Adyen N.V.

Hi everyone, and thank you for joining our business update call today. My name is Josh Massa, Head of Investor Relations, and I'm joined today by our CFO, Ethan Tandowski. Building on our investor day last November, we are happy to keep the dialogue open with more regular status updates. The idea of today's short call is to add some color to the progress we've made in the business since our H2 publication in February. we'll start with a brief q1 overview from ethan followed by a live q a the call will be limited to 30 minutes so we ask you to please keep your questions to a maximum of two per person so we can take questions from as many of you as possible following the call the ir team will be of course available to respond to any outstanding queries As always, we will be using the Q&A functionality in Zoom and not the raised hand function. And when submitting your questions, please share your name and the firm you represent. Okay, let's get started. Ethan, over to you for the recap.

Thanks, Josh, and thanks, everyone, for being here. I'll first recap the past few months by the numbers and then provide some additional voiceover. To start, process volume landed at 297.8 billion euros, up 46% year on year. Within this, digital volumes were up 51%, unified commerce volumes grew 30%, and our platforms pillar grew at 55%. Our net revenue was 438 million euros, up 21%. Our growth rate would also have been 21% on a constant currency basis. Finally, we added 26 people to the team net in the first three months of the year. So now that we've gone through the numbers of the past few months, let me provide a bit more commentary. Over the course of 2023, we shared updated financial objectives that more clearly specify our expectations for the coming three years. These reflect the growth potential and operating leverage inherent to our single platform and aim to shed light on how we're tracking against our long-term ambitions. As it pertains to net revenue, our expectation is to grow between the low 20s and high 20s percent on an annual basis up to and including 2026. We further shared that we expected to be at the lower end of this guidance range in 2024. Thus far, our net revenue performance is consistent with this, and we continue to expect our annual growth for 2024 to be at the low end of that range. To give some additional color, following the same trend as in the second half of 2023, North America was again our fastest growing region thus far. Next, when you look at the recent process volume acceleration, there's a key driver we can point to. Namely, it's that we continued growing with our existing customers. Our land and expand strategy remains core to our commercial approach. and over 80% of our growth came from our existing base once again. One proof point of this strategy was our volume growth with an existing digital customer, which greatly ramped up in H2 2023 and which we discussed at that time. While this customer had a significant volume impact, we also saw acceleration with other large volume enterprise businesses. Their collective expansion contribute to that 46% year on year volume increase. As we reiterated in H2, substantial wallet share growth with our customers undoubtedly drives value for our business. Of course, when we grow faster with our largest volume customers, a natural outcome may be periods in which processed volume outpaces net revenue. This dynamic gives us the opportunity to be a strategic enabler for enterprise businesses of varying sizes while pricing for the outside value and functionality we bring. It's why we consciously manage on net revenue rather than on take rate. And we don't manage on take rate because in enterprise partnerships, absolute net revenue impact and profitability are what's most important to us. Finally, I'll spend a moment on our global team. Our strategy remains unchanged and we continue to expect to bring on a couple of hundred net new joiners over the course of 2024. As you know, as part of our long term investment, we did a lot of hiring over the past two years. It's important to remember that we are still annualizing the hires made in 2023. As a reference point, we ended March 2024 with 15% more employees than at this time last year. For that reason, we expect that the EBITDA margin should expand year on year on a full year basis, albeit it will be more limited than in the following years. When we closed our significant two year investment period in H2 last year, we plan to continue to make strategic hiring investments, albeit at a much lower rate. And so far this year, we prioritize bringing on senior leaders who will play an essential part in our hiring process for the rest of the year. Our hires thus far were more weighted towards commercial roles. While we've been focused on growing the commercial organization, I want to stress that it takes time to see new customer wins driven by our expanded team. These are investments we make for the long term. To wrap up, we feel we're in a solid position three months into the year. We're confident that the products we're building with our expanded tech team are positioning us well in the industry. Combining this with our commercial team increasing in both size and Augent experience, we believe our investments are on track to deliver growing value to both current and future customers.

Thank you for that commentary, Ethan. That was very helpful. We'll now transition to our Q&A segment. As always, we ask that you please submit your question with the name and firm you represent. Thank you. Thank you. The first question comes from James Goodman at Barclays. So James, please go ahead and unmute yourself and ask your question. James, can you hear us?