Q1 2025 Adyen NV Earnings Call

Operator: Good afternoon, everyone, and thank you for joining Adyen's Q1 2025 Business Update Call.

Good afternoon, everyone and thank you for joining audience Q1, 'twenty 'twenty five business update call. My name is Maggie O'donnell I'm part of the Investor Relations team and I'm happy to be joined today by Ethan our CFO.

Maggie O'Donnell: My name is Maggie O'Donnell. I'm part of the Investor Relations Team, and I'm happy to be joined today by Ethan, our CFO. In today's call, we'll discuss Adyen's financial and business updates from the quarter, followed by a Q&A segment.

In today's call, we'll discuss audience financial and business updates from the quarter, followed by a Q&A segment.

Maggie O'Donnell: As the session will be slightly shorter than our half-yearly earnings presentation, we ask you to keep your questions to a maximum of two per person so that we can respond to as many of you as possible. When submitting your questions, please use the Zoom Q&A functionality rather than the raised hand option. And as always, we ask that you include your full name and the firm you represent when submitting your questions. With that, let's get started.

This session will be slightly shorter than our half yearly earnings presentation. We ask you to keep your questions to a maximum of two per person. So that we can respond to as many of you as possible.

When submitting your questions. Please use the zoom Q&A functionality, rather than the raised hand option.

And as always we ask that you include your full name and the firm you represent when submitting your questions.

With that let's get started.

Ethan Tandowsky: Ethan, what are your key takeaways from the quarter? Yeah, sure.

Ethan: Ethan what are your key takeaways from the quarter.

Ethan Tandowsky: Thanks, Maggie. During the first few months of this year, we saw solid growth, in line with our expectations, mostly driven by continued wallet share gains with our existing customers. This can be seen in our net revenue growing 22% year over year. Our growth this quarter was broad-based, reflecting an increasing diversification not only across pillars but also across regions, with Europe and North America growing the fastest.

Ethan: Yeah sure. Thanks, Maggie during the first few months of this year, we saw solid growth in line with our expectations, mostly driven by continued wallet share gains with our existing customers. This can be seen in our net revenue growing 22% year over year. Our growth. This quarter was broad based reflecting an increasing diversification not.

Ethan: Only across pillars, but also across regions with Europe, and North America growing the fastest.

Operator: All in all, we're pleased with our progress and confident in the direction that we're heading. Great.

Ethan: All in all we're pleased with our progress and confident in the direction that we're heading.

Operator: Thanks, Ethan. That's helpful context.

Speaker Change: Great. Thanks, Ethan that's helpful context can you give us the key takeaways for the pillars in Q1, yeah, absolutely, but before we dive into the pillar updates I wanted to highlight that we are now also reporting net revenue by pillar because pricing is driven by the size of the customer we focus on absolute net revenues as a business.

Ethan Tandowsky: Can you give us the key takeaways for the pillars in Q1? Yeah, absolutely.

Ethan Tandowsky: But before we dive into the pillar updates, I wanted to highlight that we are now also reporting net revenue by pillar. Because pricing is driven by the size of the customer, we focus on absolute net revenues as a business. Net revenue provides a more accurate view of our underlying performance and the value we create. We believe this change will give you greater clarity on the key drivers of our growth. We'll continue to report process volume by Pillar as well through 2025.

Speaker Change: Net revenue provides a more accurate view of our underlying performance and the value we create.

Speaker Change: We believe this change will give you greater clarity on the key drivers of our growth.

Speaker Change: We will continue to report process volume by pillar as well through 2025.

Ethan Tandowsky: On to the developments in the Pillars.

Speaker Change: Onto the developments and the pillars.

Ethan Tandowsky: Starting with our most established pillar, digital. It remained a key contributor thus far this year. Net revenue was up 13% year on year, driven by continued momentum in verticals like content and subscriptions. We're seeing continued adoption of products like Audgen Uplift and Intelligent Payment Routing for U.S. debit. These solutions help our customers balance performance, cost, and fraud, highlighting the value of our platform and our commitment to ongoing innovation.

Speaker Change: Starting with our most established pillar digital it remains a key contributor thus far this year net.

Speaker Change: Net revenue was up 13% year on year, driven by continued momentum in verticals like content and subscriptions we're.

Speaker Change: We're seeing continued adoption of products like our gen uplift and intelligent payment routing for U S. Debit this.

Speaker Change: These solutions help our customers balanced performance cost and fraud, highlighting the value of our platform and our commitment to ongoing innovation.

Ethan Tandowsky: Turning to Unified Commerce, Net revenue for the Pillar was up 31% year-on-year, reflecting strong momentum across a diversified array of verticals.

Speaker Change: Turning to unified Commerce net revenue for the pillar was up 31% year on year, reflecting strong momentum across a diversified array of verticals.

Ethan Tandowsky: While retail continues to be a significant part of the mix, newer verticals including food and beverage and hospitality were among the fastest growing this quarter, underscoring the broadening relevance of our offering beyond our historic core.

Speaker Change: While retail continues to be a significant part of the mix newer verticals, including food and beverage and hospitality. We're among the fastest growing this quarter underscoring the broadening relevance of our offering beyond our historic core.

Ethan Tandowsky: And finally, platforms. Net revenue was up 63% year-on-year, reflecting solid underlying momentum, particularly as SaaS platforms further embed payments.

Speaker Change: And finally platforms net revenue was up 63% year on year, reflecting solid underlying momentum, particularly SaaS platforms. Further embed payments. We now have 30 platform customers processing over 1 billion euros annually up from 19, a year ago.

Ethan Tandowsky: We now have 30 platform customers processing over 1 billion euros annually, up from 19 a year ago. This milestone demonstrates the strength of our value proposition for platforms looking to embed these services into their core offerings. In short, in Q1 we delivered a solid, broad-based growth across each of these three pillars.

Speaker Change: This milestone demonstrates the strength of our value proposition for platforms looking to embed these services into their core offerings.

Speaker Change: In short in Q1, we delivered a solid broad based growth across each of these three pillars.

Operator: Thanks for that summary, Ethan.

Speaker Change: Thanks for that summary, Ethan I'd like to shift gears for a moment and touch on the broader environment. How are you thinking about the current macroeconomic uncertainty as it relates to audience outlook, yes sure. It is true that there is more uncertainty around the macroeconomic outlook at the same time, thus far this year our performance is in line with our expectations.

Operator: I'd like to shift gears for a moment and touch on the broader environment.

Ethan Tandowsky: How are you thinking about the current macroeconomic uncertainty as it relates to Adyen's outlook? Yeah, sure. It is true that there is more uncertainty around the macroeconomic outlook. At the same time, thus far this year, our performance is in line with our expectations. The biggest part of our growth continues to come from increasing share of wallet, and our view on this opportunity going forward has not changed. This is what gives us the confidence in our ability to deliver now and over the long term. A smaller yet meaningful portion of our growth is inherently linked to the performance of our customers.

Speaker Change: The biggest part of our growth continues to come from increasing share of wallet and our view on this opportunity going forward has not changed this is what gives us the confidence in our ability to deliver now and over the long term.

Speaker Change: A smaller yet meaningful portion of our growth is inherently linked to the performance of our customers. When we shared our HQ2024 results earlier. This year, we shared that we anticipate a slight acceleration in our 2025 net revenue growth driven by wallet share gains with existing customers.

Ethan Tandowsky: When we shared our H2 2024 results earlier this year, we shared that we anticipate a slight acceleration in our 2025 net revenue growth, driven by wallet share gains with existing customers. Included in this expectation is the assumption that our customers will continue to grow at a stable pace. While we focus on further driving these WalletShare gains, that acceleration may become harder to achieve should market volumes slow in the year ahead. That said, our three financial objectives remain unchanged, and we are confident we are well positioned to navigate what lies ahead for this year and beyond.

Speaker Change: Included in this expectation is the assumption that our customers will continue to grow at a stable pace.

Speaker Change: While we focus on further driving these wallet share gains that acceleration may become harder to achieve should market volume slow in the year ahead.

Speaker Change: That said, our three financial objectives remain unchanged and we are confident we are well positioned to navigate what lies ahead for this year and beyond.

Operator: Great. Thanks for that recap, Ethan.

Speaker Change: Great. Thanks for that recap Ethan we now transition to our Q&A segment will get to as many as we can with the time remaining and otherwise we will follow up directly to those who submitted.

Operator: We now transition to our Q&A segment. We'll get to as many as we can with the time remaining, and otherwise, we'll follow up directly to those who submitted. Following the call, the IR team will, of course, be available to respond to any outstanding queries.

Speaker Change: Following the call. The IR team will of course be available to respond to any outstanding queries.

Speaker Change: Okay.

Speaker Change: No.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yeah.

Operator: Let's take a look at the questions we've received.

Speaker Change: Let's take a look at the questions we've received.

Mohammed Moawalla: The first question comes from Mohammed Moawalla at Golden Sack. Mo, can you unmute yourself and go ahead and ask your question, please? Mo, are you able to unmute yourself? Yes, hi, can you hear me? Yes, we can hear you. Great. Thank you.

