Adyen, a Dutch payment processing company, faced a setback on Thursday as it reported a slowdown in the growth of its transaction volumes in the third quarter. This news led to a significant drop in the company’s market capitalization by $20 billion.
The company’s shares plummeted nearly 5% following the release of its third-quarter report, although they had initially fallen by as much as 11% during early trading in Amsterdam. Adyen’s sales growth was driven by a 32% increase in total processed volume (TPV) year-over-year, reaching 321 billion euros. This growth rate was lower than the 45% jump in TPV reported in the first half of the year.
Analysts at Citi noted that the weaker transaction volume was likely to be the main focus for investors, with concerns over end-market weakness. However, they also highlighted that the take rate on processed volume exceeded expectations, which could support sales growth acceleration in the coming years.
Digital processed volumes grew by 29% year-over-year, with the exception of a decline caused by a single large-volume customer, Block’s Cash App. Despite this, Adyen reported a 21% increase in net revenue in the third quarter on a constant currency basis, reaching 498.3 million euros.
The company attributed this growth to gaining wallet share, acquiring new customers, and diversifying its merchant mix. Adyen saw stronger traction in in-store payments, with a 33% increase in year-over-year growth for its “unified commerce” point-of-sale terminals. Additionally, the company added 46,000 physical payment devices, bringing the total to 299,000.
Adyen also mentioned a slight increase in hiring, with 35 new employees added in the quarter. This hiring trend follows a period of slowed recruitment due to concerns about the company’s investment pace.
Despite the recent challenges, Adyen has benefited from partnerships with North American clients like Cash App in the U.S. and Shopify in Canada. The company maintained its guidance, expecting net revenue growth in the low to high twenties percent range until 2026. Adyen also aims to improve its earnings before interest, tax, depreciation, and amortization to over 50% by 2026, with capital expenditure remaining at up to 5% of net revenues.
In conclusion, while Adyen’s recent performance may have disappointed investors, the company’s strategic partnerships and focus on innovation position it well for future growth and success.
