Adyen Shares Rebound After Company Details Turnaround Plans

Adyen’s plan to “evolve” its financial objectives reportedly hit the right note with investors.

Shares in the Dutch payments firm jumped 38% Wednesday (Nov. 8) — the highest since Adyen went public in 2018 — after the company detailed its plans to reach its growth targets, Bloomberg reported Thursday (Nov. 9).

Adyen released a third-quarter business update Wednesday at its Investor Day, scheduled after the company’s half-year earnings report showed it missing its internal targets because of hiring costs and lagging growth in the United States.

The company said Wednesday it had “evolved its financial objectives in order to specify timelines around growth expectations” for the next three years while maintaining that its long-term opportunities have not changed.

Adyen said its new objectives include annual net revenue growth in percentages between the low 20s and high 20s through 2026, an EBITDA margin improved to levels higher than 50% and a sustainable capital expenditure level of up to 5% of its net revenue.

“These updated objectives reflect the growth potential and operating leverage inherent to Adyen’s single platform,” the company said.

Adyen also said it is in the final months of its accelerated investment phase, having hired 175 full-time equivalents (FTEs) in the third quarter as it continued to focus on global expansion and scaling its tech operations.

“We are now deliberately and gradually slowing down,” the company said. “In Q4, we anticipate bringing on at maximum Q3’s number of FTEs.”

Adyen was one of the few companies in the tech sector to buck the layoff trend last year, with a hiring spree that continued into 2023, a move it has justified as necessary as it operates at an increasingly global scale.

Analysts have praised the new forecast, calling it more realistic at a moment when the digital payments sector is struggling in the face of regulatory scrutiny and tighter consumer spending. Adyen’s market value has fallen by about half this year.

“Adyen’s investor day was narrative-changing,” Bernstein analyst Harshita Rawat wrote in a note to clients quoted in the Bloomberg report.

Rawat said Adyen offered a “much better-than-expected” third-quarter update, more credible financial goals and a closer look at what separates it from its rivals.