FOUR - Shift4 Payments Inc. (FOUR) Q4 2022 Earnings Call Transcript

Shift4 Payments, Inc. (FOUR)

Q4 2022 Earnings Conference Call

February 28, 2023 08:30 AM ET

Company Participants

Tom McCrohan - IR

Jared Isaacman - CEO

Taylor Lauber - President and CSO

Nancy Disman - CFO

Conference Call Participants

Dan Perlin - RBC

Timothy Chiodo - Credit Suisse

William Nance - Goldman Sachs

Darrin Peller - Wolfe Research

Andrew Bauch - SMBC Nikko

Anthony Cyganovich - UBS

Presentation

Operator

Hello and welcome to the Shift4 Fourth Quarter and Full Year 2020 Earnings Conference Call. My name is Lauren, and I will be coordinating your call today. There will be an opportunity for questions at the end of the presentation. [Operator Instructions] Please note that this call along with the Q&A will be for a duration of 60 minutes.

I will now hand you over to your host, Tom McCrohan, Head of Investor Relations to begin. Tom, please go ahead.

Tom McCrohan

Thank you, operator and good morning everyone, and welcome to Shift4's fourth quarter earnings conference call. With me on the call today are Jared Isaacman, Shift4's Chief Executive Officer, Taylor Lauber, our President and Chief Strategy Officer; and Nancy Disman, our Chief Financial Officer.

This call is being webcast on the Investor Relations section of our website, which can be found at investors.shift4.com. Our quarterly shareholder letter, quarterly financial results, and other materials related to our quarterly results have all been posted to our IR website.

Our call and earnings materials today include forward-looking statements. These statements are not guarantees of future performance and our actual results could differ materially as a result of many important factors.

Additional information concerning those factors is available in our most recent reports on Forms 10-K and 10-Q, which you can find on the SEC's website and the Investor Relations section of our corporate website.

For any non-GAAP financial information discussed on this call, the related GAAP measures and reconciliations are available in today's quarterly shareholder letter.

With that, let me turn the call over to Jared. Jared?

Jared Isaacman

Thank you, Tom. Good morning everyone. We are very pleased with the record results we delivered this year in the face of ongoing economic uncertainty. We ended full year 2022 with record levels of volume, gross revenue, gross revenue less network fees, adjusted EBITDA, and adjusted free cash flow all in excess of our midterm outlook.

Our 2022 results were predominantly driven through organic initiatives, including the release of new products and well-timed to entry into new verticals. Our high-growth core, which represented the totality of our business at the time of our 2020 IPO was still the primary driver of our growth last year with an ever increasing contribution from our new verticals. Shift4 continues to lift the intersection of payments and commerce enabling software, and we are well on our way to delivering that capability globally.

On that note, this past year included several important company milestones and marked the beginning of our European and international expansion, the successful launch of our next-generation restaurant point-of-sale solution, SkyTab POS, including a pivot towards more direct distribution, and we also cemented our position as the preferred technology provider for sporting arenas, and entertainment venues across the country. Our entire management team is extremely proud of our employees embracing the Shift4 way, which embodies the core principles and beliefs driving our success.

As we enter 2023, our team is very excited about the abundance of opportunities we see ahead of us. Our excitement for the future is due to the lens of cautious optimism in light of the uncertain climate we currently operate in.

Industry-wide payment volumes moderated during the December quarter and as such, this informed our internal planning process, including how we constructed our 2023 guidance. That is to say that while we remain confident in our ability to deliver profitable growth well in excess of our peers, the range of potential outcomes is wider this year, as you would expect. Nancy will go into more or more detailed assumptions surrounding our guidance later in the call.

Regardless, we will respond accordingly to changes in market conditions and are confident our growth model affords us a higher degree of relative visibility or stability, otherwise unavailable to our peers.

For those that have been newer to the story, Shift4 possesses significant competitive advantage given the embedded opportunity that lives within our gateway as well as our software products. This was best demonstrated in 2020 when we delivered double-digit growth despite the overwhelming majority of our customers comprised of restaurants and hotels that were highly impacted by the pandemic. Our ability to take share and grow has only accelerated since and that confidence remains as we look to the year ahead.

So, on to our quarterly performance and results. For the fourth quarter, we generated 55% year-over-year growth in our end-to-end payment volume and 36% year-over-year growth in our gross revenue less network fees, both quarterly records.

In fact, we achieved quarterly records across all our KPIs, including gross profit, adjusted EBITDA, and adjusted free cash flow. The cornerstone of our performance remained our high-growth core with an increasing contribution from our new verticals, particularly sports and entertainment, gaming, travel and leisure, and Sexy Tech.

Our gateway conversion strategy continues to be a reliable source of incremental volumes and we continue to renew additional enterprise gateway customers on economic terms comparable to our end-to-end offering as part of our Gateway Sunset initiative. As a reminder, our Gateway Sunset is a multiyear initiative that remains in its early innings and there are new actions on the table for 2023 that are also in the works.

The fourth quarter represented the first time we participated in cross-border and European payments. And despite early success, the needle will really begin to move only after the closing of the Finaro acquisition. And Taylor will provide a more detailed update on Finaro including expected contribution and synergies during his prepared remarks.

I will focus the rest of my comments on three areas; to our high-growth core, new verticals, and global expansion. On to high-growth core the foundation of our high-growth core remains the over 500-plus software integration that allows us to go-to-market and service the needs of merchants, especially complex merchants operating in a multi-software environment.

We added over 100 new software integrations during 2022 and continue to identify new ways to incentivize our gateway-only customers to convert to our end-to-end offering.

As we highlighted in our recent investor event this past November, we officially launched our new restaurant point-of-sale system in September of 2022. We now have over 10,000 SkyTab POS systems deployed and are highly encouraged with our overall sales pipeline.

And keep in mind, we have yet to turn on the marketing engine and continue to enjoy an industry-leading customer acquisition costs. We are pleased to announce the chain of major entertainment venues called Live signed up to install SkyTab POS at restaurants operating across all of their US venues. This includes venues such as Xfinity live near Wells Fargo Arena in Philadelphia, Texas Live located between the Texas Rangers Globe Life Baseball Stadium and the AT&T Stadium, home of the Dallas Cowboys, and the Power and Light District located in Kansas City.

We anticipate just live locations contributing hundreds of millions in SkyTab POS payment volume in the year ahead. It also includes sports and social and TVR Cowboys [ph], two of the fastest-growing concepts in the country.

