Q1 2020 and COVID-19 Trading Update

Q1 2020 and COVID-19
Trading Update

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Q1H12020
2019 andShareholder
COVID-19
letter
Trading Update

Q1 2020

Processed volume

Net revenue

EBITDA 38% yoy

 34% yoy

 16% yoy

67.0 bn

135.5 mn

“At Adyen, we build everything for the longterm. The COVID-19 pandemic does notchange that. Notwithstanding, where we havetraditionally shied away from providing short-term
updates, we felt it sensible to provide additionaltransparency to our shareholders during these
unprecedented times. For us, we continue tofocus on our merchants to help them navigate thisnew environment, albeit from a distance.”
Ingo Uytdehaage
CFO

63.6 mnebitda Margin 47%

Q1 2020 and COVID-19 Trading Update

page 3Figure 1
Weekly total processed volume and weekly travel volume indexed to the first week of January.

Total processed volumeTravel

Summary•	A continuation of historical growth trends during January andFebruary, with Q1 2020 processed volume up 38% year-on-year.
•	The impact on volume we saw from mid-March through mid-April is areflection of the impact of COVID-19. We registered negative impact
mostly in the travel (i.e. airlines, OTAs and accomodation) and in-store
retail verticals, and positive impact in digital goods and online retail.
As is reflected in Figure 1 above, we see stabilization in the first two
weeks of the second quarter.
•	Net revenue was up 34% year-on-year for the quarter. Due to the strong
growth in January and February, mostly from the enterprise segment,
the take rate was down for Q1, totaling 20.2 bps. We continue to focus
on onboarding volume at scale, and on absolute margin.
•	EBITDA margin declined as we continue to invest in long-term growth,both in the form of headcount and in marketing campaigns, combinedwith a net revenue that was impacted by COVID-19 in March.
•	Free cash flow conversion ratio was 93% in Q1 2020, with CapEx
remaining <5% of net revenues.

Q1 2020 and COVID-19 Trading Update

page 4RetailThe decline in in-store retail volume due to lockdown measures is very
visible, with large numbers of stores closed. Online retail volume largely
compensates for the decline in in-store volume, and is steadily rising as
shown in Figure 2. This underscores the robustness of unified commerce
strategies — these merchants are able to seamlessly move volume fromin-store to online sales channels.
Due to the shutdown of physical stores and other sales channels (e.g.
call centers), we’ve seen a notable uptick in certain types of integrations,
including in the use of our Pay by Link product — allowing merchants to taketheir activities online quickly.

Figure 2
Weekly retail processed volumes indexed to the first week of January.

Online retail* In-store retail volume is not a proxy for total point-of-sale volume.

In-store retail*

Total retailQ1 2020 and COVID-19 Trading UpdatePeople
We added 169 FTE in Q1 2020, totaling 1,351, compared to 1,182 at the endof FY 2019. We have not ceased hiring as we continue to invest in long-term
growth. Of the new hires, 49% were in tech and 38% in commercial roles.
Absorbing new hires into the Adyen culture is naturally more difficult during
these times, therefore we have chosen to limit hiring to critical roles for thetime being. Senior management continues to see every new hire before theyjoin the Adyen team, now via video conferencing software, as keeping theAdyen culture remains as crucial as ever.

Figure 3
Adyen’s Q1 2020 FTE growth.

Business Continuity
We have business continuity protocols in place that allow us to continue our
day-to-day activities while adjusting to this new normal. Adyen staff are fully
equipped to work remotely, and have been doing so without impact to our
payment processing ability.
We choose to invest in the longevity of the relationships with our merchants
by working with them to ensure the sustainability of their business, in lieu ofimposing stricter measures on a wide scale.
Our merchant portfolio is mostly made up of enterprise merchants and has
been built with a long-term perspective in mind. We’ve historically been
averse to onboarding high-risk volume as a part of this philosophy, which
gives us added comfort in the current environment.

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Q1 2020 and COVID-19 Trading Update

Pipeline
We continue to be able to connect merchants to the platform at our regularspeed. However, some onboarding timelines have somewhat slowed due
to merchants’ challenges in the current environment. We expect that theseprojects are merely delayed, and that onboarding timelines will return tonormal once the situation stabilizes.

Guidance
We have not altered our medium– to long-term guidance. In line with our
long-term focus, we have not issued short-term guidance for this year.

Annual General Meeting
An emergency bill allowing companies to organize virtual annual general
meetings is likely to take effect in the Netherlands shortly. Adyen's AGM,
scheduled for May 26, will be converted from a hybrid AGM – for which a
convening notice was sent out on April 10 – to a virtual AGM as soon as
this bill has taken effect.

Contact
ir@adyen.com
press@adyen.com
Please subscribe to our news feed on adyen.com/ir.

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