Adyen, King of Payments
2026 Investment Thesis Update
Company: Adyen (AMS: ADYEN / US: ADYEY)
Market Cap: €28.5 bn Euro
EV: €24 bn Euro
Float: 89.5%
Net Cash: €10.5 bn Euro (€3.8 bn net of customer funds)
Return on Equity: 25%
Organic Growth: 20-22%
Addressable market to target: ~98%
Normalized earnings multiple: ~14x
Normalized PEG: ~0.7x
DISCLAIMER & DISCLOSURE: The author is invested in Adyen at the date of publication but that may change. The views expressed are those of the author and may without notice. The author has no duty or obligation to update this information. Some content is sourced from third parties believed to be reliable, but accuracy is not guaranteed. Forward-looking statements involve assumptions, risks, and uncertainties, meaning actual outcomes may differ from those envisaged in this analysis. Past performance is not indicative of future results. All investments carry risk, including financial loss. This analysis is for educational purposes only and does not constitute investment advice or recommendations of any kind. Conduct your own research and seek professional advice before investing.
1. Introduction: The Disconnect
Back in 2023, I published an investment thesis on Adyen, one of the world’s leading payments businesses.
Since then, the stock has taken investors on a round trip. Shares more than doubled after the thesis was published, only to surrender those gains and trade close to where they started.
What’s striking is that the business itself has continued to execute exceptionally well.
Over the past three years, Adyen has expanded its product offering, deepened customer relationships, increased profitability, and processed record payment volumes.
In FY 2025, Total Processed Volume (TPV) reached €1.39 trillion.
At first glance, the chart above may cause you to conclude that the TPV growth rate is slowing. Yet a closer look suggests otherwise.
Several years ago, Adyen replaced PayPal as eBay’s payment processor. While eBay remains a significant customer, its own growth has slowed amid increasing competition from alternative online marketplaces. The resulting decline in eBay volumes temporarily weighed on Adyen’s TPV rates.
That headwind has now largely washed through the numbers. In Q1 2026, Adyen processed €382 billion of payment volume, up 21% year-over-year
Net revenue reached €2.36 billion in 2025, growing 21% on a constant-currency basis, while EBITDA rose to €1.25 billion, producing a remarkable 53% margin.
These are not the numbers of a business in decline.
Yet investor sentiment has cooled considerably.
There are several possible causes.
Growth has certainly moderated from the extraordinary levels seen during the pandemic; competition has intensified; several senior executives have departed; and, questions have emerged around capital allocation and the company’s growing cash balance.
As a result, the market appears increasingly convinced that Adyen’s best years are behind it.
The disconnect between Adyen’s business performance and Mr Market’s perception of the business, as reflected in its valuation, is the central question this update seeks to address.
More importantly, it raises the question every investor should care about: does today’s share price represent an attractive entry opportunity?
The original thesis explored Adyen’s business model in detail, so I won’t repeat every aspect here. Instead, this update focuses on what has changed, what hasn’t, and whether the current valuation properly reflects the quality of the underlying business.
If you’re unfamiliar with the company, I’d encourage you to read the original 2023 analysis for the full story.
The debate today is no longer whether Adyen is a high-quality company. That question was settled years ago.
Instead, investors are debating how fast the business can grow from here, whether management is allocating capital optimally, and how emerging developments such as AI and agentic commerce may reshape the payments landscape.
Those are important questions.
But they are very different from questioning the durability of the franchise itself.
For patient investors willing to look beyond the next few quarters, Adyen may offer one of the more attractive risk-reward opportunities it has presented in years.
2. What Has Played Out as Expected since 2023?
The original investment thesis rested on four pillars: Adyen’s unified single-platform architecture, its highly sticky customer relationships, its unusually long-term focused management culture, and the enormous global payments market it serves.
Three years later, those pillars remain firmly intact.
The company has historically avoided empire-building acquisitions, excessive stock-based compensation, aggressive financial engineering, and the quarterly earnings management common across much of the technology sector.
The strongest part of the original thesis was its technology.
Adyen was founded in 2006 on a simple observation: the global payments industry was built on fragmented legacy infrastructure.
Most payment providers evolved through acquisitions, integrations, and decades of technological patchwork. The result was a collection of disconnected systems operating behind a unified brand.
Adyen took the opposite approach.
Rather than stitching together existing infrastructure, it built a single platform from scratch that combines payment gateway, processing, risk management, acquiring, settlement, banking services, and financial products within one code base.
Nearly twenty years later, that architectural decision remains the foundation of the business.
Every transaction flows through the same system. As a result, Adyen has a complete visibility of payment activity across channels, geographies, payment methods, and customer interactions. This allows merchants to achieve higher authorisation rates, lower fraud losses, fewer failed transactions, and ultimately higher sales conversion.
For large enterprises, even a modest improvement in checkout performance can be worth millions of euros in additional revenue.
This is why payments are often misunderstood.
Merchants (Adyen’s customers) rarely choose providers based solely on cost. They choose providers based on reliability, performance, scalability, and the ability to maximise transaction success.
When Adyen provides more value to its customers, there is more for it to capture for itself.
The next strength of the business flows from the first. It maintains high rates of customer retention and merchant relationships remain exceptionally strong.
Adyen’s business is all about optimizing volumes, not margins. Adyen retains a nominal fee (~17 basis points) of every transaction it processes. Some competitors may be marginally cheaper, but for most merchants, the risk of a dip in revenues, due to lower sales conversion rates or higher levels of fraud, would far outweigh any savings from switching providers.
As a result, Adyen’s product is exceptionally sticky.
Approximately 80% of Adyen’s growth still comes from existing customers. Merchants frequently begin with online payments before adopting Unified Commerce, embedded finance, treasury products, issuing capabilities, or banking services. Each additional product increases switching costs and embeds Adyen more deeply within daily operations.
Layered on top of these operational advantages is culture. Management continues to think in years rather than quarters and does things differently to most. This reflects a culture that prioritises long-term decision-making over short-term optimisation.
