Adyen's Pragmatic Growth Targets Lead to Stock Price Surge

Adyen's Pragmatic Growth Targets Lead to Stock Price Surge

Adyen on Wednesday cut its medium-term sales target, earning praise from analysts who said the new forecast was more realistic at a time when the digital payments sector is struggling. 

Adyen is now aiming for a 20-30% increase over the next three years.

While Adyen said its “substantial long-term opportunity remains unchanged,” it wanted to specify its expectations for the coming three years. Revising the forecast with a third-quarter update is a departure from its customary half-yearly reports and reflects pressure to provide greater clarity on its growth trajectory.

It comes after Adyen shocked the market in August by disclosing its slowest net revenue increase since listing in 2018. Its shares plunged 39% that day, and the shaken confidence has erased €24.1 billion ($25.8 billion) of its market value since then.

In a shift from its biannual reporting routine, the company has committed to more frequent updates, starting with quarterly reports, in a bid to restore investor confidence. Adyen’s CFO, Ethan Tandowsky, announced these changes during their Investor Day, acknowledging the need for transparency in the company’s progress.

The Long Story Short: 

⚫️ Processed volume was €243.1 billion, up 21%YoY.
⚫️ Net revenue was €413.6 million in Q3, up 22% YoY. On a constant currency basis, net revenue of €413.6 million would have been 4% higher than reported.
⚫️ 175 FTE were hired to the team as part of the final stages of Adyen’s accelerated investment phase.
⚫️ The company evolved its financial objectives in order to specify timelines around growth expectations.

Adyen's Investor Day spurred a favorable market response, resulting in the stock soaring by over 35% (!) in just a day.

Meanwhile, Adyen now faces a new challenger on its home ground: Swan, an Embedded Finance Fintech enters the Dutch market with an office in (also my hometown) Amsterdam, and launches localized Dutch accounts, as part of its continued European expansion.

The launch is part of the company's European hyperlocalization strategy, following a successful launch in Spain earlier in the year. The launch will enable Swan’s Dutch customers to issue NL IBANs, and ensure all activities including compliance, legal, and product, are thoroughly localized.

In the past three weeks, three companies have already opened hundreds of Dutch accounts for their customers through Swan’s embedded banking platform, demonstrating a strong appetite for its services in the Netherlands.

The announcement follows a month after a Series B investment round of €37 million to support the internationalization of the company and its Banking-as-a-Service platform.

Never a dull moment in Amsterdam 😉

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