift4 Payments, Inc. had no operations.

All intercompany balances and transactions have been eliminated in consolidation.

The assets and liabilities of Shift4 Payments, LLC represent substantially all of the consolidated assets and liabilities of Shift4 Payments, Inc. with the exception of certain cash balances and the aggregate principal amount of $690.0 million of 2025 Notes that are held by

9


Table of Contents

 

Shift4 Payments, Inc. directly. See Note 10 for information on the accounting for the 2025 Notes. As of March 31, 2021 and December 31, 2020, $684.4 million and $684.5 million of cash was held by Shift4 Payments, Inc., respectively. Shift4 Payments Inc., which was established November 5, 2019, has not had any material operations on a standalone basis since its inception, and all of the operations of the Company are carried out by Shift4 Payments, LLC and its subsidiaries.

Liquidity and Management’s Plan

 

The unprecedented and rapid spread of COVID-19 as well as the shelter-in place orders, promotion of social distancing measures, restrictions to businesses deemed non-essential, and travel restrictions implemented throughout the United States have significantly impacted the restaurant and hospitality industries. As a result, the Company’s revenues, which are largely tied to processing volumes in these verticals, were materially impacted beginning in the final two weeks of March 2020. Since late March 2020, the Company has seen a significant recovery in its end-to-end payment volumes as merchants reopened their operations. While end-to-end volumes for the three months ended March 31, 2021 have exceeded those for both the three months ended March 31, 2020 and the three months ended December 31, 2020, the ultimate impact that the COVID-19 pandemic will have on the Company’s consolidated results of operations in future periods remains uncertain. The Company will continue to evaluate the nature and extent of these potential impacts to its business, consolidated results of operations, and liquidity.

As of March 31, 2021, the Company had $1,140.0 million outstanding under its credit facilities and was in compliance with the financial covenants under its debt agreements. The Company expects to be in compliance for at least 12 months following issuance of these consolidated financial statements. See Note 10 for further information on the Company’s debt obligations.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Significant estimates inherent in the preparation of the accompanying unaudited condensed consolidated financial statements include estimates of fair value of acquired assets and liabilities through business combinations, fair value of debt instruments, allowance for doubtful accounts, income taxes, investments in securities, noncontrolling interests and the February 2021 transfer of the right to select a participant for one seat on board Inspiration4, the first all-civilian mission to space, from Jared Isaacman, the Company’s Chief Executive Officer and founder, or the Founder. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.

Additionally, the full impact of the COVID-19 pandemic is unknown and cannot be reasonably estimated. However, the Company has made accounting estimates based on the facts and circumstances available as of the reporting date. To the extent there are differences between these estimates and actual results, the unaudited condensed consolidated financial statements may be materially affected.

Revision of Previously Issued Financial Statements

During the course of preparing the Company’s consolidated financial statements for the year ended December 31, 2020, it was identified that $4.8 million of acquired technology recorded in “Other intangible assets, net” in the Consolidated Balance Sheet should have been impaired during fiscal year 2018. Although the Company has determined that this error did not have a material impact on its previously issued condensed consolidated financial statements, it has revised the accompanying condensed consolidated financial statements to correct for this error and to reflect the associated decrease in amortization expense of $0.1 million recorded in “Cost of Sales” for the three months ended March 31, 2020.

In addition, a misclassification of $1.2 million was identified for the three months ended March 31, 2020, resulting from expensing equipment provided to customers under the Company’s warranty program as “General and administrative expenses” which should have been classified as “Cost of sales” in the unaudited Condensed Consolidated Statements of Operations. This misclassification has also been corrected in connection with the revision of the unaudited Condensed Consolidated Statements of Operations. The revisions had no net impact on cash flows from operating, investing or financing activities in the unaudited Condensed Consolidated Statements of Cash Flows.

The applicable notes to the unaudited condensed consolidated financial statements have also been revised to correct for these errors. The following table sets forth the effects of the revisions to the previously issued unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2020 to correct for the prior period errors.

