Adyen NV provided a more moderate set of growth targets for the next three years as the Dutch payments processor seeks to manage investor expectations after a recent sales slowdown triggered a selloff.
The company now targets growth in the low- to high-20 percent range, according to a statement released after European market hours on Wednesday. That compares to a previous medium-term forecast, which called for annual increases between the mid-20s and low-30s. The Dutch payments company’s US-listed ADRs jumped as much as 37%.
While Adyen said its “substantial long-term opportunity remains unchanged,” it wanted to specify its expectations for the coming three years.
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Revising forecast following the third quarter is a departure from its customary half-yearly updates and reflects pressure to provide greater clarity on its growth trajectory. It comes after Adyen had shocked the market in August by disclosing its slowest net revenue increase since listing in 2018. Its shares plunged 39% that day, and the shaken confidence has erased €24.1 billion ($25.8 billion) of its market value since then.
Investors had demanded more frequent financial communication and a clear blueprint for achieving its growth ambitions, and many questioned whether the medium-term targets need to be reset.
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In its business update on Wednesday, Adyen also said it aims to improve earnings before interest, taxes, depreciation and amortization to above 50% of sales in 2026. In the past, it has only detailed a long-term target for Ebitda margins of above 65%.
Net revenue in the third quarter rose 22% to €413.6 million and processed volume increased at a similar pace to €243.1 billion, the Amsterdam-based company said.
Adyen, which competes with the likes of Stripe Inc. and PayPal Holdings Inc.-owned Braintree, had attributed the sales slowdown in the first half of the year to increasing price competition in North America, its second-largest market. It had said customers there had tightened purse strings and shifted some volumes to cheaper rivals.
The firm added 175 employees in the third quarter, saying it is in the “final stages” of its industry-defying hiring push.
Adyen’s Chief Executive Officer Ingo Uytdehaage had previously said the company’s growth view wasn’t being understood by the market and it needed to “better explain this.” The company’s top brass is scheduled to brief investors in San Francisco on Wednesday.
