H1 2020

Shareholder letter


Continued profitable growth during the COVID-19 pandemic

  • Business resilience due to diversification across verticals, merchant base and geographies

  • Online retail and digital goods volumes accelerated while travel and in-store volumes slowed down following lockdown restrictions

  • EBITDA margin at 50% as we continue to invest in headcount

Building for the long term – people and tech

  • Scaling the team to capitalize on long-term growth opportunities

  • Investing in the platform with 43% of new hires in tech

  • Maintaining the Adyen culture, for now from a distance

Volume contributions across growth pillars

  • Onboarding volume at scale in the enterprise space

  • Continued increase of merchants opting for unified commerce approach

  • Investments in long-term approach to mid-market 

Incremental innovation led by merchants’ needs

  • Ongoing build-out of product suite to address merchants’ needs

  • Expanding the global footprint of the single platform

  • New product features to solve for complexity across the industry

Continued profitable growth amid challenging macroeconomic environment

August 20, 2020

Dear shareholders,

In line with previous periods, we saw continued profitable growth during the first half of 2020. We processed €129.1 billion in the period, up 23% year-on-year. Net revenue for the first half of the year was €279.9 million, up 27% year-on-year, with EBITDA at €140.9 million. Due to the continued diversification of our merchant base across verticals and geographies, the business has proven itself especially resilient in the first half of the year, despite the COVID-19 pandemic. Illustrative to this resilience is how online retail and digital goods volumes accelerated while travel1 and in-store volumes slowed down after global lockdown restrictions went into effect. 

Several historical trends did persist over the past six months, as existing merchants contributed to over 80% of our growth, overall merchant concentration continued to decline, and volume churn was below 1%. 

For the long term, the payments space continues to benefit from several tailwinds including the shift from cash to cashless payments, the increase in cross-border commerce and the blurring of lines between the offline and online shopping channels. In addition to these trends, the reopening of physical stores increases the need for merchants to work with a tech-first payments partner to facilitate contactless shopping experiences.

Due to the COVID-19 pandemic, the day-to-day of many of our merchants changed drastically. Therefore, our focus was to meet their needs in this ever-shifting reality. We have found our product suite to be particularly suited to rapid adaptations during these challenging times. When stores shut down we were able to help merchants move volumes online quickly, and in recent reopening scenarios we have facilitated several contactless in-store set-ups.

1 Airlines, online travel agencies and accommodation

Figure 1

Figure 1

Weekly total processed volume and weekly travel volumes indexed to the first week of January

Figure 2

Figure 2

Weekly retail processed volumes2 indexed to the first week of January

As illustrated in our April Trading Update, we saw a dip in volume in March driven by the pandemic’s impact on the travel and in-store retail verticals. The decline in these volumes stabilized quickly, while online retail and digital goods volumes accelerated after global lockdown restrictions went into effect. Following the publication of the Trading Update, travel volumes have begun to slowly recover (see Figure 1). Simultaneously, the upward trend in online retail volume persisted even though lockdown restrictions eased in some geographies – illustrating how the pandemic has accelerated the already ongoing shift from in-store to online (see Figure 2).

Point-of-sale (POS) processed volume was €11 billion in H1 2020, making up 9% of total processed volume, compared to €11 billion and 11% of total processed volume in H1 2019. Year-on-year growth was limited mainly due to the forced closure of physical stores around the world.

Full-stack volume share (i.e. volume for which we earn both a processing and settlement fee) for H1 2020 was 77%, up from 71% in H1 2019. This is chiefly due to the impact of global lockdown measures on the travel vertical, as airline volume traditionally made up the largest part of our gateway-only volume. The remaining portion of gateway-only volume relates either to markets wherein we do not yet offer local acquiring, or to volumes of payment methods that often sign direct contracts with merchants such as American Express and PayPal.

We continuously invest in building out the platform with merchant-led innovations. Following this approach, we recently expanded our global acquiring footprint to include Malaysia and added key local payment methods including GrabPay in APAC and Amazon Pay in Europe.

Despite the pandemic forcing the shift to a work-from-home environment and some initial logistical challenges such as remote onboarding, we have been able to grow the team at higher pace in H1 2020 than in previous periods. With our intent to capitalize on long term opportunities and scale the team accordingly, we added 266 FTE in the first half. The Adyen team now totals 1,448 FTE.