For instance, even after reaching almost 5,000 employees, every prospective hire still interviews with one of the company’s six board members before joining to ensure cultural alignment. Attention to detail is everything.
Finally, the target addressable market opportunity for Adyen remains enormous; the runway is long. After nearly two decades of faultless execution, the company remains early in its growth journey.
In short, the core thesis remains largely unchanged.
3. What I Didn’t Anticipate Back in 2023
While the original thesis has broadly played out as expected, several developments emerged that were either underestimated or not anticipated at all.
I shall call them out in this section, but then explore each in more detail later.
The first was growth normalisation.
During the pandemic, digital commerce accelerated dramatically and Adyen routinely delivered revenue growth exceeding 40%. Those growth rates were never sustainable.
Today, management is guiding for 20% to 22% growth in 2026. While still impressive for a company generating more than €2 billion of annual revenue, it represents a fundamentally different phase of the company’s evolution.
Adyen is no longer transitioning from start-up to scale. It is transitioning from hyper-growth to durable growth.
The second surprise was executive turnover.
A series of senior leaders departed between 2025 and 2026, including the CFO, the President of North America, and several senior sales and finance executives.
While operational performance remains strong and management has consistently described these departures as personal decisions rather than strategic disagreements, the volume of turnover has understandably raised investor concerns, particularly given the importance of North America as a growth market.
The third development was capital allocation.
Historically, investors largely ignored Adyen’s cash balance because growth opportunities were abundant.
Today, the company holds approximately €3.8 billion of excess net cash, carries no long-term debt, and continues generating significant free cash flow.
As the balance sheet has grown, investors have increasingly debated whether management should pursue acquisitions, initiate buybacks, or continue accumulating capital.
The fourth surprise was Adyen’s decision to pursue its first acquisition.
For most of its history, management was almost philosophically opposed to M&A. That changed in 2026 with the €750 million Euro acquisition of Talon.One GmbH, a loyalty and promotional software provider.
The deal is strategically important because it moves Adyen beyond payment optimisation and further into customer engagement, promotions, and commerce enablement.
Rather than simply processing transactions, Adyen is increasingly positioning itself to influence whether those transactions occur in the first place.
This acquisition was followed by a June 2026 announcement that the company was making a second acquisition, Orb, a San Fransisco based enterprise billing platform for $335m USD.
It appears that Adyen may become a serial acquirer.
The final development is that agentic commerce emerged as a serious strategic discussion.
The prospect of AI agents increasingly conducting transactions on behalf of consumers introduces both opportunities and risks for payment providers.
While the economic impact remains negligible today, the long-term implications will be significant.
Interestingly, the fragmented nature of emerging agentic commerce protocols may ultimately reinforce Adyen’s value proposition. Just as the company simplified a fragmented payments ecosystem, it may become a protocol-agnostic infrastructure layer sitting beneath multiple AI commerce standards.
Taken together, these developments explain much of the market’s uncertainty. For some it is the ‘too hard’ pile. For others, perhaps they simply haven’t taken the time to look under the hood.
Importantly, none of these developments have fundamentally altered the economics of the business. They have simply changed the nature of the debate.
4. The Business Today
Adyen retains only a small fraction of every transaction it processes, roughly 17 basis points on average. The vast majority of fees are passed through to issuing banks and card networks under its interchange++ pricing model.
That makes volume far more important than margin.
Adyen seeks not to optimize per transaction, but on the basis of life-time customer value. To achieve this it focuses on achieving the best transaction outcomes, attracting larger merchants, gaining greater share of customer wallet, and compounding payment volume over time.
The model has worked remarkably well.
Net revenue has grown from approximately €1.0 billion in 2021 to €2.4 billion in 2025 (~24% CAGR), while processed volume reached a record €1.39 trillion.
But more important than growing payment volumes is that Adyen’s role within the payment ecosystem continues to expand.
Adyen essentially sells simplicity. Said differently, it abstracts away complexity.
For instance, consumers increasingly use a wide variety of payment methods including cards, digital wallets, bank transfers, buy-now-pay-later products, local payment schemes, and mobile payment platforms.
The diagram below demonstrates the vast variety of payment options that exist in Europe alone. On a global scale, the number is far larger.
When a new method becomes available, Adyen is often the first to make it available to merchants. For instance, Adyen became the first third-party payment processor, and the first fintech platform outside the Square ecosystem, to offer Block’s Cash App Pay to merchants1.
Why is this important?
Studies suggest that more than half of consumers abandon purchases when their preferred payment method is unavailable. Yet supporting hundreds of payment methods independently would be impractical for most merchants.
Adyen solves this problem by acting as a single integration point that provides merchants with the ability to instantly accept almost all available payment methods across developed economies, and some of the larger emerging economies (India and Brazil).
In this way, Adyen can be distinguished from other operators in the payment space.
PayPal, for example, is frequently considered a direct rival. In reality, many merchants access PayPal through Adyen’s infrastructure. PayPal itself selected Adyen to support Fastlane, recognising the value of its merchant network and technical capabilities.
This illustrates an important aspect of the payments industry.
Adyen frequently succeeds, not by replacing incumbents, but simplifying their operations by partnering with them.
Adyen’s Evolution
Over time, the company has evolved beyond online payments and built three distinct growth engines.
Digital remains the largest segment, generating approximately 55% of net revenue.
This serves many of the world’s largest internet businesses, including Meta, Uber, Microsoft, Spotify, Netflix, Airbnb, Booking.com, and countless others. Growth has naturally moderated as the segment matures, but customer relationships remain exceptionally strong and deeply embedded.
The second growth engine is Unified Commerce.
Representing roughly one-third of revenue, Unified Commerce connects online and physical transactions through a single platform and customer view.
This has become one of Adyen’s most important strategic advantages.
Historically, retailers treated e-commerce and physical stores as separate channels. Adyen allows merchants to unify both environments, creating a consistent customer experience while generating valuable data across the entire purchasing journey.
