Next up, we have Shift4. Chris Cruz, I'm proud to say, had his first presentation as CFO over here at our conference a year ago, and so he's back for some gruesome questions from Sanjay Sakhrani. Chris Cruz, CFO of Shift4. He became CFO in September of last year after serving on the company's board since its formation. He previously served as partner at Searchlight Capital Partners and earlier worked on the investment team at Oaktree Capital Management. Chris, thank you so much for joining us.
Thank you for having me.
All right. So it's been a little over a year that you've been CFO. What's your biggest learnings, and how have they changed the way you're thinking about Shift4 and its priorities going forward?
Well, first off, thank you again for having us.
Yeah.
As you said, fond memories popped up on my social feed that it's been one year, and this was my first fireside chat.
Yeah.
I am ready for your gloves to come off on this one.
Right.
Nonetheless, really excited to be here.
I promise.
You guys do a great job. Reflecting on the year, one heck of a year to have as your first year in the CFO seat. Hard not to reflect on the number of crosscurrents, number of curveballs we got thrown, macro, geopolitical, and otherwise. Before going into that, I would say my biggest observation in the seat is that our strategy is working. It resonates, this idea of simplifying payment complexity, enabling the acceptance of the ever-growing number of payment modalities, and bringing that all into a high fidelity, single reconciliation point, single integration point. That strategy resonates no matter where you are in the experience economy, shop, dine, stay, play, no matter what geography you are in the Americas or the worldwide regions that we serve, or whether you are an SMB or an enterprise.
The idea that our strategy is working is something I am really enthused by, I am really emboldened by. At the same time, I have to pair that enthusiasm with what has been a pretty tough and challenging year from the perspective of getting thrown a lot of curveballs, a lot of crosscurrents that really end up making you reflect and kind of bias you towards more of a cautious and a cautionary tone. As I reflect on the year, I have that dichotomy of two forces, real excitement about the business, but a reflection that there are reasons to kind of exude a certain caution and a bias towards caution, especially as you talk about external expectation setting.
Good. I will say positively, payments organic growth of 14% remained really strong in the third quarter. What gives you the confidence that that growth is durable despite some of the challenges that you guys mentioned on the earnings call?
Yeah. Payments-based organic growth delivering kind of mid-teens every quarter this year is a really good testament to not just payments-based as a category of revenue, but when you look at the business as a whole, the business has demonstrated resilience across the board. The third quarter results were in line across the board, and we also had a record Adjusted Free Cash Flow quarter at $200 million of Adjusted Free Cash Flow. The demonstration of resilience is yet another reinforcing point that the business is doing what we said it would do. The deliberate strategy to diversify across the experience economy is working, diversify across a mature Americas region and a really exciting growth region set in the worldwide markets that we serve, diversify across SMB and enterprise, which is something we started doing a few years ago.
All of that deliberate and strategic choice to diversify is creating this resilience, and it is translating into the numbers.
Now we just want to see that accelerate.
Okay. Now, just onto the softer fourth quarter outlook.
Yep.
Maybe you could just talk about, at a high level, how much of that reflects timing issues versus the weaker demand environment, versus a change in the underlying opportunity.
Sure. On the fourth quarter, we guided to some specific ways to bridge the variance from the preexisting guide that had been out there, and that can be broken down into three parts. $20 million-$25 million associated with what was embedding or introducing into the guide the travel disruption variable. That had not been in the guide previously. It had been telegraphed and sensitized so that folks could figure out how to size that if they had wanted to in advance, but then it formally entered the guide at $20 million-$25 million of travel disruption in the fourth quarter. $6 million of that variance is associated with FX. Simply put, the continued U.S. dollar strengthening has a translation impact on our non-U.S. dollar revenues.
The part that you are probably most focused on inside of this question, which really is a question about the timing versus permanent change in the $25 million-$30 million associated with the subscription and other types of revenues, right? That was really broken down into two parts.
