724500973ODKK3IFQ447-2022-12-31-en

Message from the

CEO

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 from

our team and business, but my reflections on 2022 presented a

tension that made these topics difficult to start this message with.

This was a year in which Adyen showed strong performance, but the

surrounding global environment was challenging by so many

measures. From the new technologies we developed to the

partnerships we deepened, Adyen made significant progress

throughout 2022. Simultaneously, geopolitical instability, record

inflation, and supply chain shortages impacted the lives of people and

companies around the world. When zooming out further, climate

emergencies and humanitarian relief became nearly constant features

in the state of our world.

In recent years, we have solidified our firm belief that as our business

grows, 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, and

charities 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 the

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 of

investment 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 and

successfully 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 the

bar for talent high and scaling the Adyen culture. We feel the strong

responsibility for Adyen to continuously assess the Formula fit of our

team 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, our

culture 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 our

intended 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 our

team in person again has been so energizing. To me, these

interactions 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 with

our customers. With 2022 affording the long-awaited return to travel,

we were able to visit our 27 global offices again as well as the

businesses we work with. Connecting face-to-face strengthened our

relationships with existing customers – who continue to contribute the

vast majority of our volume growth – and helped us establish exciting

new partnerships.

While the environment around us changed when we returned to

working 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 when

realizing 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 felt

that 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 our

investments 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 the

solutions that will benefit many customers, rather than just one. Our

constant 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, but

rather go and meet them to hear what they need. We think critically

about creating lasting technical and commercial roadmaps that

answer our customers’ demands, then proceed with discipline in

building for the complexity inherent to our ambitions. In 2022, this

resulted in the bolstering of strengths in areas such as Digital and

Unified Commerce, while also investing in new capabilities in budding

initiatives like our embedded financial products that enable platform

businesses to offer banking services to the SMBs they serve.



Annual Report 2022		3

The challenges our customers face are in many ways shaped by a

continuously global landscape. Shifts such as the digitization of

businesses 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 position

in 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 the

course 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.

Pieter



Annual Report 2022		4

Processed volume

2022 49% YOY

€767.5 BN

Net revenue

2022 33% YOY

€1.3 BN

EBITDA

2022 16% YOY MARGIN 55%

€728.3 MN


2020	2021	2022
303.6 BN	516.0 BN	767.5 BN


2020	2021	2022
684.2 MN	1,001.5 MN	1,330.2 MN


2020	2021	2022
402.5 MN	630.0 MN	728.3 MN

Highlights in 2022

Expanding our team across regions and disciplines

•We continued to invest in scaling our global team, which brought the company to a total

of 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 in-

house designed terminals, EFP suite, and advanced Digital offering

•We deepened our global presence to help drive our customers’ domestic and

international expansion

Making a positive impact with our platform, partnerships, and

people

•In 2022, we announced our commitment to annually donating 1% of our net revenue to

causes 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 in

skill-based volunteering opportunities, fundraising campaigns, and emergency response

Adyen at a glance

Adyen is the global financial technology platform of choice for leading

businesses. 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 as

a 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 future

of global commerce. Bolstered by the company’s unique data

ecosystem, both brick-and-mortar and digital-native customers are

equipped to solve problems and grow.

For the service of payments processing, Adyen earns processing and

settlement fees (gateway and acquiring services, respectively) as well

as some smaller fees related to products or functionalities that reduce

complexity and friction. For a full breakdown of the fees Adyen earns

for its services, refer to Note 2 ‘Revenue and segment reporting’ of the

attached Consolidated Financial Statements for more information.



Annual Report 2022		6

Business strategy

Adyen grows with its customers. This means we maintain a dedicated,

long-term approach to every partnership we establish. In fact, the

large majority (over 80%) of our 2022 annual volume growth came

from 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 and

capacity, then steadily increase our scope as each partnership

progresses. This is a highly collaborative process that requires us to

work closely with our customers to identify and build solutions to their

challenges.

