Shares of Adyen lost ground in early Thursday deals, as the company reported a slowdown in the growth of its transaction volumes in the third quarter.
Shares of Adyen initially failed to open Thursday after the company’s third-quarter report, but resumed trade. The stock was down 9.8% at 8:35 a.m. London time, taking it to the bottom of the pan-European Stoxx 600.
Adyen’s sales growth came off the back of a rise in total processed volume (TPV), which climbed 32% year-over-year to 321 billion euros. In the first half, Adyen posted a 45% jump in TPV, after previously reporting 46% year-over-year growth in the first quarter.
Analysts at Citi said in a research note that “weaker” transaction volume was likely to attract most of the focus from investors Thursday, amid concerns over end-market weakness.
“Either way, the take rate on the processed volume is comfortably higher than expected and, if sustainable, should support sales growth acceleration in 2025/26, while the lower run-rate of hiring should support continued margin uplift,” they wrote.
Digital processed volumes grew 29% year-over-year, Adyen said, lower than in the previous quarter due to impacts from a single large-volume customer, Block’s Cash App.
The company otherwise reported a jump in sales in the third quarter as the Dutch payments firm gained wallet share and added new customers, diversifying its merchant mix. Adyen, whose technology allows businesses to accept payments online and in-store, reported third-quarter net revenue of 498.3 million euros ($535.5 million), up 21% year-on-year on a constant currency basis.
The firm observed stronger traction from in-store payments in the third quarter, with its “unified commerce” point-of-sale terminals seeing 33% year-over-year growth, as it installed base of physical payment devices increased by 46,000 to 299,000.
Adyen also said that it expanded hiring slightly, adding 35 new people in the quarter. The firm has been slowing hiring in the past year following concerns over its pace of investment.
Last year, the Dutch payments giant’s shares tanked nearly 40% in a single day on the back of worse-than-expected sales and declining profits in the first half of 2023
.
Payments firms saw a boost from an increase in online shopping during the height of the Covid-19 pandemic.
But in recent years, companies such as Adyen have faced pressure from lower consumer spending.
Adyen, however, has benefited from significant growth from partnerships with its North American clients, such as Cash App in the U.S. and Shopify in Canada.
Adyen kept guidance unchanged Thursday, saying it expects to achieve net revenue growth between the low to high-twenties percent, up to and including 2026.
The firm added it expects to improve its earnings before interest, tax, depreciation and amortization to levels above 50% by 2026.
Capital expenditure will remain consistent at a level of up to 5% of net revenues, Adyen said.
Sam Altman, co-founder and C.E.O. of OpenAI, speaks during the New York Times annual DealBook summit at Jazz at Lincoln Center on December 04, 2024 in New York City.
Michael M. Santiago | Getty Images
After months of C-suite changes, tender offers and a soaring valuation, OpenAI has reached a new milestone: 300 million weekly active users.
OpenAI CEO Sam Altman revealed the new figure Wednesday at The New York Times’ DealBook Summit. A source familiar with the company told CNBC last week that the company’s weekly active user count was still at 250 million.
Over the next year, though, the company is reportedly targeting 1 billion active users.
It’s part of a serious growth plan for OpenAI, as the Microsoft-backed artificial intelligence startup battles Amazon-backed Anthropic and Elon Musk’s xAI, the latter of which Altman said he views as a “fierce competitor” on Wednesday at DealBook. The company is also up against established tech giants like Google, Meta, Microsoft and Amazon for a bigger slice of the generative AI market, which is predicted to top $1 trillion in revenue within a decade.
OpenAI on Tuesday announced it had hired its first chief marketing officer, nabbing Kate Rouch from crypto company Coinbase — an indication that it plans to spend more on marketing to grow its user base. In October, OpenAI debuted a search feature within ChatGPT that positions it to better compete with search engines like Google, Microsoft‘s Bing and Perplexity and may attract more users who otherwise visited those sites to search the web.
Also at DealBook on Wednesday, Altman denied reports that the company had asked investors not to also invest in its competitors but said that those who decide to wouldn’t have access to OpenAI’s “information rights,” like the company’s roadmap and other materials.
Marc Benioff, CEO of Salesforce, appears on a panel at the World Economic Forum in Davos, Switzerland, on Jan. 18, 2024.
Stefan Wermuth | Bloomberg | Getty Images
Shares of Salesforce popped more than 8% Wednesday, a day after the company reported third-quarter results that exceeded analysts’ estimates for revenue and guidance and showed strong promise for its artificial intelligence offerings.
Salesforce’s revenue grew 8% year over year to $9.44 billion in its third quarter, up from the $9.34 billion expected by LSEG. The company’s net income was $1.5 billion in the quarter, up 25% from $1.2 billion a year ago.
Salesforce raised revenue guidance to between $37.8 billion and $38 billion for its fiscal 2025, up slightly from $37.7 billion to $38 billion it had previously reported. The new range puts the midpoint for Salesforce’s fiscal 2025 revenue guidance at $37.9 billion, ahead of analysts’ expectations.
Analysts at Morgan Stanley reiterated their overweight rating on the stock, stating in a note that “the force is strong with this one.” The analysts said they are encouraged by Salesforce’s strong start with its artificial intelligence agent, Agentforce, as it closed more than 200 deals during the quarter with “thousands” more in the pipeline.