Two parts are, one, we are seeing a responsive merchant when it comes to providing interesting kinds of incentives and interesting kinds of trades in our mind between non-core, often legacy acquired revenue streams, and exchanging that for what we view as the higher quality revenue, payments-based revenue, right? Payments-based revenue in our minds is the North Star, growing in that category that delivered the 14% organic growth. That is our North Star because that revenue stream is like the original usage-based billing model, right? That is the original model that as your merchant wins, you win, you are kind of fully aligned, right?
When we have the opportunity to trade away non-core revenue streams, think of things like gift card, plastic sales, think of hardware sales, perpetual license sales, anything where there would have been a more of an upfront dynamic, trading that away so that we can get long-term contracts with payments-based reoccurring revenues, that is a trade that comes straight out of our playbook. We do that all day. That made up one of the two parts of that 25, 30 bucket. The other part is about really pure timing, right? If the first part will show up in our payments based over time, the second part is truly just timing. That is why we refer to it as the deferral of commercial initiatives in the European markets.
It was pretty clear to us that the idea of trying to take commercial initiatives on or implement commercial initiatives in Europe, especially net towards merchants that were being impacted by travel disruption, both geopolitically, but then net new travel disruption from what looked like some civil unrest that emerged in the fourth quarter in capital cities like Paris and Milan.
If we had taken those commercial initiatives, it would have been, I think, the wrong decision strategically, wrong decision long term. It is the kind of thing that you have to, as much as it sometimes is, it challenges a plan in terms of what you expected to do in the fourth quarter, it was still like the right thing to do, would have been viewed, I think, often as, it would have been viewed as a very tone-deaf approach to not acknowledging what was happening in the market around you. We deferred those. We will continue to monitor in FY 2027 on when an action could be taken, and that is why that is timing.
Got it. If we zero in that part one, which is the trade-off piece, like how much more of a headwind over the years is that? Do we feel like we are closer to an end, or is that a perpetual sort of a headwind that we face?
Yeah, it is a good question. Embedded inside of that kind of timing versus permanence question is also a question of, how do I then take that Q4 guide, which implies a growth rate in kind of the low single digits, and map that to the newly introduced FY 2027-
That was my next question.
Oh.
Go ahead. That is perfect.
Okay, good. Got it. How does that map to the FY 2027 GRLNF growth framework of mid- to high-single digits? I think simply put, we are not anticipating that this change in, we will say dollar change, in Q4 subscription and other persists.
I think you could kind of get yourself to a place where mid- to high-single digit growth in GRLNF is achievable if simply put, you did not have the step down in subscription and other. More intuitively, I think from our perspective, it really is timing, right? It really was a deferral and a timing. It really is something that we think does not need to persist in terms of forward outlook. Subscription and other, I think on a go-forward basis, kind of a pretty steady dollar, has some volatility quarter to quarter, has always been one of the trickier parts of disaggregated revenue to model.
Yeah.
But I think stability is the right assumption going forward.
Okay. When we think about the mid to high single digit organic growth framework, what is inside that number? Because I think investors would want to know if that framework is conservative or aggressive or, a realistic base case.
Yeah. We are going to provide the fulsome kind of unpack of the FY 2027 guide at the upcoming quarter, as would be the ordinary course. But if you wanted a little bit more insight into how to think about mid to high single digit GRLNF growth, you can kind of unpack it through the way we talk about the business in the growth algorithm that we introduced at the start of last year, or at the start of this year, which is to say, payments-based growth probably in the, call it low double digits.
Tax-free shopping, disaggregated revenue category 2, probably more of a mid single digit akin to this year. And subscription and other, for the most part, flat with some quarter-to-quarter volatility where it could go kind of low single digit negative, but on balance, flattish. That's probably a reasonable unpack if you're trying to map it back to a framework of the growth algorithm that exists out there.
Got it. Okay, Shift4 is live across 15 countries.