Not only do these entertainment-related venues provide a natural extension of our growing presence in professional sports and entertainment. They also validate the capabilities of our SkyTab POS offering in the marketplace overall. Other notable SkyTab POS wins this quarter include L.A. Music Center and FedEx Field, home of the Washington Commander's professional football team.

SkyTab POS is also making amazing progress with traditional restaurants. Its disruptive price-to-value proposition is resonating as we had expected, and we have a highly motivated and energized direct sales team called Skyforce that has already signed thousands of new restaurants.

It's important to note our success has been without much marketing or promotional efforts. By offering an unmatched customer experience with leading-edge technology a disruptive price point, SkyTab POS represents a compelling migration path for our existing base of restaurants who are seeking new capabilities and key integrations to better serve their patients. We expect this to represent meaningful cost savings to drive operational efficiencies in the year ahead.

Additionally, when serving such a large existing base of customers, we can generate substantial referrals, which also contribute to our low customer acquisition costs and management result, very attractive unit economic model.

Moving to our other organic initiatives within high-growth core. We signed numerous hotels and resorts during the quarter, including the Manhattan Clubs, luxury hotel located in New York City; Charleston Harbor Resort outside of Charleston, South Carolina; The Cliffs at Princeville located on [Indiscernible] North Shore.

I'm also really pleased to announce that we signed a strategic enterprise agreement with a major hospitality operator that we are unable to disclose, but that we expect will contribute billion in additional payment volume in the year ahead.

All of these organic initiatives are driving our performance. When viewed on a four-year volume CAGR growth basis, our volumes grew 45% since 2018 compared to low double-digit growth at the two major card networks. Moreover, our average volume per merchant continues to increase and with 200% of pre-pandemic 2019 levels for the most recent quarter.

Our quarterly volume growth is 342% of our pre-pandemic levels, along with gross revenue less network fees at 237% and adjusted EBITDA at 456% over the same period. Our mix continues to shift towards higher end merchants, although it's important to highlight that spreads within our restaurant and hotel verticals remain very stable.

On to new verticals we consider new verticals to consist of all the verticals we entered into post our IPO, including sports entertainment, Sexy Tech, travel, non-profits and gaming, as well as volume contributions from various alternative payment methods or APMs, we currently support as a result of our international expansion.

Consistent with our commentary from last quarter, we're not breaking out volumes or spreads between our new verticals, including our strategic enterprise relationship and our high-growth core due to confidentiality and competitive sensitivity with certain strategic customers.

That stated, and as we expected and previously communicated, we did witness a sequential improvement in our spreads during the fourth quarter as a result of new customer board alongside processing of international and APM volume.

It's worth highlighting, as we continue to expand internationally and partner with international gateway and alternative payment method, like our recently announced PayPal partnership, we may not be directly settling funds for those transactions, the impact of which is that our gross revenue and gross revenue less network fees will essentially be the same.

For the quarter, volume contribution across all our new verticals continue to ramp as expected as we benefited from the fall NFL football season, including ticketing sales, the non-profit donation season volume contribution from large strategic customers and contribution from Allegiant Airlines, and we are now processing all of the US ticketing volume.

As mentioned above, we also signed a partnership agreement with PayPal to enable PayPal Checkout including PayPal Pay Later as well as Venmo to our enterprise clients. We will also more prominently promote PayPal as a checkout option to ship for shop merchants and QR Pay customers in return for an expanded revenue share wherever PayPal has selected at checkout.

In sports and entertainment, we signed ticketing agreements with premier production and the Space Center in Houston. Last month, we also began processing ticketing for several professional teams, including the New Orleans Saints, New Orleans Pelicans, and Arizona Cardinals.

We also signed payment processing and ticketing agreements with the Baltimore Oreos, the Baltimore Raven, the Florida Panthers, Cleveland Cavaliers, and the University of Minnesota. We will see much more ticketing volume in 2023, now the integration with CPET is complete. And in college sports, we expect to begin processing ticketing for college sports through our integration with [indiscernible] in the coming weeks.

We will look back on 2022 as the year shift for cementing its position as the preferred payments and technology partner for sports and entertainment venues, including ticketing. Our pipeline remains very healthy in sports and entertainment vertical.

In gaming, we signed [Indiscernible] Casino Resort in Southern California, one of the top 10 largest casinos in California as well as the [Indiscernible] last Casino, one of the largest casinos in the state of Washington.

We also signed a partnership with Passcode [ph] Technology, a leading gaming technology provider for cash advance and ATM services where Shift4 is assisting in the development of a cashless gaming experience.

We continue to add state and tribal gaming licenses, including the District of Columbia and added additional states with BetMGM. We anticipate being live in every online state with BetMGM by the end of this first quarter.

We are constantly adding critical integration within our online gaming ecosystem and are currently testing multiple B2B integration that combined operate more than a dozen jurisdictions. We are also incorporating Finaro's European gaming capabilities within our US payment platform.

Moving to non-profits. Our non-profit vertical continues to grow and during 2022, we added over 1,000 new non-profits to the platform. The Giving Block has expanded outside of crypto, enhancing their product suite to include stock donations in addition to the ability to accept traditional card-based payments.

The Giving Block has evolved from its position as the leading crypto donation platform to the leading non-cash fundraising platform that supports all forms of digital assets. The Giving Block will continue adding new payment methods and product capabilities as we pursue the $450 billion payment opportunity living with inside the non-profit vertical.

In travel, the integration of Allegiant Airlines is now complete, and we are now processing all of Allegiant's ticketing volume. We signed another US airline during the quarter, which we look forward to disclosing next quarter.

With respect to Sexy Tech, we continue to serve an increasingly exciting mix of next-generation e-commerce customers. As you are aware, one very fast-growing customers driving the next evolution of Shift4 and our global expansion strategy.

Additionally, we entered into partnerships with Zipin and Maskin [ph], two next-generation retail concepts that allow customers to check out without having to interact with a cashier. Zipin is already in use in several retail locations in the Dallas-Fort Worth Airport, and Maskin has deployed more than 2,300 locations across the US.

Additionally, in the category, we began processing for payments and completed a Bridger Pay integration. All of our success supporting much larger merchants in a variety of new verticals has garnered interest from other large multinational merchants. We are evaluating several exciting RFPs across all our new verticals, which we believe will only accelerate as we expand internationally.

