Adyen lowers mid-term sales target, aims to slow hiring
Reuters
Published Nov 08, 2023 19:21
(Reuters) - Adyen on Wednesday cut its medium-term sales target, earning praise from analysts who said the new forecast was more realistic at a time when the digital payments sector is struggling.
The Netherlands-based company, whose clients include Netflix (NASDAQ:NFLX), Meta and Spotify, said it expects net sales to grow annually between a low to high twenties percentage, while it had previously forecast percentage growth between mid-twenties and low thirties.
"Despite guidance being lowered, we see this as a positive as it's more realistic," J.P.Morgan analysts wrote in a note, adding the release is a "major relief" that will reassure investors.
"Overall targets are lowered from previous targets and while likely more realistic, they still look ambitious," Jefferies analysts said in a note.
Adyen added it would aim to improve its core profit (EBITDA) margin to above 50% in 2026.
The group's third quarter net revenue rose 22% year-on-year to 413.6 million euros ($442.92 million).
Adyen's American Depository Receipts rose about 30% at 1803 GMT on the New York stock exchange, with Jefferies flagging the results as "more encouraging".
The digital payments sector faces an investor exodus as inflation-hit consumers spend less money, while tougher regulatory scrutiny is also lurking.
France's Worldline's shares tanked last month - sparking a sell-off in the sector - after it shocked investors with the size of its full-year guidance cut and comments that it had ditched some clients amid rising fraud.
This year so far, Adyen has lost about half its market value which currently stands at 21.58 billion euros.
The group is dealing with high wage costs and tough competition in the U.S. - a key market - as some rivals there are slashing prices.
It said it would slow down hiring, and that it hired 175 full-time employees over the quarter, which was "substantially below" Jefferies' expectations.
($1 = 0.9344 euros)
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.