Yep.
Maybe you could talk about the milestones we should look at to gauge your success and sort of maybe talk about where you're further along versus relatively in their infancy stages and, you know, where you might see some stair steps higher.
Yeah. It is a real pride point that we were able to achieve the 15 countries live milestone before the end of the year, and a real testament to the team that that was all achieved. When you step back and think about this, the number of achievements that the Global Blue business or the Tax-Free Shopping business has been able to achieve, this milestone of a completely new product in Shift4 One, live in 15 countries, which is now going to give us the base to bring all of our other products into those countries, is a huge milestone for us. I'd say the other metric that would have been my answer. My answer would have been, follow the countries live, but we're there. The other milestone that I think you want to look at is really about the delivery of synergies.
We talked about how the Global Blue transaction, back at the time it was announced, had a target of $70 million in EBITDA synergies, and progress and pace against those synergies is probably the next big milestone that you want to be focused on. Then, of course, just simply put, Shift4 One will contribute to payments-based revenue growth in the long run. So expect to kind of see the improvement in that category as a result of the continued momentum of Shift4 One. But if you're out in Europe and traveling and travel shopping, you'll see it, and I think that's an important milestone as well.
Got it. Is there a specific country that you think is sort of the biggest opportunity-
Yep.
More immediately for you versus other countries?
Yeah. If you look at the markets where Tax-Free Shopping is the most dense, where the TAM opportunity is the greatest, it wouldn't surprise anyone that you'd sort of look in the European countries, France, Italy, Spain, as kind of a big three. Increasingly so, though, you will look at the German market and the Nordic markets. But I think if you started to just map out where is there luxury goods and luxury consumption propensity from a TAM standpoint, those will be a good proxy for where the market opportunity is the greatest.
Got it.
The only other thing I would say is that, and this is maybe less appreciated from the outside in, is that the Shift4 One product is often characterized as a way to kind of cross-sell or incentivize Tax-Free Shopping customers to then take on payments and currency solutions. But the other way around is totally in play, because when you have a product that is truly unique, right, there's no other way for a payment distribution partner or a professional that is in the payments distribution business, there is no other way for them to distribute a product that has Tax-Free Shopping. So when they go door-to-door and they walk into a location and they see an opportunity to sell an integrated device to a POS system at retail that has currency solutions, Tax-Free Shopping, and payments, that's a one-of-one product.
That is going to be not just a product that appeals to a merchant, but it has great appeal to a distribution partner.
That's the only other thing I would say is a really important kind of component of that product.
Very interesting. So on the synergies that you mentioned for Global Blue, I think you said you've talked about $50 million of those synergies exiting 2027, the remainder pushed out to 2028. Maybe you could walk us through the major drivers of those synergies and where you have the highest conviction, and whether or not some of these macro factors weigh in against those synergies.
Actually, one clarifying point. What we talked about at the time of earnings was that we anticipate exiting the year-
Right.
At $50 million of annualized synergies, well on our way to the $70 million target. There is no pushing out to 2028.
Got it.
This is really about exiting the year on a path to being well on our way to the target, and then having really the remainder of 2027 to continue to deliver against that annualized target. In my mind, I think the way that folks should interpret the synergy realization progress is that we are on great pace. If not for some of the things that we had to do from deliberate decisions in the fourth quarter to defer commercial initiatives, we could have been even further along.
That's just piece one from a clarification standpoint. No pushing out to 2028, and well on our way to deliver on that target. I'd say that the parts that we talked about in terms of deconstructing it, breaking it down, majority of that is revenue-oriented in nature, but we have been able to deliver on cost synergies as well. I think the concept of Shift4 delivering, continuing to kind of abide by the cultural values, get flat, stay flat, delete the parts, all very much alive and well in how we approach integration of acquisitions and having a real discipline around it.