Volume contributions across growth pillars

In line with previous years, enterprise merchants already on the platform continued to be our largest growth driver both in the form of us winning additional volumes with them and their organic growth. While merchants’ priorities shifted during the pandemic towards themes such as operational resilience and business continuity, their interest in partnering with us remained unchanged. We continued to focus on onboarding volume at scale and were able to add enterprise merchants to the platform with timelines largely unaffected by COVID-19. The addition of leading names such as iFood, Fiverr and Delhaize to the platform underscores the success of our strategy in this space – offering a best-in-class solution to large merchants looking to future-proof their payments.

We partner with our merchants to solve for their complexities and typically win additional volume after successfully doing so. Illustrative of this land-and-expand approach is how our partnership with Zalando evolved over the past year. As a result of our ability to clear potential regulatory hurdles in the form of PSD2 last year, we recently grew the relationship to the point where we now process their European acquiring volume.

In the unified commerce segment, shoppers increasingly expect seamless experiences across sales channels – continuously driving the blurring of lines between offline and online. This longer-term trend was clearly reflected on the platform as we saw the number of merchants adding a second channel continued to increase in H1 2020. Recent additions to our unified commerce portfolio are GoSport and Pandora – underlining the ongoing success of unified commerce in the retail sector.

The day-to-day of merchants in the in-store retail and quick-service restaurant sectors was dominated by lockdown restrictions. We saw that merchants with a unified commerce set-up (i.e. processing both channels with Adyen) were more robust than single-channel merchants, as they were able to efficiently shift volumes to the online channel. With lockdown restrictions easing in some geographies and in-store volumes coming back, we see the surge in online volumes persist. We are ready to help merchants reopen safely, as the full range of our POS devices facilitates contactless payments.


For merchants without the online channel that had to move volumes online quickly, we were able to use Pay by Link, an easy-to-implement integration of our Checkout product, to help them do so and keep sales flowing during global lockdowns. We have seen remarkable uptake from merchants in the high-end retail sector, which has traditionally been very focused on in-store. In this space, Pay by Link was instrumental in providing tailored shopping experiences – now online. 

In mid-market, we continued to invest in our long-term approach of moving into the next-adjacent segment to enterprise. We are investing in our plugin solution, our approach to partnerships and the expansion of our mid-market salesforce. Our value proposition to mid-market merchants is grounded in our ability to future-proof their payments set-up and provide access to the full strength of the Adyen platform via simplified integrations – so they can focus on growing their business. In the current macroeconomic environment, this facilitative approach translated into us helping these merchants navigate challenging times instead of imposing stricter measures across the board.


Incremental innovation on the single platform

We offer our merchants a membership to ongoing innovation and work to facilitate their growth through incremental innovations. In line with this philosophy we improved RevenueAccelerate, our revenue optimization product, with enhanced machine learning capabilities to facilitate higher authorization rates. RevenueAccelerate automatically tests and runs multiple optimizations for every transaction on both the gateway and acquiring levels. This means that even if a merchant sees a card for the first time, we may have seen that card before and thus know how to best treat that transaction – consequently uplifting authorization rates. 


On Adyen Issuing, the first half of the year was momentous as we are now live with the first Adyen Issuing transactions. We are working closely with our pilot merchants to further build out the product and are very excited about potential future applications.

To accommodate for the trend towards stronger authentication across the industry, including but not limited to the PSD2 regulation in Europe, we updated our 3DS2 product with a whitelisting feature. Our merchants’ shoppers are now able to identify our merchants’ brands as trusted beneficiaries, and after an initial two-factor authentication transaction skip the need for future checks. We see whitelisting being significant moving forward as it removes barriers to completing a purchase and have seen impressive first results. 

Equally solving for regulatory complexity is Adyen for Platforms’ hosted onboarding feature, with progressive information verification and checks enabling a smooth sub-seller onboarding process. Facilitating compliance with local requirements with minimal required development work, this feature enables our merchants’ growth into new geographies at a higher pace. This allows for increased scalability of Adyen for Platforms, making the solution more attractive to merchants that run platforms. Additionally, with the expanded roll-out of eBay volumes underway, there has been a strong focus on building out the robustness of our Adyen for Platforms offering.

Building Adyen for the long term

We have always built Adyen for the long term, and as such continuously invest in the resilience of the single platform. With 43% of new hires in tech in H1 2020, this is mirrored in how we are building the team. We are a tech company, redefining payments. In addition, to best support our merchants’ growth across geographies, 42% of new hires were in commercial roles.

To capitalize on long-term growth opportunities, we added 266 FTE to the team in the first half of the year. While initially slowed by some logistical challenges in Q2, such as remote onboarding and obtaining visas for international hires, we were able to keep up our hiring pace and expect to continue this in the near future. We continued to invest in new offices to facilitate for the team’s future growth – one in Warsaw and a second larger office in Amsterdam.