 

 

 

As previously

reported

 

 

Adjustment

 

 

As revised

 

Cost of sales

 

$

154.9

 

 

$

1.1

 

 

$

156.0

 

Gross profit

 

 

44.5

 

 

 

(1.1

)

 

 

43.4

 

General and administrative expenses

 

 

22.3

 

 

 

(1.2

)

 

 

21.1

 

Total operating expenses

 

 

36.0

 

 

 

(1.2

)

 

 

34.8

 

Income from operations

 

 

8.5

 

 

 

0.1

 

 

 

8.6

 

Loss before income taxes

 

 

(4.9

)

 

 

0.1

 

 

 

(4.8

)

Net loss (a)

 

 

(5.2

)

 

 

0.1

 

 

 

(5.1

)

10


Table of Contents

 

 

 

 

(a)

Net loss is equal to comprehensive loss.

As a result of the revisions, "Retained Deficit" and "Total equity (deficit)” as of March 31, 2020 were revised from $(183.6) to $(187.5) and $(35.4) to $(39.3), respectively.

 

 

Significant Accounting Policies

The Company’s significant accounting policies are discussed in Note 2 to Shift4 Payments, Inc.’s consolidated financial statements as of and for the years ended December 31, 2020 and 2019 in the 2020 Form 10-K. There have been no significant changes to these policies which have had a material impact on the Company’s unaudited condensed consolidated financial statements and related notes during the three ended March 31, 2021, except as noted below.

Investments in securities

Investments in securities represents the Company’s investments in equity of non-public entities. These non-marketable equity investments have no readily determinable fair values and are measured using the measurement alternative, which is defined as cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. Adjustments, if any, are recorded in “Other income, net” on the unaudited Condensed Consolidated Statements of Operations. As of March 31, 2021, the Company has invested $16.0 million in Space Exploration Technologies Corp., or SpaceX, which designs, manufactures, and launches advanced rockets, spacecraft and satellites.

Recent Accounting Pronouncements

The Company, an emerging growth company, or EGC, has elected to take advantage of the benefits of the extended transition period provided for in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards which allows the Company to defer adoption of certain accounting standards until those standards would otherwise apply to private companies.

Accounting Pronouncements Adopted

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This ASU removes certain separation models in ASC 470-20 for convertible instruments, and, as a result, embedded conversion features that do not require bifurcation under ASC 815 are no longer subject to separation into an equity classified component. Consequently, a convertible debt instrument, such as the Company's 2025 Notes, will be accounted for as a single liability measured at its amortized cost. The Company adopted ASU 2020-06 on January 1, 2021 using the modified retrospective transition method. As of December 31, 2020, the Company had recorded a discount on the convertible notes of $111.5 million related to the separation of the conversion feature. This discount resulted in the accretion of interest expense over time and was removed upon adoption of this ASU. The adoption of ASU 2020-06 resulted in a decrease to additional paid-in capital of $111.5 million, a decrease to retained deficit of $1.6 million and a net increase to long-term debt of $109.9 million. Interest expense recognized in future periods will be reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost. The impact on net loss per share and the Company’s debt covenants was not material.

In August 2018, the FASB issued ASU 2018-13: Fair Value Measurement—Disclosure Framework (Topic 820). The updated guidance improves the disclosure requirements on fair value measurements. The Company adopted ASU 2018-13 effective January 1, 2020 and there was no significant impact on the Company’s disclosures upon adoption.

Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02: Leases. The new standard requires a lessee to record assets and liabilities on the balance sheet for the rights and obligations arising from leases with terms of more than 12 months. As a result of amendments in May 2020, this guidance is effective for the Company for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. The Company expects to adopt the new standard on January 1, 2022 using a modified retrospective approach. The Company is evaluating the potential impact that the adoption of this standard will have on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13: Financial Instruments—Credit Losses (Topic 326), which changes the impairment model for most financial assets, including accounts receivable, and replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The guidance is effective for the Company for interim and annual periods beginning after December 15, 2022. Early adoption is permitted. The Company is currently assessing the timing and impact of adopting ASU 2016-13 on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04: Simplifying the Test for Goodwill Impairment, which removes step 2 of the quantitative goodwill impairment test. Under the amended guidance, a goodwill impairment charge is recognized for the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance is effective for the Company for interim and annual periods beginning after December 15, 2022, with early adoption permitted for any impairment