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 can

take many forms, including adding new sales channels, activating

additional regions, or broadening our services. At its core, our land-

and-expand approach encompasses starting small before tackling

larger 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 to

understand, 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, and

Platforms - assess the market to uncover trends, challenges, and

opportunities through which we can best scale our solutions.

Innovating across our commercial pillars keeps us at the forefront of

an 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 our

customers 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 with

technological autonomy, which often results in implementing new

payment methods, adapting functionality, or launching new products

that 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 and

cohesive and transparent view of all transaction activity. Our Unified

Commerce offering centers around this concept, and empowers our

customers to understand consumer behavior regardless of their

preferred on and offline sales channels. It provides seamless

experiences 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. Our

interconnected insights enable these businesses to increase their

performance by making more data-driven decisions, personalize their

consumer 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 our

terminal portfolio reflects the world’s persisting hunger for advanced



Annual Report 2022		7

in-store and cross-channel experiences. Over the past years, this has

become a need rather than a nice to have for businesses and

consumers 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 of

enterprise-sized businesses. However, the enterprise platforms we

partner with also serve as a conduit to a worthwhile demographic of

potential customers: the small and medium-sized businesses (SMBs)

they host. In recent years, we have begun exploring how our

enterprise-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 our

embedded 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 the

long-tail of the market.

Our single integration allows platform businesses to unlock an end-

to-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, data-

driven 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 positive

change for the world around us. In 2022, we materialized our

commitment to the United Nations’ Sustainable Development Goals

(UN SDGs) to support economic growth, sustainable development,

and climate action by annually donating 1% of our net revenue to

causes that align with the UN SDGs framework.

Beyond our financial commitment, we have taken steps to instill this

focus into our product development. Our Impact technology - a

philanthropic feature within our core payments platform - enables

businesses to seamlessly embed charitable donation functionality into

their checkout journeys. In addition to processing their payments, we

ensure 100% of consumer contributions reach the intended charity.

We will continue to evolve our Impact suite’s capabilities in order to

meet the growing charitable appetite of global businesses and

consumers.

With 27 offices around the world and a global acquiring footprint,

Adyen is equipped with the local and international expertise needed to

partner with businesses spanning every size, industry, and region. We

look forward to powering their ambitions and growing alongside each

customer we support.



	Digital Within our Digital pillar, we are pushing to become the preferred partner in content tools and platforms (e.g. streaming services, social media, editing software). To make this possible, we have a solid sales approach in place targeting strategic digital content verticals and geographies. Unified Commerce 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 from curbside 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 to broader 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		8

“Adyen rewards people who go the extra step

and 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, the

company will support you in getting there.”

Joëlle — Commercial Growth Manager



Annual Report 2022		9

Discussion of

financial results

Processed volume for 2022 was €767.5 billion, up 49% year-on-year.

The majority of our processed volume reflects the success of our land-

and-expand commercial strategy.

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 is

driven by the continued growth of customers already on the platform.

It was also impacted by our increased overall ATV, due to travel

volumes rebounding.

Operating expenses for 2022 came in at €665.4 million, up 64% year-

on-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 end

of the year, up from 2,180 FTE at the end of year 2021. It is our

intention to grow our team with a similar number of new colleagues in

2023 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.

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

by employee benefits exceeding net revenue growth as we

accelerated our hiring pace.

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.

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.


	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

+48% YoY

+31% YoY



Annual Report 2022		10

Financial objectives

We did not see any business developments in 2022 that would lead us

to update our guidance. Our standing financial objectives1 therefore

remain unchanged.

Net revenue growth: We aim to continue to grow net revenue and

achieve a CAGR between the mid-twenties and low-thirties in the

medium term by executing our sales strategy.

EBITDA margin: We aim to improve EBITDA margin, and expect this

margin to benefit from our operational leverage going forward and

increase 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.



Annual Report 2022		11

1 Adyen has not defined, and does not intend to define, "medium-term" or "long-term” for

its 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 as

indicating 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 a

number 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.