For businesses such as McDonald’s, payment terminals increasingly function as data collection tools rather than simple transaction devices. Every interaction generates information about customer behaviour, purchasing patterns, loyalty engagement, and conversion dynamics. That kind of visibility was absent before Adyen became the payment provider for the fast-food franchise.
This creates a powerful feedback loop. More transactions generate more data. More data improves performance. Better performance strengthens customer relationships and drives additional volume.
Equally impressive was the recent rollout across 943 Starbucks stores in Europe, completed in only seven weeks, demonstrating Adyen’s ability to execute these complex deployments at enterprise scale.
The third growth engine is Platforms.
Although still the smallest segment at roughly 11% of revenue, it is also the fastest growing.
Rather than signing individual merchants one by one, Adyen partners with software platforms and marketplaces such as eBay, Shopify, and other vertical software providers.
These businesses then distribute Adyen’s services across their own customer ecosystems.
The attraction is obvious.
Instead of acquiring thousands of customers individually, Adyen piggy-backs a platform that already serves them, thereby creating a powerful distribution channel.
Beyond payments, these platforms can offer lending, issuing, treasury services, bank accounts, cash management, and embedded financial products through a single infrastructure layer. Adyen evolving into a system that companies use to collect, hold, and distribute money, not just process card payments.
As it expands, Adyen increasingly resembles a financial operating system rather than a payment processor.
That evolution has been reinforced by one of the most important strategic decisions in the company’s history: obtaining banking licenses across Europe, the United States, and the United Kingdom.
These licenses fundamentally altered the shape of the business.
By bringing banking capabilities in-house, Adyen reduced dependence on third-party institutions, lowered funding costs, gained greater control over merchant funds, and captured a larger share of the economics flowing through its network.
The result is greater strategic flexibility, stronger unit economics, and additional avenues for future growth.
Artificial intelligence is becoming another important layer within the platform.
Unlike many AI initiatives currently being marketed across technology, Adyen’s products are designed to solve measurable commercial problems.
Its Uplift suite uses machine learning to improve payment performance, increase conversion rates, reduce fraud, and optimise transaction routing. Early deployments have generated conversion improvements of up to 6% while simultaneously reducing transaction costs.
Its Dynamic Identification system now recognises approximately 95% of 400 million unique shoppers across the network.
Because Adyen operates across online, mobile, and physical channels, it possesses one of the richest payment datasets in the industry.
The more transactions processed, the better these systems become.
This creates a subtle but important network effect.
The competitive advantage is gradually evolving from pure infrastructure towards infrastructure combined with intelligence.
That distinction matters because infrastructure can eventually become commoditised. Decision-making layers are considerably harder to replicate.
Customers welcome the benefits that this AI integration introduces to thie businesses, which may explain why approximately 80% of growth continues to come from existing merchants leaning in to all that Adyen is able to offer.
A typical customer initially adopts online payments, then expands into Unified Commerce, financial products, treasury capabilities, embedded finance, issuing, or banking services.
Each additional product increases switching costs and deepens integration.
What begins as a payment relationship gradually evolves into mission critical financial infrastructure.
That is the essence of Adyen’s moat.
The company’s financial performance reflects these advantages.
While growth has slowed from the extraordinary levels achieved during the pandemic lock-down period when all commerce was forced online, it remains impressive for a business of this scale.
Net revenue increased 21% on a constant-currency basis during 2025, and management expects similar growth in 2026.
Even more important is that profitability continues to improve.
EBITDA margins expanded from 50% to 53% during 2025 and reached 55% during the second half of the year.
The economics behind this expansion are straightforward.
The key driver is operating leverage.
Adyen’s largest expense is people. Yet revenue has consistently grown faster than headcount. Once the platform has been built and regulatory infrastructure is in place, processing an additional billion euros of payment volume requires remarkably little incremental cost.
Unlike a retailer that must purchase more inventory or a manufacturer that must build additional factories, Adyen can often serve substantially higher transaction volumes using largely the same underlying infrastructure.
This creates a powerful economic characteristic. As payment volumes increase, a growing proportion of incremental revenue falls through to the bottom line.
The effect is already visible in the financial results. Net revenue has more than doubled since 2021, while EBITDA margins have expanded from approximately 43% to 55%. Importantly, this expansion has occurred while Adyen continues investing heavily in hiring, artificial intelligence, financial products, and international growth.
In other words, margin expansion is not being driven by cost-cutting. It is being driven by scale.
Management believes EBITDA margins can eventually exceed 55% and move towards a long-term target of 65%. While ambitious, those targets remain consistent with a software-driven platform processing ever-larger volumes through a largely fixed cost base.
The balance sheet is equally impressive.
Adyen carries no long-term debt, maintains several billion euros of excess liquidity, and holds an A- credit rating from S&P.
CAPEX consumes only ~5% of revenue, so this really is a capital light business.
This gives management enormous flexibility.
The company can continue investing aggressively through economic downturns, fund new products internally, pursue acquisitions when opportunities arise, and expand internationally without relying on external financing.
EMEA continues to represent the largest share of revenue, but North America has become an increasingly important growth engine, expanding by more than 30% in the second half of 2025. At the same time, markets such as India and Japan remain relatively underpenetrated and offer significant long-term potential.
Despite processing €1.39 trillion annually and serving many of the world’s largest enterprises, Adyen still controls only a small percentage of the global merchant acquiring market (estimated at ~2%).
The runway ahead remains substantial.
The business today is larger, more diversified, more profitable, and strategically broader than it was when I first wrote about it in 2023. But more importantly, the share price appears not to reflect the earnings power and growth potential of this business.
5. The Market’s Concerns: Valid or Overdone?
If the investment debate around Adyen in 2023 centred on the quality of the business, the debate today centres on the concerns surrounding it.
The market’s scepticism can largely be distilled into four areas: competition, growth moderation, executive turnover, and capital allocation.
All are legitimate issues.
The question is whether they justify the current valuation.
