Adyen Clinches Wirecard Clients During Online Shopping Boom
Adyen NV said it poached new merchants from embattled German payments firm Wirecard AG, as the Dutch company reported a 27% rise in revenue for the first half of the year.
The scandal that plagued competitor Wirecard proved to be a
boost in Adyen’s favor. Retail merchants looked for payment processing
alternatives following the German company’s spectacular collapse in June, when
Wirecard filed for insolvency after admitting that almost 2 billion euros
($2.37 billion) previously reported as cash didn’t exist.“We certainly got some
inbound from merchants that wanted to work with us,” Adyen Chief Financial
Officer Ingo Uytdehaage said in an interview. They were primarily in the
Asia-Pacific region, he said.
Partnerships with a couple of former Wirecard clients are
already live, while Adyen is still in talks with many others, the finance chief
said. Some are “really well-known brands” that “wanted to convert quickly,” he
said, declining to name specific new merchants.
But, Uytdehaage said, the Wirecard scandal overall was “not
good for trust in the industry.”Nonetheless, that same industry remains buoyant
during the pandemic as more shoppers rely on contactless cards and ecommerce
while shunning cash. Amsterdam-based Adyen, which processes payments for firms
including Uber Technologies Inc. and EBay Inc., has benefitted from the trend,
leading its shares to double this year even as Amsterdam’s AEX Index has declined
7.3%.On Thursday, the company reported 279.9 million euros in net revenue for
the first half of the year, just beating average analyst expectations of 274.2
million euros. The Amsterdam-based company said it processed 129.1 billion
euros of payments for the period, an increase of 23% from last year. Analysts
on average had expected processed volumes of 127.15 billion euros for the
period, according to data compiled by Bloomberg.
Adyen also reported earnings before interest, taxes,
depreciation and amortization of 140.9 million euros, just missing analyst
estimates of 144 million euros.
Shares were down 4.3% to 1,397 euros at 9:43 a.m. in
Amsterdam on Thursday.
While Adyen’s first-half results show strong resilience to
the pandemic, they “might not be enough to confirm the strong share rally these
last three months,” KBC analyst Thomas Couvreur said in a note, adding that a
derivative liability correction “might further cause some negative
sentiment.”Despite the wins, there were some bruises for the Dutch company in
the first half, particularly in the travel industry, where traffic has cratered
due to the pandemic. Uytdehaage said the company is starting to see a rebound
from online booking platforms with more people taking holidays in their local
regions but “it’s absolutely not at the levels before Covid started,” he
said.Adyen expects to continue to benefit from an accelerating trend from cash
toward cards, even as customers start to trickle back into brick-and-mortar
stores, Uytdehaage said, pointing to government incentives for customers to pay
with cards or smartphones. The Amsterdam-based company offers merchants
payments processing both online and in stores and in a variety of local
payments methods.The finance chief confirmed the company’s outlook, and said it
continues to hire new employees, growing its workforce to around 1,500 people
by the end of the second quarter.Adyen still expects to grow net revenue at a
rate between the mid-20s and low-30s in the medium term. It also plans to
increase its annual EBITDA margin to above 55% in the long term. The company
doesn’t define what it perceives as medium or long-term.
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