“At Adyen, you get a lot of responsibility from

day one. You scope your project, you define

the objectives, you implement it, and you’re

the 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



Annual Report 2022		12

Management Report



Annual Report 2022		13

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 of

working 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 and

define business as usual. As such, we plan to remain accountable and

transparent 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 the

world around us, we have taken an essential step in our long-term

ambition to build an ethical business and create sustainable value for

our 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 a

comprehensive list of global sustainability topics pertinent to Adyen

and the broader sector. From there, our research led us to perform a

risk 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 and

other financial risk2. 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 to

Adyen from the perspective of making a positive impact. With this

consideration, we identified where Adyen sees opportunity and can

commit to making a difference.

Stakeholder engagement

This was Adyen’s first materiality assessment and we recognized the

importance of a controlled approach that offered a greater level of

detailed insights and identification. This included surveying and

having conversations with our employees, global leadership team, the

Management 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 formally

conducted 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.



Annual Report 2022		14

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

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 the

additional impact topics we find equally important in our efforts to

accelerate change. The order of the topics does not necessarily reflect

their relative materiality. It was encouraging to see that the results of

the 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 to

enable businesses to integrate donations in their payment flows.

Community impact

Driving positive change in the areas in which we operate by

empowering 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 team

Growing our global team across regions and disciplines.

Learning & development

Facilitating opportunities for our people to expand their skills

and knowledge.

Employment & benefits

Ensuring our people are fairly treated and supported both at work and

in 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-class

security principles into our product offering.

Tax

Paying taxes in the areas where we operate. We do not seek refuge in

tax 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) voluntary

sustainability framework. In doing so, we aim to showcase how we are

taking 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 and

communicate 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, a

simplified 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 the

Supervisory Board as the highest governance body.

In 2022, we established Adyen’s ESG Working Group, a cross-

functional group that includes members of the Reporting, Legal, and

Corporate 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, and

governance matters by aligning programs that manage our ESG risks,

opportunities, and impacts. Introducing this Working Group was a

natural 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 in

their respective areas. The Working Group reports on its activities to

Adyen’s CFO, and updates the Management Board on ESG matters

on a quarterly basis. The company’s overall ESG strategy and

activities are discussed at Supervisory Board level at least on an

annual basis. In 2022, ESG topics were discussed in three Supervisory

Board meetings — during the materiality assessment process, the

ongoing preparations for the 2022 Annual Report, and as part of the

annual strategy session.



Annual Report 2022		15

Our approach to

accelerating positive

change

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 fulfil those of tomorrow. Over the course of

sixteen years maintaining this approach, Adyen has emerged as an

industry leader in payments. Sitting at the intersection of finance and

technology, our platform functions as the trusted conduit between

businesses and global consumers. We have realized sustained growth

for 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 it

along 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 in

shaping a sustainable and socially responsible future. Adyen is

therefore 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.



Annual Report 2022		16

1% for the UN SDGs

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, we

are confident that our funds will help accelerate change where it’s

needed 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 our

business grows, so too must our impact.

In 2022, our 1% commitment totaled €13.3 million. Though it would

be simple to spend this in a single donation, we were determined to

allocate it prudently. With 2022 being the inaugural year of this

commitment, we spent time conducting research on the most

impactful ways to contribute to it. This included working with charities

that meet our integrity risk profile to gain an in-depth understanding

of the complexity of the donation landscape and the technological

challenges of global fundraising.

Throughout this learning process, three guiding principles became

clear to us: We believe 100% of every donation should reach the

intended charity. We believe every size business should have the

ability 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 on

behalf of SDG-aligned charities we work with, thus lowering the

barriers 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,

with our Impact technology facilitating this positive 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 improve

the end-to-end capabilities of our Impact technology. We will use the

2022 carry-over budget to cover the onboarding costs that accrue

when charities join our Impact portfolio. Namely, there is an initial

investment needed to operationally structure a charity to meet our

funding model. This is a critical first step before widespread support

can be received. Once established, Adyen can connect the charities to

our 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.

The 1% will also continue to go towards ensuring 100% of consumer

donations reach the intended charities. This means absorbing our

standard processing fee as well as the fees currently in place from

major 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 pull

from 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 and

enable global progress at scale, we are engineering methods of

creating 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 and

partnerships can play in scaling support of the UN SDGs.