11


Table of Contents

 

tests performed after January 1, 2017. The Company is currently assessing the timing and impact of adopting ASU 2017-04 on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected. The guidance is effective for the Company for annual reporting periods beginning after December 15, 2020, and interim reporting periods within annual periods beginning after December 15, 2021. The Company adopted ASU 2018-15 prospectively for the Company’s annual reporting period effective January 1, 2021 and will adopt it for interim reporting periods within annual periods beginning on January 1, 2022. The adoption is not expected to have a significant impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 removes certain exceptions associated with (i) intraperiod tax allocations, (ii) recognition of deferred tax liability for equity method investments of foreign subsidiaries, and (iii) the calculation of income taxes in an interim period when in a loss position. Additionally, ASU 2019-12 simplifies accounting for (i) income taxes associated with franchise taxes, (ii) tax basis of goodwill in a business combination, (iii) the allocation of tax expense to a legal entity that is not subject to tax in standalone financial statements, (iv) enacted changes in tax laws, and (v) income taxes related to employee stock ownership plans and investments in qualified affordable housing projects accounted for under the equity method. The guidance is effective for the Company for annual reporting periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company is currently assessing the timing and impact of adopting ASU 2019-12 on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform, which provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to certain criteria, that reference the London Interbank Offered Rate, or LIBOR, or another reference rate that is expected to be discontinued. This ASU is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating whether it will elect the optional expedients, as well as evaluating the impact of ASU 2020-04 on the Company’s consolidated financial statements.

2.

Acquisitions

Each of the following acquisitions was accounted for as a business combination using the acquisition method of accounting. The respective purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair value at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill and represents the future economic benefits arising from other assets acquired, which cannot be individually identified or separately recognized. Under the acquisition method of accounting for business combinations, if there are changes to acquired deferred tax balances, valuation allowances or liabilities related to uncertain tax positions during the measurement period, and they are related to new information obtained about facts and circumstances that existed as of the acquisition date, those changes are considered a measurement-period adjustment, with the offset recorded to goodwill.

VenueNext

The Company completed the acquisition of VenueNext Inc., or VenueNext, a leader in integrated payments solutions in sporting arenas and event complexes, on March 3, 2021, for $66.9 million of total purchase consideration, net of cash acquired, by acquiring 100% of VenueNext’s membership interests. This acquisition enhances the Company’s presence and capabilities in a number of large and growing verticals such as stadiums and arenas, while significantly expanding its total addressable market with entry into entertainment, universities, theme parks, airports, and other verticals. The purchase price included the following forms of consideration:

 

Cash

 

$

42.2

 

Shares of Class A common stock (a)

 

 

24.5

 

RSUs granted for fair value of equity-based compensation awards (b)

 

 

1.8

 

Total purchase consideration

 

 

68.5

 

Less: cash acquired

 

 

(1.6

)

Total purchase consideration, net of cash acquired

 

$

66.9

 

 

 

(a)

Total purchase consideration includes 345,423 shares of common stock. As of March 31, 2021, 325,127 shares of common stock have been issued.

 

(b)

The Company assumed all equity awards held by continuing employees. The portion of the fair value of the equity-based compensation awards associated with prior service of VenueNext employees represents a component of the total consideration as presented above and was valued based on the fair value of the VenueNext awards on March 3, 2021, the acquisition date.

12


Table of Contents

 

The following table summarizes the fair value assigned to the assets acquired and liabilities assumed at the acquisition date. These amounts reflect various preliminary fair value estimates and assumptions, and are subject to change within the measurement period as valuations are finalized. The primary areas of preliminary purchase price allocation subject to change relate to the valuation of accounts receivable, accrued expenses, other current liabilities assumed and residual goodwill.

 

Accounts receivable

 

$

0.7

 

Prepaid expenses and other current assets

 

 

0.2

 

Inventory

 

 

0.2

 

Other intangible assets

 

 

18.5

 

Goodwill (a)

 

 

48.4

 

Accounts payable

 

 

(0.9

)

Deferred revenue

 

 

(0.2

)

Net assets acquired

 

$

66.9

 

 

 

(a)

Goodwill is not deductible for tax purposes.