Competition
The payments industry is fiercely competitive.
Checkout.com continues to grow rapidly. PayPal and Braintree remain important players among enterprise merchants. Block continues expanding its ecosystem. Legacy processors such as Global Payments maintain extensive merchant relationships built over decades.
While Checkout.com’s revenue growth exceeds Adyen’s, it is doing so from a much smaller base than Adyen.
Worldline, once viewed as one of Europe’s strongest payments franchises, has described underlying European payments growth as slowing to only 4-5% annually. This has impacted its business. It reported organic revenue declines during 2025, generated EBITDA margins below 20%, produced negative free cash flow, and now commands a market capitalisation that is a tiny fraction of Adyen’s.
The gap illustrates an important point.
Payments may appear commoditised from the outside, but the economics of modern software-driven platforms are diverging sharply from those of legacy processors built on older infrastructure.
Increasingly, the enterprise payments market is viewed as a two-horse race between Adyen and Stripe, a view reinforced when BMO Capital initiated coverage in 2026 and described Adyen as a “world-class platform rivalled only by Stripe.”
Stripe remains private and has successfully positioned itself at the centre of several emerging technology themes. It pushes an aggressive narrative, U.S. style, and so is often perceived as a faster-moving technology company.
Adyen, by contrast, tends to communicate more conservatively, a more European approach, and focuses on execution rather than storytelling.
This creates a perception and valuation gap that may be larger than the underlying operational gap.
Stripe does possess genuine strengths. The company maintains a powerful position among developers and digital-native businesses. Its Link wallet continues gaining adoption and it has expanded from initially targetting mom-and-pop shops into larger enterprise accounts.
While each offers differentiated solutions that appeal to different customers, there is an increasing overlap between the two. It is therefore sensible to consider Stripe a formidable competitior for Adyen.
Of particular note is that earlier in 2026, Adyen secured the UK Government payments contract, replacing Stripe as the underlying provider for one of the country’s most visible public-sector payment platforms.
The significance extends beyond the contract itself.
It demonstrates that large organisations continue to select Adyen when evaluating mission-critical payment infrastructure.
The evidence suggests Adyen is not losing the competitive battle. Instead it is growing alongside Stripe and punching well above its weight.
Adyen continues to execute exceptionally well.
The majority of growth still comes from existing customers. Management described the 2025 customer cohort as the strongest in company history, while customer adoption across Unified Commerce, Platforms, and financial products continues to expand.
Stripe’s recruitment of Adyen’s Head of Unified Commerce Sales for the UK and Ireland in 2026 highlights that the battle extends beyond customers to talent as well.
Yet investors should avoid viewing payments as a winner-take-all market.
Large merchants routinely use multiple payment providers to improve resilience, optimise routing, and reduce operational risk. Even the largest platforms rarely secure 100% wallet share.
The objective is not to eliminate competitors. It is to process an increasing share of transaction volume over time. As such, both companies are likely to emerge triumphant.
It is fair to conclude that competition concerns are largely overdone.
Growth Moderation
The next concern relating to Adyen relates to growth.
This is perhaps the easiest criticism to understand.
From 2014 to 2023, Adyen compounded net revenue at approximately 48% annually. Investors became accustomed to extraordinary growth rates, particularly during the pandemic when digital commerce accelerated dramatically.
Those growth rates were never sustainable. The law of large numbers eventually affects every successful business. Doubling a €200 million revenue base is fundamentally different from doubling a €2.4 billion revenue base.
Today, management guides for 20% to 22% growth in 2026.
Some investors view this as evidence that Adyen’s best years are behind it.
I view it differently.
The company continues to add hundreds of millions of euros of incremental revenue annually while maintaining EBITDA margins well above 50%.
Very few businesses operate at that combination of scale, profitability, and growth.
More importantly, several growth drivers remain underappreciated.
Unified Commerce continues expanding rapidly. Platforms remains the fastest-growing segment in the business. Financial products are still early in their development. North America remains significantly underpenetrated. Emerging markets offer a substantial runway. Last, but by no means least, agentic commerce may eventually create entirely new transaction flows.
Growth will almost certainly be slower than it was during the company’s formative years. But that does not mean growth is becoming unattractive, particularly when it is achieving over 20% organically.
The market often treats the transition from hyper-growth to durable growth as though it were a transition from growth to stagnation.
Those are very different things.
So this concern appears entirely misplaced.
Executive Turnover
The most uncomfortable development since the original thesis has been the number of senior executive departures.
The highest-profile exit came in 2026 when CFO Ethan Tandowsky announced his departure. This followed earlier exits including North America President Davi Strazza and several senior finance and commercial executives.
In total, at least fifteen vice-president-level employees have departed over an eighteen-month period.
That is not trivial.
Adyen is simultaneously scaling globally while relying heavily on North America as a future growth engine. Leadership stability matters.
North America is simultaneously Adyen's largest growth opportunity and its most competitive battleground.
This concern is understandable.
Some investors interpret the departures as evidence that internal realities may differ from the company’s external narrative. However, the numbers do not support that conclusion. Operating performance has remained exceptionally strong throughout the period.
This suggests that while senior employee churn is real, it is not caused by an issue in the business and neither has it translated into operational disruption.
Management has consistently described departures as personal decisions rather than strategic disagreements. Compensation likely plays a role. Adyen remains relatively conservative in its remuneration structure and is limited by regulation in the Netherlands relating to bonus payments, while US competitors often offer significantly larger compensation packages.
It is perfectly feasible that employees are adopting a mercenary mindset and chasing the money, rather than opting for the superior operator in the sector.
That does not mean the issue should be ignored.
In fact, the Adyen Supervisory Board acknowledged the need for ‘step adjustments’ in compensation toward peer medians and will bring a refreshed remuneration policy to the 2027 AGM.
Payments remains a relationship-driven industry, particularly at the enterprise level. Sales leadership, commercial execution, and regional expertise matter.
The key area to watch is North America.
If turnover begins affecting customer acquisition, growth rates, or execution quality, investors should reassess the situation.
