Adyen reported revenue of 739.1 million euros ($804.3 million) for the first six months of the year, which exhibits a 21% increment from 2022, however, it is lower than what analysts had predicted. Adyen acknowledged that hiring costs, higher wages and their North American customers' inclination towards cost optimization rather than expansion during the first half of the year were responsible for the underwhelming results.
Shares of Adyen, the European payments powerhouse taking on U.S. giant Stripe, fell about 28% on Thursday after the business reported decreased sales and a reduced profit in the first half of 2023. The revenue of 739.1 million euros ($804.3 million) was 21% higher than the same time last year but below the analyst predictions of 853.6 million euros and 40% annual growth, according to Eikon. Moreover, the EBITDA (earnings before interest, tax, depreciation and amortization) of 320 million euros was 10% lower than 356.3 million euros during the first half of 2022 and in agreement with analyst predictions. Adyen pointed to increased hiring, larger wages and a shift in its American customers' business focus from development to cost-saving in the beginning of the year as potential reasons for the weaker performance. This is in comparison to the 37% year-on-year growth reported in the first half of the previous year.
CEO Ethan Tandowsky told CNBC's "Squawk Box Europe" that Adyen wants to prioritize investment in the company and that the payments industry provides a "real opportunity in the financial services space." Statista and CNBC ranked the company among the top 200 global fintech companies, and it services popular entities such as Netflix, Microsoft and Spotify. Aside from 6.3 million euro losses in inventory write-offs, Adyen faces stiff competition from other payment companies like PayPal, Stripe, Block and Fiserv. The business has seen success in the past due to the Covid-19 pandemic and associated lockdowns, which increased demand for digital and e-commerce options. But, recent economic developments like higher interest rates, inflation and global equity market slumps have become a headwind for the payment fintech industry. Adyen makes money off a portion of the total transactions charged to merchant accounts. To distinguish itself from rival payment organizations, Adyen offers a unified single payment platform with access to debit cards, mobile wallets and other services.
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