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Adyen unveiled its future strategy plans and objectives in the CMD. The newly proposed targets are both ambitious and time-bound, fulfilling the expectations of both investors and AV. The Q3 update was a relief and better than had been feared by investors. Adyen plans to hire more slowly than initially planned, which will improve the profitability expectations. We maintain our BUY recommendation based on the increased confidence in Adyen’s strong single platform.
Companies: Adyen NV
AlphaValue
Adyen’s Q3 trading update revealed that the market’s response has been overly severe. The Q3 numbers exceeded our initial expectations, surpassing our industry peers. In terms of hiring, the company has revised its plans, shifting from the originally projected 550 new hires to a more realistic estimate of around 350. Moreover, the company has established new, attainable targets. We embrace this change in objectives and appreciate having a set deadline to achieve them.
Adyen’s H1 23 results were unexpectedly weak. The EBITDA fell well short of expectations, primarily due to extensive hiring. While the decline in the margin was somewhat anticipated, the situation took a more concerning turn as the revenue growth fell by more than the consensus. Our confidence in Adyen’s platform remains strong. However, our previous optimism about any setbacks being a temporary hurdle has slightly diminished. We now consider the possibility that these setbacks could signify th
Adyen released H2 22 figures that surprised everyone with EBITDA margins shrinking on the back of intense recruiting. However, the firm’s path to growth remains intact and the share price drop (-16% at closing) offers a unique entry point.
As we highlighted a couple of days ago (see our comment on Nov 4), Adyen’s CEO has confirmed that the firm will not be making lay-offs. The CEO’s comment indicated the firm’s disciplined approach to recruitment so far and the fact that growth needs to be fed by talent as Adyen is sourcing new products. Adyen’s CEO mentioned that it plans to slow recruitment only by 2024 and then fully exploit the leverage of the firm’s platform. This confirms our investment case on Adyen.
This is first set of disappointing results since we have covered Adyen. Tensions on the top-line can be sensed and foreseen, while profitability missed materially on the back of more intense hiring. However, we believe this to be temporary while the new generation of embedded finance products is launched and reiterate our belief that the medium-term targets will be met.
Adyen’s capital markets day was much anticipated. In fact, while the broader industry accumulates news of potential disruption stemming from BigTech, the CMD was a timely reminder of what Adyen is about and the future roadmap. Developing in embedded finance is hardly ground-breaking in our view and much will depend on execution where we expect Adyen to deliver.
Results come and go and all look similar. Adyen is once again beating consensus expectations as management shows a sassy control over its business. Despite our recommendation, we believe that, with the visibility over cash flows and the maintained super-efficient business model, the firm is well on its way to recover its previous valuation levels, unless there is a new Central Banks’ coup.
As we previously anticipated, Adyen is now more exposed to North America than any other continent, in terms of gross revenues, highlighting the high tension in the market when comparing net revenues. This implies a lot however, as according to its H1 release, nothing seems to be a drag on its outstanding growth while the world seems very much bonded with its online-shopping habits.
Adyen has announced on Tuesday that the US Federal Reserve had approved its banking license application. While the obtaining the Office of the Comptroller of the Currency’s approval (OCC) remains outstanding, a “formality” as per our industry discussions, the announcement reveals a wrong assumption on our part. We had overstated the BIN-sponsor cost effect, which turns out to reassert -more than ever- our opinion regarding the company’s valuation.
Adyen is piling up money in its balance sheet with no plans to spend it. This is questionable behaviour for which we believe the answer may be that the company is building up some capital to reach the requirement for a US banking licence. However, time is ticking and Adyen needs to keep up with the pace of its American peers. Raising further equity would be the key.
Adyen is releasing FY top-line growth (+28%) which is consistent with the market’s expectations (+1%), sustained by high growth in the US now almost equally weighing with Europe’s gross revenues. The company also disclosed a much higher than expected FY EBITDA margin (61.5% vs 55.5%) and has set its long-term target to more than 65%... 1,000bp higher than the previous 55% target.
Adyen has developed a best-in-class payment software for merchants with unique growth prospects. It’s out of this world valuation has benefitted from the Covid-19 wave(s), Central Banks’ liquidity plans and a self-feeding buy loop (ETF, indices). Even heroic growth assumptions cannot match the recent valuations.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Adyen NV. We currently have 2 research reports from 5 professional analysts.
