Amsterdam, Netherlands – The European online payments giant Adyen experienced a significant setback when it reported a big miss on first-half sales, leading to a staggering $20 billion loss in the company’s market capitalization.
Following the news, Adyen’s shares surged after the company reported strong sales growth and better-than-expected profit for 2023. This positive report came after the company addressed concerns about its aggressive spending on expanding its team, as well as compressed margins, by slowing the pace of its hiring.
In its 2023 annual letter to shareholders, Adyen revealed that it had slowed its hiring as a response to investor concerns. The company’s net revenue for the full year was reported at 1.626 billion euros, showing a 22% increase year-on-year, which was in line with expectations. Additionally, its EBITDA (earnings before interest, tax, depreciation, and amortization) of 743.0 million euros marked a 2% increase from the previous year, surpassing analysts’ forecasts.
The net revenue growth was attributed to continued growth across Adyen’s existing customer base, aligning with the company’s underlying land-and-expand fundamentals. Adyen also expanded its partnership with a single unnamed existing digital customer, further contributing to its sales growth.
As part of its strategic decisions, Adyen gradually slowed down its hiring significantly in the second half of the year, focusing on hiring outside of Amsterdam across its tech and commercial teams. This move aimed to address concerns about aggressive spending on hiring, while competitors were cutting back on their capital expenditure.
This news follows a challenging year for payment companies, including Adyen, amid higher inflation, rising interest rates, and slowing consumer spending. This placed pressure on valuations of payment companies such as Stripe, PayPal, Block, and Worldline, all of which faced similar challenges.
Adyen’s EBITDA margin came in at 48% in the second half of the year, reflecting the deliberate slowdown in hiring, despite bringing in 313 new staffers for the period. By the end of 2023, Adyen had a total of 4,196 full-time employees.
Overall, the company is making strategic decisions to address investor concerns and maintain its position within the competitive online payments landscape. These initiatives, along with its continued partnerships and revenue growth, position Adyen for further success in the coming year.