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



Annual Report 2022		17

“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 critical

assistance to people facing crises such as the

war in Ukraine, and the earthquakes in Türkiye

and Syria.

We are so grateful for your solidarity, and look

forward 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 Section



Annual Report 2022		18

Impact Technology

Adyen is determined to generate a multiplier effect by combining the

strengths of our platform, people, and partnerships. The first way we

are doing so is embodied in our Impact technology, a product within

our core payments solution that was launched in 2020. We have

always been a partner when it comes to driving our customers’

growth, and we are now applying the same logic to scaling support for

charitable 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 have

the resources to build them. Lowering these common barriers to

connection facilitates lasting relationships between businesses on the

Adyen platform, consumers with a growing charitable appetite, and

the 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 the

charitable organizations who are on the ground aiding in societal

causes, humanitarian crises and climate emergencies. In 2022, this

feature 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 the

frequency of such global crises steadily increasing around the world,

unlocking widespread responsiveness is key. For that reason, we are

proactively making payments executed on the Adyen platform an

opportunity to accelerate financial support whenever it’s

imminently needed.

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 success

is protecting the planet and its people. To make this possible, we are

joining forces with the charitable organizations alleviating many of the

world’s most pressing issues. We are proud to have now partnered

with a total of 118 charities. With their deeply rooted volunteer

networks, specialized response knowledge, relief supplies, and long-

standing reputations, we know that quality charities can make a

tangible 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, and

we 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 this

process 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 a

customers’ 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 of

detailed reporting provided by Adyen.

Our focus on utilizing our technology to benefit our customers and

charity partners is expressed in a number of ways across our Impact

suite, which processed €7.7 million total volume in 2022, an increase

of 126% from 2021. Our Impact technology reduces the local

fragmentation of global fund collection. We tap into the new

generation of givers whose wallets are online. We leverage our vast

customer 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 our

Giving 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 to

further 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



Annual Report 2022		19


		“When businesses look to partner with global charities like ours, they often face a lot of red tape and complexity. With Adyen’s Giving product, these barriers are lowered so that working together is simple and effective.” Aliénor Descours — Make-a-Wish International


		“Because Adyen Giving puts transparency first, customers know exactly where their money is going and that their entire donation will be received by their charity of choice in full.” Sindiswa Nobula — World Wildlife Fund (WWF)


		“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 really allow us to drive collective change and make the impact we need.” Hassina Bahar — United Nations High Commissioner for Refugees (UNHCR)

Figure 4

Donations matched and number of Adyen customers live with Giving

Donations matched by Adyen in 2022

€3.9 MN

Number of Adyen customers live with Giving



Annual Report 2022		20

“One of Adyen’s guiding principles is bringing

people together with different backgrounds

and perspectives. Our team doesn’t just come

from the financial and tech industries — they

come from all experiences and, with that, bring

many 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 this

interest on a global and local level to make a

positive difference in the communities where

our people live and work.”

Savannah — Partnerships Specialist



Annual Report 2022		21

Community impact

While Adyen is passionate about engineering a global multiplier effect,

we find it essential to think locally too. For us, an important dimension

of building an ethical business concerns our impact on the areas in

which we operate. We take a vested interest in the 27 cities where

we’re located, and want our teams to thrive alongside their

surrounding communities. In these areas, our mission is to drive

positive impact across social issues and local causes. To make this

possible, we empower our teams to become actively involved in

community 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, our

initiatives 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 when

the ‘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 than

solely facilitating funding, they connected our people to our charitable

partnerships in a hands-on way. The groups achieved this by

organizing high-impact events that were locally tested and regionally

scaled. A great example of this iterative process can be seen in

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 have

formalized 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 they

would for holiday or personal time off. At the same time, we will

continue to encourage and facilitate regular opportunities for

employees to participate in.

