Adyen Q1 profit up 34%; hires more staff

Brussels

REVENUE at Adyen NV, which processes payments for companies including Uber Technologies Inc and EBay Inc, grew by over a third in the first quarter, despite a hit in fees from the travel and accommodation sector.

The payments company typically only publishes earnings on a biannual basis but made an exception due to the coronavirus crisis. The company said it posted net revenue of 135.5 million euros (S$209.6 million) for the first quarter of the year ending March 31, up 34 per cent year-on-year.

The Amsterdam-based company said it processed 67 billion euros of payments for the period, an increase of 38 per cent, but warned that the prospect of a deep economic recession brought on by a prolonged pandemic could hurt earnings. Despite the threat, it made 169 new hires in the quarter, boosting its workforce by about 14 per cent since the end of last year.

Earnings before interest, taxes, depreciation and amortisation margin declined to 47 per cent, from 56 per cent last year, due to the new hires and marketing campaigns, and a hit to net revenue in March from the crisis.

"As a company we are very well positioned" to deal with the impact resulting from the virus, said Adyen chief financial officer Ingo Uytdehaage in an interview, adding the biggest risk to his company is the uncertainty over how long the crisis will last.

"If we as an economy go through a very deep recession, of course that's also going to impact us."

The company said it was hardest hit in the travel and accommodation sector, where processed volumes fell by around 90 per cent by the end of March compared to the first week of January. In-store retail was also similarly impacted, but online sales have started to rise to compensate for that, it said.

Still, Adyen's lack of debt and positive cash flow has given the company room to maneuver, including to continue hiring as it invests for the long-term, Mr Uytdehaage said.

Its main customers are also large global companies that so far have been able to respond reasonably well to the crisis, he said. BLOOMBERG