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Adyen Shares Soar to a Record High as the Payments Firm Beats 2020 Profit Estimates

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  • Adyen said its full-year 2020 earnings came in at 402.5 million euros ($488.2 million), up 27% from a year earlier.
  • The online payments firm's CEO said it had proven "resilient" in the latter half of 2020 and saw strong gains in North America.
  • The company is now worth more than some of Europe's biggest banks, including BNP Paribas and Santander.

LONDON — Dutch online payments firm Adyen saw its shares surge over 10% Wednesday to hit a record high after posting annual profits that beat expectations.

Adyen said its full-year 2020 earnings came in at 402.5 million euros ($488.2 million), up 27% from a year earlier and beating the 386 million euros expected by analysts in a Refinitiv poll, according to Reuters.

The firm posted net revenues of 684.2 million euros last year, up 28% versus 2019, as it benefited from a boost in e-commerce volumes during the coronavirus pandemic.

Shares of Adyen hit an all-time high of 2,123 euros Wednesday following the release of its 2020 numbers.

The company said processed payment volume came in at 303.6 billion euros in 2020, a 27% increase from the previous year. Its full-year profit margin was 59%, an improvement from 56% in 2019.

In the second half of the year, Adyen said, revenues rose 28% year-on-year to 379.4 million euros, while profit grew 36% to 236.8 million euros.

Adyen CEO Pieter van der Does said the business had proven "resilient" in the latter half of 2020, adding it saw strong gains in its North American operations in 2020.

"The business' resilience over the period was fueled by the continued diversification of our merchant base across verticals and regions," van der Does said in a letter to shareholders. "Most notable is the pace at which North American net revenue contributions grew."

"With a 70% year-on-year increase, net revenue contributions from the region rose to 20% of total net revenue in H2 2020, compared to 15% in H2 2019."

Despite tailwinds from increased demand for online payments, Adyen saw growth slow in 2020 amid a sharp decline in travel volumes. Still, it's rare to see profitable growth in the fintech sector. Start-ups like Revolut and N26, for example, remain heavily loss-making.

Adyen isn't like consumer-facing fintech platforms, instead focusing on payments to businesses. The company provides payment services to companies such as Uber, Spotify and Netflix.

Adyen, which competes with U.S. firm Stripe and U.K. start-up Checkout.com, went public on the Amsterdam stock exchange in 2018. Adyen's initial public offering was one of the most high-profile tech listings in Europe in recent years, alongside Spotify.

Since its debut, Adyen's shares have climbed more than 700%. With a market value of
63 billion euros, the company is now worth more than some of Europe's biggest banks, including BNP Paribas and Santander.

Despite securing a strong position in the payments technology market, increased competition in the space from privately-held rivals is likely to keep Adyen on its toes. Stripe raised $600 million last year at a $36 billion valuation, and is reportedly on track to secure further funding at a market value of up to $100 billion. Stripe declined to comment on reports about the fundraising.

Meanwhile, Checkout.com attracted a $450 million investment round at a $15 billion valuation last month, making it the most-valuable fintech unicorn in Europe.

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