Adyen shares fall as hiring and travel costs hit earnings

Increased hiring and increased business travel saw Dutch payments group Adyen miss first-half revenue despite a 60% rise in transaction volume, driven by the travel boom after blocking.

Net income for the first six months of the year rose 37% year-on-year to 608.5 million euros, Adyen said on Thursday, but fell short of analysts’ estimates of 615.2 million euros. euros. The volume of processed transactions reached 345.8 billion euros as travel increased, beating the forecast of 329.9 billion euros.

The lack of revenue saw the group’s share price fall by more than 11 percent on Thursday to 1,603 euros. Adyen’s share price remains well above its 2018 public listing, but is still down more than 30% this year, reflecting broader problems for the tech sector amid rising interest rates. interest and economic uncertainty.

Adyen acts as an intermediary between other payment groups and merchants, including Uber, LinkedIn, Spotify and Microsoft, and has begun supporting Apple’s Tap to Pay option for merchants.

Despite the drop in share price, CFO Ingo Uytdehaage defended the company’s strategy to focus on investment and recruitment.

“We have a very long-term focused group of investors,” he said. “That’s why we’re not focused on the consensus numbers, we understand that this is a long-term game.”

While e-commerce remains Adyen’s main revenue driver, transaction volumes at brick-and-mortar stores almost doubled to 45 billion euros in the first half of 2022 when they reopened. Adyen also launched its own point-of-sale terminals for merchants this year.

Earnings before interest, taxes, depreciation and amortization rose 31% year-on-year to €356.3m, in line with H2 2021 results but down from €383.5m loved by runners.

Operating expenses rose almost 50% to €277.7 million, driven by a 33% increase in employee benefits to €158.5 million. Adyen hired nearly 400 employees in the first half of the year, as many as in all of 2021.

Travel expenses and other staff expenses, such as events, increased fivefold to €15.7 million when the lockdowns ended. Adyen had 2,575 full-time employees at the end of the first half of 2022.

The company, founded in 2006, was listed on the Euronext Amsterdam stock exchange in 2018 with a market value of more than €13 billion at its debut. It is currently valued at close to 50,000 million euros.

Payments fintechs surged during the pandemic, benefiting from the success of e-commerce during lockdowns. But the sector has faced growing headwinds as consumer spending has been squeezed by rising costs driven by rapid global inflation.

“Of course, we follow macroeconomic trends closely,” said Uytdehaage, “but because of diversification, we are in a pretty good position: if some industries face difficulties, others do better, so We’re not too worried at the moment.”

Adyen did not update its guidance from February, which includes a long-term ebitda margin of 65 percent and a goal of growing net income in the mid-20s to mid-30s over the medium term.


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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!