Speaker Change: The first question comes from Mohammed Mark Miller at Goldman Sachs. Now can you on mute yourself and go ahead and ask your question. Please.

Speaker Change: Now are you able to on mute yourself.

Speaker Change: Yes, Hi can you hear me yes.

Speaker Change: Yes, we can hear you.

Speaker Change: Great.

Speaker Change: Thank you.

Mohammed Moawalla: I had a question firstly on the quantum of the acceleration that you anticipate. I think earlier in the year you talked about roughly around 100 basis points. I appreciate there's a lot of moving parts, the macro environment as you said is more uncertain. Do you still expect a quantum of acceleration this year? And if you can help us understand what would help you get to that kind of 100 basis points or perhaps below? And under what scenario would you perhaps not achieve this acceleration?

Speaker Change: And I had a question firstly on the quantitative about the acceleration that you anticipate I think earlier in the year you talked about roughly around 100 basis points I. Appreciate there's a lot of moving parts the macro environment. As you said is more uncertain.

Speaker Change: Do you still expect a quantum of acceleration this year and if you can help us understand what would help you get to that kind of 100 basis points or perhaps below.

Speaker Change: And under what scenario would you perhaps not achieved this acceleration.

Mohammed Moawalla: The second question was really around eBay. There was a significant ramp down on share of wallet.

Speaker Change: The second question was really around E Berry.

Speaker Change: There was a significant ramp down in share of wallet can you help us understand what's going on here and how that should evolve over the midterm. Thank you.

Ethan Tandowsky: Can you help us understand what's going on here and how that should evolve over the midterm? Thank you. Yeah, sure.

Speaker Change: Yeah sure first on how we talked about acceleration in 2025. So if I go back to February in H. Two when we were reporting <unk> 'twenty 'twenty four we were talking about what do we expect for the year ahead, and we've been talking consistently about the fact that we expect.

Ethan Tandowsky: First on how we talked about acceleration in 2025. So if I go back to February when we were reporting H2 2024, we were talking about what do we expect for the year ahead. And we've been talking consistently about the fact that we expect increasing acceleration in our net revenue growth driven by wallet share gains with our existing customers, as well as new wins as we We also talked about how that was connected to relatively stable growth within our customer base. And so when we look at how the business is performing so far this year, we see strength in the performance against expectations that we had for the first months of this year.

Speaker Change: Increasing acceleration in our net revenue growth driven by wallet share gains with our existing customers.

Speaker Change: As well as new wins as we add them to the platform similar to what we saw in 24, when we grew from 22% to 23%.

Speaker Change: <unk>.

Speaker Change: We also talked about how that was connected to relatively stable grow growth within our customer base and so when we look at how the business is performing so far this year, we see strength in the performance against the expectations that we had for the first months of this year and when we look ahead into the opportunity to gain wallet share.

Ethan Tandowsky: And when we look ahead into the opportunity to gain wallet share and how our pipeline is developing, that all looks strong comparably to where we've been at. So there's nothing that's changed in our thinking based on what we're seeing on the platform today. What we also wanted to give a bit of insight into is that there is a portion of our growth which is connected to our own customers' growth. And we've talked about it in past presentations, talking about the building blocks that make up our growth.

Speaker Change: Our pipeline is developing that all looks strong comparably to to where we've been at so there's nothing that's changed in our thinking based on what we're seeing on the platform today, but we also wanted to give a bit of insight into is that there is a portion of our growth which is connected to our own customers growth.

Speaker Change: And we've talked about it in a.

Speaker Change: In past presentations talking about the building blocks that make up our growth.

Ethan Tandowsky: And given that there's more uncertainty in the macroeconomic outlook, we wanted to share that that acceleration could become more challenging should their growth slow down. At the same time, it's not what we see. Today, we absolutely see that the growth is in line with our expectations, the share of wallet opportunities that we've looked at for the rest of the year. We've also recently re-looked at again as an organization, as a company. We are in constant contact with our customers, and that all is trending as we would expect.

Speaker Change: And given that Theres more uncertainty in the macroeconomic outlook, we wanted to share that that acceleration could become more challenging showed their growth slowdown at the same time, it's not what we see today, we absolutely see that the growth is in line with our expectations.

Speaker Change: The share of wallet opportunities that we've looked at for the rest of the year. We've also recently, we looked at again as an organization as a company. We are in constant contact with our customers and that all is trending as we would expect so I think that gives us the confidence that we're really well positioned to grow not only in 25 at the rate we're expecting but also in the years beyond.

Ethan Tandowsky: So I think that gives us the confidence that we're really well-positioned to grow not only in 2025 at the rate we're expecting, but also in the years beyond.

Ethan Tandowsky: Then the second question you have around eBay. So I think we'll stay away from talking too much on single customers, but I think what I can share, and that's similar to what we've been sharing over the last couple of years, is that there's a few payment methods which you can work with directly. I think PayPal, Amex, those are typically the biggest ones, or you can work through a PSP like Audgen.

Speaker Change: Then the second question you have around ebay.

Speaker Change: So I think we'll stay away from talking too much on single customers, but I think what I can share and that's similar to what have been sharing over the last couple of years is that theres a few payment methods, which you can work with directly I think Paypal amex. Those are typically the biggest ones or you can work through a P. S P like like origin.

Speaker Change: <unk>.

Ethan Tandowsky: This is the cause of the swings in volume on the ex-eBay side. At the same time are on the eBay volumes. If you look at our ex-eBay volumes in platforms, they're growing at 63%. Growing strongly, I think the traction that we have there in general is really in a good place. Similarly, we're growing at that rate on a revenue side.

Speaker Change: This is the cause of the swings in volume on the ex ebay side at.

Speaker Change: At the same time or are on the ebay volumes. If you look at our E Bay volumes in platforms that are growing at 63% growing strongly I think the traction that we have there in general isn't is really in a good place. Similarly, we're growing it at that rate on a revenue side. So I think we're really well positioned broadly and platforms to continue.

Ethan Tandowsky: So I think we're really well positioned broadly in platforms to continue to have that drive our growth through part of this year, of course, and into the years ahead.

Speaker Change: To have that drive our growth.

Speaker Change: Part of this year of course and into the years ahead.

Speaker Change: Thanks now.

Adam Wood: The next question comes from the line of Adam Wood at Morgan Stanley.

Speaker Change: The next question comes from the line of Adam Wood of Morgan Stanley Adam can you on mute yourself and ask a question. Please.

Adam Wood: Adam, can you unmute yourself and ask your question, please? We have quite a diversified merchant base. We're not only diversified across verticals, but we're also diversified across geographies. Your question around TCO in a weaker macro. I think we've been in constant discussion with our customers for the last years. So this is not a discussion that went away and may come back. This is something that we've always been discussing with our customers. Take a product like Audgen Uplift. It's very much focused on the balance between performance, between cost, between fraud. Not sacrificing one for the other, but really bringing indeed that whole total cost of ownership perspective to the choices that you make within payments.

Adam Wood: Yes, thanks very much.

Speaker Change: For taking the question.

Speaker Change: Maybe just first of all reassuring on the macro side just have you clarify that you said.

Speaker Change: The question becomes on the pace of wallet share gains how are we come at Craig could potentially impact that could you maybe just help festival in prior cycles. How that's trended and then maybe you have made a lot of effort on the Tcf side to help merchants. Matt is there an argument that this could be better. This time around because you are able to help more with CCI and a weaker macro in that focus.

Speaker Change: As measures on that one I see plans and development work and sales work that you've done over the last couple of years and.

Speaker Change: And then maybe just secondly, the take rate on platforms is lower than the group.

Speaker Change: Businesses.

Speaker Change: The conversations we've had is the pace and the industry has been almost the tendency for the highest price because there is more complexity around on boarding managing paths et cetera on at the time you could essentially also onboard smbs at a higher take rate as the lower rate that today, just that you've got very big match and so naughty stage.

Speaker Change: And the complexity of managing the platforms and the SMB ramp up is still to come. Thank you.

Speaker Change: Yeah. Thanks, So first on the pace of share gains. So again, we're very enterprise focused as a business, where which means we're in constant dialogue with our customers of course.

Speaker Change: That means that we're talking about still what are their priorities for the rest of the year. What are the opportunities that we have to grow get together and we look at that on a on a total basis for the rest of 2025 that looks very similar again to where we were a few months back. So we feel really well positioned to continue to gain that share with our customer base, we see the same on the.

Speaker Change: On the pipeline side, so for new business. So as we're of course building out working with existing customers. We're also very much focused on how do we add new customers to the platform and that those discussions are also trending in the same way that we expected a few months ago, So nothing really to flag on that side.

Speaker Change: How has it trended in prior cycles I think we've proven that we have strong and resilient growth through multiple cycles here that we've seen over the last years.

Speaker Change: We have quite a diversified merchant base, we're not only diversified across verticals, but we're also diversified across geographies.

Speaker Change: Your question around T C O and in a weaker macro I think we've been in constant discussion with our customers for the last years. So.

Speaker Change: This is not a discussion that went away and may come back this is something that.