For now, the evidence suggests noise rather than structural deterioration.
Capital Allocation
The final concern is perhaps the most interesting because it reflects success rather than weakness.
Adyen has become a victim of its own balance sheet strength.
The company now holds approximately €3.8 billion of excess net cash, generates substantial free cash flow, carries no long-term debt, and requires very little capital to fund growth.
As the cash balance has grown, investors have increasingly seen it as a drag on performance and questioned whether management should be doing more with it.
This is a business that pays no dividend, which is an encouraging break from convention for a European public company. That is, in my humble opinion, a good choice. But in the absence of investment oportunties, given the attractive corporate valuation, many advocate for a share buyback. Their argument is straightforward.
Repurchases, done properly, are a recapitalization of the balance sheet2 (not to be confused with dividends which are merely a return of capital). Shareholders benefit from increased ownership of all future earnings, cash flows and capital valuation uplifts.
The logic is compelling.
Management, however, sees the situation differently.
Its argues in favour of flexibilityre i. Maintaining a large cash balance allows Adyen to act quickly when opportunities emerge. The Talon.One and Orb acquisitions demonstrated the value of that flexibility.
The company also points to regulation in defense of its position.
Adyen increasingly operates as a regulated financial institution rather than a pure software company. Maintaining an investment grade balance sheet supports regulatory relationships, customer confidence, and future product expansion.
There is also a procedural issue for it to contend with.
Unlike ordinary technology businesses, as a financially regulated business, Adyen cannot simply announce a large buyback programme without first securing regulatory approval. That process takes time and has its own challenges.
These are valid considerations, yet the counterargument remains equally persuasive.
Organic growth does not require billions of euros of excess capital. Talon.One consumed less than one-fifth of the company’s cash balance, and Orb was half of that value. Even after these acquisitions, Adyen remains substantially overcapitalised relative to immediate operating needs.
What is clear is that the market increasingly wants evidence that the cash balance will be used productively.
If attractive investment opportunities exist, shareholders will likely support them.
If they don’t, the pressure for buybacks will continue growing.
So Are The Concerns Overdone?
None of these concerns should be dismissed, but none relate to the current business quality. They certainly don’t explain the degree of pessimism embedded within the current valuation.
The market appears to be pricing a business entering structural decline or long-term stagnation.
The available evidence suggests something very different: a business transitioning from hyper-growth to durable growth while continuing to strengthen its competitive position.
That distinction is central to the investment case.
6. The Strategic Position
The most important question facing Adyen today is not whether it can continue processing payments. It can.
The more important question is what management wants Adyen to become.
For most of its history, the company occupied a relatively clear position within the payments ecosystem. It provided merchants with a superior infrastructure layer for accepting and managing payments globally.
That opportunity remains enormous.
But management is now thinking beyond payments.
The clearest signal came in 2026 with the acquisition of Talon.One.
For years, Adyen maintained an almost ideological opposition to acquisitions. Management repeatedly argued that building internally produced better long-term outcomes than buying external businesses.
That made the recent €750 million acquisition particularly significant.
Talon.One provides loyalty, rewards, promotion, and customer engagement software. At first glance, this appears far removed from payments.
In reality, it moves Adyen further upstream in the commerce value chain.
Traditionally, payment providers become involved once a customer reaches the checkout page. Talon.One allows Adyen to influence what happens before the transaction occurs.
Promotions affect purchasing behaviour; loyalty programmes influence retention; and rewards shape customer engagement.
Taken together, these functions help determine whether a transaction takes place at all.
This creates a powerful strategic extension.
Rather than simply optimising payment performance, Adyen can increasingly participate in customer acquisition, engagement, conversion, and retention.
The distinction may seem subtle.
It’s not.
The closer a company moves towards influencing revenue generation itself, the more strategically valuable it becomes.
The Talon.One acquisition was closely followed by the acquisition of Orb.
Orb specializes in usage-based billing and monetization infrastructure, critical for AI-powered and consumption-based business models. Combining Orb’s billing solutions with Adyen’s payments platform closes the loop between what merchants charge and how those charges perform, enabling automated real time revenue decisions to be made.
This is Adyen’s second acquisition in under two months and so M&A now looks like a potential blueprint for future expansion.
If management is now willing to deploy capital selectively in this way, what other assets might it seek to acquire to strengthen the platform?
Acquisition Targets
Two businesses frequently mentioned by investors as strategic acquisition targets are Wise3 and dLocal4.
Neither should be viewed as predictions, but both illustrate the types of opportunities available.
As commerce becomes increasingly global, the distinction between payments, treasury management, cross-border money movement and foreign exchange continues to blur.
Merchants don’t care which category a service falls into. They simply want money to move quickly, cheaply, and reliably across borders.
This is where Wise becomes strategically interesting.
Combining Adyen’s payment infrastructure with Wise’s foreign-exchange and international money movement capabilities would create a powerful end-to-end commerce platform capable of handling both payments and treasury functions.
The strategic logic is reinforced by the fact that Adyen’s CEO, Ingo Uytdehaage, already sits on the board of Wise, giving him direct insight into both businesses.
The fit is obvious, but that doesn’t necessarily mean it will happen.
The other potential target is dLocal, which represents a different type of opportunity.
Adyen built its franchise primarily across developed markets where debit and credit card networks dominate, regulations are relatively stable, and payment infrastructure is standardised.
Emerging markets present a very different challenge.
Many developing economies bypassed large parts of the traditional card infrastructure. The decision made sense. Payment rails used in the US and Europe were developed in the mid 20th century. They are slow and expensive with network providers extracting their pound of flesh on every transaction.
Instead, developing economies moved directly from cash-based systems to mobile wallets, real-time transfers, domestic payment rails, and locally developed payment methods.
The result, however, is an extraordinarily fragmented landscape. Each country possesses its own regulatory requirements, payment methods, currency controls, settlement processes, and technological standards.
For multinational merchants, navigating this complexity independently is impractical.
