Bob's Payment Stock Substack

Lots of exciting things happening in March. Unfortunately (or fortunately for you), that means I won’t be posting or interacting on this platform. I’ll be back after Easter, just in time for…earnings season. Best of luck to all!

February was a difficult month health wise w/at least 1 member of our household sick every day of the month, including myself for the last 10 or so. Still managed to do 10k steps everyday, mostly walking. Looking to get back running more in March.

@invest091 @stripe Being at the bottom likely means opportunity for improvement. $XYZ will have 500 less employees than $TOST post RIF but 5.5x the gross profit.

@bobspaysubstack @stripe Dang my new position $TOST at the bottom lol I do believe they have a pretty big sales force

Two charts of FinTech employment and efficiency. People can draw own conclusions, but in no way is $XYZ a laggard, or uniquely 'bloated' - same cannot be said for $ADYEN $TOST $SHOP $KLAR $AFRM $PYPL @stripe

@Im_Specter Another issue with Global Blue acquisition is that it took $FOUR off table for takeout, in my opinion

@bobspaysubstack Do you think that with the simplification of governance at Shift4, a major player (GPN, Fiserv, etc.) could attempt to acquire it? It's complicated with such a high level of debt, but...

Better but in legacy payments?

*buy*

Better buy in fintech?

Intuit's $INTU online payroll and payments business, which is >$3B revenue run-rate, grew 28% last quarter. Really hard to find that combination of growth and scale across peer group. It's a huge opportunity as traditional merchant acquiring and payroll have only moderate attach to QBO subs and bill pay and capital are nascent businesses growing rapidly. To me, $INTU is ultimate SMB platform and primary reason why I like the stock.

@FeatherFund PayPal $PYPL Employees 23,200>>23,800 (1.0x) GP/Employee 2025 $715

@bobspaysubstack How about $PYPL?

Payments/FinTech employees, GP/employee stats: Employees 2019>>>2025 $TOST 2,600>>6,500 (2.5x) $ADYEN 1,182>>4,771 (4.0x) $SHOP 5,000>>7,600 (1.5x) $XYZ 3,835>>10,200 (6,000) (2.7x) (1.6x post RIF) GP/Employee 2025 $TOST $310 $ADYEN $560 $SHOP $655 $XYZ $960 ($2,030 post RIF)

All the analysts penciling in 40% RIFs across their coverage w/a stable demand/spending environment $xyz

Post $XYZ RIF, $XYZ will generate nearly 7x the amount of GP/employee as Toast $TOST. Time to go long $TOST?

Very little evidence that $XYZ was 'bloated' based on the metrics below

@diederik_theo @Square That GPV # for Cash App is irrelevant. It’s p2p transfers funded with a credit card or c2b Cash App. The Cash App card PV is more relevant. They don’t disclose it separately but the volume bucket it’s in was +17%, similar to q3

@bobspaysubstack @Square Cash App’s GPV is abysmal, it’s in complete free fall.

Great quarter for $XYZ. Cash App a monster, every metric moving in right direction. 26 guidance raised from investor day. @Square GP soft in Q4, but volume has reaccelerated to >12% through 2/24. Am I surprised the stock is +25%. Yes. We'll see what tomorrow brings.

Fascinating to see how the 40% headcount reduction by $XYZ plays in the press. Could there be some blowback from a business perspective? Maybe. Significantly so? Unlikely. Also, all other payments and fintech companies are on notice. Raising headcount unacceptable… $ADYEN?

Damn, didn't even read to the part where they cut headcount by...>40% $XYZ

@yetman_mark I calculated it as 12-13% in q4

@bobspaysubstack I am not following this one as closely because I am out of it, but tangentially follow it and was updating some information. I thought they said that they were going to report organic growth and highlighted that they were doing it on last call, but I didn't see it in the letter.

Thoughts on $FOUR I call it like I see it. Don't necessarily agree w/this dramatic of sell-off, but this was not a good quarter and while guidance was ok (slightly below expectations), hard to tell how conservative they are actually being in terms of beat & raise potential throughout year. Global Blue MSD organic growth is below HSD embedded expectations when they underwrote deal. I do get a little squeamish when $FOUR starts talking about China/Japan tourism and FX dynamics (hurts travel, helps translation) impacting business. That's a problem, IMO. $1b FCF guide is off table as they prioritize share buyback over debt paydown. Management preferring to look at on FCF/share basis. Good news is that core business still looks to be doing relatively well, and significant opportunity remains in front of them internationally. The bottom line, is that we're in for a slug. I say that b/c I own the stock and still plan to after this. Attach is comp table @ $47/share for $FOUR. About 7.5x EV/EBITDA ex SBC and 1x costs.

@SunDraftssGer @stonkmetal No opinion on $sofi

@bobspaysubstack @stonkmetal I know they are not the same companies and operatie in different fields, but what company is more attractive at this price. Four or Sofi

Flat FCF for $FOUR obviously isn't great and with the TRA liability buyout and another $500 million in buybacks cash is gonna be tight. I hope they don't do more M&A here. Too cheap to ignore, but I don't feel like adding to the position.