Figure 3

Figure 3

Adyen’s H1 2020 FTE growth

To ensure the absorption of new hires into the team during a work-from-home setting, our onboarding process and the company introduction sessions moved online swiftly in March. Small groups of new joiners now meet at the office where possible – to further smoothen the onboarding process and get to know the Adyen culture.  

While our hiring pace continued to accelerate, we kept a strong focus on maintaining our culture. Senior management continues to invest significant time in the hiring and the onboarding process, with every new hire meeting at least one board member prior to joining the team.

Even though we are fully equipped to work from home and have not experienced a slowdown in scaling or onboarding, we look forward to going back to the office when safe. 

The Adyen team totaled 1,448 FTE as of June 30, 2020. 


Discussion of financial results

Solid volume growth mainly from merchants already on the platform

We processed €129.1 billion in the period, up 23% year-on-year. This growth came mainly from the increased volumes of enterprise merchants already on the platform. 

Point-of-sale processed volume was €11.0 billion and made up 9% of total processed volume in H1 2020, compared to €11.0 billion and 11% in H1 2019. Year-on-year growth was limited as global lockdown restrictions strongly affected in-store volume.

H1 2020 Income statement. All amounts in EUR thousands unless otherwise stated

EBITDA – Continued profitability while scaling Adyen for the long term

EBITDA was €140.9 million in H1 2020, up 12% from €125.8 million in H1 2019.

EBITDA margin was 50%, compared to 57% in H1 2019. This decrease is a result of our enhanced hiring pace, as growth in employee benefits exceeded net revenue growth in the first half of the year4. 

Net income impacted by other financial results 

Net income in the first half of 2020 was €78.4 million, down 15% from €92.5 million in the first half of 2019.

This decrease is primarily driven by the movement in other financial results, largely caused by the increase in the derivative financial instrument as a result of the increase in the Adyen share price in H1 2020.

Steady free cash flow conversion

Free cash flow was €129.3 million in the first half of 2020, up 15% from €112.4 million in the first half of 2019. We have now excluded lease payments from our free cash flow, as the costs associated are not included in EBITDA due to the IFRS 16 accounting change.

Free cash flow conversion ratio ((EBITDA-CapEx-Lease payments)/EBITDA) was 92% in the first half of 2020, up from 89% in H1 20195.  

Low CapEx due to operational scalability

Capital expenditures were 2% of net revenue in H1 2020, down from 4% of net revenue in H1 2019. This falls within our objective to maintain capital expenditure levels below 5% of net revenue due to the low cost of operating the single platform.

Financial objectives 

We have set the following financial objectives, which remain unchanged from our IPO prospectus.

Net revenue growth: We aim to continue to grow net revenue and achieve a CAGR between the mid-twenties and low-thirties in the medium term by executing our sales strategy.

EBITDA margin: We aim to improve EBITDA margin, and expect this margin to benefit from our operational leverage going forward and increase to levels above 55% in the long-term.

Capital expenditure: We aim to maintain a sustainable capital expenditure level of up to 5% of our net revenue.

We will host our earnings call at 15.00 CEST (09.00 EDT) today (August 20) to discuss these results.

To listen to a live audio webcast please visit our Investor Relations page. A recording will be available on the website following the call.

As an addendum to this letter, please find our H1 2020 financial statements and three one-page updates on our growth pillars (Enterprise, Unified commerce and Mid-market).


Pieter van der Does


Ingo Uytdehaage


4 Due to the impact of IFRS 16, EBITDA margin is 3% higher than it would have been before the adoption of this accounting standard.

5 With lease payments included in free cash flow, H1 2020 free cash flow conversion ratio would have been 96%, compared to a H1 2019 free cash flow conversion of 93%.


In line with previous periods, existing enterprise merchants contributed to the majority of our growth. We continued to win additional geographies, sales channels and product lines with existing enterprise merchants.

Enterprise volume in EUR billions

Unified commerce

The day-to-day of many merchants changed severely due to the pandemic. We focused on helping them, by moving volumes online swiftly. In reopening scenarios, we are ready to help merchants open up safely – all our POS devices facilitate contactless.


Mid Market

We continue to invest in our long-term approach of moving into the next-adjacent segment to enterprise. We provide these merchants with access to the full strength of the Adyen platform via simplified integrations, so they can focus on growing their business.

Interim Condensed Consolidated Financial Statements H1 2020 Adyen N.V.
H1 2020 Adyen N.V

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