Speaker Change: We've always been discussing are discussing with our customers take a product like our gen uplift, it's very much focused on the balance between performance between cost between fraud, not sacrificing one for the other but really bringing indeed that hole.

Speaker Change: That whole total cost of ownership perspective to the choices that you make within payments and that's that's landing very well something like U S. Debit also positions us really well, it's not only reducing costs, but doing that without sacrificing performance and that combination is really important for our customers and something that.

Ethan Tandowsky: And that's landing very well. Something like U.S. Debit also positions us really well. It's not only reducing costs, but doing that without sacrificing performance. And that combination is really important for our customers. And something that I expect they'll continue to be focused on as they have been in the last couple of years. If you talk about take rates amongst the pillars, Indeed Platforms is a lower take rate if you look at it amongst the three. That's driven by the size of the customers. So, indeed, you mentioned a few other services. There are more services or products, typically, that we can offer a platform.

Speaker Change: I expect they'll continue to be focused on as they have been in the last couple of years.

Speaker Change: If you could talk about take rates amongst the pillars. Indeed.

Speaker Change: Indeed platforms is the lower take rates if you look at it amongst the three.

Speaker Change: That's driven by the size of the customers.

Speaker Change: So indeed, you mentioned a few other services there are more services or products typically that we can offer our platform. So to your earlier point I think it is logical to assume that there's more ways to monetize but at the same time. These platforms bring a lot of volume to the table. We have talked about 30 platforms processing over 1 billion euros in volume.

Ethan Tandowsky: So, to your earlier point, I think it is logical to assume that there's more ways to monetize. But at the same time, these platforms bring a lot of volume to the table. We've talked about 30 platforms processing over a billion euros in volume as of this quarter, compared to 19 in the year before. So, there is real scale that these platforms bring. And it's just more concentrated to date, given that it's the newest and smallest pillar of the three. But I think your assessment that there's more opportunity to monetize amongst platforms is true.

Speaker Change: As of this quarter compared to 19 in the year a year before so there is real scale that he said that this platform spring and it's just more concentrated to date given that it's a it's the newest and smallest pillar of the three.

Speaker Change: But I think your assessment that there's more opportunity to monetize among amongst platforms is true.

Speaker Change: Okay.

Justin Forsythe: Our next question comes from Justin Forsythe at UBS.

Speaker Change: Our next question comes from Justin for sites at UBS.

Justin Forsythe: Justin, please go ahead and unmute yourself and ask your question. Great, thank you so much. Can you hear me well? We can hear you. Great. I don't know if it's just me, but I am getting a little bit of feedback on the line. I'll just say that for the benefit of others.

Speaker Change: Justin Please go ahead, and Amit yourself and ask your question.

Justin: Great. Thank you so much can you hear me well.

Speaker Change: Can hear you.

Speaker Change: Great I don't know if its just anybody I'm getting a little bit of feedback on the line I'll, just say that for the benefit of others.

Justin Forsythe: I have two questions here for you.

Speaker Change: I have two questions here for you. So first one I was just wondering if theres any given a number for macro so you more or less gone ahead and reiterated that 24% number.

Justin Forsythe: So first one, I was just wondering if there's any given a number for macro. So you're more or less going ahead and reiterated that 24% number. I think what some might fear is that The reiteration of that, if we assume our base case is for a lower macro or a worse macro in 2H, that more or less the 24% is the upside case, and that we're talking about something perhaps in the low 20s as the real base case.

Speaker Change: What some might fear is that.

Speaker Change: The reiteration of that if we assume our base case is for a lower macro or a worse macro into H that more or less the 24% as the upside case and that we're talking about something perhaps in the low twenties as the real base case. So maybe you could talk a little bit about the moving pieces within the macro is there a little bit of given that number that 24 number sorry, it wasn't exactly.

Ethan Tandowsky: So maybe you'll talk a little bit about the moving pieces within the macro. Is there a little bit of given that number, that 24 number, or sorry, it wasn't exactly 24, it was a slight acceleration as you worded it, which maybe you put at 24. If there's any given that number, and particularly given we're expecting, I think, a higher exit rate, all else equal, as cash app, and maybe eBay comps get a little bit easier in the back half of the year. Just talking us through the moving pieces there.

Speaker Change: 24, it was a slight acceleration as you where did it which maybe you put out 24, if theres any given that number and particularly given we're expecting I think a higher exit rate all else equal as cash app, and maybe ebay comps get a little bit easier in the back half of the year, just talking us through the moving pieces there.

Ethan Tandowsky: The second question relates to platforms, and more specifically capital. I guess if you could remind us, initially, before it goes off balance sheet, what type of capital you think you require for this. Can you be using some of the deposits you're getting on the account side of things, and about the velocity you expect to ramp this?

Speaker Change: Second question relates to platforms and more specifically capital I guess, if you could remind us initially before it goes off balance sheet what type of capital. You think you require for this can you be using some of the deposits you're getting on the account side of things and about the velocity you expect to ramp there. So maybe just remind us on when it came out of beta and how you expect.

Ethan Tandowsky: Maybe just remind us on when it came out of beta, and how you expect it to ramp over time. Also, lastly, on the credit rating, you've talked about before how there's a qualitative capital allocation policy as a driver.

Speaker Change: Its a ramp over time and also lastly on the credit rating you've talked about before how there's a qualitative capital allocation policy as a driver.

Ethan Tandowsky: Have you clarified with them what changes actually would trigger any sort of downgrade or if there's any give and what you would do with that cash over time or if they've been more explicit on what exactly would trigger any changes to that?

Speaker Change: Have you clarified with them what changes actually would trigger any sort of downgrade or if theres any given what you would do with that cash over time.

Speaker Change: Or if they've been more explicit on what exactly would trigger any changes to that thank you very much.

Ethan Tandowsky: Thank you very much. Yeah, sure.

Speaker Change: Yeah sure. So let me address your first question on impact of the macro so.

Ethan Tandowsky: So, let me address your first question on impact of the macro. So, what we shared previously when we talked about our building blocks is that the growth of our customers is typically around high single digits, low double digits contributor to our growth, right? And so, it is an important part, albeit it's not the biggest part. The biggest part is in our existing base combined with how we ramp up our new customers. So, that part we feel is very well on track, right? That's exactly what I've tried to share around how we look at the opportunity in the year ahead is that the wallet share opportunity looks very, very similar to how we expected it to transpire.

Speaker Change: Well, we shared previously when we talked about our building blocks is that the growth of our customers is typically around high single digits low double digits.

Speaker Change: Contributor to our growth rate and so it is an important part, albeit it's not the biggest part the biggest part is growth in our existing base combined with how we ramp up our new customers.

Speaker Change: So that part we feel is very well on track right that's exactly.

Speaker Change: What what I've tried to share around how we look at the opportunity in the year ahead is that the wallet share opportunity. It looks very very similar to how we expected it to transpire.

Ethan Tandowsky: We're really confident in our position to be able to continue to gain market share within our customer base. So, I think that's the important part and what gives us the confidence that we're really well positioned to grow through any uncertainty is that the biggest part of our growth is driven by what's in our own control and what's driven through our execution.

Speaker Change: We're really confident in our position to be able to continue to gain market share with our within our customer base. So I think that that's the important part and what gives us the confidence that we're really well positioned to to grow through any any uncertainty is that the biggest part of our growth is driven by what's in our own control and what's driven through our execution.

Speaker Change:

Ethan Tandowsky: Second question that you have is around capital, that is, yeah, of course, we can fund it on our own balance sheet for the next while.

Speaker Change: The second question that you have is around capital that is.

Speaker Change: Yeah of course, we can fund it on their own balance sheet.

Speaker Change: For the next while it will take some time to ramp up. So this is also not in a conversation that we're having actively now about when we would need to move it off balance sheet, we are positioned to be able to.

Ethan Tandowsky: It will take some time to ramp up, so this is also not a conversation that we're having actively now about when we would need to move it off balance sheet. We are positioned to be able to provide that capital from our own funds and allow ourselves to scale and do that flexibly, and we're focused on that. In terms of velocity to ramp, it's still to be seen. It will take some time, but it's absolutely still a key driver of why we're winning embedded payments business today and why you see that number going from 19 to 30 within a year.

To provide that capital from our own funds.

Speaker Change: And allow ourselves to scale and do that flexibly and we're focused on that in terms of velocity to ramp still to be seen it will take some time, but.

Speaker Change: But it's absolutely still a key driver of why we're winning embedded payments business today and why you see that number going from 19 to 30 within a year.

Speaker Change: On the credit rating side have we clarified what changes would lead to a downgrade.

Ethan Tandowsky: On the credit rating side, have we clarified what changes would lead to a downgrade? Of course, we're in constant dialogue with the rating agencies, and we look for as much clarity as possible.

Speaker Change: Of course, we're in constant dialogue with our with the rating agencies.

Speaker Change: So we look for as much clarity as possible I think the reality is that on the short term nothing will likely change in our in our position around capital allocation and we'll continue to focus on driving growth in the business as we know that's the biggest driver also of shareholder returns.