That’s where dLocal has built its franchise. The company effectively abstracts away the complexity of more than sixty emerging markets through a single integration layer. In many respects, dLocal does for emerging markets what Adyen did for developed markets.
The strategic fit is therefore obvious.
Together, Adyen and dLocal would offer merchants a unified solution spanning both developed and emerging markets through a single relationship.
More importantly, such acquisitions could strengthen one of Adyen’s most important selling points: simplicity.
Large enterprises increasingly want fewer providers, fewer integrations, and fewer operational headaches.
The ability to manage global payments through a single platform becomes increasingly valuable as commerce grows more complex.
Wise and dLocal have both experienced valuation drawdowns despite demonstrating exceptionally strong underlying economics. This potentially creates an opportunity for Adyen to play the capital cycle and use its large cash balance counter-cyclically.
Whether Adyen ultimately pursues acquisitions such as these is unknowable. What matters is that management now appears willing to consider them.
That represents a meaningful shift in capital allocation philosophy.
Banking Licenses
The company’s banking ambitions provide another important clue regarding its long-term direction.
Rather than merely processing transactions, Adyen can increasingly participate in lending, treasury services, issuing, cash management, embedded finance, and other financial activities.
Each additional service deepens customer relationships while increasing switching costs.
This evolution is gradually transforming Adyen into something closer to a financial operating system.
Agentic Commerce
Agentic commerce may represent the most important part of the company’s future strategy.
Few developments currently generate more excitement within technology than the prospect of AI agents transacting on behalf of consumers.
The basic idea is straightforward. Rather than humans manually browsing websites and completing purchases, AI agents will increasingly search, compare, negotiate, and transact autonomously.
If realised at scale, this could fundamentally alter the way commerce operates.
As is often the case with new technology, rather than collaborate on a universal best approach, everyone is anxious to be ‘first’ to launch something. It becomes another gold rush.
Unfortunately, this results in fragmentation rather than convergence.
At least five competing standards are now emerging, including OpenAI’s Agentic Commerce Protocol (ACP), Google’s Universal Commerce Protocol (UCP), Google’s Payments Protocol (AP2), Visa’s Trusted Agent Protocol, alongside broader initiatives such as the x402 Foundation and the Agentic AI Foundation.
Rather than a single dominant standard, the ecosystem is shaping into a multi-protocol environment.
Merchants face a growing integration problem. Every agent platform uses different protocols, product feeds, cart structures, and checkout requirements. Without a common translation layer, every new platform becomes a new integration project.
That’s not what merchants want. They don’t want to rebuild their commerce stack every time a new protocol emerges. They want a stable infrastructure layer that absorbs the complexity and allows them to transact regardless of which agent initiates the purchase.
This is exactly the type of problem Adyen is built to solve.
In June 2026, Adyen launched Adyen Agentic, a suite of modular APIs that allows enterprises to sell through conversational AI platforms without rebuilding their commerce systems for every new channel. The product consists of three layers: Agentic Feed, Agentic Cart, and Agentic Payments, covering the entire agentic commerce journey from product discovery through to payment.
The goal is simple. Merchants integrate once. Adyen then translates that integration across multiple agent platforms, protocols, and payment methods, allowing merchants to participate in new commerce channels without rebuilding every time the ecosystem evolves.
As Visa’s Rubail Birwadker put it:
“Together with Adyen, Visa is helping make payments agent-ready from the start, embedding trust, security and global acceptance into every transaction, no matter where or how it’s initiated.”
Mastercard expressed a similar view. Sherri Haymond, Executive Vice President and Global Head of Digital Commercialization, stated:
“Mastercard is helping establish a strong foundation for secure, scalable agent-driven transactions, while solutions like Adyen Agentic are contributing to a more vibrant, connected ecosystem.”
The strategic logic is straightforward.
Adyen isn’t trying to predict which protocols or agent standards will win. It is positioning itself beneath them all. By acting as a protocol-agnostic infrastructure layer, Adyen aims to become the universal translator connecting merchants to whatever agent ecosystems ultimately emerge.
Management has already begun working with hundreds of enterprise merchants on agentic commerce readiness.
Importantly, this agentic AI opportunity does not require Adyen to build an entirely new customer base. The company already processes payments for many of the merchants most likely to participate in agentic commerce from day one, including Microsoft, Meta, Uber, Spotify, and countless other global platforms.
Its challenge is therefore not customer acquisition. It’s integration. That’s the easy part.
Yet, despite the excitement surrounding AI agents, the commercial opportunity remains small today relative to Adyen’s existing business.
Management does not expect meaningful financial impact for at least the next year, with material contributions more likely emerging between 2027 and 2028.
That perspective is sensible. The long-term significance of agentic commerce lies less in immediate revenue and more in strategic positioning.
Technology transitions rarely reward whichever company moves first. They tend to reward businesses capable of scaling solutions reliably once adoption arrives.
Adyen appears focused on ensuring it remains relevant regardless of which protocols, platforms, or interfaces ultimately prevail.
Taken together, Talon.One, banking services, financial products, acquisitions, and agentic commerce all point towards the same conclusion.
The company is building a broader commerce and financial infrastructure platform that sits at the centre of increasingly complex transaction flows.
That’s important to the investment thesis. Payment processing alone is a low moat business, but decision-making layers and integrated commerce infrastructure is considerably more difficult to replicate and compete with.
The strategic position today is therefore stronger than it was several years ago. The business is now participating in a larger share of customer workflows.
The opportunity is no longer simply to process more payments. It is to become an increasingly indispensable layer of global commerce.
7. Valuation
One of the more frustrating aspects of the Adyen story is that the business has continued to improve while the valuation has steadily compressed.
When I first wrote about the company in 2023, the primary concern was valuation. Adyen was clearly an exceptional business, but investors were paying a premium for that quality.
Today, the situation is almost the reverse.
The business is larger, more profitable, more diversified, and strategically stronger than it was three years ago. Yet the market values it far less generously.