On that note, I also would like to provide you with an update on our global expansion progress. International expansion remains our number one capital allocation priority, both in terms of our M&A pipeline and organic investment initiatives.

We expect to receive final regulatory approval on Finaro shortly, and our 2023 guidance does not include any contribution from Finaro. We will update our guidance accordingly following the deal closing.

In the interim, we are integrating our payment platform [indiscernible] partnership and continue to refer merchants to each other. As you recall, we announced last quarter that we acquired a highly capable European payment service provider, or PSP, that now affords us strike like integration capabilities to offer our European and US merchant.

These capabilities include the ability to optimize conversion and authorization rates, sophisticated fraud protection, and best-in-class recurring billing and payment technology. We now offer these capabilities in over 40 countries.

We are also expanding organically into Canada and the Caribbean and in partnership with Finaro, we're already expanding into Eastern Europe. In the year ahead, I firmly believe we will begin processing payments across Europe for many hotels, restaurants and stadiums.

Before handing the call over to Taylor, I want to provide a few more comments on 2022 and how we're thinking about 2023. In the beginning of 2022, we were one of the first payment companies to express concern about the deteriorating macroeconomic conditions.

I commented that this is the type of climate that Shift4 performs tested. Unlike many of our peers that grew up in a zero interest rate environment and a growth at all cost mentality, we self-funded Shift4 through the first 15 years of our editions. We grew through every economic downturn, including the Great Recession and the challenging pandemic conditions of 2020.

Based on past experience, I stated we would reduce spending and focus our resources in 2022 on the true needle movers. As a result, we generated growth rates in line with our midterm outlook in 2022 and expect to continue driving real growth across our core and new verticals. We are accomplishing this while expanding internationally and expanding our margins and free cash flow.

As we look ahead to 2023, we have assembled guidance that we feel confident we were able to deliver upon and assuming consumer spending remains reasonably stable, we are poised to deliver another year of similar performance.

Nancy will go into this in just a minute, but I want to speak a bit about expenses. I've expressed a very strong position that the leadership team has Shift4 that we will meet our growth targets this year while striving to keep expenses and headcount as flat as possible exiting Q4.

I fully expect we will be upgrading talent throughout the year as competitors we admire continue to shed personnel, but I will resist to the greatest extent possible increasing spending. I believe this is a responsible way to navigate the year ahead and will demonstrate the scalability of the Shift4 platform.

Last, Shift4 is a strong record of unlocking value through accretive M&A. Our balance sheet remains strong, and we are reducing leverage now at an accelerated pace. Our adjusted net leverage on a trailing 12-month basis is now 2.7 times, giving us ample capacity to pursue other strategic priorities.

And with that, I'll turn the call over to our President and Chief Strategy Officer, Taylor Lauber. Taylor?

Taylor Lauber

Thanks Jared, and good morning everyone. I'd like to provide a bit more detail on some of the more interesting trends we saw in the fourth quarter, early views on 2023, and how we are positioning ourselves strategically for the year ahead.

As Jared mentioned, we approached 2022 with a deliberate caution given what we viewed as the potential for a slowdown in consumer spending in the face of rising interest rates and broader economic customers.

While we believe that approach would be highly prudent, it has not manifested itself in our processing volumes. Merchants largely exhibited a normal seasonal cadence with restaurants moderating from the summer highs and our sports and entertainment and other new verticals filling the gap nicely. Hotels performed stronger than usual as travel was not impacted by the large waves of COVID that we had experienced in prior years.

As we mentioned during our Q3 call in November, we also began to see some benefit from our international expansion and alternative payment methods during the fourth quarter, which helped contribute to spread expansion versus Q3.

Early indications for 2023 are positive. We saw record volume days as travel resumed during President's Day weekend and suspect that Spring Break and Easter travel will create strong month-over-month growth as it has in prior years. As you may recall, we typically experienced our slowest period during January and early February.

While that was true, we have benefited from some easier comps when considering the impact of Omicron in January of last year. We are sometimes compared to payment companies operating in a single industry vertical and I think our performance in Q4 highlights the advantages that our vertical expansion strategy has created.

We have large and fast-growing franchises in restaurants, hotels, sports and entertainment, gaming, non-profit, travel, and core Sexy Tech, all of which serve to bolster our performance when a single sector experiences moderation.

Most importantly, we've been able to deliver these strong results and expand our margins and free cash flow. As we've mentioned before, many of our competitors in the Fintech arena have not been required to operate with a focus on profitability and positive cash flow.

Shift4 approached our growth with a very disciplined and consistent process, constantly balancing a desire for growth with a realistic payback assumption. This means that we generally deploy capital with an expectation for positive returns within 12 to 18 months or less.

As investors justify we put demands higher demand for results in free cash flow, we believe that many of our competitors will be forced to dramatically change their behavior.

As Jared mentioned, this type of an operating environment is typically where Shift4 drives, and we are leaning into the current environment, which positions us well to continue to grow and take share, as well as to continue to operate in the same fiscally responsible manner that we have since our founding 24 years ago.

To that point, stock-based compensation and the dilutive effects on shareholder returns has been a significant focus in the investment community of late. Since long before our IPO, we've been prudent in balancing the benefits of broad-based employee equity ownership with the dilution it causes to existing shareholders.

We have had average dilution of about 1% a year for 2021 and 2022, and this includes the impact of equity used for acquisitions. Our adjusted EBITDA grew by nearly 75% during that same timeframe.

A strong early mover understanding of integrated payments alongside of M&A has been a significant driver of our ability to rapidly gain share in numerous verticals and geographies.

And the current climate and our balance sheet positions us well to continue to execute in that regard. We do not have any M&A transactions during the fourth quarter and have not included the impact of potential M&A in our guidance, but do expect it will present upside opportunities in the quarters ahead. On that note, we are nearing what we believe to be the final stages of regulatory review for our acquisition of Finaro.

Bear in mind, these regulatory approvals can typically take up to 18 months. And while the timing is by its nature, uncertain, we believe a closing during Q2 is likely. You will recall that we announced -- when we announced the transaction, we estimated a full year contribution to volume and adjusted EBITDA of $15 billion and $30 million, respectively. We will continue to update you on the closing progress and pro forma economic contribution as we progress towards closing.

Before turning the call over to Nancy, I'd like to sing her praises for just a moment. During a short time as CFO, she has made meaningful contributions to help enhance our operating performance, free cash flow, and forecasting abilities. Her approach to expense discipline is also particularly helpful as we strive to maintain both best-in-class growth and our very strong margins. Nancy?