Ethan Tandowsky: I think the reality is that on the short term, nothing will likely change in our position around capital allocation, and we'll continue to focus on driving growth in the business as we know that's the biggest driver also of shareholder returns. Great.

Speaker Change: Great. Thanks for your question Justin.

Harshita Rawat: The next question comes from Harshita Rawat at Bernstein.

Speaker Change: Next question comes from Hershey Terawatt at Bernstein Hershey, Sir. Please go ahead, and Amit yourself and ask your question.

Harshita Rawat: Harshita, please go ahead and unmute yourself and ask your question. Hi. Good morning. Thanks for taking my question. Ethan, can you maybe talk about going back to the high single-digit customer growth, talk about what you saw in March and April, and also just remind us of, you know, around your exposure to overall discretionary spend. We've seen some weakness in travel verticals, not necessarily for you guys, but just overall in the market. I know airlines is primarily gateway kind of volume for you, but anything else to consider there?

Hershey Terawatt: Hi, good morning, Thanks for taking my question.

Speaker Change: Ethan can you maybe talk about going back to that high single digit growth.

Hershey Terawatt: Talk about what you saw in March and April.

Speaker Change: And also just remind us.

Speaker Change: Ill get exploited deal.

Speaker Change: Discretionary spend.

Speaker Change: We have seen some weakness.

Speaker Change: But it does not necessarily for you guys to what our.

Speaker Change: The market.

Speaker Change: Airlines dynamic gateway.

Speaker Change: Volumes for you than anything else to consider there.

Ethan Tandowsky: And then my second question, I just want to follow up on the U.S. You ramped up hiring and sales more than a year ago. How is the pipeline looking now? How are the conversations going? Thanks. Yeah, sure. So what we saw in March and April, your first question, we didn't see real change. I think the thing that we saw move of anything was that the USD devalued against the euro. And of course, we report in euro. That won't have an impact on a constant currency basis. But of course, on a euros reported basis. That's the only thing that we've seen really move.

Speaker Change: And then my second question I, just want a follow up.

Speaker Change: On the U S you ramped up hiring.

Speaker Change: With the year ago, how is the pipeline looking now.

Speaker Change: Thank you.

Speaker Change: Yeah sure. So what we saw in March and April your first question.

Speaker Change: We didn't see real change I think the thing that we saw move of anything was that the USDA devalued against the Euro and of course, we report in euro that.

Speaker Change: Want to have an impact on a constant currency basis, but.

Speaker Change: Of course on a euro reported basis. That's that's the only thing that we've seen really move.

Ethan Tandowsky: And of course, there's some movements in specific verticals, you called out a few, but when we look at it on a total basis, there's nothing of real significance in those months other than again, that currency movement that I just referenced. So we're not seeing something on our platform today that gives us an indication that anything's changed.

Speaker Change: And of course, we there's some movements in specific verticals you called out a few but when we look at it on a total basis theres nothing of real significance in those months other than again that currency movement that I just referenced so we're not seeing something on our platform today that gives us an indication that anything has changed.

Ethan Tandowsky: Your second question around the U.S. and how we're ramping up sales, yeah, it's going well. We're, we look at both how individual salespeople are performing compared to previous cohorts, but also how the overall cohorts of customers we're bringing in in any given year are developing. And of course, it's one thing to open that pipeline and to close that pipeline, but then that's just the land part of our land and expand model. And we also need to expand those customers once they're live with us. And so we track each of these cohorts quite closely. They're developing well, as we would have expected based on the size of the teams that we're building.

Speaker Change: Your second question around the U S and how we're ramping up sales.

Speaker Change: Yes, it's going well, where we look at both.

Speaker Change: How individual salespeople are performing compared to previous cohorts, but also how the overall cohorts of customers, we're bringing in in any given year are developing and of course, it's one thing to to open that pipeline into closed that pipeline, but then that's just the land part of our land and expand model and we also need to expand those customers once they're live with us.

Speaker Change: And so we track each of these cohorts quite closely they are developing well as we would have expected based on the size of the teams that were building.

Ethan Tandowsky: So I think all of that is on track, also in the U.S. It's also a reason why we've been able to grow North America as one of our fastest growing regions over the last years. And so far, also in the first quarter, we see the newest cohort also delivering.

Speaker Change: So I think all of that is on track also in the U S. It's also a reason why we've been able to grow North America is one of our fastest growing regions over the last years in <unk>.

Speaker Change: So far also in the first quarter, we see the newest cohort also delivering.

Great.

Hannes Leitner: The next question comes from Hannes Leitner at Jeffreys. Hannes, please go ahead and unmute yourself and ask your question. Yes, thanks for letting me on. Just a couple of questions. The first one is looking at 2023 irrational pricing behavior of some competitors. Can you talk about any early indicators you have built in in your forecasting or contracts to mitigate any stock shift in key merchant trends through competitive pricing behavior?

Harness Laettner: The next question comes from harness Laettner at Jefferies. Please.

Speaker Change: Please go ahead, none yourself and ask your question.

Harness Laettner: Yes, thanks for letting me on those couple of questions. The first one is looking at 'twenty two 'twenty three irrational pricing behavior or some competitors can you talk about any early indicators U S built in your forecasting or contract to mitigate any stock.

Speaker Change: Shift in key merchant trends through <unk>.

Speaker Change: Competitive pricing behavior and the second one is on platforms.

Hannes Leitner: And the second one is on platforms. That has actually two parts. Can you give an update on embedded finance if you have moved up with single business limits? And what is the experience so far in terms of competitive offerings where you have the key benefits?

Speaker Change: <unk> had two parts can you give an update on embedded finance. If you have moved through a single business limits and what is the experience so far in terms of.

Speaker Change: Hydro test offerings, where you're asked to key benefits and then just maybe on customer.

Ethan Tandowsky: And then just maybe on customer Grof in within the platform segment, excluding eBay, can you talk to about that, that you win there the international legs or you win that the whole business replacing former platform businesses, platform payment providers? Thank you. Yeah, sure. So I think on pricing behavior, you referenced what we discussed in 2023. I think if you look at us now, we're really well positioned to have these types of conversations with our customers. And we are engaging directly on these types of conversations, right? So it's not anything new that our customers care about a combination of cost, performance, about managing fraud, right?

Speaker Change: And within the platform segment, excluding ebay.

Speaker Change: <unk> did you win there the international legs or you win the whole business, replacing former platform businesses.

Speaker Change: That's from payment providers.

Speaker Change: Thank you.

Speaker Change: Yes sure.

Speaker Change: So I think on pricing behavior, you referenced what we discussed in 2023 I think if you look at US now, we're really well positioned to have these types of conversations with our customers and we are engaging directly on these types of conversations right. So it's not anything new that our customers care about a combination of cost performance about managing fraud.

Ethan Tandowsky: We've been having these conversations at length with our customers for years now. And we feel we're really well positioned as we sit here today to be able to support them, however their priorities develop through the course of this year and the years ahead, right? If you again take a product like Uplift, it's that balance. It's saying, hey, you don't need to sacrifice performance to save costs. We can do that while also managing fraud within your overall payment system. So it's always about trying to find that balance. And I think that's landing really well. Another example, again, is U.S.

Speaker Change: Right, we've been having these conversations at length with our customers for years now and we feel we're really well positioned as we sit here today too to be able to support them. However, their priorities develop through the course of this year and the years ahead, alright, if you again take a product like uplift, it's that balance it, saying, hey, you don't need to sacrifice.

Speaker Change: <unk> performance to save costs.

Speaker Change: We can do that while also managing fraud within your overall payment system. So.

Speaker Change: It's always about trying to find that balance and I think that's landing really well.

Speaker Change: Another example, again as U S debit right, we provide again the balance between cost and performance I think we're really well positioned both from a <unk>.

Ethan Tandowsky: debit, right? We provide, again, the balance between cost and performance. I think we're really well positioned both from a go-to-market motion perspective, but also from a product perspective to deliver against whatever priorities our customers are asking for. And we've been doing so over the last year.

Speaker Change: A go to market motion perspective, but also from a product perspective to deliver against whatever priorities. Our customers are asking for and we've been doing so over the last years.

Ethan Tandowsky: on the second piece on an update on embedded finance. I think a couple of things I can mention. One, we talked about how issuing was growing nicely in our H2 update. That continues to grow nicely also through the course of the beginning of this year. It's still very small in the scheme of things compared to our acquiring side of our business, but there's really good signs that we are doing something right on the issuing side as well.

Speaker Change: On the second piece on an update on embedded finance.

Speaker Change: I think.

Speaker Change: A couple of things I can mention one we've talked about how issuing was growing nicely in our H two update that continues to grow nicely also through the course of the beginning of this year.

Speaker Change: It's still very small in the scheme of things compared to our acquiring side of our business but.

Speaker Change: There's really good signs that we are doing something right on the on the issuing side as well and then an embedded embedded finance if you if you're meaning capital yeah, where we.

Ethan Tandowsky: In embedded finance, if you're meaning capital, we've got customers live, we're in general availability, we're of course constantly looking at how to improve the product as we build with our customers, and we feel that that product's also really well positioned for us to scale. At the same time, it's not a big factor in our 2025 growth as we currently expect.

