Adyen – 22x FCF for a Best-in-Class FinTech Stock growing at 20%+
Here's why last week's 27% sell-off is a gift to investors, and why I remain bullish!
Last week, Dutch fintech company Adyen – one of 15 stocks in my personal portfolio – released its Q4 and FY25 results and, safe to say, it didn’t please investors, with shares on the Amsterdam exchange ending the week 27% lower and at their lowest level since November 2023.
I certainly agree that Adyen didn’t deliver the most brilliant report, especially regarding the headline numbers, but the market reaction struck me as disproportionate to the actual results. The results were not a deterioration in the business, but rather a continuation of trends already visible in prior quarters: normalization in certain consumer-driven volumes, a small revenue miss, and cautious guidance. None of these meaningfully alters the company's long-term trajectory.
In fact, beneath the surface, the core drivers remain intact. Enterprise adoption continues, wallet share keeps expanding, margins are improving, and cash generation stays exceptional. The disconnect between optics and underlying performance is precisely what makes this quarter interesting: the stock sold off as if growth had structurally weakened, while the fundamentals suggest little has changed.
So, time to revisit this best-in-class business!
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Adyen delivered an unsurprising quarter
Before I delve into the H2 and 2025 numbers, let me provide a little bit of background on Adyen’s business model and strategic focus for those of you not entirely familiar with it, as Adyen is far from a standard Fintech.
You see, Adyen was built around a simple idea: instead of stitching together multiple legacy providers for acquiring, gateways, fraud tools, and point-of-sale systems, merchants should be able to run their entire payments stack on one unified platform.
As a result, Adyen doesn’t just process payments like a typical gateway; it replaces the payments infrastructure behind the scenes. The entire flow from gateway, risk engine, acquiring, settlement, to reporting runs inside a single global codebase, allowing large enterprises to manage online, in-store, and international payments through one connection and one transaction history.
For companies operating across dozens of countries, this removes enormous operational complexity. Instead of managing multiple contracts, integrations, reconciliation files, and settlement currencies, expansion becomes largely a matter of configuration rather than new integration work. A merchant connects once and can activate new regions and payment methods, while finance teams receive standardized reporting across all markets.
This architecture also improves performance, not just convenience. Because Adyen controls the full transaction lifecycle, it can dynamically route payments to the acquiring connection with the highest probability of approval and apply data-driven risk decisions in real time. The result is higher authorization rates, less fraud, and fewer failed payments.
During the latest Black Friday and Cyber Monday, Adyen processed 837 million transactions across online and in-store channels, maintained 99.9999% uptime, and identified nearly 95% of approximately 400 million unique shoppers in real time.
That is unmatched.
That matters particularly for Adyen’s target customers: large enterprises and fast-growing digital platforms such as marketplaces, software platforms, and global retailers. For these businesses, payments are not merely a checkout feature but a core operating layer embedded into their product. Even small improvements in payment performance can translate into tens of millions in incremental revenue annually.
Adyen’s go-to-market reinforces this positioning. The company focuses on fewer, larger customers and invests heavily during implementation, often replacing the entire payments stack rather than relying on a single vendor. Integration can take months, but once live, switching would require rebuilding risk logic, reporting, tokenization, and in-store systems simultaneously, creating long-term partnerships and high retention as customers scale globally.
More importantly, once integrated, merchants typically expand their usage over time, adding new regions, channels, and financial workflows onto the same infrastructure. Growth, therefore, often comes less from constantly winning new customers and more from existing customers routing a larger share of their global payment volume through Adyen.
For reference, Adyen states that customers who are on the platform for 3-7 years have, on average, 20% of their transaction wallet with Adyen. However, this rises to 30% after 8-11 years and over 40% after more than 12 years, clearly highlighting the flywheel of wallet-share growth.
This is an important consideration. It means Adyen’s growth is largely tied to the success and expansion of its customers, making revenue more dependent on deepening relationships than on continuously replacing competitors — a much more favorable dynamic, as growth increasingly comes from existing integrations rather than new sales.
This was no different in the second half of 2025. Let’s delve into the numbers.
Adyen reported H2 processed volume of €745 billion, up 12% YoY, which isn’t that impressive for a high-growth fintech. However, this includes a notable volume drag from a single large customer, Cash App. This was already a headwind in prior quarters, and excluding Cash App, volume growth would be much stronger at 19%.
During the pandemic and crypto boom, Cash App generated enormous payment activity, lots of small peer-to-peer transfers and card transactions, which inflated Adyen’s processed volume. That growth has now normalized as user growth has slowed, crypto activity has cooled, and consumers have become more cautious about spending.
