A 51% Increase In Earnings, At Scale

Adyen, a Dutch payments processor, reported a 51% increase in core earnings in the second half of 2021, exceeding expectations and sending its stock price soaring. Net sales for the period was 556.5 million euros ($635.9 million), up 47% year over year, according to the business. For the full year, EBITDA grew 57% year over year to 630.0 million euros.

  • According to Reuters, this was greater than analysts' expectations of 552 million euros in net revenue and 346 million euros in EBITDA
  • In the second half, Adyen's profit margin increased to 64%, up from 61% in the first half
  • The overall volume of transactions completed increased by 72% to 300 billion euros

Mix Of Digital And Physical Payments Boost Adyen

Even as economies recover, the Dutch company thrives because its system accepts a wide range of payments: in-store at traditional shops or self-serve checkouts, and online for delivery or curbside pickup. In 2013, it began developing that in-store capacity as a strategic endeavor.

  • Adyen built its system from the ground up rather than through acquisitions, and it continues to improve it by solving existing client problems while also pursuing a few broad objectives
  • This typically means that a solution designed for solving one specific issue can be extended to most of its current customer base

"Once a company uses Adyen for its in-store payment terminal, [Pieter van der Does, Adyen’s cofounder and chief executive officer] said, it tends to use Adyen as its sole payments provider across all parts of its business, whereas those who were only using the company for mobile or e-commerce had often maintained relationships with multiple payment vendors." by Jeremy Khan for Fortune

This contributes to customer satisfaction and retention. Current merchants accounted for over 80% of growth last year, while those who stopped using the service accounted for less than 1% of transaction volumes. And the company is not standing still.

  • The product road map includes solutions for new purchase methods such as buy-now-pay-later
  • As well as huge ambitions to provide merchants additional insight into their in-store customers, including connecting with online shopping data

Disclaimer

Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products.

Photo by Adyen.