Speaker Change: We've got customers live where in general availability, where of course constantly looking at how to improve the product as we build with our customers and we feel that that that products also really well position for us to scale at the same time, it's not a big factor in our 2000 and twenty-five.

Speaker Change: Growth as our as we currently expect it.

Ethan Tandowsky: And then you added one last question on how platforms are growing and whether that's international everything Yeah, it's both, right? I think platforms are biggest in North America and in Europe. And so when we're talking to platform customers, we're talking about their whole business, both how they expand into new markets, whether that's somewhere in Europe or into the US, or if that's taking over existing business. Both are very much processes that we've seen in those 30 platforms we talk about doing over a billion.

Speaker Change: And then you added one last question on how platforms are growing and whether that's international everything.

Speaker Change: <unk>.

Speaker Change: Yeah, It's both right I think platforms are our biggest in North America and in Europe.

Speaker Change: And so when we're talking to platform customers, we're talking about their whole business.

Speaker Change: Both how they expand into new markets, whether that's somewhere in Europe or or into the U S or if that's taking over existing business. Both are very much processes that we've we've seen in the in those 30 platforms, we talk about doing over 1 billion with.

Speaker Change: Okay.

Fred Boulan: Our next question comes from Fred Boulan at Bank of America. Fred, please go ahead and unmute yourself and ask your question. Hey, thank you very much for taking the time.

Speaker Change: Our next question comes from Fred Golan at Bank of America. Fred. Please go ahead, and a neat yourself and ask your question.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Thanks.

Fred Boulan: I'm just going to do a follow-up to the previous question around... the rest of the year. So we started with 21%. XFX Growth in Q1, you will have less headwinds from these large clients towards the end of the year, but any other moving parts you can point to that give you confidence in that revenue acceleration that is embedded within your current guidance?

Speaker Change: I'm just going to do for them.

Speaker Change: Previous question around.

Speaker Change: The rest of the year.

Speaker Change: So we started with 21%.

Speaker Change: Yes.

Speaker Change: Ex FX growth in Q1.

Speaker Change: You will have less headwind from with large clients.

Speaker Change: At the end of the year, but any other moving parts you can point to that.

Speaker Change: Dan It seems that revenue acceleration.

Speaker Change: Got it.

Speaker Change: In your current guidance.

Ethan Tandowsky: And then follow up on the platform side.

Speaker Change: And then follow up on the platform side.

Speaker Change: Anything you can share around the differentiation versus existing offerings in the market.

Ethan Tandowsky: Anything you can share around the differentiation versus existing offers in the market, you know, very strong growth in the quarter, so it's good to have the revenue breakdown, but it would be good to have a bit more perspective on how you see the perspective on the potential in that business. Thank you very much. Sure, so I think the biggest thing that gives us confidence is when we look at the opportunities within our existing base to grow over the next nine months, right? And I think we've been talking about within digital seeing the biggest opportunity in content and subscription.

Speaker Change: In a very strong growth.

Speaker Change: In the quarter. So it's good to have the revenue breakdown.

Speaker Change: Good to have a bit more perspective.

Speaker Change: How you see the.

Speaker Change: Perspective on the potential in that business.

Speaker Change: Thank you very much.

Speaker Change: Sure. So I think the biggest thing that gives us confidence is when we look at the opportunities within our existing base to grow over the next nine months right and I think we've been talking about within digital that are seeing the biggest opportunity in content and subscription.

Ethan Tandowsky: In unified commerce, it's not only the fact that we've been working in retail over the last years, but it's also that we've been expanding and diversifying to more verticals. We see the fastest growth in verticals like hospitality, like food and beverage. And then, of course, platforms is getting bigger as a pillar within the overall business each quarter as we go, and we continue to see really, really strong traction also within the platform pillar. So I think the biggest part that gives me the confidence that we'll continue to grow at a strong rate is that the opportunities that we've identified for the course of the year are really there, they're in active discussion with our customers and in many cases are already being worked on.

Speaker Change: Unified Commerce, it's not only the fact that we've been working in retail over the last years, but it's also that we've been expanding and diversifying to more verticals, we see the fastest growth in verticals like hospitality like food and beverage and then of course platforms is getting bigger as a pillar within the overall business.

Speaker Change: Each quarter as we go and we continue to see really really strong traction also within the platform pillar. So I think the biggest part that gives me the confidence that we'll continue to grow at a strong rate is that.

Speaker Change: The opportunities that we've identified for the course of the year are really there they're in active discussion with our customers and in many cases are already being worked on so we're in a really good position to.

Ethan Tandowsky: So we're in a really good position to drive that growth through that expansion with our existing base over the course of the rest of the year. You did mention easing of a headwinds towards H2. I think, of course, that that's the case. We've talked about volumes starting to come off in Q3 and in Q4 of last year, but I think more than anything, it's important, especially, right, you mentioned this year, this quarter's growth, but also if you look back to last year, Every quarter's growth is not the best indicator of the next quarter's growth, right?

Speaker Change: Drive that growth through that expansion with our existing base over the course of the rest of the year.

Speaker Change: Yeah.

Speaker Change: You did mention.

Speaker Change: The easing of the headwinds towards H two.

Speaker Change: I think.

Speaker Change: Of course, that's the case, we've talked about volume starting to come off in Q3 and in Q4 of last year, but I think more than anything it's important, especially right. You mentioned this year. This quarter's growth, but also if you look back to last year.

Speaker Change: Every quarters growth is not the best indicator of the next quarter's growth.

Ethan Tandowsky: That's what we've seen last year. We saw 21%, 26%, 23%, 23%. What gives us most confidence is looking at, hey, where is the real opportunity within our customer base? How do we expect that to develop over the course of the year? And there we have real concrete details on an account-by-account level of how we expect the year to play out. Those are active conversations that we're having day-to-day with our customers and why we feel well-positioned to deliver on the growth that we've been discussing.

Speaker Change: That's what we've seen last year, we saw a 21% 26% 23% 23.

Speaker Change: What gives us the most confidence is looking at hey, where is the real opportunity within our customer base. How do we expect that to develop over the course of the year and there we have real concrete.

Speaker Change: Details on an account by account level of how we expect the year to play out those are active conversations that we're having day to day with our customers and why we feel well positioned to deliver on the growth that we've we've been discussing.

Ethan Tandowsky: Your second question around how we differentiate, I think we differentiate in many ways that may sound familiar within platforms. So one is that we have a global offering, right? We're not a single market. We can offer this in multiple regions around the world. We have a unified commerce offering. Many of our platforms also have an in-person need. That's where we are also really strong in the offering we can provide. And we can offer not only payments, but an embedded finance suite on our own banking licenses, on our own technology that is quite differentiated in the market.

Speaker Change: Your second question around how we differentiate I.

Speaker Change: I think we differentiate in many ways. It may sound familiar within platform. So one is that.

Speaker Change: We have a global offering right. We're not single market. We can offer this in multiple regions around the world.

Speaker Change: We have a unified commerce offering many of our platforms also have an in person need that's where we are also really strong in the offering we can provide.

Speaker Change: And we can offer not only payments, but in embedded finance suite on our own banking licenses on our own technology that is quite differentiated in the market.

Ethan Tandowsky: And that positions us really well to, say, if you want to go on a growth journey as a platform, bringing on payments, bringing on financial products that were a great fit to be your partner in doing that, not only now, but also over time. That's been hugely differential for us as we've been expanding with our platform.

Speaker Change: And that positions us really well to say if you want to go on a growth journey as a platform, bringing on payments, bringing on financial products that we are a great fit to be your partner in doing that not only now but also over time and that's that's been hugely differential for us as we've as we've been expanding with our platform customers.

Speaker Change: <unk>.

Speaker Change: Thanks Fred.

Darrin Peller: Our next question comes from Darrin Peller at Wolf Research. Darrin, please go ahead and unmute yourself and ask your question. Thanks, Maggie. Thanks, guys. Just maybe talk on...

Speaker Change: Next question comes from Darrin Peller at Wolfe Research Darren. Please go ahead and I meet yourself and ask your question.

Speaker Change: Thanks, Maggie thanks, guys.

Speaker Change: Just maybe touch on your <unk>.

Speaker Change: S border.

Speaker Change: And within that.

Speaker Change: West Cros.

Operator: Iceberg, Wolfgang Amadeus Bogner, Wall Street Journal, James Currie, Akshay Desai, We're really thinking about...

Speaker Change: Versus.

Speaker Change: Even directional so just any thoughts.

Speaker Change: We're really thinking about.

Operator: And then maybe as a follow-up, just be your, if you could provide some more color in the conversation about the NFTs you've had during the quarter, what hiring plans you've put in place this year, just as a change at all from your prior assumption, investing. I see on yours I didn't pick up every word, but I think I got the first question, which is how do we see cross-border e-commerce, especially in the U.S.? If I got that wrong, please correct me, but I think that's what I picked up. Yeah, so I think you're right to think about the fact that we are working with many global customers, but I think partly what we see is that...

And then maybe is it.

Speaker Change: Just the or if you could provide some more color.

