Adyen shares up 30% on Investor Day outlook
As we flagged in our Tuesday equity update, yesterday’s Adyen Investor Day was a moment of truth for the company and its shareholders. How much would management take down medium-term expectations for revenue growth and EBITDA margin. The key takeaway is that investors liked the Investor Day presentation in which financial objectives were clarified to “grow net revenue annually between the low-twenties and high-twenties percent until 2026” which is a slight downgrade from previous growth expectations. EBITDA margin expectation is set to above 50% by 2026 which is down from 65% in their previous target, and finally capex is set to up to 5% of net revenue. Shares are up 32%.
Here are some the key takeaways from the Investor Day presentation:
- Steadily rising NPS score
- Rapid internationalization
- The payments landscape has become more complex
- Used Burberry as an example of helping them cut complexity from 20 payment service providers to 1
- Slowing their hiring pace in H2 2023
- Q3 processed volume up 21% y/y
If Adyen can maintain the growth and EBITDA margin they are guiding then the equity valuation is not stretched at all compared to previous growth cases in the equity market.