Why?
Part of this disconnect stems from a misunderstanding that emerged in 2023 when Adyen changed the way it reported revenue.
Adyen acts as an agent for much of the payment ecosystem. It may collect 150 to 200 basis points of fees on a transaction while ultimately retaining only around 17 basis points as revenue.
Historically, the company reported all Collected Revenue, which included fees gathered on behalf of card networks, issuing banks, and other payment participants.
Money owed to third parties featured in Cost of Goods Sold, and so Gross Profits were Adyen’s real top line revenue.
To remedy this situation, management shifted its accounting approach. It began to report only top line revenue that truly belonged to the company. The intention was to introduce better transparency around the true unit economics of the business.
The change was sensible and should have been welcomed by investors.
Unfortunately, however, lazy Mr Market didn’t take the time to understand what had happened. Instead, on the face of it, the top line number looked like it had fallen off a cliff, dropping ~80%.
This is what happens when algorithms dominate trading activity and people trade off numbers appearing on an automated screener. They aren’t designed to understand, just to respond on reflex.
The company de-rated and the share price took an immediate hit.
The reporting transition coincided with a broader normalisation in digital commerce growth as we emerged from the Covid period, reinforcing the perception that Adyen’s best days were behind it.
The irony is that while sentiment deteriorated, the business continued to execute very well.
Then came the second sell-off.
In early 2026, management guided for 20% to 22% revenue growth, mostly organic. Ordinarily, that would be viewed as an excellent outlook for a company generating over €2 billion of annual revenue.
The market saw it differently.
When guidance came in modestly below previous expectations and slightly below analyst consensus, investors anchored to the shortfall rather than the absolute growth number. Sentiment deteriorated and the share price fell once again.
Mr Market is an eratic chap.
The business continued growing rapidly while its valuation contracted.
Today, Adyen is capitalized at approximately 24 times trailing earnings. On an EV forward basis, the multiple is somewhere in the mid-teens and the PEG hovers somewhere around 0.67.
For a business growing revenue around 20%, generating EBITDA margins of 55% and targetting another 1,000 basis point improvement, carrying no debt, and holding billions of euros in excess cash, that valuation appears difficult to rationalize.
The comparison with peers is revealing.
Visa and Mastercard command earnings multiples in the mid-to-high twenties despite now only generating high-single-digit growth rates. Both are exceptional businesses, but neither is expanding anywhere near as quickly as Adyen.
The most obvious comparison is Stripe.
Here the valuation gap between is striking.
Based on its February 2026 tender valuation of approximately $159 billion and estimated net revenue of $5.8 billion, Stripe trades at roughly 27 times sales!
Adyen ended 2025 with approximately €3.8 billion of excess net cash. Investors are not simply buying the operating business, they are also acquiring a significant cash reserve. Adjusting for that cash balance means Adyen trades at closer to 9 times sales.
Some may still consider 9 times sales to be uncomfortably high, but against EBITDA margins of 55%, rising towards 65%, and with strong top line growth (the business ought to double its top line over the next 3 to 4 years), it appears perfectly reasonable.
So why the disconnect with the Stripe valuation?
Even accounting for Stripe’s higher take rates, estimated at roughly 34 to 36 basis points compared with Adyen’s approximately 17 basis points5, the disparity remains difficult to justify purely on economics.
Part of it undoubtedly reflects Stripe’s lack of public market price discovery. The tender was run internally for employees only, many of whom have no expertise in valuing companies. There is no doubt that they over paid, probably based on Stripe’s aggressive AI narrative.
If Stripe eventually pursues a public listing, investors will gain a more reliable valuation benchmark.
If Stripe achieved a lofty valuation at IPO, that would act as a catalyst for Adyen’s own rerating.
For now, however, Stripe remains private. As John Collison noted earlier this year in a Bloomberg interview, the company is in no hurry to pursue an IPO while it remains well-capitalised and operationally successful.
So what does the street think about the valuation of Adyen?
The analyst community remains overwhelmingly constructive on Adyen despite the share-price weakness.
BMO initiated coverage with an ‘Outperform’ rating and a €1,200 target price.
Monness Crespi established a target of €1,900.
Even Berenberg, which cut its target from €1,550 to €1,000, described the Adyen platform as ‘best-in-class.’
Generally, across the broader analyst community, consensus remains strongly positive, with targets clustering well above the current share price of €880.
While sell side analyst targets should be treated with extreme caution, they do illustrate how differently Mr Market and industry observers currently view the Adyen business.
The market is therefore assigning a surprisingly modest multiple to one of the highest-quality businesses in global fintech.
The best investments often emerge when market expectations become disconnected from business fundamentals.
That appears increasingly true here.
If growth settles at 10% to 15%, today’s valuation may prove reasonable.
If the company continues compounding revenue at approximately 20%, expands margins as intended, deploys its growing cash balance intelligently, and deepens its position within global commerce infrastructure, the current valuation begins to look unusually cheap.
Here is my high level factorized thinking.
From its 2021 high share price of ~€2,700 Euro to today’s valuation at €890, that is a negative 19.49% CAGR in terms of total shareholder returns. There is no dividend, so the attribution of that negative return over the 5 year period is:
The shares were, at their peak, vastly over valued. Back in 2021 the company was capitalized at almost 200 times earnings. Evidently one of Mr Market’s more exuberent mood swings. That multiple compression has caused all of the damage for early shareholders.
But the valuation today is far more reasonable. By some measures it is cheap. That means further multiple contraction is unlikely. More particularly, as margins continue to improve (EBITDA margins are targetted to grow by another 1,000 basis points in coming years), and as the top line grows in the low 20 percentages, the multiple may even expand slightly.
My conservative assumptions are 20% top line growth over the next five years (which is largely a business as usual rate and ignores the accretive value of recent acquisitions and agentic ecommerce), zero repurchases to the share count remains unchanged, EBITDA margins increase as per management guidance from 55% to 65%, and the business is capitalized at a multiple that is a couple of turns higher than today.
