Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Adyen NV (ADYYF) reported a strong net revenue growth of 22% for the period, reaching close to 1.1 billion.
• EBITA margins expanded to 53% in the second half of the year, reflecting efficient cost management and strategic investments.
• The company successfully launched innovative products like Uplift and intelligent payment routing, which have improved cost efficiency and conversion rates for customers.
• Adyen NV (ADYYF) continues to gain market share in North America, demonstrating its competitive strength in a challenging market.
• The company's single platform strategy has resulted in a high net promoter score of 66%, indicating strong customer satisfaction and loyalty.

Negative Points

• Adyen NV (ADYYF) experienced a slowdown in volumes from a large digital customer, impacting growth rates in the short term.
• The company's growth in regions like Asia and Latin America is slower compared to Europe and North America, partly due to incomplete product offerings.
• Despite strong growth, the company faces intense competition in the US market, where some competitors focus on cost rather than value.
• The issuing business, while showing strong growth, remains small and concentrated, limiting its immediate financial impact.
• Adyen NV (ADYYF) anticipates a step-up in hiring, which may affect operating leverage and margin expansion in the short term.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Signs with ADYYF.

Q: Can you discuss the impact of a major competitor in the US focusing more on value rather than price, and how you see the pricing landscape in the US? A: Ethan, CFO: Our strategy has been consistent in focusing on delivering value to our customers rather than competing on cost. We are gaining market share in the US, winning from competitors who focus on cost. This trend has been ongoing as we continue to gain market share.

Q: What is your strategy for embedded finance, and how are you meeting the demand for embedded financial solutions? A: Ingo, Co-CEO: Our strategy is to grow with our platforms. We have over 28 platforms processing more than a billion in payments volume, and over 150,000 subsellers. This growth allows us to upsell financial products, and we are pleased with the progress.

Q: Can you elaborate on the growth drivers for 2025 and the importance of different levers? A: Ethan, CFO: Share of wallet growth with existing customers will be the biggest part of our growth in 2025. We expect acceleration across digital, unified commerce, and platform pillars. Our growth isn't linear, but we expect slight acceleration on an annual basis.

Q: How do you view the competitive environment in North America, and what is your approach to gaining market share? A: Ingo, Co-CEO: North America is a key market for us, and we are committed to investing further. Our value proposition and innovative products like uplift and debit routing demonstrate our right to play in this market, helping us gain market share.

Q: What are your hiring plans for 2025, and how do they compare to 2024? A: Ethan, CFO: We plan to hire more in 2025 than in 2024, focusing on North America and engineering. However, we expect margins to continue expanding, albeit not at the same rate as from 2023 to 2024.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.