(News Bulletin 247) – The Dutch online payments company is making significant progress on the Amsterdam Stock Exchange. Adyen has published results that exceed expectations, supported by market share gains and better cost control. The group took advantage of this milestone to renew its medium-term forecasts.

In August 2023, Adyen had chilled the markets by revealing half-year results significantly below expectations due to disappointing activity in the United States, its key market. The Dutch company specializing in online payments said at the time that it was suffering from increased price competition across the Atlantic.

Adyen then paid cash for this disappointment, with a share price that plunged 39% in one session on the day of publication. Then in November 2023, operators had to take note of a lowering of targets for 2026.

Since then, the company has been working hard to reassure investors. In February 2024, Adyen released second-half 2023 results that ticked all the boxes. Revenue, payment volumes, and operating profit grew more than expected.

The latest release should further bolster market confidence in the direction of Adyen’s business, almost exactly a year after the huge disappointment of its first-half 2023 results.

Market share gains

The company, which counts eBay, Booking.com, Uber, Spotify and LinkedIn among its clients, has in fact revealed results that exceed expectations for the first half of 2024.

The ninth largest capitalization on the Amsterdam Stock Exchange revealed net revenues up 24% over one year to reach 913.4 million euros, whereas in the first half of 2023, growth had been lower, at 21%.

“We continued to gain market share, driven by increasing share of wallet from existing customers and acquiring new customers,” the company said in its statement.

The EMEA region, which includes Europe, the Middle East and Africa, recorded net revenue growth of 25%. Adyen is particularly reassuring about the direction of its business in North America, which was the major black spot in its publication last year. Revenue in North America increased by 30%, making it once again the fastest growing region in which the group operates.

“We continued to win new customers including Scheels, Crate & Barrel, CB2, Pet Supplies Plus and Reitmans, to whom we will provide our range of services, including e-commerce and in-person payments in their stores,” management said in a letter to shareholders. The company also said it has won a contract with Ikea Mexico.

Gross operating profit (EBITDA) rebounded by 32% in one year, to 423.1 million euros, when analysts expected on average a figure of 413.39 million euros, according to the LSEG consensus quoted by Reuters. Last year, the group had seen its gross operating profit fall by 10%.

The corresponding margin increased to 46%, compared to 43% a year earlier, thanks to a slowdown in the pace of hiring and a reduction in operating expenses during this period.

Net profit per share increased significantly to 13.19 euros compared to 9.10 euros a year earlier.

2026 targets confirmed

For 2024, Adyen expects its business growth to be in the lower end of a range of between 20 and 30%.

In addition to this publication, Adyen believes that it is well “placed to meet the expectations” expressed during its investor day organized in November 2023. The company took advantage of this meeting with the financial community to adjust downwards its 2026 objectives, which were considered more “realistic” by the independent research firm AlphaValue.

By 2026, Adyen therefore anticipates annual growth in net sales of between 20% and 30%. The EBITDA margin is expected to be above 50% in 2026, the company plans to “benefit from the operational leverage inherent in [son] business model”. The company hopes to maintain a sustainable level of capital expenditure of up to 5% of its net revenues.

On the Amsterdam Stock Exchange, Adyen’s publication was welcomed in a complicated context for this sector due to a drop in consumption. The share price rose 7% to 1,217.80 euros.

The latest announcements from the Dutch group do not really benefit the French Worldline, another player in the payments sector, whose shares are down 0.5%. It must be said that Adyen’s French competitor is in a more delicate position.

On August 1, Worldline dropped more than 15% on the Paris Stock Exchange following a lowering of its 2024 targets. The company then mentioned uncertainties relating to domestic consumption in Europe.