Adyen's First Earnings After Record IPO Excite Investors
(Bloomberg) -- Fintech darling Adyen NV published its first earnings report on Wednesday, following the soaring value of the Dutch firm’s shares since its blockbuster public offering in June.
The company, which processes payments for Uber Technologies Inc., Netflix Inc., and Spotify Technology SA, reported a 67 percent rise in net revenue for the six months ended June 30, to 156.4 million euros ($181 million). Adyen also said it processed 70 billion euros in payments for the period, an increase of 43 percent on the year before.
“We continued our strong and profitable growth in the first half of this year," said Chief Executive Officer Pieter van der Does and Chief Financial Officer Ingo Uytdehaage in a joint letter to shareholders, “helping our merchants grow across channels and geographies."
Investors have flocked to Adyen, whose shares have risen from 240 euros at the time of the IPO, to as much as 609 euros a month later. Following Wednesday’s report, shares in Adyen rose as much as 5.8 percent in Amsterdam to 580 euros. They were up about 4.6 percent at 4:25 p.m, valuing the company at around 16.9 billion euros.
Adyen’s first results, and its growth in processed payments of 43 percent, give “credence to its strong growth story,” said Anil Akbar, an analyst at Kempen & Co.
The company is part of a new breed of fintech firms uprooting the position of big banks, credit card issuers and IT suppliers, who for years have controlled the systems for processing payments in stores and online. The rapid rise of online commerce around the world has bolstered their growth.
Adyen has sought to stand out from the pack by making it easier and cheaper for merchants to process e-commerce payments, while also providing tools to analyze financial data. The Dutch payments processor can also handle transfers in more currencies and payment types than competitors like Chase Paymentech or Vantiv, helping companies spread their business to other parts of the world.
Uytdehaage said the company sees opportunities in the restaurant and hospitality industry.
Those businesses are increasingly seeing “that consumers want to pay in different ways,” Uytdehaage said in a phone interview. “They want to use their mobile phones to order food and pick up food when they get there."
Some analysts questioned the Amsterdam-based company’s decision to maintain its previous guidance despite the strong results, concerned that maintaining a 2018 net revenue forecast of at least 40 percent meant growth may slow in the second half of the year.
When asked about the guidance on an analyst call, Uytdehaage said "it’s a good point," stressing the guidance was "at least" 40 percent. He added the company is very confident about the second half of the year.
Adyen also aims to boost its annual earnings before interest, taxes, depreciation and amortization margin to above 55 percent in the long-term, once current investment efforts begin to pare down. The company doesn’t define what it perceives as long-term. On Wednesday, it reported a 44.9 percent Ebitda margin for the first half.
Adyen’s recent IPO has boosted other fintech rivals, like German payments company Wirecard AG, which last week raised its earnings forecast for the second time this year and overtook Deutsche Bank AG in market value. Worldpay Inc. earlier in August reported second-quarter results that beat the highest estimates.
But those same competitors also pose one of the greatest risks to Adyen’s growth, according to analysts.
When asked Wednesday to what extent the company worries about competitors, Uytdehaage’s answer was direct: “If you look at what we offer to our biggest customers, there is no real competition.”
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