As this framework develops, Adyen will continue leveraging the

invaluable 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		22

North America

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 the

beachcombing day, our colleagues learned about

the harmful effects of plastic on the ocean, and

how 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 low-

income circumstances. Adyen fundraised and

assembled care packages containing essential

baby and toddler items. The team also volunteered

in person at Room to Grow’s donation drive to

connect with families in the community and

meaningfully expand their support networks.

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 and

then donate 40 bicycles to underprivileged

children, who joined us on-site to celebrate in the

office.

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.

Europe & Middle East

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, team

members subsequently volunteered at the food

bank in person to experience powerful, hands-on

connection with the community.

Amsterdam: Our Amsterdam team partnered with

Life 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 of

creating rich and biodiverse ecosystems.

Asia-Pacific

Tokyo: Employees from Adyen’s Tokyo office

participated in a street clean-up event organized

by Green Bird, a grassroots organization

originating from Harajuku Omotesando. By joining

forces with other Green Bird volunteers, Adyen was

able to help remove large amounts of litter from

pedestrian areas with high foot traffic. It was a

special opportunity to clean the streets of Tokyo

while inspiring others to incorporate this civic

contribution into daily life.

Sydney: Adyen’s Sydney teammates spent time

volunteering 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 in

need of support.



Annual Report 2022		23

People & culture

When asked to describe life at Adyen, many of our colleagues have

surmised the experience in a single word: autonomy. Across all areas

of the business, individual autonomy is an intentional through line.

Whether contributing to the business as an engineer, product

marketer, 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 of

momentum 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 the

more diverse the perspectives on our side, the sharper our ideas

become. Yet one shared trait is essential amongst the diversity of

others: 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 the

domain or region, they are doers. They think bigger. They tackle

challenges. They take ownership. They remain accountable. We make

our 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.



Annual Report 2022		24

The Adyen Formula

From day one, we were intentional about the company culture we

wanted to create. Our considerations went beyond the technical

ambitions of our single platform, and included defining the principles

that would govern the way we work. We believe that what we were

setting out to do was as important as how we would do it - not only as

a 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 — no

matter where in the world an office is located. Across regions, time

zones, and cultures, our Formula is the key to scaling our culture

of autonomy.

Much of the Adyen Formula directs the way we operate together as a

team. 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 is

by design, as optimizing our interactions facilitates autonomy and

speed — 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 each

qualified 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 and

foster 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.

The Adyen Formula

We build to benefit all merchants

(not just one)

We don’t hide behind email, instead we

pick up the phone

We make good choices to build an ethical

business and drive sustainable growth for

our 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; we

work as a team — across cultures and time

zones

We create our own path and won’t be

slowed down by “stewards”



Annual Report 2022		25

“I think the beauty of the Formula is the way it

translates 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 across

regions. 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



Annual Report 2022		26

Diversity, Equity, and Inclusion

At Adyen, one of our Formula points is including different people to

sharpen our ideas. We know that thinking differently is vital to

continuously 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 stem

from 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 our

attention to specifically focus on gender and racial ethnicity. Through

our 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 to

consist of at least one-third female members. Furthermore, we are

committed to maintaining a Supervisory Board that is at least one-

third 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% representation

of any one group.

Lasting change can’t happen overnight, but we have a plan in place to

bring us closer to reaching our long-term goals. First and foremost,

we are working hard to assess the diversity of our workforce and their

employee experience. We will use these valuable quantitative and

qualitative 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 a

number of DE&I strides, which can be found below.

Candidate attraction

When it comes to candidate attraction, we have taken steps to

promote 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

website

Recruitment activities

While attracting diverse applicants is arguably the crux of enacting

further internal change, we are simultaneously improving the next

stages of the employee journey. To ensure our recruitment and

interview 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 program

at 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 they

arise. 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		27

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 of

individual 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 employee-

led and employee-founded communities that celebrate, endorse, and

share 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, and

LatinX at Adyen.

ERGs are crucial to empowering underrepresented communities, and

as 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 this

process enables our leadership team to understand where progress

has been made and where we still must improve.


