Adyen

Thesis

• The business: a bank-licensed payment processor that acquires and settles card and local payments for large merchants and platforms, on a global in-house platform, onshore and in-store.
• Unit economics:
  • A small cut of every euro processed: a settlement mark-up plus a fixed per-transaction processing fee, with add-ons (risk, FX, terminals, accounts, issuing, capital) on top.
  • High operating leverage (cost dominated by headcount).
  • High cash conversion.
  • Negative working capital (merchant funds payable) -> finance income driven by rates.
  • Downside mechanism: Enterprise merchants using a downturn to renegotiate tiers and move volume, more than falling transaction volume.
• Moat:
  • One codebase across all regions and channels.
  • Own banking licences and direct scheme/local-rail connections.
  • Share-of-wallet gains that compound over a decade.
  • Scale and lean cost structure.
• Earnings drivers:
  • Share of wallet with existing merchants. High recurring revenue and low churn.
  • Platforms and embedded finance.
  • Unified Commerce (offline commerce is stickier).
  • Beyond-payment products and M&A.
  • Operating leverage on a largely fixed tech and people base.
  • E-commerce and card adoption (shared by all acquirers).
• Risks:
  • Large merchants multi-home away faster than new products offset tiering.
  • Stripe captures the platform and AI native segment.
• What to watch:
  • Take-rate drift from volume tiering;
  • whether EBITDA margin reaches the >55% 2028 target while funding Talon.One/Orb;
  • relative growth versus Stripe and Checkout.com.
• Questions:
  • TAM at durable margin?

Reports

• Adyen-Business-Overview
• Adyen-Valuation-Premium-Check
• Adyen vs Stripe Peer Duel 2026 09 17
• Adyen_vs_Stripe_Peer_Duel_2026-09-17
• Adyen-vs-AXP-Peer-Duel
• Adyen-vs-Visa-Peer-Duel
• ADYEN_Payments_Sector_Overview_2026-09-17
• merchant-payments-learning-packet

Reference

Forward PE and EPS chart some thoughts on Adyen

• Competition:
  • Disintermediation and aggregation: gateways provide choices across acquirers. Orchestration platforms provide choices across gateways and PSPs.
  • Paypal's transaction profits as a share of volumes has been declining since 2020 as margin-dilutive unbranded volumes fueled by aggressive pricing have outpaced branded.
  • North America has been a extremely competitive market, with integrated players like JPMorgan Chase.