Nancy Disman

Thanks so much, Taylor and good morning everyone. In the fourth quarter, we delivered record results and ended the year exceeding the top end of our previously provided guidance ranges for volume, gross revenue less network fees, and adjusted EBITDA, and we also meaningfully exceeded our adjusted free cash flow guidance.

Total Q4 volume of $20.7 billion grew 55% compared to the same period last year. Q4 gross revenues were $537.7 million, up 35% from the same quarter last year, and gross revenue less network fees were $199.4 million, an increase of 36% over last year.

Our adjusted EBITDA for the quarter was $94.4 million and our adjusted EBITDA margins were strong for the quarter at 47%. Our quarterly results were driven by the continued strength of our high-growth core, improved economics earned from our gateway customers, and higher unit economics resulting from our decision to insource a large portion of our go-to-market distribution in connection with the launch of SkyTab in the third quarter, shifting from third-party distribution to direct in major markets.

As expected, we continue to add and ramp very large enterprise merchants, which is resulting in lower blended spreads. The blended spread for the fourth quarter was 71 basis points versus 74 basis points a year ago and 68 basis points last quarter. We anticipate the ongoing mix shift will continue into 2023 and that our blended spread will continue to decline as we successfully move our market.

As we mentioned last quarter, we are not further breaking down the components of the blended spread, given disclosure limitations and competitive sensitivities. However, we did see sequential improvement in both our hybrid core and non-hybrid core spreads in Q4 as compared to Q3, driven by volume mix, new board, and international growth.

Having an early look at Q1, spreads remained strong and in line with Q4, but will decline modestly due to the impact of the newly signed strategic enterprise agreement with a major hospitality operator that Jared previously mentioned.

We are very pleased with the margin expansion we delivered this year. For the full year 2022, our adjusted EBITDA margins were 39.8%, representing over 800 basis points of expansion compared to full year 2021. We delivered this margin expansion despite ongoing growth-related investments, including international expansion, new vertical expansion and the SkyTab product launch.

We are very confident in our ability to deliver further margin expansion in 2023 and are committed to remain disciplined in our cost management while continuing to support and invest in growth.

Net income was $38.5 million for the quarter. Net income per share was $0.51 and $0.46 per share on a basic and diluted basis, respectively. Adjusted net income for the quarter was $40.5 million or $0.47 per share on a diluted basis.

Adjusted free cash flow in the quarter was $56.7 million, bringing full year total adjusted free cash flow to $147.2 million adjusted free cash flow conversion was 60% for the quarter and 51% for the full year.

A complete reconciliation of adjusted free cash flow is available in the appendix of our earnings materials. In reviewing these materials, you will see that as of year-end, we settled the outstanding receivable we had with our sponsor bank. We did not include the benefit of the settlement cash inflow and our adjusted free cash flow balances.

We are exiting the quarter with just over $776 million of cash, $1.8 billion of debt, and $100 million undrawn on our credit facility. Our net leverage at year-end was 3.5 times and approximately 2.7 times, as Jared mentioned, when adjusted for the contribution of recent initiatives based on the trailing four quarters of adjusted EBITDA.

Our strong balance sheet and free cash flow profile will continue to allow us to invest in the business and our strategic growth priorities, while we remain disciplined in our capital allocation approach.

For the full year of 2023, we are introducing guidance ranges for each of our key performance indicators. Our guidance range attempts to account for a variety of business and economic scenarios.

As demonstrated last year, the onboarding of multibillion-dollar enterprise merchants and have significant weighting on volume in a particular quarter and it's difficult to predict.

Additionally, the persistent uncertainty of the macroeconomic climate compels us to be cautious. The low end of our guide contemplates modest headwinds in consumer spending during which, we are confident we can deliver best-in-class growth among our peer set. The high end of our guide invites a continuation of recent trends in both our growth and consumer spending.

As Taylor mentioned, Finaro is not included in either scenario and we will be adjusting our guidance on the closing date becomes certain. Regardless, both the high and low end of our ranges represent strong profitable growth, including margin expansion and improved free cash flow conversion. For 2023, we expect to deliver total end-to-end volumes of $100 billion to $109 billion, representing 40% to 52% year-over-year growth.

Gross revenues of $2.5 billion to $2.7 billion, representing 25% to 35% year-over-year growth; gross revenue less network fees of $915 million to $955 million, representing 26% to 31% year-over-year growth; and adjusted EBITDA of $410 million to $435 million, representing 42% to 50% year-over-year growth.

We anticipate adjusted EBITDA margins to expand approximately 500 basis points at the midpoint of our guidance ranges and adjusted free cash flow conversion to expand to 52% plus. As a reminder, one more time, this guidance does not include Finaro or any other contemplated M&A in 2023.

With that, let me now turn the call back to Jared.

Jared Isaacman

Thank you, Nancy. So, operator, we're ready to take questions.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions]

Our first question comes from Dan Perlin from RBC. Dan, please go ahead.

Dan Perlin

Thanks. Good morning and a lot of good stuff in the results today. I just wanted to ask a question around kind of the embedded expectations within guidance. And Jared, I appreciate the fact you don't want to give like the vertical number specifically. But I was just wondering kind of directionally, how do we think about how much contributions ultimately are going to be coming from kind of net new business, some of that being vertical, some of that being other opportunities versus just high-growth core and how that may toggle given some of the macro scenarios you've built into the year assumptions? Thanks.

Jared Isaacman

Hey Dan, thank you so much and I'm looking around the room just to see if Taylor and Nancy wants to add on. What I would say is that if we were trying to put a 2023 volume bridge in place, it would look very similar -- approximately similar to what we did last year, if you just took it on a percentage basis of current volume, how much is coming from the annualized impact of 2022?

How much is kind of net new from high-growth core and then the balance being all else, which is predominantly new verticals and to some extent, a very small portion, I'd say, from like international expansion.

Taylor Lauber

Yes, that's exactly right. So, the one thing to keep in mind is as Jared mentioned, annualizing our Board last year is always the largest contributor inside of the year. We got a half a year on average contribution from those merchants and just getting a full year is a really nice grow the benefit that we get.

One thing to keep in mind with a lot of these big merchants did not contribute a full year last year. So, while we surprised, I think investors would the contribution of new verticals kind of serving in Q3 and expanding further you can expect that grow over benefit to help.