Concurrent Technologies delivered a record £31.7m revenue and a substantial increase in profitability in FY23. Management has successfully navigated through the challenging period of worldwide component supply problems that characterised FY22 and delivered a strong recovery in FY23. The business has been completely transformed since the new management team started in 2021 and the focused strategy is delivering. With revenue from the increased number of design-in wins secured in FY23 starting to
Companies: Concurrent Technologies Plc
Cavendish
Altitude has released a trading update for the year to 31 March 2024 confirming Management expects FY24 results to at least meet market expectations. Our unchanged forecasts show annual revenue growth of 38.9% in FY24 as the Group’s Merchanting division expanded significantly, driven by increased numbers of sales Affiliates and by the US Gear Shops. This translates to adjusted PBT growth of 29.4% to £1.2m on our FY24 estimates. In line results also means that over the last two years both revenue
Companies: Altitude Group plc
Zeus Capital
17th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi
Companies: ARS TIDE SCE SNX ECK CNS TST SPEC SSTY
Hybridan
1Spatial’s FY24 results reflected robust momentum for the enterprise business and continued improvement in the revenue mix, with investment in growth suppressing margin and cash generation. This investment phase will continue in FY25 to lay the foundation for transformational growth from 1Streetworks and in the US in the coming years. Our scenario analysis indicates the upside from successful execution is significant, with further wins for 1Streetworks and in the US being the key catalysts for m
Companies: 1Spatial Plc
Edison
Auto Trader’s FY23 results last week showed continued strong performance from its core marketplace business despite constrained supply in new and used vehicles.
Companies: Auto Trader Group PLC
Arcontech has reported encouraging H1 24 results to December, with revenue £1.45m, adj EBIT £0.4m and net cash £5.7m, in line with our conservatively unchanged £2.8m FY24 revenue estimate. Revenue growth (+7% yoy) reflects the multi-year contract won in October and the strengthening relationships with core Tier-1 customers, with signs of improvements in challenging market conditions. Our prudent forecasts reflect the impact of unexpected growth in floating user terminal numbers in H1, with plent
Companies: Arcontech Group PLC
GE Healthcare has announced the launch of the Voluson Signature 20 and 18 ultrasound systems, with the related press release noting these systems ‘comprehensively integrate artificial intelligence’ to improve the ultrasound procedure for clinicians and the women being scanned. These ultrasound systems include SonoLyst, the AI which incorporates Intelligent Ultrasound’s ScanNav Assist and ScanNav AutoCapture AI software. The launch of additional Voluson systems including the SonoLyst suite of AI
Companies: Intelligent Ultrasound Group Plc
FY19 revenue increased 16.9% to £19.4m following a strong H2/19, c9% ahead of forecast. New products released included Concurrent's first AI board, aimed at the military market. Order intake was strong, especially during H2/19, continuing into 2020. Inevitably COVID-19 has caused uncertainty about H2/20 activity levels and potential delays from customers, though there has been no immediate slow-down. Concurrent is a supplier to some of the world's most prominent defence companies in the UK and U
Concurrent has delivered a strong H1/20 trading performance during a volatile period, with revenue of £9.2m (H1/19: £9.5m). Though COVID-19 caused initial uncertainty around FY20 activity levels, Concurrent is a supplier to some of the world's most prominent defence companies in the UK and US and was thus designated an essential defence supplier. Activity levels therefore continued throughout COVID-19 lockdown, with the defence market representing 68% (H1/19: 58%) of revenue in the period. Follo
The trading update today has indicated that the FY20E revenue and PBT are expected to be ahead of market expectations and that a further interim dividend payment is to be maintained. Though COVID-19 caused initial uncertainty around FY20E activity levels earlier this year, being a supplier to some of the world's most prominent defence companies in the UK and US, was designated as an essential defence supplier. Activity levels therefore continued throughout lockdown. The Telecoms market is also b
Concurrent delivered results ahead of our December 2020 upgraded revenue and PBT forecasts, with record revenues in FY20, up 9% to £21.1m (FY19A: £19.4m). As a supplier to some of the world's most prominent defence companies, Concurrent was designated an essential defence supplier and production, design and development operations substantially continuing throughout the period of COVID-19 interruption. With a strong order book, £11.8m cash and no debt, focussed advanced technology R&D increasing
Concurrent H1/21 trading has been strong, with revenue and profitability ahead of the same period last year (which was a record year for revenues), higher gross margin and an increased £12.4m in cash (16.4% of market cap). The order book currently stands at a record £15.9m (H1/20: £13.9m) giving good visibility of future revenues, though the timing of some shipments in Q4/21 and into 2022 has become uncertain due to the widely reported electronic component availability. Concurrent has an experie
FY21 revenues of £20.5m were 5.1% ahead of forecasts, with gross margin increased 2.2% to 55.9% and PBT up 17% to £3.5m. R&D is accelerating with a focus on increasing the product range at double the previous frequency and within half the time. Order in-take is strong, though revenues in FY22E will be affected by the widely reported electronic component availability. However, with this growing order in-take and significant balance sheet strength, Concurrent is strongly positioned to continue to
The prescient demand for cyber security protection is shown in these results, with double-digit organic revenue and EBITDA growth. Major contracts wins are reinforcing revenue visibility and the re-platforming of the Software division bodes well for new sales once completed.
Companies: Shearwater Group plc
Concurrent Technologies' interim results confirm the worldwide shortage of semiconductor components has placed significant headwinds in front of the business, inevitably slowing manufacturing output and order shipments to customers. None of these delays have led to any loss of underlying business, however, we anticipate a significant period of growth to follow the normalisation of component supply chains, fulfilling both delayed backlog and a rapidly growing order intake. Investment in R&D doubl
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