Defying Odds: Adyen’s Net Income Climbs in H1 2023 despite Fivefold Revenue Drop

Despite nearly a fivefold decline in total revenue, the Amsterdam-based payments company Adyen achieved higher net revenue in the first six months of 2023 than in the same period of the previous year. Net profit also slightly increased, showcasing the resilience of European fintech amidst the deteriorating condition of the financial technology industry in recent months.

Adyen Reports H1 2023 Results, Showcases Volume Growth

One of the standout figures from the H1 2023 report is the processed volume, which reached €426.0 billion, marking an increase of 23% compared to the previous year. In addition, the total point-of-sale volumes soared to €67.0 billion, reflecting a year-on-year (YoY) increase of 49%.

Even though gross revenue fell from €3.95 billion to €854 million during the reported period, drastically reduced costs allowed for an increase in net revenue. This eventually settled at €739 million, growing by over €130 million YoY. As a result, the net profit amounted to $283.17 million, compared to $283.14 million seen in the previous year.

However, there was a notable decrease in EBITDA by 10% YoY. The primary reason behind this decline is attributed to "increased wages and salaries stemming from Adyen's continuous effort to scale its global team.” As a consequence of these decisions, the EBITDA margin settled at 43%.

“We closed H1 2023 with €739.1 million in net revenue, up 21% year-on-year. The EBITDA margin landed at 43%,” Pieter van der Does, the Co-Founder and Co-CEO of Adyen, stated in the shareholder letter. “We continued building Adyen for the long term and made solid progress in attracting top talent, scaling our Platforms offering, and driving growth in Unified Commerce.”

Diving deeper into the finances, the free cash flow conversion ratio remained strong at 77%. Meanwhile, the capital expenditure (CapEx) was recorded at 7.6% of the net revenue.

Growth Despite Fintech Industry Challenges

Adyen maintained profitability at a time when the condition of the European fintech industry was deteriorating. In the second half of 2022, fintech financing amounted to 63.2 billion USD, spread across 2,885 transactions. However, there was a decline in the first half of 2023, with funding dropping to 52.4 billion USD from 2,153 transactions, according to the Pulse of Fintech report by KPMG.

Last year, Adyen introduced several new solutions, including embedded financial products. According to the press release, platforms and marketplaces can now create tailored financial experiences for their users, such as small business owners and individual sellers using these products. This solution was adopted, among others, by the e-commerce company, Radial.

Meanwhile, Adyen introduced the ‘Tap to Pay’ function for its US customers on Apple devices. Adyen partnered with enterprise clients and commerce platforms, like Lightspeed Commerce and NewStore, to make this feature accessible to as many businesses as possible.