Speaker Change: Sure.

Speaker Change: During the quarter.

Speaker Change: Our hiring plans.

Speaker Change: Sure Justin.

Speaker Change: Change at all from here.

Speaker Change: Our assumption.

Speaker Change: <unk>.

Speaker Change: Thanks again guys.

Speaker Change: I Didnt pick up every word, but I think I got the first question, which is how do we see cross border E Commerce.

Speaker Change: Especially in the U S. If I got that wrong. Please please correct me, but I think that's what I picked up.

Speaker Change: Yeah. So I think youre right to think about the fact that we are working with many global customers, but I think partly what we see is that <unk>.

Ethan Tandowsky: Many of our global customers are represented around the world, and we work locally with them as well. So the majority of our volumes are local volumes that we're acquiring in the regions in which we're operating with them. And so there's nothing specific that I would call out in this part of the business. I think there's others who probably have better insight to this, but it hasn't really moved the needle in any way for us, if I look over the last months or weeks.

Speaker Change: Many of our global customers are represented around the world and we work locally with them as well right. So the majority of our volumes are.

Speaker Change: Our local volumes that were acquiring in the regions in which we're operating with them and so there's nothing specific that I would call out in this in this part of the business I think there's others, who probably have better insight to this but it hasn't really moved the needle in any way for us.

Speaker Change: I look over the last.

Speaker Change: Months or weeks in terms of FTE and in our hiring plans.

Ethan Tandowsky: In terms of FTE and our hiring plans, we talked about 110 net joiners in Q1, and that's a pretty reasonable expectation of the type of hiring that we'll do in the quarters throughout the rest of the year. There's no real change in how we're thinking about that, and the main driver of that is that our hiring is not directly connected to any short-term movement, it's connected to a long-term opportunity, because hiring on the short-term is not typically connected to revenues on the short-term. And so we're very confident in not only the opportunity to grow revenues this year, but also to grow revenues in the years ahead.

Speaker Change: We talked about 110 that join us in Q1 and that that's a pretty reasonable expectation of the type of hiring that will do in the quarters throughout the rest of the year. There's no real change in how we're thinking about that and the main driver of that is that.

Speaker Change: Our hiring is not directly connected to any short term movement, it's connected to a long term opportunity because hiring on the short term is not typically connected to revenues on the short term and so.

Speaker Change: We're very confident in not only the opportunity to grow revenues. This year, but also to grow revenues in the years ahead and given that confidence we want to continue to hire against those plans and make sure that we can capitalize on that opportunity. So nothing has changed in our in our hiring plans.

Ethan Tandowsky: And given that confidence, we want to continue to hire against those plans and make sure that we can capitalize on that opportunity. So nothing has changed in our hiring plans.

Speaker Change: Thanks Darren.

Andrew Bauch: The next question comes from Andrew Bauch from Wells Fargo.

Speaker Change: The next question comes from Andrew Bock from Wells Fargo. Andrew. Please go ahead, and Nutmeat yourself and ask your question.

Andrew Bauch: Andrew, please go ahead and unmute yourself and ask your question. Hey guys, thanks for taking the question. The first one I wanted to ask about was your AI push and how you guys are going to market both with AI, both externally and internally. There's been a lot of talk around agentic commerce over the last couple of weeks and from your peers as well.

Andrew Bock: Hey, guys. Thanks for taking the question.

Andrew Bock: The first one I wanted to ask about was your AI push and how you guys are going to market both with AI both.

Andrew Bock: Externally and internally there's been a lot of talk around agenda commerce over the last couple of weeks and from your peers as well and then my second question would be on the platform side. The point of sale volumes continuing to tick up as a percentage of the overall mix. What are you kind of think that debt and terminal state would be as far as a percentage.

Ethan Tandowsky: And my second question would be on the platform side, the point of sale volumes continue to tick up as a percentage of the overall mix. What do you think that end terminal state would be as far as the percentage goes? I'd imagine that recently it's been driven by restaurant, but I'm happy to hear what you have to say.

Andrew Bock: He goes I would imagine that recently its been driven by restaurant, but happy to hear you say thank you.

Ethan Tandowsky: Thank you. Yeah, so where we've highlighted, especially our focus on AI has been around, for instance, our Uplift product. What Uplift ultimately does is, again, it balances performance, cost, fraud, but it also puts these tools in the hands of our merchants, so they all have access to be able to test different settings on different transactions, see how they perform, what does it do to cost, what does it do to auth rates, how does that influence fraud, and we ultimately give that tooling back to them so that they have the power to make these decisions and make them in an informed way.

Andrew Bock: Yeah. So we're we've highlighted especially our focus.

Andrew Bock: On AI has been around for instance, our uplift product what.

Andrew Bock: What uplift ultimately does is again it balances performance cost fraud, but it also puts these tools in the hands of our merchants. So they all have access to be able to test.

Andrew Bock: Different settings on different transactions see how they perform what does it do to cost what does it do to author eights, how does that influence fraud, and we ultimately give that give that tooling back to them. So that they have the power to make these decisions and make them in an informed way I think this is really powerful and something that we will continue to focus.

Ethan Tandowsky: I think this is really powerful and something that we will continue to focus on to drive the impact that our merchants are looking for. We see many other potential opportunities. There's a lot of change, of course, happening from a technology perspective, and we're really excited what that could bring to our customers.

Andrew Bock: On.

Andrew Bock: To drive drive the impact that our merchants are looking for.

Andrew Bock: We see many other potential opportunities.

Andrew Bock: There's a lot of change of course happening from a technology perspective, and we're really excited what that could could bring to our customers at the moment I wouldn't I wouldn't talk to you more than that.

Ethan Tandowsky: At the moment, I wouldn't talk to more than that. On the platform side, indeed, I mentioned that a big part of our differentiation is that we are offering a unified commerce-type experience to platforms, so both allowing them to accept payments in person and online. And that's a huge part of why we're winning in the platform space. It's also why you see the in-person payments part ticking up faster within that space. And in general, payments still are around 80% in person. So I think the fact that we're at something like 25%, 30%, I think 27% in total within platforms means there's still a way to go for us to look like the market within that space.

Andrew Bock: On the platform side, Indeed, I mentioned that a big part of our differentiation is that we are offering a unified commerce type experience two platforms, so both allowing them to accept payments in person and online.

Andrew Bock: And that's a that's a huge part of why we're winning in the platform space.

Andrew Bock: That's also why you see the in person payments part.

Andrew Bock: Ticking up faster within that space and in general payments still are around 80% in person so I.

Andrew Bock: I think the fact that were at something like 25% to 30% I think 27% in total it within platforms means there's still a way to go for us to look like the market within that space and so it's a it's really important that we continue to differentiate here for our platform customers.

Ethan Tandowsky: And so it's really important that we continue to differentiate here for our platform customers.

Speaker Change: Thanks, Andrew.

Sven Merkt: The next question comes from Sven Merkt from Barclays. Sven, please go ahead and unmute yourself and ask your question.

Speaker Change: The next question comes from spend Merit from Barclays. San Please go ahead, and Unmeet yourself and ask your question.

Sven Merkt: Are you able to hear us and unmute yourself? Let's come back to Sven.

Speaker Change: And then are you able to hear us on mute yourself.

Speaker Change: Let's come back to spin.

Ethan Tandowsky: The next question... Can you hear me? Oh, yeah, we can hear you. Go ahead. Oh, perfect. Good afternoon. First, maybe a question on the higher U.S. tariffs. To some of your customers, you have direct exposure to that. I think, for example, Timo is planning to increase prices by 100% plus. How do you see this impacting your volumes? Are the price increases sufficient to offset lower activity? Yeah, curious how you think about that.

Speaker Change: Next question Oh, Yeah, we can hear you go ahead.

Speaker Change: Oh, Okay, all right good afternoon.

Speaker Change: First maybe a question on the higher U S tariffs.

Speaker Change: So if youre asking me.

Speaker Change: Direct exposure to that.

Speaker Change: Zinc for example, T Mo is planning to increase prices by 100%.

Speaker Change: How do you see this impacting volumes.

Speaker Change: Are the price increases sufficient to offset lower activity yes.

Speaker Change: Curious, how you're thinking about that and then secondly, the patch on taken has been very strong.

Ethan Tandowsky: And then secondly, the platform taken has been very strong on a year-on-year comparison. Can you comment what drove this? Was this only due to the lower eBay volumes or do you start to see there perhaps a more meaningful tailwind from your embedded finance offering or anything else to consider? Thank you. Yeah, sure.

Speaker Change: On a year on year comparison can you come and go drove this list is only due to their lower ebay volumes or do you start to see that perhaps in more meaningful tailwind from the embedded finance operating or anything else.

Speaker Change: Thank you.

Speaker Change: Yeah sure. So first on tariffs in general I think I would like to stay away from speaking on individual customers because of course, various customers have a range of impacts.

Ethan Tandowsky: So first, on tariffs in general, I think I would like to stay away from speaking on individual customers, because, of course, various customers have a range of impacts from these types of these types of outcomes. I think what's important to understand here is that we stay very close to our customers. It's especially an important time to be in discussion with your customers to understand how do they look at their own business and how does their strategy, if at all, shift. I think the benefit we have is that we're very global in nature. We're very well diversified across verticals.

