Adyen tops profit forecast on market expansion and slower hiring

By Dimitri Rhodes and Olivier Sorgho

(Reuters) -Payments company Adyen beat half-year core profit expectations on Thursday as it gained market share and slowed hiring, sending its shares up 12%.

The digital payments sector faces pressures from lower post-pandemic consumer spending, but Adyen has outpaced peers with the help of clients such as U.S.-based Cash App and Canada's Shopify.

Expanding services to existing clients is its biggest driver of growth, finance chief Ethan Tandowsky told Reuters.

"There's still room to grow, even in our most mature markets," he said.

Adyen has a single-digit percent market share in the Europe, Middle East and Africa (EMEA) region and North America, leaving it ample room to increase sales there, it said.

The group's shares had their best day in about six months on Thursday, adding about 4.3 billion euros ($4.72 billion) to its market value, currently at 39.6 billion euros, making Adyen one of Europe's most valuable financial firms.

Core profit rose 32% to 423.1 million euros, beating the average estimate of 413.39 million from 13 analysts polled by LSEG.

J.P.Morgan said results were positive given investors' cautious stance on the stock while Barclays said they were strong in a tough macroeconomic environment.

Stifel however said new customer wins seemed "lacklustre" versus last year.

Adyen said it won a contract with IKEA in Mexico and a new clearance to operate as an online payment aggregator in India.

Net revenue rose 24% to 913.4 million euros, while EBITDA margin expanded to 46% from 43%.

French rival Worldline in early August cut its 2024 forecast citing a sharp decline in demand in Europe, while Adyen lowered its 2026 guidance last November and said it would slow hiring.

It hired 37 employees in the first half of 2024, down from 551 in the same period last year.

The group confirmed its 2024 and 2026 guidance.

($1 = 0.9083 euros)

(Reporting by Dimitri Rhodes and Olivier Sorgho; Editing by Kim Coghill, Milla Nissi and Barbara Lewis)