The one thing I would just sort of maybe caveat Jared's statement with is we were more pessimistic on same-store sales growth in our guidance this year than we were last year. So, if you recall, we had a portion of our bridge that was same-store sales growth and travel recovery. I think we're more cautious on that front because I think it's prudent to be so.

Dan Perlin

Yes. No, that's great. And then just a quick follow-up. Just any initial commentary around the success you're having in sourcing strategy. The go-to-market strategy here is a lot more direct distribution than what you've had. Obviously, you had a quarter now to kind of see how that's going. So, I would just love to hear any kind of initial phases there. Thank you.

Jared Isaacman

Yes, sure, Dan. So, we're really pleased. I mean, I don't know how many people really follow us on like on any of our digital marketing or social media spend, but we've really spent virtually a euro in terms of generating needs for our Skyforce. And the reason is we wanted to spend really the first kind of two quarters just dialing in our operational process.

One area of focus is our like literally five days turnaround time from when a new customer is signed to having a fully operational POS system in the restaurants. So, we wanted to really get that dialed in and working very, very well before we kind of turned on the marketing engine.

The reason we've had so much production is because -- and I don't know how many people picked up on this nuance in last quarter, we spoke about it. A lot of the partners that we acquired insource have had portfolios of customers on many of our competitors, whether you call it like Heartland or Spot On. Some of them former [Indiscernible] dealers, so they already had what we refer to as kind of the low-hanging fruit list to be able to go out and knock on doors now that they were part of our team and sign up customers to SkyTab without any real marketing support.

And that was part of the plan by design was to use the first two quarters, kind of burn down some of that low-hanging fruit dial in the process before kind of ramping marketing.

I think as a result, you end up in like just a ridiculously low customer acquisition costs over the last couple of quarters, but really pleased with how things are coming along. Great balance between our direct team and filling in the gaps with some authorized partners. And we're really happy with the results of the product, some extraordinarily high-volume locations right now.

Dan Perlin

Thank you.

Operator

Thank you. Our next question comes from Timothy Chiodo from Credit Suisse. Timothy, please go ahead.

Timothy Chiodo

Hey, thank you. Good morning everyone. I want to talk a little bit about the ticketing opportunity. So, you have [indiscernible] you have Ticket Socket. You recently got the Pacion [ph] integration, which opens up a lot of college sports and stadiums there.

Maybe you could just expand upon what Pacion actually does for you in terms of the opportunity? And then also, if there's any thoughts around the potential to integrate with Ticketmaster, which I believe remains the only large integration that you have yet to make.

Taylor Lauber

Hey Tim, I'll cover that one. I don't want to talk about any of the names specifically. We are trying to be pretty deliberate walking back from specific customer names, specific partnering. But the way you should think about a ticketing opportunity, the way investors should is, it's an integration of a software platform that lots of other merchants use.

So, pick any of those names that you mentioned, getting an integration to the platform means that you're now technically capable of serving a TAM that is substantially wider than the day before you completed that integration.

And so, having the integration means that you can light up a customer that's using it very, very quickly, but the integration is what takes a lot of time to get done. So, we announced kind of our foray in the sports and entertainment in a meaningful way with the acquisition of VenueNext in March 2021.

We started to win full stack stadiums and start to have ticketing conversations throughout the end of 2021 and into 2022. We've kind of completed the bulk of that ticketing integration work and now it's much faster for us to light up customers, much in the same way we can line up a customer who's using a hotel property management software integration that we already have.

And obviously, being able to deliver for that in the really high demand environment of their stadium, there's some confidence that we can handle their ticketing volume as well.

So, you should think about each integration as an instant way to expand our TAM and that the volume comes much faster as a result of having the integration. It's basically a customer saying yes and signing an agreement that allows you to serve them.

Timothy Chiodo

Excellent. Really helpful. And congratulations on those integrations. The quick follow-up is around inorganic contributions. I realize they're small from the European TSB a little bit from The Giving Block, but could you just recap what was included in Q4 that was inorganic and the small portion that's included for the 2023 guide for both volumes and revs?

Taylor Lauber

Yes, sure. It's suffice to say, I think we have these comments in November. We were not terribly optimistic around The Giving environment at the time and this is probably pre some of the other tough news in the crypto community. So, the contribution from The Giving Block largely came in the form of SaaS from the incremental customers they signed up it was not particularly meaningful.

Although when you think about that customer base being double what it was bought it as The Giving environment starts to improve, the donation and should come very quickly thereafter. So, we're quite constructive on that platform despite the troubles in the crypto community the lower donation volume.

And I think we have commented in the same call in November that we expected the contribution of our international PSP to be less than 1% of our net revenue for the year. And I think it's landed but where we expected it to be. So, reasonably inconsequential in the quarter, although really, really strong technical capabilities.

Jared Isaacman

Yes, I think just to layer on that, pretty consistent with it is important I think for all investors to understand it is not uncommon for us at all to acquire assets that we think give us some unique right to win within a specific vertical and then just totally pivot the revenue model around payments.

Great example of that is the VenueNext acquisition at the time we purchased it, I mean, fantastic software. I mean wasn't a cash-generating business at all? Pivoted it from predominantly SaaS at that point and now being a real contributor from a volume perspective, which is driving a lot of the net revenue not to mention it's opened up doors for ticketing opportunities as well.

When you think about The Giving Block, I mean, right now, the overwhelming majority of the revenue that we take in from non-profits is coming from major non-profit brands like St. Jude and others that are giving us traditional card payment volume and many of which we were able to solicit from the 2,200 or so existing Giving Block customers with respect to the European PSP, we bought that asset to put volumes that we knew we had already with respect to some of our strategic customers into the European market.

So, I know it's been a question we've been asked since the time of the IPO, what contributions are coming organically versus inorganically, it's almost always organically and then some because you're often times devastating the revenue model of the existing business you acquired to pivot towards our organic strategy. I think that holds with the deal of the bills that we actually did in 2022.

Timothy Chiodo

Perfect. Thanks a lot Jared and Taylor.

Operator

Thank you. Our next question comes from William Nance from Goldman Sachs. William, please go ahead.

William Nance

Hey guys. Good morning. Thanks for taking the question. Jared, I think the company benefited a lot from some of the aggressive actions you guys took distribution insourcing, the rolling out of SkyTab, Gateway Sunset, what's kind of the big needle mover in your mind for 2023? What are the main two or three things that investors should be focused on to kind of track the next leg of growth this year?

