Adyen shares drop 12% as lower margin target overshadows revenue beat 

By Jakob Van Calster

Oct 28 (Reuters) - Shares in Adyen fell about 12% in early Amsterdam trading on Wednesday after the Dutch payments platform lowered its 2026 core earnings margin target to 50% from around 52% and scrapped its medium-term EBITDA goal "to retain flexibility".

Co-CEO Ingo Uytdehaage said the reduced margin target reflected plans to step up investments in hiring as Adyen expands beyond payments into billing and loyalty products, with 1,000-1,100 new employees planned for 2026.

He said demand for billing software was rising as more companies sought ways to charge customers for the use of artificial intelligence models, with much of the hiring aimed at supporting Adyen's recently acquired businesses.

REVENUE, PAYMENT VOLUMES BEAT FORECASTS

The share decline extended Adyen's year-to-date losses to roughly 40%, despite the company reporting third-quarter revenue and payment volumes above expectations.

Net revenue rose 23% to €738.1 million ($820.77 million), above a company-compiled consensus of €730.3 million, while processed payment volumes increased to €451.1 billion , surpassing analysts' estimate of €435.6 billion.

Adyen, whose customers include LVMH and Microsoft, takes a percentage of transactions processed on its platform, although fees typically decline as customer volumes increase.

In a note to clients on Wednesday, Degroof Petercam said Adyen had once again pulled "a rabbit out of the hat", catching investors off guard with a margin-target cut whose impact on future growth remained unclear.

The new outlook is "clearly a nasty surprise", the broker said, noting the move came just one quarter after guidance had been updated for two acquisitions and with a new CFO yet to start at the company.

Adyen reiterated its 2026 target for constant-currency net revenue growth of 21%-23% and said capital expenditure would remain at 7% of net revenue. The company said it would provide its outlook for 2027 alongside full-year results in February.

($1 = 0.8981 euros)

(Reporting by Jakob Van Calster; Editing by Rashmi Aich and Sonia Cheema)