Why One Fund Is Doubling Down on Shift4’s 61% Revenue Surge With a $392 Million Bet
Key Points
California-based Darlington Partners Capital Management purchased 105,320 additional shares of Shift4 Payments in the third quarter.
At quarter-end, the fund reported holding nearly 5.1 million total shares of Shift4, valued at $392.6 million.
The position is about 13.3% of overall AUM, making it the fund's second-largest holding.
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California-based Darlington Partners Capital Management increased its stake in Shift4 Payments (NYSE:FOUR) by 105,320 shares in the third quarter, according to an SEC filing released on Friday.
What Happened
According to a filing with the Securities and Exchange Commission (SEC) released on Friday, Darlington Partners Capital Management bought 105,320 additional shares of Shift4 Payments (NYSE:FOUR) in the third quarter. The post-transaction position reached nearly 5.1 million shares with a reported value of $392.6 million at quarter-end. The position accounted for 13.3% of the fund's $3 billion in reportable U.S. equity assets.
What Else to Know
Top holdings after the filing:
- NASDAQ: WMG: $408.6 million (13.8% of AUM)
- NYSE: FOUR: $392.6 million (13.2% of AUM)
- NYSE: CRM: $296.7 million (10% of AUM)
- NASDAQ: TPG: $283.2 million (9.6% of AUM)
- NYSE: TKO: $272.7 million (9.2% of AUM)
As of Monday's market close, shares of Shift4 were priced at $67.65, down 30% over the past year and far underperforming the S&P 500, which is up nearly 14% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Monday) | $67.65 |
| Market Capitalization | $6 billion |
| Revenue (TTM) | $3.9 billion |
| Net Income (TTM) | $194.8 million |
Company Snapshot
Shift4 Payments, Inc. is a leading provider of integrated payment and commerce technology, supporting over 4,000 employees and a broad merchant base. The company leverages proprietary software and hardware to deliver secure, scalable solutions that streamline payment acceptance and business operations. Its strategic focus on omni-channel capabilities and value-added services positions it competitively in the evolving payments landscape. It serves businesses in hospitality, retail, stadiums, entertainment venues, and e-commerce sectors, targeting merchants seeking comprehensive payment and technology integration.
Foolish Take
Darlington’s latest move underscores a core element of its playbook: doubling down when conviction outweighs volatility. Shift4 remains one of the fund’s most concentrated bets, and increasing the position during a year when the stock fell 30% signals confidence not just in the company’s market positioning, but in management’s ability to compound earnings through scale and disciplined execution.
The firm's third-quarter earnings report supports that thesis. Shift4 posted $589.2 million in gross revenue less network fees, up 61% from one year prior, alongside 62% gross-profit growth and $292.1 million in adjusted EBITDA at a 50% margin. The company also continued expanding internationally and across verticals, and authorized a $1 billion share repurchase program—the largest in its history.
Against the rest of Darlington’s book, Shift4—now 13.2% of AUM—sits just behind Warner Music Group, which is down 7.5% over the past year and also reflects the fund’s willingness to hold concentrated, multi-year compounders even amid near-term drawdowns. For investors, the key takeaway is that Darlington isn’t treating Shift4 as a quick trade; it’s treating it as a core business it wants to own through the next leg of growth.
Glossary
Stake: The ownership interest or investment a fund or individual holds in a company.
13F assets under management (AUM): The total value of U.S. equity securities reported by an institutional investment manager in SEC Form 13F filings.
Reportable 13F assets: U.S. publicly traded securities that institutional managers must disclose quarterly to the SEC on Form 13F.
Post-trade position: The total number of shares or value held in a security after a transaction is completed.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Omni-channel: An approach that integrates multiple sales and service channels to provide a seamless customer experience.
Value-added services: Additional features or offerings that enhance a core product, often generating extra revenue.
Integrated payment processing: Combining payment acceptance with other business systems for streamlined transactions and operations.
Point-of-sale (POS) solutions: Hardware and software systems used by businesses to process customer payments at the time of sale.
Compound annual growth rate (CAGR): The average annual growth rate of a value over a specified period, assuming compounding.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Proprietary software: Software owned and controlled by a company, not licensed for public use.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Salesforce and Shift4 Payments. The Motley Fool recommends TKO Group Holdings. The Motley Fool has a disclosure policy.
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