Shares of Adyen saw a hefty drop of 39% on Thursday, leading to a loss of 18 billion euros ($20 billion) in the company's market value. This drop off seemed to come as a result of fears that cheaper alternatives from competitors, mainly in North America, are diminishing its potential.Adyen had a strong start to its stock market debut in 2018 with a consistent pattern of 26% revenue growth every six months. This downturn in growth appears to be what has caused the stock to take a hit.
When Adyen floated on the Amsterdam Stock Exchange in 2018, enthusiasm was high. The company had experienced success in Europe's tech sector and was making inroads against its major U.S. rival PayPal. Since then, it has faced various difficulties including a substantial decrease in activity from its travel clients due to the worldwide pandemic. In an effort to bolster its presence in North America, where several of its most prestigious merchants are situated, Adyen extensively grew its staff and infrastructure. However, in 2023, the macroeconomic environment shifted and posed a considerable test to Adyen's growth plan. Investors reacted harshly when the company released its lowest revenue growth figures to date, causing the company's market capitalization to decrease by 18 billion euros ($39 billion). On Thursday, the stock plunged 39%, and then fell a further 2.9% on Friday.
CNN and Statista have identified Adyen as one of the world's leading fintech companies. The firm provides payments services to companies such as Netflix, Meta, and Spotify. As well as this, it also specializes in point-of-sale systems for physical stores, enabling payments both online and in-store. Rather than simply being a processor, Adyen is what is known as a payment gateway, using technology to enable businesses to accept card payments and online transactions. For every deal processed through its platform, Adyen receives a small commission. It was founded by CEO Pieter van der Does and former CTO Arnout Schuijff.
Adyen reported results for the first half of the year that came in significantly below analyst expectations, with revenue of 739.1 million euros ($804.3 million) being up 21% year-on-year, but this represented its smallest rate of growth since its 2018 stock market launch. Predictions for the company had been for 853.6 million euros of revenue and 40% of year-on-year growth, according to Eikon Refinitiv forecasts. The Chief Financial Officer of Adyen, Ethan Tandowsky, informed CNBC's "Squawk Box Europe" that the alteration in focus to "less growth, more bottom line" had been caused by increasing inflation leading to higher interest rates. Despite this, Tandowsky maintained that the company had not lost any large customers and is prioritising functionality over other organisations which may have cheaper services. This lack of growth in the first half of 2023 is the result of higher employment costs like wages due to more hiring, and a decrease in North American growth. Tandowsky believes the ability to develop new functionality that outdoes competitors will lead to regaining the market share that the company expects.
At the core of Adyen's issues lies a business heavily reliant on customers adopting a single platform for all their payment needs. Additionally, the company has to demonstrate that what it offers is superior to what any rival can. During its half-year 2023 report, Adyen mentioned that North American customers have been curtailing expenses in light of economic headwinds like higher inflation and rising interest rates. The organization stated that businesses prioritize cost reduction and competition for digital activities was producing savings instead of features. These issues weren't unheard of and online transactions are shiftable. In spite of these factors, Adyen continues to value the worth of its contribution. Furthermore, Adyen's EBITDA was 320 million euros in the first half of 2023, which is 10% lower than the first half of 2022, due to the company's intent to increase its hiring. Adyen's personnel count is now at 3,883, a growth of 551 employees from the previous year. In contrast, some of Adyen's adversaries have cut back on employment significantly. For instance, in November 2022, Stripe decreased its workforce by 14%, or approximately 1,100 people. At the present, Adyen has to confront competition from agile players providing cheaper fees than what it offers. Pieter van der Does, Adyen's CEO, spoke to the Financial Times earlier in the week declaring that merchants "try to locate local providers" to economize. He went on to say that the company isn't shrinking, it simply has a slower rate of growth. Simon Taylor, the head of strategy at Sardine.ai, commented that Adyen may have a "natural limit" to how far it can extend its size without having to lower its margins to keep on growing. Taylor concluded by saying that despite being vulnerable to the same macroeconomic conditions as everyone else in e-commerce, Adyen still achieved a 21% growth - a statistic that established firms would regard with envy.
コメント