However, this is not as bad as it might seem. You see, Cash App produces huge volumes but relatively little revenue for Adyen. So, when its activity slows, total processed volume growth declines noticeably, even as the economically important parts of Adyen’s business, large enterprise merchants, grow.
In other words, the headline volume looks weaker, but the underlying business quality is largely unchanged – this is simply a loss in very low-margin volume, a normalization in consumer wallet activity and mix, which is why Adyen continues to downplay it, and analysts don’t worry over it.
It is better to focus on adjusted volumes, and, as shown below, they remain strong, although they are slowing amid more cautious consumer spending and the same correction impacting Cash App revenues. However, management indicates that the performance for core enterprise merchants remains healthy. Again, this is still more of a mix normalization, posing a near-term headwind.
As expected, growth continues to be driven mostly by wallet-share gains.
This brought FY25 volume to $1.39 trillion, up 8% on a reported basis but 21% excluding Cash App.
However, as these low-margin volumes gradually fall, Adyen’s total take rate improves. The H2 take rate was 17.1 bps, up from 16.2 bps one year earlier and 16.8 bps in H1, so notable progress there, which largely offsets the volume headwind, meaning revenue isn’t impacted as much.
H2 revenue was €1.27 billion, up 17% YoY or 21% when adjusted for the weak dollar, which I would argue better reflects actual performance. This constant currency (CC) growth was in line with H1, as guided, but was still short of consensus estimates by about 2%.
As shown below, Adyen’s revenue growth has been fairly stable in the low to mid-20s over the last three years.
For FY25, this brought the revenue total to €2.36 billion, up 21% in constant currency or 18% on a reported basis, falling just short of Wall Street’s estimates and €60 million short of my own forecast.
Breaking down performance by channel, let’s start with digital, which was the slowest-growing in H2 but the largest revenue contributor. H2 revenue hit €696 million, up 10% in constant currency, with volumes up 11% YoY (excluding Cash App). Slow growth here was partly driven by customers shifting channels to Unified Commerce (UC) as more digital-native customers add physical channels, so this slower growth isn’t unexpected.
Moving to UC, revenue here was up 33% YoY (CC) to €431 million, with processed volume up 30% YoY. This continued to be driven by strong growth in a handful of sectors, including retail, hospitality, entertainment, and food & beverage, where merchants see high transaction volumes across both online and in-person channels. This includes customers such as LVMH and Starbucks, but the segment is also expanding into more complex industries, such as airlines, with payments onboard, during booking, and at the airport. Here is a quote from management laying out how valuable the Adyen platform can be for these enterprises:
“In an industry long constrained by fragmented and outdated technology, our ability to operate a true single global platform allows airlines to simplify operations, improve resilience, and reach travelers consistently across regions. Recent wins such as Lufthansa and Vietnam Airlines rely on this unified approach to modernize payment infrastructure and support global scale.”
I expect UC to remain one of Adyen’s growth engines in the coming years, as more sectors and customers discover the value of the Adyen platform and shift more volume to Adyen, especially as more digital-native customers shift to physical channels. Take Uber’s recent launch of in-person booking and payment options at airports or Starbucks’ growing shift to digital.
Adyen now counts 569 UC customers processing in multiple regions, up 22% YoY, and UC customers processing across channels at scale total 467, up 50% YoY, signaling strong growth and significant potential to capture more volumes.
Finally, there is platforms, which is currently Adyen’s smallest segment but by far its fastest growing and most promising one. Platforms revenue reached €143 million in H2, up 49% YoY (CC), supported by strong underlying momentum across the SaaS segment.
For reference, Adyen’s Platforms segment serves companies that handle payments on behalf of others rather than just accepting payments for themselves. These include marketplaces, software platforms, and on-demand apps that need to collect payments from customers, split them among multiple parties, and disburse funds to sellers, drivers, or creators. Instead of a single payment flow, Adyen becomes the financial backbone of the ecosystem, onboarding users, processing transactions, managing balances, and enabling payouts, cards, and accounts.
Typical examples include platforms such as Uber, Etsy, eBay, Fresha, and Mindbody, where thousands of businesses operate within a single network, and every transaction flows through the same infrastructure.
H2 processed volume grew 28% YoY, or 54% excluding eBay, which is a large customer with slow volume growth. This reflects very strong momentum. The number of platform customers processing more than €1 billion was up 11% YoY to 31, while the number of active business customers on Platforms grew to 220K, up from 145K a year ago.
This signals that while Adyen isn’t aggressive about acquiring new platforms, its existing platforms rapidly grow their wallet share.
