Adyen

Adyen announced another strategic acquisition by purchasing the billing platform Orb for $335 million in cash. This follows Adyen’s recent acquisition of Talon. One for €750 million.

Orb is designed for software companies and automatically calculates what a business should charge based on real-time usage, whether it’s for AI requests or data consumption, making the whole process much simpler and more flexible.

Right now, billing (calculating what a customer owes based on usage) and payments (actually charging the credit card or moving the money through the bank) live in two completely separate worlds.

Unlike its competitors, Adyen is evolving beyond a simple payment processor by vertically integrating the entire monetization stack. By acquiring Orb, the company is positioning itself as an end-to-end financial operating system that connects complex billing logic directly to real-time transaction execution.

Both transactions are expected to close on July 1st.

Regarding the financials, Adyen expects a 1 percentage point increase in net revenue growth, alongside a 1 percentage point dilution in margin, which includes one-time transaction costs.

We like Adyen and we think the valuation is currently very low in our opinion. The company reityerated its FY guidance. Last week a research report suggested the company had to lower its pricing to maintain its market share. Even though that was denied on the day, the share price tanked 10% on the day.

The deal makes sense from a strategic standpoint, but bear in mind that many payment companies (Nexi and Worldline notably) had a disastrous track record in terms of acquisition. Therefore, any acquisition in the sector is viewed with suspicion.

We view these two acquisitions as structurally different (vertical integration rather than horizontal consolidation) but perception may be blurred. 

Adyen is currently one of my strongest conviction on the market. 

Stock trades on a PE26 of 18.7x for an expected EPS growth of more than 20% per year for the next 3 years. 

For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu