Adyen stock falls after Q3 report shows transaction volume slowdown

Adyen shares sank Thursday after the company reported a slowdown in the growth of its transaction volumes in the third quarter.

Shares of Adyen fell nearly 6% Thursday after the company’s third-quarter report, paring losses of as much as 11% during earlier in the trading session. The stock initially failed to trade when markets opened in Amsterdam and later in the day, shares closed down 3%.

Adyen’s sales growth came off the back of a rise in total processed volume (TPV), which climbed 32% year-over-year to 321 billion euros. In the first half, Adyen posted a 45% jump in TPV, after previously reporting 46% year-over-year growth in the first quarter.

Analysts at Citi said in a research note that “weaker” transaction volume was likely to attract most of the focus from investors Thursday, amid concerns over end-market weakness.

“Either way, the take rate on the processed volume is comfortably higher than expected and, if sustainable, should support sales growth acceleration in 2025/26, while the lower run-rate of hiring should support continued margin uplift,” they wrote.

Digital processed volumes grew 29% year-over-year, Adyen said, lower than in the previous quarter due to impacts from a single large-volume customer, Block’s Cash App.

The company otherwise reported a jump in sales in the third quarter as the Dutch payments firm gained wallet share and added new customers, diversifying its merchant mix. Adyen, whose technology allows businesses to accept payments online and in-store, reported third-quarter net revenue of 498.3 million euros ($535.5 million), up 21% year-on-year on a constant currency basis.

The firm 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, as it installed base of physical payment devices increased by 46,000 to 299,000.

Adyen also said that it 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.

Last year, the Dutch payments giant’s shares tanked nearly 40% in a single day on the back of worse-than-expected sales and declining profits in the first half of 2023

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Payments firms saw a boost from an increase in online shopping during the height of the Covid-19 pandemic.

But in recent years, companies such as Adyen have faced pressure from lower consumer spending.

Adyen, however, has benefited from significant growth from partnerships with its North American clients, such as Cash App in the U.S. and Shopify in Canada.

Adyen kept guidance unchanged Thursday, 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 will remain consistent at a level of up to 5% of net revenues, Adyen said.