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Adyen shares plummet nearly 40% after disappointing H1 2023 results
Adyen shares plummet nearly 40% after disappointing H1 2023 results, dLocal hires the former CFO of Mercado Libre, and BILL exceeds $1 billion in annual revenue
There are like three publicly traded Fintech companies in Europe, so it is really disappointing to see one of them being decimated on missing earnings expectations. Yet, this is what happened to Adyen yesterday. Hope it’s just a bump in the road for this amazing company! More on that and other things Fintech:
Adyen shares plummet nearly 40% after disappointing H1 2023 results,
dLocal hires the former CFO of Mercado Libre, and
BILL exceeds $1 billion in annual revenue
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Adyen Shares Plummet Nearly 40% After Disappointing H1 2023 Results
Shares of the European payments giant Adyen (AMS: ADYEN), plummeted nearly 40% following the release of the company’s first half 2023 results. The company’s market capitalization dropped by €18 billion, as it missed analysts’ expectations due to increased hiring and intensified competition in the US from rivals like Stripe. Adyen reported a 23% YoY in processed volume to €426.0 billion and a 21% YoY growth in revenue to €739.1 million. However, the company failed to meet analysts’ expectations on profitability, reporting €320.0 million in EBITDA. EBITDA margin was 43% compared to the company’s long-term target of 65%.
Despite the broader trend of Fintech retrenchment, Adyen continued aggressive recruitment, which resulted in an almost 15% growth in its workforce and 0ver 80% growth in compensation costs during the first half of the year. The majority of new hires (75%) were in tech roles, the company disclosed in its shareholder letter. In addition, the intensified competition in the US market, particularly from Stripe and Braintree, affected Adyen's net revenue growth rate, which declined from 36.7% YoY in the first half of 2022, to 21.5% in the first half of 2023. The company's shares declined 38.98% in yesterday’s trading.
dLocal Hires Former CFO of Mercado Libre
Uruguayan payment company dLocal (NASDAQ: DLO) appointed the former Mercado Libre CFO Pedro Arnt as its co-CEO. The move comes as part of dLocal's efforts to restructure its management after facing challenges from a short seller's attack and an investigation in Argentina. Arnt, a seasoned e-commerce veteran, aims to expand dLocal's payments platform for business clients in emerging markets and believes the company doesn't require a major overhaul, only fine-tuning. Dlocal's market value, which had dropped to under $3 billion in 2022, rebounded to over $5 billion following the announcement and strong second-quarter results.
In November last year, dLocal faced allegations of fraud by the short-seller Muddy Waters Research. The company’s stock was cut in half after Muddy Waters accused the company of inflating reported payment volume numbers, booking conflicting inter-company transactions, and back-dating accounting entries to reflect stock transactions by the founders. In May this year, Argentine news outlet Infobae reported that dLocal was investigated by the country’s government for an illicit transfer of funds outside of the country through a network of subsidiaries. dLocal later committed to hiring 300 people and investing $100 million in its operations in Argentina over the coming years.
✔️ Payments Startup Dlocal Taps Former MercadoLibre CFO Arnt as Co-CEO
✔️ dLocal Is a Gem and No Need to Fix Anything, Former MercadoLibre CFO Arnt Says
✔️ dLocal Reports 2023 Second Quarter Financial Results
BILL Exceeds $1 Billion in Annual Revenue
BILL (NYSE: BILL), a financial automation software maker for small and midsize businesses, reported its second quarter (fiscal Q4 2023) and full fiscal year results yesterday. The company’s revenue for the full year increased by 65% YoY reaching $1.06 billion. Gross profit was $864.5 million, which represents a 81.7% gross margin, compared to $497.0 million, or a 77.4% gross margin, in the prior fiscal year. The company reported a Net loss of $223.7 million and a Non-GAAP Net income of $194.4 million, which compares to a Net loss of $326.4 million and a Non-GAAP Net loss of $24.3 million in the previous fiscal year.
The company revenue growth was fueled by a 57% YoY growth in transaction fees to $691.4 million, a 31% YoY growth in subscription fees to $253.3 million, and a 13x increase in float revenue (interest earned on customer funds) to $113.8 million. The gross profit margin of 82% and an Enterprise Value / NTM Sales multiple of 7.8x suggests that BILL is a software company, while the largest part of revenue (and revenue growth) comes from payment processing and interest income. The company guided expects $1.29 - $1.31 billion in revenue and $217 - $235 million in Non-GAAP Net income for the full fiscal year 2024.
2023 has not been a great year for publicly traded payments companies. Thus, only Shopify (NYSE: SHOP) outperformed the Nasdaq Composite Index year-to-date. Let’s see what the rest of the year brings!
🇺🇸 Chicago, IL, United States
🇪🇸 Madrid, Spain
VP of Engineering - In-Person Payments
🇳🇱 Amsterdam, Netherlands
🇿🇦 Remote, South Africa
Senior Director, Product Design - Platform
🇺🇸 Remote, United States
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Cover image source: Adyen
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