This has been one of the hottest growing areas of financial services. Adyen is not just a normal payment provider. While payment usually is a very unsexy piece of our industry, you guys made it sexy. Growth on our platform has been very significant. We're investing for the future. If you work with newer technology, you get to better quality.

We completely rebuilt the infrastructure that typically is run by banks. And by doing that, we come to much better conversion rates for our customers. Ladies and gentlemen, the Co-CEO of Adyen, Ingo Dar. Hi, good to see you. Let me give just a little brief overview for a second. So Ingo has been with Adyen since 2011.

First as the CFO and now as Co-CEO since May of 2023. Adyen is based in the Netherlands, founded in 2006, and is one of the largest payment processors in the world today. In 2023, Adyen processed nearly a trillion euro in payment volume. They had net revenue of 1.6 billion euros and an EBITDA, Jesus Christ, EBITDA of 743 million euros, a 46% EBITDA margin.

Incredible. It's a capitalist conference. We applaud for EBITDA margin. Can you just say it one more time slowly? EBITDA. The company reported a 24% year-on-year revenue growth in H124. They just expanded into India, which is really interesting. I want to talk to you about that. Your market cap is today, actually, I just checked, about 45 billion American dollars.

So it's one of the most successful, not just European tech companies of all time, but frankly, tech companies of all time. So welcome, Ingo. Thank you. Thank you for having me today. You're a former CFO. I'm going to put you on the spot. You're no longer the CFO, nor the co-CEO of Adyen.

You're an analyst at an investment bank. And J-Cal, your managing director, says, "Put together a spread trade. You can be long or short one of Adyen and Stripe." How do we construct the business case? That's a really good question. Just the parameters of how we construct the case. I would say, if you look at this industry, for ourselves and Stripe, there is a lot to win.

Because I think we are the only two companies globally that are investing in technology, in financial technology. And if you look at where most of the business currently is, it is with the traditional players. It's the banks, it's incumbent players. So I would certainly go for long for both of us, because I believe that we, together, are going to change this industry.

That's how I look at Adyen versus Stripe. We come from different angles, but what I really appreciate about them is the fact that they also innovate, and competition is good. We're a company of a lot of athletes. We like to compete, and competition is good. So when you do compete in the marketplace, are you competing then with Stripe, or are you competing more with incumbents where traditional players are looking for payments?

- Yeah, I would say, of course, there are areas where we compete with Stripe. But if you see where we win most of our business, it's with the traditional businesses. So indeed, the incumbents, the banks, that's where volume comes from. - And what do they find? They find both the cost is too high, and then they find the technology's too brittle for what you need to do today.

- Exactly, I think if you look at this industry, banks, incumbents haven't invested for ages. We build everything from the ground up, so we have a single platform globally. And what we can do is we can basically lower total cost of payments, and increase the authorization rates. And that combination is very powerful.

And the reason why we can do that is because we have lots of data in a single platform. - Now, at the end of the day, you guys still sit on top of these fundamental rails, right? Meaning, is there a way where we are in a world where the traditional payment infrastructure, and then the traditional credit card rails, is there a world soon where all of that disappears, or is there enough?

- Specifically, the networks like Swift, the banks themselves, what role do they-- - Why do these people still exist? - Well, it's a good question. I think, indeed, what we try to replace is the fundamental infrastructure. So in the US, we have our own access to the Fed. We have a banking license in the US.

So we don't need commercial banks to be successful. And I think that's very crucial in our development. If you take long-term, also on the platform side, a lot of small businesses, they struggle to work with banks. And a lot of the software service providers, they, of course, build banking as a service.

And there are only a few companies globally that can offer this. We want to be that player, that partner for these type of companies to help them sell financial products. So that's also why we have expanded from payments to broader financial technology. - Do you, have you ever had a conversation internally which said something along the following lines?