Speaker Change: From these types of.

Speaker Change: These types of outcomes I think what's important to understand here is that we stay very close to our customers, especially in important time to be in discussion with your customers to understand how do they look at their own business and how does their strategy. If at all shift I think the benefit we have is that we're very global in nature, we're very well diversified across verticals.

Ethan Tandowsky: So typically, we're a great partner to be able to help should any strategy shift at all. Right. And again, coming back to this point, I find it the most important one that we look at internally is like, how do opportunities develop over time? What is the opportunity still in 2025 to grow with our customer base? And there, again, on a total basis, we have seen almost no shift at all from the last couple of months to where we are today on a total basis. So we feel really well positioned to continue to gain that share through whatever scenarios they are planning for.

Speaker Change: So typically we're a great partner to be able to help should any strategy shift at all alright, and again coming back to this point I find it the most important one that we look at internally is like how do opportunities develop over time.

Speaker Change: What is the opportunity is still in 2025 to grow with our customer base and.

Speaker Change: There again on a total basis, we have seen almost no shift at all from the last couple of months to where we are today.

Speaker Change: On a total basis, so we feel really well positioned to continue to gain that share.

Speaker Change: Through whatever scenarios. They are they are planning for and.

Ethan Tandowsky: And we'll continue to focus again on what we have in our control, on that execution component, on talking to our customers, on being deeply engaged, on helping them through whatever scenarios they're working through. And I think we're really well positioned to be able to grow through however this develops.

Speaker Change: We will continue to focus again on on what we have in our control on that execution component on talking to our customers and I'm being deeply engaged on helping them through whatever scenarios, they're working through and I think we're really well positioned to to be able to grow through two through however, this develops.

Ethan Tandowsky: Second piece is on the platform take rate. I think what you're seeing here is more of a diversification across this pillar, right? So going from that 19 customers processing over a billion euros in volume to 30 customers processing over a billion. We're getting more diversified as a pillar. That pillar is growing quickly and it's not dependent as much as it was previously on individual customers. I think that's helping to drive that overall development that you explained in take rate. It's not specifically because of financial products just to. Great.

Speaker Change: Second piece is on the platform take rate.

Speaker Change: I think what you're seeing here is more of a diversification.

Speaker Change: Across this across this pillar.

From that 19.

Speaker Change: Customers are processing over $1 billion in euros and volume to 30.

Speaker Change: <unk> crossing over $1 billion.

Speaker Change: We're getting more diversified as a pillar that pillars growing quickly and it's not dependent as much as it was previously on individual customers I think that's helping to drive that overall development that you explained in take rate, it's not specifically because of financial products just to just to be clear.

Speaker Change: Great. Our next question comes from Josh Levin from Autonomous Josh. Please go ahead and meet yourself and ask your question.

Josh Levin: Our next question comes from Josh Levin from Autonomous. Josh, please go ahead and unmute yourself and ask your question. Yeah, good afternoon. Two questions. The first is related to sort of what was asked previously. Investors are mostly focused on the risks associated with macro uncertainty and tariff wars. Are you seeing specific opportunities presented by TerraForce?

Josh Levin: Yes, good afternoon.

Speaker Change: Two questions.

Josh Levin: The first is related.

Josh Levin: Sort of what was asked previously.

Josh Levin: Investors are mostly focused on risks associated with macro uncertainty and <unk>.

Josh Levin: Tariff wars.

Speaker Change: Are you seeing specific opportunities presented by.

Josh Levin: For example, if global trade ends up being rerouted, is that going to create an opportunity for Adyen?

Speaker Change: Example of global trade it ends up being rerouted is that going to create an opportunity for audio and.

Josh Levin: And then the second question, you mentioned before that issuing volume, it's very early stages, it's kind of small. Adyen has been saying that for years.

Speaker Change: And then the second question you mentioned before that issuing volume, it's very early stages small.

Speaker Change: Our team has been saying that for years.

Ethan Tandowsky: What is sort of preventing more robust growth and issuing? Is it lack of demand or is it audience sort of really... Thanks for the restricting supply. Thank you. Yeah, sure. So there certainly are opportunities again, to my earlier point, because we're such a global business, depending on how our customers look at their strategies for the rest of the year. we have opportunities across many markets, right? Because of our presence in Latin America, because of our presence in APAC, in EMEA, in North America, we're well diversified and can support them depending on how their strategies shift, if they do, right?

Speaker Change: What is sort of preventing more robust growth in issuing is it lack of demand or is it audience sort of really.

Speaker Change: Sort of restricting supply.

Speaker Change: Thank you.

Speaker Change: Yeah sure. So there certainly are opportunities again to my earlier point, because we're such a global business depending on how.

Speaker Change: Our customers look at their strategies for the rest of the year.

Speaker Change: We have opportunities across many markets right because of our presence in Latin America, because of our presence in APAC and in Europe, and EMEA in North America, we're well diversified and can support them depending on how their strategies shift if they do right and thats why its especially important that we are engaged day to day really.

Ethan Tandowsky: And that's why it's especially important that we are engaged day-to-day, really understanding the challenges and opportunities that our customers are looking at, because we're really well positioned to support them however those develop. And so it's certainly something that we're very much focused on, especially because it's tied back, again, to what's in our control, to what we can execute again.

Speaker Change: Understanding.

Speaker Change: The challenges and opportunities that our customers are looking at because we're really well positioned to support them. However, those develop and so it's certainly something that we're very much focused on especially because it's tied back again to what's in our control to what we can execute against.

Ethan Tandowsky: As for issuing volume... I think the reality is that in building anything new, it just takes time in our space. We're talking about enterprise issuing, right? Really delivering premium functionality that takes time to build. And I think we're seeing really good traction. We talked about the growth that we're seeing in the second half of last year, that continued acceleration in our issuing volume growth we're also seeing through the course of the beginning of this year. At the same time, it's competing with a huge acquiring business and therefore, on the total financial impact to date, it's relatively limited.

Speaker Change: As for issuing volume.

Speaker Change: I think the reality is that in building anything new it just takes time in our space, we're talking about enterprise issuing right really delivering premium functionality that takes time to build and I think we're seeing really good traction we talked about the growth that we're seeing in the second half of last year that continued acceleration in our in our <unk>.

Speaker Change: Issuing volume growth. We're also seeing through the course of the beginning of this year.

Speaker Change: At the same time, it's competing with a yes, a huge acquiring business and therefore.

Speaker Change: On the total financial impact to date, it's relatively limited, but there is real progress happening on the issuing side and I think we're really excited about the opportunity that will come with that.

Ethan Tandowsky: But there is real progress happening on the issuing side and I think we're really excited about the opportunity that will come with that.

Speaker Change: Great. Our next question comes from Hassan the Suwannee from Citi.

Pavan Daswani: Our next question comes from Pavan Daswani from Citi.

Pavan Daswani: Pavan, please go ahead and unmute yourself and ask your question. Great, thanks. Afternoon, Vincent. Thanks for taking my question. I've got a couple of follow-ups to earlier questions. Firstly, I appreciate the flag on market growth component of growth. On WalletShare gains and new wins, you've previously talked about having a six to 12-month visibility.

Please go ahead 90 yourself and ask your question.

Speaker Change: Great. Thanks.

Speaker Change: Thanks, Nick.

Speaker Change: Question I have got a couple of follow ups to earlier questions.

Speaker Change: Lee I appreciate the flag on market growth component to growth.

Speaker Change: On wallet share gains and new wins, you've previously talked about having a six to 12 months visibility could you maybe touch on the stickiness of these plans that you have in place for existing customers, maybe referring to previous periods of slower e-commerce growth like in 2022.

Ethan Tandowsky: Could you maybe touch on the stickiness of these plans that you have in place for existing customers, maybe referring to previous periods of slower e-commerce growth like in 2022? And then secondly, you've done 110 hires in Q1, which you mentioned as a cadence we should expect on a quarterly basis for the rest of the year. I appreciate the focus today is on top line, but is this broadly in line with your plans for margin improvement in 2025 that you've talked about? Yes. So, I would say in general, when we look out to our plans of, let's say, 6 to 12 months, they generally, for the large majority of them, are executed as we would expect.

Speaker Change: And then secondly, you've done 110 highest in Q1, which you mentioned is the cadence we should expect on a quarterly basis for the rest of the year.

Speaker Change: I appreciate the focus today is on top line, but is this broadly in line with your plans for margin improvement in 2025 that you've talked about.

Speaker Change: Yes, so I would say in general when we look out to our plans.

Speaker Change: Our of let's say six to 12 months.

Speaker Change: They generally for the large majority of them.

Speaker Change: Our executed as we would expect that also happened through different macroeconomic cycles, you referenced 2022.

