Adyen Delivers Strong Q2, Shares Rise By Investing.com

Investing.com — Shares of Adyen NV (AS:) jumped on Thursday after its half-year results.

At 4:00 am (0800 GMT), Adyen was trading 8.1 percent higher at €1,230.80.

The company reported a 26% year-over-year increase in its second-quarter net income to 475 million euros. This was in line with consensus estimates and even beat Jefferies expectations by 2%.

A major driver of this growth was the 45% year-on-year increase in total payment volume (TPV), which totaled €322 billion for the quarter.

Adyen’s solid revenue growth was complemented by a slight sequential improvement in its take rate, a key measure of profitability for payment processors. The takeover rate rose to 14.8 basis points (bps) from 14.7 bps in Q1, beating market expectations.

On the earnings side, Adyen’s EBITDA rose 32% year-on-year to €423 million, margins improved 3 percentage points to 46.3%.

This was not only ahead of market expectations, but also reflected the company’s effective cost management as it managed to maintain modest headcount growth with just 26 additional full-time equivalents (FTEs) in Q2, well below anticipated increase of 199 FTEs.

Regionally, Adyen’s performance varied, with North America and EMEA showing accelerated growth rates of 30% and 25% y/y, respectively.

However, there was a noticeable slowdown in the APAC region, where growth slowed to 15% y/y, and in LatAm, where growth was just 2% y/y.

Despite this, Adyen has continued to focus on these regions, securing additional acquisition licenses in key markets such as India and Mexico, which are expected to drive future growth.

“We see IKEA Mexico, Australian MECCA and Belmond Hotels, an LVMH house, as key wins,” analysts at Jefferies said in a note.

In terms of segment performance, the Digital segment, which accounts for 63% of POS, saw a robust growth of 49% y/y. Unified Commerce, which accounts for 24% of POS, grew 28% y/y, while the Platforms segment outperformed others with 64% y/y growth, with an even more impressive 91% growth excluding eBay ( NASDAQ:).

The company expects net income growth in the “low 20s” and anticipates a modest improvement in EBITDA margins compared to 45.7% in 2023.

To achieve these goals, Adyen will need to maintain a net revenue growth rate of 19-23% in the second half of 2024, with EBITDA margins expected to be around 48%.

Analysts at Jefferies noted that Adyen’s Q2 performance largely met expectations, particularly on take rate and segmental growth in digital and unified commerce.

“We believe Adyen met expectations with Q2 showing some resilience in take rate and in digital and unified commerce, while platforms accelerated, although ex-eBay growth slowed on tougher comparisons” , analysts said.