(Bloomberg) -- Adyen NV shares plunged after it reported second-half earnings that missed estimates, weighed down by a hiring push that contrasts with mounting job cuts across the tech industry.

The company’s margin on earnings before interest, taxes, depreciation and amortization — a measure of profitability — was 52% for the six months ended December 2022. That compares with an average estimate of 59.7% in a Bloomberg survey of analysts. 

The Amsterdam-headquartered fintech firm, which processes transactions for companies such as Uber Technologies Inc. and H&M, has said it’s in a high-growth stage, pushing ahead on investments even as rivals work to rein in costs. Adyen’s hiring plans stand out amid a wave of tech industry layoffs as funding slows.

The shares were down 13% to 1,326.20 euros apiece as of 11:03 a.m. local time, after falling as much as 15% in early trading.

Adyen reaffirmed its financial objectives on Wednesday, with the long-term outlook for Ebitda margins at levels above 65%. 

“We haven’t specified what long term is,” Co-Chief Executive Officer Ingo Jeroen Uytdehaage said in an interview. He said Adyen had indicated to the market that it will continue to invest this year, adding that “we strongly believe that we are in an excellent position right now.”

Read More: Adyen’s 65% Ebitda Margin Promise More Distant After Miss: React

Adyen’s net revenue rose 30% to €722 million in the second half of last year, compared with an estimate of €725 million in a Bloomberg survey. Processed volume for the period increased by 41%.

What Bloomberg Intelligence says:

Adyen’s 52% Ebitda margin in 2H vs. 59.7% consensus — a 7.7 percentage-point miss — is due to continued rampant hiring and may weigh on sentiment, with this year’s projected 60% likely facing downgrades. Volumes and revenue in-line with expectations offer little offset, with skepticism mounting on Adyen’s long-term 65% Ebitda margin promise.

— Mar’Yana Vartsaba, banking analyst

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Adyen’s larger peer PayPal Holdings Inc said last week that it will cut 2,000 employees and Stripe Inc. announced a 14% cut in workforce late last year. 

By contrast, the Dutch fintech firm had ruled out headcount reductions in November, saying its recruitment strategy wasn’t led by short-term trends such as pandemic-related e-commerce or in-store volume fluctuations. 

In a letter referencing job cuts across the wider tech industry, co-founder Van der Does had at the time said Adyen would expand staff by a similar number in the new year as it did in 2022. 

Adyen’s management explained that the company has been investing heavily for the long-term growth of the business, but refused to quantify the cost impact, Citigrup Inc. said in a research note. 

“The lack of absolute guidance has led to the market being correct on direction but wrong on magnitude of profit pressure,” Citi analyst Andrew Gardiner said.

The company added 757 more employees in the second half, taking the total count for last year to 3,332.

“We expect investors to question why Adyen has picked up the pace of hiring in this way – is it purely the opportunity or has there been any change in competition?” Morgan Stanley analyst Adam Wood said in a published note.

Leadership Reshuffle

The company also reshuffled its top ranks on Wednesday, elevating Chief Financial Officer Ingo Jeroen Uytdehaage to a newly created position of co-CEO as Van der Does seeks the flexibility to focus on his health. It said Ethan Tandowsky will transition into the CFO position while Kamran Zaki steps down as chief operating officer.

“What I learned is that, should it be needed in the future, it’s important to be able to spend time on my health,” Van der Does said in a statement. “With Ingo as co-CEO, I can do that while Adyen stays its course.” 

--With assistance from Henry Ren.

(Updates throughout with details and comments)

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