Got it. Maybe shifting over to Shift4 Dine. With more than half of the restaurant software companies on Shift4 Dine, is the bigger opportunity now winning more merchants or increasing more wallet share within that existing base?
It's a great question, and the restaurant ecosystem in general is one that I think is a pretty dynamic one. For us, I think some of the most exciting places for not just Shift4 Dine, but let's call it Shift4's restaurant value proposition, is to identify where a merchant actually has a broader set, maybe they're not in a single state in their technology journey of how to deliver commerce in restaurant, but they actually have a multitude of restaurant technology sitting inside their walls, because they're not a single location mom and pop restaurant.
They're actually a multi-location, multi-banner, multiple brands, potentially multi-country. Potentially, they have locations that aren't standalone. They are actually embedded inside of hotels. If you take that type of complexity, which is the kind of thing you see at an Alterra or the kind of thing that you see in our now, like the recently announced largest restaurant win we've had in Kahala Brands. This sort of non-uniformity in restaurant technology is the exact place where we have a super unique right to win. Because if some of your locations have the GMV density to go to modern POS, they can stomach the costs, and they can handle the conversion downtime. Modern POS, you can get that from us in Shift4 Dine.
But if you have legacy POS technology that's also in the field, but you do not want to compromise on a single integration point for payments, for a payment experience, a single reconcilable set of financial information and settlement files to go to the back office, then you need to integrate to us, and we can handle that. And if on top of that, you have locations that are in multiple countries or are non-standalone and they are in hotels, we can handle that too.
Right? That ability to meet the merchant wherever they are on their technology journey is something that we view as the most exciting proposition, and it is something that we are seeing. If you start to go to the For those that enter ski season and start to go to the Alterra properties, you will start to see Dine there, but our payments platform is everywhere. And in the case of Kahala Brands, a similar dynamic is at play. But this is not a new part of the story. I just think it is one of the most exciting things that is bearing a lot of fruit, that we are seeing this proposition of meet the merchant wherever they are in their multitude of technology in running restaurant.
Well, I guess, like when we think about sort of what you guys anticipated Shift4 Dine to be and where it is today, are you guys satisfied with its progress or do you feel like you are behind? Because, I mean, what you are describing seems like it is a longer sales cycle.
So, it is, I would say, enterprise in general is a longer sales cycle. Kahala Brands is thousands of locations.
Right.
It is owned by a group that owns thousands of locations more. To kind of meet those needs, for sure, there is a different selling cycle than what we do when we are capable of serving and when we meet the needs of a single location, tableside dining environment. The fact that we can serve up and down SMB to enterprise in multiple regions around the world, in a variety of different environments, both standalone and embedded inside of stadium entertainment environments or embedded inside of huge resort ecosystems like Alterra, those are just ordinary course for us. If you bring it back to, is the product able to deliver on meeting the needs of everyone from single location to enterprise? The answer is yes. We are very satisfied with the pace of progress on what we're seeing in Shift4 Dine.
We're making quarterly record investment in product and platform, and we absolutely like what we see. I think it's a testament to the way we win, that we're seeing these kinds of results. But the product absolutely has to be solid, has to be good enough in order to meet those needs.
Got it. If you focus in or zero in on the small to mid-size-
Yep.
There's a ton of competition there with Toast and Square and many others, right?
Yeah.
Clover, Global Payments.
Yeah.
I'm just curious, like, do you feel that competitive pressure there, like that it's increased, or do you feel like-
Yeah.
The product is still resonating as you expected?
Believe it or not, this is not the most competitive time in restaurant technology, in restaurant POS.
Right.
If you've been in the industry as long as our company has, and has witnessed the ebbs and flows, you mentioned a lot of really great peers and competitors that we have a ton of respect for. Today, we're glad that they have to be profitable as part of the benchmark, because competing with them when they didn't have to be, that was a tough time. You named a handful of names. Once upon a time, there were multiple multi-billion dollar unicorn restaurant POS companies, that are not part of that set anymore.