Ah, 46% EBITDA, that's a lot. We don't need that. How much of that 743 million would grow the business if we just took it to zero? Told our investors for the next few years, like, could I grow twice as fast? Is that better in the long run? How, why, why be this profitable, I guess, maybe?

- Yeah, I think profit is for me the same as value. So if we deliver value and also have premium pricing, merchants are willing to pay a premium and pay basically for the value that we bring. And I would be afraid that if we would just go for the lowest price, because I think we potentially could.

We run at the lowest cost as an infrastructure. You would basically destroy a lot of value that's in, still in there. And I'm not sure if you would just go for price that you have the right conversations about the value that you bring. So that's the reason why we haven't done that so far.

But it's of course a question that you should always ask yourself, like, can you invest more in the business to accelerate growth? And that's still the trade-off that we're making every day. Our main focus is on revenue growth. If we can invest, if we see an opportunity, we will, but we have a long-term view there.

- What's it like building a company based in the Netherlands? What is it like hiring people? Where do you hire people? Do you make them come to the office? How does the culture change? - Yeah, so building a company in the Netherlands or starting in the Netherlands, at least, at least makes you aware that you need to go international from day one.

Like, the Netherlands is a super small country. You can never build a very successful business just based on population there. So we immediately went international, but in the beginning, we hired mostly into Amsterdam. So we had a very strongly focused Amsterdam operation, and that shifted like 10 years ago.

So 10 years ago, we went to the US, we started to build our team here. There's a very significant base here now in the US. We have more than 800 people working in the US. So it's our largest market outside of Europe. Growing fast, it's already 1/3 of our total revenues, the US.

And I find that very interesting to see also how that has changed our company. We have a different perspective on how we should serve merchants. I think not being local in the beginning did not help to solve the real problem. So you need to have product and engineering very close to where customers are.

And I think when we made that shift, we got more traction. And with the current setup, with like over 1/3 of our revenues already in the US, we see that we win a lot of domestic brands. And I think we're also proving that payments is not a commodity because-- - Do you find it, is there differences in employee issues, employee quality between America and Europe?

- I think there are very talented people in both markets. I think the, honestly, the technology market, of course, in the US is way more competitive than in Europe. I think we benefit from the fact that in Europe, we are one of the few companies. - Top dog. - Yeah, it's relatively easy.

Our brand awareness in Europe is higher than in the US. That's one of the things that we're working on right now to make sure that more people get to know us. In the end, we're a business-to-business brand, so that requires additional push to show what we do, but we work for the largest companies globally, whether that's online, we work for Google, Meta, Microsoft, for retail, H&M, Nike, Gap.

So we work for the best brands, and by also having them as referral customers, it is better to get into a country like the US. - If we were sitting here-- - Sorry, some of the challenges with being based in Europe, maybe not on the commercial side, but just on the shareholder side.

American investors, kind of public investors, private investors are mostly investing, mostly in private American and public American companies. Is it hard to attract a shareholder base? Does that affect the valuation? Because it's challenging to do so, and if you look at the valuation difference in the private market for Stripe versus your public valuation, there's a gap, there's a difference in the multiples, your metrics.

- It's a 2x gap on numbers that look very similar. - And your numbers are similar, some of your metrics are much better. Maybe, I don't know if you wanna explain the valuation gap difference, or maybe just talk about the challenges of building a shareholder base and shareholder interest as a European company.

- Yeah, that's a good question. Like when we, our biggest private round was in 2014, and then we realized that we want to have global investor base. That's when Iconic, General Atlantic, but also Temasek from Singapore came on board. They're still, they have been very supportive in the years up till the listing, we listed in 2018.

And when I worked on the listing, we were quite convinced that we would list in the US, given the fact that most of the technology stock list here. But when we looked at valuation, and also index inclusion, et cetera, we realized that listing in Europe was as easy as the US, or even easier.

And that from a valuation perspective, also if we benchmarked it to other IPOs at that time, that we even got a premium for listing in Europe, because we have a fully US, almost like 60, 65% at the listing, US investor base, so it was almost like a US IPO.