Given these dynamics and the room for growth, Platforms will remain Adyen’s main growth engine in the years ahead, as it scales across ecosystems rather than individual companies. When a retailer grows, payment volume rises roughly in line with its own sales. But when a platform grows, it adds new sellers, drivers, or businesses, each of which generates its own payment activity. One integration, therefore, expands into thousands of merchants over time, allowing Adyen to grow without repeatedly signing new customers.
In addition, platforms handle multiple financial flows rather than a single checkout transaction. Beyond accepting payments, they collect commissions, split funds, manage balances, send payouts, and sometimes offer cards or accounts. As the platform expands into new countries or services, all of these flows grow simultaneously, causing payment volume and revenue to compound faster than in traditional enterprise commerce.
So, platforms is definitely Adyen’s most compelling market, and one that perfectly fits its architecture.
Finally, let’s break down Adyen’s H2 performance by region. EMEA remained Adyen’s largest region by revenue, accounting for 57%, and delivered 17% YoY revenue growth in H2, driven by increased wallet share, partially offset by slower market volume growth, resulting in a slight slowdown in revenue growth.
Positively, the performance in North America, accounting for 27% of revenue, was notably strong, growing 26% YoY (CC), supported by impressive share of wallet gains, even as volumes from APAC-headquartered online retailers in the U.S. fell due to tariffs.
Finally, APAC grew 22% YoY (CC) thanks to deepening relationships, now accounting for 10% of revenue, and LatAm grew revenue by 37% YoY (CC) thanks to wallet-share gains among existing international customers. The region now accounts for 6% of revenue.
No huge surprises overall, with a slowdown in Europe offset by strength in North America.
On that note, let’s move to the P&L!
Adyen reported an H2 EBITDA of €702 million, up 23% YoY, reflecting an EBITDA margin of 55%, up roughly 200 bps YoY and the highest level since the first half of 2022.
For FY25, this brought EBITDA to €1.25 billion, up 26% YoY and reflecting a 53% EBITDA margin.
While the EBITDA margin hit a 3.5-year high in H2, this still reflects deliberate investments in product and infrastructure. Primarily, Adyen continues to invest in headcount, adding another 203 team members in H2, and it doesn’t plan to slow down. As a result, operating expenses in H2 totaled €644 million, up 12% YoY, yet still growing more slowly than revenue.
Really, the only thing holding back margins is this aggressive headcount growth. As shown below, personnel costs account for 75% of total expenses, with Adyen operating extremely lean in all other areas, thanks to its unique architecture and a go-to-market strategy that requires minimal investment in sales and marketing.
And despite rapid headcount growth, the company is consistently improving efficiency. Revenue per employee has consistently trended upward, as shown below, signaling that Adyen continues to grow very efficiently.
Overall expenses continue to underperform revenue, driving steady EBITDA growth and margin expansion. Once Adyen sees room to slow headcount growth, it can easily expand its EBITDA margin to 60-65% over time.
Further down the line, Adyen reported an H2 net income of €582 million, up 13% YoY, and FY25 net income was €1.06 billion, up 15% YoY, both growing more slowly than EBITDA, reflecting the higher interest rate environment.
For H2, this translated into an EPS of €18.40, up from €16.49 in the prior year.
Finally, Capex was steady at 5% of revenue, allowing Adyen to deliver a very strong H2 FCF of €607 million, up 22% YoY, and a FY25 FCF of €1.08 billion, up 26% YoY, and reflecting a sublime FY25 FCF margin of 46%.
This allowed Adyen to end the year with a very strong balance sheet. It now holds nearly €11 billion in cash, but part of this is attributable to retained customer earnings. Still, its cash position remains strong at nearly €6 billion, and this stands against practically zero debt, leaving Adyen with a bulletproof balance sheet with ample cash. Given its very low expenses and impressive FCF margin, this is a business in excellent financial health.
And Adyen knows how to use its equity, with an ROE consistently above 20%, sitting at 22% over the last twelve months.
Given the strength of the balance sheet and Adyen’s low current share price, I would favor some share buybacks, but Adyen's management doesn’t appear to plan to pursue them, preferring financial flexibility for investments in the coming years.
In conclusion, I think Adyen delivered a solid quarter. Yes, the company may have fallen short on growth, but Adyen shareholders should recognize that its performance should be viewed over a longer time frame, not as a €60 million miss in a 6-month period.
Meanwhile, Adyen continues to deepen customer relationships, shows promising underlying results, expands margins, and maintains its highly efficient business model, delivering strong cash flows. I am quite pleased with this performance.
With that, let’s move to the outlook!
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Outlook & Valuation
As always, let’s start with guidance.