During the three months ended March 31, 2021, the Company incurred expenses in connection with the VenueNext acquisition of $1.0 million. These expenses are included in “Professional fees” in the unaudited Condensed Consolidated Statements of Operations. 

The fair values of intangible assets were estimated using inputs classified as Level 3 under the income approach using either the relief-from-royalty method (developed technology, trademarks and trade names) or the multi-period excess earnings method (customer relationships). The transaction was not taxable for income tax purposes. The weighted average life of developed technology, trademarks and trade names, and customer relationships is 10 years, 10 years and 11 years, respectively. The goodwill arising from the acquisition largely consists of revenue synergies associated with a larger total addressable market, the ability to cross-sell existing customers, new customers and technology capabilities.

The VenueNext acquisition did not have a material impact on the Company’s consolidated financial statements. Accordingly, revenue and expenses related to the acquisition and pro forma financial information have not been presented.

3dcart

The Company completed the acquisition of Infomart2000 Corp., doing business as 3dcart, on November 5, 2020, by acquiring 100% of its membership interests for $39.9 million in cash, net of cash acquired, and approximately $19.2 million in shares of the Company’s Class A common stock. The purchase was funded with cash on hand. Since the acquisition, 3dcart has been rebranded as Shift4Shop to align the ecommerce offering with Shift4’s existing ecosystem of services. The acquisition expands the Company’s omni-channel transaction capabilities and will enable Shift4Shop merchants to augment their ecommerce platform experience with the Company’s secure integrated payments solutions. In addition, the Company’s indirect sales distribution network is able to offer Shift4Shop’s turnkey ecommerce capabilities to the Company’s new and existing POS and payments customers.

Hospitality Technology Vendor

The Company completed the acquisition of a Hospitality Technology Vendor on October 16, 2020, by acquiring 100% of its membership interests for $9.9 million, net of cash acquired. Subsequently, the total consideration was adjusted to $9.5 million during the measurement period due to a working capital adjustment of $0.4 million, which reduced goodwill. The purchase was funded with cash on hand. This acquisition enables the boarding of the vendor’s customers on the Company’s end-to-end acquiring solution and empowers the Company’s distribution partners to sign the vendor’s customer accounts and leverage the combined expertise to handle all aspects of installation, service, and support. The primary areas of preliminary purchase price allocation subject to change relate to the valuation of accounts receivable, accrued expenses and other current liabilities assumed and residual goodwill.

 

 

3.

Revenue

ASC 606: Revenue from Contracts with Customers

Under ASC 606, the Company has three separate performance obligations under its recurring SaaS arrangements for point-of-sale systems provided to merchants: (1) point-of-sale software, (2) lease of hardware and (3) other support services. For the period January 1, 2019 through June 29, 2020, the hardware provided under the Company’s software as a service, or SaaS, agreements was accounted for as a sales-type lease. Effective June 30, 2020, the Company modified the terms and conditions of its SaaS arrangements and updated its operational procedures. As a result, beginning June 30, 2020, hardware provided under the Company’s SaaS agreements is accounted for as an operating lease. See Note 8 for more information on equipment for lease.

13


Table of Contents

 

Disaggregated Revenue  

Based on similar operational characteristics, the Company’s revenue from contracts with customers is disaggregated as follows:

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Payments-based revenue

 

$

215.9

 

 

$

176.4

 

Subscription and other revenues

 

 

23.4

 

 

 

23.0

 

Total

 

$

239.3

 

 

$

199.4

 

 

Based on similar economic characteristics, the Company’s revenue from contracts with customers is disaggregated as follows:

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Over-time revenue

 

$

230.2

 

 

$

188.8

 

Point-in-time revenue

 

 

9.1

 

 

 

10.6

 

Total

 

$

239.3

 

 

$

199.4

 

 

Contract Liabilities

The Company charges merchants for various post-contract license support/service fees and annual regulatory compliance fees. These fees typically relate to a period of one year. The Company recognizes the revenue on a straight-line basis over its respective period. As of March 31, 2021 and December 31, 2020, the Company had deferred revenue of $14.8 million and $8.1 million, respectively. The change in the contract liabilities is primarily the result of a timing difference between payment from the customer and the Company’s satisfaction of each performance obligation.