Jared Isaacman

Yes. What an awesome question. So, I mean I think we set the table incredibly well through 2022. But actually, it also kind of matches off of the Investor Day we had in November of 2021, where we basically told our investors that we're moving -- we're diversifying from outside of just restaurants and hotels into all these exciting new verticals, gaming, non-profit, sports entertainment, they were all e-commerce, international, they were all anchored off of like a significant merchant that was going to give us more than a foot in the door within those specific verticals.

We moved into 2022 building on every one of those initiatives. We certainly saw -- or at least were concerned enough that there would be a deteriorating economic climate in 2022 so much so that we decided to move a little bit faster on things like our Gateway Sunset initiative, rolling out SkyTab POS with a balanced direct and indirect distribution. And we made some real meaningful progress between Finaro, which is still a commercial capacity and then an inorganic acquisition in Europe to set the stage well. So, I think we really set the stage really well in 2022, going to 2023, and where the needle movers right now.

Let's start with high-growth core Gateway Sunset is going to still deliver significant results in the years ahead. years ahead. There is still like an enormous amount of volume on our gateway business. So, I know everybody like as are we in like middle innings, later and it's still early innings with Gateway Sunset. So, I expect that to be, by and far, the largest contributor to our growth in 2023.

All the new verticals we've built upon, and you've got real traction there. We made our investments were really well timed in late 2021. So, I expect that still to crush it in sports and entertainment, except now you're going to have [Indiscernible], which is huge and comes in at higher take rates than we've had previously. We've got like almost every sport a real decent presence in almost every one of the major sports lease.

So, some of the like seasonal trends that we saw in prior years in sports entertainment won't be there anymore. And I think what's most exciting for us is we're making real progress internationally, both inorganically and organically. And that's not just for the benefit of one or two really strategic customers, but it allows us to bring restaurants and hotels in all these new markets too, as I mentioned in our remarks. So, I look at high-growth core, continuing to deliver the majority new verticals moving very quickly and real progress in the international markets in 2023.

William Nance

Got it. That's super helpful. And maybe if I could just follow up on some of the comments that you had on the Gateway Sunsetting strategy you mentioned being in middle innings. I know it's kind of back to the basics with Shift4, but could you maybe provide an update on kind of just general expectations of the pace of conversions going forward?

I think you previously talked about something in the ballpark of $8 billion year. It sounds like that's accelerated as a result of the sunsetting strategy. So, whether it's full on conversions or repricing to better economic terms, how much of the kind of growth in the near-term do you expect solely to come from that opportunity?

Jared Isaacman

Yes, I mean, just to clarify, I didn't say we're still early inning. So, maybe we're in the second inning, I don't know, late bottom of the second, I still expect Gateway Sunset to contribute a substantial amount of volume like that we didn't pre-discuss what our current gateway-only volume. Most of us don't actually look at it that often. But you're still talking like well in excess of $100 billion, like well in excess of that in volume there. Like even if we're working 24/7 and still a lot of volume to move over,

And we did say that we're trying to take our Gateway Sunset initiative, we move the parts to unlock a lot of efficiency and make it not a 10-year initiative or a five-year like trying to pull that into three years. It's a lot of volume to deliver in that period of time. So -- but I'd say it's still like a pretty substantial focus for us.

And in terms of getting properly rewarded for the capabilities that we're delivering, which is the heart of the integrated payment solution these customers benefit from, super early innings. I think we mentioned last year, like we effectively added a Netflix subscription to hotels and restaurants to millions a year in volume. So, I'd say that that's still pretty early on as well.

Taylor Lauber

The one thing I'd add on just to help contextualize it for smaller merchants on the gateway and the B2B merchants doing $1 million, $2 million, $3 million a year in volume. These decisions are typically made by the owner/operator. They happen quite quickly. They happen regular course and we get hundreds of these a month. And it's really just a function of getting the time with that owner operator to have the conversation on the benefits and obviously, the pricing actions that Jared mentioned do like slightly nudge the conversation in our direction.

Larger operators, and there are many multibillion dollar sort of companies that are using the gateway, take longer naturally to make these decisions. They happen over multiple quarters. So, the one thing that Nancy mentioned in her script that we want to be mindful of is, we've had a lot more time to have these big conversations with state merchants.

And so, as they agree to move over and increasingly, they are -- it creates a little bit of lumpiness in sort of the volume growth in the quarter and the corresponding spread that we deliver in that quarter.

So, we want to be cautious that we have a good enterprise-level conversation that can make the volume growth in this effective spread a little bit more volatile, all for very good reasons. But that's sort of some color behind the scenes on the nature of the really big merchants and their decision-making.

William Nance

Got it. Appreciate you taking the question. Very helpful.

Operator

Thank you. Our next question comes from Darrin Peller from Wolfe Research. Darrin, please go ahead.

Darrin Peller

Hey guys, nice results. Thanks. Listen, I wanted to touch on the international build a little more on the opportunity there. Obviously, when you closed the deal, the Finaro deal will help. But if you can give us a sense in the past -- and what you see as the opportunity in terms of vertical expansion? I know you have obviously your large customer as an anchor, it's helping. But what kind of opportunity do you really see that being both in 2023 and then maybe a little bit longer term, Jared?

And then, Nancy, just a quick follow-up on the financial side. That kind of relates because you're going to have to spend time and money building that out, I imagine. And so, when we think about the margin implications of something like that, and I guess if we back out the residual benefit you have in either last year or this year, it looks like your margins are basically stable with the expansion coming from those initiatives. So, what's happening under the hood in terms of investment and what you can do on the margin front as you're building out? Thanks guys.

Jared Isaacman

Nancy, why don't you start?

Nancy Disman

Okay. Starting on the margin side, I would say you're right. Certainly, the in-force distribution helps the margin lift by design, of course, right? And so, I think as we're strategically looking at where we want to invest for growth.

From an international perspective, a lot of these kind of tuck-in or small technology and product deals that we're looking at to provide us a lot of opportunity to create the investments that we need kind of outside of the US, right? So, we don't really need to use kind of the US platform necessarily to make core investments for that expansion.

And when I look at Shift4 and kind of the history of Shift4, I think there was some discipline but the opportunity here without really cutting into any kind of muscle or really, I would say we're just at like a very first layer of fat level and just really putting better process in place that will generate a lot of that margin expansion from here forward that you're looking at.

