Adyen’s shares dropped on Thursday following its report of slower growth in transaction volumes for the third quarter. Adyen's stock initially plunged nearly 6%, recovering slightly from an 11% loss earlier in the trading session.
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Trading was briefly delayed when the Amsterdam markets opened, and by the close, Adyen’s shares had settled at a 3% decline.
The growth in Adyen’s sales was primarily supported by an increase in total processed volume (TPV), which rose 32% year-over-year to reach 321 billion euros. This growth is slightly below the 45% TPV jump the company recorded in the first half of the year, following a 46% increase in the first quarter. Citi analysts noted that the lower transaction volume might be a key concern for investors amid ongoing market weakness.
Citi further emphasized that, although transaction volumes were lower, the take rate on processed volumes exceeded expectations. If sustained, this trend could drive sales growth into 2025 and 2026, while Adyen’s slower pace of hiring may continue to support margin improvements.
Adyen reported a 29% year-over-year increase in digital processed volumes. However, this growth rate was affected by a high-volume client, Block’s Cash App. The company, which enables businesses to process payments both online and in-store, saw third-quarter net revenue rise to 498.3 million euros (about $535.5 million), reflecting a 21% increase year-over-year in constant currency terms. Adyen has been expanding its merchant base, adding new customers and diversifying its revenue sources.
The third quarter also saw stronger results from in-store payment solutions, with its “unified commerce” point-of-sale (POS) terminals experiencing 33% year-over-year growth. Adyen’s base of physical payment devices expanded by 46,000, bringing the total to 299,000 units.
Adyen also made modest additions to its workforce, hiring 35 new employees, though it has reduced its pace of hiring over the past year to manage investment more cautiously.
Adyen’s co-CEO highlighted that consumers are now becoming “channel-agnostic,” as they increasingly embrace both online and in-store shopping options. Last year, Adyen’s shares took a significant hit, plummeting nearly 40% in one day due to weaker-than-expected sales and shrinking profits in the first half of 2023.
While the payments sector benefited from the surge in online shopping during the COVID-19 pandemic, firms like Adyen have since felt pressure due to reduced consumer spending.
Adyen, however, continues to gain from strong partnerships with North American clients, including Cash App in the U.S. and Shopify in Canada. The company reaffirmed its guidance on Thursday, projecting net revenue growth in the range of low to high twenties percentage-wise through 2026.
Adyen also anticipates improving its earnings before interest, tax, depreciation, and amortization (EBITDA) to over 50% by 2026, with capital expenditures expected to remain steady at up to 5% of net revenues.
