Adyen: Third-Quarter Business Update Brings Lowered Guidance; Investor Day Following

Adyen published a third-quarter business update outside of its normal semiannual reporting schedule. Figures presented were limited to volumes and net revenue in the third quarter as well as growth rates across its business segments. Overall trends have been in line with those presented at the first half of the year. Processed volume increased 21% year over year while net revenue increased 22%. Digital volumes were up 21%, with the U.S. showing stable trends to those in the first half. Important to highlight here is that Adyen again grew above the market in the U.S. Unified commerce saw volumes increase 25% while platforms grew 15% (120% if we exclude eBay volumes). The take rate remained stable at 17 basis points relative to the same period a year ago, which suggests that Adyen did not engage in any price competition in the U.S. The largest change in the limited business update was a change in guidance. While Adyen was previously setting targets for the medium term and investors were lost at what exactly that would mean, the payment services provider now specified a clear time frame up to and including 2026. Importantly, Adyen reduced guidance significantly. Net revenue that was previously guided to be growing between the mid-20s and low-30s percent per year was now lowered to between low-20s and high-20s. EBITDA margin is guided to improve above 50% by 2026, the previous target was set at above 65% in the long term. Our assumptions are fully aligned with the updated guidance, and as such we do not make a change to our fair value estimate of EUR 1,660 per share. Our wide moat rating is also unchanged.