So, for sure, we're going to get an annualization benefit of the in-sourcing. But from there forward, there's just lots of room across every piece of the business to kind of optimize is the way that I would say it. And the investment for growth I think will come alongside these tuck-in acquisitions or partnerships that we -- the ones that we've announced and the ones that have come in the coming years.

So, I feel very confident. And you could tell from the EBITDA guide that we feel pretty solid about that. And look, you know is the Shift4 way that we always like to kind of beaten these expectations. So, I would just say there's room there for us to make the investments that we need.

Jared Isaacman

Yes. And I guess, just to layer on a little bit on that point. With every initiative, I was kind of trying to make this point in Q4 of last year when we were interacting with a lot of investors. It's like virtually everything we are doing right now has a margin and has an efficiency benefit, which then translates into margin and free cash flow.

So, just to give you an example, right now, is actually more labor intense for us to support a gateway customer than an end-to-end. So, when we're -- every day that goes by, we move more customers from our gateway to our end-to-end platform, it makes things easier on our support resources.

It's so much different than where we can handle the situation and to end versus trying to get a conference call going with I don't know, Bank of America, First Data to try and trouble through the situation. Every SkyTab POS system that goes out right now is like 3x or 4x easier to support because it's cloud-based, than all of our legacy POS systems.

Actually, we caught fair criticism for the first couple of years as a public company. They have a lot of Windows-based POS software is in that previous generation, yes. And they're like more labor-intense to support. So, like every day that goes by, more SkyTab POS systems come in, like we are able to more efficiently support probably the most labor-intense portion of our customer base, which is small restaurants.

Last, our diversification into new verticals, stadium. I mean a single stadium that may be hundreds of millions a year in volume can be covered by, let's just say, one person with half their time versus that same person might have to cover thousands potentially of restaurants that are calling multiple times, you need a lot of people in order to manage the number of inbound calls on that.

So, the point is like there's areas of the business that are able to operate more efficiently, and that frees up resources for us to make investments in areas like product of R&D finance for sure as we continue to expand internationally.

Moving on to the first part of your question is like just general excitement, how big the opportunity for internationally, it's huge. I mean, I think -- I hope most people took a look at some of the numbers that got released on strike only helped. I mean you're talking about like $800 billion in volume growing at an extraordinary rate. I mean, even adding these numbers take margin aside. That's a lot of volume growth.

What that is right there is integrated payment 3.0 or commerce-enabling software anywhere in the world and making like you here on some of the largest enterprises in the world.

Yes, we're coming to that heavily. We're going to follow an incredible customer on that journey, we'll do it organically in some parts of the world, like we announced with Canada and the Caribbean. We're looking at other markets now. We'll do some one to many partnerships in some parts of the world, and we'll deploy capital effectively to own rails in other parts of the world. And in doing so, like we're going to first be able to compete.

So, it's not just adding the strike going for some of those huge multinational corporations, but we're going to take everything that made us special in the US as one of the most competitive markets in the world and bring it into those new markets. It's incredibly exciting. Like this is our journey to like $1 billion plus in EBITDA. I mean that's the march we're on right now. So, I think it's one you can ignore.

Darrin Peller

That's really helpful. Thanks. Just very last quick follow-up is on SkyTab and the progress you're making seem really strong on the location adds. Just maybe a quick update on the expectations for the year ahead.

Taylor Lauber

Yes, we thought it was fair to give you some sense of how SkyTab is moving because I think it's such an important part of the distribution and sourcing story. The expectation is like I think both Toast and Chip we're going to have -- continue to have great years. And I'm sure both Toast and Chip will take our products into international markets. And we'll go and clean up all those legacy terminals and Windows-based POS systems, and I think both enjoy a lot of success.

What I don't think we'll do, I mean we'll certainly give you insights in spreads and volumes. I don't think we're going to every quarter give updates on location count. I don't think kind of -- we tend to be way more upmarket than that. You'd rather have hypothetically 4,000, 2 million of your customers and 5,000, 800,000 of your customers or something of that effect.

But yes, I think it's like looking at the competitive landscape, it's a two-horse race for sure. And there won't be a winner take off, both Toast and Chip were going to have a lot of success with our cloud-based products in the US and in other markets.

Darrin Peller

That’s great guys. Thanks again.

Operator

Thank you. Our next question comes from Andrew Bauch from SMBC Nikko. Andrew, please go ahead.

Andrew Bauch

Hey guys. Nice set of results and thanks for taking my questions. I just want to tail Darren's international question there. In the context of the regulatory approvals needed for Finaro, I know that you're not considering anything from Finaro in this guide, but given how important the international expansion and roadmap is the Shift4 story right now, is there any kind of changes to how results would shake out one way or another if the regulatory approvals were signed off today versus bleeding the third quarter or even beyond?

Taylor Lauber

I don't believe so. The -- as Jared mentioned during his scripted remarks, we have an arm's length partnership. It's allowed us to complete a lot of the technical work to service cost. So, we have -- I think there's been some comments around this previously. We have successfully made transactions on SkyTab by a combination of platforms on VenueNext as well.

We do share a handful of customers today. So, while there's modest improvement in economics from having in one quarter versus the next we're not really thinking about it in those terms. So, we want to close it as soon as we're allowed to just because it helps both companies operate with a clearer lens towards the future. But we've spent a lot of time together -- the maximum the extent appropriate on working through these solutions. So, it's not hitting the pace of progress inside of our business.

And the international acquisition of the PSP that we mentioned last quarter is just another example. So, we're kind of operating strategically with this full speed ahead mentality. The opportunity of owning a bank in Europe is really quite high, that the opportunity cost of that is the fact that these regulatory approvals can take up to 18 months, as I mentioned in my comments.

So, we're pleased with the progress that we've made thus far. We do expect that we report is a slightly opaque nature, which is I'd say nothing more than mildly frustrating. I don't think it has a significant impact on performance one quarter to the next.

Andrew Bauch

That's good to hear. And then I wanted to get a little bit more color around the investment philosophy here. And what are the key kind of macro indicators that you guys are looking for to give you more confidence of, say, stepping down the gas regarding investments.

I mean I really appreciate the commentary in the shareholder letter that said focusing on upgrading talent versus outright adding heads. So, maybe if you could just kind of give a sense of the investment versus the macro and maybe how -- what areas of the upgrading talent you're really focused on?

