Adyen shares plunge as costs squeeze profit margins
Shares in Dutch payments giant Adyen plunged this morning despite reporting a surge in revenue in the first half of the year, as it revealed profit margins were squeezed by a jump in travel and event costs.
Processed payments surged 60 per cent to €345.8bn while revenues topped €608.5m, below an analysts consensus of €615m compiled by Bloomberg. Profits before deductibles meanwhile hit €356.m, up 31 per cent year-on-year.
Margins were squeezed to 59 per cent however – three percentage points lower than the analyst consensus – after a surge in travel and event costs following its global company meeting in the first half of the year.
Adyen also accelerated its hiring in the first half of the year, with headcount rising by 395 to total 2,575 by the end of June.
Shares plunged beyond 13 per cent on the margin miss before settling to trade down by over four per cent. Adyen is now trading down over 31 per cent this year amid a global rout on tech and fintech stocks.
In a letter to shareholders today, Adyen bosses doubled down on their commitment to travel, describing the firm’s global company meeting as a “particularly major moment”.
“The relationships we build face-to-face are vital to scaling our founding principles of speed, flexibility, and our singular focus on innovating to address our customers’ needs,” the firm said.
“It’s clear that building trusted relationships and driving innovation moves faster when time is spent together,” the firm added, pledging to “continue this approach” going forward.
Over 80 per cent of the firm’s growth came from customers already on the platform, Adyen said, with churn staying under one per cent.
Bosses said they would also now be investing heavily in “unified commerce” as it invested in “the most advanced customer journeys” including the launch of in-house developed terminals.
It is now lining up a push into banking-as-a-service in future as the demand swells.
“We find ourselves uniquely well-positioned to seize the opportunity it presents due to historical investments in our global licensing footprint, product offering, and strong team,” the firm said.