World Stock Watch

Payment Processor Adyen Sees Slowing Growth in Transaction Volumes

Adyen, a leading payment processor, saw its shares plummet over 6% on Thursday after reporting a slowdown in transaction volume growth in the third quarter. The company’s stock initially failed to trade when markets opened in Amsterdam, but eventually recovered some losses.

Strong Sales Growth Despite Slowing Transaction Volumes

Despite the slowdown, Adyen reported a 32% year-over-year increase in total processed volume (TPV) to 321 billion euros. While this growth rate is lower than the 45% jump seen in the first half of the year, it still represents a significant increase.

Digital Processed Volumes Take a Hit

Digital processed volumes grew 29% year-over-year, lower than in the previous quarter due to impacts from a single large-volume customer, Block’s Cash App. However, Adyen reported a jump in sales in the third quarter as it gained wallet share and added new customers, diversifying its merchant mix.

In-Store Payments See Strong Growth

Adyen observed stronger traction from in-store payments in the third quarter, with its “unified commerce” point-of-sale terminals seeing 33% year-over-year growth. The company’s installed base of physical payment devices increased by 46,000 to 299,000.

Hiring Slows Down

Adyen expanded hiring slightly, adding 35 new people in the quarter. The firm has been slowing hiring in the past year following concerns over its pace of investment.

Guidance Remains Unchanged

Adyen kept guidance unchanged, saying it expects to achieve net revenue growth between the low to high-twenties percent, up to and including 2026. The firm added it expects to improve its earnings before interest, tax, depreciation, and amortization to levels above 50% by 2026.

Capital Expenditure to Remain Consistent

Capital expenditure will remain consistent at a level of up to 5% of net revenues, Adyen said. Despite the slowdown in transaction volume growth, Adyen remains confident in its ability to drive sales growth and improve profitability in the coming years.