Annual Report 2022

2022

AnnualReport1

Annual Report 2022

2

01

02

Adyen at a glance

03

Management report

Governance

Message from the CEO

3

Building a responsible business

14

Highlights

5

Our approach to accelerating positive change

16

Corporate governance65

Adyen at a glance6

Impact technology

19

Report of the Supervisory Board

69

Business strategy

7

People & culture

24Compliance with the Dutch Corporate Governance Code72

Discussion of financial results

10

Responsible business practices

39

Remuneration report73

Financial objectives

11

Risk management

48

Statement by the Management Board

61

05

04

Other information

Financial statements
Financials statements table of contents

82

Other information

142

Independent auditor’s report143

GRI Index

158

EU Taxonomy report

160

Disclaimer: This document is only a "printed version" and is not the official annual financial
report, including the audited financial statements thereto pursuant to article 361 of Book 2of the Dutch Civil Code. The official annual financial report, including the audited financial
statements and the auditor's report thereto, are included in the single report package
which can be found via www.investors.adyen.com/financials.
In case of any discrepancies between the printed version and the annual financial
reporting package, the aforementioned financial reporting package prevails. Note that theauditor's opinion included in the printed version does not relate to the printed version but
only to the official annual financial reporting. No rights can be derived from using theprinted version, including the unofficial copy of the auditor's report. Our auditors did not
determine (nor do they need to) that the printed version is identical to the official version.

Annual Report 2022

Message from theCEO
Dear reader,
While compiling my notes for this letter, it was hard to decide which
topic to address first. I typically start with the main developments fromour team and business, but my reflections on 2022 presented atension that made these topics difficult to start this message with.
This was a year in which Adyen showed strong performance, but thesurrounding global environment was challenging by so manymeasures. From the new technologies we developed to thepartnerships we deepened, Adyen made significant progress
throughout 2022. Simultaneously, geopolitical instability, record
inflation, and supply chain shortages impacted the lives of people andcompanies around the world. When zooming out further, climate
emergencies and humanitarian relief became nearly constant featuresin the state of our world.
In recent years, we have solidified our firm belief that as our businessgrows, so too should our positive impact on the planet and its people.
In 2022, we announced our decision to annually dedicate 1% of our
net revenue to initiatives that support the United Nations Sustainable
Development Goals (UN SDGs). The best way for us to contribute to
the UN SDGs is through our financial technology, which enables
fundraising at scale by connecting businesses, consumers, andcharities around the world. Knowing this is our most impactful avenue,
we are investing to connect the many points of this ever-growing
ecosystem that enables the multiplier effect the world needs. This
year, we launched our emergency donation functionality which allows
businesses to opt in to emergency relief campaigns and harness the3
power of collective fundraising to respond when it’s needed most. The
tool was widely used within our customer base in 2022 in support of
the UNHCR’s support work in Ukraine, Syria, and Türkiye.
Alongside investments into our Impact technology, 2022 was a year ofinvestment into expanding our horizons. The business once again
proved resilient, and we were in the fortunate position of sustained
profitable growth despite macro challenges. To further extend our
growth runway, we expanded and deepened our product suite andsuccessfully accelerated our hiring pace to grow our team to the size
required for our next growth phase. While the broader tech industry
course-corrected their hiring plans, our stable position and discipline
throughout market cycles allowed us to benefit from an opportune
hiring market and bring on additional talent to prepare for our
upcoming chapters of scale.
Amid our increased pace of hiring, our focus remains on keeping thebar for talent high and scaling the Adyen culture. We feel the strong
responsibility for Adyen to continuously assess the Formula fit of ourteam members. Our culture remains one of our core differentiators,
and we continue to go to great lengths to preserve and scale it. In
order to expand at the pace required to reach our ambitions, ourculture of speed and autonomy is key and drives how we combine
strategy and tactics to further expand our leading position.
Returning to working at our offices in 2022 greatly supported ourintended speed of execution. Although we are able to operate
effectively from home, the creativity and energy that sparks when our
team is together cannot be replicated online. Being able to meet ourteam in person again has been so energizing. To me, theseinteractions confirm that our common denominator – building Adyen– is strong as ever.
The energy that results from our in-person collaboration is not only
felt between our team members, but also when we spend time withour customers. With 2022 affording the long-awaited return to travel,
we were able to visit our 27 global offices again as well as thebusinesses we work with. Connecting face-to-face strengthened ourrelationships with existing customers – who continue to contribute thevast majority of our volume growth – and helped us establish exciting
new partnerships.
While the environment around us changed when we returned toworking together in-person, our long-term focus did not waver. For
us, it’s business as usual to keep our focus on where we want to be
years from today. We always embrace a long-term approach whenrealizing our potential. To make this tangible: in this year’s results, we
saw multiple of our longer-term investment areas further materialize
as the contributions from North America and point-of-sale rose to
new heights. When we started in these spaces years ago, many feltthat they were too commoditized to enter. Our long-term vision told us
otherwise. We saw that there was still significant room to play, but that
it would take time to make our desired impact. Through ourinvestments today, we are pursuing similar long-term horizons.
In 2022, the disciplined execution of our customer-led strategy
resulted in continued robust growth rates amid difficult
macroeconomic conditions. This approach enables us to identify thesolutions that will benefit many customers, rather than just one. Ourconstant focus on our customers’ needs and building real-world use
cases resulted in our sustained profitable growth. Above all, it brought
us to the fortunate stage we are at today.
We have never been in the business of predicting what our customers
need. We don’t prescribe their needs from behind our desks, butrather go and meet them to hear what they need. We think critically
about creating lasting technical and commercial roadmaps thatanswer our customers’ demands, then proceed with discipline inbuilding for the complexity inherent to our ambitions. In 2022, thisresulted in the bolstering of strengths in areas such as Digital andUnified Commerce, while also investing in new capabilities in budding
initiatives like our embedded financial products that enable platformbusinesses to offer banking services to the SMBs they serve.

Annual Report 2022
The challenges our customers face are in many ways shaped by acontinuously global landscape. Shifts such as the digitization ofbusinesses and societies, the declining access to banking services for
SMBs, and consumer demand for seamless multi-channel
experiences present our customers with challenges and Adyen with
opportunities. With our single platform, we are in the principal positionin our space to address these demands.
We are at an exciting point in our trajectory, and I feel that our
momentum is accelerating. We have a strong but still small position in
payments, and are taking share from the traditional banks. Over thecourse of the upcoming years, we will be a driving force in how SMBs
access banking services too. We proceed with discipline and focus
while we build Adyen to capitalize on our long-term potential.
Pieter4

Processed volume
2022

49% YOY€767.5 BN
Net revenue
2022

33% YOY

2020

2021

2022

303.6 BN

516.0 BN767.5 BN

Expanding our team across regions and disciplines

2020

2021

2022

684.2 MN

1,001.5 MN

1,330.2 MN€1.3 BNEBITDA2022

16% YOY MARGIN 55%€728.3 MN

Highlights in 2022

2020

2021

2022

402.5 MN

630.0 MN

728.3 MN•

We continued to invest in scaling our global team, which brought the company to a totalof 3,332 FTE at the end of 2022•

We strengthened our internal resources across established disciplines such as platform
engineering, as well as young initiatives including our embedded financial products•

With our tech-first approach to innovation, 2022 saw us open our first tech hubs in
Chicago and Madrid

Growing with our customers by enabling their ambitions•

In a testament to our land-and-expand strategy, more than 80% of our growth in 2022
came from customers who were already on our platform before the year began•

We further catered to the evolving needs of our customers with the launch of our new inhouse designed terminals, EFP suite, and advanced Digital offering•

We deepened our global presence to help drive our customers’ domestic andinternational expansion

Making a positive impact with our platform, partnerships, andpeople•In 2022, we announced our commitment to annually donating 1% of our net revenue tocauses that support the United Nations Sustainable Development Goals (UN SDGs)•

Our Impact technology enabled businesses to seamlessly embed donation functionality
into their checkout journeys, which unlocks charitable funding at scale•

Adyen teams around the world connected with their local communities by participating inskill-based volunteering opportunities, fundraising campaigns, and emergency response

Annual Report 2022

Adyen at a glance
Adyen is the global financial technology platform of choice for leadingbusinesses. Through its single integration, Adyen handles the full
payments lifecycle spanning gateway, risk management, processing,issuing, acquiring, and settlement. With direct payment connections
to local and global card and banking networks, the company serves asa strategic partner to businesses across countless verticals.
With a focus on security, performance, and continuous innovation,
Adyen’s single platform enables businesses to succeed in the futureof global commerce. Bolstered by the company’s unique data
ecosystem, both brick-and-mortar and digital-native customers areequipped to solve problems and grow.
For the service of payments processing, Adyen earns processing andsettlement fees (gateway and acquiring services, respectively) as well
as some smaller fees related to products or functionalities that reducecomplexity and friction. For a full breakdown of the fees Adyen earns
for its services, refer to Note 2 ‘Revenue and segment reporting’ of theattached Consolidated Financial Statements for more information.

6

Annual Report 2022

7

Business strategy
Adyen grows with its customers. This means we maintain a dedicated,
long-term approach to every partnership we establish. In fact, thelarge majority (over 80%) of our 2022 annual volume growth camefrom businesses already on our platform when the period began. We
have seen this trend reflected each half-year period since our IPO in
2018, alongside consistently low volume churn at less than 1%.
Our ability to continuously gain wallet share from current customers
underscores the success of our land-and-expand strategy, which
serves as the engine powering our continued expansion. Onboarding
new customers is only the start of what we aim to achieve. Our
approach - which has repeatedly proven effective across diverse
regions and industries - is to demonstrate our strategic value andcapacity, then steadily increase our scope as each partnershipprogresses. This is a highly collaborative process that requires us towork closely with our customers to identify and build solutions to theirchallenges.
Executing on our land-and-expand strategy would not be possible
without the many teams at Adyen working to secure new customers,
technically advance them, and drive their growth thereafter. This cantake many forms, including adding new sales channels, activating
additional regions, or broadening our services. At its core, our landand-expand approach encompasses starting small before tacklinglarger ambitions together.
While there is always more wallet share to be gained from existing
relationships, we simultaneously work to establish new ones. To
maintain our speed and efficiency on this front, we have structured
our organization into solutions (Payments, Data, Platform
Engineering, and Platforms & Financial Services). These solutions
consist of product and technical teams that work together tounderstand, prioritize, and address key customer needs. Each year,
our annual product roadmaps are acutely shaped by their findings.
Our three commercial pillars - Digital, Unified Commerce, andPlatforms - assess the market to uncover trends, challenges, andopportunities through which we can best scale our solutions.
Innovating across our commercial pillars keeps us at the forefront ofan ever evolving industry. With our origins in online payments, we
pride ourselves on how flexibly and quickly we reduce friction on
behalf of digital businesses. Adyen’s decisions are guided by what ourcustomers need, no matter which unprecedented complexities they
may be facing. Engineered for speed, our end-to-end, in-house built
tech stack enables us to iterate or pivot with agility. It provides us withtechnological autonomy, which often results in implementing new
payment methods, adapting functionality, or launching new productsthat enable our customer’s growth.
Adyen’s single platform and holistic data ecosystem do not only
benefit digital customers. Our platform also provides businesses
operating online and in-store with a single multi-channel solution andcohesive and transparent view of all transaction activity. Our Unified
Commerce offering centers around this concept, and empowers ourcustomers to understand consumer behavior regardless of theirpreferred on and offline sales channels. It provides seamlessexperiences and captures valuable insights as they move fluidly
between them.
Within our Unified Commerce offering, we continually permeate
further into verticals that have historically been in-person first, but are
actively seeking to adopt and consolidate new revenue streams. Ourinterconnected insights enable these businesses to increase theirperformance by making more data-driven decisions, personalize theirconsumer interactions, and increase engagement and loyalty.
On the front-end, our terminal portfolio facilitates speed, convenience,and flexibility at the point of sale. The continued expansion of ourterminal portfolio reflects the world’s persisting hunger for advanced

Annual Report 2022
in-store and cross-channel experiences. Over the past years, this has
become a need rather than a nice to have for businesses andconsumers alike. Our Unified Commerce solution has proven uniquely
positioned to enable this transition to the future of commerce for the
benefit of both parties.
The natural evolution of our product offering can be further seen
across our Platforms pillar. At the outset of its development, we put
ourselves technologically ahead by meeting the complex needs ofenterprise-sized businesses. However, the enterprise platforms wepartner with also serve as a conduit to a worthwhile demographic ofpotential customers: the small and medium-sized businesses (SMBs)
they host. In recent years, we have begun exploring how ourenterprise-quality technology can also benefit SMB needs.
To further seize the widespread interest in our platform’s capabilities,
in 2022 we launched our embedded financial product (EFP) suite,which equips platform businesses to deliver superior financial
experiences to their users. This was a logical next step following ourembedded payments offering. By historically investing in our banking
licenses and industry-leading technology, we were poised to deepen
our reach, leverage our established platform, and steadily address thelong-tail of the market.
Our single integration allows platform businesses to unlock an endto-end financial ecosystem for SMBs. Our innovative products
comprise cash advances, business bank accounts, and card issuing.
Catering to the growing embedded financial services movement,
businesses of all sizes can access our payment capabilities, datadriven insights, and financial products enjoyed by the world’s leading
companies. Alongside embedded payments, these products further
solidify us as the premier platform powering the future of global
commerce.
We also believe that our platform can simultaneously unlock positivechange for the world around us. In 2022, we materialized ourcommitment to the United Nations’ Sustainable Development Goals

8(UN SDGs) to support economic growth, sustainable development,
and climate action by annually donating 1% of our net revenue tocauses that align with the UN SDGs framework.
Beyond our financial commitment, we have taken steps to instill thisfocus into our product development. Our Impact technology - aphilanthropic feature within our core payments platform - enables
businesses to seamlessly embed charitable donation functionality into
their checkout journeys. In addition to processing their payments, weensure 100% of consumer contributions reach the intended charity.
We will continue to evolve our Impact suite’s capabilities in order tomeet the growing charitable appetite of global businesses andconsumers.

DigitalWith 27 offices around the world and a global acquiring footprint,
Adyen is equipped with the local and international expertise needed topartner with businesses spanning every size, industry, and region. We
look forward to powering their ambitions and growing alongside eachcustomer we support.

Unified Commerce

Within our Digital pillar, we are pushing to become thepreferred partner in content tools and platforms (e.g.
streaming services, social media, editing software). To
make this possible, we have a solid sales approach inplace targeting strategic digital content verticals andgeographies.

Our Unified Commerce solution continues to facilitate
advanced cross-channel experiences, rich data
insights, and the most interconnected point-of-sale(POS) technology. In the coming year, we will focus on
enabling complex consumer journeys ranging fromcurbside pick-up to order ahead on a more global
scale.
Platforms
Within platforms, our embedded payments offering
provides SMBs multi-channel, enterprise-quality
payments offering, and will act as the gateway tobroader EFP adoption. With the recent launch of our
EFP, we are in the very early stages of providing
financial products to SMBs, who have historically been
underserved by traditional institutions and is hungry
for better methods of financial services.

Annual Report 2022

“Adyen rewards people who go the extra stepand challenge the status quo. Showing
ambition and giving your all shines through.
When you build your own path, people see it.
This is a place where you can speak up if you
want to develop certain skills and your honesty
will be well received. If you have clear
conversations about where you want to go, thecompany will support you in getting there.”Joëlle — Commercial Growth Manager

9Annual Report 2022

10

Discussion offinancial resultsby employee benefits exceeding net revenue growth as we
accelerated our hiring pace.

Processed volume for 2022 was €767.5 billion, up 49% year-on-year.
The majority of our processed volume reflects the success of our landand-expand commercial strategy.

CapEx was €99.1 million and 7% of net revenues for the full year due
to further investments into our data centers, which technologically
prepare us for the volume growth we will handle in the coming years.

Net income was €564.1 million in 2022, up 20% year-on-year.
2022 free cash flow was €607.0 million, up 7% year-on-year. Full year
free cash flow conversion was 83%, down 8% year-on-year.

Figure 1
Net revenue per region (in EUR millions). Comparative figures have been
updated to reflect the Net Revenue geographical breakdown as disclosed
further in note 2.4 Non-IFRS financial measures, in the 2022 Consolidated
Financial Statements.

+25% YoY

Full year EBITDA was €728.3 million for 2022, up 16% year-on-year.
Full year EBITDA margin was 55%, compared to 63% in 2021, driven+31% YoY

599.3

Operating expenses for 2022 came in at €665.4 million, up 64% yearon-year. The largest contributor was employee benefits, which totaled€380.6 million, up 58% year-on-year. As we scale our existing
activities and ramp up new ones, 2022 was a year of accelerated
investment in our global team. The team totalled 3,332 FTE at the endof the year, up from 2,180 FTE at the end of year 2021. It is ourintention to grow our team with a similar number of new colleagues in2023 to realize our long-term ambitions.
In 2022, we announced that we will annually donate 1% of our net
revenue to initiatives that support the UN SDGs. This commitment
totaled EUR 13.3 million for the year. Approximately 47% was spent,
while the outstanding EUR 7.1 million will carry over to 2023.

+48% YoY

746.8

In 2022, our point-of-sale (POS) volumes were €112.5 billion,
comprising 15% of total processed volume, up from 13% in 2021. In
terms of volume growth, POS was up 74%.
Net revenue was €1.3 billion for the year, up 33% from 2021. Full year
take rate for 2022 was 17.3 bps, down 10.8% year-on-year. This isdriven by the continued growth of customers already on the platform.
It was also impacted by our increased overall ATV, due to travel
volumes rebounding.

+48% YoY

343.2

231.4
142.4
96.1

EMEA

North America
2021

Asia-Pacific
2022

74.7

97.8

Latin America

Annual Report 2022

Financial objectives
We did not see any business developments in 2022 that would lead us
1
to update our guidance. Our standing financial objectives therefore
remain unchanged.
Net revenue growth: We aim to continue to grow net revenue andachieve a CAGR between the mid-twenties and low-thirties in themedium term by executing our sales strategy.
EBITDA margin: We aim to improve EBITDA margin, and expect thismargin to benefit from our operational leverage going forward andincrease to levels above 65% in the long-term.
Capital expenditure: We aim to maintain a sustainable capital
expenditure level of up to 5% of our net revenue.

1

Adyen has not defined, and does not intend to define, "medium-term" or "long-term” forits financial objectives. Adyen's medium-term and long-term financial objectives should
not be read as forecasts, projections or expected results and should not be read asindicating that Adyen is targeting such metrics for any particular year, but are merely
objectives that result from Adyen's pursuit of its strategy. Adyen's ability to meet its
medium term and long-term objectives is based upon the assumption that Adyen will be
successful in executing its strategy and, furthermore, depends on the accuracy of anumber of assumptions involving factors that are significantly or entirely beyond Adyen 's
control and are subject to known and unknown risks, uncertainties and other factors that
may result in Adyen being unable to achieve these objectives.

11Annual Report 2022

“At Adyen, you get a lot of responsibility fromday one. You scope your project, you define
the objectives, you implement it, and you’rethe end-responsible person. That’s what I like— not only that you get a lot of responsibility
early on, but that people really take it.”Sebastiaan — Product Specialist
Martijn — Finance Business Partner

12Annual Report 2022

01

Management Report13Annual Report 2022

Building a
responsible business
Introduction
A defining aspect of our long-term vision is our dedication to building
an ethical business. Now more than ever, we know that our ways ofworking should not only enable sustainable growth for our company
and customers — but also drive sustainable change for the world
around us. To achieve this, responsible practices are being
increasingly integrated into all areas of the business as standard.
While the importance of doing good was clear at the time of our
founding, it is now becoming an integral part of how we conduct anddefine business as usual. As such, we plan to remain accountable andtransparent in our annual reports as we progress.

Materiality assessment
To better understand Adyen’s impact on global sustainability issues
and, conversely, the impact of those issues on Adyen, we performed
our first materiality assessment in 2022. By identifying, prioritizing,
and benchmarking the topics most material to our business and theworld around us, we have taken an essential step in our long-term
ambition to build an ethical business and create sustainable value forour stakeholders.
Taking inspiration from some of the best practices included in the
Global Reporting Initiative (GRI) and the draft European Sustainability
Reporting Standards (ESRS), we started this process by compiling acomprehensive list of global sustainability topics pertinent to Adyen2

14
and the broader sector. From there, our research led us to perform arisk and opportunity expert assessment of each identified topic in
relation to Adyen. Our risk assessment categories included: credit
risk, market risk, operational risk, integrity risk, reputational risk and2other financial risk . Through this lens, we identified the topics
presenting the most material residual risk to Adyen. To complement
these focus areas, we further identified the topics most material toAdyen from the perspective of making a positive impact. With thisconsideration, we identified where Adyen sees opportunity and cancommit to making a difference.

Stakeholder engagement
This was Adyen’s first materiality assessment and we recognized theimportance of a controlled approach that offered a greater level ofdetailed insights and identification. This included surveying andhaving conversations with our employees, global leadership team, theManagement Board and Supervisory Board. These internal
stakeholders provided valuable feedback to both the risk and impact
perspectives, which strengthened our shortlisted material topics.
Although external stakeholder reviews were not formally carried out,
we did seek input in the form of investor engagements, focus group
letters, ESG indices, and beyond. These contributions were indirectly
accounted for in the outcome of this first materiality assessment.
Looking forward, external stakeholder engagement will be formallyconducted in 2023 and directly incorporated into the next iteration of
the assessment. We are aware that as we incorporate a broader
stakeholder view and embark on a double materiality methodology,
the current material topics may evolve in meaning, materiality
and priority.

For more information on the assessment conducted, please see the ‘Risk Management’ section of this Annual Report.

Annual Report 2022

Material topics
The results of our materiality assessment provide a snapshot of the
topics that are most important for Adyen’s long-term value creation.
Below are the results of the materiality assessment, bolstered by theadditional impact topics we find equally important in our efforts toaccelerate change. The order of the topics does not necessarily reflect
their relative materiality. It was encouraging to see that the results ofthe materiality assessment mirror Adyen’s existing focus areas across
our people and practices.
Social innovation and partnerships
Impact Technology
Combining the strengths of our platform, people, and partnerships toenable businesses to integrate donations in their payment flows.
Community impact
Driving positive change in the areas in which we operate byempowering our teams to become actively involved in community
initiatives that give back.
People & culture
Diversity, equity & inclusion
Creating an environment that welcomes all, embraces different ideas,
and treats everyone equally.
Investing in the teamGrowing our global team across regions and disciplines.
Learning & development
Facilitating opportunities for our people to expand their skills
and knowledge.

15
Employment & benefits
Ensuring our people are fairly treated and supported both at work andin their normal course of life.
Responsible business practices
Environmental sustainability
Taking action to mitigate climate change, facilitate climate transition,and reduce our impact on the environment by embedding sustainable
practices into our business.
Ethics, conduct & integrity
Creating an environment of ethical behavior, upholding the highest
integrity and conduct standards, and treating one another fairly.
Information security & data privacy
Protecting the data of our customers, their end-consumers, and our
employees data, effective governance, and embedding best-in-classsecurity principles into our product offering.
Tax
Paying taxes in the areas where we operate. We do not seek refuge intax havens and respect relevant laws and regulations.
With the Corporate Sustainability Reporting Directive (CSRD) adopted
in 2022 and the European Sustainability Reporting Standards (ESRS)
currently in review, we will continue to report on the above material
topics in reference to the Global Reporting Initiative’s (GRI) voluntarysustainability framework. In doing so, we aim to showcase how we aretaking steps to positively contribute and responsibly manage our
impact on the environment and society. Throughout this document,
we are following the GRI’s guidance in how we report on andcommunicate our 2022 economic, environmental, and social impacts.
As of January 1, 2022, Adyen is required to report on environmentally
sustainable economic activities in line with EU Taxonomy regulation.
As requested by delegated Act Art. 10 of the EU Taxonomy, asimplified disclosure has been included further in the document within
the EU Taxonomy report.

ESG governance and oversight
We believe that building an ethical business requires putting solid
governance practices in place. To achieve this, our two-tiered board
structure - consisting of a Management Board and Supervisory Board- enables sound oversight, transparency, and accountability. The
governance of specific ESG topics is distributed amongst various
Management Board members and generally overseen by theSupervisory Board as the highest governance body.
In 2022, we established Adyen’s ESG Working Group, a crossfunctional group that includes members of the Reporting, Legal, andCorporate Risk teams. The objectives of the ESG Working Group are
two-fold: to increase understanding and raise awareness of the three
dimensions of ESG across the organization, and to establish a unified
approach to reporting on Adyen’s ESG strategy. The group supports
Adyen’s ongoing commitments to environmental, social, andgovernance matters by aligning programs that manage our ESG risks,
opportunities, and impacts. Introducing this Working Group was anatural next step in further embedding ESG into Adyen’s long-term
mission and business activities.
The Working Group holds sessions with identified subject-matter
experts on material ESG topics to track progress and drive success intheir respective areas. The Working Group reports on its activities toAdyen’s CFO, and updates the Management Board on ESG matterson a quarterly basis. The company’s overall ESG strategy andactivities are discussed at Supervisory Board level at least on anannual basis. In 2022, ESG topics were discussed in three Supervisory
Board meetings — during the materiality assessment process, theongoing preparations for the 2022 Annual Report, and as part of theannual strategy session.

Annual Report 2022

Our approach toaccelerating positivechangeSince our founding in 2006, Adyen has remained focused on building
for the long-term. This means continuously advancing our people,
platform, and partnerships to meet the needs of today, while
relentlessly innovating to fulfil those of tomorrow. Over the course of
sixteen years maintaining this approach, Adyen has emerged as anindustry leader in payments. Sitting at the intersection of finance andtechnology, our platform functions as the trusted conduit between
businesses and global consumers. We have realized sustained growthfor our customers from the start, and now technologically touch
millions of people around the world as we process their transactions
daily.
At this level of maturity, we are primed to prosper and it is our firm
belief that there will be no world to succeed in if we do not protect italong the way. Our long-term outlook is not limited to Adyen’s
business ambitions – we take equally seriously the long-term
trajectory of the world around us. Everyone has a role to play inshaping a sustainable and socially responsible future. Adyen istherefore determined to not only take action ourselves, but also utilize
our technology to empower others to do the same. In the sections
below, we expand upon our 1% for the United Nations’ Sustainable
Development Goals (UN SDGs) commitment, Impact technology
solution, and community impact activities.

16Annual Report 2022

17

1% for the UN SDGs

with our Impact technology facilitating this positive impact.

This year, we announced that we will annually donate 1% of our net
revenue to initiatives that support the United Nations’ Sustainable
Development Goals (UN SDGs). By aligning with this framework, weare confident that our funds will help accelerate change where it’sneeded most. It is worth noting that we are committed to contributing
1% of Adyen’s net revenue to the UN SDGs rather than an annually
fixed amount. The rationale behind this decision is that as ourbusiness grows, so too must our impact.

The remaining amount (approximately 53% of the total annual
commitment) was not spent in 2022. This outstanding budget,
totaling €7.1 million, will carry over to 2023 and be used to improvethe end-to-end capabilities of our Impact technology. We will use the2022 carry-over budget to cover the onboarding costs that accrue
when charities join our Impact portfolio. Namely, there is an initialinvestment needed to operationally structure a charity to meet ourfunding model. This is a critical first step before widespread support
can be received. Once established, Adyen can connect the charities toour customers and, from there, to the wallets of global consumers.
With this network unlocked, we enable them to accept substantial
funding quickly and at scale. We view this exercise not as making a
donation, but rather an investment. For every euro we spend, we aim
to unlock many more on behalf of charitable initiatives.

In 2022, our 1% commitment totaled €13.3 million. Though it would
be simple to spend this in a single donation, we were determined toallocate it prudently. With 2022 being the inaugural year of thiscommitment, we spent time conducting research on the mostimpactful ways to contribute to it. This included working with charities
that meet our integrity risk profile to gain an in-depth understandingof the complexity of the donation landscape and the technologicalchallenges of global fundraising.
Throughout this learning process, three guiding principles became
clear to us: We believe 100% of every donation should reach theintended charity. We believe every size business should have theability to fundraise for important causes. And we believe that globally
reputable charities should be able to efficiently call for and receive
funds on a global scale.
While these tenets took form, €3.9 million of the dedicated budget
helped us build upon the initiatives we previously established, by
donation matching processed via our Giving product (see the ‘Impact
Technology’ section below). By the end of the year, these funds helped
us significantly scale their impact and reach. A further €1.5 million of
the 1% went towards absorbing scheme and interchange fees onbehalf of SDG-aligned charities we work with, thus lowering thebarriers for our customers to use our Giving product and ensuring
100% of the donation benefits the intended charities. Our customers
are the driving force in choosing their preferred charities and SDGs,

The 1% will also continue to go towards ensuring 100% of consumer
donations reach the intended charities. This means absorbing ourstandard processing fee as well as the fees currently in place frommajor card schemes. For example, in the United States we see on
average 44% of fees on round-up donation transactions are taken by
the schemes in the process of transferring donations to charities. Our
goal is to not let any contribution get diluted in transit, thus we pullfrom our own budget to offset such reductions.
Though we are proud to have operationalized our long-term
philosophy through the 1%, Adyen knows that our contribution alone
is not enough to sufficiently move the needle. To encourage andenable global progress at scale, we are engineering methods ofcreating a multiplier effect. Equipped with cutting-edge technology, a
motivated team, industry expertise, and a vast customer network,
Adyen is uniquely well-positioned to mobilize funds and financial
services. Using the connective power inherent to our platform, we are
actively embracing the facilitating role our technology andpartnerships can play in scaling support of the UN SDGs.

Figure 2
1% for the UN SDGs 2022 spend categorization (in EUR)

€257,000€1,542,553€3,675,316€740,000€7,087,000

Donation matching - Moments that Matter
Scheme- and interchange fees
Roll-over to 2023
Ad-hoc donations
Donation matching - UNHCR

Annual Report 2022

“Adyen’s 1% pledge shows a heart-warming
commitment to refugees and displaced
people worldwide. With UNHCR as a recipient,
Adyen has supported us in delivering criticalassistance to people facing crises such as thewar in Ukraine, and the earthquakes in Türkiye
and Syria.
We are so grateful for your solidarity, and lookforward to deepening our strategic
partnership with Adyen to help those in need
who deserve our support.”
Astrid van Genderen Stort — UNHCR Chief, DER Emergencies
and External Engagement Section18

Annual Report 2022

Impact Technology
Adyen is determined to generate a multiplier effect by combining thestrengths of our platform, people, and partnerships. The first way weare doing so is embodied in our Impact technology, a product within
our core payments solution that was launched in 2020. We havealways been a partner when it comes to driving our customers’
growth, and we are now applying the same logic to scaling support forcharitable organizations. In its current form, our Impact technology
enables businesses to seamlessly integrate donations into their
payment flows. In the process, we ensure 100% of these donations
reach the end charities. By transforming this traditionally complex
process, we have removed the operational burden that often hinders
charities who are in need of business partnerships, but may not havethe resources to build them. Lowering these common barriers toconnection facilitates lasting relationships between businesses on the
Adyen platform, consumers with a growing charitable appetite, andthe causes that matter most to them.
Having a multiplier effect not only applies to generating sizable
donation streams, but also to quickening the world’s response time.
With this in mind, we ensured our Impact technology’s infrastructure
enables speed at scale - an essential factor in times of crisis. At a
moment’s notice, our donation functionality can prioritize thecharitable organizations who are on the ground aiding in societal
causes, humanitarian crises and climate emergencies. In 2022, thisfeature proved highly effective in our fundraising efforts for the war in
Ukraine. By launching these time-sensitive campaigns, we
significantly differentiate ourselves from legacy resources that slow
the funding process and subsequently delay its impact. With thefrequency of such global crises steadily increasing around the world,
unlocking widespread responsiveness is key. For that reason, we areproactively making payments executed on the Adyen platform an
opportunity to accelerate financial support whenever it’s
imminently needed.

19
At our core, Adyen has set out to build the financial technology
platform that helps businesses succeed in the future of global
commerce. Today we understand that the key to everyone’s successis protecting the planet and its people. To make this possible, we are
joining forces with the charitable organizations alleviating many of theworld’s most pressing issues. We are proud to have now partneredwith a total of 118 charities. With their deeply rooted volunteer
networks, specialized response knowledge, relief supplies, and longstanding reputations, we know that quality charities can make atangible difference in ways Adyen cannot.
The synergy lies in Adyen’s ability to help scale and accelerate charity
funding, which ultimately determines when, where, and how
effectively their teams can deploy. We already help businesses adjust
to ever-changing consumer behavior and increased digitization, andwe are now extending our capabilities to the donation landscape. In an
increasingly cashless society, it’s clear that the power of traditional
fundraising methods has changed. Fortunately, our unique industry
position enables us to solve the complexities all charities face as they
try to adapt.
Our highest priority for our Impact technology is optimizing thisprocess to remove barriers to doing good. We do this by creating
distinct routes that ensure donations and payments are processed as
different transactions in our backend, without sacrificing ease of
integration for our customers. This means donations never touch acustomers’ books, which frees them from the accompanying
responsibility of guaranteeing fund delivery, reconciliation, legal
implications, and consumer support. Meanwhile, the customer
maintains full oversight of their fundraising impact in the form ofdetailed reporting provided by Adyen.
Our focus on utilizing our technology to benefit our customers andcharity partners is expressed in a number of ways across our Impact
suite, which processed €7.7 million total volume in 2022, an increaseof 126% from 2021. Our Impact technology reduces the local
fragmentation of global fund collection. We tap into the newgeneration of givers whose wallets are online. We leverage our vastcustomer network - the driving engine for future Impact technology
partnerships - by connecting charities and consumers at global scale.
We’re proud to see the additional 87 businesses who utilized ourGiving functionality this year. This number reflects our customer
base’s appetite to embed charitable moments into their consumer
journeys, and Adyen’s unique way of meeting this demand. Alongside
our customer-focused technology, our 1% budget enables us tofurther match donations, which effectively incentivizes and expands
the funding pool. Our donation matching amounted to €3.9 million
this year. Businesses and charities are ready for digital transformation,and our Impact technology is here to be the engine powering it.

Figure 3
Total Giving processed volume in 2021 and 2022

2021
2022

€3,423,280.00€7,724,998.00

Annual Report 2022

“When businesses look to partnerwith global charities like ours,
they often face a lot of red tapeand complexity. With Adyen’s
Giving product, these barriers arelowered so that working together
is simple and effective.”

20“Because Adyen Giving puts
transparency first, customers
know exactly where their money isgoing and that their entire
donation will be received by theircharity of choice in full.”Sindiswa Nobula — World Wildlife Fund (WWF)Aliénor Descours — Make-a-Wish International“The challenges that we're facing
today are too big, too complex
and extremely urgent for one
organization to tackle alone.
Businesses have the resources
and the customer base to reallyallow us to drive collective change
and make the impact we need.”
Hassina Bahar — United Nations HighCommissioner for Refugees (UNHCR)

Figure 4
Donations matched and number of Adyen customers live with Giving

X

Donations matched by Adyen in 2022

Number of Adyen customers live with Giving€3.9 MN

Annual Report 2022

21

“One of Adyen’s guiding principles is bringing
people together with different backgrounds
and perspectives. Our team doesn’t just comefrom the financial and tech industries — theycome from all experiences and, with that, bringmany diverse interests and passions. This puts
Adyen in a unique position. People join us
because they have a genuine curiosity about
the world around them. We leverage thisinterest on a global and local level to make apositive difference in the communities where
our people live and work.”
Savannah — Partnerships Specialist

Annual Report 2022

Community impact
While Adyen is passionate about engineering a global multiplier effect,
we find it essential to think locally too. For us, an important dimensionof building an ethical business concerns our impact on the areas inwhich we operate. We take a vested interest in the 27 cities where
we’re located, and want our teams to thrive alongside theirsurrounding communities. In these areas, our mission is to drive
positive impact across social issues and local causes. To make thispossible, we empower our teams to become actively involved incommunity initiatives that give back.
Adyen’s initiatives take the form of community or skill-based
volunteering opportunities, employee fundraising campaigns,
humanitarian and natural disaster response. In most instances, ourinitiatives are local to the city in which an Adyen office has been
established. For example, this year, employees in our San Francisco
office volunteered at local food banks to assist those facing poverty
and hunger. However, in exceptional circumstances, an initiative may
be local to our employees’ country of origin. This was the case whenthe ‘Pakistanis at Adyen’ Employee Resource Group based in
Amsterdam launched a fundraising campaign supporting flood relief
in Pakistan — a country where we have no physical presence. When it
comes to these grassroots initiatives, the shared responsibility
employees feel for their local communities remains the key driver.
With employee demand for charitable involvement increasing, in 2022
Adyen’s Community Impact Groups found new ways to champion
community volunteering throughout their offices and teams. They
worked to establish quality partnerships and nurture our existing
relationships with respected charitable organizations. Rather thansolely facilitating funding, they connected our people to our charitablepartnerships in a hands-on way. The groups achieved this byorganizing high-impact events that were locally tested and regionallyscaled. A great example of this iterative process can be seen in

22
Adyen’s Feeding America partnership, which started small but in is
growing towards tangible activities across our US offices.
To further cater to employee interest in giving back, we haveformalized our charity portfolio and approach to time spent
volunteering. Our global teams are now able to view, book, and track
their volunteering hours within our human resources tool, just as theywould for holiday or personal time off. At the same time, we willcontinue to encourage and facilitate regular opportunities for
employees to participate in.
As this framework develops, Adyen will continue leveraging theinvaluable network of charities utilizing our Impact technology. We
look forward to marrying our platform’s unique donation capabilities,
the onboarded charities, and the time and skills of our people - which
can in the future combine seamlessly in support of the UN SDGs.
Below you will find a regional glimpse into the many community
initiatives Adyen participated in throughout 2022.

Annual Report 2022

23

North America
Europe & Middle East

San Francisco: Teammates from Adyen’s San
Francisco office took part in a beach clean-up
project with the Surfrider Foundation, during which
they aided in environmental efforts to keep
Northern California’s coastline healthy. During thebeachcombing day, our colleagues learned about
the harmful effects of plastic on the ocean, andhow the local community can better protect it for
future generations.
New York: For the second year running, Adyen’s
New York office partnered with Room to Grow to
support caregivers raising babies born into lowincome circumstances. Adyen fundraised andassembled care packages containing essential
baby and toddler items. The team also volunteeredin person at Room to Grow’s donation drive toconnect with families in the community andmeaningfully expand their support networks.

Paris: Colleagues from our Paris office came
together to pack hygiene kits consisting of
women's menstrual products, toothbrushes,
toothpaste, deodorant, and other essential items
for their local food bank. In addition to preparing
and donating these kits in our office, teammembers subsequently volunteered at the foodbank in person to experience powerful, hands-on
connection with the community.

Latin America
Mexico City, São Paolo: Adyen’s LATAM offices
jointly participated in a region-wide event to
reduce inequities in partnership with Heartbike.
Our LATAM teams worked together to build andthen donate 40 bicycles to underprivilegedchildren, who joined us on-site to celebrate in theoffice.
Mexico City, São Paolo: Adyen once again
partnered with Generation to provide technical,
behavioral, and professional skills trainings to 975
local students with reduced access to career
resources. Our training and mentoring program
resulted in 2 students being hired by Adyen
as Developers.

Amsterdam: Our Amsterdam team partnered withLife Terra to contribute to impactful climate action.
Adyen planted and geotagged 582 multispecies
trees at a local farm, which are being monitored to
track their continued health and growth.
Throughout the hours of physical tree planting,Adyen was educated on the positive effects ofcreating rich and biodiverse ecosystems.