And we got a premium for being a SCARE tech stock in Europe. And I think that combination worked really well for us. There is a difference, I think, between public and private markets. And I think that explains for me a bit the difference in valuation. - You mean that'll get rationalized over time?

- I think so, ultimately, if-- - The spread trade? - If we're both public, you're gonna compare the same numbers, and it's a combination of growth rate and profitability. - Would you ever do a deal lifting? Would you lift in the US as well? - If I would list in the US?

If there would be no liquidity in Europe, I would list in the US, but there is sufficient liquidity in Europe. So you need to have certain size, but we have the size. There is liquidity, so it's not needed. - Yeah, these valuations will merge at some point when the people who are betting on promise versus performance, the public market is performance, and the private market is promise.

- These EBITDA margins are bananas. - Yeah, it's fantastic. So if we were sitting here 10 years ago, this entire conference would be centered around crypto and this amazing impact and how your business would absolutely be destroyed by crypto, and there would be no need for banks or for countries or for nation states, and everything was gonna be on blockchain.

Yeah, it was just everything was gonna be solved by blockchain, and everything goes away. And obviously, none of that has happened, but one thing that has happened that's really promising or interesting is stable coins. You have Circle in the United States doing really well, going public. I believe they're still on track to do that.

Then you have Tether, obviously banned in a bunch of countries, bunch of problems, and being used for a lot of illegal activity. I'm curious what your thoughts are, though, on the concept of stable coins and their impact on the industry and the business, 'cause it does seem to be working, especially internationally.

We don't see it here in the United States, but in other countries, Tether and Circle, these things are being used for lots of transactions, and people believe they'll ultimately be used for business transactions in a major way. What are your thoughts on stable coins? - Yeah, so I think the question is, are you looking at, indeed, domestic payment flows?

And then, of course, I don't think that there is a high need for stable coins in well-developed markets, and ultimately, we are processing well-developed markets at the moment. If it's about, indeed, cross-border type of transactions, we still work with relatively old systems like SWIFT, with all their challenges. They try to innovate.

That's the area where I would see there is a future for stable coins, indeed, if you need to. - Would you ever consider launching one? - No, I think we would consider working with stable coins. - So you might partner with a server or something. - Partner, exactly. - Yeah.

- That's always been our model. We want to bring financial technology to our customers, but also working together with the partners that we have, because they are ultimately also making a lot of success, and that's where we want to help them. - Ingo, one of the things that we talk a lot about is censorship, but beyond idea censorship, there's an even more, probably, corrupting thing, which is financial censorship and deplatforming, and the way that I think it came on our radar was there was these truckers in Canada that were protesting COVID a few years ago, and they effectively got deplatformed from financial services.

How do you balance that as a company that becomes this critical artery to send money back and forth and process money for millions and millions of people? - Yeah, I think one of the ways how we want to do this is work with a lot of platforms that basically have these truckers, as an example, as a customer, and I think the unique thing of these platforms, they have a lot of knowledge about these people, and I think combining that knowledge with providing financial technology is a very good outcome, because they have their knowledge about the industry, about the business data of these people, combined with what we know is needed in the financial industry, everything around money laundering prevention, terrorism financing, if you combine that, I think you have a very strong proposition, and I think that's the answer to the more traditional players, like the banks that also don't always have the knowledge to do this at scale.

I think that's what we have been automating from the start, like everything around AML, machine learning, we've invested highly in that to build something very scalable, and that's what we want to offer to our companies. - Is it complicated being a European company more than an American company in that context where there's a lot of points of view that Europe has, and do they try to exert that pressure or not really?