The following reflects the amounts the Company recognized as annual service fees and regulatory compliance fees within “Gross revenue” in the unaudited Condensed Consolidated Statements of Operations and the amount of such fees that was included in deferred revenue at the beginning of the respective period.

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Annual service fees and regulatory compliance fees

 

$

4.4

 

 

$

3.5

 

Amount of these fees included in deferred revenue at beginning of period

 

 

2.1

 

 

1.6

 

 

Accounts Receivable

The change in the Company’s allowance for doubtful accounts was as follows:

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Beginning balance

 

$

5.7

 

 

$

2.5

 

Additions to expense (a)

 

 

6.7

 

 

 

7.6

 

Write-offs, net of recoveries and other adjustments

 

 

(0.3

)

 

 

(4.4

)

Ending balance

 

$

12.1

 

 

$

5.7

 

 

(a)

Includes a $5.2 million allowance on chargebacks from a single merchant recorded during the three months ended March 31, 2021, which is included in “Cost of Sales” on the unaudited Condensed Consolidated Statements of Operations.

 

4.

Restructuring

The following table summarizes the changes in the Company’s restructuring accrual:

 

 

 

 

 

 

Balance at December 31, 2020

 

$

2.9

 

Severance payments

 

 

(0.5

)

Accretion of interest (a)

 

 

0.1

 

Balance at March 31, 2021

 

$

2.5

 

 

 

(a)

Accretion of interest is included within “Restructuring expenses” in the unaudited Condensed Consolidated Statements of Operations.

14


Table of Contents

 

 

During the three months ended March 31, 2021 and 2020, the Company recognized $0.1 million and $0.2 million, respectively, of restructuring expenses associated with a historical acquisition.

The current portion of the restructuring accrual of $1.4 million at both March 31, 2021 and December 31, 2020 is included within “Accrued expenses and other current liabilities” on the unaudited Condensed Consolidated Balance Sheets. The long-term portion of the restructuring accrual of $1.1 million and $1.5 million at March 31, 2021 and December 31, 2020, respectively, is included within “Other noncurrent liabilities” on the unaudited Condensed Consolidated Balance Sheets.

Of the $2.5 million restructuring accrual outstanding as of March 31, 2021, approximately $1.1 million is expected to be paid in 2021 and $1.6 million in 2022, less accreted interest of $0.2 million.

5.

Goodwill

The changes in the carrying amount of goodwill were as follows:

 

Balance at December 31, 2020

 

$

477.0

 

VenueNext acquisition (Note 2)

 

 

48.4

 

Hospitality Technology Vendor measurement period adjustment (Note 2)

 

 

(0.4

)

Balance at March 31, 2021

 

$

525.0

 

 

6.

Other Intangible Assets, Net

Other intangible assets, net consisted of the following:

 

 

 

Weighted Average

 

March 31, 2021

 

 

 

Amortization Period

(in years)

 

Carrying Value

 

 

Accumulated

Amortization

 

 

Net Carrying

Value

 

Merchant relationships

 

8

 

 

193.3

 

 

$

113.1

 

 

$

80.2

 

Acquired technology

 

9

 

 

113.1

 

 

 

45.2

 

 

 

67.9

 

Trademarks and trade names

 

9

 

 

60.3

 

 

 

41.4

 

 

 

18.9

 

Capitalized software development costs

 

4

 

 

27.9

 

 

 

7.2

 

 

 

20.7

 

Residual commission buyouts (a)

 

3

 

 

20.9

 

 

 

14.6

 

 

 

6.3

 

Total intangible assets

 

 

 

$

415.5

 

 

$

221.5

 

 

$

194.0

 

 

 

 

Weighted Average

 

December 31, 2020

 

 

 

Amortization Period

(in years)

 

Carrying Value

 

 

Accumulated

Amortization

 

 

Net Carrying

Value

 

Merchant relationships

 

8

 

$

185.8

 

 

$

106.5

 

 

$

79.3

 

Acquired technology