Asia-PacificTokyo: Employees from Adyen’s Tokyo officeparticipated in a street clean-up event organizedby Green Bird, a grassroots organization
originating from Harajuku Omotesando. By joining
forces with other Green Bird volunteers, Adyen wasable to help remove large amounts of litter frompedestrian areas with high foot traffic. It was aspecial opportunity to clean the streets of Tokyo
while inspiring others to incorporate this civic
contribution into daily life.
Sydney: Adyen’s Sydney teammates spent timevolunteering at a food drive hosted by OzHarvest.
By participating in Oz Harvest’s ‘Cooking for a
Cause’ class, our colleagues not only prepared
meals for people in need of food relief, but also
learned more about the local food waste problem.
Their eyes were opened to the amount of food that
ends up in landfills, and how to better deliver
surplus food to charities that help feed those inneed of support.

Annual Report 2022

People & culture
When asked to describe life at Adyen, many of our colleagues havesurmised the experience in a single word: autonomy. Across all areasof the business, individual autonomy is an intentional through line.
Whether contributing to the business as an engineer, productmarketer, office manager, or tax specialist, Adyen is a place where
everyone is licensed to take the wheel and drive the business forward.
Critical to preserving this defining aspect of our culture is the growth
Adyen systematically facilitates. We constantly ensure we provide
avenues through which individual autonomy can be channelled into
work, entrepreneurship, educational, and personal development. Our
talent and global mobility frameworks - both of which are detailed in
the upcoming sections of this Annual Report - empower employees to
explore, learn, and evolve. Building a company with this level ofmomentum comes with many opportunities. These are fully
accessible to anyone who takes the initiative to grab them.
In addition to shaping an environment with autonomy at its core, we
seek the people who will thrive in it. When attracting and interviewing
prospect talent, Adyen seeks a variety of skill sets, educational
backgrounds, work experiences, and walks of life. We believe that themore diverse the perspectives on our side, the sharper our ideas
become. Yet one shared trait is essential amongst the diversity ofothers: everyone at Adyen yearns for freedom and possesses an ability
to accomplish the extraordinary with it.
Across our 27 global offices, our people span the full gamut of tech,product, commercial, and operational roles. But regardless of thedomain or region, they are doers. They think bigger. They tackle
challenges. They take ownership. They remain accountable. We makeour people feel safe to think and speak freely. This strong sense of
autonomy has been crucial to enabling what we’ve achieved today,
and is what we will continue to ingrain in our teams of tomorrow.

24

Annual Report 2022

The Adyen Formula
From day one, we were intentional about the company culture we
wanted to create. Our considerations went beyond the technicalambitions of our single platform, and included defining the principles
that would govern the way we work. We believe that what we weresetting out to do was as important as how we would do it - not only asa team, but also regarding how we collaborate with our customers.
This philosophy resulted in the Adyen Formula, a list of eight guiding
principles that have and continue to shape all aspects of our business.
The Adyen Formula creates common ground in how we operate — nomatter where in the world an office is located. Across regions, timezones, and cultures, our Formula is the key to scaling our cultureof autonomy.
Much of the Adyen Formula directs the way we operate together as ateam. We pick up the phone. We talk straight. We put our egos aside.
We win together. We include others to sharpen our ideas. This focus isby design, as optimizing our interactions facilitates autonomy andspeed — the backbone of our company.
To ensure its continuation, we incorporate the Adyen Formula into
every stage of the employee journey, beginning with our global
interviewing processes. By testing the Adyen Formula against eachqualified candidate, culture fit serves as a determining factor in our
recruitment decisions. The Formula is also central to our onboarding
program, discussed in our company podcast, and covered in Team
Lead training to keep it fresh no matter the stage of one’s career. To
help those who remotely joined Adyen after March of 2020, this year
we launched a series of ‘Reconnect Days’ to build their networks andfoster a sense of community.
16 years into the company, the Adyen Formula is by now equal parts
art and science. It can be interpreted and expressed in endless forms.
But in 2022, when we brought the entire team together for our global
company day, one thing was certain: it works.

25

The Adyen Formula
We build to benefit all merchants(not just one)
We don’t hide behind email, instead wepick up the phone
We make good choices to build an ethicalbusiness and drive sustainable growth forour merchants
We talk straight without being rude
We launch fast and iterate
We include different people to sharpen
our ideas
Winning is more important than ego; wework as a team — across cultures and timezones
We create our own path and won’t beslowed down by “stewards”

Annual Report 2022

“I think the beauty of the Formula is the way ittranslates who we are. It’s not something that
we want to become — it expresses in words
how we have always worked. Over the years,
I’ve seen how the Formula adapts acrossregions. In Brazil, ‘talking straight without
being rude’ can initially be a challenge.
But the more you master the points,
the sharper you become.”
Renato — Head of Sales Brazil

26

Annual Report 2022

Diversity, Equity, and Inclusion
At Adyen, one of our Formula points is including different people tosharpen our ideas. We know that thinking differently is vital tocontinuously refining our product, broadening our offering, executing
our strategy, and remaining ahead of the competition. Blending a
range of unique perspectives has produced our most successful
outcomes. We recognize that such diverse perspectives can stemfrom differences in age, gender, sexuality, race, ethnicity, and beyond.
And we believe that all of these forms of diversity offer important
insights.
However, after conducting in-depth surveys and with the help of our
Employee Resource Groups, we have come to prioritize different
underrepresented groups at Adyen relative to the local communities
in which we operate. It is on this basis that we have honed ourattention to specifically focus on gender and racial ethnicity. Throughour participation in programs such as ‘Women in Tech’ and by
supporting a range of women-centered charitable organizations, we
believe we can make the greatest impact and pave the way for other
underrepresented groups.
Although we actively strive to hire, promote, and enable
underrepresented groups, there is - and will always be - room for
improvement. We’re committed to increasing the gender balance of
our Management Board and senior leadership team together toconsist of at least one-third female members. Furthermore, we arecommitted to maintaining a Supervisory Board that is at least onethird female, in line with the statutory diversity quota. In our hiring
processes, we are committed to including diverse candidates,
meaning that we measure the diversity of our candidate pipelines
when possible and that we strive for no more than 70% representationof any one group.
Lasting change can’t happen overnight, but we have a plan in place tobring us closer to reaching our long-term goals. First and foremost,27
we are working hard to assess the diversity of our workforce and theiremployee experience. We will use these valuable quantitative andqualitative insights to develop an improvement scheme addressing
gaps in the employee experience. In the medium term, we will further
embed diversity, equity, and inclusivity (DE&I) into our company
culture through meaningful and more frequent dialogue,
engagements, and activations. Fortunately, we have already made anumber of DE&I strides, which can be found below.

Candidate attraction
When it comes to candidate attraction, we have taken steps topromote diversity, eliminate gender bias, and support equal
opportunity in our recruitment activities. These actions include:• Auditing the wording across all job vacancy wording to make it
more inclusive, for example by introducing more gender-neutral
language• Increasing our outreach to organizations and student associations
for underrepresented groups• Visually representing our diverse employee base on our careers
websiteRecruitment activities
While attracting diverse applicants is arguably the crux of enacting
further internal change, we are simultaneously improving the nextstages of the employee journey. To ensure our recruitment andinterview processes uphold our high standards of inclusivity, we are:
• Incorporating the skills matrix into the hiring and interview process• Facilitating accessible recruitment processes including the option
to interview remotely• Closely monitoring the diversity of our interviewers and interview
panelists• Piloting hiring targets across key regions, beginning with LATAM

Continuous education
We believe there is no end to understanding and embodying DE&I.
Rather, it is an ever-evolving subject. For this reason, Adyen has
incorporated the subject into our learning and development programat all employee levels. Adyen employees are educated on DE&I
throughout their career, through (but not limited to) the following
courses:• Unconscious bias training for all Adyen employees• Cross-cultural awareness training• Normal course of life education for Team Leads• Building and leading inclusive teams sessions

Mitigating measures
Despite factoring DE&I into every employee’s education, we have put
controls in place to mitigate discrimination incidents should theyarise. These measures include:• Clear reporting processes for immoral, unethical, or unfair conduct& incorporated in annual Integrity & conduct training• Publishing guidance on reporting incidents to Team Leads and HR
Business Partners• Providing guidance to our employees and team leads in our
Amsterdam offices when and how to reach out to confidential
advisors, a point of contact for employees who have any questions
regarding or reporting discrimination and/or inappropriate
behaviors

Annual Report 2022

Employee Resource Groups at Adyen
Though we are formally shaping a work environment in which all
employees feel welcomed, safe, and encouraged to be their authentic
selves, DE&I is not a top-down directive. In line with Adyen’s culture ofindividual autonomy, we are proud to witness our employees taking
the reins to drive change. A prime example of their initiative is
exemplified in our Employee Resource Groups (ERGs): the employeeled and employee-founded communities that celebrate, endorse, andshare perspectives from Adyen’s diverse communities. Our active
ERGs currently include: Black at Adyen, Asians at Adyen, Pridyen,
Women at Adyen, Jews at Adyen, Working Parents at Adyen, andLatinX at Adyen.
ERGs are crucial to empowering underrepresented communities, andas such play an integral role in expanding and retaining our diverse
workforce. They help the business hold space for employees to freely
share their unique views and experiences. Any feedback gained in thisprocess enables our leadership team to understand where progresshas been made and where we still must improve.

28

Figure 5
Gender and age diversity at Adyen in 2021 and 2022

Total FTE gender diversity

Management Board gender diversity

2021

36%

63% 1%

2021

17%

83%

2022

38%

62% —%

2022

17%

83%

Female

Male

Other

FemaleMale

xxx

Team leads gender diversity

Supervisory Board gender diversity

2021

36%

64%

2021

40%

60%

2022

38%

62%

2022

40%

60%

FemaleMale

FemaleTotal FTE age diversity

Senior leadership gender diversity

2021
2022

21%
27%

Female

Male

Male

79%

2021

44%

54% 2%

73%

2022

44%

55% 1%< 30

31 - 50> 51

Annual Report 2022

Investing in the teamIt’s business as usual for Adyen to focus on our long-term opportunityand hire specifically to meet our strategically determined technicaland commercial ambitions. We see the significant runway ahead of us
in this ever-evolving payments landscape and find ourselves only inthe early stages of our journey. While further solidifying our position as
leaders in the financial technology spaces, the time to make headway
in both of these domains is now. To capitalize on the opportunity athand, we spent 2022 consciously investing in growing our team.
2022 marked Adyen’s most significant period of headcount growth todate. This year, we grew the team by 1,152 FTE, bringing us to a totalof 3,332 FTE at the end of December 2022. Even with this quantity of
new joiners, we kept our long-standing talent standards. We remained
efficient and disciplined regarding how many people were required tocreate new solutions, resolve problems and continue to address
customer needs. Rather than hiring for the sake of adding hands, we
continued to only hire exceptional people who will make the greatest
impact. This high bar enables us to scale our culture of speed andautonomy as we grow.
To sustain the hiring pace necessitated in 2022, we identified new
ways to expand our recruitment capabilities. To start, we increased
the number of internal specialists dedicated to sourcing top talent. To
keep speed in our hiring progress, we also added multiple membersof our senior leadership team to the group conducting final interviews
with candidates. Whereas all final conversations were historically heldwith a member of Adyen’s Management Board, we are now at a sizethat requires additional voices to weigh in. Alongside the board, weplace full trust in these senior leaders to make the final decision on
who is fit to join the company in their respective domains.
With these contributions to Adyen’s rigorous interview process, wespent 2022 successfully hiring at speed - without compromising on
our high employee standards. Our focus on investing in our tech

29
capacity resulted in this domain encompassing more than half of all
Adyen employees. We have also been impressed by the rapid
development of our new tech hubs, which opened this year in Madrid,
Spain and Chicago, USA. These cities were selected for our latest
offices for their energetic tech climates and concentrated talent pools.
We have already onboarded 85 colleagues in these offices, and arepleased to see our Formula and company culture thrive at both
locations.

Figure 6
Adyen’s overall workforce per domain in 2022

While our rule of thumb has historically been to promote internally,
Adyen has reached a level of maturity in which senior hires are more
often being brought on board to help us navigate the opportunities
ahead. By gaining experience from all corners of the finance industry
and big tech, we are utilizing their extensive experience to deepen our
knowledge and sharpen our ideas.
To broaden our reach and connect with global talent, we will bepresent at key industry events. With the employee market currently
leaning in our favor, in 2023, we will grow our team with a similar
number of new colleagues as we did in 2022 to realize our long-term
ambitions.

13%

54%

33%

Tech

Commercial

Staff

Annual Report 2022

30

Annual Report 2022

“It was clear from the get-go that we wanted tohave the Adyen culture in Mumbai. We’re one
company, with one platform, and always one
culture. It’s extremely exciting that we work soclosely with our colleagues around the world.
You get to understand other markets andmeet people from different cultures andoutlooks. Having this broader perspective
helps us build and solve problems in achallenging and complex market like India.”
Aditya — Country Manager India

31

Annual Report 2022

Learning & development
Our approach
At Adyen, we know that our ambitions can only be reached byunlocking the full potential of our team — the driving force behind ourcontinued innovation and global expansion. Fortunately, the people
who work at Adyen are ready to continually learn and increase theirimpact. To nurture this symbiotic relationship, Adyen is a place whereindividual growth is both nurtured and encouraged. To achieve this at
scale, we have built - and continue to iterate - a framework thatenables talent development at all employee levels. Whether
contributing to the company as a coordinator or director, there areroads to career growth to feed every ambition appetite.

Early careers
At the earliest stage, we have invested in expanding our NextGen
program, through which we develop the next generation of talentacross our tech, sales, and operations domains. Now in its 7th year
running, our NextGen program offers students a valuable opportunity
to kick-start their careers at Adyen. Alongside their studies, NextGen
team members hold part-time roles within our teams. They are given
significant responsibilities, expected to contribute to key projects, andare treated as equal, full-time team members. This year, 78 NextGens
were offered a full-time position upon completing the program andtheir studies. To sustain our strong candidate pipeline for upcoming
NextGen programs, we have established partnerships with leading
technological universities and diverse student associations.

Leadership development
As we are inclined to promote talent internally, we take care to ensure
our colleagues are properly equipped to handle their newfoundresponsibilities once granted. Our Human Resources team has goneto great lengths to fine-tune our Team Lead development program.

32
The ‘Essentials’ track was created for first-time leaders to learn key
skills, build their teams, and connect with their peers. First-time
managers are also invited to participate in peer-to-peer mentoring, as
well as one-on-one external coaching.
Next, the ‘Advanced’ track hosts leaders looking to further develop
their management capabilities. From there, the ‘Lead’ track was
designed for senior leaders ready for the next step in their journey.
Handling dilemmas, decision making, inclusive leadership, and team
wellbeing are incorporated into every level of our team lead trainings.
While there is much to learn throughout a career at Adyen, we
appreciate that people can also bring a wealth of knowledge fromprior work experiences. As our company matures, we have steadily
increased the number of senior hires we secure. Hiring senior teammembers not only bridges our knowledge gaps, it also gives theircolleagues the chance to learn from the outside-in and draw fromways of working at other companies. To offer development
opportunities to those who joined Adyen at later stages in theircareers, we specifically designed a program for those with extensive
leadership experience gained outside our company.

Adyen Academies
In addition to offering Team Lead training, Adyen has a range ofinternal academies that keep our global teams continuously upskilled
and freshly resourced. Our academies currently span the: Operations
Academy, Commercial Academy, Recruitment Academy, ProductAcademy, Tech Academy, Marketing Academy, and Sales Academy.
Our Sales Academy, a prime example, aims to develop the mostimpactful sales force within the payments landscape. The Adyen Way
of Selling teaches the global best practices, principles, and methods
that have made us experts at closing better deals faster. It creates anenvironment for Sales & Partnership Managers to practice ourpreferred sales tactics while receiving honest, constructive feedback.

Annual Report 2022

“We’ve always been able to attract really smart
and talented people. As they are often in theearly stages of their careers, they still need touncover how to best utilize their skills andtalents. We believe this works well if we don’t
box them too tightly into a role or job
description. We purposely have a very open
structure. As a Management Board, we realizethat it’s our responsibility to guide and support
our people as best we can. When you have thislevel of smart and talented people, you have aduty to facilitate their growth.”Mariëtte — Chief Legal & Compliance Officer

33

Annual Report 2022

34

"I get to meet some of the smartest people atwork who enjoy asking questions and learning.
The diversity of people in a classroom nationalities, experiences, and work profiles brings so much depth and value to eachsession. The genuine care we have for one
another makes Adyen a great place to be mybest while I bring out the best in others."
Anish — Learning & Development Specialist

Annual Report 2022

35

Create your own path

Performance management

At Adyen, we believe career growth needn’t only take the form ofmoving up within a team or advancing your skillset. Mobility can occur
laterally or even regionally. We do not set predetermined career paths,
and instead encourage each team member to pursue the directionthat best suits their individual interests.

Our culture of continuous feedback encompasses regular check-ins
on performance, progress, and improvement points. These
conversations are held with all members of our team. We always strive
to have employees take part in at least two formal performance
reviews. The findings from these conversations help us refine andtrack individual career development plans. They also allow us tomonitor and maintain our employee skill sets, by shedding light ontimes an employee may require additional support or guidance.

One way we facilitate career freedom is via our internal job board,which lists open roles that current employees can apply for. The job
listings span every area of the business and are not limited to a teammember’s current domain. Rather, a Marketing colleague is welcome
to apply to the Recruitment team and vice versa. We have seen manysuccess stories emerge from employees pursuing new passions
through intercompany transfers. At the end of the day, if a colleague
embodies the Adyen Formula, we believe any skill set can be learned
and developed on the job — even if it’s not in an area they wereoriginally hired for.
Beyond inter-team transfers, interoffice mobility is one of the great
benefits of working at Adyen. With our 27 offices around the world, thepossibilities are endless for those looking to bring their impact toanother location. The spectrum of regional mobility ranges from officevisits, to temporary exchange, secondment, and full internationaltransfers. These opportunities mean a team member has been
entrusted as a champion of our Formula, a culture ambassador, and aknowledge expert. Such transfers can be instrumental in helping us
build our business and scale our culture across teams and offices.

Annual Report 2022

36

“My manager provided amazing support as I
applied for a totally new role in a different
country. It’s really cool that people at Adyen
recognize potential and are willing to take achance on you. I feel so lucky to be part of acompany that encourages this culture ofpossibility. As long as you give 100%, anything
can happen and things really will.”Raquel — Head of Marketing Italy

Annual Report 2022

Employment & benefits
At Adyen, we take a long-term approach to building our global team,and therefore seek team members who we hope will grow alongside
the business. To ensure everyone feels connected to driving Adyen’s
sustainable growth and simultaneously benefits from it, a form ofequity is included in every offer. This fosters a vested interest in ouroverall business performance and motivates employees to hold along-term outlook for their time with the company.
In addition to our various equity models, we take pride in generously
rewarding performance. To keep high-achievers feeling valued, wematch exceptional contributions with exceptional remuneration.
Compensation is reviewed annually on an individual basis. In the same
way there is no set path to career development, Adyen also remains
flexible when it comes to earning trajectories. Just as careerdevelopment happens quickly, so too can salary increases.
To remain competitive, we determine salaries based on what ourpeers pay for the same role, at the same seniority, in the same
location. By prioritizing fair compensation, we hope to attract great
people who want to work in an inspiring and limitless environment. In
keeping with our standard of fair remuneration, each year we iterate
our approach to Equal Pay & Equal Chances. This ensurescontributions are rewarded through the same lens — giving ourpeople equal chances, and treating equal work with equal value.
Within the competitive fintech space, a wholistic approach to total
rewards is critical. One of our means to achieving this comes in theform of Adyen+. With our belief that there is no one-size-fits-all
solution to such a diverse group of people working at Adyen, this year
we globally launched the Adyen+ benefits initiative, which provides amonthly stipend for employees to spend however they see fit. As ourpeople come from all walks and stages of life, we find it important tosupport their diversity of interests outside work. For some, the stipend
may be best put towards learning a new language. For others, it’s
personal training at the gym. And for others still, it’s childcare.

37
Through Adyen+, we do not assume which perks are most desirable,
and instead empower our people to enjoy the benefits most relevantto their individual situation.
This sense of flexibility applies to employees dealing with life events.
Whether starting a family or coping with difficult personal
circumstances, our ‘Normal Course of Life’ philosophy is to help ourteam members navigate extraordinary times with understanding andsupport. Recognizing the importance of one’s personal role as aparent, we offer all of our employees parental leave. On a country-bycountry basis we evaluate our local parental leave approach. Our aim
is to be globally consistent, which doesn't necessarily mean copying
and pasting one method everywhere, but rather following market
practice per region.

The Essentials

The Essentials are our benefits relevant to all
employees, plus the benefits mandated by local
governments. No matter which office our employees
work from, Adyen provides paid holidays, healthinsurance, long-term savings incentives, disability
insurance, commuting allowances, and lunch at our
offices. All benefits are regionally adapted, keeping
local practices in mind.

Annual Report 2022

“The nice thing about Adyen+ is that it works
for everyone in the way that they uniquely need
it. For some people it’s about travelling theworld, for others it’s put towards doing a new
course. It gives the flexibility to make a real
impact per person.”
Dominique — Head of Impact

38

Annual Report 2022

Responsible
practices
Generating long-term sustainable change requires keeping
responsible practices at our core. With our belief that environmental
sustainability, integrity, privacy, security and responsible tax behavior
make up our license to operate, we have accordingly embedded theminto all areas of our business. Consciously designing our business inline with these responsible practices creates a culture that embodies
our mission.

39

Annual Report 2022

Environmental sustainability
With environmental sustainability comprising a key component ofresponsible business practices, Adyen is committed to further
reducing and compensating for our global footprint. Since we beganassessing our company’s environmental impact in 2019, we havemade notable improvements - from tracking our carbon emissions
and moving to renewable energy, to expanding our officesustainability efforts. Consciously shaping our operations in line withthese responsible practices is key to realizing our ambitions.
Making progress has also come in the form of broadening ourenvironmental knowledge, which has matured and is contributing toour company’s priorities. We see that although our business model
lends itself to low global emissions and is exposed in a limited way toclimate risk, we recognize our responsibility to continuously reduce
our negative impact. To ensure we make strides, we are proactively
optimizing our internal processes to better understand our emissions
hotspots and reviewing our supplier relationships.
When it comes to sustainable practices, we know there is no finish lineor time for complacency. To lay the foundation for continuous
improvement, we identified the need to improve our data accuracy.
For that reason, in 2022, we improved the way we measure our GHG
emissions. As one example, we are now accounting for the energy
consumption of our terminal warehouses, as well as the downstream
transportation associated with shipping our terminal devices to ourcustomers. By transitioning to a professional platform and managing
it in-house, we can now continuously monitor our emissions
throughout the course of the year as opposed to on an annual basis.
We’ve already seen a marked improvement in the corresponding data
quality, putting us in a better position to drive our efforts.
One outcome of our knowledge maturing is our decision to moveaway from targeting a Climate Neutral certification, which we alignedwith and reported on in the past. While we recognize the positive40
intentions of the label, our efforts in this space have historically been
focused on purchasing carbon credits on a 1:1 basis to total GHG
emissions, and we feel that this approach alone does not adequately
address our accountability in this space. While expanding ourenvironmental sustainability knowledge, we found that carbon offsets
may run the risk of inadequately compensating for our emissions or
may be inaccurate in their claims. To improve our approach toprocuring carbon credits going forward, we have therefore
established a list of criteria for suitable projects which includes key
qualities such as: geographical relevance, additionality andpermanence, as well as a focus on supporting carbon removal
technology projects. Please find more information on these projects
on the pages below.
Though we are excited by the momentum behind our sustainability
ambitions, we acknowledge that we are at the outset of our journey on
this front. Adyen will not stop working to improve our approach andfind innovative ways to increase our environmental accountability. We
will continue to evolve our thinking and stay close to changes in thecorporate sustainability landscape. Below we have outlined where wecurrently stand across GHG emissions and renewable energy usage
across our global operations.
Adyen’s 2022 operational GHG emissions, measured in tCO2e
Scope
Scope 1: direct GHG emissions

Emissions(tC02e)% of total

tCO2e/
FTE

112

0.19 %

0.03

Scope 2: indirect GHG emissions frompurchased electricity, heating and cooling

4,449

7.67 %

1.34

Scope 3: other indirect GHG emissions

53,43292.14 %

16.04

Total GHG emissions

57,993

100 %

17.41

From 2021 to 2022, our total GHG emissions increased as a result of
the continued growth of our global team, expansion of our physicaloffice locations, return to office, and an increase in business travel. In
addition to these growth drivers, the improvement of our calculation
methodology (in line with the GHG Protocol) has also led to a moredetailed picture of our emissions, as we were able to include
additional data points this year. On an ongoing basis, we will continue
to refine this approach and work with our suppliers to obtain betterdata.
Scope 1
Scope 1 emissions are emissions from sources owned or controlled
by us — such as refrigerants used to heat or cool our offices — andremain largely in line with prior years.
Scope 2
Scope 2 emissions cover indirect emissions, such as purchased
electricity for our buildings. Since 2019, we have accounted for theenergy consumption across our offices and data centers, and this year
we expanded the calculation to include our terminal warehouses aswell. While the largest portion of our energy consumption is attributed
to data centers, we are pleased to report that our renewable energy
coverage across our global data center footprint remains high at 95%.
Scope 3
Scope 3 emissions stem from activities across our value chain that are
not directly owned or controlled by Adyen. Our Scope 3 emissions
have increased substantially relative to 2021 as a result of ourcalculations leveraging several new inputs in addition to the growth of
our company and the return to offices and business travel postCOVID. Actual lifecycle analysis data from our hardware suppliers forour key infrastructure purchases, such as servers, which were notpreviously included in our calculations are now part of ourcalculations. We have also accounted for the downstream
transportation of our POS terminals by air and ground, as well as an

Annual Report 2022

41

updated method to account for terminals sold to customers and their
lifetime energy consumption.

emissions with permanent carbon removal credits to claim net-zerocarbon.

Environmental sustainability projects and climate
contributions

To address Scope 2 emissions, we committed to a purchase of
unbundled energy attribute certificates (EACs) that matched our nonrenewable energy consumption for the year to the amount of 5446
mWh. Our purchase was based on utility data for our top offices,
accounting for over 94% of our employee headcount, as well as ourdata centers and warehouses. Where actual data was not possible tocollect, we made estimates based on floor areas and local emissions
grid factors.

In 2022, we iterated our approach to funding climate-rated projects,
selecting addressable emissions, and ensuring our environmental
sustainability projects meet high quality standards.
Rather than pursuing a climate neutrality claim, we sought to moreaccurately calculate a fair contribution to go towards our climate
offsetting efforts. We derived a reference fee of €92/tCO2e or $100/
tCO2e for removing and storing carbon at scale (based on theexchange rate at the time of our analysis for 2022). This follows
3
guidance from the UN Global Compact as well as the latest IPCC
report which also references this level as a benchmark for assessing
the feasibility and cost-effectiveness of carbon removal efforts at
scale.
Next, we looked at emissions from key areas of the business that areoutside of our direct control but necessary for our operations. To
compensate for these emissions, we focused on addressing Scope 1,
Scope 2 and business travel-related emissions (which fall within
Scope 3). Measurements for our Scope 1 and Scope 2 emissions
primarily leverage our hard consumption data while our emissions
from business travel are also based on accessible data. To
compensate for Scope 1 and business travel emissions, we decided touse our carbon fee-setting approach to calculate our 2022
contribution amount. We chose to put funds towards environmental
projects in the carbon removal space, as we observed a growing
number of frameworks and initiatives, such as the Science-Based
Targets initiative (SBTi) and Carbon Removal Certification Framework(EU CRCF), which require companies to remove their residual3

We secured carbon removal credits based on our Scope 1 andbusiness travel emissions, totalling 111.97 tCO2e and 11,536 tCO2e
respectively and our carbon fee of €92/tCO2e. With our desire to
pursue a portfolio approach, we worked with a third party to ensure
projects are durable, additional, verifiable, safe, and legal. We
supported the five following projects:
1. Carbon capture
Carbon Capture makes modular Direct Air Capture (DAC) machinesthat can be connected in large arrays with the ambition to remove
large amounts of CO2 from the atmosphere. Due to the modular
architecture of its technology, the project is particularly promising due
to its combination of renewable energy (wind & solar) with geologicalstorage close to the plant and first-time utilisation of Class VI injection
for permanent carbon dioxide storage in deep saline aquifers.
Adyen’s commitment will directly contribute to the development of
Project Bison, one of the most significant DAC projects in the world,
aiming to reach five megaton levels in carbon capture and storage by2030. In particular, the commitment will help accelerate theimplementation of the technology on a large scale as well as support
research and development in making the DAC technology more
efficient and cost-effective.

The UN Global Compact calls on companies to set an internal price at a minimum of $100 per metric ton over time. Find more information on www.unglobalcompact.org/take-action/action/carbon.

2. UNDO
Mineral weathering already naturally captures CO2 at a gigaton scale
but takes a very long time (1,000+ years). UNDO accelerates thisnatural process by spreading basalt on croplands to increase
dissolved inorganic carbon in the soil. Their technology uses novel soilmodels and data to maximize CO2 removal while boosting crop
growth. The team is scaling their empirical verification, river network,and plant-tissue studies to advance the measurement of CO2
drawdown and ecosystem impact.
Adyen’s commitment will contribute directly to the deployment of over
7,400 tons of basalt being spread on cropland in the UK. Adyen is thus
enabling faster deployment and testing, helping enhanced weathering
to become a viable and cost-effective solution for tackling climatechange.
3. InPlanet
InPlanet uses the power of enhanced weathering to sequester CO2
permanently and regenerate soils. While most projects and studies in
the field have been conducted in Europe and North America to date,
InPlanet is deploying this technology in Brazil, where warmer andwetter conditions result in faster rock weathering rates and, thus,
faster CO2 drawdown. InPlanet is teaming with local mines andquarries to source rocks and works with the University of Sao Paulo todevelop monitoring, reporting, and verification field stations to collectbetter data on how weathering changes with the different silicate
rocks under a variety of weather and soil conditions across Brazil.
Adyen’s commitment will translate into over 4,000 tons of silicate rockpowder deployed on sugarcane plantations while simultaneously
allowing local farmers to reduce the inputs of limestone, synthetic
fertilisers and pesticides, contributing to more sustainable agriculture.

Annual Report 2022
4. Sonnenerde
Sonnenerde uses pyrolysis, a process under which waste biomass isheated without oxygen to produce carbon-rich biochar, which ishighly stable and can sequester carbon for multiple centuries. Biochar
also acts as a soil enhancer when applied, reducing erosion andincreasing soil fertility. Sonnenerde is a European biochar production
pioneer, with its first facility built in 2012.
Adyen’s commitment will be directed to the development of the new
pyrolysis plant and help with the initial costs and the scale-up from
historical production. In the first phase of development, the biochar
production will reach an annual capacity of 600 tons and is expected
to reach over 3,000 tons by 2026.
5. Project Vesta
Project Vesta is a non-profit developing a coastal weathering solution
to store CO2 permanently. The process accelerates the naturalchemical weathering of the mineral olivine by spreading large
amounts of ground olivine-containing rock onto coastlines where it
can dissolve in seawater, thereby increasing the rate of CO2
absorption by the ocean. The process also helps counteract ocean
acidification.
Adyen’s commitment will be deployed against a pilot based in North
Carolina, slated to be 12x more prominent than its previous fieldwork.
Vesta is collaborating with researchers at the US Army Corps ofEngineer Field Research Facility located in North Carolina on thisproject, where it plans to place 8,000t of olivine sand offshore fromthe Town of Duck’s shoreline.
X

42

Annual Report 2022

Ethics, conduct & integrity
People & integrity
This year, Compliance at Adyen has focused on further strengthening
the controls Adyen has in place to foster ethical and integrous
conduct pursuant to Adyen’s Global Integrity Framework. Central tothis work are the efforts to ensure Adyen remains compliant with new
and upcoming requirements, as well as to establish ethical decisionmaking practices that continually inspire trust in all stakeholders. To
achieve this, the Compliance function made changes to how ourteams go about assessing customers, partners, and suppliers before
engaging in any agreements to ensure integrous operations that
support long term and sustainable growth.
As regards partners and suppliers, Adyen is committed to uphold
ethical behaviors that fully respect human rights. For these reasons,Adyen actively pursues compliance with social safeguards as
mandated by Dutch law (Child Labor Due Diligence Act), EU
regulations (European Convention on Human Rights), and the
mandates in all other jurisdictions where Adyen operates. We require
our partners and suppliers to also comply with all applicableregulations and laws regarding human rights, child labor,
and sustainability.

43
the course of the year, the Compliance function has devoted further
attention to ensuring appropriate internal channels are in place. These
are designed to encourage stakeholders to ask questions and raise
concerns about any aspects of the business, to fully promote
discussions about relevant or concerning topics, and to make sure all
stakeholders are equally aware of existing channels, such as Adyen’s
4anonymous ‘Speak Up’ reporting tool . To further protect employees,
additional safeguards have been established to ensure any
inappropriate behaviors that could take place within Adyen’s
professional environment — such as any aggressive behavior,bullying, discrimination, and/or sexual harassment, can besafely reported.
The annual, company-wide Integrity training is a testament to Adyen’scommitment to these subjects. To ensure Adyen operates in an
integrous manner and in accordance with the highest industry
standards, a comprehensive integrity and conduct training is run eachyear for all employees. This educational refresher ensures all teams
and functions are properly informed about relevant developments andhow such developments impact their day-to-day work as well as
Adyen’s wider role in safeguarding the integrity of the financial
system. In 2022, training emphasis was placed on topics such as
ethical behavior, internal conduct risks (e.g. whistleblowing, third
parties onboarding practices), as well as integrity risk management.

In the same way Adyen externally prioritizes ethical principles, it is also
expected that all employees to treat one another fairly and withrespect. To uphold an environment of ethical behavior, everyone at
Adyen knows that they share the responsibility to prevent any acts
contrary to generally accepted social or business conduct standards,
or those which could seriously damage confidence in Adyen or in thefinancial industry.
Adyen is collectively committed to maintaining this oversight andencouraging people to speak up when in doubt. To facilitate this, in4

Our full Reporting and Whistleblower policy can be found on www.investors.adyen.com/governance.

Annual Report 2022

Information security & data privacy
Information Security
As a company processing our customers’ data and that of their endconsumers, information security is of vital importance to us. Securing
our data has been a top priority since our founding, which is why wehave long embedded security into each area of our platform
and organization.
In 2022, we further strengthened Adyen’s security strategy, which isbuilt upon the principles we deem fundamental in our mission toremain in full control of our data and ensure the best security
outcomes. These principles are defined as follows:

Scaling our security culture
To ensure we maintain our security mindset throughout all growthstages of the company, Adyen continuously educates our global teamon our high security standards. Every Adyen employee - no matter
their region, team, or domain - is required to participate in our security
training program as part of their onboarding. This program is regularly
updated to include the latest threats from the market as well as thosepertaining to the growth phase the organization is in. These programs
range from sharing generic security principles to scaling specificprocesses such as incident handling and reporting, threat modelling,and security penetration testing. Over the past year, we also raised thequality and effectiveness of our annually securing training, in which wecommunicate Adyen’s security foundations.

Securing our products as we innovate
Adyen’s security strategy outlines how we instill confidence in our
products and solutions by embedding security at all (especially early)
stages of product and software development. This in part means
conducting the necessary security testing to confirm the strength of44
our security posture. Throughout 2022, Adyen was committed toincreasing and improving our threat modelling activities. Our
automated, offensive security testing activities were significantly
increased to ensure our broader and richer product offering wasdelivered in line with our high security standards.

In 2022, Adyen took a consistent and analytical approach to security
events. We did not suffer any data breaches nor notable incidents that
required reporting to our regulators, customers, or stakeholders.

Expanding our product offering and market presence in 2022
required us to address the risks associated with specific regulatory
and compliance requirements. Fortunately, our strong security
foundation and extensive compliance coverage enabled us to meetthose obligations without requiring significant changes that might
impact the services we provide to our customers.
As a company that collects, processes, stores, and transmits
cardholder data, Adyen is required to comply with the Payment Card
Industry Data Security Standards (PCI DSS). Our PCI DSS attestation
was successfully renewed during 2022, which new regions added tothe scope of our regional expansion. Furthermore, Adyen maintains
compliance programs related to other PCI standards applicable to oursolutions, such as PCI PIN, PCI 3DS, PCI P2PE, etc.

Monitoring the threat landscape and proactively
addressing emerging risks
Despite Adyen’s full confidence in our security foundations andcontrols, we remain vigilant of our environment, industry, and theever-evolving technology space. Over the last year, we focused on
expanding our monitoring and detection capabilities, in addition toensuring we have a strong signal-to-noise ratio and a fast and precise
response to relevant events.
To complement our "assume breach" strategy, Adyen has been
expanding our Security Incident Response capabilities by leveraging
regular testing. The frequency of this testing is commensurate withthe growth and transformation of our products, external threat
landscape, and additional scrutiny from regulators.

Responsible business practices trainings &completion rates (per 31 December 2022)• Insider trading training — 100%
• Data privacy & security training — 99%• Integrity & conduct training — 93%
The completion rates also include employees on leave (e.g., parental
leave and long-term sick leave).

Annual Report 2022

45

“You need to be innovative and creative at
Adyen. When I’m working with my team, I feellike a powerful designer who can change theworld. We have a special bond that’s easy tosee from miles away. It connects our ideas andmakes our work even stronger.”
Natalia — Brand Designer

Annual Report 2022

46

Data privacy

Knowledge & awarenessInternational data transfers and global privacy laws

To support the business in building the most customer-focusedfinancial technology platform, Adyen’s Privacy team strives for thebest possible data privacy and compliance program. Customers trust
Adyen with their shoppers’ transaction information. Given thesensitive nature and commercial value of this data, Adyen takes our
responsibility very seriously. Ensuring data privacy and complianceare key commitments that Adyen makes to all of its customers.

Data privacy is a responsibility of everyone at Adyen. To make privacy
knowledge tangible for all employees, the Adyen Privacy Principles
were created to guide employees in day-to-day decisions thatconcern personal data.

The final focus area for the Adyen Privacy team in 2022 wasinternational data transfers and global privacy laws.

Alongside transaction information, Adyen processes and collects
employee personal data and registration information from ourcustomers. The privacy protection that comes with collecting suchdata is therefore relevant for every facet of Adyen. Employees areaware of the expectations to uphold our data privacy andsecurity measures.
Data privacy continues to grow in importance on the global agenda. In
2022, the Adyen Privacy team accordingly continued improving andstrengthening our global privacy compliance framework by focusing
on four key areas: product compliance, knowledge and awareness,
individual rights, international data transfers, and global privacy laws.

Product compliance & data ethics
Adyen views privacy as an essential component of how we build an
ethical business. We do not sell, and have never sold its
5customers’ data .
Part of ethically handling means making sure our teams always workwith data in a considered manner. As part of our product compliancefocus, we established an AI & Data Ethics Working Group that willassess new products and services that leverage AI or machinelearning. These assessments are to be included as part of Adyen’s
product approval and review process.
5This is further clarified in Adyen’s Privacy Statement.