I think that the dynamics of understanding where you are in terms of like a competitive framework, if you're looking at it through the lens of, "I'm comparing it to the last year or the last three years," versus, "I'm looking at it through the lens of how long we've been in this business, in this game," which is like a multi-decade journey, this is not the most competitive time. This is a very rational time to be a scaled incumbent participant in the restaurant technology and restaurant payment ecosystem, and we're happy to be one of those players. At the same time, I can easily make that statement of enthusiasm about that industry, about that end market, because we absolutely do view it as a core of where we are a leader.
But I can also look at it and say that if there's irrational activity happening in that sector, I'm glad that I have the diversification to look at other places of shop, stay, play, and allocate capital towards where better unit economic returns can be had. We can do both at once. We can walk and chew gum. We know how to balance this, and we've been doing it for decades.
Okay, great. Maybe shifting gears and talking about investments and margins. I think last couple years, the margins have been pressured by acquisitions, international expansion, go-to-market investments. As we look ahead, where are you in the investment cycle, and when should we expect more operating leverage and margin expansion?
Yeah, this is a real point that I would like to see us make a ton of progress on. No surprise to anyone that has looked at our journey this year and seen us sort of go backwards on incremental margin. EBITDA margin that has come together when you sort of take a large acquisition in the low 40s EBITDA margin, merging it with a business that has a low 50s EBITDA margin, going through the integration of that while also aggressively expanding into many new markets. You mentioned the 15 of Shift4 One. That is not all of them. We expanded into multiple country markets all at once, without wanting to compromise on investments in product and platform that are at quarterly record levels. How do you balance that with a path back to incremental margins?
I think from my perspective, right now, we have gone through the tough work of that financial profile integration mapping, and from here forward, I think we see a path in the medium term back to these kind of historical levels of EBITDA margin, back to the low 50s.
It is not something anyone should expect as a step function tomorrow. I think we view the business as at a stable place. It will not go backwards in EBITDA margin, but on a go forward, I think there is opportunity for getting incrementals back to the historical levels, back to kind of that mid-60s incrementals, which means though on a moderate, but on a moderate pace. Because when we look at the investments we are making, especially in market expansion, these are great long-term, high return yielding investments to keep building out globally, to keep expanding, because we have not yet brought our products that are going to build the gross profit density to drive high incrementals in these regions of expansion. So, we are still in the expansion phase. We are still opening markets, and I think you should expect that in the year to come.
Modest, like be modest within the margin expansion expectation.
But know that we have line of sight back to 50s. We have line of sight back to mid-60s incrementals.
Really bright light in the third quarter results was the free cash flow generation, and obviously the outlook remaining stable. I'm just curious what's driving the improvement in conversion? How should we think about the path for free cash flow generation from here?
Yeah. I think it is a pride point for us to be so focused on Adjusted Free Cash Flow, and in particular, kind of this idea that compounding Adjusted Free Cash Flow per share, like that's the metric that matters over a long run time series if you're a long-term oriented investor. That's the way we think about the business since we have an owner's mentality. And that idea of being focused on improvements in free cash flow, that is, I'd say, broken down into a couple of fronts. One, the synergy we don't talk about, because the EBITDA targets and revenue targets were the ways we expressed the synergies at the time of the Global Blue acquisition.
The synergies we don't talk about are trying to get benefit from this global scale that we have as an enterprise, global treasury, global working capital management, and try to deliver kind of an excellence within that'll ultimately yield improved NWC, improved free cash flow. There are also synergy opportunities within CapEx. As you are one of the fastest growing in international markets, your procurement and purchasing leverage with OEMs, with other parts of our value chain, that improves. And then there is the dynamic that there are also synergies within areas of cap software. There are areas of synergies across the board on those kinds of procurements as well. We don't talk about it as much, but some of the benefit to free cash flow is doing that blocking and tackling very well.
