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June 13, 2018, 8:36 a.m. EDT

Adyen IPO: 5 things to know about the PayPal rival

The company is valued at nearly $14 billion

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By Emily Bary


Simon Dawson/Bloomberg
Pieter van der Does, chief executive of Adyen.

As the recent tech IPO boom bleeds into payments, European financial-technology giant Adyen NV has gotten in on the action.

The payment processor went public Wednesday in Europe’s largest tech offering of 2018. Shares priced at 240 euros and doubled early in the session, before settling near €431. The offering was “multiple times oversubscribed,” according to Adyen, which now has a market value of €12.7 billion, or $14.9 billion. Adyen said the offering size was €849 million, or €947 million if the over-allotment options are exercised.

Adyen /zigman2/quotes/205351021/delayed NL:ADYEN -0.59%  is sometimes likened to PayPal, albeit on a smaller scale. PayPal recently crossed back over the $100-billion market-cap threshold and operates in a variety of business areas, including peer-to-peer payments through its popular Venmo platform.

Don’t miss: PayPal’s iZettle purchase is likely to be followed by a lot more fintech M&A

While Adyen had a relatively low profile in the U.S. for much of its history, a recent deal put the company on the radar, at least for investors in PayPal Holdings Inc. /zigman2/quotes/208054269/composite PYPL -0.29% . EBay Inc. /zigman2/quotes/204653455/composite EBAY -2.66%  announced earlier this year that Adyen would soon become its “primary partner” for payments efforts, an arrangement that will relegate PayPal to a lesser role on the eBay site.

That said, Adyen has been racking up high-profile customers for years, and it currently processes payments for the likes of Uber Technologies Inc. and Netflix Inc. /zigman2/quotes/202353025/composite NFLX -0.27% .

Here are five things to know about Adyen ahead of its IPO.

Growing revenues, plus profits

Like most tech companies going public these days, Adyen has been posting solid revenue growth. It boosted revenue by 54%, to €1 billion, in the latest quarter.

Unlike a lot of its tech peers, however, the company has a history of profitability. Adyen recorded €71.3 million in net income in 2017, though that was down from €97.2 million in 2016.

Susquehanna Financial Group’s Jamie Friedman said recently that Adyen has better adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) margins than many of its rivals. “Our checks suggest that Adyen’s platform is modern and fully integrated, meaning more efficient and better customer experience,” he wrote.

An impressive customer base

American consumers might be unfamiliar with Adyen’s name, but they’ve likely come across the company while making purchases from internet giants. Adyen lists Uber, Netflix, Etsy Inc. /zigman2/quotes/202790087/composite ETSY -3.40% , Spotify Technology SA /zigman2/quotes/207488629/composite SPOT -1.71% and Microsoft Corp.-owned /zigman2/quotes/207732364/composite MSFT +2.11%  LinkedIn as customers.

“Adyen primarily targets large global merchants,” wrote Friedman. “Based on their near-triple-digit growth rates — and their competitive case studies and commentary — Adyen appears to be competing effectively against companies such as PayPal, Global Payments Inc. /zigman2/quotes/201234787/composite GPN -2.35% and WorldPay Inc. .”

Lately the company has been making a push into Asia, according to Rohit Kulkarni, head of research at SharesPost. He cautioned that the payments landscape in Asia is different than it is in Europe and the U.S., as credit-card usage isn’t as prevalent.

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2,446.00
-14.50 -0.59%
Volume: 19,299
Nov. 30, 2021 10:11a
P/E Ratio
203.76
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N/A
Market Cap
€73.92 billion
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€2.08M
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/zigman2/quotes/208054269/composite
US : U.S.: Nasdaq
$ 187.24
-0.55 -0.29%
Volume: 16.31M
Nov. 29, 2021 4:00p
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45.10
Dividend Yield
N/A
Market Cap
$220.64 billion
Rev. per Employee
$808,830
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/zigman2/quotes/204653455/composite
US : U.S.: Nasdaq
$ 70.37
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1.02%
Market Cap
$45.37 billion
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/zigman2/quotes/202353025/composite
US : U.S.: Nasdaq
$ 663.84
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P/E Ratio
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N/A
Market Cap
$294.85 billion
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/zigman2/quotes/202790087/composite
US : U.S.: Nasdaq
$ 281.48
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P/E Ratio
83.06
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N/A
Market Cap
$36.94 billion
Rev. per Employee
$1.22M
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/zigman2/quotes/207488629/composite
US : U.S.: NYSE
$ 246.60
-4.29 -1.71%
Volume: 1.35M
Nov. 29, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$47.10 billion
Rev. per Employee
N/A
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/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 336.63
+6.95 +2.11%
Volume: 28.56M
Nov. 29, 2021 4:00p
P/E Ratio
37.63
Dividend Yield
0.74%
Market Cap
$2475.23 billion
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$928,663
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/zigman2/quotes/201234787/composite
US : U.S.: NYSE
$ 120.26
-2.90 -2.35%
Volume: 3.09M
Nov. 29, 2021 4:00p
P/E Ratio
37.90
Dividend Yield
0.83%
Market Cap
$35.73 billion
Rev. per Employee
$309,315
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