Every Adyen employee is comprehensively trained on data privacy,
security, and confidentiality principles, including an annual mandatory
refresher training to remind all team members of the significance of
keeping our data and our customers’ data safe. At the end of 2022,
100% of Adyen employees completed a data privacy and security
refresher training.
By hosting regular training sessions on a global level, Adyen spent
2022 further focused on its employees’ knowledge and awareness ofprivacy laws and regulations around the globe. Local privacy
champions in regions outside of Europe were also established,reflecting the growing global trends in privacy legislation.
The Privacy team works in close collaboration with the Information
Security team, taking an active role in strategy setting and day-to-day
operations (e.g. launching new products and expanding into newmarkets), including working on Adyen’s SOC 2 certification.
In January 2023, the Adyen Privacy team hosted an event with a range
of internal and external speakers in honor of International Privacy Day.

Individual rights
Another focus area for 2022 was automating our process for data
subjects to request data access or deletion. Adyen therefore made a
new form publicly available on our website to ensure such requests
are further centralized and streamlined.
The Adyen Privacy team continues to ensure that, where possible,
automation is woven into its ways of working.

In 2022, Adyen updated the existing Standard Contractual Clauses it
had in place with its customers to the new version, as published by theEuropean Commission in June 2021. To ensure a smooth updateprocess ahead of the deadline, this is another instance where
automation was utilized. The team also focused its efforts on ensuring
compliance with the California Privacy Rights Act, effective January 1,
2023, as well as the other state privacy laws which will come into
effect in 2023 in Colorado, Connecticut, Virginia, and Utah.
Adyen is committed to further improving, developing, andstrengthening its privacy compliance efforts and standards to help ourcustomers succeed. The impact of upcoming changes in global
privacy legislation continues to be closely monitored.

Reportable data breaches and substantiatedcomplaints
In 2022, Adyen did not suffer any reportable data breaches, and did
not receive any substantiated complaints from regulatory bodies orparties outside the organization concerning breaches ofcustomer privacy.

Annual Report 2022

Tax
Responsible tax behavior is an essential component of Adyen’s ethicalbusiness practices. We pay taxes in the countries wherein we have ataxable nexus, dependent on the laws of the respective countries. Inline with this approach and our values, we do not seek refuge in tax
6havens and, when making decisions, we respect relevant laws andregulations. We support the principles that are the fundamentals of
the OECD’s work on Base Erosion and Profit Shifting (BEPS),
including country-by-country reporting to tax authorities.
When it comes to tax, Adyen has a low risk appetite. We operate undera global, scalable tax framework that aims to support the business in
its growth, while simultaneously allowing us to be in control of our tax
position. Our global tax framework covers Adyen’s total tax
contribution, both the corporate income taxes paid and the taxes
collected, such as: Value added tax, withholding tax, and payroll tax.
More details on the taxes paid and taxes collected can be found in
Note 24 of the Consolidated Financial Statements.

Tax governance, control, and risk management
Adyen utilizes a tax control framework to manage and control Adyen’s
global tax risks, compliance requirements, and processes. Having arobust governance, control, and risk management system for tax
ensures Adyen’s tax strategy and approach to tax are properly
embedded within the organization.
The tax control framework defines the roles and responsibilities within
Adyen when it comes to managing tax risks and ensuring compliancerequirements are met. Adyen’s Tax team is responsible for all of
Adyen’s tax affairs around the world. Members of the Tax teamparticipate in relevant external training. Compliance with the tax
control framework is effectuated through a set of internal controls forwhich evidence is documented and collected on a regular basis.
647Internal Control team continuously monitors and tests compliancewith the tax control framework. As part of our internal control
processes, we perform an annual tax in-control statement.
We continuously seek new ways to embed technology across all areasof our tax control framework, including tax processes and tax
data management.
The tax strategy is monitored by the Tax team on a continuous basis
and is formalized in the tax policy. The Tax team updates the tax policy
at least annually or in case of significant changes. The Risk Committee
reviews the policy before submitting it to the Management Board fortheir approval. The tax strategy as included in this Annual Report andas included in the tax policy is ultimately approved by theManagement Board and Supervisory Board. We refer to ourWhistleblowing Policy for the mechanism for anyone within Adyen toreport its concerns about unethical or unlawful behavior in relation totax. In 2022, there have been no reports of incidents, breaches orclaims that exceeded Adyen’s tax risk appetite.

Stakeholder engagement and management ofconcerns related to tax
Adyen maintains an open relationship with all relevant tax authorities.
We are open to participating in cooperative compliance agreements
in order to seek an active real-time audit, whereby clearance isobtained for any significant transactions or tax risks. This may result in
Adyen concluding a tax agreement with a tax authority to get upfront
certainty on any tax implications that may arise.
Adyen typically refrains from public policy advocacy on tax, nor
engages in any lobbying activities related to tax. We have no active
involvement in the development of tax systems, legislation, or
administration. Within Adyen, tax follows the business. Adyen’s Tax
team is well embedded in the organization to engage with (external)

Adyen follows the EU list of non-cooperative jurisdictions to determine which country qualifies as 'tax haven'.

stakeholders and address any views and/or concerns. The descriptionof our tax strategy, as presented in this Annual Report, is constantly
evaluated and iterated following an active dialogue with stakeholders.
This way, we make sure that the tax strategy stays aligned with theorganizational values and business strategy.

Risk management
Adyen recognizes that risks are associated with achieving its strategy
and business objectives. Adyen aims to be risk aware without being
unduly risk averse. Adyen therefore actively manages its risks toprotect and grow the company. Adyen has adopted a uniform andsystematic approach for managing risks. Adyen's integral risk
management framework is based on the Enterprise Risk Management(ERM) model as issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in 2017.

Risk governance
Adyen has established a risk governance that is consistent with thesize, international presence, complexity of the organization and therisk profile of the company. Adyen's governance identifies, establishes
and reinforces the importance of oversight responsibilities for risk
management. The Supervisory Board supervises and advises theManagement Board. The Audit and Risk Committee is charged withsupervising, monitoring, and advising the Management Board in
relation to the functioning of the internal risk management andcontrol systems.
The Management Board is responsible for maintaining an adequate
system for risk management and internal control. The Management
Board has instituted a Risk Committee to support them with risk
management oversight. The CFO, CLCO, and CTO represent theManagement Board in the Risk Committee. The Corporate Risk andInternal Control team reports its findings from monitoring Adyen’s risk
profile to the Risk Committee. The Risk Committee keeps theManagement Board informed of the observations, recommendations,and deliberations on findings regarding risk management and internal
control. The Risk Committee reports any material risk limit breach thatwould place Adyen at risk of exceeding its risk appetite promptly to
the Management Board.

Three-lines-model
Adyen has adopted the three-lines-model, as published by theInstitute of Internal Auditors (IIA), which reflects the segregation
between operations (first line management), the risk management,
security and compliance functions (second line), and the independentinternal audit function (third line). The first line owns and manages
risks, the second line sets control standards and monitors adherence
to them, and the third line - internal audit - provides assurance on theadequacy of the first two. The Corporate Risk and Internal Control
team supports the Management Board and Risk Committee with its
risk oversight, management of the risk framework, setting of therelevant risk management policies, risk appetite, and independent
monitoring of key risks, limits, and controls.

The Adyen Way ofBeing In Control
We always ask why and are critical, we
don’t just tick the box
Your work impacts others, involve them
We evidence our work at the source, we
don’t replicate it

Risk culture

If you see a problem, act on it

Culture is a key aspect of risk management at Adyen. Our people
establish the mission, strategy, and business objectives, and put risk
management practices in place. Adyen believes that a strong culture
serves as a safety net to guide people in making good decisions.
Therefore, Adyen promotes and safeguards the key elements ofculture through the Adyen Formula and the Adyen Way of Being
In Control.

We all make mistakes, we seek help andshare as soon as we find out
Always look for improvement, automate
processes continually & challenge thestatus quo
The Adyen Formula guides our behavior,policies support itAnnual Report 2022

49

Strategy, objective setting, and risk
appetite

specific risk categories. A notable example of the latter category is
the Systemic Integrity Risk Analysis (SIRA) which focusses on
integrity risks.

At Adyen, risk management, strategy, and objective-setting work
together. Operational objectives put strategy into practice whileserving as a basis for identifying, assessing, and responding to risk.

Adyen has continued in 2022 with expanding the use of its
Governance, Risk management and Compliance (GRC) tooling tosupport the evaluation of the effectiveness of its control framework.
This year saw a significant increase in adoption of the GRC toolingacross the company for various modules and functionalities.
The Corporate Risk and Internal Control team advocates this adoption
in line with its integral risk management philosophy.

Risk appetite defines the amounts and types of risk Adyen is willing toaccept in pursuit of its objectives. A low risk appetite implies a low
residual risk acceptance and therefore requires the risk response andinternal controls to reduce the residual risk to corresponding levels. A
higher risk appetite may allow for additional activity and less strong
internal control compared to a moderate or low risk appetite. Adyen's
risk appetite is aligned with its strategy. Changes in strategy andwillingness to assume risks or external developments may necessitate
Adyen to update its risk appetite, which is ultimately bound by Adyen’s
risk capacity.
Adyen has translated its view on risk appetite into risk appetitestatements, which set the overall tone for Adyen's approach to risktaking. In 2022, the Management Board performed its annual review
and updated Adyen’s risk appetite statements and risk limits, whichwere discussed in the Audit and Risk Committee, and approved by theSupervisory Board.

Event identification and risk assessment
Adyen performs a top-down, company-wide risk assessment at least
on an annual basis. The purpose is to identify and assess principal andemerging risks in order to focus attention on the most significant
threats and opportunities. The Management Board has updated its
company-wide risk assessment in 2022. For a more detailed
description of the principal risks, see the ‘Risk Factors’ section of thisAnnual Report. The top-down, company-wide risk assessment iscomplemented by a multitude of targeted bottom-up risk
assessments. These are conducted at process level or aimed at

Control activities
Adyen uses COSO's Internal Control — Integrated Framework (2013)as a reference for its design, implementation, and evaluation ofcontrol activities as part of a system of internal control. Adyen has
implemented internal risk management and control systems to
manage the risks effectively and efficiently and to provide reasonableassurance that objectives can be met. Policies and procedures ensurethat employees understand their role in Adyen's risk and control
systems. An example is fraud risk prevention, which is documented in
the SIRA report and starts with the identification of potential internaland external fraud risk scenarios. This identification is a process that
continues throughout the year, with a notable detailed analysis during
the annual SIRA exercise. As a first step the identification, analysis anddetermination of the internal and external fraud risks relevant toAdyen takes place, followed by the nature and inherent size of theserisk. Subsequently, the relevant controls that are in place are mapped
to the risks. Finally, Adyen concludes on the overall residual risk andan assessment is made to what extent the remaining residual risk is
within Adyen’s risk appetite. Adyen’s key internal fraud risk scenarios
include the manipulation of financial results, the misuse ofconfidential information, and the misappropriation of assets. Relevant
mitigating controls mapped to these internal fraud risk scenarios varyin origin. There are governance measures, such as oversight by theManagement Board, Internal Audit, Compliance and the Supervisory
Board’s Audit and Risk Committee. Adyen also applies measures
aimed at people, conduct and culture, such as an anti-fraud policy,
employee background screening, a whistleblower policy and atargeted training program. Furthermore, a broad range of detective
controls at process level are present, such as system monitoring,reconciliation and auditing. These are complemented by preventive
measures that include review and approval flows and segregation ofduties. Whenever fraud is suspected or reported, an internal
investigation is conducted and corrective actions are taken. Adyen’s
key external fraud risk scenarios include customers providing Adyenwith fraudulent documents, circumvention of Adyen’s fraud
prevention system through brute force or fraud rings, and customers
initiating fraudulent transactions. Relevant mitigating controls
mapped to these external fraud risk scenarios include both preventive
and detective controls, such as customer due diligence, customer
screening, security monitoring, vulnerability management, access
controls, and transaction monitoring. Adyen has assessed that therelevant controls and mitigating measures in place sufficiently
mitigate the identified internal and external fraud risk scenarios. There
were not any material fraud cases identified. Upon identification of
fraud, our policy (or as part of our corrective actions) describes that we
perform a root-cause analysis, and assess if there are any
shortcomings or weaknesses in design and/or effectiveness of ourinternal controls. Further, we evaluate the significance of potentially
identified weaknesses in internal controls and we embed further
improvements in internal controls to mitigate any identified residual
risk below our risk appetite. During 2022 no material weaknesses
were identified in our internal controls. Also refer to 'Effectiveness ofrisk management and internal control systems’ paragraph below.

Annual Report 2022

Stress testing
Adyen uses stress testing to understand the potential impact ofadverse events on its business model, capital, and liquidity ratios.
The stress scenarios are based on exceptional but plausible eventswith an sufficient degree of severity. Adyen also performs stresstesting to evaluate the adequacy of capital and liquidity plans understressed conditions using scenarios and risk factors prescribed by theregulator. Adyen performs these tests in accordance with EBA
guidelines on stress testing. In 2022, Adyen’s Internal Capital and
Liquidity Adequacy Assessment Process (ICLAAP) confirmed its highfinancial shock absorption capacity and high capital and7liquidity ratios .

Effectiveness of risk management andinternal control systems
In compliance with principle 1.2 of the Dutch Corporate Governance
Code, the Management Board is responsible for establishing andmaintaining an adequate system for risk management and internal
control. Adyen has implemented internal control over financial
reporting designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial
statements for external purposes in accordance with financial
reporting standards. In compliance with principle 1.4 of the Dutch
Corporate Governance Code, the Management Board annually
evaluates the effectiveness of the design and operating of its risk
management and control systems. Per December 31, 2022, no major
failings in the effectiveness of the internal risk management andcontrol systems were observed, nor were significant changes to thesesystems made or major improvements planned. The Management
Board has discussed the evaluation of its risk management and

750
control systems with the Audit and Risk Committee andSupervisory Board.

Risk factors
In compliance with principle 1.4 of the Dutch Corporate Governance
Code, the Management Board has updated its company-wide risk
assessment in 2022. This section describes the principal inherent
risks that could potentially affect Adyen, with further detail on financial
risks provided in Note 12 of the Financial Statements. While Adyen
believes that the risks described below are the material risks
concerning Adyen's business, they are not the only risks relevant toAdyen. Other risks, facts, or circumstances not presently known toAdyen or that Adyen currently deems to be immaterial, could
individually or cumulatively prove to be significant and could have amaterial adverse effect on Adyen's business, results of operations,financial condition, and prospects.

Principal risks
Adyen identifies risks in two stages; inherent risk and residual risk.
Inherent risk is defined as the risk to Adyen in the absence of any
actions taken to alter the likelihood or impact of that risk. Residual risk
is the remaining risk after consideration of the mitigating actions
taken to alter the likelihood or impact of that risk. Adyen’s risk appetite- and broader risk management approach - is set in the context ofresidual risk. We believe this approach creates most risk awarenessacross all three lines as it is nested in the daily practice of running atechnology company.
Adyen recognizes that there are inherent risks persistently connected
and relevant to Adyen’s business model and the financial technology
sector. The risk profile of Adyen varies across products andgeographies — still these four risks are key considerations wheneverMore information on Adyen’s capital and liquidity ratios can be found in the 2022 Transparency and Disclosure Report (Pillar 3) at www.investors.adyen.com.

we explain our risk profile to regulators, investors, customers or otherinterested external parties. That is why we start with describing the
topics of information security, regulatory compliance, platform
availability and operational liquidity risk. We will then recount the most
relevant risk developments in 2022, and conclude with acomprehensive description of relevant residual risks to Adyen.
Information security
Adyen has a low risk appetite regarding information security risk andbreaches of confidential data. As Adyen is a global financial
technology payments platform working with some of the world’s
largest businesses, Adyen faces continuous attempts to intrude or
disrupt its payments platform. To counter this inherent risk, Adyen has
implemented its Information Security Program and continuously
updates where needed. The goal of the program is to ensure theongoing confidentiality, integrity and availability of data, systems andprocesses at Adyen, and to ensure that specific information security
compliance programs are maintained and externally assessed as
appropriate. Adyen has assigned an Information Security Officer andthe Security team to operate the Information Security Program on a
day-to-day basis.
Regulatory compliance
Adyen does not only need to comply with laws and regulations in thejurisdictions in which it operates, but also with laws and regulations
that have worldwide application. If Adyen's efforts to comply with laws,
regulations, and standards differ from the activities intended byregulatory bodies or supervisory authorities, they may initiate legal
and regulatory proceedings against Adyen. To ensure that applicablelaws and regulations are identified and mapped to the activities andservices Adyen offers in local markets, Adyen performs ongoingregulatory scanning by regulatory compliance specialists withvalidation from external legal counsel.

Annual Report 2022

51

Adyen believes that the use of a single platform is best overlaid with a
global compliance and risk framework, whereby Adyen strives for
global application of best practices while being cognizant of the needto implement local deviations where required or for better fit.

Decreased platform stability and availability can have various causes
including intrusion, disruption or physical events. Adyen monitors its
operational excellence on a large number of indicators often focusedat specific platform sections, or products and services.

Adyen maintains a proactive approach to regulation. Compared topeers in the fintech industry, Adyen actively commits to regulatory
frameworks via licenses and externally audited standards. This has
always been part of the Adyen strategy, as it facilitates both global
growth but our compliance also provides comfort to our customers.
As a result, Adyen is well-placed to deal with regulatory complexityand differences in supervisory approaches in a sustainable manner.

Adyen has a low appetite for issues in the availability, connectivity, andperformance of its platform. Adyen has built its systems and services
to avoid the presence of single points of failure, and to ensure thatsufficient capacity exists to continue normal operations for criticalprocesses despite the loss or unavailability of corporate resourcesfrom information technology, physical locations or even personnel
and whole departmental structures. The highly available payment
platform is designed to withstand individual telecommunications,systems and data center instance failures. Furthermore, thequantitative limits monitored revolve around platform uptime and arein line with supervisory requirements. The design of Adyen’s
infrastructure and the related controls and processes aim to provide
highly available services and ingrained operational processes tomaximize platform stability and availability. Adyen invests
continuously in resources and training to maintain its high level of
performance.

Nevertheless, accents and focus areas of supervisors within
regulatory frameworks do differ across the globe. To manage thevariety of supervisory conversations, Adyen actively invests in local
compliance and regulatory teams as well as strengthening therelationships with regulators and payment schemes, maintaining
transparent and constructive interactions.Our strategy, our global
reach, as well as the continuous increase of regulatory pressure in thefinancial industry, all contribute to the heightened inherent risk profile
of regulatory compliance.
Platform stability and availability
Platform stability and availability are key determinants of Adyen’s
performance as a payments platform. Downtime, deteriorated
performance or connectivity issues can lead to transactions being
rerouted away from Adyen’s platform and impact Adyen’s transaction
volume. Even more impactful, deteriorated performance could lead to
reputational damage amongst current and prospecting customers. As
Adyen generates a large portion of its volume growth from growing
with its merchant base, platform stability and availability are a priority
for Adyen. This is why we acknowledge a heightened inherent risk
profile. Our strong track record on this topic is testament to thecentral role that stability and availability has across Adyen, risk
management is no exception.

Operational Risk and liquidity
A payments platform plays a central role for customers in revenue
generation and providing liquidity. To Adyen, it all starts at realizing apayout at the right time, in the right currency in the right manner,
according to the preferences of the involved merchant. We do thisunder a high degree of automation and by deploying sophisticatedprocesses and procedures. This also creates an inherently higher
operational risk profile, in which there can also be some dependencies
on partner financial institutions and card schemes. At Adyen, an
operational issue somewhere in the payment chain has the potential
to result in a liquidity event for a merchant. Adyen in itself has a strong
liquidity position (please refer to Note 12 ‘Financial Risk Management’of the attached Consolidated Financial Statements for additional

disclosures). Nevertheless, liquidity management is fundamental to
our service offering and therefore is also key to our risk management.
As a technology company experiencing significant growth, Adyen has
an inherently heightened risk profile for operational risks. We
acknowledge this and have a structured approach in place to deal
with operational incidents. We prepared root-cause analyses (RCAs)
for operational events within risk appetite and evaluated the impact on
the overall risk and control framework. The lessons learned from the
RCAs are used to strengthen processes and risk management going
forward. There is also an intended focus on transparency on
operational incident handling; through the Risk Committee RCAs areshared at management level and through monthly company-wide
discussions (‘post-mortems’) and training sessions Adyen promotes
an analytic and productive learning culture for all employees.

Risk developments
2022 External risk developments
The European continent has been abruptly thrown into war after theRussian invasion of Ukraine in February of 2022. Our first andforemost concern is the needless suffering that this casts on peacefulsocieties. European countries have seen an influx of refugees which
has in turn tested the ability of societies to provide humanitarian relief
in a time of need. The relative stability the West has enjoyed has been
put at risk and this is expected to take a long time to stabilize. While
Adyen does not have a presence in Ukraine nor Russia, the economic
instability impacts economies in Europe through transactions andvolume. Geopolitical tensions and related economic downturn may
have impact on Adyen’s operations and payment volumes even
without Adyen being active in the directly affected area.
At the same time, COVID-19 has not been completely eradicated fromglobal societies and local disruptions, lockdowns, and societal unrest
remain lingering at various levels in different countries. The impact on
people, businesses, and economies will likely impact economic

Annual Report 2022
development in the short- to medium-term. The example of China,
being mostly locked down in 2022, provides significant logisticalchallenges to companies throughout the world as companies dependon raw materials or production there. While lockdowns andrestrictions inherently affect Adyen and its personnel, Adyen has beenable to adapt to this reality and is adopting the hybrid way of working
going forward. In terms of logistics, Adyen has relatively short andsimple supply chains but is also actively diversifying where possible to
avoid logistical pressure.
In light of geopolitical tensions, financial markets, and energy pricemarkets in particular, have been volatile. The impact this has had on
heavy industries, businesses of all sizes, as well as consumers is
significant as energy prices soared and remained unstable in 2022.
The rise of inflation in all major economies in 2022, as downstream
effects of the geopolitical tensions mentioned above, provides a freshchallenge to businesses. Discretionary spending and the purchase ofpremium goods will be impacted more by consumers’ sensitivity to
prices compared to previous years, which could materialize in
reduced growth of transaction volumes on Adyen’s platform.
In order to combat inflation, central banks are raising interest rates in
an attempt to reduce spending and discourage lending at all levels of
the economy. As a result, Adyen experiences positive interest rates
and expects to gain net interest income. Interest rates changes have
limited effects on the Adyen business model as disclosed in Note 12,
in the 2022 Consolidated Financial Statements.
2022 Internal risk developments
Adyen has announced the next steps in offering embedded financial
products in 2022. New product additions such as merchant bankaccounts and Adyen capital extend the current product offering withfinancial services. The potential demand for additional financial
services connected to payments is broad as platforms want to expand
their product offering to increase the interaction with customers in
addition to payments. Adyen works closely with pilot customers to test

52
and improve the products and service offering in cash advances,business bank accounts, and card issuing.
Whenever Adyen launches a new product or feature, or enters a newmarket, a Product Approval and Review Process (PARP) is performed.
The purpose of the PARP is to align Adyen's organization for launch.
An important element of this is identifying any risks associated to thenew product, feature, or market.
The launch of these new products also results in an increase ininherent risk in various categories such as credit risk, operational risk,
or integrity risk. The introduction of small business working capitalloans, in particular, means that Adyen’s business model will include
asset transformation, as is typical for traditional banks.

Strategic and business risk
Adyen accepts strategic and business risk knowing that in order toachieve its strategic objectives it will consume capital when investingin new assets, people, and processes. In pursuance of its strategic
objectives Adyen values a solid financial and capital outlook.
Execution risk
Central to the success of Adyen has always been the ability toinnovate and respond quickly to opportunities that arise. The
organizational competences of speed and decisiveness are key inrealizing future strategic objectives. Adyen therefore actively mitigates
its execution risk, which it has defined as increased complexity leading
to a loss of organizational focus and loss of ability to act effectively.
Adyen has a relatively flat organizational structure and governanceaimed at direct co-creation and focus on growing the businessthrough commercial pillars and solutions. Adyen has implemented astrategy focused on embedded financial products and platforms tofurther expand its product and service offering. Adyen has evolved its
organization and grew its headcount, locations, and licenses in order
to execute this strategy. Execution risk is top-of-mind for Adyen given

the organizations’ growth stage and Adyen has a low risk appetite for
execution risk, believing in focus on the priorities within the strategy
keeps execution risk within appetite. To apply this organizational focus
within its current growth stage, Adyen has selected a small number ofpriority objectives and set up specific program management activities
to achieve them.
Disruptive innovation
Adyen expects that rapid and significant advancements in technology
will continue. These changes may be more superior, cheaper, andimpair or render obsolete the products and services Adyen offers. If
Adyen is unable to provide enhancements and new features that
achieve market acceptance or keep pace with rapid technologicaldevelopments and evolving industry standards, its business could bematerially and adversely affected. Adyen aims to provide best-in-classproducts and services in order to combat commoditization of
payment products. Adyen accepts disruption and innovation as
standard market practices. As such, Adyen continues to build andactively invest in its single platform solution and complementary
products. An example of this investment in complementary products
is the launch of Embedded Financial Products (EFP) on Adyen’s
technology platform. Adyen has established pillars, solutions andworkstreams that continuously work on improving its service offering
based on customers’ needs and innovations. Through the setup of thesolutions and workstreams with product, technical, and commercial
staff, Adyen can work closely with its customers and quickly address
their evolving needs.
Competition
Adyen competes against a wide range of businesses. These
competitors might have a dominant position, or offer other products
and services to shoppers and customers that Adyen does not offer.
Some competitors have greater merchant bases, volume, scale,resources, and market share compared to Adyen, which may provide

Annual Report 2022
significant competitive advantages. Furthermore, Adyen is facing
competitive pressure from non-traditional payments processors andother parties entering the digital payments industry, which may
compete in one or more of the functions performed in processing
merchant transactions. Adyen has a moderate risk appetite forcompetition as it has accepted that it will experience competition as it
seeks to increase market share, thereby potentially reducing profit
margins. But not at all cost — if pricing is not sustainable, then Adyen
will not pursue a deal. In light of global macroeconomic conditions,
Adyen expects an increased focus on price by customers. In general,
Adyen is able to react quickly to market developments due to how its
technology and solutions are structured such as the introduction ofApple Tap-to-Pay in 2022, where Adyen was the first platform to
introduce this product.
Reputational risk
Adyen has low appetite for reputational risk and aims to avoid actions
that trigger negative international media attention and/or significant
reputational damage. Any negative publicity about Adyen, the quality
and reliability of its products and services, changes to its products andservices, its ability to effectively manage and resolve complaints, its
privacy and security practices, litigation, regulatory activity, and theexperience of customers and shoppers with its products or services,
could adversely affect its reputation and the confidence in and use of
its products and services. Harm to Adyen's brand can arise from manysources, including failure by Adyen or its partners to satisfy
expectations of service and quality, inadequate protection of sensitive
information, compliance failures and claims, litigation and otherclaims, employee misconduct, rumours or false stories, andmisconduct by its partners, service providers, or other counterparties.
Adyen wants to build an ethical and sustainable business andtherefore actively mitigates risks that could negatively affect the
Adyen reputation or brand.

53
Access to card networks
The majority of transactions processed on the Adyen platform go
through international credit and debit card networks. In order toaccess these card scheme networks to provide acquiring, processing,and issuing services, Adyen must have the relevant geographically
based operating licenses or memberships. In some markets where it
is not feasible or possible for Adyen to have a direct license with a card
network, Adyen has a relationship with a local financial institution toact as a local sponsor for the license. Adyen has low appetite for
failure to comply with card network rules or for any other deteriorationin its relationships with the card networks, which could result in the
restriction, suspension, or termination of Adyen's own licenses, or theuse of sponsoring banks’ licenses. In 2022, no significant
impediments in relation to the access to card networks or sponsoringbanks occurred. Given the increased global footprint and local
licenses obtained by Adyen, the reliance on local financial institutions
is becoming less apparent while maintaining an adequate level ofaccess to card networks and local financial environments.

concentration of customers net revenue has decreased in 2022 incomparison to prior years.
Macroeconomic conditions
Adyen accepts that entering and operating in markets with somemacroeconomic volatility could lead to financial losses. Uncertainty
about global and regional economic events and conditions, may resultin shoppers and customers postponing spending, which could have amaterial adverse impact on the demand for Adyen's products andservices. Adyen therefore monitors relevant indicators and has
observed inflation rates, energy prices, and interest rates going up in
the majority of key markets. In 2022, several indicators (e.g. inflation
rates and energy prices) increased significantly but demand for
Adyen’s products and services was not materially impacted. Given theforecasts on macroeconomic conditions globally, Adyen is
continuously monitoring the risks and formulating appropriate
responses in order to minimize the negative impact to Adyen and its
stakeholders in the long-term.

Concentration of customers

Intellectual property rights

Some of Adyen's largest customers provide significant contributions
to its net revenue. Large customers typically have arrangements withmultiple payment service providers (primarily in order to mitigate theirsingle-point-of-failure risk). These customers could terminate theircontracts or shift business away, leading to lower processed volumes
and net revenue. Adyen has low risk appetite for commercial
dependency and therefore continues to execute its growth strategy toboard new customers from different verticals on its platform. Adyen
believes that its merchant portfolio is well-diversified, especially given
the multiple payment channels supported by Adyen’s single platform.
Taking into consideration the macroeconomic forecasts globally, thediversification of customers and payment channels simultaneously
reduces the risk in concentration of customers. Given Adyen’s
continuous expansion into new markets and overall growth,As substantially all of Adyen's intellectual property is developed inhouse, the protection of such intellectual property, including Adyen's
platforms, trademarks, copyrights, domain names, trade dress, andtrade secrets is important to the success of its business. Adyen seeks
to protect its intellectual property rights by relying on applicable laws
and regulations, as well as a variety of administrative procedures.
Nevertheless, Adyen's intellectual property rights may be contested,circumvented, or found unenforceable or invalid, and Adyen may not
be able to prevent third-parties from infringing, diluting, or otherwise
violating them. Any failure to adequately protect or enforce Adyen's
intellectual property rights or significant costs incurred in doing so
could diminish the value of its intangible assets.
As the number of products in the technology and payments industries
increases and the functionality of these products further overlaps,

Annual Report 2022
Adyen may become subject to intellectual property infringement andother claims. Adyen’s international growth and development ofintellectual property in new jurisdiction can also influence it’s risk ofclaims. The ultimate outcome of any allegation is often uncertain and,regardless of the outcome, any such claim, with or without merit, may
be time-consuming, result in costly litigation, divert management's
time and attention, and require Adyen to, among others, stop
providing transaction processing and other payment-related services
or redesign, stop selling its products or services, pay substantial
amounts to satisfy judgments or settle claims or lawsuits, pay
substantial royalty or licensing fees, or satisfy indemnification
obligations that Adyen has with certain parties with whom Adyen hascommercial relationships. Adyen has not experienced amaterialization of this risk in 2022 which is in line with therisk appetite.
Environmental, Social and Governance (ESG) risk
Sustainability, social responsibility, ethical business practices andgovernance are topics that are becoming key to the mission andpurpose of entities in the financial sector and the corporate world.
Most commonly, these topics are grouped and referred to as ESG
topics. Initially, the focus in the financial sector on ESG topics was onbanks’ assets and more specifically the lending activity, especially withregards to climate- and environmental topics. Fuelled by a strong
push from European regulators, that focus is now shifting towards a
broader application including payments and incorporating Social andGovernance topics as well.
Climate and environment-related risks are commonly understood tocomprise two main risk drivers: physical and transition risks. Physicalrisk refers to the financial impact of a changing climate. Physical risk
is categorized as “acute” when it arises from extreme events, such as
droughts, floods, and storms, and “chronic” when it arises fromprogressive shifts, such as increasing temperatures, sea-level rises,
water stress, biodiversity loss, land use change, habitat destruction,54
and resource scarcity. This can directly result in, for example, damage
to Adyen property or reduced productivity, or indirectly lead tosubsequent events, such as the disruption of the Adyen supply chain.
Transition risk on the other hand, refers to a financial loss that can
result, directly or indirectly, from the process of adjustment towards alower-carbon and more environmentally sustainable economy. This
could be triggered, for example, by a relatively abrupt adoption ofclimate and environmental policies, technological progress orchanges in market sentiment and preferences.
ESG Materiality assessment
For the first time in 2022, Adyen has performed a materiality
assessment on Environmental, Social, and Governance topics. It
aimed to drive Adyen’s reporting on ESG topics and to identify which
topics are key to Adyen from an impact, risk and opportunity
materiality perspective, largely based on the draft guidance provided
by the draft ESRS standards. In the materiality assessment, several
Adyen teams and internal stakeholders provided input considering theinherent risk of a topic to Adyen. Please refer to ‘Building a
responsible business’ section of this Annual Report for a further
description and the results of the materiality assessment. In thefollowing paragraphs, we will further outline ESG risks to Adyen.
Environmental and Climate risk
Adyen is not a traditional bank and does not hold assets on its balance
sheet that have an inherently high exposure to physical climate risk. It
is also not straightforward to make the connection between transition
risk and Adyen’s payments business model. As a result, there is not a
broad array of inherently high climate and environment-related risks.
As its main inherent climate risk, Adyen does recognize the potential
adverse impact on Adyen’s ability to provide services to its customers.
Prolonged power outages due to natural disasters could have a
harmful impact on critical infrastructure used by Adyen and its service
providers. Adyen’s headquarters are located in Amsterdam, which is acity potentially vulnerable to flood due to the gradual rise of sea levels.
Physical risk could also occur in other locations where Adyen’s offices
or vendors are located. Adyen’s offices are typically close to its
customers in metropolitan areas, which could make Adyen vulnerable
to the adverse impact from pandemics.
There are structural measures Adyen has implemented that mitigate
its environmental risk exposure. The one single platform of Adyen isdesigned to create redundancy in its critical infrastructure andoperations, surpassing traditional back-up setups, as is detailed in thesection on availability of the platform. Adyen furthermore continues todiversify its global customer portfolio to mitigate any reliance on
sectors and markets, which could be more vulnerable to climaterelated and environmental risks, both physical as well as transitional.
In 2022, Adyen was not materially impacted by environmental- andclimate-related events.
Social risk
Adyen also considers the risks it may encounter due to social
developments. Specifically how its own workforce develops and therelationship to the society in which it operates, and the politicalenvironment. Society sees a role for private companies to support
positive social change and Adyen is contributing. It would be limited toonly point at reputational risks in this context. Diversity, Equity andInclusion (DEI) is seen as fundamental to Adyen’s company culture. It
is included in the Adyen Formula which states we involve others to
sharpen our ideas. Adyen’s DEI initiatives and DEI policy are further
testament to this. Adyen risk management identifies and monitorssocial factors and their effects throughout the year during risk
assessments. Adyen also conducts a yearly culture audit, and actively
considers geopolitical developments in light of its supply chain as wellas interest and inflation expectations.
In the ambition to drive positive change Adyen invests in products
such as Adyen Giving, which enables shoppers to support pre-definedcharities and initiatives. Often, these charities are in line with either

Annual Report 2022
environmental and/or social topics where a large number of small
donations can make a meaningful impact. The impact of Adyen’s
positive contributions notwithstanding, Adyen was not negatively
affected by social risk topics in 2022.
Governance risk
Governance risk relates to decision making, at Adyen in particular withrespect to the distribution of rights and responsibilities among
different participants in the company, including the board of directors,
managers, shareholders and other stakeholders. Ultimately,
governance risk topics reflect on the responsibility a company has
towards the society in which it operates, in Adyen’s case the global
footprint means an encompassing view on its responsibilities.
Mitigating factors are sound management structures, policies andprocedures, ethical business decisions, healthy employee relations,well-thought remuneration and tax compliance.
Adyen sees governance risks as directly connected with therobustness and resourcefulness of the procedures for compliancewith the framework of relevant laws and regulations wherein Adyen
operates. However, Adyen does go beyond evaluating just the formal
routines for compliance, as the company consciously connects tovoluntary frameworks such as GRI and sees the company culture as aprime measure in mitigating governance risks.
A considerable amount of new ESG regulation, with accompanying
disclosure frameworks, approach Adyen, as explained earlier in thisAnnual Report. In preparation, Adyen has further integrated ESG
during 2022 in its overall risk management framework.

55

Annual Report 2022

“What I like most about working at Adyen isthat everyone is not only willing to collaborate,
but they also really enjoy it. I feel comfortablereaching out to anyone in the company.
No matter which team someone is a part of,
I know they’re going to do whatever they canto help me find the answers.”
Hanya — Team Lead Product Management

56Annual Report 2022

Operational risk
Adyen recognizes that operational risks are associated with achieving
its business objectives. Operational risk concerns the risk of losses
resulting from inadequate or failed internal processes, people, andsystems or from external events, including legal risk. Adyen has amoderate appetite for operational losses. During 2022, Adyen
remained well within its risk limits that were set as a reflection of its
risk appetite for operational risks.
Customers’ potential liability for shopper chargebacks
When shoppers claim that a merchant has not delivered goods orservices as agreed, issuing banks can file chargebacks. Adyen seeks
to offset such chargebacks with the payouts to the merchant, but may
not be able to succeed in full. While Adyen has implemented risk
mitigation, including withholding funds from the payouts to its
customers based on assumptions and estimates that Adyen believes
are reasonable to cover such eventualities, the measures, including
the withheld funds, may not be sufficient.
Adyen has a dedicated MPL team that closely follows thedevelopment of this risk. The team frequently discussed its
observations and recommendations with the Merchant Risk
Committee, Management and Supervisory Board throughout theyear. Despite challenging macroeconomic conditions in several key
markets in 2022, Adyen has not incurred sizeable MPL losses due tochargebacks during the year. The cumulative MPL losses were wellwithin the set risk appetite. For more details on MPL reserves, pleaserefer to Note 16 ‘Trade, other payables, and payables to merchants
and financial institutions’ in the the 2022 Consolidated
Financial Statements.

57

Availability, connectivity, and performance of products andservices
Adyen has a low appetite for issues in the availability, connectivity andperformance of the platform. Adyen's systems and those of its thirdparty service providers, including data center facilities andcommunication networks, have experienced service interruptions in
the past and may experience significant service interruptions in the
future. Frequent or persistent availability, connectivity, or performanceissues could cause current or potential customers to believe that its
systems are unreliable, leading them to switch to a competitor or to
avoid Adyen's products and services, potentially harming Adyen's
reputation and brand permanently. Moreover, to the extent that any
platform failure or similar event results in damages to Adyen's
customers or their business partners, the customers or partners could
seek significant compensation or contractual penalties from Adyen for
their losses, which, even if unsuccessful, could likely be timeconsuming and costly for Adyen to address and divert management
attention. Furthermore, frequent or persistent interruptions could leadto regulatory scrutiny, significant fines and penalties, and/or
mandatory and costly changes to its business practices and could
ultimately cause Adyen to lose existing regulatory licenses or preventor delay Adyen from obtaining additional regulatory licenses that
Adyen needs to expand its business.
Adyen has built its platform and services to avoid the presence of
single points of failure, and to ensure that sufficient capability exists tocontinue normal operations for critical processes despite the loss or
unavailability of corporate resources, from information technology,
physical locations or even personnel and whole departmental
structures. The highly available platform is designed to withstand
individual telecommunications, systems and data center instance
failures. Adyen staff is fully equipped to work remotely, and have been
doing so without impact to our payment processing ability. In 2022,
Adyen did not experience material events on the availability,
connectivity, or performance of products and services.