We started to see it, but we have a lot of global scale now.
That also appeals down to the way we may choose to finance things, the way we manage the working capital locally, and the sort.
Okay. So you think there's still a lot of wood to chop in terms of improving and getting synergy out of CapEx?
I don't want to set expectations around it.
No, but o ver time.
I think that it is my job and my team's job, many of whom are here, are the ones that have to hold ourselves to the standard that that opportunity is gettable. At the same time-
Completely understand.
Let's be cautious around expectations.
Yeah. Let's keep expectations low and beat them. Maybe you could talk about the recent acquisition of Paramount and what it does for Shift4. Obviously, you talked about a lot of the trade-offs of capital.
Yeah.
Right? Especially when your stock is where it is today. Maybe you could talk about what attracted you to Paramount, why you decided to go this direction versus buy back stock, and we'll go from there.
Yeah. The balancing act is always something we have to do from a capital allocation framework standpoint. We talk about it a lot, and it is not new. The balancing act of capital allocation across organic opportunities, inorganic opportunities, and return of capital to shareholders, that is not new to us. You are right to ask the question of what does Paramount give you that was so compelling from a capabilities enhancement and the sort. Let us start with, this is a Rule of 40 business that we think we are acquiring at a very fair price. We think that that is also a price that if certain objectives and goals are achieved, that drive gross profit and earnings growth to levels that we think are well-aligned, there are earnout dynamics that will blend that multiple down.
That inside of eight multiple could go down over time, and that just makes the business even more attractive from the upfront setup. Okay, so put that aside. Rule of 40 business at a fair setup. Capabilities enhancements here is the theme that I want folks to take away, because when you step back and look at our core knitting of the payment modality that is card acceptance, you ignore, and that is our knitting because we grew up in the U.S. When you look around the world, the payment modality that dominates is not necessarily card acceptance.
When you look around the world and you look at especially high-value transactions, think about things like large ticket purchases, think about things like the corporate activity to put down a reservation in a private room or in a conference space, these things happen over the modality of bank rails much more than they happen over the modality of cards. So when we looked at what was missing within our payment capabilities, when we looked at the very obvious next sets of cross-sell to drive value into the proposition, whether it is in shop, dine, stay, or play, it was pretty clear to us that we had to really improve the bank rails proposition. So it is a nice follow-up to the ACH capabilities that we acquired in Bambora to be able to bring account-to-account to the table.
The other capability enhancement that it really gives us is a capabilities enhancement that we do not talk that much about, which is payouts, right. We have been historically all about pay-ins, like enable our merchants to accept payment in a high fidelity, easily integrated way. But payouts is actually a really interesting value proposition when you think about some of the markets we serve. Certainly within the world of gaming, that is a factor. But if you think about merchant environments where they are looking to pay out tips to underlying employees, where you are looking to move money across markets because you are receiving a tax-free refund, this idea that we are now far more into the bimodal, like pay-in and payouts game, is something that very much came into mind when we looked at this capability enhancement.
You step back, you think about a Rule of 40 business at a fair price, you set it up with a structure to even improve that setup, you look at the capabilities enhancements that create a really nice set of cross-sells and plug a hole within the platform around being able to deliver bank rail modality at a really great way, and you think about now the other side of the coin of payouts, there was a lot to like about this transaction, which is why we pursued it for many years. In true Shift4 fashion, this is never something that happens overnight. It's a really patient approach to inorganic capital allocation that we have, that most of the transactions culminate after many, many years of persistent pursuit, and then things have to align.
Not to set expectations, but how quickly can Paramount actually start contributing to the synergies that you're talking about?
I mean, we will probably talk about it a lot more when we get into FY 2027 guide. Obviously, as a reminder, Paramount is not yet closed, so it's not in the Q4 guidance. This is really a forward-looking kind of a topic that I'm excited to talk more about in terms of financial contribution and where that could go when we unpack the FY 2027 guide.