On this basis, the share price in 2031 is ~€3,100, representing a 28.1% annual shareholder return.
If the 2031 share valuation is ~€3,100, and we use an Ibbotson 10% discount rate, then the implied value of Adyen shares today is ~€1,925. This aligns with the Monness Crespi valuation of ~€1,900.
We all seem to be coming out at the same place in terms of value and the conclusion is that today’s share price of under €900 looks way too low. Either way, there is a huge margin of safety built in to today’s valuation.
Investing ultimately comes down to expectations.
The irony is that the original thesis argued investors may have been paying too much for a great business.
Three years later, the stronger argument may be that investors are paying too little.
8. Risks
No investment thesis is complete without a candid assessment of what could go wrong.
The most obvious risk is that growth slows further.
Payments businesses are not immune to the law of large numbers, and parts of the European market are already maturing. Investors must recognise that a business processing more than €1 trillion annually cannot grow at the same pace indefinitely.
That said, Adyen remains a global business with multiple growth drivers beyond its original payments franchise. Unified Commerce, Platforms, embedded finance, banking services, North America, and emerging markets all provide meaningful runways for future growth.
Competition is a risk in every industry.
Stripe remains the most formidable challenger. Its developer-first ecosystem, private-market valuation, talent base, and willingness to invest aggressively make it a serious competitor.
The battle is occurring not only for customers, but also for employees.
If Stripe successfully accelerates enterprise adoption, strengthens its Unified Commerce offering, or captures a disproportionate share of future transaction growth, Adyen’s market-share gains could come under pressure.
Fortunately, payments is not a winner-take-all industry. Large merchants routinely operate multiple providers, meaning success is determined more by wallet-share gains than outright victory.
The next risk is execution.
The departure of the CFO, former North America President, and several senior commercial leaders creates uncertainty at a time when North America represents one of the company’s most important growth opportunities.
There is currently little evidence that turnover has affected operating performance, but this is something for investors to monitor closely.
Agentic commerce brings risks as much as opportunties.
Much of the current enthusiasm assumes AI agents will transact using infrastructure broadly similar to today’s payment ecosystem. That may prove correct. But technological transitions rarely unfold exactly as expected.
If a dominant protocol emerges that bypasses traditional payment infrastructure or disproportionately favours a competitor’s ecosystem, Adyen could find itself disadvantaged.
At present, this appears a low-probability outcome because the company’s value increasingly resides in fraud prevention, authentication, acquiring, settlement, financial services, risk management, and merchant infrastructure.
Autonomous agents will still require trust, identity verification, transaction monitoring, and financial controls. These are areas where Adyen already possesses significant expertise.
The final risk concerns capital allocation.
The company’s growing cash balance provides flexibility, but it also creates expectations.
If management fails to deploy capital productively through acquisitions, investment, or shareholder returns, the valuation discount may persist regardless of operating performance.
None of these risks are trivial.
But they are largely risks of expectation and execution rather than risks to the fundamental quality of the franchise itself.
9. Conclusion: Is Adyen A Good Investment?
My original thesis concluded that Adyen was an exceptional business trading at a demanding valuation.
I referenced Charlie Munger’s famous observation: “Better to buy a great company at a fair price than a fair company at a great price.”
Three years later, the situation has changed considerably. The valuation is materially lower on a unit economics basis.
The investment is also less risk as Adyen has successfully diversified beyond its origins as a pure e-commerce payment processor.
Its single-platform architecture continues to differentiate the business from competitors and customer retention remains exceptionally strong.
Operating leverage is becoming increasingly visible as margins have expanded and are forecast to expand further.
The balance sheet remains one of the strongest in global fintech and there are several very interesting opportunities to put surplus capital to work through strategic acquisitons which would accelerate growth.
As with all businesses, there are risks and challenges ahead. But these concerns appear more than reflected in the current valuation.
The share price has been volatile, the business has not. That divergence remains the central reason Adyen interests me.
Those that invest with a focus on the next quarter tend to focus on slowing growth, executive departures, and unresolved capital allocation questions. Soft demand among these momentum chasing investors explains why the stock is cheap.
Investors with a longer time horizon may conclude that the more important variables are market-share gains, product expansion, financial services, agentic commerce, and the company’s ability to compound earnings over the next decade.
Whether the stock rerates next quarter or next year is unknowable. But whether Adyen remains one of the highest-quality payments businesses in the world is a much easier question to answer.
For me, the answer remains yes.
And that is ultimately why I continue to believe the current share price offers an attractive long-term opportunity.
Cash App Pay: Adyen became the first third-party payment processor, and the first fintech platform outside the Square ecosystem, to offer Cash App Pay to merchants. The partnership was strategically attractive for both companies. For Block, it provided access to Adyen’s enterprise merchant base, including retailers such as SHEIN and Dick’s Sporting Goods, helping accelerate Cash App Pay adoption and strengthen its competitive position against PayPal. For Adyen, the partnership expanded its payment-method offering while improving relevance among younger consumers. Financially, Cash App represented a high-volume but relatively low-margin customer.
Stripe’s Higher Take Rate: Stripe has historically focused on small and medium-sized businesses, many of which possess limited negotiating power and therefore pay standard pricing. In contrast, Adyen has focused on large enterprise customers that can negotiate aggressively on price. Adyen’s management has consistently prioritised durable, high-quality payment volume over maximising transaction margins. The lower take rate is therefore not evidence of weakness. It reflects a deliberate strategic choice regarding customer mix.
Thanks for the great write up. I'm getting up to speed on the company and their financials. Do you know why operating cashflow has trended down in the last few years and was negative in H22025, even as operating profits have trended up?
Great article. I dont think you can attribute the drop in stock price in 2023 to the change in the way they report revenue though ;). It was mostly downward revised guidance, increased hiring and the EBITDA margin compressing from the highs of 64% in 2021 to as low as 43% in 2023 . Either way, I agree, Adyen is a wonderful business selling at a wonderful price!