Information security risk
Adyen and its customers, partners, and others who use its services,
obtain and process a large amount of sensitive data. Adyen's and its
partners' IT systems may be vulnerable to physical and electronic
breaches, computer viruses and attacks by cyber-criminals, internet
fraudsters, employees or others. This could lead to, amongst otherthings, a leakage of customers’ data, damage related to incursions,destruction of documents, inability or delays in processing
transactions, and unauthorized transactions. Adyen has a low appetite
for information security risk which includes cyber security risk. Anyreal or perceived breaches or improper use of, disclosure of, or accessto such data could harm Adyen's reputation as a trusted brand in thehandling and protection of this data. Although Adyen carries cyberliability insurance that it believes to be reasonable to cover such
eventualities, such insurance may not be sufficient to cover all
potential losses or could come at a price where it is no longer
economically sensible to take out in the future.
Adyen’s Security Officer is responsible for managing the Information
Security Program. The goal of the Information Security Program is toensure the ongoing confidentiality, integrity, and availability of data,systems, and processes at Adyen, and to ensure that specificinformation security compliance programs are maintained andexternally assessed as appropriate. Adyen undertakes backgroundchecks for new hires. Training is undertaken on IT security on the firstday at Adyen. A follow-up general security introduction, which
addresses privacy and confidentiality policies, must be completed
within two months of start date. Annual refresher training on topics asprivacy and security is mandatory for all employees. Adyen’s riskbased approach has resulted in an efficient and flexible IT
infrastructure, which enabled a very steady and stable transition to thework-from-home environment.
Information security will be a structural risk for Adyen, andstrengthening our capabilities to mitigate the evolving risk is therefore

Annual Report 2022

continuous. Information security risk was not necessarily higher in
2022 compared to previous years, but did have its specific events.
Third party risk
Vendors and supply chain dependencies could negatively impact
Adyen’s operations and security of data, systems, and services. Adyen
has a low appetite for dependency on third-parties in its criticalprocesses. Adyen strives to minimize outsourcing of activities directly
related to its core processes or platform to avoid dependency on
suppliers. Adyen believes that not being limited by third-party
software in its core operations is a key factor in its ability to rapidly
increase the number of transactions that the platform can process.
Adyen has established a Third Parties Policy, which defines aframework, including clear ownership, for assessing third-party risk.
Adyen is monitoring third-party risk on a continuous basis withsupport of a third-party risk management tool. In 2022, Adyen carriedout a residual risk classification on all its third parties to update theirrisk profile and monitor compliance with the updated policy. An
overview with local regulatory requirements has been created for all
countries where Adyen has a local license.
Data privacy
Adyen is subject to several privacy and data protection laws andregulations, such as the GDPR, CCPA and LGPD (referred to as"privacy laws") relating to the collection, use, retention, security,
processing, and transfer of personal data about its customers,
shoppers, third-parties and others, and their transactions in the
countries wherein Adyen operates. Adyen’s expanding global footprint
and product offering requires Adyen to steadily adapt, improve andstrengthen its processes and procedures and closely monitor any
changes to new and existing privacy laws.
Any failure, or perceived failure, by Adyen to comply with its privacy
policies or with any applicable privacy laws in one or morejurisdictions could result in proceedings or actions against Adyen by58

governmental entities or others, including class action privacy
litigation in certain jurisdictions, significant fines, penalties,
judgments, and reputational damage. Adyen has a low appetite fordata privacy risks and promotes a culture of diligence and high ethicalstandards with regards to the collection of information. Please refer tothe ‘Data Privacy’ section in this Annual Report for more informationon the topic.
Entrepreneurial culture
Adyen is committed to maintaining its entrepreneurial company
culture, which fosters innovation, diversity, and talent development,
and therefore has a low appetite for elements threatening this culture.
Adyen's entrepreneurial culture has been one of the primary drivers of
its historical growth. As Adyen continues to grow, it may not be able tomaintain its entrepreneurial culture. If Adyen does not successfully
manage its growth, and is not able to differentiate its business fromthose of its competitors, drive value for and retain customers, or
effectively align its resources with its goals and objectives, Adyen may
not be able to compete effectively against its competitors, leading to
declining growth and net revenue. Adyen promotes and safeguards
the key elements of its culture through the Adyen Formula.
During 2022, Adyen saw the hybrid return to the office globally as abeneficial state where flexibility was allowed to its employees whilst
simultaneously encourage collaboration in offices around the world.
When possible, company events were organized that emphasized
Adyen’s unique culture and the shared responsibility of maintaining it.
TalentAdyen's future performance substantially depends on the continued
services of key talent and its ability to attract, retain, and motivate
such talent. The loss of services of any of Adyen's key talent orAdyen's inability to attract highly qualified key talent may adversely
affect its operations. Adyen has low appetite for the loss of key talent
and actively manages the composition and quality of its talent pool.

2022 continued to impact Adyen’s relatively young labor force indifferent ways. A hybrid working situation became the default for
employees and sustainable and structural ways to develop, grow andbind talent were implemented. Adyen has been able to grow the teamconsiderably during 2022 with the successful launch of two Adyen
tech hubs in Chicago and Madrid.These two locations are focused ontechnically growing the platform, provide an inspiring environment forengineers and tap into the locally available talent pool. Adyen
furthermore strives to hire, promote, and enable underrepresented
groups, while challenging the status quo in the communities in which
it operates. In realizing this aspiration, Adyen deployed a number ofactions during 2022. The ‘People and Culture’ section in this Annual
Report provides more information.
Integrity risk
In line with the growing maturity of Adyen, Compliance at Adyen in
2022 has focused on deploying a scalable strategy for maintaining a
global set of compliance standards that address the integrity risks
faced by Adyen and incorporate the range of laws and regulations
applicable to Adyen’s operations. In the context of Adyen’scommitment to automatable and scalable Compliance, importancecontinues to be placed on embedding such global compliancestandards in the heart of the technology.
Integrity topics including anti-money laundering and counter terroristfinancing (AML/CTF), preventing the circumvention of sanctions,compliance with relevant laws and regulations and combattingsocially unacceptable behavior were particular points of focus in
2022. Adyen leveraged its continuous risk assessment cycle toidentify and account for new/changing integrity risks arising inconnection with changing laws and regulations and the evolution ofAdyen’s product/service offering.
In respect of the range of laws and regulations applicable to Adyen
around the Globe, it is notable that the pace at which new regulations
are being introduced, as well as varying interpretations in theAnnual Report 2022

application of such regulations to non-traditional market participants
such as Adyen, continues to be a key challenge. To manage the paceof regulatory change and address nuance in regulatory interpretation,
significant investments in human resources were made in the fields ofRegulatory Compliance, AML/CTF as well as Compliance Monitoringand Data.
A dedicated Product Compliance team was also created in 2022, toensure that the integrity risks associated with the expansion to new
financial products/ services, and markets are appropriately accounted
for and relevant controls are built into new products and services bydesign to support sustainable expansion.
Anti-money laundering (AML), Counter terrorist-financing (CTF)
and preventing the circumvention of sanctions
As a global financial institution, Adyen has always taken very seriously
its responsibility to prevent abuse of the financial system for money
laundering and terrorist financing (amongst other key integrity risks).
To continually meet this responsibility, Adyen has further
strengthened relevant AML/CTF controls across 2022 – including to
improve detection methods, screening, and quality assurance
verifications in line with Adyen’s growth.
Adyen also consistently monitors and updates its sanctions screening
program to align with its responsibility for prevent the misuse of thefinancial system through the circumvention of sanctions. During2022, these efforts included addressing the unprecedented changes
in international sanctions arising in connection with the Russian
invasion of Ukraine. While Adyen does not offer any payment or otherfinancial services to customers who are Russian residents and nor
does Adyen have any presence in Russia, Adyen has neverthelessparticipated in international efforts to enforce all new sanctions
regulations stemming from national and supranational governments
in connection with the Russian-Ukraine conflict.

59

Tax

Financial reporting

Adyen has a low appetite for risk forthcoming from its tax obligations.
Adyen wants to meet its obligation to pay the amount of tax legally
due in any territory, in accordance with rules set by governments. The
determination of Adyen's worldwide provision for income taxes, valueadded taxes, and other tax liabilities requires estimation andsignificant judgment. Like many other multinational corporations,
Adyen is subject to tax in multiple tax jurisdictions. Key tax risks, that
could potentially affect the strategic and operational objectives, areidentified through the annual top-down and bottom-up companywide risk assessments. When a specific tax risk is encountered, we
may seek for professional advice and strive for open communication
towards tax authorities.

Gaps in internal controls could negatively impact the accuracy of our
financial and management reporting. Adyen has a low appetite forerrors in financial reporting and does not accept material
misstatements in the financial statements. Adyen has implemented
internal control over financial reporting designed to provide
reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes inaccordance with financial reporting standards. Due to its inherent
limitations, internal control over financial reporting can’t provide
absolute assurance that a misstatement in Adyen’s financial
statements would be prevented or detected. Also, projections of any
evaluation of the effectiveness of internal control over financial
reporting to future periods are subject to the risk that the controls may
become inadequate because of changes in conditions, or that thedegree of compliance with the policies or procedures may deteriorate.

Adyen's determination of its tax liability is always subject to audit andreview by applicable domestic and foreign tax authorities. Any adverse
outcome of any such audit or review could have a negative effect on
Adyen's business and the ultimate tax outcome may differ from theamounts recorded in its financial statements. For more information,please refer to the ‘Tax’ section in this Annual Report.

Annual Report 2022

Financial risks
Adyen has a limited appetite to incur losses from financial risks,
please refer to Note 12 ‘Financial Risk Management’ of the attached
Consolidated Financial Statements for additional disclosure.
Credit risk in respect of counterparties, including other financial
institutions
Credit risk at Adyen can originate from the risk that a counterparty will
not settle the full value of an obligation — neither when it becomesdue, nor thereafter (default risk), or the risk of losses stemming fromon- and off-balance sheet positions arising from concentrations in
exposures to a single counterparty or a group of connected
counterparties (concentration risk). Within the regulatory limits set by
the Large Exposure framework Adyen has a moderate risk appetite.
Adyen makes good choices in our financial counterparties andactively monitor them, nevertheless engaging with partner banks
resulting in a credit exposure is unavoidable in certain circumstances
for providing payment services. Adyen did not see a material increasein counterparty credit risk that can be directly related to the remnantsof the COVID-19 pandemic or the developments in macroeconomic
conditions in key markets. For markets or jurisdictions that areconsidered key to successful operations, Adyen seeks to work with atleast two different partner banks. During the year 2022, Adyen
remained comfortable within its internally set risk appetite limits for its
credit risk related indicators, as well as within the regulatory
relevant limits.
Fluctuations in foreign currency exchange rates
The strengthening or weakening of the Euro impacts the translation ofAdyen's net revenue generated from its international operations thatare denominated in foreign currencies into the Euro. Additionally, inconnection with providing its services in multiple currencies, Adyen
generally sets its foreign exchange rates once per day. Adyen may
face financial exposure if Adyen incorrectly sets its foreign exchange

60

rates or as a result of fluctuations in foreign exchange rates between
the times that Adyen sets them. Given that Adyen also holds somecustomers’ and own funds in non-euro currencies, its financial results
are affected by the translation of these non-euro currencies into Euro.
While Adyen has measures in place intended to manage its foreignexchange risk, primarily natural hedges and spot trades for any net
open positions forthcoming its acquiring activities for customers, noassurance can be given that fluctuations in foreign exchange rates will
not have a significant impact on Adyen's results of operations. Adyen
is also exposed to foreign exchange risk on its assets and liabilities
denominated in currencies other than the functional currency,
including certain contract assets, its holding of Visa Inc. shares andthe assets and liabilities of its subsidiaries. The majority of theseassets to which Adyen is exposed to are denominated in US dollars.
Adyen pays attention specifically to risk management of the FX
position that originates through the international payment services it
provides for its customers, this FX position originates as a result oftransactions done by customers. Contrary to its own long-termbalance sheet positions, Adyen does not control this FX origin directly
and during 2022 Adyen performed spot trades on a daily basis tomaintain FX positions within its risk appetite set limits. While Adyenmanages FX rate on a continuous basis, some fluctuations in
exchange rates resulted in differences between card scheme rates
and Adyen’s rates. There were no material FX losses to be reported
and the processes on FX trading have been improved to further
mitigate the risk of a loss occurring. Given the macroeconomic
conditions and potentially significant changes in local economies andcorresponding currencies, Adyen sees this as a prudent movetowards managing FX risk and maintain within risk appetite.
Note 12 of the Consolidated Financial Statements supports this, as it
shows the limited effect that a 10% shock of the Euro FX rate has on
the net position of USD (EUR 1.2 million) as at December 31, 2022.

Price risk of financial instruments
Adyen's exposure to price risk of financial instruments at fair valuearises from a holding of Visa Inc. shares and a derivative financial
liability. Any movements in the underlying share prices could have an
impact on Adyen's financial condition and results of operations. Adyen
obtained the Visa Inc. shares as the result of its previous holding in
Visa Europe, which subsequently was acquired by Visa Inc., which
resulted in amongst others Adyen being issued shares of Visa Inc. as
consideration for the acquisition. Adyen has no appetite to take on
additional equity positions and resulting price risk. Please refer toNote 12 of the Consolidated Financial Statements for more
information.
Interest rate risk of cash and cash equivalents
Currently, Adyen’s customer centric business model is fee-based andis not materially impacted by the transformation of assets or any
interest spread. Therefore, the current increases in interest rates do
not impact Adyen’s revenues significantly. However, Adyen is exposed
to interest rate risk in the banking book in relation to its high-quality
liquid assets in the form of cash held at central banks within EU for
which it has received positive interest in 2022. Second, a limited
amount of cash is invested in money-market funds that hold USgovernment T-bills. Despite this low risk profile, in 2022 Adyen
quantified the impact of interest rate movements in its earnings aswell as market value changes of its financial instruments and theirdirect effect on capital for each significant currency. The results of thisexercise show minimal impact, as is also supported by the overall
limited impact of finance expense in our financial statements of EUR
12.8 million, which can be primarily attributed to negative interest
paid on the DNB central bank account.

Annual Report 2022

Liquidity and funding risk
Liquidity risk is the risk that Adyen could not meet its short- to
medium- term payment and collateral obligations without affecting
daily operations. Adyen has no appetite for not being able to meet its
payment and collateral obligations without affecting daily operations.
Funding risk is the risk that Adyen will not have stable sources offunding in the medium and long term, resulting in the current orprospective risk that it cannot meet its financial obligations, such as
payments and collateral needs, as they fall due in the medium to longterm, either at all or without increasing funding costs unacceptably.
Adyen aims for a simple, stable, and solid funding position and thecentral ratio it monitors in this context is its Net Stable Funding Ratio(NSFR). For context, the NSFR remained stable and within acceptablebounds in 2022.
Secure financing on favorable terms
Adyen has funded its operations since inception through equity
financing. Adyen is currently able to generate sufficient cash throughoperational results to fund its upcoming operations, but there is no
guarantee that Adyen will be able to continue doing so in the future.
Going forward, Adyen may require additional funding to respond tobusiness opportunities or unforeseen circumstances and may decideto engage in equity or debt financings or enter into credit facilities forother reasons, and may not be able to secure any such debt or equity
financing or refinancing on favorable terms in a timely manner, or atall. If Adyen is unable to obtain adequate financing or financing on
terms satisfactory when it requires it, its ability to continue to grow or
support its business and to respond to business challenges could besignificantly limited.

61

Statement by theManagement Board
The Management Board of Adyen is responsible for establishing andmaintaining an adequate system for risk management and internal
control. This system is designed to manage risks effectively andefficiently, to provide reasonable assurance that objectives can be
met, that financial and non-financial reporting is reliable and that laws
and regulations are complied with.
Internal control over financial reporting is an integral part of the risk
management and control systems of Adyen. Internal control overfinancial reporting is a process to provide reasonable assurance
regarding the reliability of our financial reporting for external purposesin accordance with IFRS and IFRIC interpretations as endorsed by theEuropean Union and in accordance with sub article 8 of article 362,
Book 2 of the Dutch Civil Code. Internal control over financial
reporting includes:• Maintaining records that, in reasonable detail, accurately, and fairly
reflect our transactions• Providing reasonable assurance that transactions are recorded asnecessary for preparation of our financial statements
Due to its inherent limitations, internal control over financial reporting
is not intended to provide absolute assurance that a misstatement of
our financial statements would be prevented or detected. Also,
projections of any evaluation of the effectiveness of internal control
over financial reporting to future periods are subject to the risk thatthe controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies orprocedures may deteriorate.

The Management Board has performed a company-wide risk
assessment and described the principal risks facing the Company inrelation to its risk appetite in the section ‘Risk factors’ of thisAnnual Report.
The Management Board has assessed the effectiveness of the designand operation of the risk management and control systems as ofDecember 31, 2022. The results were shared with the Audit and Risk
Committee and the Supervisory Board and discussed with theindependent external auditor (hereafter “external auditor”).
Based on the assessment and with reference to best practiceprovision 1.4.3 of the Dutch Corporate Governance Code, theManagement Board confirms that to the best of its knowledge
and belief:• This Annual Report provides sufficient insights into any failings in
the effectiveness of the internal risk management and control
systems (see section ‘Risk management’);• The aforementioned systems provide reasonable assurance thatthe financial reporting does not contain any material inaccuracies(see section ‘Risk management’);• Based on the current state of affairs, it is justified that the financial
reporting is prepared on a going concern basis (see ‘Consolidated
Financial statements’); and• This Annual Report states those material risks and uncertainties
that are relevant to the expectation of the Company’s continuity forthe period of twelve months after the preparation of this report (seesection ‘Risk Factors’ and ‘Consolidated Financial statements’).
However, the risk management and internal control systems cannot
provide absolute assurance that missing of objectives, misstatements,
fraud or non-compliance with laws and regulations will not occur.

Annual Report 2022

62

In accordance with Article 5:25c of the Financial Supervision Act, theManagement Board confirms that to the best of its knowledge andbelief:• The financial statements of 2022 give a true and fair view of theassets, liabilities, financial position and profit or loss of theCompany; and• The Annual Report 2022 gives a true and fair view of the position as
at December 31, 2022, the development and performance during2022 of Adyen, together with a description of the principal risks
that Adyen faces.
Amsterdam, the Netherlands
March 8, 2023

P.W. van der DoesCEOK. ZakiCOO

R. Prins
CCO

M.B. Swart
CLCO

I.J. Uytdehaage
CFO

A. Matthey
CTO

02
Corporate GovernanceAnnual Report 2022

“Within Adyen, you’re encouraged to develop
yourself and to find areas where you can add
the most value. It’s about seeing what you’reinterested in, and then which parts of thebusiness can benefit from those interests. This
process can take you to different teams oreven different offices. I started off in Adyen’s
Investor Relations team based in Amsterdam.
From there, I dove into demystifying FX, before
a bigger role emerged within our product teamin our new Chicago office.”
Annemarije — Product Manager

64

Annual Report 2022

Corporate Governance

65

Name

Year of birth Nationality Gender Position

Current appointment date

Term

Pieter Willem van der Does

1969

NL

Male

CEO

June 2022

June 2026

A solid, transparent, and seamless corporate governance structure is key to Adyen. It is consistent with the
Adyen Formula and allows us to focus on growing our business. In setting up and maintaining ourgovernance structure Adyen is guided by Dutch statutory requirements, the Dutch Corporate Governance
Code 2016 (the Code), European Banking Association (EBA) Guidelines on Internal Governance and(inter)national best practices. As Adyen is operating globally, international developments areclosely monitored.

Roelant Prins

1975

NL

Male

CCO

June 2022

June 2026

Ingo Jeroen Uytdehaage

1973

NL

Male

CFO

June 2021

June 2025

Kamran Zaki

1973

US

Male

COO

January 2020

January 2024Mariëtte Bianca Swart

1980

NL

Female

CLCO

January 2020

January 2024

Alexander Matthey

1981

DE

Male

CTO

February 2021

February 2025

Adyen’s corporate governance is reflected in its Articles of Association, the Management Board By-Laws,
the Supervisory Board By-Laws, the Terms of Reference of our Supervisory Board committees and certain
other internal policies and procedures. These documents are available on Adyen’s Investor Relations
website.

Each Managing Director has duties related to their specific area of responsibilities and expertise. In
performing their duties, the Managing Directors are required to be guided by the best interests of theCompany and the business connected thereto, taking into consideration the interests of the Company’s
stakeholders. The Management Board By-Laws set out rules regarding the composition, responsibilities andobjectives of the Management Board.

Management structure

On December 14, 2022, Brooke Nayden’s proposed appointment as Chief Human Resources Officer(CHRO) has been announced. The proposed appointment as CHRO will be effective per May 11, 2023, after
the finalization of the fit and proper assessment by the Dutch Central Bank and shareholder approval in the2023 Annual General Meeting (AGM).

Adyen maintains a two-tier board structure consisting of a Management Board and a Supervisory Board,
each of which have specific responsibilities. The Management Board is collectively responsible for theoverall management, which includes, among others, developing and executing Adyen’s strategy and risk
management policy based on long-term value creation, and setting and achieving Adyen’s objectives. The
Supervisory Board oversees and advises the Management Board, and can give guidance to its generaldevelopment. Each board is accountable to the General Meeting for the performance of its duties.

Management Board
Composition, Powers, and Function
Per December 31, 2022, Adyen’s Management Board is composed of the following members(the Managing Directors):

On February 8, 2023, the proposed appointments of Ingo Uytdehaage as co-CEO and Ethan Tandowsky as
CFO have been announced. Furthermore, Kamran Zaki will step down as Chief Operating Officer as of May
11, 2023. In his new role as co-CEO, Ingo Uytdehaage will oversee the Product and Operations teams, andRoelant Prins (CCO) the Account Management teams. Kamran will be closely involved in the Company’s
operations to ensure a proper handover during the summer of 2023. The proposed appointments of Ingo
Uytdehaage and Ethan Tandowsky as co-CEO and CFO respectively will be effective per May 11, 2023, after
the finalization of the fit and proper assessments by the Dutch Central Bank and shareholder approval in the2023 Annual General Meeting (AGM).
More information on the Management Board can be found at www.adyen.com/about.
Subject to certain statutory exceptions, the Management Board as a whole is authorized to represent theCompany. Two Managing Directors acting jointly are also authorized to represent the Company. This
reflects the four-eyes principle that Adyen operates across the organization: (at least) two Adyen Managing
Directors must sign off on significant business decisions.

Annual Report 2022

66

Supervisory Board
The Supervisory Board functions as a separate corporate body and is fully independent from theManagement Board. The composition of the Supervisory Board is such that members are able to act
independently of one another, the Management Board and any particular interest and allows for properly
carrying out all Supervisory Board tasks, including staffing of committees. The Supervisory Board is capableof assessing the broad outline of the overall policy of the Company and of the most important risks incurred.
The background, knowledge and expertise of each Supervisory Director adds to the Board’s effectiveness,enabling it to fulfil its duties in the Company’s best interest.

Composition, powers, and function
Adyen’s Supervisory Board is composed of the following members (the Supervisory Directors) as ofDecember 31, 2022:
Year of birth

Nationality

GenderPosition

Current appointment
date

Term

Piero Overmars

1964

NL

Male

ChairmanJanuary 2021

January 2025

Delfin Rueda Arroyo

1964

SP

Male

MemberJanuary 2022

January 2026

Joep van Beurden

1960

NL

Male

MemberJanuary 2020

January 2024

Pamela Joseph

1959

US

FemaleMemberMay 2019

May 2023

Caoimhe Keogan

1978

IE

FemaleMemberFebruary 2021

February 2025

Name

As of December 31, 2022, the Supervisory Board is composed of five members — Piero Overmars(Chairman), Delfin Rueda Arroyo, Joep van Beurden, Pamela Joseph and Caoimhe Keogan.
Piero Overmars serves as a member of the Supervisory Boards of Dura Vermeer Group N.V. and Dutch
Organic International Trade B.V., and as a member of the Management Board of Stichting Continuïteit
PostNL. Next to this, he serves as Chairman of the Supervisory Board of Land Life Company B.V. Previously,
he was a member of the Management Board of Randstad Beheer B.V. and was Chairman of the Supervisory
Boards of Nutreco and SNS Reaal, and member of the Supervisory Board of Amsterdam UMC. He also
served as President of the Nyenrode Foundation, following an extensive career at ABN Amro that culminatedin a Board Member position. Piero Overmars holds an MBA from Nyenrode Business University.

Delfin Rueda Arroyo is a CFO & General Partner of Mundi Ventures, and serves as non-executive director ofAllfunds Bank and Allfunds Group. Previously, he served as CFO and Vice-Chair of the Executive Board andManagement Board of NN Group and ING Insurance, following an extensive career at Atradius, JP Morgan,
UBS, Salomon Brothers and Andersen Consulting. Delfin Rueda Arroyo holds a master degree in Economic
Analysis and Quantitative Economics from the Complutense University of Madrid (Spain). He also holds an
MBA from the Wharton School, University of Pennsylvania (USA).
Joep van Beurden is CEO and member of the Executive Board of Kendrion N.V. and member of theSupervisory Board of the Twente University of Technology. Previously, he served as CEO of CSR Plc. and
NexWave Inc., following a career at Royal Dutch Shell, McKinsey, Philips and Canesta Inc. Joep van Beurden
holds a degree in Applied Physics from Twente University of Technology (the Netherlands).
Pamela Joseph is CEO and member of the Management Board of Xplor Technologies, holds a position as
Chair of the Board of Directors of TransUnion and is a non-executive member in the Board of Directors ofPaychex. In addition to these positions, Pamela serves as Operating Partner at Advent International.
Previously, she served U.S. Bank corp. Payment Services as a Vice-Chairman, and prior to that Elavon as
President and COO. She started her career at Wells Fargo Bank and VISA International. She holds a degreein Business Administration from the University of Illinois (USA).
Caoimhe Keogan serves as CPO (Chief People Officer) for Aveva Group plc. Previously, she served as Chief
People Officer for Moneysupermarket Group plc, and as SVP People, Places & Community at SoundCloud.
Prior to these roles, she was Senior HR Business Partner at Google. Caoimhe Keogan holds a degree in
Occupational Psychology from Queen’s University Belfast (UK).
The Supervisory Board oversees the conduct and policies of the Management Board and the general courseof affairs of the Company and its business. The Supervisory Board also provides advice to the Management
Board. In performing their duties, the Supervisory Directors are required to be guided by the interests ofAdyen which includes the interests of the business connected with it, taking into consideration the interestsof the Company’s stakeholders. These interests are driven by Adyen’s focus on long-term value creation andits implementation in Adyen’s strategy and culture. The Supervisory Board also has due regard forenvironmental, social and governance (ESG) matters relevant to the Company. The Supervisory Board ByLaws set out rules regarding the composition, responsibilities and objectives of the Supervisory Board.

Annual Report 2022

67

Supervisory Board committees

Audit and Risk Committee

The Supervisory Board has appointed from among its members two permanent committees: A 'Nomination
and Remuneration Committee' and an 'Audit and Risk Committee' (the Committees). Each of theseCommittees has a preparatory and/or advisory role to the Supervisory Board. The Committees report theirfindings to the Supervisory Board, which is ultimately responsible for all decision making. Terms ofReference apply for each Committee, which can be found at our Governance webpage. All Supervisory
Directors have a standing invitation to attend meetings of Committees of which they are not a member andhave accepted these invitations on a frequent basis in 2022.

The Supervisory Board has assigned certain tasks to the Audit and Risk Committee. This Committee
supervises the provision of the Company’s financial information and risk management. The Committee
issues preliminary advice to the Supervisory Board regarding the approval of Adyen’s interim and annual
accounts.

Nomination and Remuneration Committee
The Supervisory Board has assigned certain tasks to the Nomination and Remuneration Committee. This
Committee drafts proposals for Adyen’s remuneration policy, and it proposes the remuneration of theindividual Managing Directors and Supervisory Directors. It analyses developments of the Code and otherapplicable laws and regulations, and prepares proposals for the Supervisory Board on these topics. It further
advises the Supervisory Board on its duties regarding the selection and appointment of Managing Directors
and Supervisory Directors. The Committee is also responsible for carrying out annual assessments on thefunctioning of the individual Managing Directors and Supervisory Directors and on the functioning of theManagement Board and Supervisory Board as a collective.

It also advises the Supervisory Board on the nomination of the external auditor, who is appointed by theGeneral Meeting. It is in regular contact with the internal audit function and the external auditor, andmonitors the auditor’s independence. In addition to advising the Management Board on tax and financematters, it is also responsible for supervising compliance with relevant legislation and regulations.
The Audit and Risk Committee meets as often as required for a proper functioning of the Committee. The
meetings are held at least four times a year. The Committee consists of at least three Supervisory Directors.
The Committee members are Delfin Rueda Arroyo (Chairman), Piero Overmars and Pamela Joseph. The
composition and number of members of the Committee provide for sufficient capacity to carry out thesupervisory functions. The members of the Audit and Risk Committee have the specific skills and experience
required to properly carry out their duties.
Adyen’s CEO, CFO and CLCO have a standing invitation for each Committee meeting. The Company’s
internal auditor and external auditor also attend the meetings of the Committee.

Where necessary, the Nomination and Remuneration Committee prepares proposals for (re)appointments
and drafts the selection criteria for the (re)appointment of Managing Directors and Supervisory Directors.

General Meeting, shares and shareholders

The Nomination and Remuneration Committee meets as often as required for a proper functioning of theCommittee. The meetings are scheduled three times a year. The Committee consists of at least three
Supervisory Directors. The Committee members are Joep van Beurden (Chairman), Piero Overmars, andCaoimhe Keogan.

General Meetings

The composition and number of members of the Committee provide for sufficient capacity to carry out thesupervisory functions. The members of the Committee have the specific skills and experience required toproperly carry out their duties.
Adyen’s CEO, CFO and CLCO have a standing invitation for each Committee meeting. The Company’s HR
Director also attends the meetings of the Committee.

Adyen holds a General Meeting of shareholders within six months of the end of the financial year. The
agenda for this meeting includes (i) the adoption of the annual accounts, (ii) the Annual Report, (iii) the
remuneration policy and remuneration of the Management Board and the Supervisory Board, (iv) the releasefrom liability of the members of the Management Board and the Supervisory Board for their performance
during the financial year, (v) the policy of the Company on additions to reserves and on distributions ofprofits, (vi) any proposal to distribute profits, (vii) the auditor’s report, and (viii) any other proposals placed on
the agenda by the Management Board.
General Meetings can be held as often as the Management Board or the Supervisory Board deem
necessary. A General Meeting is also convened in case of a decision entailing a significant change in theidentity or character of the Company or its business. One or more shareholders representing at least theAnnual Report 2022

68

statutory threshold of 3% of the voting rights may request that the Management Board places items on theagenda of a General Meeting. Such a request must be honoured by the Management Board provided thatthe request is received in writing at least 60 days before the date of such a meeting.

granting rights to subscribe for ordinary shares for a term of 18 months as of June 1, 2022. In 2022, 29,213(2021: 600,850) shares were issued following this approval. These shares were a result of exercises of
options granted to employees and share issuance relating to the depositary receipts award plan.

The Annual General Meeting of 2022 was held on June 1, 2022. Aside from the topics of this meeting as
listed above, Pieter van der Does and Roelant Prins were reappointed as members of the Management
Board with the title CEO and CCO respectively for another four-year period.

Repurchase of shares

Adyen’s 2023 Annual General Meeting will be held on May 11, 2023.

Voting rights
Each share reflects one vote in the General Meeting. Subject to certain exceptions provided by Dutch law or
the Articles of Association, resolutions of the General Meeting are passed by an absolute majority of votes
cast. Votes can be cast at the General Meeting either in person or by proxy.

Amendment to the Articles of Association
The General Meeting may pass a resolution to amend the Articles of Association with an absolute majority ofthe votes cast. A proposal to amend the Articles must be made by the Management Board and must be
approved by the Supervisory Board. When a proposal to amend the Articles of Association is made to theGeneral Meeting, the intention to propose such resolution must be stated in the relevant notice convening
the General Meeting.

Issue of shares
Shares can only be issued pursuant to a resolution of the General Meeting, unless the General Meeting has
designated this authority to the Management Board. During the Annual General Meeting held on June 1,
2022, the General Meeting granted the Management Board — subject to the Supervisory Board’s approval— the authority to issue ordinary shares or to grant rights to subscribe for ordinary shares for a term of 18
months as of June 1, 2022 for up to 10% of the total number of shares issued at the time of the General
Meeting for any purpose. Hence, within the aforementioned limit shares can be issued by a decision of theManagement Board, which allows the Management Board to react promptly when for example a business
opportunity arises which requires such issuance. This decision must be approved by the Supervisory Board.
Any issuance exceeding the aforementioned limit needs approval by the General Meeting.
In addition, the General Meeting granted the Management Board — subject to the Supervisory Board’s
approval — the authority to restrict or exclude applicable pre-emptive rights when issuing ordinary shares orShares can only be repurchased by Adyen pursuant to a resolution of the General Meeting and subject toany required regulatory approvals. The General Meeting may designate the authority to repurchase sharesto the Management Board. During the General Meeting held on June 1, 2022, the shareholders granted theManagement Board — subject to the Supervisory Board’s approval — the authority to acquire shares in thecapital of the Company, either through purchase on a stock exchange or otherwise. The authority applies fora term of 18 months as of June 1, 2022, under the following conditions: The repurchase (i) may constitute up
to 10% of the total number of shares issued at the time of the General Meeting; (ii) provided that theCompany will not hold more shares in stock than 10% of the issued share capital; and (iii) at a price(excluding expenses) not less than the nominal value of the shares and not higher than the opening price atEuronext Amsterdam on the date of repurchase or on the preceding day of stock market trading plus 10%.
Any repurchases exceeding these limits need approval by the General Meeting. In 2022, no repurchases ofshares were performed.

Issued capital and shareholdings
Adyen’s issued capital and voting rights are notified to the Dutch Authority for the Financial Markets (AFM)from time to time. This reporting can be found in the register issued capital on www.afm.nl. Shareholders
owning 3% or more of the issued capital and/or voting rights of a listed company must report this to the AFM
as soon as the threshold is reached or exceeded. This reporting by shareholders can be found in the‘Register of substantial holdings and gross short positions' at www.afm.nl.

Annual Report 2022

69

Report of the Supervisory Board
The Supervisory Board is pleased to present its report for 2022. Adyen’s business has proven to be resilient
to macroeconomic factors in 2022 — including high inflation and geopolitical instability — during achallenging period for global commerce. Nevertheless, Adyen’s demonstrated history of building for thelong term and remaining a committed partner to its customers put us in the fortunate position of sustained
profitable growth. In 2022, the Adyen platform processed €767.5 billion, growing 49% year-on-year.
Furthermore, Adyen was able to grow the team to a total of 3,332 FTE as of December 31, 2022, adding
1,152 FTE to its global team.
This report includes a more specific description of the Supervisory Board’s activities during the financial
year 2022 and other relevant information on its functioning.

Supervisory Board meetings
The Supervisory Board convened for eight regular meetings, of which seven were held at the offices ofAdyen, and one was held via videoconferencing.. The meetings were held in the months February, March,May, August, October and December. Members of the Management Board were also present during
these meetings.

The Supervisory Board also discussed Adyen’s (long-term) strategy including its Solutions, Commercial
Pillars, focus areas and associated risks, and reviewed proposed annual and other financial reporting.
The Company Secretary attended all Supervisory Board meetings and Committee meetings but one, andacted as the secretary of the Supervisory Board and its Committees. The Chairman of the Supervisory Board
met regularly during the year with the CEO and other Managing Directors to discuss the performance of theCompany and projects as part of executing the strategy. The Supervisory Directors also interacted
individually and collectively with Managing Directors outside the formal Supervisory Board meetings, andinformally with other members of the team, including the global leadership team.
In 2022, there were no conflicts of interest between Adyen and Managing Directors or Supervisory Directors.

Committee reporting
The Supervisory Board has established two Committees, as further explained in the chapter ‘Governance’:
The Nomination and Remuneration Committee and the Audit and Risk Committee. The main considerations
and conclusions of each Committee were shared with the full Supervisory Board.

In 2022, the attendance rate of the Supervisory Directors was 100%.

Nomination and Remuneration Committee

The Supervisory Board meets at a minimum each six months, or prior to the publication of the half-yearly
results, and discusses these results with the Management Board, as well as the draft press release andauditor’s report on the procedures performed. These documents are first discussed in the Audit and Risk
Committee meeting prior to the Supervisory Board meeting.

The duties and composition of the Nomination and Remuneration Committee are described in the section‘Governance’ of this Annual Report.

In addition to the regular agenda for the Supervisory Board meeting — which includes topics such as risk
management, business performance, strategic updates and the development of the financials — theSupervisory Board discussed topics related to customer relations, price sensitive information, regulatory
affairs, ESG, culture, diversity, and the preparation and evaluation of the Annual General Meeting of
Shareholders. Furthermore, deep dives and educational sessions on topics relevant to Adyen’s businesswere held, such as cyber security, operations and reputational risks.

The Nomination and Remuneration Committee convened three times in 2022. All Committee members
attended all meetings. The Committee has reviewed the composition of the Supervisory Board andManagement Board, and has prepared the proposal to appoint Brooke Nayden as CHRO. Furthermore, it
has drawn up a plan for the succession of the Managing Directors and the Supervisory Directors. In 2022,
the Nomination and Remuneration Committee discussed and paid particular attention to the Company’s
culture, talent management and leadership, hiring strategies, compensation and Diversity, Equity &Inclusion (DEI).
The Committee monitored and analyzed developments of the Code and applicable laws and regulations inrelation to remuneration policies, reviewed Adyen’s Remuneration Policy and its execution for complianceAnnual Report 2022with the Code and the Dutch Act on Remuneration Policies Financial Undertakings (Wet beloningsbeleid
financiële ondernemingen) as implemented in the Dutch Financial Supervision Act (Wet op het financieeltoezicht). For more information on the Remuneration Policy, please refer to the section ‘Remuneration
Report’ of this Annual Report.

70

Supervisory Board committees

The Nomination and Remuneration Committee leads the evaluation of the performance of the individual
Managing Directors and Supervisory Directors. During the evaluation the Committee took note of theManaging Directors’ views on their own remuneration. The Committee drafted proposals to the Supervisory
Board for the remuneration of the individual Managing Directors and Supervisory Directors. Please refer tothe section ‘Remuneration Report’ for more information on the remuneration packages of the Managing andSupervisory Directors.

Nomination and Remuneration Committee

Audit and Risk Committee• Diversity, equity and inclusion

The duties and composition of the Audit and Risk Committee are described in the section ‘Governance’ ofthis Annual Report.
In 2022, the Audit and Risk Committee convened for four meetings. The Committee discussed theCompany’s key risks, risk exposure, risk appetite statements, and the design, operation and effectiveness of
the risk management and internal control systems of the Company. The Committee also discussed the halfyearly financial results and the financial statements. Furthermore, the Committee discussed the reports
from internal and external auditors, reviewed the Annual Report and the H1 and H2 Shareholder Letter
including the relevant press releases, and discussed the overall internal control environment.
Other topics on the agenda in 2022 included compliance, governance, ICLAAP, SREP, Pillar III reporting,tax, legal, ESG and investor relations. The members of the Committee met with the internal and external
auditors outside the Committee meetings to ensure all relevant information was discussed. The Committee
evaluated the performance and remuneration of the external auditor. All Committee members, the internal
auditor and the external auditor attended all meetings held in 2022.

