August 22, 2018 / 7:08 AM / 9 months ago

Adyen keeps investors happy as first-half profit surges

AMSTERDAM (Reuters) - Adyen, the payments processor for Netflix and Facebook, reported a 75 percent jump in first-half net profit, further bolstering its shares which have more than doubled since their initial public offering in June.

The addition of new household names such as eBay, Valve and Dunkin’ Donuts to Adyen’s platform helped spur earnings growth along with existing customers processing more payments, Chief Executive Pieter van der Does said.

Amsterdam-based Adyen said net profit in January-June rose to 48.2 million euros ($55 million), while sales soared 67 percent from a year earlier to 156.4 million euros.

“We often see that when we sign up one customer in a certain sector, others follow,” Van der Does said in a telephone interview. “We benefit from our growing brand name. We are becoming a logical partner in places where we were once considered an odd choice.”

Adyen helps retailers take customer payments - in any form and either online or in-store - and usher them through complicated payment networks quickly. It operates globally, but more than half of the transactions it processes derive from Europe.

It said the total volume of transactions it processed in the first half grew by 43 percent to 70 billion euros.

“Results year-to-date are impressive,” Morgan Stanley analysts said in a note. “New merchant wins should begin to contribute volume and support growth from 2019, supporting the medium-term outlook.”

Adyen shares rose 4.3 percent to 571.60 euros by 0940 GMT on Euronext, taking their total gain from an IPO price of 240 euros to 138 percent.

The soaring share price has led some analysts to urge investor caution as the company’s free float is relatively restricted: its IPO featured only secondary shares, and investors sold shares representing only a 13.4 percent stake.


Adyen, set up in 2006, traditionally targeted large multinationals for its services, but said it is beginning to attract more business from new sectors, such as hotels, supermarkets and restaurant chains including Dunkin’ Donuts.

Van der Does, a co-founder of the company, attributed that growth to Adyen’s ability to quickly activate all kinds of new payment methods used globally, without only catering to the needs of any individual company.

“We design platforms that are interesting for all companies in a sector,” the CEO said. “We put everything into one system, so that all customers benefit from our new developments.”

The company, which is debt-free, on Wednesday repeated its forecast for medium-term average sales growth of at least mid 20 percent to low 30 percent, and at least 40 percent for 2018.

It said it expects margins on earnings before interest, taxes, depreciation and amortization to increase to “above 55 percent” in the long term. In the first half that margin was 45 percent, up from 41 percent in the first half of 2017.

Morgan Stanley called Adyen’s guidance conservative, and said it might imply a slowdown in the coming months, as business for Adyen was better in the second half of 2017 than it was in the first six months.

“Our guidance is a minimum level we expect to achieve”, Van der Does said. “We take a long-term view and don’t see any reason to change our forecasts.”

($1 = 0.8744 euros)

Reporting by Toby Sterling; Editing by Sherry Jacob-Phillips and Susan Fenton

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