Salesforce’s Agentforce is an example of so-called AI agent technology. Several companies believe these advanced chatbots represent the next logical step from ChatGPT and other related tools powered by large language models.
Goldman Sachs analysts raised their Salesforce price target from $360 to $400 and reiterated their buy rating on the stock. The analysts said the company’s Data Cloud and Agentforce are driving “notable pipeline generation,” and they’re starting to contribute to the fundamentals of the business.
“We believe that Salesforce remains poised to be one of the most strategic application software companies in the $1tn+ TAM cloud industry and is on a path to $50bn in revenue,” the analysts said in a Tuesday note.
Similarly, analysts at Bank of America said Salesforce’s third-quarter results suggest it is “leading the way” with Agentforce, and they reiterated their buy rating on the stock. The analysts raised their price target to $440 from $390.
The analysts said the emerging AI agent product cycle is not derailing Salesforce’s margin expansion, and that a meaningful pipeline exists in the service and sales sectors.
“Commentary suggests no contribution for Agentforce is assumed in the guide, suggesting early Agentforce deal closure could provide a source of upside,” they wrote Wednesday.
–CNBC’s Michael Bloom and Jonathan Vanian contributed to this report
Washington, D.C.’s attorney general sued Amazon on Wednesday, accusing the company of covertly depriving residents in certain ZIP codes in the nation’s capital from access to Prime’s high-speed delivery.
The lawsuit from AG Brian Schwalb alleges that, since 2022, Amazon has “secretly excluded” two “historically underserved” D.C. ZIP codes from its expedited delivery service while charging Prime members living there the full subscription price. Amazon’s Prime membership program costs $139 a year and includes perks like two-day shipping and access to streaming content.
“Amazon is charging tens of thousands of hard-working Ward 7 and 8 residents for an expedited delivery service it promises but does not provide,” Schwalb said in a statement. “While Amazon has every right to make operational changes, it cannot covertly decide that a dollar in one zip code is worth less than a dollar in another.”
Amazon spokesperson Steve Kelly said in a statement it’s “categorically false” that its business practices are “discriminatory or deceptive.”
“We want to be able to deliver as fast as we possibly can to every zip code across the country, however, at the same time we must put the safety of delivery drivers first,” Kelly said in a statement. “In the zip codes in question, there have been specific and targeted acts against drivers delivering Amazon packages. We made the deliberate choice to adjust our operations, including delivery routes and times, for the sole reason of protecting the safety of drivers.”
Kelly said Amazon has offered to work with the AG’s office on efforts “to reduce crime and improve safety in these areas.”
In June 2022, Amazon allegedly stopped using its own delivery trucks to shuttle packages in the ZIP codes 20019 and 20020 based on concerns over driver safety, the suit states. In place of its in-house delivery network, the company relied on outside carriers like UPS and the U.S. Postal Service to make deliveries, according to the complaint, which was filed in D.C. Superior Court.
The decision caused residents in those ZIP codes to experience “significantly longer delivery times than their neighbors in other District ZIP codes, despite paying the exact same membership price for Prime,” the lawsuit says.
Data from the AG shows that before Amazon instituted the change, more than 72% of Prime packages in the two ZIP codes were delivered within two days of checkout. That number dropped to as low as 24% following the move, while two-day delivery rates across the district increased to 74%.
Amazon has faced prior complaints of disparities in its Prime program. In 2016, the company said it would expand access to same-day delivery in cities including Atlanta, Chicago, Dallas and Washington, after a Bloomberg investigation found Black residents were “about half as likely” to be eligible for same-day delivery as white residents.
The ZIP codes in Schwalb’s complaint are in areas with large Black populations, according to 2022 Census data based on its American Community Survey.
The Federal Trade Commission also sued Amazon in June 2023, accusing the company of tricking consumers into signing up for Prime and “sabotaging” their attempts to cancel by employing so-called dark patterns, or deceptive design tactics meant to steer users toward a specific choice. Amazon said the complaint was “false on the facts and the law.” The case is set to go to trial in June 2025.
According to Scwalb’s complaint, Amazon never communicated the delivery exclusion to Prime members in the area. When consumers in the affected ZIP codes complained to Amazon about slower delivery speeds, the company said it was due to circumstances outside its control, the suit says.
The lawsuit accuses Amazon of violating the district’s consumer protection laws. It also asks the court to “put an end to Amazon’s deceptive conduct,” as well as for damages and penalties.
To get packages to customers’ doorsteps, Amazon uses a combination of its own contracted delivery companies, usually distinguishable by Amazon-branded cargo vans, as well as carriers like USPS, UPS and FedEx, and a network of gig workers who make deliveries from their own vehicles as part of its Flex program.
Amazon has rapidly expanded its in-house logistics army in recent years as it looks to speed up deliveries from two days to one day or even a few hours. In July, the company said it recorded its “fastest Prime delivery speeds ever” in the first half of the year, delivering more than 5 billion items within a day.
In relying on its own workforce, Amazon has assumed greater control over its delivery operations.
In his complaint, Schwalb cites an internal company policy that says Amazon may choose to exclude certain areas from being served by its in-house delivery network if a driver experiences “violence, intimidation or harassment.” The company relies on UPS or USPS to deliver packages in excluded areas.