• Culture• Executive compensation• Remuneration• Succession planning• Talent management and retention• Learning & development
Audit and Risk Committee• Risk management• Financial reporting• Ethics, conduct, integrity and compliance• IT, information security and data privacy• Tax
Please refer to the Report of the Supervisory Board for a complete overview of topics discussed by the Supervisory
Board in 2022, and to our Governance page for the Terms of Reference of the Supervisory Board committees.

Annual Report 2022

71

Diversity

Performance assessment

The Supervisory Board aims for a balance in its composition with respect to gender, nationality, age,experience and affinity with the nature and culture of the business of Adyen in all countries in which it isactive. The Supervisory Board values and promotes diversity, both within the Supervisory Board and theManagement Board, as within Adyen in general. Differences in amongst others educational background,nationality, age, race, gender, experiences and beliefs are vital to the business, enabling the Boards and theCompany to look at issues and opportunities differently and to respond to challenges in new ways. Diversity
is a key driver for innovation and allows Adyen to attract and retain the most talented and smart people.

In 2022, the Supervisory Board has assessed its performance and composition and that of its Committees.
The Supervisory Board has conducted the annual self-assessment without the Managing Directors being
present, and has subsequently asked the Managing Directors for their input on the performance of theSupervisory Board in 2022. The Supervisory Board has received satisfactory feedback on its functioning.
The main results of the self-assessment have subsequently been shared back with the Management Board.
The performance of the Supervisory Board, the Nomination and Remuneration Committee and the Audit
and Risk Committee has been assessed as satisfactory. The functioning of the Supervisory Board fullycomplies with the relevant principles and best practices as set out in the Dutch Corporate
Governance Code.

This standpoint has also been embedded in the Adyen Diversity, Equity and Inclusion (DEI) Policy, as
published on our Governance webpage. The Policy outlines the commitment to maintaining a Supervisory
Board that is at least one-third female, in line with statutory diversity quota. Currently, Adyen’s Supervisory
Board consists of 40% women. Furthermore, Adyen is committed to increase its gender balance of theManagement Board and global leadership team together to consist of at least one-third female members.
We are encouraged to see that Adyen’s global leadership team now comprises of 27% female members. For
the Management Board, this is at 17% in 2022. We’re happy to announce that Brooke Nayden will
strengthen the Management Board this year in her role as Chief Human Resources Officer, adding valuable
experience on culture, DE&I, and scaling tech organizations to the Management Board. Brooke’s
appointment is subject to shareholder approval during the General Meeting on May 11, 2023. With theproposed appointments of Ethan Tandowsky and Brooke Nayden as Managing Directors, and the stepping
down of Kamran Zaki as Managing Director, the Management Board will consist of 29% female members
respectively. Please refer to the ‘People & culture’ section of this Annual Report for more information on the
Company’s Diversity, Equity & Inclusion efforts in 2022.

The points for follow-up as proposed in last year’s external evaluation have been implemented successfully,
such as to spread the Supervisory Board and Committee meetings over multiple days and to allocate moretime to second-line functions. For the upcoming year, the Supervisory Directors among others aim to
dedicate even more time to Adyen’s global leadership team.

Financial statements
The financial statements for the year ended December 31, 2022, were prepared by the Management Boardand approved by the Supervisory Board. The Report of the Independent Auditor, PricewaterhouseCoopers
Accountants N.V. (PwC) is included in the Independent Auditor’s Report in the ‘Other Information’ section ofthis Annual Report. The Supervisory Board recommends that the General Meeting adopts thesefinancial statements.

Independence

Appreciation

Throughout the year, four Supervisory Directors — Piero Overmars (Chair), Delfin Rueda, Pamela Joseph,and Caoimhe Keogan — were independent from the Company within the meaning of Best Practice
Provisions 2.1.7, 2.1.8 and 2.1.9 of the Code. One Supervisory Board Director, Joep van Beurden, has acted
as an advisor to the Company in the years preceding his appointment in 2017, and is therefore considered
not to be independent within the meaning of Best Practice Provision 2.1.8 (iii) of the Code. The Supervisory
Board is, as a body, independent as defined in the Code.

Looking back at 2022, the Supervisory Board would like to thank all Adyen employees for their contribution
during the past year. The Supervisory Board is proud to see the team was able to continue to serve theinterests of customers, shareholders and other stakeholders of the Company with the highest standards.

Annual Report 2022

Compliance with the Dutch
Corporate Governance CodeAdyen acknowledges the importance of good corporate governance. The Company agrees with the general8
approach and with the provisions of the Code . As such, it fully complies with the Code with the exception ofBest Practice provision 4.3.3 of the Code, which provides that the general meeting of shareholders of acompany not having statutory two-tier status may pass a resolution to cancel the binding nature of anomination for the appointment of a member of the Management Board or of the Supervisory Board and/or
a resolution to dismiss a member of the Management Board or of the Supervisory Board by an absolutemajority of the votes cast. It may be provided that this majority should represent a given proportion of theissued capital, which proportion may not exceed one-third. However, Adyen applies a higher proportion of
one-half, which follows from a previous arrangement with Adyen’s shareholders.

72

Relevant documents on our Governance page• Articles of Association• By-Laws Management Board• By-Laws Supervisory Board• Disclosure and Bilateral Dialogue Policy• Diversity, Equity and Inclusion Policy• Dividend Policy• General Remuneration Policy• Remuneration Policy — Management Board and Supervisory Board• Reporting and Whistleblower Policy• Terms of Reference Audit and Risk Committee• Terms of Reference Nomination and Remuneration Committee• The Adyen Way of Building an Ethical Business8

For the full version of the Dutch Corporate Governance Code 2016, please refer to www.mccg.nl. In December 2022, the Corporate Governance Code Monitoring Committee has published a revised version Dutch Corporate Governance Code (‘2022 Code”). The 2022 Code is effective per
January 1, 2023. Adyen will refer to the 2016 Corporate Governance Code in this Annual Report.

Annual Report 2022

73

Remuneration report
This remuneration report explains how the remuneration policies for the Management Board andSupervisory Board were put into practice in 2022. These remuneration policies have received strong
shareholder support, with an 99.86% approval rate for the Management Board and Supervisory Board
remuneration policy in the General Meeting on May 26, 2020.
The remuneration report has been prepared in accordance with article 2:135 of the Dutch Civil Code, theDutch Corporate Governance Code and, where possible, inspired by the updated draft EC guidelines on thestandardized presentation of the remuneration report. It will be submitted for an advisory vote to theshareholders at the 2023 AGM. Additionally, the last section of this report includes remuneration-related
information regarding other staff members. This section of the report is prepared in line with article 1:120 of
the Dutch Financial Supervisory Act and is for informational purposes only. It is not subject to the advisory
vote applicable for our Management Board and Supervisory Board section.

Our philosophy
When it comes to our remuneration policies, Adyen maintains the same objectives and goals for all
employees, including our Management Board and Supervisory Board.
Our primary objective is to recruit and retain the best global talent by offering competitive payment
structures that account for our strategy of focusing on our customers’ growth, changing the payments
landscape, and having fun while doing so. We believe it is key that every remuneration decision aligns with
the Adyen Formula and company strategy. As such, we have defined guiding principles that ensure that our
remuneration policies and approach to remuneration sufficiently reflect these objectives.

Equal pay
We are committed to ensuring equal pay. We value all perspectives equally and do not weigh one greaterthan another. At its core, this approach means: same role, same pay. Our annual equal pay audit is designed
to safeguard and uphold this standard.

Internal remuneration ratios
On a yearly basis we assess our internal remuneration ratios to ensure the Management Board andSupervisory Board remuneration develops in line with the rest of the organization. We therefore track
possible changes to pay ratios when reviewing the remuneration of our Management Board. In the section‘Pay ratio’ of the Management Board remuneration, we report on this internal ratio and its developmentin 2022.

Level of support in society
Since our founding in 2006, Adyen has remained focused on building for the long-term. This means
continuously advancing our people, platform and partnerships to meet the needs of today, while relentlessly
innovating to fulfill those of tomorrow. As articulated in the Adyen Formula, we strive to make good choices
to build an ethical and sustainable business and drive sustainable growth for our customers.
As part of our commitment to building an ethical business, we observe the law and applicable regulations toensure our remuneration policies and practices are compliant with relevant requirements. This framework
includes the the Dutch Remuneration Policy for Financial Institutions Act (Wet beloningsbeleid financiele
ondernemingen), the Rules on Sound Remuneration Policies (Regeling beheerst beloningsbeleid Wft) andthe EBA Guidelines on Sound Remuneration Policies (EBA Guidelines). We closely monitor regulatory
developments to ensure we remain fully compliant.
Our remuneration policies and practices consistently promote sound and effective risk management. They
are always aligned with our strategy and the Adyen Formula to create long-term value for our company andour customers. As such, we do not provide any incentives that exclusively benefit individual staff members or
encourage improper risk-taking.
Our Management Board, Supervisory Board and other staff remuneration policies are published on
our website.

Annual Report 2022

74

Our Management Board remuneration policy
Our current and proposed remuneration policy at a glance
The overview on this page provides insight into the main elements of our current Management Board
remuneration policy and those of our proposed policy (subject to shareholder approval at our 2023 AGM).
Subject to adoption by the AGM, the policy will be effective as per January 1, 2024 and is intended to remainin place for 4 years. The full proposed policy will be published in combination with our 2023 AGM
convening notice.
PolicyCurrent

Proposed

Rationale

Comparison against AEX constituents.

The use of a tailored peer group reflecting our level of maturity and based on predefined andobjective selection criteria such as size and industry.

The use of a tailored peer group will better reflect our executive talent market, which is broader
than only AEX constituents.

Peer group

Remuneration is positioned below the median of the benchmark
against the AEX.

We aim for total remuneration of Management Board members to not be positioned above the The market positioning reflects our pay philosophy and acknowledges that the peer groupmedian of the peer group. In exceptional circumstances, we allow deviation from this market
includes international companies from markets where pay is generally higher than in thepositioning and allow for positioning up to the 75th percentile of the peer group.
Netherlands. The possibility to deviate from the market positioning provides us with theflexibility to recruit and retain the best talent available in our global talent market.

Fixed remuneration

Fixed remuneration can be paid in a combination of cash andequity(-linked) instruments.

Fixed remuneration can be paid in a combination of cash and equity(-linked) instruments.
Any pay-out in equity(-linked) instruments will be subject to a holding period of five years.

Increase the alignment between Management Board members’ interest and Adyen’s
stakeholders to contribute to Adyen’s long-term value creation.

Variable remuneration

A minimum of 50% of the variable remuneration will be awarded inequity or equity(-linked) instruments.

Variable remuneration will be awarded in equity(-linked) instruments.

Awards in equity will increase the alignment between Management Board members’ interests
and Adyen’s stakeholders and contribute to Adyen’s long-term value creation.

Share ownership

Currently not in place

Stimulate the Management Board members to retain (a proportion of) the equity(-linked
instruments) awarded under the various remuneration components during employment untilthe value of ownership is at least 50% of fixed remuneration.

Share ownership guidelines will further strengthen our focus on building for long-term
success, independent of the Management Board member’s tenure or history within Adyen.

New hire policy

Currently not in place

Possibility of granting a sign-on award in cash and/or equity(-linked) instruments to externalhires.

The new hire policy enables Adyen to recruit the best talent available in our global talentmarket.

Annual Report 2022

Our approach to variable remuneration
Adyen has a uniquely entrepreneurial and performance-driven culture. This has been one of our primary
drivers for historical growth and will remain a key driver for future growth. In order to incentivize this culture
and reward merit, we have the option to incorporate variable remuneration. At this moment, we do notbelieve variable remuneration is required to maintain this performance-focused culture. This does notnecessarily mean we will never consider the use of variable remuneration for (future) Management Board
members, but it is not the case at present.

Determination of the remuneration package
The level of the Management Board member’s remuneration is based on various factors, including thescope of responsibilities and experience of each individual Management Board member. If a member of theManagement Board has a principal place outside the Netherlands, the remuneration package may take local
market practice or requirements into account.

Comparison with the external landscape
One factor is the comparison to the external landscape. Under the scope of our current remuneration policy,
the Management Board’s remuneration is compared to AEX companies. The remuneration of all
Management Board members is below the median of the benchmark. As explained in previous sections of
this remuneration report, and subject to shareholder approval, as per January 1, 2024, we will make use of a
tailored peer group which reflects our relevant market for executive talent. We have defined four categories
that we believe form the foundation of our talent market and thus should be represented in our peer group(see table).
We determine the composition of the peer group on an annual basis, balancing the weight of the different
categories appropriately. Individual peer companies are selected objectively, with quantitative and industry
criteria used to ensure comparability in terms of size and structure. We aim to position ourselves around the
median of the peer group in terms of size, with the spread between the smallest and largest companies is
kept within reasonable boundaries. The proportion of North American peers will be limited to a maximum of
40% of the peer group composition. We will disclose on retrospective basis the peer group composition in
our annual remuneration report, subject to shareholder approval, for the first time in our 2024
remuneration report.

75

Category

Description

Rationale

Payment platforms Combination of our direct (business) competitors andComparison against companies operating in similar(FinTech) companies active in the payment, cryptocurrency industry dynamics as Adyen.
and banking platform sector.
Financial sector

Selection of relevant banks.

Comparison against companies acting in similar
governance environment and where remuneration is
subject to (broadly) similar regulation as for Adyen.

High-Tech

Companies active in software, platform or (digital) services
related sectors.

Comparison against companies active in innovation-driven
an fast-moving industries, like the payment industry.

Listing index

AEX listed companies.

Comparison against companies that are operating withinsimilar Dutch stakeholder environment.

Annual Report 2022

Management Board remuneration in 2022
In this section, we outline the implementation of our Management Board remuneration policy in 2022. This
implementation was done in accordance with our remuneration policy and principles. There has been no
deviation from the remuneration policy, principles or procedures for its implementation in 2022.
Similar to previous years, we did not award variable remuneration to our Management Board members in
2022. Therefore, their remuneration consists of base salary only. In line with the Dutch Corporate
Governance Code, we performed a scenario analysis and back-test on the remuneration. However, due tothis absence of variable remuneration, all scenarios resulted in the same outcome.
We believe the remuneration approach for our Management Board mitigates short-term orientation andcontribute to the long-term performance of our company. This is achieved by awarding Management Board
members with share-related remuneration, while other members still have significant shareholdings in ourcompany. The purpose hereof is to ensure a financial ownership-like position where shares are concernedand for them to obtain an economic interest in the pursuit of Adyen’s long-term objectives such assustainable growth, development, profitability, and the financial success of Adyen.

Base salary
In 2022, the base salaries of our Management Board members increased by 9.6%, which is in line with theaverage salary increase of our employees in 2021. As outlined in our 2021 remuneration report, two
exemptions were made. Per 1 January 2022, the annual fixed compensation of our Chief Legal &Compliance Officer was adjusted to EUR 750,000, based on full-time employment. This adjustment wasmade to reflect the increased scope of her role and responsibilities, and bring the remuneration package
towards a more competitive level. Furthermore, total fixed compensation of our Chief Technology Officer
was adjusted to EUR 600,000 to recognize his experience and ensure the remuneration change is in linewith the technology organization and external technology sector.
Currently, all our Management Board members, with the exemption of our Chief Legal & Compliance Officer
and Chief Technology Officer, receive their base salary in cash. For our Chief Legal & Compliance Officer,
50% of base salary is paid in depository receipts, and for the Chief Technology Officer, 46% part of basesalary is paid in depository receipts reflecting historical increases and in accordance with our remuneration
policy. The depository receipts are subject to a holding period of five years.
Other than the information above, when setting base salaries, we take various internal and external factors
into consideration. Our Management Board members provide the Nomination and Remuneration
Committee with their individual views with regard to the amount and structure of their remuneration.

76

Furthermore, a comparison against AEX companies was made, whereby our remuneration levels are below
the median of the benchmark.

Variable remuneration
No variable remuneration was awarded to our Management Board members in the financial year 2022. No
variable remuneration to our Management Board members was adjusted or clawed back over 2022 orprevious years.

Pension & Benefits
We deeply believe in treating our Management Board members the same as other employees. Therefore, weoffer them pension and benefits arrangements in line with typical market practice and in accordance withwhat we offer our wider workforce.
Pension
As from January 2017, all Dutch Managing Directors participate in the Collective Defined Contribution(CDC) pension plan, with respect to their salary up to EUR 114,866 gross per year for 2022 (2021: EUR
112,189). On behalf of each Managing Director, Adyen pays a contribution of 4% of the pensionable salary— being 12 times the monthly fixed salary plus holiday pay up to the fiscally allowed maximum minus adeductible — for the accrual of old age pension benefits as well as the administration costs. If and as far as
fiscally allowed, each Managing Director has the possibility of making additional contributions in order to
accrue additional pension capital.
Kamran Zaki participates in a 401k retirement plan in the US, for which Adyen provided an employer matchof up to 2% of base salary in 2022.
Benefits
All Managing Directors are insured under an insurance policy taken out by Adyen against damages resulting
from their conduct when acting in their capacities as directors.
All Dutch Managing Directors are insured for the risk of death and disability, for which Adyen pays theinsurance premiums.

Annual Report 2022

Pay ratio
On an annual basis, we determine the internal ratio of the Management Board members’ remuneration
versus all other Adyen staff. For this ratio, Adyen included all remuneration components of the CEOcompared to the average total remuneration of all Adyen employees worldwide. For the CEO, a ratio of [7:1]
applies (2021: [7:1]). For the other Management Board members, a ratio of [7:1] applies (2021: [6:1]).
This calculation methodology is in accordance with the guidance as provided by the Monitoring
Commission of the Dutch Corporate Governance Code. Our pay ratio is observed to be amongst the lowest
compared with other AEX companies and reflects our vision of not treating the Management Board
materially different than the other staff. Nevertheless, we believe this ratio is currently reasonableconsidering the tenure of (most of) our Management Board members within Adyen.

Overview of the Management Board remuneration in 2022
The table below provides an overview the Management Board remuneration in 2022 and 2021. In
accordance with the information shared under the ‘Base salary’ section of this remuneration report, sharebased compensation refers to share-based fixed remuneration awarded in depository receipts. As explainedin previous sections of this remuneration report, total remuneration consists of fixed remuneration only.

77

Managing Director
Pieter van der Does

Roelant Prins

Ingo Uytdehaage

Kamran ZakiMariëtte Swart

Alexander Matthey*

Total

Reported Year

Base salaryPension andbenefits

Share-based
compensation

Variable income

Total
Remuneration

2022

671,530

20,044——

691,574

2021

612,710

15,975——

628,6852022

545,124

20,044——565,1682021

497,376

15,975——513,351

2022

632,028

20,044——652,0722021

576,668

15,975——592,6432022

830,328

24,465——

854,7932021

727,510

17,217——744,7272022

500,000

20,044250,000—

770,0442021

347,625

15,975

115,863—

479,4632022

411,000

104,186

189,000—

704,1862021

375,000

15,975125,000—

515,975

2022

3,590,010

208,827

439,000—

4,237,837

2021

3,136,889

97,092

240,863—3,474,844

All amounts are in EUR*In 2022, the amount for Alexander Matthey’s pension and benefits includes housing and schooling allowances.

Annual Report 2022

78

Stock options awarded in previous years

or otherwise terminated by Adyen (for any reason other than urgent cause within the meaning of article
7:678 of the Dutch Civil Code (dringende reden)), in accordance with the Dutch Corporate GovernanceCode. In the financial year 2022, no severance payment has been paid to any Managing Director.

The table below provides an overview of the stock options per December 31, 2022 that have been granted
to Managing Directors as part of their share-based compensation. No new grants were given in 2022.

2022

Numberof options
Final vesting datevestedOutstanding
31 December
Expiry date
2022

Loans
Exercisedin 2022

Grant date

Grant priceMariëtte Swart

1 November 2015

39,90

1 November 2019

7,500

1 November 2023

3,400

0

Alexander Matthey

1 December 2015

66,50

1 December 2019

2,500

1 December 2023

1,250

0

Share and Depositary Receipt holdings

No loans, advance payments, nor guarantees have been granted to or on behalf of the Managing Directors.

Remuneration and Company Performance Development
The below table shows the difference in Management Board remuneration compared to the previous year
and company performance over the last two reported financial years:
Annual change

The table below reflects the equity position directly or indirectly held by the Managing Directors as per
December 31, 2022 and 2021:
Shareholdings (aggregate number of Shares and/or Depositary Receipts
2022

2021

Pieter van der Does

947,542

1,022,539

Roelant Prins

287,309287,309

Ingo Uytdehaage

195,182

195,182

Kamran Zaki

47,16847,168Mariëtte Swart

158

79

Alexander Matthey

164

84

2022 vs 2021

2021 vs 2020

Pieter van der Does

62,88915,921

Roelant Prins

51,817

12,561

Ingo Uytdehaage

59,42914,871

Kamran Zaki

110,066

73,110Mariëtte Swart

290,581

11,583Alexander Matthey

188,211515,975

Net revenues

328,649

317,317

EBITDA

98,296

227,512

7,185

4,663

Director's remuneration (in EUR)

Company Performance (in EUR ‘000)

Average remuneration comparative on FTE basis (inEUR)

Service and Severance Agreements

Wages and Salaries / FTE

All Managing Directors have entered into a service agreement (overeenkomst van opdracht) with Adyen N.V.
effective as of the date of the listing of Adyen, whereby Kamran Zaki is currently assigned to Adyen N.V. San
Francisco Branch. The terms and conditions of these service agreements have been aligned with the Dutch
Corporate Governance Code. The service agreements will be entered into for a term of 4 years. The service
agreements provide for a severance of one annual base salary if the Managing Director is not re-appointed

The difference in Mariëtte Swart and Alexander Matthey’s salary compared with previous years is the resultof their increased total remuneration they receive per January 1, 2022 and as explained in the previous
sections of this remuneration report.

Annual Report 2022

79

Our Supervisory Board remuneration policy
Determination of the remuneration package

Our policy at a glance
The overview below provides insight into the main elements of our current Supervisory Board remuneration
policy and those of our proposed policy (subject to shareholder approval at our 2023 General Meeting).
Subject to approval from shareholders during the 2023 General Meeting, the policy will be effective as per
January 1, 2024 and is intended to remain in place for 4 years. The full proposed policy will be published in
combination with our 2023 General Meeting convening notice.

The level of Supervisory Board remuneration is based on various factors, including their role, associatedtime commitment and responsibilities within the Supervisory Board and committees.
Comparison with the external landscape
One of the factors is the comparison against the external landscape. Under the scope of our current
remuneration policy, the Supervisory Board’s remuneration is compared to AEX companies. The
remuneration of the Supervisory Board is below the median of the benchmark.
Similar to the peer group approach as applied for our Management Board, and subject to shareholder
approval, as per January 1, 2024, we will make use of a tailored peer group which reflects our relevantmarket for non-executive director talent. As there is significant overlap in our talent market for Supervisory
Board and Management Board members, we aim to operate a consistent peer group for both boards.
However, we also observe significant differences in time commitment and responsibilities between one-tierand two-tier boards, especially for the role of the Chair.

Element

Current

Proposed

Rationale

Peer group

Comparison against
remuneration observed within
AEX constituents.

The use of a tailored peer group,reflecting our transformation andbased on predefined andobjective selection criteria suchas size and industry.

The use of a tailored peer groupwill better reflect our NonExecutive Director talent market,
which is broader than only AEX
constituents.

Adyen’s Supervisory Board
remuneration is positioned below
the median of the benchmark
against the AEX.

We aim that the Base andCommittee fees for our
Supervisory Board members are
not positioned above the medianof the peer group.

The market positioning reflects
our pay philosophy.

Furthermore, pay practices within North American boards are different compared with European boards,
amongst others due to the prevalence of equity awards. Therefore, we will exclude any US peers andEuropean peers with one-tier boards from the Management Board peer group in our Supervisory Board
peer group.

Base Fee

Fixed fee for Chair and Member

Any future adjustments of thebase fees will be separately
brought to the AGM forshareholder approval.

We will disclose on retrospective basis the peer group composition in our annual remuneration report,
hence, subject to shareholder approval, for the first time in our 2024 remuneration report.

Committee Fee

Fixed fee for the Chair andMember of the Audit & Risk
Committee and the Nomination &Remuneration Committee

We will closely monitor thecurrent levels against thedevelopments of our Board’s role,time commitment,
responsibilities and the externalmarket during the term of the newpolicy.

Annual Report 2022

Supervisory Board remuneration in 2022
In this section, we outline the implementation of our Supervisory Board remuneration policy in 2022. This
implementation was done in accordance with our remuneration policy and principles. There has been no
deviation from the remuneration policy, principles or procedures for its implementation in 2022.
Overview of the Supervisory Board remuneration in 2022
The table below provides an overview of the Supervisory Board remuneration in 2022 and 2021. No
increases have been made in Supervisory Board remuneration in the financial year 2022. In addition to thebase and committee fees, expenses incurred by the members of the Supervisory Board in the performanceof their duties are reimbursed in full. Supervisory Board members do not receive variable remuneration ofshare-based remuneration.

80

Role

2022 (in EUR)

Chair

80,000Member

60,000Chair Audit and Risk Committee

15,000Member Audit and Risk Committee

10,000Chair Nomination & Remuneration Committee

10,000Member Nomination & Remuneration Committee

7,000

2022
(in EUR)

2021

Remuneration in cash

Total Remuneration

Remuneration in cash

Total Remuneration

Piero Overmars

97,00097,00097,00097,000Delfin Rueda Arroyo

75,00075,00075,00075,000

Joep van Beurden

70,00070,00070,00070,000

Pamela Joseph

77,00077,00077,00077,000

Caoimhe Keogan

67,00067,00067,00067,000

Total

386,000

386,000

386,000

386,000

Annual Report 2022

81

Share-based compensation
The table below provides an overview of the aggregate number of Shares and/or Depositary Receipts per
December 31, 2022 that have been granted prior to the Company’s IPO in 2018 to Supervisory Directors aspart of their share-based compensation.
Shareholdings (aggregate number of Shares and/or Depositary Receipts)
2022

2021

Piero Overmars

1,094

1,094

Delfin Rueda Arroyo——

Joep van Beurden

1,719

1,719

Pamela Joseph——

Caoimhe Keogan——binding shareholder vote, unless explicitly prescribed by applicable regulation for specific elements (e.g.,shareholder mandate to exceed 100% variable remuneration cap).

Our policy at a glance
The overview below provides insight into the main elements of our General remuneration policy applicablefor our employees, excluding our Management Board or Supervisory Board. The full remuneration policy,
including applicable governance and review procedures, is published on our website.
Determination of the individual remuneration packages
We set the remuneration package of our employees in accordance with the scope of responsibilities andexperience of the individual. This might include a comparison against relevant market practice and levels. If
an employee has its principal place of business outside the Netherlands, it may take account of local
practice or requirements.

Other staff disclosures for 2022
Piero Overmars and Joep van Beurden committed not to sell, transfer or otherwise dispose of any Shares
and/or Depositary Receipts during the term of their appointment.

Variable remuneration

Insurance

We award variable remuneration, if any, in accordance with our remuneration principles, applicablelegislation and our general remuneration policy.

The Supervisory Directors of Adyen are insured under an insurance policy taken out by Adyen against
damages resulting from their conduct when acting in their capacities as Supervisory Directors.

Loans
No loans, advance payments, nor guarantees have been granted to or on behalf of theSupervisory Directors.

Our remuneration policy for other staff
This section is for informational purposes only and is not subject to an advisory vote on our 2023 AGM.
Furthermore, our remuneration policy for other staff (General remuneration policy) is not subject to a

In 2022, our total global company-wide amount of variable remuneration awarded to employees, not being
our Management Board or Supervisory Board, was EUR 22,219,633 (2021: EUR 19,861,792) compared to a
total staff expense of EUR 380,587,000 (2021: EUR 240,538,495).

Identified Staff
In 2022, there were 33 employees (2021: 26) identified as “Identified Staff”.

Total annual remuneration
In 2022, there were 7 employees (2021: 3) to whom total annual remuneration (including employer pension
contributions and any severance payments made) of EUR 1,000,000 or more was awarded.

Annual Report 2022

03
Financial Statements 2022

82

Annual Report 2022

83

Consolidated Financial Statements

Company Financial Statements

Consolidated Statement of Comprehensive Income

85

Consolidated Balance Sheet

86

Consolidated Statement of Changes in Equity

87

Consolidated Statement of Cash Flows89

Notes to the Consolidated Financial Statements

90

Key Disclosures92

2. Revenue and segment reporting92

3. Inventories

98

4. Employee benefit expense98

5. Other operating expenses

102

6. Other financial results

103

7. Income tax

105

8. Capital management

108

9. CRR/CRD IV Regulatory Capital108

10. Cash and cash equivalents

109

11. Financial instruments

109

12. Financial risk management

113

Other disclosures

116

13. Intangible assets

116

14. Plant and equipment

117

Company Statement of Comprehensive Income

129

Company Balance Sheet

130

Company Statement of Changes in Equity

131

Company Statement of Cash Flows133

Notes to the Company financial statements

134

25. Basis of preparation

134

26. Company - Revenue

134

27. Company - Employee benefits

134

28. Company - Other operating expenses

134

29. Company - Other financial results

135

30. Company - Plant and equipment

135

31. Company – Leases

136

32. Company - Investments in consolidated subsidiaries on equity method

137

33. Company – Trade, other receivables, and receivables from merchants andfinancial institutions

138

34. Shareholders’ equity

139

35. Dividends paid

139

36. Company – Trade, other payables, and payables to merchants and financial
institutions

139

37. Directors’ remuneration

139
139

15. Trade, other receivables, and receivables from merchants and financial institutions

118

38. Audit fees

16. Trade, other payables, and payables to merchants and financial institutions

119

39. Contingencies and commitments

140

17. Leases

120

40. Proposed profit appropriation

140

18. Other contingent assets, liabilities and commitments

121

19. Related party transactions

121

41. Events after balance sheet date140

20. New and amended standards adopted

121

21. Audit fees122

22. Compensation of key management

122

23. Share information

124

24. Tax reporting124

Annual Report 2022

Consolidated Financial
Statements84

Annual Report 2022

85

Consolidated Statement of Comprehensive Income
For the years ended December 31, 2022 and 2021
(all amounts are in EUR thousands unless otherwise stated)
Note

2022

2021

Note

Revenue28,935,611

5,995,419

Income before income taxes

Costs incurred from financial institutions

2(7,550,960)(4,960,951)

Income taxes

Costs of goods sold

2, 3

Net revenue(54,485)(32,951)

1,330,166

1,001,517

Wages and salaries

4(328,316)(199,141)

Social securities and pension costs

4(52,271)(41,398)

13,14,17(63,613)(35,011)5(221,237)(131,236)

(54)

250

664,675

594,981

Amortization and depreciation
Other operating expenses
Other income/(expense)
Income before net finance income/(expense) and income taxes

2022

2021

719,939

580,847(155,800)(111,130)

Net income for the year

564,139469,717

Net income attributable to owners of Adyen N.V.

564,139469,717

7

Other comprehensive income
Items that may be reclassified to profit or loss:
Currency translation adjustments subsidiaries(1,326)

11,373

Other comprehensive income for the year

(1,326)

11,373

Total comprehensive income for the year
(attributable to owners of Adyen N.V.)

562,813

481,090

Earnings per share (in EUR)
Finance income

10

29,323

1,039–

Net profit per share - Basic

23

18.21

15.40

Finance expense

17,10(11,963)(12,788)–

Net profit per share - Diluted

23

18.17

15.31

Other financial results
Net finance income/(expense)

6

37,904(2,385)55,264(14,134)

The accompanying notes are an integral part of these consolidated financial statements.

Annual Report 2022

86

Consolidated Balance Sheet
As at December 31, 2022, and 2021
(all amounts are in EUR thousands unless otherwise stated)
Note

December 31, 2022

December 31, 2021

Note

December 31, 2022

December 31, 2021

Intangible assets

13

8,140

9,841

Share capital

8

310

310

Plant and equipment

14

140,796

72,981

Share premium

8352,399335,725

Right-of-use assets

17

181,676

128,063

Other reserves

156,552

137,457

Other financial assets at FVPL

11

12,26422,504Retained earnings

1,902,857

1,336,922

Contract assets

2.2

48,612

79,341

Total equity attributable to owners of Adyen N.V.

2,412,118

1,810,414

Deferred tax assets

7

143,727

127,782535,215

440,51235,00081,700Total non-current assets

Derivative liabilities

11

Deferred tax liabilities

7

11,345

16,401Inventories

3

87,891

22,138

Lease liability

17

169,873

119,968

Receivables from merchants and financial institutions

15369,104

633,249

Cash-settled share-based payment plan

4.3

6,742

5,601

Trade and other receivables

15

89,35056,852

Total non-current liabilities

222,960

223,670

Current income tax receivables

7

12,445

6,761

Cash and cash equivalents

10

6,522,345

4,616,094

Payables to merchants and financial institutions

16

4,795,804

3,608,531

16

147,827

100,116

33,20022,996

Total current assets

7,081,135

5,335,094

Trade and other payables

Total assets

7,616,350

5,775,606

Lease liability

17

Current income tax payables

7

4,441

9,879

Total current liabilities

4,981,272

3,741,522

Total liabilities and equity

7,616,350

5,775,606

The accompanying notes are an integral part of these consolidated financial statements.

Annual Report 2022

87

Consolidated Statement of Changes in Equity
For the years ended December 31, 2022 and 2021
(all amounts are in EUR thousands unless otherwise stated)
Other reserves
Note

Balance - January 1, 2021

Share capital

Share premium

Legalreserves

Share-based payment
reserve

Warrant reserve304

194,608(1,504)

98,03453,401

Net income for the year
Currency translation adjustments

Retained earnings

Total equity

873,291

1,218,134

469,717469,717469,717

481,090

129—

11,373

Total comprehensive income for the year——

11,373

11,373——Adjustments:
Intangible assets(129)

Other adjustments
—

—

(129)

—

59

59

—

188

59

(26,700)(7,400)—Transactions with owners in their capacity as owners:
Equity transfer on exercise of warrant

2.1

Deferred tax on share-based compensation

7

34,100

Options exercised
Proceeds on issuing shares

8

Share-based payments

4.3

6

—

5,548

5,548

1,732

(1,732)—

105,285

105,291292

Other adjustments

Balance - December 31, 2021

292
(1,126)

1,126

—

6

141,117—

4,108(27,826)(6,274)111,131310

335,725

9,740

102,142

25,575

1,336,922

1,810,414

Annual Report 2022

88

Other reserves
Note

Share capital

Share premium

310

335,725

Balance - January 1, 2022

Legal reserves

Share-based payment
reserve

Warrant reserve

9,740

102,142

25,575

Net income for the year
Currency translation adjustments

Retained earnings

Total equity

1,336,922

1,810,414

564,139564,139(1,326)

Total comprehensive income for the year——

(1,326)(1,326)——564,139562,813

2,160

—

(364)

(203)

1,796

(203)

Adjustments:
Intangible assets(2,160)

Other adjustments

161
—

—

(2,160)161—

Transactions with owners in their capacity as owners:
Deferred tax on share-based compensation

7

Options exercised
Proceeds on issuing shares

8

Share-based payments

4.3

Balance - December 31, 2022

The accompanying notes are an integral part of these consolidated financial statements.

—

6,180

22,97929,159

568

(568)

—

9,926

9,926
9

9

—

16,674—22,420——39,094

310

352,399

6,254

124,723

25,575

1,902,857

2,412,118

Annual Report 2022

89

Consolidated Statement of Cash Flows
For the years ended December 31, 2022 and 2021
(all amounts are in EUR thousands unless otherwise stated)
Note
Income before income taxes

2022

2021

719,939

580,847

Adjustments for:–Finance income–

Finance expenses–

Other financial results

10(29,323)

Note

2022

2021

Interest received

10

29,323

1,039

Interest paid

17,10

(11,963)(12,788)(1,039)

Income taxes paid

(149,573)(127,427)

2,021,158

1,820,146

17,10

11,963

12,788Net cash flows from operating activities

6(37,904)

2,385

Purchases of financial assets at FVPL
11

—

(211)

—

12,427–

Depreciation of plant and equipment

14

28,354

15,315

Redemption of financial assets at amortized cost–

Amortization of intangible fixed assets

13

5,224

3,088

Redemption of financial assets at FVPL

11

11,407—

14(95,575)(51,387)13–

Depreciation of right-of-use assets

17

30,035

16,608Purchases of plant and equipment–

Equity-settled share-based compensation

4.3

9

292

Capitalization of intangible assets–

Cash-settled share-based payment plan

1,141

5,601

Proceeds from issues of shares

8(3,851)

Lease payments

17

Changes in working capital:–

Inventories

3(65,753)

Net cash used in investing activities(3,523)(2,959)(87,691)(42,130)

9,926

105,285(22,144)(9,045)(12,218)

96,240–Trade and other receivables

15(32,650)

19,780Net cash flows from financing activities–

Receivables from merchants and financial institutions

15

264,145

250,690

Net increase in cash, cash equivalents and bank overdrafts

1,921,249

1,874,256

Cash, cash equivalents and bank overdrafts at beginning of the year

4,616,094

2,737,486–

Payables to merchants and financial institutions

16

1,187,273

1,019,668–

Trade and other payables

16

40,155(11,048)

Exchange gains/(losses) on cash, cash equivalents and bank overdrafts

30,76348,198

Cash, cash equivalents and bank overdrafts at end of the year

2,153,371

1,959,322–

Amortization and additions of contract assets

Cash generated from operations

2.2

The accompanying notes are an integral part of these consolidated financial statements.

10(14,998)

4,352

6,522,345

4,616,094

Annual Report 2022

90

Notes to the Consolidated Financial Statements
General Information
Adyen N.V. (hereinafter ‘Adyen’, ‘the Company’, or ‘the Group’) is a licensed Credit Institution by De
Nederlandsche Bank (the Dutch Central Bank) and registered in the Netherlands under the company
number 34259528. The Credit Institution license includes the ability to provide cross-border services in theEuropean Economic Area. Adyen shares are traded on Euronext Amsterdam, where the Company is part of
the AEX Index and has a credit rating of A- per S&P rating agency.
Adyen was granted a license to operate as a US Federal Foreign Branch in San Francisco, California by the
Office of the Comptroller of the currency and the Federal Reserve in 2021. As a result, Adyen Inc. was
liquidated, which was finalized in 2022, and all the assets/liabilities have been transferred to the newly setup branch of Adyen N.V. in San Francisco effective January 1, 2022.

1.

Basis of preparation

The consolidated financial statements have been prepared on a going concern basis in accordance with
International Financial Reporting Standards and IFRS IC interpretations as endorsed by the European Union(EU-IFRS) and in accordance with sub articles 8 and 9 of article 362, Book 2 of the Dutch Civil Code. The
financial statements comply with IFRS as issued by the International Accounting Standards Board (IASB). Allamounts in the notes to the consolidated financial statements are stated in thousands of EUR, unlessotherwise stated.
The impact of the Russia-Ukraine conflict
The Russian invasion of Ukraine in 2022, alongside the imposition of international sanctions, has a pervasive
economic impact. Adyen has assessed that there is no significant impact on the business environment,
liquidity and asset values, giving consideration to higher inflation and rising interest rates, supply chain
disruption, market volatility, payment risk and increasing commodity costs resulting from the invasion.
Therefore, no significant impact is assessed relating to the recognition and measurement of assets andliabilities and presentation and disclosure.

1.1

Consolidation

Accounting policy – Consolidation
The Group controls an entity when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which Adyen acquires control and they are deconsolidated from the date that control ceases.
Inter-company transactions, balances and unrealized gains on transactions between groupcompanies are eliminated.

