Shift4 Payments, Inc.FOUR
Shift4 Payments, Inc. Fair Value Disclosure
Fair Value Measurement
U.S. GAAP defines a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The Company determines the fair values of its assets and liabilities that are recognized or disclosed at fair value in accordance with the hierarchy described below. The following three levels of inputs may be used to measure fair value:
•Level 1—Quoted prices in active markets for identical assets or liabilities;
•Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
•Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include items where the determination of fair value requires significant management judgment or estimation.
The Company makes recurring fair value measurements of contingent liabilities arising from certain acquisitions using Level 3 unobservable inputs. Contingent liabilities included in the purchase price of an acquisition are based on achievement of specified performance metrics as defined in the purchase agreement.
Acquisition-Related Contingent Consideration
The Company’s acquisitions often include contingent consideration, or earnout, provisions. The total fair value of contingent consideration related to the acquisitions of Vectron, Finaro, and two other acquisitions as of December 31, 2025 was $14 million, of which $10 million is included in “Accrued expenses and other current liabilities” and $4 million is included within “Other noncurrent liabilities” on the Company’s Consolidated Balance Sheets. The change in fair value of these liabilities is included in “Revaluation of contingent liabilities” on the Company’s Consolidated Statements of Operations. Each of these fair value measurements utilize Level 3 inputs, such as projected merchants acquired, projected revenues, discount rates and other subjective inputs.
There were no transfers into or out of Level 3 during the year ended December 31, 2025. The table below provides a reconciliation of the beginning and ending balances for the Level 3 contingent liabilities, all of which related to acquisitions:
| Year Ended December 31, 2025 | |||||
| Balance at beginning of period | $ | 26 | |||
| Contingent consideration | 5 | ||||
| Fair value adjustments | (4) | ||||
| Impact of foreign exchange | 2 | ||||
Contingent liabilities that achieved earnout | (15) | ||||
| Balance at end of period | $ | 14 | |||
The estimated fair value of the Company’s outstanding debt using quoted prices from over-the-counter markets, considered Level 2 inputs, was as follows.
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Carrying Value (a) | Fair Value | Carrying Value (a) | Fair Value | ||||||||||||||||||||
| 2032 Senior Notes | $ | 1,633 | $ | 1,706 | $ | 1,086 | $ | 1,119 | |||||||||||||||
| Term Loan | 984 | 999 | — | — | |||||||||||||||||||
| 2033 Euro Notes | 1,304 | 1,343 | — | — | |||||||||||||||||||
| 2025 Convertible Notes | — | — | 687 | 928 | |||||||||||||||||||
| 2027 Convertible Notes | 628 | 610 | 626 | 684 | |||||||||||||||||||
| 2026 Senior Notes | — | — | 446 | 443 | |||||||||||||||||||
| Total | $ | 4,549 | $ | 4,658 | $ | 2,845 | $ | 3,174 | |||||||||||||||
(a) Carrying value excludes unamortized debt issuance costs related to the Revolving Credit Facility of $3 million and $4 million as of December 31, 2025 and 2024, respectively. | |||||||||||||||||||||||
The estimated fair value of the Company’s investments in non-marketable equity securities was $5 million and $3 million as of December 31, 2025 and 2024, respectively. 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 for these investments, if any, are recorded in “Gain on investments in securities” on the Company’s Consolidated Statements of Operations.
Other financial instruments not measured at fair value on the Company’s Consolidated Balance Sheets at December 31, 2025 and 2024 include cash and cash equivalents, settlement assets, accounts receivable, prepaid expenses and other current assets, collateral held by the card networks, other noncurrent assets, settlement liabilities, accounts payable, accrued expenses and other current liabilities, bank deposits, and other noncurrent liabilities, as their estimated fair values reasonably approximate their carrying value as reported on the Company’s Consolidated Balance Sheets.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 8, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.