European payment processor Adyen NV made progress in the first half of the year, adding merchants and improving its geographical balance, but its shares dropped after the company reported its latest results.
Adyen ADYEN, -4.96% earned €3.02 a share for the half on €221 million in revenue. Those results came in ahead of the expectations of Keefe, Bruyette, & Woods’s Sanjay Sakhrani, the only analyst whose estimates are tracked by FactSet. He had predicted €2.73 in EPS and €211 in revenue.
Adyen is a global payment company that allows businesses to accept e-commerce, mobile, and point-of-sale payments. Adyen has more than 3,500 customers and is listed on the stock exchange Euronext.
Shares were off 5% in Thursday trading. Sakhrani said in a note to clients that the stock weakness could be attributed to “high expectations heading into the quarter and the fact that the outperformance on the Ebitda [earnings before interest, taxes, depreciation and amortization] margin was partially due to accounting changes.”
Chief Financial Officer Ingo Uytdehaage told MarketWatch that the company is seeing traction with customers who have “complicated problems” to solve, such as integrating online and offline payments. The company reported several merchant wins from the first half, including VF Corp.’s North Face as well as Restoration Hardware Holdings Inc.
Adyen disclosed in its shareholder letter that U.S.-only businesses like Restoration Hardware haven’t historically been “the most logical fit for us” but that the company is seeing increasing ability to add value for these types of merchants.
The Dutch financial technology company is looking to drive “less concentration in our merchant base, and less concentration in Europe,” according to Uytdehaage. In Asia, Adyen is mainly following existing customers that want to add payment-processing capabilities in Asia as well, but Uytdehaage said the company is also seeing some local merchants that want to work with it.
In Europe, Adyen sees opportunity to win new customers as regulators begin to enforce Strong Customer Authentication, a European payments regulation that will require merchants to institute new measures that help verify that online shoppers actually are who they say they are.
Ayden shares have climbed 37% on the year, while the Amsterdam AEX AEX, -0.64% index has risen 12%.
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