Adyen N.V. directly or indirectly owns 100% of the shares of, and therefore controls, all entities included inthese consolidated financial statements (refer to note 32 ‘Company - Investments in consolidated
subsidiaries on equity method’ for a full list of entities included in scope of consolidation of these financial
statements).
Adyen has offices in the Netherlands, Brazil, Singapore, United Kingdom, Canada, Australia, Hong Kong,
Mexico, China, India, Japan, and United Arab Emirates, with branches in Germany, France, Sweden, and theUnited States, and representative offices in Belgium, Italy, Poland and Spain. The address of Adyen’s N.V.
registered office is Simon Carmiggeltstraat 6-50, 1011 DJ Amsterdam, the Netherlands.

Annual Report 2022

1.2.

Significant accounting policies, estimates and judgements and new andamended standards Adopted by the Group

The table below provides an overview of the significant and new accounting policies and where they areincluded in these financial statements. It further provides an overview of how accounting policies, together
with significant accounting estimates and judgements, are connected throughout the notes to thesefinancial statements.
In the 2022 financial statements, Adyen adopted amendments issued and made effective from January 1,
2022. Adyen has assessed that the implementation had no impact on its current accounting policies. Detailsof the overall impact assessment of the first-time application on January 1, 2022 of new amendments isdisclosed in note 20.1 ‘New standards adopted by Adyen’.
For the assessment whether a disclosure is relevant to users of these financial statements the following wasconsidered: the amount in question is significant in size and/or nature, importance for understanding theresults of Adyen or explaining the impact of significant changes in Adyen’s business and whether judgement
is involved.

91

Accounting Policies

Significant Accounting Estimates or Judgments

What it is

Accounting policies considered relevant forunderstanding the financial statements, or required tobe disclosed by law or IFRS

These accounting policies involve a higher degree of judgement
or complexity. The estimates applied are more likely to bematerially adjusted due to inaccurate estimates and/or
assumptions applied

Where

Provided per note to the financial statements.
The notes are organized into the following sections:
Key disclosures:provide a breakdown of
individual line items in
the financial
statements that usersof the financial
statements consider
most relevant;

2. Revenue and segment
reporting
3. Inventories
4. Employee benefit
expense (including sharebased payments)
5. Other operating expenses
6. Other financial results
7. Income taxes

Capital, investment
and financial risk
management: key
information relating toAdyen’s capitalmanagement,
explanations regarding
financial instruments
and financial risk
management;

8. Capital management
9. CRR/CRD IV Regulatory
Capital
10. Cash and cash
equivalents
11. Financial instruments
12. Financial risk
management

Other: information on
items required to bedisclosed to becompliant with EUIFRS and other legal
requirements.

Notes 13 – 41

2. Revenue - Principal versus agent for revenue out of settlementfees
7. Income taxes – Recognition of deferred taxes related to sharebased compensation

Annual Report 2022

92

Key Disclosures
In relation to our strategy, as outlined in the Management report, Adyen’s management considers thefollowing disclosures as key in understanding its financial performance or position.

2. Revenue and segment reporting
The Adyen platform integrates the full payments stack (gateway, risk management, processing, acquiringand settlement) with a common back-end infrastructure for authorizing. The company derives revenue fromsettling and processing payments, sales of goods such as the sale of point of sale (POS) terminals, and otherpayment specific services.

Accounting policy – Revenue from contracts with customers
Adyen has the following sources of revenue from contracts with customers:(I) Settlement fees: Fees paid by merchants, usually as percentage of the transaction value,
where Adyen offers acquiring services. These fees are recognized as revenue when apayment transaction has been completed by means of settlement with a merchant.
Settlement fees include interchange and payment network fees and other costs incurredfrom financial institutions. Adyen adopts a transparent pricing model and charges fees tomerchants based on its own incurred costs plus a mark-up for its acquiring services, as
contractually agreed between each merchant and Adyen.
(II) Processing fees: Fixed fee per transaction paid by merchants for the use of Adyen’s
platform and recognized as revenue when transaction is initiated via the Adyen payment
platform.
((III) Sales of goods: Adyen satisfies the performance obligations to deliver the ownership of
the POS terminals and related accessories upon transfer of control of the terminal to themerchant. Adyen considers this performance obligation to be distinct from its payment
services. As a result, the revenues for the sale of POS terminals and related accessories arerecognized at that point in time(IV) Other services: Includes foreign exchange service fees, third party commission andissuing services which are deemed other services - recognized at point in time. Services
transferred over time relate to the amortization of deferred revenue for services provided aspart of the merchant contract (note 2.1) and terminal services fees as part of the unified
commerce offering.

Annual Report 2022

93

The breakdown of revenue from contracts with customers per type of goods or service is as follows:
Types of goods or service

2022

2021

Settlement fees

8,270,626

5,525,079

Processing fees

387,541

289,824

Sales of goods

55,71033,042Other services

221,734

147,474

Total revenue from contracts with customers

8,935,611

5,995,419

Costs incurred from financial institutions(7,550,960)(4,960,951)(54,485)(32,951)

1,330,166

1,001,517

Key Judgement – Principal versus agent for revenue out of settlement fees
Adyen applied its judgment in determining whether it has control of the full payment service
before the service is transferred to its merchants, and, in consequence, whether theCompany is acting as agent or principal in relation to the settlement fees charged tomerchants. This judgement is supported by existing facts and circumstances during the year
up to 31 December 2022, not limited to Adyen’s financial risk exposure as acquirer in its
relationship with third parties and merchants.

Net revenue

Adyen contracts with third parties (financial institutions and network scheme providers) thatprovide services to enable Adyen’s payment processing and acquiring services tomerchants, for which interchange and payment network fees are charged to Adyen. Adyen
adopts a transparent pricing model and charges fees to merchants based on its own
incurred costs plus a mark-up.

Adyen’s total revenue contains scheme fees, interchange and mark-up for which Adyen acts as a principal.
The Management Board monitors net revenue (net of interchange and scheme fees (costs incurred fromfinancial institutions), and costs of goods sold) as a performance indicator. Adyen considers net revenue toprovide additional insight to its users to evaluate the nature and financial effects of the business activities inwhich it engages and the economic environments in which it operates. Net revenue is a non-IFRS measure –refer to note 2.4 for further explanation on the non-IFRS measures reported by Adyen.

Based on existing terms and conditions, Adyen is considered primarily responsible forfulfilling the promise to provide payment transaction services. Although Adyen contracts withthird parties to facilitate the interchange of funds between the issuer and merchant, Adyen isultimately responsible for ensuring that the services are performed and are acceptable to themerchant. Adyen is responsible for its contractual terms with merchants. Adyen is thus
considered to control the full payment service before the service is transferred to merchants.

Costs of goods soldNet revenue

Settlement fees – Adyen is the principal
For all payment processing services Adyen provides to the merchants as an acquirer, it
retains the exposure to financial institutions and payment networks for the interchange andpayment network fees, other costs incurred from financial institutions as well as a mark-up
charged by Adyen. As such Adyen concluded it acts as Principal for the aforementioned fees
and as such are recognized based on this conclusion.

Annual Report 2022

94

Element

Accounting treatment

Note reference

Contract assets

Contract assets are initially recognized at cost on the balance sheet, and subsequently
amortized against revenue (settlement fees) in profit or loss on a pro rata basis in linewith the fulfilment of the expected payment services performance obligation. The
contract assets are separated into a monetary and non-monetary component and areassessed for impairment annually with reference to the remaining (net) benefits fromthe long-term merchant contract.

2.2.Contract assets

Accounting policy – Revenue recognized at a point in time and over time
All processing and settlement fees, together with the sales of goods are recognized asrevenue when the services are rendered or the ownership of the goods is transferred (‘goods
and services transferred at a point in time’). In addition to the aforementioned revenue
streams, Adyen provides terminal replacement services included in ‘other services’, for whichrevenue is recognized over a period of time. Adyen recognizes revenue for these services ona straight-line basis over the contract term.

The USD "monetary item" is translated at each balance sheet date at the EUR/USD
spot rate and is assessed for impairment under the expected credit loss model.
Exchange movements on the "monetary item" is recognized in profit or loss (otherfinancial results). The monetary component has been fully repaid and amortized in
2022.
Settled by:

The breakdown of revenue from contracts with customers based on timing is as follows:
Timing of revenue recognition
Goods and services transferred at a point in time
Services transferred over time
Total revenue from contracts with customers

2.1.

2022

2021

8,923,199

5,985,474

12,412

9,945

8,935,611

5,995,419

Long-term contract

In 2018 Adyen entered into a long-term contract with eBay for the provision of payment services that
resulted in the initial recognition of contract assets settled with a cash advance and issue of warrants over
Adyen’s shares. The following accounting elements were recognized as a result of the contractual
agreements.

1. Cash advanceCash consideration is treated as part of incremental costs of obtaining the merchantcontract ('contract assets').

2.2. Contract assets

2. Warrants

Derivative liabilities relating to the warrants are recognized initially at fair value and aresubsequently stated on the balance sheet at fair value, with movements recognized in
profit or loss (other financial results). The warrants vest in four tranches, each linked toa milestone of processed payments volume. Each milestone is deemed achieved at
the moment that the processed merchant volume exceeds the milestone amount in asingle calendar year following the issue date (January 31, 2018). Only two warrant
tranches may vest in a single calendar year, and upon vesting, each entitles thewarrant holder to acquire 1.25% of Adyen's issue-date diluted share volume at any
time prior to the warrant expiration date (January 31, 2025).

2.2. Contract assets
8. Capital management
11. Financial instruments
23. Share information

After the IPO (on June 13, 2018), the derivative liabilities relating to tranches 1 and 2
were reclassified as a warrant reserve in equity in the amount of EUR 68.2 million.
During 2021, the first tranche milestone was met, vested, and the related warrant was
subsequently exercised by eBay. A total of 403,724 shares were issued to eBay at€240 per share. The gross equity balance relating to tranche 1 and related deferred
tax were transferred from ‘warrant reserve’ to ‘share premium’ and ‘retained earnings’,
respectively. The dilutive effect of the exercised warrant in 2021 (tranche 1) wasreflected in the shares outstanding at year-end - refer to note 23 ‘Share information’.
There were no further tranche milestones met during 2022. As per December 31,
2022, the ‘warrant reserve’ was carried at historic cost (EUR 34.1 million (net ofdeferred tax)) while the derivative liabilities relating to tranches 3 and 4 were carried atfair value on Adyen's balance sheet.

Annual Report 2022

2.2.

Contract assets

Accounting policy – Contract assets
Recognition and measurement
If an incurred fee or commission is not paid in connection with any distinct goods or services,it should be considered as a reduction of the total transaction price of a contract with acustomer. As a result, this incurred fee or commission should be deducted from revenue
when revenue is recognized for providing the services to the customer. These considerations
are recognized as contract assets in the balance sheet.
Amortization and Impairment
The contract assets are assessed for impairment annually with reference to the remaining(net) benefits from the long-term merchant contract. An impairment loss is recognized if thecarrying amount of the contract assets are higher than the estimated remaining benefits inthe merchant contract, net of directly attributable costs to fulfil the remaining payment
service obligations. The contract assets are amortized and booked to revenue (settlementfees) on a pro rata basis in line with the fulfilment of the expected payment services
performance obligation.
For the monetary component of the contract asset, Adyen applies the IFRS 9 simplified
approach to measuring expected credit losses which uses a lifetime expected loss allowance
for all trade receivables, other financial assets measured at amortized cost and the contract
asset.

95

Management derived its best estimate of the future (net) revenue from expected payments volumes and fees
determined in the merchant contract, net of directly attributable costs to fulfil the remaining payment service
obligations. The contract assets were not impaired at December 31, 2022 and 2021 as the remaining
estimated (net) benefits from the merchant contract exceeded the contract assets balance at year-end.
In addition to the long-term contract with eBay (note 2.1), during 2021 and 2022, Adyen capitalized contract
costs (‘other contract assets’) relating to multi-year service contracts with its merchants. These costs mainly
relate to integration and development fees that are directly incremental to obtain the multi-year contracts
and do not represent separate performance obligations. Adyen will amortize these costs against revenue(settlement fees) on a pro rata basis as the related revenue is recognized.
The following table summarizes the movement in the contract assets balance:
Contract assets
Balance - 1 January, 2021

Monetary
component

Non-monetarycomponent

Other contract
assetsTotal contract
assets47,65776,456—

124,113

8,946

8,946

(42,112)(14,395)(637)(57,144)

62,061

8,309

79,341

1,791

1,791

(20,397)(3,063)(32,554)(89)

34

41,664

6,948

48,612

Movements:
Additions
Amortization for the year
Exchange differences

3,426

Balance - December 31, 2021

8,971

3,426

Movements:
Additions
Amortization for the year
Exchange differences (note 6)
Balance - December 31, 2022

(9,094)123—

Annual Report 2022

2.3.

Segment reporting

96

2022

2021

Europe, the Middle East, and Africa (EMEA)

3,430,434

2,351,662

North America

4,289,241

2,899,788

Accounting policy – Segment Reporting

Asia-Pacific784,189

436,185

An operating segment is a component of an entity that engages in business activities fromwhich it earns revenues and incurs expenses. The operating results of each segment are
regularly reviewed by the entity’s Chief Operating Decision Maker (“CODM”) in order tomake decisions about resources to be allocated to the segment and assess its performanceand for which discrete financial information is available.

Latin America

431,747

307,784

8,935,611

5,995,419

Adyen has identified the Management Board as the CODM who is responsible for theassessment of the allocation of resources and performance of the operating segments
identified. Based on Adyen’s business and operating model, Adyen has identified a single
operating and reporting segment: ‘Payment services’.
Payment services
The total revenue earned from Adyen’s only operating and reporting segment contains
settlement fees, processing fees, other fees and sales of goods. The Management Board
monitors net revenue (net of interchange, scheme fees and costs of goods sold) as aperformance indicator. As a result, Adyen considers net revenue to provide insight to its
users to evaluate the nature and financial effects of the business activities in which itengages and the economic environments in which it operates. Net revenue is a non-IFRS
measure – refer to note 2.4 for further explanation on the non-IFRS measures reported by
Adyen.

As a result of the entity wide disclosure requirements of IFRS 8, a geographical breakdown is provided.
The following table summarizes Adyen’s geographical breakdown of its revenue based on the billing location
as requested by the merchant for the periods indicated.

Revenue - Geographical breakdown

Total revenue from contracts with customers

Large customers
For the year ended December 31, 2022, as measured by revenue, Adyen's top 10 merchants represent 33%
of revenue (2021: 29%). In 2022 and 2021 there were no single customers that on an individual levelaccounted for more than 10% of the total revenue.
For the year ended December 31, 2022, as measured by net revenue, Adyen's top 10 merchants represent
18% of net revenue (2021: 20%). There were no customers with individually more than 10% of the total net
revenue (2021: nil).
Non-current assets
At December 31, 2022 EUR 308 million of the non-current assets were carried by Adyen N.V. (2021: EUR
289 million). Based on the location of the Adyen offices the following geographical breakdown of noncurrent assets is prepared.
Non-current assets - Geographical breakdown

2022

2021

Netherlands

307,911

288,788

Rest of the World

227,304

151,724

Non-current assets

535,215

440,512

Annual Report 2022

2.4.

97

Non-IFRS financial measures

Selected non-IFRS financial measures

Non-IFRS financial measures are disclosed in addition to the statement of comprehensive income, in orderto provide relevant information to better understand underlying business performance of the Company.
Furthermore, Adyen has provided guidance on several of these non-IFRS measures. Adyen reports on thefollowing additional financial measures that are directly derived from the consolidated statement ofcomprehensive income or statement of cash flows:– Net revenue: Revenue net of interchange and scheme fees (costs incurred from financial institutions),
and costs of goods sold;
The following table summarizes Adyen’s geographical breakdown and the year-on-year growth of its net
revenue, based on the billing location as requested by the merchant for the periods indicated.
Net revenue - Geographical breakdown and year-on-year growth594,981

63,61335,011

EBITDA

728,288629,992

1,330,166

1,001,517

Net revenue
EBITDA margin (%)

55%
95,57563%
51,387

3,523

2,959

CapEx

99,09854,346

74%

EBITDA

728,288629,992

48%

CapEx

(99,098)(54,346)

74,69324%

Lease payments(22,144)(9,045)1,001,517

46%

Free cash flow

607,046

566,601

Free cash flow

607,046

566,601

EBITDA

728,288629,992

2021

YoY%

Europe, the Middle East, and Africa (EMEA)

746,82325%

599,332

41%

North America

343,15848%

231,406

Asia-Pacific142,346

48%

96,086

97,83931%

1,330,166

33%– EBITDA: “Income before net finance income/(expense) and income taxes” less “Amortization anddepreciation” on the consolidated statement of comprehensive income;– EBITDA margin: EBITDA as a percentage of net revenue;– CapEx: Capital expenditures consisting of the line items "Purchases of plant and equipment" and"Capitalization of intangible assets" on the consolidated statement of cash flows;– Free cash flow: EBITDA less CapEx and “Lease payments” on the consolidated statement of cash flows;– Free cash flow conversion ratio: free cash flow as a percentage of EBITDA.

664,675

Amortization and depreciation

Capitalization of intangible assets
YoY%

Total net revenue from contracts with customers

2021

Income before net finance income/(expense) and income taxes

Purchases of plant and equipment

2022

Latin America

2022

Free cash flow conversion ratio (%)

83%

90%

Annual Report 2022

98

3. Inventories

4.

Inventories relate to the point of sale (POS) terminals in connection with the roll out of the Unified
Commerce strategy.

Employee benefit expense

The average number of full-time equivalents (FTE) during the year was approximately 2,756 FTE (2021:
1,964 FTE) with main expansions of our operations in the EU and US. From those hired during 2022, 60%
were in tech roles, 25% in commercial roles and 15% in staff or supporting functions.
At the end of the reporting period the regional breakdown of FTE per office is as follows:

Accounting policy – Inventories
Inventories are measured at the lower of cost or net realizable value. The cost of inventories isbased on the first-in, first-out method (FIFO) and includes expenditure incurred in acquiring
the inventories and other costs incurred in bringing them to their existing location andcondition. Net realizable value is defined by Adyen as the estimated re-sell price in theordinary course of business.
The carrying amount of inventories is recognized as an expense when the inventories are
sold or written off, unless they form part of the cost of another asset.

Inventories

2022

2021

Balance - January 1

22,13819,548Purchases during the year (products for resale)

120,893

39,814

Costs of goods sold(54,485)(32,951)

Transfer to contract assets (note 2.2)
Expense recognized in other operating expenses
Balance - December 31—(3,093)(655)(1,180)87,891

22,138During 2022, there were no additions to contract assets (2021: EUR 3,093) related to POS terminals given
as consideration for entering in to multi-year service contracts with its merchants. Adyen recognised
inventory price variances of EUR 655 in ‘Other operating expenses’ (2021: EUR 1,180) related to purchasesof POS terminals from resellers at higher than standard price. Inventory write-offs amounting to EUR 380(2021: EUR 3) were recognised during the year and included in Costs of goods sold.

FTE per office

2022

2021

Amsterdam

1,941

1,262

San Francisco

270

199

São Paulo

146

88

New York

139

72

Singapore

127

101

London

123

98

Paris

75

51

Berlin67

48

Madrid64

32Stockholm

55

33

Other

325

196

Total

3,332

2,180

For representation of the FTE per subsidiary, refer to note 24.2.

Annual Report 2022

4.1.

99

Employee benefits

4.2.

Post-employment benefit obligations
Accounting policy – Post-employment benefit obligations

Accounting policy – Employee benefits

Post-employment benefits are employee benefits (other than termination benefits and shortterm employee benefits) that are payable after the completion of employment.

Employee benefits are all forms of consideration given by an entity in exchange for services
rendered by employees or for the termination of employment, except when they are related
to share-based payments (refer to note 4.3).

The Adyen group companies operate various pension schemes. The entitlement of theemployees under the company’s pension plans are all classified as defined contributionplans.

The employee benefit expense can be specified as follows:
Employee benefits

2022

2021

Salaries and wages

317,817

187,133

Share-based compensation (note 4.3)

10,49912,008

Total wages and salaries

328,316

199,141

Social securities

43,81135,413Pension costs - defined contribution plans

8,460

5,985

Total social securities and pension costs

52,271

41,398Reference is made to note 22 ‘Compensation of key management’ for the remuneration of the Management
Board and Supervisory Board.

For defined contribution plans, the Group pays contributions to publicly or privately
administered pension insurance plans on a mandatory, contractual or voluntary basis. The
Group has no further payment obligations once the contributions have been paid. The
contributions are recognized as employee benefit expense when they are due.

The expected contributions to the pension benefit plans for 2023 are EUR 11,283 (2022: EUR 5,928).

Annual Report 2022

4.3.

100

Share-based payments

I.

Equity-settled option plan

The share-based compensation consists of both equity- and cash-settled compensation expenses. A
specification of the expenses is presented in the following table:
Share-based compensation
Equity-settled

2022

2021

9

292

Cash-settled

10,49011,716

Total share-based compensation

10,49912,008Adyen considers its employees and culture as core to its growth. As part of the total remuneration package,
Adyen has three types of compensation plans:
I.

Equity-settled option plan (granted until 2018);

II.

Cash-settled share-based payment plan (granted from 2018 onwards); andIII.

Depositary receipts award plan for directors and employees (granted from 2018) presented in

Accounting policy – Equity-settled options
Adyen has an option plan for directors and employees. Exercisable options provided
participants the opportunity to obtain Depositary Receipts at an exercise price. The exercise
price of the granted options is equal to the market price of the shares at grant date. Subject
to the employees’ and directors’ continued employment with Adyen, options will vest over a
period of four years. The vesting period starts on the grant date. Subject to the employees’
and directors’ continued employment with Adyen N.V., 25% of the options will vest on thefirst anniversary of the grant date. The remaining 75% of the options will then vest monthly, inequal proportions at the end of each month, over the following 36 months. Options can be
exercised at any time from the vesting date until the 8th anniversary of the grant date. Adyen
has no legal or constructive obligation to repurchase or settle the options in cash.

salaries and wages.
The change in cash-settled share-based compensation expense was mainly linked to the Adyen share pricedecrease over the period.
These plans are described in more detail below:

9

Amounts in this paragraph are not rounded to the nearest thousand.

The maximum aggregate number of Depository Receipts in respect to which options shall be granted is9
1,312,500 . All of the outstanding options are exercisable as at year end (2021: 84,306). The exercise priceof share options outstanding at year end ranges from EUR 11 to EUR 106 (2021: EUR 11 to EUR 106). No
options were granted during the year ended December 31, 2022 and 2021. The fair value of options granted
was determined using the Black-Scholes valuation model as at each respective grant date. At December 31,
2022, the weighted average grant date fair value is equal to EUR 65.42 (2021: EUR 65.42) and the weighted
average remaining expected option life is 1.43 years (2021: 1.22 years).

Annual Report 2022

101

Movements in the number of share options outstanding and their related weighted average exercise prices
are as follows:
2022

Cash-settled share-based payment plan

2021

Weighted average
exercise price (in EUR)
per share option

Number of options(thousands)

Weighted average
exercise price (in EUR)
per share option

Number of options(thousands)

Balance - January 1

53.63

147

39.20

344

Forfeited

72.46

(24)

105.74(1)

Share options
outstanding

II.

Exercised

66.71

(16)

28.05

(196)

Balance - December 31

47.51

107

53.63

147

Accounting policy – Cash-settled share-based payment plan
Adyen has established a cash-settled share-based payment plan (phantom shares) for newly
hired directors and employees as well as for certain current employees. The phantom sharesare granted at the underlying market price of Adyen shares at grant date. Subject to theemployees’ continued employment with Adyen N.V., the phantom shares will vest over a
period of four years from the grant date. 25% of the phantom shares will vest on eachanniversary of the grant date, until all are vested after four years.
Adyen recognizes a cost over the vesting period and a corresponding liability based on themarket price of Adyen’s shares. The liability is measured at fair value through profit or loss
using the market price of Adyen’s shares at balance sheet date with remeasurements oneach reporting date. Changes in the fair value are recognized as “share-based compensation
expense”.
The expense reflecting the recognition of the grant date fair value and changes in fair value ofthe phantom share plan is presented in wages and salaries in the statement ofcomprehensive income.

10

In 2022 a total of 41,206 phantom shares (2021: 8,166) were granted. The share price at December 31,
2022 is EUR 1,288 per phantom share (December 31, 2021: EUR 2,312). The fair value of the liability
recognized resulting from the phantom shares is EUR 15,908 (2021: EUR 13,045).

10

Amounts in this paragraph are not rounded to the nearest thousand.

Annual Report 2022

III.

Depositary receipts award plan

Adyen has granted the possibility to purchase Depositary Receipts at fair market value to directors and to
employees as part of their remuneration from 2018. The underlying shares of Adyen are held by anadministration foundation that in turn issues the Depositary Receipts to the employees. Each Depositary
Receipt issued represents the economic interest of one underlying STAK (“Stichting Administratie Kantoor
Adyen N.V.“) share. The related employee benefits expense for 2022 amounted to EUR 9,973 (2021: EUR
3,348) and is presented in wages and salaries. The fair value of the liability recognized resulting from theplan is EUR 484 (2021: EUR 163), and the plan resulted in a total increase of EUR 8,186 (2021: 2,552)
recognized in share capital and share premium during the year. There is a lock-up period but no vesting
condition attached to the Depositary Receipts award plan. Thus there was no revised estimate of thenumber of Depositary Receipts expected to vest or relating income statement impact in 2022.

102

5. Other operating expenses

Accounting policy – Operating expenses
Operating expenses are recognized in the period when they occur.

The other operating expenses can be specified as follows:
Other operating expenses

2022

2021

Sales and marketing costs

55,63036,384

Travel and other staff expenses

44,086

10,102

IT costs

33,08623,190Advisory costs

27,722

15,711

Contractor costs

13,48910,384

Housing costs

10,914

6,427

Office costs

8,186

4,308

Miscellaneous operating expenses

14,822

24,7301% for the UN SDGs

13,302—

Total other operating expenses

221,237

131,236

Travel and other staff expenses increased during 2022, as a result of a reduction in lockdown restrictions
across the globe and resurgence of business travel. Advisory costs increased mainly related to hiring costs
linked to the increase in FTE. As part of Adyen's sustainability efforts, 1% of net revenue is pledged towards
UN Sustainable Development Goals (UN SDGs). In addition, sales and marketing costs increased as a resultof our increased investment in brand awareness on a global level and the ability to host events to meet ourcustomers in-person.

Annual Report 2022

6.

103

Other financial results

The other financial results can be broken down in the following categories:
Other financial results

2022

2021

Exchange gains/(losses) (note 6.1)

(8,643)

11,37546,700(13,300)

(153)

(322)

—

(138)

37,904(2,385)

Fair value re-measurement of financial instruments:
Derivative liabilities (note 6.2)
Other financial assets at FVPL (note 6.3)
Loss on redemption of other financial assets at amortized cost
Total other financial results

6.1.

Exchange gains/(losses)

The exchange gains/(losses) recognized during the year relate to realized and unrealized translationdifferences on monetary assets and liabilities. The exchange losses during 2022 mainly relate to Adyen’s
foreign-denominated cash balances and proceeds received on disposal of Visa Inc. common stock of €864.
This was partially set-off by exchange gains from other financial assets at FVPL of € 2,183 (refer to note 6.3‘Other financial assets at fair value through profit or loss (‘FVPL’) (Visa Inc. preferred shares))’.

Accounting policy – Functional currency and foreign currency translation
The functional currency of Adyen N.V. is the Euro as the Euro area is the primary economic
environment in which Adyen operates. The financial statements of entities that have afunctional currency different from Adyen N.V. (“foreign operations”) are translated into Euros
as follows:• Assets, equity and liabilities – at the closing rate at the date of the statement of financial
position;• Income and expenses – at the average rate of the period (as this is considered areasonable approximation of the actual rates prevailing at the transaction dates).
Foreign currency differences are recognized in other comprehensive income and arepresented within equity in the legal reserves.
Monetary items
Monetary items are units of currency held and assets and liabilities to be received or paid in a
fixed or determinable number of units of currency. Monetary assets and liabilities
denominated in foreign currencies are retranslated into Adyen’s functional currency at therates prevailing on the balance sheet date. Exchange rate differences resulting from thesettlement of such transactions and from the translation at year-end exchange rates ofmonetary assets and liabilities denominated in foreign currencies are recognized in thestatement of comprehensive income within “other financial results”.
Non-monetary items
Non-monetary items that are measured in terms of historical cost in a foreign currency aretranslated using the exchange rate at the date of the transaction. Non-monetary assets andliabilities that are measured at fair value through profit or loss are retranslated at the datethat the fair value is determined.

Annual Report 2022

6.2.

Derivative liabilities

As part of the merchant contract referred to in note 2.1, Adyen recognized derivative liabilities measured atfair value through profit or loss. The nature of the derivative liabilities is described in more detail in note 11‘Financial instruments’. For 2022, a EUR 46,700 gain (2021: EUR 13,300 loss) is recognized in ‘otherfinancial results’ due to the re-measurement of the fair value of the derivative liabilities. The change in fairvalue of the derivative liabilities is mainly linked to the Adyen share price decrease and revision of valuation
input related to time to maturity.

6.3.

Other financial assets at fair value through profit or loss (‘FVPL’) (Visa Inc.
preferred shares)

Adyen has classified the convertible preferred Visa Inc. shares as a financial instrument at fair value throughprofit or loss. For 2022, the effect on other financial results is a net gain of EUR 2,030 (2021: EUR 1,400)
relating to an exchange gain of EUR 2,183 (2021: EUR 1,722) and fair value loss of EUR 153 (2021: EUR(322)). Refer to note 11 ‘Financial instruments’ for more detail on the other financial assets at FVPL.

104

Annual Report 2022

105

7.

Income taxes

Effective tax calculation

7.1.

Income tax expense

Statutory tax rate in the Netherlands (%)

Income before income taxes

Income taxes based on statutory tax rate in the Netherlands

Accounting policy – Current income tax expense
Current income tax expense is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted, at the end of the reporting period, and any
adjustment to tax payable in respect of previous years.

2021
580,847

25.8%

25%

185,744

145,212(37,306)(31,163)7,362(3,128)155,800

111,130

Tax effects of:Innovation box
Change in tax rate
Other adjustments (such as prior year and non-deductible amounts)
Effective tax amountThe tax on Adyen’s income before income taxes differs from the amount that would arise using the statutory
tax rate in the Netherlands. The effective tax rate (“ETR”) of Adyen for the year ended December 31, 2022 is
21.64% (2021: 19.13%) which differs from the statutory headline corporate tax rate in the Netherlands of
25.8% (2021: 25%) due to the application of the innovation box, partially offset by the tax rate differences on
foreign operations and other adjustments (such as non-deductible expenses). The innovation box is a Dutch
tax incentive whereby a portion of qualifying profits derived from innovative activities are taxed at a lower
rate than the headline corporate tax rate in the Netherlands. Further detail on Adyen’s total tax contribution
and country-by country reporting are included in note 24.

2022
719,939

209

The breakdown between current and deferred income taxes for the year ended December 31, 2022 and2021 is disclosed below:
Income taxes
Current income tax expense
Deferred income tax expense/(income)
Total income taxes

2022

2021

153,656

126,898

2,144(15,768)

155,800

111,130

The breakdown between current income tax receivables and payables as at December 31, 2022 and 2021 isdisclosed below:
Current income tax receivables/(payables)

2022

2021

Current income tax receivables

12,445

6,761

Current income tax payables(4,441)(9,879)Annual Report 2022

7.2.

Deferred income taxes

Accounting policy – Deferred income taxes
Deferred income taxes arise, in general, as a result of temporary differences between tax andcommercial accounting treatment. Deferred income tax assets and liabilities are measured at
the tax rates that are expected to apply in the year when the asset is realized or the liability issettled. The applied rates are based on tax rates and tax laws that have been enacted or
substantively enacted at the balance sheet date.
In some tax jurisdictions, Adyen is granted a tax deduction (i.e. an amount that is deductible
in determining taxable profit) that relates to remuneration settled by options over Adyen’s
shares. The amount of that tax deduction may differ from the related cumulative
remuneration expense, and may arise in a later accounting period. In the event where tax
deductions exceed the remuneration expense, Adyen recognizes a deferred tax position with
the impact presented directly in equity.
Deferred tax assets are recognized by Adyen to the extent that it is probable that futuretaxable profits will be available against which they can be utilized.
In connection with the long-term contracts (refer to note 2.1 ‘Long-term merchant contract’),Adyen has recognized derivative liabilities and contract assets. The deferred tax positions onthese items are in-substance linked to the merchant contract, and are presented on a grossbasis in the balance sheet.

106

The below movement schedule includes the changes in deferred taxes with the respective impact in equity
and profit or loss:
Recognized in Effects of foreign
equityexchange

Balance
December 31,
2021

Balance January
1, 2021

Recognized in
Profit or Loss

Derivative liabilities

17,1003,979

Windfall tax benefit

43,934

Tax losses carried forward

43,085(939)

Temporary differences

2,218

5,205

106,337

8,245

Other financial assets at FVPL

(4,527)

4,527—

Contract assets(19,114)3,104(16,010)Deferred tax assets:

Total deferred tax assets

21,079(33,384)

2,258

12,80838,932

5,394

86,472
7,423

5,548

7,652

127,782

Deferred tax liabilities:

Temporary differences

(283)

(108)

Total deferred tax liabilities(23,924)

7,523

—

—

(16,401)(391)

Net deferred tax assets / (liabilities)

82,413

15,768

5,548

7,652

111,381Annual Report 2022

107

Balance January
1, 2022

Recognized in
Profit or Loss

Recognized in Effects of foreign
equityexchange

Balance
December 31,
2022

Deferred tax assets:
Derivative liabilities

21,079Windfall tax benefit

12,808Tax losses carried forward

86,472

Temporary differences(12,049)

1,737

9,030
(4,990)(2,493)

5,325

34,149(3,521)

118,837

29,159(6,014)

143,727

7,423

3,112

127,782(7,200)———(16,010)

5,261(10,749)

(391)

(205)

(596)

Total deferred tax liabilities(16,401)

5,056

—

—

(11,345)

Net deferred tax assets

111,381(2,144)29,159(6,014)132,382

Total deferred tax assets

10,535

Deferred tax liabilities:
Other financial assets at FVPL
Contract assets
Temporary differences

I.

Deferred tax assets

The deferred tax assets include an amount of EUR 118,837 (2021: EUR 86,472) relating to net operating
losses carried forward. The increase in this balance relates primarily to share-based compensation excess
deduction from exercised options taken in the United States, explained in more detail later in this section.
Further, EUR 9,030 (2021: EUR 21,079) of the deferred tax assets relates to the recognized derivative
liabilities. The decrease in the related deferred tax asset is caused by the decrease in fair value of thederivative liability (refer to note 11 for further details).
The deferred tax liabilities consist mainly of the deferred tax on the non-monetary part of the contract assets(December 31, 2022: EUR 10,749; December 31, 2021: EUR 16,010).
The deferred tax assets and liabilities are presented as non-current on the Adyen balance sheet.

Significant accounting estimate: Deferred tax assets linked to windfall benefits
Deferred tax assets include tax losses carried forward at a Federal and State level relating tooptions exercised in the United States and United Kingdom (December 31, 2022: EUR
115,121; December 31, 2021: EUR 86,277) and windfall benefits relating to options granted
and vested, however not yet exercised (December 31, 2022: EUR 5,325; December 31, 2021:
12,808). EUR 6,180 of the tax losses carried forward was utilised during the period andrecognised in the share premium reserve (2021: nil).
During 2022, Adyen has reassessed the recoverability of deferred tax assets on windfall
benefits linked to the share-based compensation plan in the United States and United
Kingdom. Adyen continues to recognize deferred tax assets that will be realized against
future profits, on a going concern basis.
• The United Kingdom windfall benefit continues to be recognized as these carry forward
losses have no expiration date.
• The United States Federal Tax windfall benefit continues to be recognized, as thesecarry forward losses on a Federal level have no expiration date.
In addition, during 2022, Adyen reassessed its position relating to the recoverability ofdeferred tax assets relating to the State net operating losses in the United States, which
resulted in recognizing EUR 27,834 of previously unrecognized tax losses. This was the resultof obtaining Federal Foreign Branch and acquiring licenses, leading to increasedtransactions recorded on a local level and an expectation that tax losses will be utilizedagainst future taxable income.
The recoverability of the deferred tax asset in the US is not impacted by the liquidation ofAdyen Inc, finalised during 2022, as the deferred tax asset has been transferred to the newly
set-up branch of Adyen N.V. in San Francisco effective January 1, 2022, and is recoverable
against the future taxable profits of the branch.
This windfall benefit has been recognized assuming all options granted to date will be
exercised within the 8th anniversary of the grant date (grant date + 7 years).

Annual Report 2022

8.

Capital management

Adyen’s objective when managing capital is to safeguard its ability to continue as a going concern.
Furthermore, Adyen ensures that it meets regulatory capital requirements at all times.

Accounting policy – Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue ofequity instruments are shown in equity as a deduction, net of tax, from the proceeds.

108

Derivative liabilities and Warrant reserve
In relation to the warrants granted to eBay (refer to note 2.1 ‘Long-term merchant contract’), as per
December 31, 2022, Adyen has classified the first two tranches as an equity instrument, with the grossequity balance relating to tranche 1 (vested and exercised in 2021) presented within ‘share premium’, andtranche 2 (unvested) presented within ‘warrant reserve’. The derivative liabilities relating to the first two
tranches were measured at fair value through profit or loss before being de-recognized and reclassified toequity. Equity instruments are not subsequently remeasured to fair value.
The remaining derivative liabilities relating to tranches 3 and 4 are measured at fair value with a closingbalance of EUR 35,000 as per end of December 2022 (2021: EUR 81,700). Fair value movements arepresented within ‘other financial results’ in profit or loss. Reference is made to note 11 ‘Financial
Instruments’ for further details on the accounting treatment of the derivative liabilities.

9.
11

In 2022, 29,213 (2021: 600,850) additional shares were issued. The additional issued shares were a resultof exercises of options granted to employees and share issuance relating to the Depositary receipts award
plan (refer to note 4.3 for further information) (2021: as well as the exercise of the warrant linked to tranche 1of the long-term merchant contract (note 2.1)). The paid up and called share capital increased to EUR
309,863 (2021: EUR 309,571) resulting in a total of 30,986,299 (2021: 30,957,086) ordinary shares (nominal
value EUR 0.01 per share). In 2022, the total number of authorized shares was 80,000,000 (2021:
80,000,000).
The following reserves are considered to be non-distributable: legal reserves (in accordance with Dutch
Law), share-based payment reserve, warrant reserve, and total comprehensive income for the current period(in accordance with regulatory capital requirements). The total of distributable reserves amounts to EUR
1,691,427 (2021: EUR 1,203,240). The legal reserves restricted for distribution in accordance with Dutch
Law amounts to EUR 18,518 (2021: 32,244) refer to company statement of changes in equity.
Net income is added to retained earnings reserve and the current dividend policy is not to pay dividends, as
retained earnings are used to support and finance the growth strategy of the Company.

11

Amounts in this paragraph are not rounded to the nearest EUR thousand.