Taylor Lauber

Stepping on the gas is an interesting way to phrase it because I think we kind of always feel like our it's pretty heavy down on the gas. The reality is we think about kind of capital deployment or M&A, if you will, through the lens -- through a couple lens, number one, is there a capability that we need that we don't have that an acquisition accelerates our base into and I would say that's been a portion of our M&A, but not the entirety of it.

Another portion is just, is this a customer acquisition cost funnel that is substantially lower than finding them. And I think if you look at things like the acquisition of Merchant Link gateway, like the acquisition of the restaurant ISP brands that we have before that, that was always to accumulate really, really nice groups of captive customers at a very attractive customer acquisition costs.

We monitor for that all the time. I don't think market valuations have a huge bearing on that and we execute when and where it's appropriate. I think the tougher one is the first thing I mentioned there, which is capability enhancements, you do typically have to pay more for or you might not get the instant margin accretion from a transaction like that, and you have to be very disciplined on what you're willing to pay for it.

We've seen the opportunity to continually progress throughout this cycle. I mean you've seen multiples in our industry get pretty battered and you see good opportunity for expansion, but we also want to be really disciplined. We don't just want to buy a capability to answer.

We want to make sure we're buying what was inherently a good company before we approach it, it needs to be able to operate at a reasonable profit on its own right before we can get confidence that plugging it into our business is the right thing to do. Jared, anything else you

Jared Isaacman

Yes, I think I'd just say this is an area that maybe look a little bit towards our past. Prior to the IPO, going back to really 2015 timeframe, we had a key sponsoring that kept us in at a comfortable six times leverage predominantly to support periodic dividend recaps.

And throughout that time period, we were reasonably active with M&A, which meant a lot of the acquisitions had to be on a synergized basis, essentially deleveraging virtually instantly.

Fortunately, our current leverage profile, we don't necessarily have to find those gems, but what I will say right now is that we are looking at deals that essentially on a fully synergized basis would be deleveraging inside of 12 to 18 months, which Taylor referenced in his prepared remarks. So, continuing to remain disciplined just given the uncertain road ahead.

That said, I think in terms of capital prioritization, Taylor mentioned, international is very important. Like I said, I'm a very big believer this 3.0 evolution of the integrated games [ph] world. And rails are since really stiff. So, there's opportunity to acquire rails and track the terms to help build out our -- support our global expansion to ever. It's going to be top of the list.

But the other thing I'd say, too, is just the organic investment. I mentioned earlier, there are a lot of reasons why we continue to become more and more efficient. So, if we're able to layer on that volume, keep headcount at endeavor to really keep it as flat as possible in Q4 and it turns out that the economic climate is not as some people fear, and there should be room for us to make some investments in some organic initiatives, whether internal systems or other things to better support our long-term profile.

Andrew Bauch

Got it. Thanks Jared and congrats on a really impressive year.

Operator

Thank you. Our final question comes from Rayna Kumar from UBS. Rayna, please go ahead.

Jared Isaacman

Rayna?

Anthony Cyganovich

Hey, sorry. This is Anthony Cyganovich filling in for Rayna. Thanks for taking the question. I know you commented on it a little bit before, but I was hoping you could kind of talk about kind of the drivers of the really strong EBITDA margin in the quarter. I know you mentioned the in-source distribution, but can you kind of help us better understand if there's anything unusual to call out or kind of the sustainability of that?

Nancy Disman

Yes. Hi, it's Nancy. I'll take that first and anyone else can jump in here. But for sure, we're incredibly confident about kind of sustaining that margin into 2023 as the guide indicate. I think there is the benefits we've already talked about, which is certainly the in-source distribution, the changing model for new vertical support and service delivery.

The model and the diversification as the book moved. It's just that service delivery model is more efficient than when we were supporting lots of small kind of high-growth core on merchants and clientele. So, that kind of overrides the flow-through and our discipline around you think about probably lose companies, headcount, compensation, things like that, being the biggest driver of SG&A.

When you look at our SG&A, trends, both on a reported basis and on an adjusted basis, very confident that those exit rates can be sustained going into 2023. And it really just comes from disciplined approach across the Board being implemented. This whole idea of defending the spend, really thinking about how every dollar is being allocated, that's really the underlying focus of the company.

And the new verticals that they go we're really taking a kind of white-glove enterprise approach surge type models to get them delivered efficiently and onboarded as quickly as possible. And I think that flows through is what you're seeing in Q4 and will continue into 2023 and beyond.

So, just the leverage of every dollar at this point, it's flowing through at a higher conversion rate. And really, I just don't want to repeat everything, Jared, it kind of just a kind of exiting Q4 will continue into 2023.

Anthony Cyganovich

Got it. That's helpful. And just a quick follow-up. I was just wondering if you think there's -- the macro conditions are impacting restaurant demand for the SkyTab POS and how is it impacting demand for SaaS-based solutions or willingness to pay tax fee? Thank you.

Taylor Lauber

So, a few things in there. I don't think like the restaurant, at least if we look at Q4, the restaurant vertical is built felt very normal, right? It typically does moderate off of the summer of Q3. That's what we saw inside of our restaurant base it did not have any bearing on our ability to add customers.

Now, as Jared mentioned earlier, we try to stack the deck in that recur. The entirety of our in-sourcing of distribution was not about gross margin economic expansion. It was also about really attractive customer acquisition costs and all the low-hanging fruit that comes with the project.

So, our ability to gain share hopefully, somewhat dislocated for many macroeconomic impact. We like to have a captive base of customers that we can sell into. It's what's driven our success in the past. So, I point that out with regard to the restaurant vertical is something that we've said.

Now, as we look ahead, I think we've been publicly probably too cautious on same-store sales inside of that vertical and the impact it could have. That caution has been represented in kind of everything that we pulled the Street. I think it continues to be, and yet we haven't seen it yet.

So, we're happy to be proven wrong to the extent there is like more resiliency inside of one of our verticals than we anticipate, but we plan for there being some adverse in almost all of our verticals. It just serves our entire operating model for the business well to be a little bit positive.

Anthony Cyganovich

Thanks for taking the question.

Jared Isaacman

Thank you. We appreciate everyone joining our call this morning and have a good day.

Operator

Thank you. This concludes today's call. Thank you for joining. You may now disconnect--

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Shift4 Payments, Inc. (FOUR) Q4 2022 Earnings Call Transcript