Amsterdam-based payment company Adyen, often regarded as Stripe’s European competitor, experienced a substantial loss of $20 billion within a 24-hour period. The events leading up to this setback shed light on the company’s current situation and challenges.

Adyen made a striking entry onto the Amsterdam Stock Exchange in 2018 amid high optimism. Capitalizing on the tech growth wave in Europe and aggressively acquiring competitors from its American mega-rival, PayPal, the Dutch payment firm seemed poised for success.

Since then, Adyen’s journey has been marked by turbulence, including the disruptive impact of a global pandemic that significantly curtailed customer volumes in the travel sector.

Notably, the company expanded its footprint in North America, home to some of its major merchants, and ramped up its workforce to fuel growth.

However, with the shifting macroeconomic landscape in 2023, Adyen’s growth strategy faced substantial headwinds.

Thursday witnessed a 39% drop in the company’s shares, erasing €18 billion (approx. $39 billion) from Adyen’s market capitalization. This sharp decline came as investors offloaded their holdings in response to the company’s reported slower revenue growth than anticipated.

The downward trend persisted, with shares closing an additional 2.9% lower on Friday following Thursday’s precipitous plunge.

Understanding Adyen
Distinguished as one of the top 200 global fintech companies by CNBC and Statista, Adyen operates as a payment service provider collaborating with prominent clients like Netflix, Meta (formerly Facebook), and Spotify.

Beyond its role as a mere payment processor, Adyen functions as a payment gateway, leveraging technology to enable merchants to accept card payments and conduct transactions through online stores.

The company retains a small percentage from each transaction processed through its platform.

Founded by CEO Pieter van der Does and former CTO Arnout Schuijff, Adyen’s portfolio also encompasses point-of-sale systems for brick-and-mortar establishments, covering both online and offline payment channels.

Recent Developments
In the past week, Adyen unveiled its first-half results for the year, which fell significantly short of expectations. The company reported revenues of €739.1 million (approximately $804.3 million) for the period, reflecting a 21% increase compared to the previous year, but still representing slower sales growth for Adyen.

Analysts, as per Eikon Refinitiv estimates, had anticipated revenues of €853.6 million and a year-on-year growth of 40%.

Notably, Adyen had historically been deemed a growth stock, consistently posting a revenue growth of 26% each semester since its listing in 2018.

In a conversation on CNBC’s “Squawk Box Europe,” Ethan Tandowsky, Adyen’s CFO, highlighted the evolving focus due to increased inflation leading to higher interest rates. He explained, “Less on growth and more on the bottom line.”

Tandowsky emphasized that while there had been some “limited churn,” none of their significant clients had abandoned the platform.

However, concerns loom over competitors in local markets, particularly in North America, entering with more cost-effective offerings, which has heavily impacted Adyen’s outlook.

In a letter to shareholders this week, Adyen attributed its declining EBITDA margin (earnings before interest, taxes, depreciation, and amortization) to 43% in H1 2023, down from 59% in the same period the previous year. The company cited slower growth in North America and increased labor costs, including salaries due to elevated hiring during the period.

Tandowsky stressed the company’s focus on “functionality” compared to competitors, even as these rivals offered cheaper services. He stated, “The efficiency with which we can develop new features, features that outpace those of our competitors, will lead us to gain the market share we expect.”

Structural Challenges
At the heart of Adyen’s challenges lies a business model heavily reliant on customer commitment to a single platform for all payment needs. The company must also persuade users that its offerings are superior to those of its competitors.

In its H1 2023 report, Adyen noted that many of its North American customers were cutting costs to navigate economic pressures like rising interest rates and inflation.

“Corporate entities have prioritized cost optimization, while the competition for digital volumes in the region has led to savings rather than functionality,” Adyen noted in a letter to shareholders.

“These dynamics are not new, and online volumes are the easiest to shift from one side to the other. Amid these developments, we continue consciously pricing based on the value we bring.”

Furthermore, Adyen highlighted that its profitability was affected by a strong push for aggressive workforce expansion. EBITDA stood at €320 million, marking a 10% decline from H1 2022.

Adyen added 551 employees in the first half of the year, increasing its full-time employee count to 3,883.

Some of the company’s rivals significantly downsized their workforce. In November 2022, Stripe laid off 14% of its workforce, around 1,100 individuals.

Adyen’s foremost current challenge is competition from rivals willing to offer lower rates than the company’s offerings. In an interview with the Financial Times, Adyen CEO Pieter van der Does noted that merchants are “looking to explore local providers” to reduce costs.

“We’re not slowing down; we’re just growing at a slower pace,” he added.

Traditionally, Adyen adopted a leaner approach to hiring compared to its main competitor, Stripe, which boasts nearly twice the employee count.

Simon Taylor, Chief Strategy Officer at, suggested that Adyen might be approaching a “natural limit” in terms of its company size before needing to sacrifice margins to resume growth.

“Ultimately, they are subject to the same macroeconomic winds as everyone in e-commerce,” Taylor told CNBC. “Yet they grew 21%. Established players would kill for that.”