Adyen drops 20% after hiring and inflation hits earnings

(Bloomberg) — Shares of Adyen NV fell by the most on record after first-half earnings missed estimates, weighed by a Dutch fintech firm’s hiring boost and inflationary pressures.

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Shares fell 20% to €1,177 at 9:23 am in Amsterdam.

Amsterdam-based Adyen said in a statement Thursday that its margin on EBITDA — a measure of profitability — was 43% in the first six months of the year. That compares with a median estimate of 48.6% among analysts surveyed by Bloomberg.

Adyen added about 1,150 employees last year and said it will hire a similar number in 2023 as it prepares for its next phase of growth. The payments company’s hiring sets it apart from its larger peers, who have announced job cuts to cut costs amid rising interest rates and economic uncertainty.

The company expects to phase out “accelerated investment mode” early next year, after which it said it will hire as needed.

The company said net revenue growth in the first half was impacted by higher inflation and interest rates as well as industry price competition. Net revenue rose 21% to 739.1 million euros ($803 million) in the period, missing estimates in a Bloomberg survey of analysts.

The company said business grew at a slower rate than expected in some areas. North American net revenue growth more than halved to 23% in the first half. Digital volumes increased at a much lower rate than the previous year.

Adyen’s chief financial officer, Ethan Tandowski, said in a phone interview that Adyen’s digital clients are focused more on profitability than growth in the United States.

“That has had some impact on the growth that we’ve seen,” he said. “In a market like this, some customers choose to see if they can find a lower-cost provider that can offer similar functionality.”

Adyen, who handles transactions for companies such as McDonald’s Corp. and Hennes & Mauritz AB, reaffirmed its guidance for Ebitda’s margin at 65% over the long term. It still expects net revenue to grow at a rate between the mid-20s and low-30s over the medium term.

(Updates to add details throughout)

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