CRR/CRD IV Regulatory Capital

The following table displays the composition of regulatory capital as at December 31, 2022. The regulatory
capital is based on the CRR/CRD IV scope of consolidation, which is the same as the IFRS scope of
consolidation.
Own funds

2022

2021

EU-IFRS equity as reported in consolidated balance sheet

2,412,118

1,810,414

Net profit not included in CET1 capital (H2 2022 not yet eligible)(282,002)(264,884)

Warrant reserve(25,575)(25,575)

Intangible assets(8,140)(9,841)(124,162)(99,084)

(47)

(104)

1,972,192

1,410,926

Regulatory adjustments:

Deferred tax assets that rely on future profitability
Prudent valuation
Total own funds

Annual Report 2022

109

The increase in total own funds in 2022 mainly relates to the additions of consolidated net profit (full year
2021 and H1 2022).

10.

Cash and cash equivalents

to deposits required under the US Federal Foreign Branch license as well as deposits held as guarantee forleased offices. The restricted cash is readily convertible and therefore classified as cash and cash
equivalents. Cash held at banks, other than central banks earned interest in the amount of EUR 17,461
during the year (December 31, 2021: EUR 904), increasing from 2021 due to rising interest rates in apositive interest rate environment .
Adyen’s cash held at banks, other than central banks is exposed to credit risk with financial institution
counterparties. Adyen actively manages concentration risk and it is Adyen’s policy that all commercial banks
where cash and cash equivalents are held have a credit rating in the A categories of Moody’s/S&P. In
situations (i.e. countries) where a partner with this credit quality cannot be found, approval must be obtained
from the Risk Committee. No defaults occurred during the year and management does not expect any
losses from non-performance by these counterparties.

Accounting policy – Cash and cash equivalents
Adyen’s cash and cash equivalents are measured at amortized cost and are included incurrent assets due to their short-term nature.
In the consolidated statement of cash flows, cash and cash equivalents includes cash in
hand, deposits held at call with banks, other short-term highly liquid investments withoriginal maturities of three months or less and bank overdrafts. Adyen presents interest paid/
received and dividends received as operating cash flows. Due to the short duration of the
cash and cash equivalents (less than 3 months), the fair value approximates the
carrying value.

11.

Financial instruments

Accounting policy – Financial instruments
Classification

Cash and cash equivalents

Adyen classifies its financial assets in the following measurement categories, those to bemeasured:

2022

2021

Cash held at central banks

4,407,540

2,565,875• subsequently at fair value through profit or loss (‘FVPL’), andCash held at banks, other than central banks

2,114,805

2,050,219• at amortized cost.

Total

6,522,345

4,616,094

The classification depends on Adyen’s business model for managing the financial assets andthe contractual terms of the cash flows. For assets measured at FVPL, gains and losses arerecorded in profit or loss.

The cash held at central banks incurred negative interest in the amount of EUR 7,456 (2021: EUR 10,536)
for the period up to October 2022, after which positive interest in the amount of EUR 11,564 was earned,
due to increased interest rates. Had the interest rate at central banks been 0.1% higher/(lower), the interest
earned on cash held at central banks would increase/(decrease) by EUR 4,408 (2021: EUR 2,566 increase/(decrease) in interest incurred).
Of the cash held at banks, other than central banks, EUR 68,564 (December 31, 2021: EUR 19,654) arerestricted and are therefore not available for general use by the Company. The restricted cash mainly relates

Annual Report 2022

110

Financial liabilities

Impairment

Adyen initially classifies financial instruments as a liability or equity instrument based on theterms of the contractual arrangement, and subsequently reassesses the accounting
treatment on changes in circumstances. The derivative liabilities are classified as financial
liabilities measured at fair value through profit or loss (refer to note 2.1 'Long-term merchantcontract'). The derivative liabilities may be derecognized or classified as equity instruments
contingent on uncertain future events linked to milestones of processed payments volume
with eBay.

Adyen assesses on a forward-looking basis the expected credit losses associated with its
debt instruments carried at amortized cost. The impairment methodology applied depends
on whether there has been a significant increase in credit risk. For trade receivables andcontract assets, the group applies the simplified approach, which requires expected lifetime
losses to be recognized from initial recognition of the assets.

Measurement
At initial recognition, Adyen measures a financial asset at its fair value plus, in the case of afinancial asset not at FVPL, transaction costs that are directly attributable to the acquisitionof the financial asset.Transaction costs of financial assets carried at FVPL are expensed in
profit or loss. Financial assets with embedded derivatives are considered in their entirety
when determining whether their cash flows are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on Adyen’s business model for
managing the asset and the cash flow characteristics of the asset. Adyen measures its debt
instruments as follows:• Amortized cost: Held within a business model whose objective is to hold financial assets inorder to collect contractual cash flows, where those cash flows represent solely payments
of principal and interest. Interest income from these financial assets is included in financeincome using the effective interest rate method.
Financial assets and liabilities at fair value through profit or loss
• Assets that do not meet the criteria for amortized cost or fair value through othercomprehensive income (‘FVOCI’) are measured at FVPL. A gain or loss is subsequently
measured at FVPL and gains or losses are recognized in profit or loss and presented net
within other financial results for the period in which it arises.

Instruments in scope on the balance sheet of Adyen include: cash and cash equivalents,
receivables from merchants and financial institutions, trade receivables, other receivables
and contract asset classified as monetary item. The expected credit loss model is designed
to measure the pattern of improvement or deterioration in the credit quality of the debt
instruments. The measurement basis consists of two categories:• Category 1: Expected credit losses (12 months)• Category 2: Lifetime expected credit losses
The Adyen Treasury policy only allows exposures to financial institutions with sound credit
quality rating and limits the exposure to a maximum amount. As a result, Adyen applies the
low credit risk simplification; hence all assets are considered to be in stage 1 and a 12-month
expected credit loss is applied.
Lifetime expected credit losses are applied for trade and other receivables. For these
instruments operational simplifications can be applied; hence it eliminates the need to
calculate a 12-month expected credit losses or to measure increases in credit risk for the
instrument. The loss allowance for trade receivables are measured at initial recognition, andthroughout the total duration, equal to lifetime expected credit losses.
As the average duration of the instruments in scope for impairment calculation is below 10
days, no forward-looking elements are included in the expected credit loss assessment.
In the event of no reasonable expectation of recovering the financial asset, the Adyen Credit
Committee decides on whether a write-off should take place for the entirety or portion of theoutstanding amount.

Annual Report 2022

111

Financial instruments

Fair value measurement
For financial instruments measured at fair value, Adyen categorizes the fair value
measurement in its entirety in the same level of the fair value hierarchy as the lowest level
input that is significant to the entire measurement. Adyen categorizes fair valuation inputs on
the following basis:

Note

Measurement
policy2022

2021

FVPL – level 2

12,26422,504

Financial assets:
Other financial assets at FVPL
Contract assets – monetary component

2.2

Amortized cost

—

8,971

Receivables from merchants and financial institutions

15

Amortized cost

369,104

633,249• Level 1: The fair value of financial instruments traded in active markets is based on quoted
market prices at the end of the reporting period.

Trade and other receivables

15

Amortized cost

89,35056,852

Cash and cash equivalents

10

Amortized cost

6,522,345

4,616,094• Level 2: The fair value of financial instruments that are not traded in an active market isdetermined using valuation techniques which maximise the use of observable market
data and rely as little as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in level 2.

Total

6,993,063

5,337,670• Level 3: If one or more of the significant inputs is not based on observable market data,
the instrument is included in level 3.

Financial liabilities:
Derivative liabilities

FVPL – level 2

35,00081,700

Lease liability

17

Amortized cost

203,073

142,964

Payable to merchants and financial institutions

16

Amortized cost

4,795,804

3,608,531

Trade and other payables

16

Amortized cost

147,827

100,116

5,181,704

3,933,311

Total

The financial instruments as at each balance sheet date are summarized in the table below. For thosemeasured at fair value, to provide an indication about the reliability of the inputs used in determining fairvalue, Adyen has classified its financial instruments into the levels described in the accounting policies
above. All other financial instruments on the balance sheet meet the requirements of the contractual cash
flow and characteristics test to be measured at amortized cost. Furthermore, the classification is based on
the business model test. As a result, the classification is consistent with how the business is managed and isin line with risk management strategies and how this is reported to key management. Adyen’s exposure tovarious risks associated with the financial instruments is discussed in note 12.

Other financial assets at FVPL (Visa Inc. preferred shares)
Adyen has recognized and classified the convertible (‘Series C’) preferred Visa Inc. shares within the FVPL
category. The fair value of the level 2 preferred shares in Visa Inc. is based on the quoted price of Visa Inc.
common shares, adjusted for lack of marketability, multiplied by an initial conversion rate of preferredshares into common shares. The conversion rate may be updated in the future. The adjustment for lack ofmarketability is determined using an option pricing model technique which relies on observable market dataof the underlying Visa Inc. common shares, as well as a presumed length of holding period restriction on thepreferred shares.
During 2022, Visa Inc. effected a partial conversion of the Series C preferred stock into Series A preferredstock. The Series A preferred stock were converted into Visa Inc. common stock and sold prior to the end of2022 at fair market value. The proceeds receivable was recognized within trade and other receivables (EUR
12,271) and an amount of EUR 11,407 was ultimately received during the year ended December 31, 2022.
No conversion of the Series C preferred stock took place in 2021.

Annual Report 2022

The remaining Visa Inc. preferred shares carry the right to receive discretionary dividend payments
presented as ‘other income’ in the statement of comprehensive income (2022: EUR 44; 2021: EUR 130).
Derivative liabilities (warrants)
As part of the long-term contract previously mentioned (refer to note 2.1 ‘Long-term merchant contract’),Adyen recognized derivative liabilities measured at fair value through profit or loss, classified as a level 2 fairvalue instrument.
The derivative liabilities are valued using a Black-Scholes option pricing model (“OPM”) technique. The
OPM takes into consideration various observable market and contractual data as well as management
estimates, including the probability of vesting based on achievement of milestones in line with the fulfilmentof the payment services to be provided to the merchant. A sensitivity analysis to Adyen’s share price isprovided in note 12 ‘Financial risk management’.
The change in fair value of the derivative liabilities is mainly linked to the Adyen share price decrease andrevision of valuation input related to time to maturity. Refer to note 6 ‘Other financial results’ for therecognition of the movement of the derivative liabilities.

112

Annual Report 2022

12.

113

Financial risk management

Adyen’s activities bring exposure to a variety of financial risks. Risk management is the responsibility ofAdyen’s management. Adyen applies a risk-aware but not unduly risk-averse approach towards risk
management. Adyen’s Integral Risk Management Framework (IRMF), which is based on COSO’s Enterprise
Risk Management (ERM) model, defines a uniform and systematic approach for managing risks across
Adyen. The main sources of financial risk to Adyen are considered in the table below:

Source of risk and risk
description

Risk mitigation

Liquidity risk

Liquidity risk is the risk that Adyen
is not able to meet its short-term
payment obligations.

Remaining risk
MinimalAdyen actively monitors its liquidity risk. The majority of the balance
sheet, for both assets and liabilities not related to merchant funds, has amaturity date of less than three months on an undiscounted contractual
basis. The portion of the balance sheet that is merchant related has avery short maturity, the remaining balances with a different maturity
date (as mentioned specifically in the notes of these financial
statements) are not considered material, including lease liabilities (refer
to note 17).
The balance sheet positions related to merchant fund flows are
considered not to impose liquidity risk as these cash balances andrelated payables are interrelated from a liquidity perspective. For the
majority of its merchants, Adyen only settles merchant payables after
the cash is collected from the card schemes. Accelerated pay-out
schedules for individual merchants are more than balanced by liquidityfrom merchants with default pay-out schedules and liquidity via
settlement by payment methods.
Adyen holds a liquidity buffer based on the Liquidity Coverage Ratio(LCR), accompanied by a survival period metric, to mitigate the residual
risk. As per 18 July 2022 De Nederlandsche Bank and Adyen agreed a
new calculation method for the Liquidity Coverage Ratio on the basis of
the application of Article 26 LCR DA. Adyen reports its LCR on the basisof this revised calculation from July 2022 onwards.
The survival period is determined by dividing the sum of cash and cash
equivalents, receivables from and payables to merchants and financial
institutions, by the total operating expenses for the period. The survival
period is set at a minimum of six months and Adyen's survival period as
at December 31, 2022 is 38 months (2021: 48 months). For short term
liquidity needs Adyen holds additional buffers in a variety of currencies.
Given the maturity of the assets and liabilities on balance sheet, as wellas Adyen's liquidity buffer and survival period metric, the Company has
sufficiently mitigated liquidity risk.

Adyen’s balance sheet
is by nature short-termbasis and in general,
cash is received prior
to payout tomerchants. The
remaining liquidity risk
remains within risk
appetite evidenced bya high LCR.

Source of risk and risk
description

Risk mitigation

Remaining risk

Market risks

MinimalForeign exchange risk

Adyen operates internationallyand is exposed to foreignexchange risk arising from various
currency exposures. Foreignexchange risk arises onrecognized assets and liabilities(principally trade and merchantflow related receivables andpayables) and investments inforeign operations.

Adyen actively manages the foreign exchange risk resulting in limited
exposure to foreign exchange risks. USD is the most significant nonfunctional currency exposure as at December 31, 2022 and 2021. The
following table highlights the net exposure to this monetary item
currency as well as the impact on profit or loss resulting from a 10%
shock (positive or negative) of the respective significant currency
against the Euro. All short-term financial instruments have been
excluded in this exposure given the short period to settle, and hence,
limited foreign exchange risk on these instruments. The decrease in net
exposure is due to the eBay monetary item being fully amortized during2022 (refer to note 2.1 for further details) and sale of Visa Inc. common
stock (refer to note 11 for further details).

CurrencyNet
exposure

10% shock

EUR 32
millionEUR 3.2
millionEUR 12
millionEUR 1.2
million31/12/2021
USD
31/12/2022
USD

The merchant funds have a natural match in currencies between
receivables and payables or a very short duration. This significantly
reduces the foreign exchange risk.
Adyen holds liquidity buffers in various currencies to ensure that it will
be able to meet payment obligations to merchants, thereby mitigating
potential liquidity risk arising from failed FX transactions.

Adyen has limits on its
open FX position per
individual currency andfor Adyen as a whole.
The open positions
including the impact ofan immediate 10%
shock remain within
Adyen’s risk appetite.

Annual Report 2022

Source of risk and risk
description

114

Risk mitigation

Remaining risk

Interest rate risk arising from maturity and tenor mismatches in assets
and liabilities is limited and therefore considered not to be material toAdyen. Some assets are interest bearing, whereas all liabilities are noninterest-bearing. Adyen is not financed with external debt, which
excludes that origin of interest rate risk.
Although significant liabilities towards merchants are present, theseliabilities are non-interest bearing and are settled at short notice.
Moreover, the interest risk on Adyen’s lease liabilities is considered
immaterial due to a fixed discount rate (determined with reference toAdyen’s incremental borrowing rate) and nominal value of outstanding
leases.
Adyen could be considered to be exposed to interest rate risk in thebanking book mainly in relation to its High-Quality Liquid Assets(HQLA): cash held at central banks and money-market funds invested
in US-government instruments. However, majority of cash balances ofAdyen are not significantly exposed to interest rate risk because thatcash is used to settle the current liabilities towards the merchants atshort notice. The nominal values of the money-market funds areminimal as compared to the overall financial instruments balance. In
addition, they are short-term in nature given the nature of underlying
assets, and are held for short-term use (overnight clearing of funds to
avoid excess concentration risk). Overall, this leads to minimal interest
rate risk for Adyen. For the volatility analysis we performed on theinterest rate risk exposure we have on our cash and cash equivalentbalances as per year-end refer to note 10.
For the limited amount of interest-bearing balances that Adyen holds,
negative interest rates applied for the period up to 31 October 2022 on
the DNB Target 2 account, after which positive interest was earned.

Due to the nature of
Adyen’s assets andliabilities, Adyen
experiences low
interest rate risk andmaintains within its risk
appetite.

Interest rate risk

Interest rate risk on financial
instruments is the risk of adverse
impact of movements of theinterest rates of underlying
financial assets.

Source of risk and risk
description

Risk mitigation

Remaining risk

The Group’s exposure to equity securities price risk arises frominvestment in Visa Inc. preferred shares, which are classified in the
consolidated balance sheet as other financial assets at FVPL. The
exposure consists of potential financial losses due to movements in theshare price of Visa Inc.
Two tranches of the long-term merchant contract with eBay areclassified in the balance sheet as derivative liabilities. The exposure isaffected by share price movements of Adyen shares.
Adyen carried out a sensitivity analysis on the Visa Inc. preferred sharesand derivative liabilities, respectively. A 5% increase (decrease) in theunderlying Visa Inc. and Adyen share price would result in the following
increase (decrease) in the balance sheet item and income before
income taxes, all other circumstances considered equal:

The remaining equity
price risk is consideredlimited as Adyen has
no other equity
instruments on its
balance sheet. The risk
appetite on equity pricerisk is low andtherefore the residual
risk is within risk
appetite.

Equity price risk

The risk that the fair value ofequities changes as a result ofchanges in the value of individual
stocks.

Balancesheet item

Carrying
amount5%underlying
share pricemovement

Visa Inc.
preferredsharesEUR 23
millionEUR 1
millionDerivative
liabilities

EUR 82
millionEUR 4
million (5%)

Visa Inc.
preferredsharesEUR 12
millionEUR 1
millionDerivative
liabilities

EUR 35
millionEUR 2
million (5%)

31/12/2021

31/12/2022

In addition, Adyen’s Treasury policy does not allow
purchasing additional equity positions (excluding treasury
shares).

Annual Report 2022

115

Credit risks

MinimalCounterparty default risk

The counterparty default (credit)risk relates to receivables fromfinancial institutions regarding
settled payment transactions.
A default of financial institution
counterparties could have anegative impact on Adyen’s
financial results.

Financial assets subject to credit risk:
Cash and cash equivalents, and receivables from merchants andfinancial institutions:
Adyen’s cash held at banks, other than central banks, is exposed tocredit risk with financial institution counterparties.
The credit risk exposure per financial institution is maximized to 25% of
Adyen’s eligible capital, provided that the financial institution has acredit rating in the A categories of Moody’s/S&P or, if not available, its
equivalent from other rating agencies Adyen has conservativelytranslated this amount into an internal limit of EUR 491 million. For
financial institutions with lower credit ratings, the credit risk per
financial institution is maximized to EUR 200 million under business-asusual conditions. Neither limit was breached during the year ended
December 31, 2022.
As per December 31, 2022, EUR 4,407,540 (2021: EUR 2,565,875)
represents cash held at central banks, representing 68% (2021: 56%) of
the cash and cash equivalents balance.
Excluding the cash held at central banks, Adyen’s top 10 exposures
include balances held at institutions with credit rating A or higher,
representing 91% of the balance of cash and cash equivalents, and 2%of receivables from merchants and financial institutions - combined top
10 exposures: 28% (2021: 63%).
Adyen has exposure to various financial institutions globally. Due toregulatory requirements, in order to mitigate the counterparty exposure
to one of its partners in Brazil, Adyen has setup a collateral account inwhich Brazilian Government bonds were deposited by a partner
financial institution. As per December 31, 2022 the total collateral was
EUR 31,086 (BRL 175,828) (2021: EUR 39,125 (BRL 250,157). Adyen
has no other collateral accounts to meet its other regulatory
requirements.
No defaults of institutions where Adyen had an exposure to occurred
during the year and management does not expect any losses from nonperformance by these counterparties.

The remaining
counterparty credit risk
is low as is Adyen’s risk
appetite. Therefore,
Adyen residual risk on
counterparty default
risk remains within risk
appetite.

Contract assets:
Refer to note 2.2 for detail on credit risk exposure resulting from themonetary component of the contract assets
The remaining financial asset credit risk exposure (such as trade andother receivables) is considered to be limited.

Concentration risk

Risk of losses stemming from onand off-balance sheet positions
arising from concentrations in
exposures to a counterparty or agroup of connected
counterparties.

Concentration risk at Adyen originates primarily at banking partners inlocations where there are no own direct acquiring licenses. In 2021 and
2022, Adyen has reduced its concentration risk in exposures held atfinancial institutions evident by the low proportion of top 10 exposures
within Adyen’s total financial assets. The residual credit risk is mitigatedby the short-term maturity of these balances of less than 7 days. Adyen
actively manages this concentration risk by distributing its cash overbank accounts at multiple banks. If needed, excess cash can be held at
accounts with central banks. Adyen continues to monitor its merchantfunds flows at partner banks that are not settled through accounts heldat the central bank, to ensure compliance with the large exposure limit.

The remaining credit
risk remains is low
where Adyen’s risk
appetite forconcentration risk ismoderate. Therefore,
the residual risk is
within risk appetite.

Annual Report 2022

116

Other disclosures
13.

Intangible assets

Adyen’s intangible assets relate to expenses capitalized on the internal development of the Adyen payment
platform.

Intangible assets

2022

2021

Cost

22,776

19,817

Accumulated amortization

Internally generated software(12,935)(9,847)

Balance - January 1

9,841

9,970

Accounting policy – Intangible assets

Additions

3,523

2,959

The intangible assets are stated at cost less accumulated amortization and include internallygenerated software with finite useful lives. These assets are capitalized and subsequently
amortized on a straight-line basis in the statement of comprehensive income over the periodwith an estimated useful life of 5 years. Intangible assets are tested for impairment whenever
events or changes in circumstances indicate that the carrying amount may not berecoverable. The useful life is assessed on an annual basis.

Amortization for the year

(5,224)(3,088)

Total as at December 31

8,140

9,841

Cost

23,02922,776

Accumulated amortization(14,889)(12,935)

Total as at December 31

8,140

9,841

Annual Report 2022

14.

Plant and equipment

117

Plant and equipment

ComputerHardware andSoftwareLeasehold
Improvements

Other

Total

2021

Accounting policy – Plant and equipment

Cost

59,016

9,060

1,964

70,040

Plant and equipment are stated at cost less accumulated depreciation. Repairs andmaintenance costs are charged to the statement of comprehensive income during the period
in which they are incurred. The major categories of plant and equipment (namely hardware
equipment and leasehold improvements) are assessed to have a useful life of 5 years. Plant
and equipment are depreciated on a straight-line basis and are tested for impairment
whenever events or changes in circumstances indicate that the carrying amount may not berecoverable. The useful life is assessed on an annual basis.

Accumulated depreciation(28,826)(4,045)(1,423)(34,294)

Balance - January 1

30,1905,015

541

35,746

Additions

39,964

9,391

2,032

51,387

Disposals

(19)

—

—

(19)

Computer Hardware and Software additions during the year mainly relate to servers for data centers andequipment such as laptops for employees. Leasehold improvements additions during the year relate to thecapitalization of improvements made to the leased offices in Rokin, Amsterdam. Adyen did not recognize an
impairment loss or reversal of impairment loss of plant and equipment during the year ended December 31,
2022 and 2021.

Depreciation for the year

(13,233)(1,797)(285)(15,315)

Other changes (e.g. exchange differences)

1,038

149

(5)

1,182

Balance - December 31

57,94012,7582,283

72,981

Cost

98,37918,738

4,002

121,119

Accumulated depreciation(40,439)(5,980)(1,719)(48,138)

Balance - January 1

57,94012,7582,283

72,981

Additions

81,84812,555

1,172

95,575

Disposals

(100)

—

—

(100)

(23,176)(4,464)(714)(28,354)

255

379

60

694

Balance - December 31

116,767

21,2282,801

140,796

Cost

178,707

31,774

5,244

215,725

Accumulated depreciation(61,940)(10,546)(2,443)(74,929)

Balance - December 31

116,767

21,2282,801

140,7962022

Depreciation for the year
Other changes (e.g. exchange differences)

Annual Report 2022

15.

Trade, other receivables, and receivables from merchants
and financial institutions

118

15.1.

Trade, other receivables, and receivables from merchants and financial
institutions

Trade and other receivables

2022

2021

Trade and other receivables

93,39961,294

Accounting policy – Trade and other receivables

Less: Allowance for expected credit losses(4,049)(4,442)

Trade receivables are amounts due from merchants for payment services performed. Ifcollection is expected in less than one year they are classified as current assets. Trade andother receivables are classified at amortized cost, initially recognized at fair value andsubsequently measured at amortized cost less impairments for expected credit losses. The
average duration of the receivables varies depending of their nature (Trade and otherreceivables: less than 3 month; receivables from financial institutions: 1-2 days; receivablesfrom merchants: 30 days). Due to the short duration of all the receivables (overall average ofless than 3 months) the fair value approximates the carrying value.

Balance - Trade receivables - Net

89,35056,852

Receivables from merchants and financial institutions

369,104

633,249

Total

458,454690,101

Trade and other receivables
These receivables are held with merchants that have not been subtracted from settlement.
Receivables from merchants and financial institutions

2022

2021

Receivables from financial institutions

279,106

561,578

Receivables from merchants

89,99871,671

Balance - December 31

369,104

633,249

Receivables from financial institutions
Receivables from financial institutions include balances due from schemes and other financial institutions
regarding transactions processed which will be settled within a short-term, as well as bank accounts which
are controlled by Adyen but do not meet the definition of cash and cash equivalents and are therefore
classified as receivables from financial institutions.
Receivables from merchants
As part of the accelerated Sales Day Payout product, Adyen settles a full sales day of transactions tomerchants before the funds from financial institutions are fully received. Therefore, Adyen is entitled to areceivable from all merchants which have opted to use this form of settlement. The receivable relates tobalances of merchants to be settled by schemes, with an average duration of less than 10 days. As at

Annual Report 2022

December 31, 2022, the receivables from accelerated Sales Day Payout have a balance of EUR 89,998(2021: 71,671).

119

2022

2021

Trade payables

19,922

8,989

Adyen assesses, on a forward-looking basis, the expected credit losses and concluded the impact of
expected credit losses on receivables from merchants is not significant.

Taxes and social security

55,59351,418

Accrued employee benefits

30,041

26,26915.2.

Accrued liabilities and other debts

33,105

5,996

Cash-settled share-based payment plan - current portion

9,166

7,444

Impairments of financial assets at amortized cost

Adyen uses a provision matrix when calculating the loss allowance on trade receivables. During the year
Adyen deducted EUR 393 (2021: deducted EUR 397) from its trade receivable loss allowance based on thecalculations from its IFRS 9 expected credit loss model for trade receivables. The expected credit loss model
was updated at year-end, to reflect reasonable and supportable information available on credit risk of the
trade receivables balance. Adyen wrote off trade receivables balances for an amount of EUR 1,684 (2021:
548). Adyen did not reverse any impairment losses in 2021 and 2022.
No financial assets are past due except for trade receivables. As at December 31, 2022, trade receivables of
EUR 60,621 (2021: EUR 37,049) were not past due, EUR 32,778 were past due ( 2021: EUR 24,245) of which
EUR 9,771 is less than 3 months (2021: EUR 9,879) and EUR 1,684 impaired (2021: 548). The average
duration of the overdue trade receivables is 3 months (2021: 3 months).

16.

Trade, other payables, and payables to merchants andfinancial institutions

Accounting policy – Trade and other payables
Payables are obligations initially recognized at fair value and subsequently measured atamortized cost to pay for goods or services that have been acquired in the ordinary course ofbusiness from suppliers. Payables are classified as current liabilities if payment is due within
one year or less. Due to the very short duration of the payables (average less than 3 months)
the fair value approximates the carrying value.

Trade and other payables

Trade and other payables

147,827

100,116

Payables to merchants and financial institutions

4,795,804

3,608,531

Total

4,943,631

3,708,647

The payables to merchants and financial institutions relate to interchange and scheme fees payable and do
not constitute borrowings. The payables to merchants include the Merchant Potential Liability (‘MPL’)
reserve as part of Adyen’s MPL risk mitigation. When Adyen acts as an acquirer, it is liable to settle eligible
chargebacks with card networks. To cover for this inherent risk, Adyen withholds funds from the payouts tomerchants, estimated as the amount of transaction volume for which issuers could potentially submit achargeback and Adyen has to take financial responsibility. These MPL reserves amounted to EUR 575,030
as per December 31, 2022 (2021: EUR 471,247).
Taxes and social security mainly relate to VAT payables and wage taxes relating to Adyen employees.
Adyen has recognized liabilities measured at fair value through profit or loss that are related to the cashsettled share-based payment plan (refer to note 4.3 ‘Share-based payments’).

Annual Report 2022

17.

LeasesAdyen’s leases relate to offices and data centers across locations where it operates.

Accounting policy – Leases
Adyen assesses if a lease exists or a contract contains a lease at the contract inception date,concluding whether an asset is identifiable and Adyen has control to direct its use and all
related economic benefits. A right-of-use asset and a lease liability are recognized at thelease commencement date, which can differ from contract inception date.
The lease liability is initially measured by bringing to present value all future lease payments,
discounted by an incremental borrowing rate, in case no interest rate is available for thecontract.
At initial recognition, the right-of-use-asset amounts to the initial lease liability. Right-of-useassets are depreciated on a straight-line basis over the lease term and tested for impairment
whenever events or changes in circumstances indicates that the carrying amount may not berecoverable. Interest on lease liability is recognized as an expense in the statement ofcomprehensive income.
Short-term (less than 12 months) and small value lease contracts are expensed in thestatement of comprehensive income on a straight-line basis over the lease term.

120

Right-of-use assets

2022

2021

Cost

168,630

149,732

Accumulated depreciation(40,567)(25,404)

Balance - January 1

128,063

124,328

Additions

81,06019,114

Depreciation for the period(30,035)(16,608)

2,588

1,229

Balance - December 31

181,676

128,063

Recognized right-of-use asset

249,760

168,630

Offices and data centers

Other movements (e.g. exchange differences)

Accumulated depreciation(68,084)(40,567)

Balance - December 31

181,676

128,063

Lease liability
Balance - January 1

2022

2021

142,964

131,485

Additions

81,06019,114

Lease instalments(25,516)(11,541)

Interest expense

3,372

2,496

Other movements (e.g. exchange differences)

1,193

1,410

203,073

142,964

Balance - December 31
Current portion

33,20022,996

Non-current portion

169,873

119,968

Additions during the year mainly relate to new lease contracts for data centres in the Netherlands, UnitedStates and India.

Annual Report 2022

121

During the year, short-term and small value leases expensed in other operating expenses amounted to EUR
4,255 (2021: EUR 1,793).
As of December 31, the future minimum lease payments are as follows:
Minimum future lease payments

2022

2021

Within 1 year

34,46020,327

Between 1 and 2 years

35,103

21,326

Between 2 and 3 years

33,135

21,331

Between 3 and 4 years

27,89020,979Between 4 and 5 years

21,74814,780Later than 5 years

49,87071,564

Total

202,206

170,307

18.

Other contingent assets, liabilities and commitments

Adyen N.V. and Adyen International B.V. are a fiscal unity for corporate income tax purposes. Under the
Dutch Tax Collection Act, the members of the fiscal unity are jointly and severally liable for any taxes payable
by the fiscal unity.
Adyen has EUR 51,299 of outstanding bank guarantees and letters of credit as at December 31, 2022 (2021:
EUR 72,290).
Adyen has setup a collateral account in which Brazilian Government bonds were deposited by a partner
financial institution, in order to decrease its exposure to this counterparty in Brazil. As at December 31, 2022
the total collateral was EUR 31,086 (BRL 175,828) (2021: EUR 39,125 (BRL 250,157).
During the year ended December 31, 2021, the Brazilian Tax Authorities initiated an audit of the Corporate
Income Tax and of the Social Contribution of Net Income for the year ended December 31, 2017. Based on
the outcomes of this audit Adyen was issued a tax infringement notice claiming approximately EUR 4,095(BRL 23,162) in relation to the financial year 2017. Adyen has disputed the findings of the Brazilian Tax
Authorities and considers it to be probable that the judgement will be in its favor. Adyen has therefore notrecognized a provision in relation to this claim.

19.

Related party transactions

During 2022, Adyen identified related party transactions that took place with Stichting Administratiekantoor
Adyen (STAK), employees and Supervisory Directors. The transactions with employees and STAK are
related to options exercised, and the transactions with Supervisory Board are related to remuneration forservices rendered throughout the year (refer to note 22.2 ‘Remuneration Supervisory Board’). The
outstanding balances as per December 31, 2022 and 2021 are:
Related party assets/ (liabilities)

2022

2021

Supervisory Board

115—

Employees (STAK)

3,627

66

The Management Board and Supervisory Board remuneration is disclosed in note 22 ‘Compensation of key
management’.
There were no other transactions with related parties in 2022 (2021: nil).

20.

New and amended standards adopted

20.1.

New standards adopted by Adyen

The following accounting standards, interpretations and amendments applicable to Adyen (collectively,“amendments”) were issued and made effective for the annual reporting period beginning on January 1,
2022:• Amendments to IFRS 3 - Reference to the 2018 version of the Conceptual Framework;• Amendments to IAS 16 - Proceeds before intended use; and• Amendments to IFRS 9, Illustrative Examples to IFRS 16 — Annual Improvements (2018-2020)
Adyen has taken into consideration the changes of each one of the above-mentioned amendments, andconcluded that the amendments do not have a material impact on the financial statements.

Annual Report 2022

20.2.

122

Amendments to existing standards that are applicable to the Company but
not yet effective

Certain amendments have been published that are not mandatory for December 31, 2022 reporting period
and have not been early adopted by the Company. The Company has assessed the amendments to become
effective in 2023, and onwards, to have no material impact on its financial statements.

21.

Audit fees

21.1.

Fees to the auditor

Other services than the Audit of the financial statements refer to services rendered outside of the European
Union.
2022

2021

Audit of financial statements

842

1,196

Audit of the regulatory returns to be submitted to the Dutch Central Bank

45

96

Assurance engagement DGS report

56

40

Assurance engagement ISAE 3402 report

101

101

Assurance engagement SOC 2 report

131

55

1,175

1,488

Other audit services required by law or regulatory requirement

Other audit services

The audit fees were expensed in the statement of comprehensive income during the reporting period.
The fees listed below relate to the procedures applied to Adyen and its consolidated group entities byaccounting firms and external independent auditors as referred to in section 1(1) of the Audit Firms
Supervision Act (“Wet toezicht accountantsorganisaties-Wta”) as well as by the Dutch and foreign-based
accounting firms, including their tax services and advisory groups. These fees relate to the audit of the 2022
financial statements, regardless of whether the work was performed during the financial year.

22.

21.2.

22.1 Remuneration Management Board

Summary of services rendered by the auditor, in addition to the audit of
the financial statements

Compensation of key management

Adyen identifies the Management Board as the only key management personnel. The total remuneration
received by the Management Board in 2022 amounted to EUR 4,238 (2021: EUR 3,475).

Our auditor, PwC Accountants, has rendered the following services to Adyen and its controlled entities
during 2022 and 2021:
2022

Total for the year

2021

Salaries and short-term employee benefits

2022

2021

3,590

3,137

PwC
Accountants

Other PwC
firms*

Total

PwC
Accountants

Other PwC
firms*

Total

Share-based payments

439

241

Audit of financial statements

842

713

1,555

655

541

1,196

Post-employment benefits

209

97

Other audit services

333

—

333

292

—

292

4,238

3,475

1,175

713

1,888

947

541

1,488

Total

* Other PwC firms refer to PwC member firms outside of the Netherlands.

Total

Annual Report 2022

Variable remuneration
As of 2018 and in line with (i) the Act on Remuneration Policies in Financial Enterprises (Wet beloningsbeleid
financiële ondernemingen), and (ii) the Guidelines on Remuneration Policies and Practices as formally
adopted on December 10, 2010 by the Committee of European Banking Supervisors, Adyen does not award
variable remuneration to the Managing Directors. As the application of such rules and principles may
include an assessment and interpretation of the remuneration restrictions, it cannot be excluded that acompetent supervisory authority takes a different view on the correct application thereof in specific cases(although there is currently no indication that a competent supervisory authority will take such position).
12

Pension

As from January 2017, all Dutch members of the Management Board participate in the Collective DefinedContribution (CDC) pension plan, with respect to their salary up to EUR 114,866 gross per year for 2022
(2021: EUR 112,189). On behalf of each Managing Director, Adyen pays a contribution of 4% of thepensionable salary - being 12 times the monthly fixed salary plus holiday pay up to the fiscally allowed
maximum minus a deductible - for the accrual of old age pension benefits as well as the administration
costs. If and as far as fiscally allowed, each Managing Director has the possibility to make additional
contributions in order to accrue additional pension capital.
Kamran Zaki participates in a 401k retirement plan in the United States, for which Adyen provides an
employer match of up to 2% of base salary.

123

San Francisco Branch. The terms and conditions of these service agreements have been aligned with theDutch Corporate Governance Code. The service agreements will be entered into for a term of 4 years.
The service agreements provide for a severance of one annual base salary if the Managing Director is not reappointed or otherwise terminated by Adyen (for any reason other than urgent cause within the meaning ofarticle 7:678 of the Dutch Civil Code (dringende reden)), in accordance with the Dutch Corporate
Governance Code.

Loans
No loans, advance payments and guarantees have been granted to or on behalf of the Managing Directors.

22.2.

Remuneration Supervisory Board

The total remuneration received by the Supervisory Board in 2022 amounted to EUR 386 (2021: EUR 386).
The table below provides an overview of the remuneration of Supervisory Directors for the financial year
2022. In addition to the remuneration, expenses incurred by the Supervisory Directors in the performance of
their duties are reimbursed in full:
2022

2021

Salaries and short-term employee benefits

386

386

Total

386

386

Insurance
All Managing Directors are insured under an insurance policy taken out by Adyen against damages resulting
from their conduct when acting in their capacities as directors.
All Dutch Managing Directors are insured for the risk of death and disability, for which Adyen pays theinsurance premiums.

Service and Severance Agreements
All Managing Directors have entered into a service agreement (Overeenkomst van Opdracht) with Adyen
N.V. effective as of the date of the listing of Adyen, while Kamran Zaki is currently assigned to Adyen N.V.
12

Amounts in this paragraph are not rounded to the nearest EUR thousand.

Insurance
The Supervisory Directors of Adyen are insured under an insurance policy taken out by Adyen against
damages resulting from their conduct when acting in their capacities as directors.

Loans
No loans, advance payments and guarantees have been granted to or on behalf of the Supervisory Directors.

Annual Report 2022

23.

124

Share information

24.
24.1.

Adyen presents basic and diluted earnings per share (EPS) data for its ordinary shares. The
calculation of EPS is as follows:
1) Basic EPS: dividing the net income attributable to owners of Adyen N.V. by the weighted
average number of ordinary shares outstanding during the period. As at December 31,
2022, only the warrant related to tranche 1 vested (and exercised), while no warrants
vested in the current year. Therefore, the issued shares relating to tranche 1 is reflected in
the calculation of ordinary shares.

Adyen is responsible for the collection and payment of taxes connected with its services and products sold,on behalf of employees, or service providers. Corporate income tax, indirect tax and payroll tax are main
sources of government income. Considering the importance of these taxes for local governments, Adyen
bears a responsibility to maintain a compliant global tax framework. Adyen’s tax team closely monitors local
regulations and Adyen’s product offerings to remain compliant.

2) Diluted EPS: determined by adjusting the basic EPS for the effects of all dilutive potential
ordinary shares which passed on contractual conditions (e.g. vesting), only related toshare options granted to employees (refer to note 4.3).

24.2.

