Adyen delivers strong Q2, shares jump

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

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

The company reported a 26% year-over-year increase in its second quarter net revenues, reaching €475 million. This was in line with consensus estimates and even exceeded Jefferies' expectations by 2%. 

A major driver of this growth was the 45%year-over-year surge 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 profitability metric for payment processors. The take rate increased to 14.8 basis points (bps) from 14.7 bps in Q1, surpassing market expectations. 

On the earnings front, Adyen's EBITDA grew by 32% year-over-year to €423 million, with margins improving by 3 percentage points to 46.3%. 

This was not only ahead of market expectations but also reflected the company’s efficient cost management, as it managed to keep headcount growth modest with only 26 additional full-time equivalents (FTEs) in Q2, far below the 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 decelerated to 15% y/y, and in LatAm, where growth was a mere 2% y/y. 

Despite this, Adyen continued to focus on these regions, securing additional acquiring 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, a LVMH maison, as key wins,” said analysts at Jefferies in a note. 

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

The company expects net revenue growth in the "low-20s" and anticipates a modest improvement in EBITDA margins compared to 2023's 45.7%. 

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

Analysts at Jefferies noted that Adyen's Q2 performance largely met expectations, particularly in terms of its take rate and segmental growth in Digital and Unified Commerce. 

“We believe Adyen met expectations with Q2 showing some resilience on take rate and in Digital and Unified Commerce, while Platforms accelerated, albeit ex-eBay growth slowed on tougher comparatives,” the analysts said.