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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 0 research reports from 5 professional analysts.
Eleco’s FY23 results show robust organic recurring revenue growth of +17% with recurring revenue +22% to £20.7m, adj EBITDA +2% ahead of the January update, and a confident outlook with Q1 ARR already at £24.5m vs £22.6m at FY23. At this point, the excellent start to FY24 leads us to reiterate our FY24-26E revenue, adj EBITDA, EFCF, and DPS, and we include the April 2024 acquisition of Vertical Digital in our FY24-26E net cash, as we explain below. As Eleco builds upon the successful acquisition
Companies: Eleco Plc
Cavendish
Made Tech has won a material expansion (worth up to £19.5m/2yrs) with a long-standing customer, The Department for Levelling Up, Housing and Communities (“DLUHC”). Coming off the back of a soft H1 bookings performance, we expect this win to materially boost investor sentiment and reassure how notwithstanding a tough backdrop (given an impending general election) MTEC continues to outcompete legacy providers and in-so-doing, grow its share of wallet with large/strategic customers. Landing near FY
Companies: Made Tech Group PLC
Singer Capital Markets
Companies: Cerillion Plc
Liberum
Cerillion has announced a very solid update, as H1 sales and EBITDA are both up 10% y/y to £22.5m and £10.9m respectively, notwithstanding the exceptionally strong base period (sales and EBITDA +27% and +38% resp.). Results therefore point to continued strong customer demand, reflecting how Cerillion’s out-of-the-box product continues to resonate and gain adoption, particularly in a ‘budget conscious’ environment, by offering faster time to market, greater configurability and at a lower cost. Me
As reported in March, underlying EBITDA profitability improved to record levels despite FX headwinds. Further platform and proposition developments were completed, key steps on its digital roadmap, and it has already won 7 contracts YTD. Alongside planned growth in private membership, this will at least offset the loss of one contract. Forecasts are left unchanged today and, as member engagement throttles back up, FX headwinds ease, and proof points of digital efficiency emerge, markets should b
Companies: Ten Lifestyle Group PLC
itim is a disruptive SaaS-based platform that enables store-based retailers to implement a proven Omni-channel solution. This morning, the group has announced an additional professional services contract with its long-standing client, The Entertainer. Following a year-long trial, The Entertainer is opening in over 800 Tesco stores across the UK & Ireland, alongside a supplier agreement for Tesco stores across Central Europe. Under the contract, The Entertainer will extend its use of itim's Unify
Companies: Itim Group PLC
WHIreland
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
22nd 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: ARV CTL AFRN FEN HUW TENG BBSN EAAS VAL
Hybridan
Alphawave Semi has reduced guidance for FY23 and prospectively citing lower revenues from China, changes in expected revenue recognition from long-term contracts, and continuing investment in R&D. The share price has reacted negatively, giving up most of the gains since the trading statement at the end of January. Current consensus, which is a good match for pre-existing guidance, should be reduced, most likely following release of the FY23 results and full 1Q24 trading update due on 23 April. H
Companies: Alphawave IP Group PLC
Capital Access Group
Companies: FOG PEB KBT EMR TIME GETB JNEO
Devolver Digital encouragingly delivered 2023 results slightly ahead of expectations and provided a steady medium-term outlook that leads us to reiterate our 2024 Adjusted EBITDA estimates. Longer term, the company is now planning to further develop its two major planned titles, Human Fall Flat 2 and System Era's next major new release. We now expect those major titles to be released in 2026 rather than 2025, meaning we lower our 2025 Adjusted EBITDA forecast to $10.6m from $17.6m but introduce
Companies: Devolver Digital, Inc.
Zeus Capital
This report is intended to help UK small- and mid-cap investors gain a better understanding of software companies’ routes to market, and to highlight how one of the most important facets of the way in which they grow and deliver value is routinely ignored. We examine sales processes for six UK-listed companies and one that has recently been taken over, and consider why they have followed their respective paths.
Companies: Idox plc
Progressive Equity Research
Banquet Buffet*** Abingdon Health 9.25p £11.3m (ABDX.L) The lateral flow contract development and manufacturing organisation announces its unaudited interim results for the six months ended 31 December 2023. Revenue increased 117% to £2.4m (H1 2023: £1.1m). The Adjusted EBITDA loss decreased 47% to £1.2m (H1 2023: £2.2m). Furthermore, reduction in operating loss of 50% to £1.2m (H1 2023: £2.4m). The Board therefore expects that H2 2024 revenue will be significantly improved compared with H1 2024
Companies: CPX SLP FA/ FIPP ECR ETP ORCA
Companies: IGP RUA BOOM
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