Amsterdam-based fintech unicorn Adyen published its shareholder letter and financial statements for H1 2024 on Thursday. The letter focuses on the company’s activities, finances, growth pillars, and more.
Here are the key takeaways:
Net revenue reached €913.4M
In the first half of 2024, the company reported a substantial increase in net revenue, reaching €913.4M, which represented a notable 24 per cent surge compared to the previous year.
Adyen continued to gain market share driven by both shares of wallet expansion with existing customers and new wins.
Net Revenue includes €2.5M of net interest income relating to Embedded Financial Products (EFP) suite
Take rate decreased from the last period, landing at 14.7 bps in H1 2024, compared to 16.3 bps in H2 2023 and 17.3 bps in H1 2023, driven primarily by merchant mix impacts.
Net revenue contributions remained consistent YOY, with EMEA contributing (57 per cent), followed by North America (27 per cent), APAC at (11 per cent), and LATAM landing at (6 per cent).
North America was the fastest growing (up 30 per cent YOY), followed by EMEA (up 25 per cent YOY), APAC (up 15 per cent YOY), and LATAM (up 2 per cent YOY).
Additionally, Adyen made headway on its long-term investments to expand its global acquiring capabilities, securing additional licenses in India and acquiring registration in Mexico.
Processed transaction and EBITDA
In the first half of 2024, the company processed €619.5B, indicating a 45 per cent year-on-year increase.
Among its commercial pillars, Digital, which serves as the largest base for the company, continued to show strong appeal, particularly in North America.
The relevance of Digital’s products was reflected in the significant growth of volumes, with contributions of €399.9B in H1, making up 65 per cent of total processed volumes and growing
by 50 per cent year on year.
Unified Commerce grew 29%
Adyen’s Unified Commerce volumes spanned increasingly diverse industries, amounting to €140.5B in H1 and growing 29 per cent YOY.
Unified Commerce volumes comprised 23 per cent of processed volume.
Platform volumes were €79.1B in H1, making up 13 per cent of the total processed volume and growing 59 per cent YOY, making it again our fastest-growing pillar.
Excluding eBay, Platforms volume growth was 91 per cent in H1.
POS reached €95.6B
The point-of-sale volumes reached €95.6B, accounting for 15 per cent of the total processed volumes and surpassing the overall business growth at 43 per cent year-over-year (YOY).
The report indicates that the full-stack volumes constituted 82 per cent of our processed volumes, an increase from 79 per cent in H1 2023.
This aligns with the company’s strategy of leveraging our full-stack capabilities to maximise value for our customers.
Operating expenses up by 19%
Operating expenses were €538.3M in H1 2024, up 19 per cent from H1 2023.
Employee benefits were €347.5M in H1 2024, up 22 per cent YOY. This figure reflects the annualisation of hires made in 2023.
IT costs totalled €22.4M in H1 2024, up 19 per cent YOY, mainly driven by costs related to our data centers and investment in IT-related equipment.
EBITDA grew by 32%
Adyen’s EBITDA for H1 2024 amounted to €423.1M, a 32 percent increase from the €320M reported in H1 2023.
Furthermore, the EBITDA margin for H1 2024 stood at 46 per cent, demonstrating an improvement from the 43 per cent margin recorded in H1 2023.
This expansion in the EBITDA margin can be attributed to the company’s moderated hiring pace during this period, resulting in noticeable operating leverage.
Net income up by 45%
Net income was €409.6M for the period, up 45 per cent YOY.
The increase in finance income is driven by a relatively higher interest rate environment and an increase in average overnight deposits held at “Cash held at central banks” and “Cash held at banks, other than central banks” compared to H1 2023, says the report.
CapEx and free cash flow
CapEx was €42.3M, or 4.6 per cent of net revenue, down from 7.6 per cent in H1 2023.
Free cash flow was €360.6M in H1 2024, up 46 per cent YOY. The free cash flow conversion ratio was 85 per cent.
Financial Objective
According to Adyen, it has not seen any developments in the business over H1 2024. As a result, the company’s financial objectives remain unchanged from the last time they published results.
- To continue to grow net revenue annually between the low-twenties and high-twenties per cent, up to and including 2026.
- To improve EBITDA margin to levels above 50 per cent in 2026,
- To maintain a sustainable capital expenditure level of up to 5 per cent of our net revenue.
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