Got it. I wanted to open up to the audience, see if anyone's got questions. Otherwise, I can keep going. Any questions from the audience? No? Guess I'm doing something right still.
It's a good thing you're prepared.
Yeah, I'm prepared. Maybe we could talk about the free cash flow generation and deleveraging. You've had leverage come down and a new $1 billion buyback authorization in place. Could we just talk about the pace of buybacks and other activities from here on out?
Sure. As I've said many times, capital allocation framework as a balancing act is always top of mind. In particular, when you acknowledge the constraints you might be facing as you think about a stated 3.75x pro forma net leverage threshold that we do not intend to be above on a sustained basis. If you think about that and look at where we are today at 3.7x, it's clear that we acknowledge that constraint. We also acknowledge that the seasonality of our free cash flows is different than it was historically, very back second half weighted versus first half. I totally acknowledge that constraint. So how do you think about the pacing of return of capital to shareholders in the face of understanding those constraints?
At the same time, acknowledge that you still want to invest organically in the platform into new markets, invest inorganically when those opportunities arise. It's a balancing act. I would say something that's very different about the recent $1 billion share repurchase authorization that the board approved is that this authorization, unlike the current November 2025 authorization, is a perpetual. So, more akin to the market convention, perpetual in nature, in contrast to the expiration date that we had of calendar this year. You can assume that, look, you can take a more measured approach. You can take a more prolonged approach in pacing repurchases than we've done this year. I think that's a fair way to think about it.
I come back to it time and again because it's the thing that the executive team talks about nonstop, the board talks about nonstop, is how do you continue to balance this and this capital allocation? We're governed by ROIC, and happily, I can also pair this balancing act with the idea that this is probably one of the best times we've seen for having a high bar on the competition of capital, because it's going to generate long-term results.
Yeah.
I think that scarcity is a healthy thing and a good thing.
My final question is, it seems like M&A activity has picked up in the sector in general. You guys are obviously acquisitive. We're talking about uses of capital. Just got this last deal, Paramount. Are there others in the pipeline? What are you guys thinking, and what do you think is driving the pickup in M&A?
Yeah, it's a great question, a real softball on the close. Gosh, I would say that if you reflect on the payment space, or the Fintech Ecosystem, aptly called at this conference broadly, it has actually surprised me how much of a hiatus we've seen in terms of M&A activity. I think especially within our sector, where financial profiles of companies are high margin, high free cash flow conversion, effectively trading at double-digit free cash flow yields, that financial profile lines up very well for the way that buyers in my former life of what I used to do look at attractive investments. It's not surprising today that we are finally hearing that there is, we'll say, private equity and interest and activity in the sector. The surprise to me has been how long we haven't heard about it.
And maybe the other side to this is not just sort of the private equity kind of perspective on it, but how do corporate strategics look at kind of this ecosystem that we are in? I think you did have to get a little bit away from historical valuation volatility, figure out where things were going to settle in order to start to see folks get more acquisitive again. I think that uncertainty just created some challenges. It is not surprising to me that we are now seeing the Fintech Ecosystem start to converge. I remember a day, and I am sure you remember it well, where you cannot commingle balance sheet businesses with EBITDA businesses. You cannot commingle consumer fintech with B2B fintech. And those lines are very easily blurring. And why is that?
It is because if you are the trusted party that can deliver financial solutions, whether that is moving money, storing money, borrowing money, if you can be the trusted intermediary for that, you can deliver all of those solutions. And people have shown that in the models, that that works.
And I think that that framework coming together is one of the reasons that we are seeing this catalyst in Fintech Ecosystem. But again, my own take on it is, it is not so much a surprise that we are here now and we are starting to see that M&A activity, but rather it has been a bit of a surprise that we have been on such a long hiatus.
Well, we are out of time. Thank you, Chris. Really appreciate it.
Awesome. Thank you for having me.
We got through all.