One of the biggest fintechs in Europe, Adyen, suffered significant falls in share value after its growth fell below analyst estimates following a lucrative recruitment drive for the group.
The firm focused significantly on the North American market, which it failed to see as much growth as anticipated. North American profits were 25% of the company’s overall profit for the period, underlining just how significant its focus on the region was.
Key to the challenge of the North American market is its competitiveness of the market – with it including the likes of PayPal and Stripe.
The rise in revenue for the firm was half of what it was in the previous year, with EBITDA down 10%, marking a challenging period for the group as it looks to move forward and restore stability to market value.
The profits led to shares in the firm falling by 40%, as the company scrambled to restore stability, emphasising that it will evolve its approach to hiring. Shareholders also outlined that it ‘anticipates our business model’s high operating leverage to kick in as it expands out of this accelerated investment phase in 2024’.
Furthermore, having been touted as one of the key players in the European fintech market, the underwhelming results impacted market status of the group, reducing its market value by in excess of €18 billion.
That being said, the group has emphasised that it predicts that revenue growth will rise off the back of the results, as it focuses on strategy and finding the right price, whilst also slowing its hiring spree.
Capping off its shareholder letter, Adyen stated: “While we see the changing industry tides reflected in this period’s results, we remain focused on building Adyen for the long term. Global digital brands continue to emphasise that – today and in the future – online payments are a vital part of their commerce strategies, which further underpins our conviction in our sizable, untapped opportunity.
“Our historical investments in our single platform leave us well equipped to maintain our leading position in digital payments in North America, and beyond. We therefore continue to build teams and products that best address the needs of Digital customers and help them operate at the forefront of their industries.”