Ethan Tandowsky: That also happened through different macroeconomic cycles you referenced, 2022. We have good insight on the growth opportunities of our customer base, and we're working day-to-day with them to understand their needs. And these typically play out on that type of timeframe in a way that, yeah, we would expect. So, I think it is pretty safe to assume that that will continue to develop as we're currently foreseeing it. Of course, we need to stay close to our customers, and we need to make sure that we understand how their businesses are developing and what their priorities are. But I think we're really well-positioned to do that, again, given our enterprise angle, the fact that we have a strong account management team day-to-day interacting with these customers.

Speaker Change: We have good insight on the growth opportunities of our customer base and we're working day to day with them to understand their needs and these typically play out on that type of timeframe in a way that yeah. We would expect so I think it is pretty safe to assume that that will continue to develop as we're as we're currently foreseeing it of course.

Speaker Change: We need to stay close to our customers and we need to make sure that we understand how their businesses are developing and what their priorities are but I think we're really well positioned to do that again, given our enterprise angle. The fact that we have a strong management team day to day interacting with these with these customers and I feel especially compared to a couple of years ago that we have.

Ethan Tandowsky: And I feel, especially compared to a couple of years ago, that we've really Landed the type of message around TCO, around how to support and balance costs and performance in a way that positions us really well. As for hiring, this is the hiring plan indeed that is in line with the margin improvements that we've been talking about, so yes, this is still our expectation. Great.

Speaker Change: Really.

Speaker Change: We ended the type of message around TCE O around how to support and balanced cost and performance in a way that positions us really well.

Speaker Change: As for hiring this is the hiring plan. Indeed it is in line with the margin improvements that we've been talking about so yes. This is still our expectation.

Speaker Change: Great. Our next question comes from Adam Fresh from Evercore. Adam. Please go ahead and meet yourself and ask your question.

Adam Frisch: Our next question comes from Adam Frisch from Evercore. Adam, please go ahead and unmute yourself and ask your question. Okay, thank you very much. Um, your runway with existing helpers is far from reaching that great end, but at some point, it will. It's getting the noise of eBay and other places. People are asking about the future growth plan. So, can you provide some context around your investment? You've helped people, new accounts brought on, how much growth that could bring. So, basically, anything to growth opportunities that are not currently on the books that you head off.

Adam Fresh: Okay. Thanks very much.

Speaker Change: Your runway with it.

Adam Fresh: Great.

Adam Fresh: Yes.

Adam Fresh: Noise.

Adam Fresh: At ebay and another.

Adam Fresh: Yes.

Adam Fresh: So can you provide context on your investment.

Adam Fresh: People new accounts brought on.

Adam Fresh: Basically anything.

Adam Fresh: Growth opportunities currently under your belt.

Adam Fresh: Yes.

Adam Frisch: Do you mind repeating that? I think we were breaking up a little bit. It would be great if you could just repeat it one more time. Yeah, it's about new growth on your book.

Adam Fresh: Do you mind repeating that I think we were breaking up a little bit it would be great. If you could just repeat it one more time.

Speaker Change: Yeah about new growth on your book.

Ethan Tandowsky: So you could talk about investment in new sales, new accounts brought on, how much more that could bring, basically anything you feel could speak to the growth opportunities that are not currently on your book. that addressed this issue. Yeah, sure, that's a good question. We talk about existing customers, but it's also important to keep in mind that every year, there becomes more existing customers, right, because we're continuously adding new cohorts. And while those cohorts are new for some time, they at some point move into the existing bucket. And if we look back at the last couple of years around the cohorts that we've been adding to the platform, who we would now call existing customers, those have developed really nicely, in line with the hiring that we've been doing over the over the past years, but also in the way that they're ramping up on our platform, right, because our model is not just land, but it's that land and expand model, they're growing in a similar way to how we would have expected previously.

Adam Fresh: Talk about that.

Adam Fresh: No.

Adam Fresh: How much more grain.

Adam Fresh: Basically any.

Yes.

Adam Fresh: The growth opportunities in or not.

Adam Fresh: Sure.

Adam Fresh: To address this issue.

Adam Fresh: Yeah sure. That's a that's a good question, we talk about existing customers, but it's also important to keep in mind that every year, there becomes more existing customers right, because we're continuously adding new cohorts and while those cohorts are new for some time they at some point move into the existing bucket and if we look back at the last couple of years.

Adam Fresh: Around the cohorts that we've been adding to the platform, who we would now call existing customers. Those have developed really nicely in line with the the hiring that we've been doing over the over the past years, but also in the way that they're ramping up on our platform right. Because our model is not just land, but its that land and expand model, they're growing in a similar way to how we would've.

Adam Fresh: Expected previously at the same time, we also look at how individual sales.

Ethan Tandowsky: At the same time, we also look at how individual sales team members are able to land deals. And that's also progressing, as we would expect, they become typically more efficient in closing deals as time goes on, as they're longer at Audgen. That trend we're seeing through the more recent sales hires. But we're also seeing that in terms of win rates. So I think the question of is there still runway for us to add new customers who will feel that existing customer growth in the years ahead? I think absolutely there is. We're not restricted to specific verticals or specific regions.

Adam Fresh: Our sales team members are able to do land deals and that is also progressing as we would expect they become typically.

Adam Fresh: More efficient in closing deals as time goes on as theyre longer at origin.

Adam Fresh: The trend we're seeing through the the more recent sales hires but we're also seeing that in terms of win rates. So I think the the question of is there still runway for us to add new customers, who will feel that existing customer growth in the years ahead I think absolutely there is.

Adam Fresh: We're not restricted to specific verticals or specific regions, even in our most mature verticals or regions, we see many opportunities to add new customers and so absolutely. We think that this this growth runway will go for a for a long time.

Ethan Tandowsky: Even in our most mature verticals or regions, we see many opportunities to add new customers. And so absolutely, we think that this growth runway will go for a long time.

Adam Fresh: Thanks, Adam our final question comes from Alex <unk> from BNP Paribas, Alex. Please go ahead.

Alex Faure: Our final question comes from Alex Faure from BNP Paribas. Alex, please go ahead. Good afternoon, thanks for quizzing me. You've had a few quarters of about 20% volume growth in digital, which is quite impressive for a relatively mature company.

Alex: Hi, good afternoon. Thanks for.

Adam Fresh: Squeezing me in.

Adam Fresh: You've had a few quarters about 20%.

Adam Fresh: Volume growth in digital.

Adam Fresh: She is quite impressive.

Adam Fresh: Relatedly Mitchell.

Alex Faure: Fragment for Adyen. I think in the most recent quarter, you also show that net revenues in digital were growing about 13%. I understand there's a cash app impact in that, but it feels like there's a five-point differential. Is this the right way of thinking of the algo in digital, so you can continue to sustain very strong volume growth, but we should expect continued take-rate erosion? I think the way to think about take rates in general is to tie it to size. Of course, we incentivize customers to grow with us, given our pricing model. And so I think this type of pricing impact, it's pretty comparable to the scale at which we shared within our building blocks at our last investor day.

Adam Fresh: Alright.

Adam Fresh: I think in our most recent quarter you also show that to net revenues.

Adam Fresh: Digital where Greg about 13%.

Speaker Change: I understand with the cash that are impacting that but it feels like you guys are five points differential.

Speaker Change: Is this the right way of thinking about the algo in digital and so you can continue to sustain very strong volume growth. We should expect continued take rate erosion.

Speaker Change: Yeah, I think the way to think about take rates in general is to tie it to size of course, we incentivize customers to grow with us.

Speaker Change: Given our pricing model and so I think this type of pricing impact of it it's pretty comparable to the scale at which we shared within our building blocks.

Speaker Change: At our at our last Investor Day, I don't think it's unusual but it also just as a development of what types of volumes from which sized customers are you, bringing in any given period and I think indeed to your point, we're quite pleased to see the developments in digital that even our most mature pillar. Our most sizable pillar is the one that's still gain.

Ethan Tandowsky: I don't think it's unusual, but it also just is a development of what types of volumes from which size customers are you bringing in. In any given period. And I think indeed, to your point, we're quite pleased to see the developments in digital that even our most mature pillar, our most sizable pillar is the one that's still gaining market share, that we're doing that across verticals and across regions. I think we're really well positioned still within our existing base as there's still a long runway for us to grow within those customers. But we're also able to scale on the new business side.

Speaker Change: The market share that we're doing that across verticals and across regions. I think we're really well positioned still within our existing base is theres still a long runway for us to grow within those customers, but we're also able to scale on the new business side.

Ethan Tandowsky: And so I think this is a trend that's well in line with our expectations. But again, on a on a shorter term basis, the movements in volumes could be less indicative, given that it's really about the scale of the customers that we're that we're building with more than anything.

Speaker Change: And so I think this is a trend thats well in line with our expectations, but again on a on a shorter term basis.

Speaker Change: The movements in volumes could be less indicative given that it's really about the scale of the customers that we're that we're building with more than anything.

Operator: Great, well, so we're out of time, so thank you very much for joining us today. We appreciate you taking the time to listen today. For any further questions, don't hesitate to reach out to the IR team. Have a great day. Thanks for watching!

Speaker Change: Great well so we're out of time. So thank you very much for joining US today. We appreciate you taking the time to listen today for any further questions don't hesitate to reach out to the IR team have a great day.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: No.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.