- No, I think we have really shifted from being a European company to a global company, and we need to comply with local regulations everywhere. We see ourselves as much as a U.S. company as a European company. If you look at the operations that we've built here, we want to make sure that we can compete with each and every competitor here in the U.S.

on the same level, so it's needed that you comply with local-- - Tell us, you're moving to India. I mean, not you personally, but the company. - No, yeah, so-- - The exposure in India is incredibly dynamic, as you know. Lots of varying regulations that you also have probably dealt with.

Tell us about the journey in India. - Yeah, it's a long journey. I think we started to work on this in 2018, 2019, and one of the most difficult things is all the data localization rules in India. So if you have a global platform, we have distributed database around the world, and then you realize that you can't store data of Indian people outside of India, so we had to really re-platform the data infrastructure that we have, but we did that.

We have local data centers now in India. We got all the licenses, and we're one of the few international companies, maybe the only one right now, that can offer this to international companies that want to go domestic, or international companies that want to go cross-border. And of course, this is a relatively niche play in India.

Today. - Today. - But it's a high need of our biggest customers. - I totally agree. - And that's what we've always focused on. We follow our customers. If they want to go into a new country, we make sure that we're ready for it. And this is a long-term investment, so this is already six years going on.

- I mean, to me, India is like China circa 2005, so if you just closed your eyes and just bought the entire country index in 2005, you'd look back in 2000, even now, and you'd be way, way ahead. And I think India's on the verge of that multi-decade kind of renaissance with less regulatory risk on the back end.

- Yeah, well, at least the regulatory rules are very clear from the start. - Exactly. - And I think that's what we appreciate. Like, ultimately, our company is a combination of technology, regulatory knowledge, and the right banking licenses. And if we play that out well, we are in such a unique position.

- So everybody is, you know, blathering. Oh, sorry, go ahead, go ahead, Jason. - No, no, finish. - Everybody's talking about AI, and you have to have an AI answer, but what's the real on-the-ground experience of trying to build stuff with machine learning and AI? Is there anything in production that really matters?

- Absolutely. - And how do you think about the future? - So one of the things, so there are, I think, two angles to this. The first one is how we optimize transaction routing. We just also launched a new way of US debit routing in the US, where AI helps us to make the best trade-off for merchants to lower the cost.

So you get a 20% plus lower cost if you route that well. And at the same time, higher authorization rates. - So the router is intelligently figuring out these rails are cheaper in this moment process over here. - And it's, yeah, and it's, of course, a trade-off with the authorization rates.

- Right. - And yeah, we work with eBay, Microsoft, et cetera, to launch this, and very good results. - And that's in production? - That's in production. That runs. - Wow. - The other part, the other angle is, of course, what we do internally for our support functions. That's more on Gen AI.

We've always built a company around open source. Also here, we're open sourcing the models. But we have a lot of data, of course, internally that we can use for that. - Have you found enough motivation to displace or reason to displace the humans that do the equivalent work? Has that not happened yet?

Or will it happen, do you think? Or does the business just grow and everybody stays? - It's just growing. And we've always had such a high focus on automation. If you ask where does the EBITDA margin come from, that's because we, if you look at our volumes and the number of people that we employ, it's a really low number, relatively.

And we will continue to do that. So AI is gonna help us to further scale. And I don't think that we are-- - Oh, come on, okay, Ingo, I have to push you. I mean, do you look at these American companies burning this kind of money to do a business that's smaller than yours?

Do you scratch your head thinking, how did they, what is going on over there? Do you think that? - These are huge investments. And we are closely following it, like where can we benefit from it? But we're always a bit of a smart follower. I think that's always been our strategy.

Like what can we use and what can we actually apply in production? We are so much focused on execution. I think that's also the only way to prove to, like we started the company with enterprise merchants. The only way to prove to the biggest merchants out there is to show that you can do it.

And just talking about it, it's also not really European, just to talk about it. We are doers, we like to build things. And that's how we've created it. - Ingo, I'm wondering how you look at authoritarian countries, dictatorships, monarchies, whatever, and providing services inside of those. This has been a very polarizing issue.

