Adyen NV’s shares plunged most on record after first-half earnings missed estimates, weighed down by the Dutch fintech company’s hiring push and inflationary pressures.
Shares fell as much as 20% to €1,177 at 9:23 a.m. in Amsterdam.
Its margin on earnings before interest, taxes, depreciation and amortization - a measure of profitability - was 43% in the first six months of the year, Amsterdam-based Adyen said in a statement on Thursday. That compared with an average estimate of 48.6% among analysts surveyed by Bloomberg.
Adyen added about 1,150 employees last year and has said it will hire a similar number in 2023 as it prepares for its next growth phase. Hiring at the payments firm sets it apart from larger peers that have announced job cuts to lower costs amid rising interest rates and economic uncertainty.
The company expects to phase out of its “accelerated investment mode” at the start of next year, after which it said it will hire as needed.
Net revenue growth in first half was impacted by higher inflation and interest rates along with industry pricing competition, the company said. Net revenue rose 21% to €739.1 million ($803 million) in the period, missing estimates in a Bloomberg survey of analysts.
The business grew at a lower rate than anticipated in some areas, the company said. Net revenue growth in North America more than halved to 23% in the first half. Digital volumes increased at a much lower rate than the previous year.
Adyen’s digital customers have been focusing on profitability more so than on growth in the US, Adyen Chief Financial Officer Ethan Tandowsky said in a phone interview.
“That did have some impact on the growth that we saw,” he said. “In a market like this, some customers choose to see if they can find a lower cost provider who could offer the similar functionality.”
Adyen, which handles transactions for companies such as McDonald’s Corp. and Hennes & Mauritz AB, reaffirmed its guidance for Ebitda margin at above 65% in the long term. It continues to expect net revenue growth at a rate between the mid-20s and low-30s in the medium term.
(Updates to add details throughout)