Payments company Adyen's shares soar after results beat forecasts
Reuters
Published Feb 08, 2024 14:56
(Reuters) - Shares of Dutch payments company Adyen jumped by nearly a quarter on Thursday after it beat 2023 earnings expectations, helped by its digital business and stricter cost control.
The shares had sunk to a four-year low in October after a cut in earnings guidance from rival Worldline fuelled a sector-wide sell-off, adding to losses incurred after Adyen disappointed with weak first-half earnings in August.
It then released what analysts described as "more realistic" medium-term guidance in November, along with a plan to slow hiring.
Net revenue for 2023 rose 22% from the previous year to 1.63 billion euros ($1.75 billion), Adyen said on Thursday, as it confirmed its financial targets for the current year.
Having risen as much as 24%, its shares were up 18.6% on the day by 1446 GMT at 1,404.6 euros, recovering to levels seen before August's earnings announcement.
"Expanding existing customer relationships delivered a period of profitable growth," Adyen said in a statement.
It highlighted its relationship with U.S. payments firm Cash App, saying that it had ramped up processing of its domestic volumes.
UBS analyst Justin Forsythe said in a note that even without Cash App, Adyen's digital volume trends would still have been stable.
Core profit rose 2% to 743 million euros, above the 720.6 million expected by analysts in an LSEG poll.
The company said its core profit margin rose to 48% in the second half of 2023, from 43% a year earlier, helped by the slower hiring.
Adyen has grown into one of Europe's most valuable financial firms with a market capitalisation that hit more than $46 billion following Thursday's results.
That compares to $43 billion Dutch lender ING and $39 billion for France's Credit Agricole (EPA:CAGR), according to LSEG Eikon data. If it were a bank, Adyen would be Europe's eighth largest by market value behind Italy's UniCredit (LON:0RLS).
The payments industry flourished during the COVID-19 pandemic but is now dealing with a drop in consumer spending and tougher regulatory scrutiny aimed at combatting online fraud risks.
Get The App
JPMorgan (NYSE:JPM) said Adyen's volume growth and improved profitability will please investors, with the only concern being that the better than expected results were driven by a single customer.
($1 = 0.9304 euros)
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.