Obviously, some companies have chosen to not operate, for example, in China because of human rights issues and having to hand over dissidents in the case of a social network, let's say, where they're outright banned in them. And then you have this alliance starting, the BRICS has expanded and added a bunch of countries.

And there's talk about, hey, maybe SWIFT, we're gonna get off of SWIFT and we're gonna create our own BRICS version of SWIFT. Are you operating in those countries? How do you think about that? And there's a lot of hand-wringing about, oh, we're gonna be off the US dollar and off of SWIFT.

What are your thoughts on that entire space? Take it where you'd like. - So the way how we approach it is that we ultimately look at what are the markets that we want to be active in. China, as an example, I think the Chinese domestic market is a super difficult market to be active.

But we have a huge team in China selling basically to Chinese merchants that want to go here in the US. And that's a very successful route. So we try to be pragmatic here. Ultimately, if we can comply with the local rules, we will. And it's a trade-off, like, can you do business somewhere?

There are countries where we have chosen not to go so far, also because the demand is limited, but also maybe it's an unstable country. We do it on a country-by-country basis at the moment. - Now, what about this sort of anti-SWIFT movement, America has too much influence, the West has too much influence over the movement of money.

They can do things like sanctions, as David's talked about on the podcast a couple of times. Is that real? - Yeah, is there really gonna be an alternative to SWIFT? - I think there is a likelihood there will be alternatives, yeah. And also, I think to your example on stable coins, like, that could be an alternative longer term, also if there are issues with SWIFT.

- It just may not be a legislative alternative. It may be more technological, like yours or others. - Yeah, yeah, but I think there are companies that also try to solve this, like to have less dependence on SWIFT even in this Western world, yeah. - Do you guys run sentiment inside of all these payment flows or getting a sense of the economic health of certain countries?

And has there been any thought to sort of sharing those so that, you know, like in America, we go through these things, Europe too. Unemployment rate comes out, you revise it. GDP numbers come out, you revise it. And nobody can actually act on these things until you're looking back six months, which is a ridiculous way to run an efficient.

But I'm sure companies like yours, Stripe, Shopify, have you guys ever thought of working together to create a more dynamic view of economies? - It's certainly something that we wanna do with the data. I think currently what our challenge is that most of our growth comes from share of wallet wins.

So it's very hard to separate this from the underlying growth. The moment we become a more stable company and that's years away, and then I think that's more possible. But it's like the data set that we sit on, like we have, I think over a billion unique shoppers in our platform.

So it's-- - A billion humans. - Yeah, that's a-- - That's an incredible story. - Yeah, so there's certainly more to tell. And that's an absolutely interesting topic. - Do you ever see PayPal in the market? I'm just curious whatever happens to it. (audience laughing) - There's no delaying.

- Well, PayPal is an important partner of us. So we work closely with them also offering, we just did a press release on their new Express checkout that we do together with them. So we see them more as a partner than a competitor. I think that's how we see them.

- Last question. We've made a lot of fun of this whole thing this past week, founder mode, manager mode, whatever. But precisely for you, you work as a co-CEO. Which is a bit of a unique setup. But when it works, it can really work. And can you just describe to us how you guys have built such a great business and how you divide and share and conflict resolve?

And what does it mean founder mode versus manager mode? - Yeah, so I think the way how we built a company together. So Peter is the founder. He focuses currently more on culture of the company. And is doing a lot of founder conferences, meeting our merchants. We all meet our merchants quite often.

I see a couple of merchants on Thursday in San Francisco. And so that's an important part. I think that's how we do this. But it's a partnership already like for 13, 14 years. Like that's the time that I know Peter. So it's a very natural way of doing things.

And we have both our strengths and we have both our weaknesses and we know it from each other. And I think that makes it a successful combination. - Thank you. Guys, please join me in thanking Ingo for joining us. - Thank you. (audience applauding) Thanks. I really appreciate it, thanks.