2022

2021

Net income attributable to owners of Adyen N.V. (in EUR '000)

564,139469,717Weighted average number of ordinary shares for the period

30,975,325

30,499,194

70,704

176,62131,046,029

30,675,815

Net profit per share – basic

18.21

15.40

Net profit per share - diluted

18.17

15.31

Dilutive effect of share options
Weighted average number of ordinary shares for diluted net profit for the period

Total tax contribution

Adyen is liable to pay corporate income tax in the countries in which it has a taxable presence. Since Adyen’s
first global expansion outside the Netherlands , Adyen has been characterized as a centralized organization
for corporate income tax purposes. Key business activities are performed in the Netherlands and sales
support activities are performed by local Adyen offices. In response to this centralized organization, transfer
pricing agreements have been established based on the applicable OECD principles.

Accounting policy – Earnings per share

Share information

Tax reportingCountry-by-country reporting

The following table provides a country-by-country table to support that taxes are paid in the country
wherein Adyen has an economic nexus. To serve this purpose, the table is split into two parts: the first part
covers per country where Adyen has a liability to pay tax; the main activity, number of FTE’s per year-end,
and consolidated IFRS data on an accrual basis of operating expenses, income before tax and income tax
expense. The second part of the table is prepared on a cash basis and covers the income tax, indirect tax,
payroll tax and grants or incentives. The table is prepared using consolidated accounts or on a cash basis.
As a result, local statutory financials and actual tax contributions may deviate from the amount disclosed.
The full list of participating interests as referred to in Article 414, Book 2 of the Dutch Civil Code can befound in note 32 ‘Investments in consolidated subsidiaries on equity method’ of the company financial
statements.

Annual Report 2022

125
Amounts accrued on IFRS Consolidated basis

Taxes received/ (paid) on cash basis

Income Tax
ExpenseETR%

Income Tax

Indirect Tax

21 %Main activity

The Netherlands

Head office - Payment service provider

1,941(357,254)

652,771(138,739)(138,952)(103,158)(86,943)642(328,411)

United Kingdom

Sales office135(27,085)

9,517

(163)

—

81

178

(12,395)—(12,136)

FranceSales office75(15,481)

1,346

(481)

36 %

(784)

(37,148)(5,257)—(43,189)

Germany

Sales office

78(12,659)

4,682(1,410)

30 %

(463)

—

(3,975)—(4,438)

SwedenSales office

55(10,572)

2,252

(634)

28 %

(4)

—

(7,320)—(7,324)

Spain

Sales office

64(8,798)

608

(424)

70 %

(286)

(2,710)(2,231)—(5,227)

Belgium

Sales office

15(2,743)

549

(144)

26 %

(155)

—

(1,254)—(1,409)

Italy

Sales office

27(4,248)

638

(160)

—

(121)

(11)

(987)

—

(1,119)

United Arab Emirates

Sales office23(4,889)

43

—

—

—

(564)

—

—

(564)

PolandSales office

14(1,914)

391

(83)

21 %

(82)

—

(529)

—

(611)

NorwayNo office

—

—

—

—

—%

United States

Sales and support office462(133,121)

29,723(7,808)26 %(1,068)(1,348)(28,800)—(31,216)

BrazilSales office164(30,553)

3,300(2,432)74 %(3,369)(19,668)(7,017)—(30,054)

MexicoSales office

17(3,346)

383

(171)

45 %

(87)

(3,594)(506)—(4,187)

CanadaSales office20(2,833)

835

(215)

26 %

—

(16,349)(629)—(16,978)

Singapore

Sales and support office127(20,583)

4,359

(779)

18 %

(468)

(14,274)(2,414)112(17,044)

Australia

Sales and support office

42(9,670)

2,223

(652)

29 %

(1,992)(11,294)(1,562)—(14,848)

China

Sales office

29(6,324)

3,596

(891)

25 %

(968)

(442)

(2,533)—(3,943)

Japan

Sales and support office

23(4,564)

923

(268)

29 %

(709)

(1,076)(854)—(2,639)Hong Kong

Sales office

9(1,263)

844

(157)

19 %

—

—

—

—

—

India

Sales office

10(6,848)

690

(102)

15 %

(59)

(347)

(356)

—

(762)

New Zealand

Sales office

—

(500)

114

(35)

31 %

—

(4,150)(173)—(4,323)

Malaysia

Sales office

2

(191)

152

(52)

34 %

(87)

—

(9)

—

(96)

Korea

Inactive

—

—

—

—

—

—

—

—

—

Switzerland

No office

—
3,332

(186)

—
(665,439)

719,939(155,800)

22 %Payroll Tax Grants / Incentives

Total tax
contribution

Country

Total

Ending FTE

Total Operating
Income Before Tax
Expense(149,573)

(186)

(39)

—

(216,180)(165,744)

(39)
754

(530,743)

Annual Report 2022

24.3.

126

General findings Country by-country reporting

The below simplified table provides an overview of general findings and exceptions regarding items covered in the country-by-country table. This overview is based on the static and year-on-year (‘YoY’) analysis and explain
the overall dynamics of our global tax position.
TTC Item

General findings

Exceptions

FTE

Most employees in NL, followed by the US, UK, SG and BR.

Entities established in recent years, had more significant growth on FTE numbers.

YoY employees grow in the same pace across locations.
Total Operating Expense

Operating expense is aligned with number of local FTE.

In some countries the operating expenses grew more quickly than FTE because of new officelease, increased business trip post-COVID, marketing events or bonus payments.

Income Before Tax

NL owns the majority of income before tax, given the key entrepreneurial functions performed,
risks managed and intangible assets owned.

YoY some declines in income before tax could be explained by an accounting difference:
consolidated IFRS (in this table) compared to statutory.

YoY income before tax is expected to grow per each country, while shifting away from NL
towards local offices in light of increasing local contributions.
Income tax expense

Income tax expense should follow the statutory tax rate multiplied by the income before tax

NL applies the innovation box.

YoY income tax expense is expected to grow in same trend as income before tax

The taxable profits of the UK and US entities exceeded the net operating losses, which caused
significant increase in the income tax expense.
Most outliers can be explained as reversal of (too high) accruals of previous years or because ofan accounting difference (IFRS vs. statutory).

Income tax paid

Income tax paid is close to income tax expense
YoY Income tax paid is expected to grow in same trend as income before tax

Indirect tax paid

Total amount of indirect tax paid in a country depends on the amount of indirect tax charged tocustomers (revenue), minus deduction of any input tax (expenses)

With our rapid growth, there are (significant) differences between income tax expense andincome tax paid, because the amount paid can regard both current year or previous year.
YoY some decrease in indirect tax paid can be explained as reclaiming more VAT, while relatively
lower revenue growth.

YoY the amount of indirect tax paid is expected to grow
Payroll tax paid

Total amount of payroll tax paid in a country includes the wage tax amount and social security
contribution (if any) in that country.

YoY outliers are caused by stock option exercises and bonus/commission payments.

YoY we expect payroll tax to grow in line with FTE.
Grants, Incentives & ESG
Taxes

No ESG taxes are applicable to Adyen
We are reluctant to apply grants and incentives

NL grants a wage tax deduction based on innovation performed (WBSO).

Annual Report 2022

24.4.

Innovation box

Adyen set out to build a payment platform capable of meeting the rapidly evolving needs of fast-growing
global businesses. Continuous innovation and technology are critical to meet the changing payment industry
dynamics and the needs of our merchants. Governments worldwide facilitate innovative research anddevelopment (R&D) activities through grants and tax incentives. One of the facilities offered by the Dutch
government is the Dutch innovation box. Following the application of the innovation box, profits attributable
to qualifying innovations are taxed at a Dutch corporate income tax rate of 9%, opposed to the corporate
income tax rate of 25.8%. As Adyen strives to continuously innovate its payment platform, Adyen applies theinnovation box in order to reinvest those benefits in the further development of the platform and growth of thecompany.
Adyen concluded an agreement with the Dutch tax authorities to obtain upfront certainty on the percentage
of taxable profit that qualifies for the innovation box. Based on this agreement the percentage of taxable profitof Adyen N.V. qualifying for the innovation box is directly linked with the number of hours spent by developers
on R&D projects.

127Annual Report 2022

Company Financial Statements

128

Annual Report 2022

129

Company Statement of Comprehensive Income
For the years ended December 31, 2022 and 2021
(all amounts in EUR thousands unless otherwise stated)
Note

2022

2021

Note

2021

Revenue

26

7,575,105

5,233,538

Share of the profit of investments in subsidiaries

21,351

38,002

Costs incurred from financial institutions

26(6,340,102)(4,387,767)

Income before income taxes

713,829

578,634

Costs of goods sold26

Net revenue

32

2022

(46,564)(29,177)

Income taxes(149,690)(108,917)

1,188,439

816,594

Net income for the year

564,139469,717

Net income attributable to owners of Adyen N.V.

564,139469,717

Wages and salaries

27(269,641)(112,618)

Social securities and pension costs

27(39,700)(22,560)

Other comprehensive income/ (expense)

13,30,31(46,720)(25,752)

Items that may be reclassified to profit or loss

28

(182,750)(99,529)

Currency translation adjustments subsidiaries(1,326)

11,373(54)

250

Other comprehensive income/ (expense) for the year

(1,326)

11,373562,813

481,090

Amortization and depreciation
Other operating expenses
Other income
Income before net finance expense and income taxes

649,574

556,385

Finance income

27,04862

Finance expense(11,251)(12,379)

27,107(3,436)42,904(15,753)

Other financial results
Net finance expense

29

Total comprehensive income for the year
(attributable to owners of Adyen N.V.)

The accompanying notes are an integral part of these company financial statements.

Annual Report 2022

130

Company Balance Sheet
As at December 31, 2022 and 2021
(all amounts in EUR thousands unless otherwise stated; and before profit appropriation)
Note

December 31, 2022

December 31, 2021

Intangible assets

13

8,140

9,841

Share capital

Plant and equipment

30

113,596

52,070Share premium

Right-of-use assets

31

153,329

110,604

Legal reserves

Other financial assets at FVPL

11

12,26422,504

Other reserves

Contract assets

2

47,91678,091Retained earnings

134,767

22,534

Net income for the year

115,030

212,318

Total equity attributable to owners of Adyen N.V.

Total non-current assets

585,042

507,962

Inventories

78,78819,059Deferred tax liabilities

Deferred tax assets
Investments in consolidated subsidiaries on equity method

32

Note

Derivative liabilities

Receivables from merchants and financial institutions

33

222,009503,647

Lease liability

Trade and other receivables

33

241,630

287,108

Total non-current liabilities

5,640

—

5,964,798

4,150,440

Payables to merchants and financial institutions

Current income tax receivables
Cash and cash equivalents
Total current assets

6,512,865

4,960,254

Trade and other payables

Total assets

7,097,907

5,468,216

Lease liability

December 31, 2022

December 31, 2021

8

310

310

8

352,399335,725

18,51832,244150,298

127,717

1,326,454

844,70111

31564,139469,717

2,412,118

1,810,414

35,00081,70010,74916,010150,278

106,622

196,027

204,33236

4,336,872

3,352,592

36

126,274

74,772

31

23,442

17,260Current income tax payables

3,174

8,846

Total current liabilities

4,489,762

3,453,470

Total liabilities and equity

7,097,907

5,468,216

The accompanying notes are an integral part of these company financial statements.

Annual Report 2022

131

Company Statement of Changes in Equity
For the years ended December 31, 2022 and 2021
(all amounts are in EUR thousands unless otherwise stated)
Other reserves
Note
Balance - January 1, 2021

Share capital

Share premium

Legal reserves

Share-based payment
reserve

304

194,608

14,85398,034

Warrant reserve

Retained earnings

Total equity

53,401

856,934

1,218,134

469,717469,717

Net income for the year
Currency translation adjustments

11,373

Total comprehensive income for the year——

11,373

11,373——

469,717

481,090

Adjustments:
Other financial assets at FVPL movement (net of deferred tax)

6,148

(6,148)—Intangible assets

(130)

130

—

Other adjustments
—

—

6,018

59

59

—

—

(5,959)59—(26,700)(7,400)—Transactions with owners in their capacity as owners:
Equity transfer on exercise of warrant

2.1

Deferred tax on share-based compensation

7

34,100

Options exercised
Proceeds on issuing shares

8

Share-based payments

4.3

6

—

5,548

5,548

1,732

(1,732)—

105,285

105,291292

Other adjustments

Balance - December 31, 2021

292
(1,126)

1,126

—

6

141,117—

4,108(27,826)(6,274)111,131310

335,725

32,244102,142

25,575

1,314,418

1,810,414

Annual Report 2022

132

Other reserves
Note
Balance - January 1, 2022

Share capital

Share premium

Legal reserves

Share-based payment
reserve

Warrant reserve

Retained earnings

Total equity

310

335,725

32,244102,142

25,575

1,314,418

1,810,414

564,139564,139

Net income for the year
Currency translation adjustments(1,326)

Total comprehensive income for the year——

(1,326)(1,326)——564,139562,813

Adjustments:
Other financial assets at FVPL movement (net of deferred tax)

(10,240)

10,240—Intangible assets(2,160)2,160—

Other adjustments

161
—

—

(12,400)

161

—

(364)

(203)

12,036(203)—

29,159Transactions with owners in their capacity as owners:
Deferred tax on share-based compensation

7

Options exercised
Proceeds on issuing shares

8

Share-based payments

4.3

—

6,180

22,979

568

(568)

—

9,926

9,926
9

9

Other adjustments

Balance - December 31, 2022

The accompanying notes are an integral part of these company financial statements.

——

16,674—22,420——39,094

310

352,399

18,518

124,723

25,575

1,890,593

2,412,118

Annual Report 2022

133

Company Statement of Cash Flows
For the years ended December 31, 2022 and 2021
(all amounts in EUR thousands unless otherwise stated)
Note
Income before income taxes

2022

2021

713,829

578,634

Adjustments for:

Note

2022

2021

Interest received

27,04862

Interest paid

(11,251)(12,379)–

Finance income(27,048)(62)

Income taxes paid

(140,910)(127,679)–

Finance expenses

11,251

12,379Net cash flows from operating activities

1,904,266

1,631,515–

Other financial results

29(27,107)

3,436

Purchases of financial assets at FVPL

—

(211)

–

Depreciation of plant and equipment30

21,725

11,733

Redemption of financial assets at amortized cost

11—

12,427–

Amortization of intangible fixed assets

13

5,224

3,088

Redemption of other financial assets at FVPL

11

11,407—–

Depreciation of right-of-use assets

31

19,771

10,931

Investments in consolidated subsidiaries on equity method

32

(106)

(17,918)–

Share of the profit of investments in subsidiaries

32(21,351)(38,002)

Net cash from liquidation of Adyen Inc.

32

6,643

—

–

Share-based payments

7

114

Purchases of plant and equipment

30(83,099)(36,138)

Capitalization of intangible assets

13.0(3,523)(2,958)Changes in working capital:–

Inventories–

Trade and other receivables

33–

Receivables from merchants and financial institutions–

Payables to merchants and financial institutions–

Trade and other payables–

Amortization and additions of contract assets

Cash generated from operations(60,016)(4,262)

Net cash used in investing activities(68,678)(44,798)(120,662)(86,573)

Proceeds from issues of shares

8

9,926

105,28533

281,638

286,624

Lease payments

31(12,907)(3,346)36

1,150,418

945,941

Net cash flows from financing activities(2,981)

101,939

51,490(1,918)Net increase in cash, cash equivalents and bank overdrafts

1,832,607

1,688,656

30,21049,448

Cash, cash equivalents and bank overdrafts at beginning of the year

4,150,440

2,458,038

2,029,379

1,771,511(18,249)

3,746

5,964,798

4,150,440

2.2

Exchange gains on cash, cash equivalents and bank overdrafts
Cash, cash equivalents and bank overdrafts at end of the period

The accompanying notes are an integral part of these company financial statements.

Annual Report 2022

134

Notes to the Company financial
statements

27.

Share-based compensation

9,395

5,265

25.

Total wages and salaries

269,641

112,618

Social securities

32,74318,076

Pension costs - defined contribution plans

6,957

4,484

Total social securities and pension costs

39,70022,560

Other operating expenses

2022

2021

Sales and marketing costs

43,26323,363Basis of preparation

The company financial statements have been prepared on a going concern basis in accordance with
International Financial Reporting Standards and IFRS IC interpretations as endorsed by the European Union(EU-IFRS) and in accordance with sub articles 8 and 9 of article 362, Book 2 of the Dutch Civil Code.
The principles in the company financial statements are the same as those stated for the consolidated
financial statements unless stated otherwise.

26.

Types of goods or service

Employee benefits

2022

2021

Salaries and wages

260,246

107,353

28.

Company - Revenue

Company - Employee benefits

Company - Other operating expenses

2022

2021

Settlement fees

7,042,045

4,838,701

Travel and other staff expenses

35,458

7,133

Processing fees

302,052

238,621

IT costs

27,16318,659

Sales of goods

50,95829,186Advisory costs

24,271

12,213

Other services

180,050

127,030

Contractor costs

12,828

10,264

Total revenue from contracts with customers

7,575,105

5,233,538

Housing costs

8,483

3,403

Costs incurred from financial institutions(6,340,102)(4,387,767)

Office costs

6,974

2,453

11,00822,041

Costs of goods soldNet revenue(46,564)(29,177)

Miscellaneous operating expenses

1,188,439

816,594

1% for the UN SDGs

13,302

Total other operating expenses

182,750

99,529Annual Report 2022

29.

135

Company - Other financial results

Other financial results
Exchange gains/(losses) (note 6.1)

30.
2022

2021

(19,440)

10,324

Other financial assets at FVPL (note 6.3)
Loss on redemption of other financial assets at amortized cost
Total other financial results

ComputerHardware andSoftwareLeasehold
Improvements

Other

Total

Cost

49,037

4,175

1,337

54,549

Accumulated depreciation(23,533)(2,377)(953)(26,863)

Balance - January 1

25,504

1,798

384

27,686

Additions

28,097

6,745

1,296

36,138Plant and equipment
2021

Fair value re-measurement of financial instruments:
Derivative liabilities (note 6.2)

Company - Plant and equipment

46,700(13,300)

(153)

(322)

—

(138)

27,107(3,436)

Disposals

29.1.

Exchange gains/(losses)

The exchange gains (losses) recognized during the year relates to realized and unrealized translation losses
on monetary assets and liabilities. The exchange gains during 2022 mainly relate to Adyen’s foreigndenominated cash balances, partially offset by other financial assets at FVPL (EUR 2,183 – refer to note 6.3‘Other financial assets at fair value through profit or loss (‘FVPL’) (Visa Inc. preferred shares)’.

Depreciation for the year
Other changes (e.g. exchange differences)

(19)

—

—

(19)

(10,879)

(713)

(141)

(11,733)

—

(2)

—

(2)

42,703

7,828

1,539

52,070Cost

75,138

10,916

2,633

88,687

Accumulated depreciation(32,435)(3,088)(1,094)(36,617)

Balance - January 1

42,703

7,828

1,539

52,070Additions

68,994

12,901

1,204

83,099

Disposals

(100)

—

—

(100)

(17,666)(3,464)(595)(21,725)

Balance - December 31
2022

Depreciation for the year
Other changes (e.g. exchange differences)

80

89

83

252

Balance - December 31

94,011

17,354

2,231

113,596

Cost

142,791

25,0304,314

172,135

Accumulated depreciation(48,780)(7,676)(2,083)(58,539)

Balance - December 31

94,011

17,354

2,231

113,596

Annual Report 2022

31.

Company – Leases

Adyen’s leases relate to offices and data centers across locations where it operates.

Accounting policy – Leases
Adyen assesses if a lease exists or a contract contains a lease at the contract inception date,concluding whether an asset is identifiable, and Adyen has control to direct its use and all
related economic benefits. A right-of-use asset and a lease liability are recognized at thelease commencement date, which can differ from contract inception date.
The lease liability is initially measured by bringing to present value all future lease payments,
discounted by an incremental borrowing rate, in case no interest rate is available for thecontract.
At initial recognition, the right of use asset amounts to the initial lease liability. Right of use
assets are tested for impairment whenever events or changes in circumstances indicatesthat the carrying amount may not be recoverable.
Short-term (less than 12 months) and small value lease contracts are expensed in statementof comprehensive income on a straight-line basis over the lease term.

136

Right-of-use assets

2022

2021

Cost

133,908

119,070

Accumulated depreciation(23,304)(14,819)

Balance - January 1

110,604

104,251

Additions

62,745

17,232

Depreciation for the period(19,771)(10,931)

(249)

52

Balance - December 31

153,329

110,604

Recognized right-of-use asset

203,727

133,908

Offices and data centers

Other movements

Accumulated depreciation(50,398)(23,304)

Balance - December 31

153,329

110,604

Lease liability

2022

2021

123,882

109,996

Additions

62,745

17,232

Lease instalments(15,672)(5,461)

Balance - January 1

Interest expense

2,765

2,115

Balance - December 31

173,720

123,882

Current portion

23,442

17,260Non-current portion

150,278

106,622

Annual Report 2022

137

32.

As of December 31, the future minimum lease payments are as follows:
Minimum future lease payments

2022

2021

Within 1 year

24,107

15,070Between 1 and 2 years

25,981

16,168Between 2 and 3 years

26,122

15,734

Between 3 and 4 years

22,987

15,663

Between 4 and 5 years

20,247

12,531

Later than 5 years

45,75064,381

Total

165,194

139,547

Company - Investments in consolidated subsidiaries on
equity method

Accounting policy – Investments in consolidated subsidiaries
Adyen’s investment in consolidated subsidiaries is initially recorded at cost and subsequently
accounted for using the equity method. Dividends received from the investees arerecognized as a reduction in the carrying amount of the investment. Goodwill is currently notapplicable.
Adyen’s share of the results of the investees is reported in the company statement ofcomprehensive income and its share of movements in other comprehensive income isrecognized in other comprehensive income.
Investments are reviewed for impairment at least annually or whenever events orcircumstances indicate that the carrying amount may not be recoverable.

Investments in consolidated subsidiaries on equity method

2022

2021

Balance - January 1

212,318

139,510Investments in consolidated subsidiaries

27,174

17,918Liquidation of Adyen Inc.

(141,658)—

Share of the profit of investments in subsidiaries

21,351

38,002Currency translation adjustments subsidiaries(1,326)

11,373

Share of changes in equity of investments in subsidiaries(2,829)5,875

115,030

212,318

Balance - December 31

During 2022, the main driver of the changes in investments balance related to increased investments in
Adyen’s wholly-owned subsidiary (Adyen International B.V.), the liquidation of Adyen Inc. which was finalized
during 2022, as well as Adyen’s share of profit and changes in equity of investments in subsidiaries.

Annual Report 2022

138

An amount of EUR 29,159 (2021: 5,548) was recognized directly in equity connected with future tax
deductions and carried forward losses on subsidiaries in the United States and the United Kingdom. Refer tonote 7 ‘Income taxes’ in the consolidated financial statements for more detail.
As a result of Adyen N.V. obtaining the US branch license, Adyen Inc was put into liquidation which was
finalized during 2022. The net assets of Adyen Inc were transferred at their carrying amounts to the newly
set-up branch of Adyen N.V. in San Francisco effective January 1, 2022. The net asset value transferred
amounted to EUR 141,658.

Adyen N.V. – Subsidiaries
Name

Legal Seat

Adyen International B.V.

Amsterdam, The Netherlands

Adyen N.V. – Branches
Name

Branch location

Adyen N.V., German branch

Berlin, Germany

Adyen France

Paris, France

Adyen Nordic Filial

Stockholm, Sweden

Adyen, San Francisco branch

San Francisco, CA, USA

Adyen N.V. – Representative offices
Name

Branch location

Adyen N.V., Belgian Rep Office

Brussels, Belgium

Adyen N.V., Italian Rep Office

Rome, Italy

Adyen N.V., Spain Rep Office

Madrid, Spain

Adyen N.V., Polish Rep Office

Warsaw, Poland

Ownership percentage
100%

Adyen International B.V. – Subsidiaries
Direct and indirect ownership
percentage

Name

Legal Seat

Adyen Services Inc.

Dover, DE, USA

100%

Adyen do Brazil Ltda

São Paulo, Brazil

100%

Adyen Singapore PTE. LTD.

Singapore, Singapore

100%

Adyen UK Limited

London, United Kingdom

100%

Adyen Hong Kong Limited

Hong Kong, Hong Kong SAR

100%

Adyen Australia PTY Limited

Sydney, Australia

100%

Adyen Canada Ltd.

Saint John, Canada

100%

Adyen Korea Chusik Hoesa

Seoul, Republic of Korea

100%

Adyen Mexico, S.A. de C.V.

Mexico City, Mexico

100%

Adyen (China) Software Technology Co. Ltd.

Shanghai, China

100%

Adyen New Zealand Ltd.

Auckland, New Zealand

100%

Adyen Malaysia Sdn. Bhd

Kuala Lumpur, Malaysia

100%

Adyen India Technology Services Private Limited

Mumbai, India

100%

Adyen Japan K.K.

Tokyo, Japan100%

Adyen Middle East Limited

Dubai, United Arab Emirates

100%

Adyen MEA FZ-LLC

Dubai, United Arab Emirates

100%Annual Report 2022

33.

139

Company – Trade, other receivables, and receivables frommerchants and financial institutions

Receivables fall due in less than one year except for deposits transferred to financial institutions.
Trade and other receivables
Trade and other receivables
Less: Allowance for expected credit losses

2022

36.

Company – Trade, other payables, and payables tomerchants and financial institutions

Trade and other payables
2021

2022

2021

Trade payables

17,0807,014

43,777

41,988245,025

290,970

Taxes and social security(3,395)(3,862)

Accrued employee benefits

22,565

17,57929,6602,571

Trade receivables - Net

241,630

287,108

Accrued liabilities and other debts

Receivables from Merchants and Financial Institutions

222,009503,647

Cash-settled share-based payment plan

13,192

5,620

790,755

Trade and other payables

126,274

74,772

Payables to merchants and financial institutions

4,336,872

3,352,592

Total

4,463,146

3,427,364

Total

463,639

In 2022, EUR 166,447 (2021: EUR 155,798) related to receivables from group companies. Intercompany
receivables and payables fall within the scope of IFRS 9 ‘Financial Instruments’. The outstanding amounts as
per December 31, 2022 and 2021 relate to transactions linked to the usage of Adyen platform which took
place throughout the year at arm’s length conditions. Considering the maturity of the intercompany
balances and the financial position of the Adyen group, the credit risk is considered not significant. As aresult, the impact of expected credit losses on intercompany balances is not significant.

All current liabilities fall due in less than one year. The fair value of the current liabilities approximates thebook value due to its short-term character.

34.

37.

Shareholders’ equity

Refer to the company statement of changes in equity for the movements in shareholders’ equity.
The total of distributable reserves amounts to EUR 1,679,163 (2021: EUR 1,180,736). The other reserves are
restricted for distribution, which includes the legal reserves, in amount of EUR 18,517 (2021: 32,244),
consisting of all exchange rate differences arising from the translation of the net investment in foreign
entities and legally non-distributable in accordance with Dutch Law relating to the revaluation of balance
sheet positions that require revaluation reserves.

35.

Dividends paid

No dividend has been paid in the years presented.

In 2022, EUR 38,766 (2021: EUR 57,023) related to payables to group companies.

Directors’ remuneration

For an overview of the directors’ remuneration, reference is made to note 22 ‘Compensation of key
management’ of the consolidated financial statements.

38.

Audit fees

For an overview of the audit fees, reference is made to note 21 ‘Audit fees’ of the consolidated financial
statements.

Annual Report 2022

39.

Contingencies and commitments

Adyen has no contingent liabilities in respect to legal claims.
Adyen has EUR 51,299 of outstanding bank guarantees and letters of credit as at December 31, 2022 (2021:
EUR 72,290).
Adyen N.V. and Adyen International B.V. are a fiscal unity for income tax purposes. Under the Dutch Tax
Collection Act, the members of the fiscal unity are jointly and severally liable for any taxes payable by thefiscal unity. Pursuant to the Collection of State Taxes Act, the company and its subsidiary are both severally
and jointly liable for the tax payable by the combination.

40.

Proposed profit appropriation

Awaiting the decision by the shareholders, management proposes the income for the year to be added toretained earnings in shareholder’s equity.

140

41.

Events after balance sheet date

Prior to publishing the 2022 Annual Report, Adyen updated its terms and conditions applicable to merchantagreements in order to clarify the responsibilities of the services provided by financial institutions andnetwork scheme providers involved in the payment processing and acquiring services. As a result, Adyen
reassessed its key accounting judgment in relation to settlement fees (namely; interchange and payment
network fees), and concluded it acts as agent in this arrangement, applied prospectively from January 1,
2023. As a result, Adyen will recognize these fees on a net (agent) basis, with no change to net revenue while
the financial impact on gross Revenue and Costs incurred from financial institutions from January 1, 2023 is
not yet known as it is dependent on future results. This change does not impact the 2022 consolidated andcompany financial statements, the non-IFRS financial measures or guidance provided in this Annual report.

Amsterdam, March 8, 2023
P.S. Overmars
Chairman Supervisory Board

D. Rueda Arroyo
Supervisory Director

J.A.J. van Beurden
Supervisory Director

P.A. Joseph
Supervisory Director

C.T. Keogan
Supervisory Director

P.W. van der DoesCEO

R. Prins
CCO

I.J. Uytdehaage
CFO

M.B. Swart
CLCO

K. ZakiCOO

A. Matthey
CTOAnnual Report 2022

04
Other Information

141

Annual Report 2022

Other information
Provisions in the Articles of Association relating to profit
appropriation
The Articles of Association of Adyen provide that the appropriation of the net income for the year is decided
upon at the Annual General Meeting of Shareholders.
For the preferred dividends the Annual General Meeting of Shareholders can elect to pay out the annual
dividend on these shares or to add the dividend to the class reserve.

Independent auditor’s report
Please refer to the next page.

Contact
Please contact ir@adyen.com in case of any questions regarding this Annual Report.

142Annual Report 2022

158

GRI Index

GovernanceIn the following table, we make reference to where in this report we disclose our environmental, social andgovernance (ESG) programs, policies and metrics. These disclosures are mapped in reference to thevoluntary reporting framework: The Global Reporting Initiative (GRI) standards. As per clause 3.3.1.1 of GRI
101 Foundation 2016, the Adyen 2022 Annual Report references the below disclosures either in part or in
full. Reference to page numbers and additional notes, where necessary, have also been included in the tablebelow. As we prepare to become compliant with CSRD, we will continue to evaluate opportunities for futurereporting enhancement.
The organization and its reporting practices
Disclosure

Description

Location in report

Section page Ref.

2-1-a

Legal name of the organization

Notes to the consolidated Financial Statements

90

2-1-b

Nature of ownership and legal form

Notes to the consolidated Financial Statements

90

2-1-c

Location of headquarters

Notes to the consolidated Financial Statements

90

2-1-d

Countries of operations

Notes to the consolidated Financial Statements

90

2-2-a

Entities included in the organization's
sustainability reporting

Notes to the consolidated Financial Statements

2-3Reporting period, frequency and contact
point

Other information (ir@adyen.com)

2-5

External assurance

Independent Auditor's report

2-7-aDescription

Location in report

Section page Ref.

2-9

Governance structure and composition

Corporate governance2-10-aNomination and selection of the highest
governance body

Corporate governance

2-11-aChair of the highest governance body

Corporate governance2-12-aRole of the highest governance body inoverseeing the management of impacts

ESG governance & oversight

2-13

Delegation of responsibility of managing
impacts

ESG governance & oversight

2-14-aRole of the highest governance body insustainability reporting

ESG governance & oversight

2-15-b

Conflict of interest

Corporate governance

65

2-19

Remuneration policies

Remuneration report

73

2-20

Process to determine remuneration

Remuneration report

73

2-21

Annual total compensation ratio

Remuneration report

73

65
65
65
15
15
15

Strategy, policies, and practices
Disclosure

Description

Location in report

90

2-22

Statement on sustainable development
strategy

Our approach to accelerating positive change

142

2-23-a-iv

Policy commitments

Responsible practices

39

143

2-24

Embedding policy commitments

Responsible practices

Section page Ref.

39

16

Stakeholder engagement

Activities and workers
Disclosure

Disclosure

Description
Total number of employees, breakdownby gender and region

Location in report
Investing in the teamSection page Ref.
29

Disclosure

Description

Location in report

2-29

Approach to stakeholder engagement

ESG governance & oversightDisclosure

Description

Location in report205-2-b to e

Communication and training about anticorruption policies and procedures

Information security & data privacy

Section page Ref.
15

Anti-corruption
Section page Ref.
44

Annual Report 2022

159

Tax

Diversity and equal opportunity

Disclosure

Description

Location in report

207-1

Approach to tax

Tax

207-2

Tax governance, control, and risk
management

Tax

207-3

Stakeholder engagement andmanagement of concerns related to tax

Tax

Country-by-country reportingTax

207-4-aSection page Ref.
47
47
47
47

EmissionsDisclosure

Description

Location in report

305-1

Direct (Scope 1) GHG emissions

Environmental sustainability

Section page Ref.
40

305-2

Energy indirect (Scope 2) GHG emissions

Environmental sustainability

40

305-3

Other indirect (Scope 3) GHG emissions

Environmental sustainability

40

Disclosure

Description

Location in report401-1-a

New employee hires and employee
turnover

People & culture

401-2

Benefits provided to full-time employeesthat are not provided to temporary or
part-time employees

Employment & benefits

401-3

Parental leave

Employment & benefits

Employment
Section page Ref.
24

37
37

Training and education
Disclosure

Description

Location in report

404-2

Programs for upgrading employee skills
and transition assistance programs

People & culture

404-3

Percentage of employees receiving
regular performance and careerdevelopment reviews

People & culture

Section page Ref.
24

24

Disclosure

Description

Location in report

405-1

Diversity of governance bodies andemployees

Report of the Supervisory Board

Disclosure

Description

Location in report418-1-c

Substantiated complaints concerning
breaches of customer privacy and lossesof customer data

Information security & data privacy

Section page Ref.
69

Customer privacy
Section page Ref.

44

Annual Report 2022

160

EU Taxonomy Report
Starting from January 1, 2022, Adyen is required to report on its environmentally sustainable economic
activities in line with EU taxonomy regulation (the “EU taxonomy”). The EU taxonomy was introduced toprovide a common classification system for sustainable economic activities in support of the action plan on
financial sustainable growth and EU’s climate and energy targets for 2030.

Total Asset Covered

As a credit institution, from January 1, 2022 to December 31, 2023, Adyen is required to report on thefollowing items :Total exposures to non- NFRD
companies

Gross carrying
amountExposures to EU
Taxonomy eligible
economic activities

Exposures to EU
Taxonomy noneligible economic
activities% Coverage (overtotal assets )3,208,810

9,513

3,199,297

0.1 %Total trading portfolio and on-demandinter-bank loans

—

—

—%

Total Derivatives

—

—

—%

235,287

235,287

3%

Other Assets

2,738,092

2,738,092

36 %Total exposures to central governments,
central banks and supranational issuers

4,407,540

4,407,540

58 %Total assets as per Balance Sheet

7,616,350•

The proportion of total assets of exposures to Taxonomy non-eligible and Taxonomy-eligible
economic activities;•

The proportion of the companies’ trading portfolio and on demand inter-bank loans in total assets ;•The total exposure to central governments, central banks and supranational users;•

The total exposure to derivatives;

Qualitative information•

The total exposure to non-NFRD companies, referring to companies that do not fall under the scopeof the Non Financial Reporting Directive (Directive 2014/95/EU).

As per Annex XI of the EU Taxonomy delegated Act, a number of qualitative disclosures to support thequantitative disclosure are included. Below is a breakdown of what is included in each KPI. The definitions
are aligned to the requirements of the delegated Act and defined further below.

As at 31 December 2022, Adyen is required to disclose on the Taxonomy eligibility. Eligibility indicates thatan activity is in scope for screening under the Taxonomy regulation. In the future, eligible activities will betested against the Technical Screening Criteria to determine Taxonomy alignment. The methodology for thecomputation of the KPIs is FinRep-driven, while the exposure is expressed in terms of carrying amount andwith reference date as at 31 December 2022.

Quantitative information
Based on the Disclosures Delegated Act Article 10, the assessment was initiated by using Adyen’s Q4 2022
FinRep report to identify the appropriate KPIs required. The metrics have been obtained based on a besteffort approach and available data. To facilitate the disclosures required by the Delegated Act Article 10, thetemplate recommended by the EU Platform on Sustainable Finance for KPI disclosure of credit institutions
was used. The KPI calculations are based on the same data as Adyen’s financial reporting under Regulation(EU) 2021/451 (FinRep), ensuring consistency between the financials in the annual report and theTaxonomy KPIs.

100%

Scope of the assets covered by the KPIs
• Total Assets Covered: include Adyen’s loans and advances (trade receivables and receivables frommerchants and financial institutions), equity holdings and all other on-balance sheet assets as at 31
December 2022 excluding exposures to central governments and central banks.
• Total trading portfolio: all positions in financial instruments and commodities held either with trading
intent or in order to hedge other elements of the trading book as defined in the Directive 2006/49/EC.
Adyen does not hold a trading portfolio as reported in the FinRep balance sheet as at 31.12.2022.
• On demand inter-bank loans: Exposures in the on demand inter-bank market (credit institutions). Adyen
does not have any of these exposures as reported in the FinRep balance sheet as at 31.12.2022.
• Derivatives: Adyen does not have any Derivatives as at 31.12.2022.

Annual Report 2022

• Total exposures to non- NFRD Companies: exposures towards companies that do not fall within thescope of the Non-Financial Reporting Directive (NFRD) such as SMEs, non-EU country counterparties,
and other non-financial companies that fall out of scope of the NFRD. Adyen does not yet have available
indicators to identify which counterparties fall under the scope of NFRD except for location. As such, total
exposures to non-NFRD related to counterparties outside of the EU.
• Other assets: include cash held at commercial banks, plant and equipment, intangible assets, right-ofuse assets and all other assets included in ‘Total Assets Covered’ excluding loans and advances, equity
holdings and exposures towards central banks and governments.
• Total exposures to central governments, central banks and supranational issuers: includes exposures
towards central banks. For Adyen, this includes cash held at central banks in the various jurisdictions inwhich the Company operates in.
As at December 31, 2022, based on the data available, Adyen only holds exposures of EUR 9.5 million
towards taxonomy-eligible activities. The eligibility exposure, expressed as a percentage of total assets, iswell below 1%. In calculating the full eligibility ratio, the numerator excludes the exposure to central
governments, central banks and supranational issuers. The eligibility ratio as a percentage of these covered
assets is therefore 0.2%. This is due to the nature of Adyen’s business strategy, which is currently not
involved in investing or financing specific activities. Adyen will continue to monitor the regulation and update
disclosures, business strategy and product.
Data sources and limitation
The total assets that should be assessed for eligibility include exposures to financial and non-financial
corporations which fall under the scope of NFRD. In order to identify which companies fall within the scopeof NFRD, an indicator at the level of the counterparty should be identified. While a regional identifier exists
helping to scope out all non-EU exposures, Adyen currently does not have an indicator to identify whether acounterparty is subjected to the NFRD regulation making it a challenge to distinguish between the type ofundertakings. As such, all EU exposures were assessed for eligibility, irrespective of the legal form ofcounterparty. The focus for the upcoming year will be to gather more data identifiers on the exposures.
Adyen will continue to monitor the regulation and update disclosures, business strategy and product design
accordingly. While we plan on disclosing the Green Asset Ratio (GAR) as part of the 2023 Annual Report,
given the limited exposure to Taxonomy eligible activities, we do not expect this ratio to be significant. In
preparation however, Adyen will focus on improvements to its data quality and availability.

161