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

xxx



Annual Report 2022		28

Investing in the team

It’s business as usual for Adyen to focus on our long-term opportunity

and hire specifically to meet our strategically determined technical

and commercial ambitions. We see the significant runway ahead of us

in this ever-evolving payments landscape and find ourselves only in

the 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 at

hand, we spent 2022 consciously investing in growing our team.

2022 marked Adyen’s most significant period of headcount growth to

date. This year, we grew the team by 1,152 FTE, bringing us to a total

of 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 to

create 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 and

autonomy 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 members

of our senior leadership team to the group conducting final interviews

with candidates. Whereas all final conversations were historically held

with a member of Adyen’s Management Board, we are now at a size

that requires additional voices to weigh in. Alongside the board, we

place 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, we

spent 2022 successfully hiring at speed - without compromising on

our high employee standards. Our focus on investing in our tech

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 are

pleased to see our Formula and company culture thrive at both

locations.

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 be

present 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.


	Figure 6 Adyen’s overall workforce per domain in 2022



Annual Report 2022		29



Annual Report 2022		30

“It was clear from the get-go that we wanted to

have the Adyen culture in Mumbai. We’re one

company, with one platform, and always one

culture. It’s extremely exciting that we work so

closely with our colleagues around the world.

You get to understand other markets and

meet people from different cultures and

outlooks. Having this broader perspective

helps us build and solve problems in a

challenging and complex market like India.”

Aditya — Country Manager India



Annual Report 2022		31

Learning & development

Our approach

At Adyen, we know that our ambitions can only be reached by

unlocking the full potential of our team — the driving force behind our

continued innovation and global expansion. Fortunately, the people

who work at Adyen are ready to continually learn and increase their

impact. To nurture this symbiotic relationship, Adyen is a place where

individual growth is both nurtured and encouraged. To achieve this at

scale, we have built - and continue to iterate - a framework that

enables talent development at all employee levels. Whether

contributing to the company as a coordinator or director, there are

roads 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 talent

across 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, and

are treated as equal, full-time team members. This year, 78 NextGens

were offered a full-time position upon completing the program and

their 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 newfound

responsibilities once granted. Our Human Resources team has gone

to great lengths to fine-tune our Team Lead development program.

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 from

prior work experiences. As our company matures, we have steadily

increased the number of senior hires we secure. Hiring senior team

members not only bridges our knowledge gaps, it also gives their

colleagues the chance to learn from the outside-in and draw from

ways of working at other companies. To offer development

opportunities to those who joined Adyen at later stages in their

careers, 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 of

internal academies that keep our global teams continuously upskilled

and freshly resourced. Our academies currently span the: Operations

Academy, Commercial Academy, Recruitment Academy, Product

Academy, Tech Academy, Marketing Academy, and Sales Academy.

Our Sales Academy, a prime example, aims to develop the most

impactful 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 an

environment for Sales & Partnership Managers to practice our

preferred sales tactics while receiving honest, constructive feedback.



Annual Report 2022		32

“We’ve always been able to attract really smart

and talented people. As they are often in the

early stages of their careers, they still need to

uncover how to best utilize their skills and

talents. 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 realize

that it’s our responsibility to guide and support

our people as best we can. When you have this

level of smart and talented people, you have a

duty to facilitate their growth.”

Mariëtte — Chief Legal & Compliance Officer



Annual Report 2022		33

"I get to meet some of the smartest people at

work 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 each

session. The genuine care we have for one

another makes Adyen a great place to be my

best while I bring out the best in others."

Anish — Learning & Development Specialist



Annual Report 2022		34

Create your own path

At Adyen, we believe career growth needn’t only take the form of

moving 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 direction

that best suits their individual interests.

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 team

member’s current domain. Rather, a Marketing colleague is welcome

to apply to the Recruitment team and vice versa. We have seen many

success 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 were

originally 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, the

possibilities are endless for those looking to bring their impact to

another location. The spectrum of regional mobility ranges from office

visits, to temporary exchange, secondment, and full international

transfers. These opportunities mean a team member has been

entrusted as a champion of our Formula, a culture ambassador, and a

knowledge expert. Such transfers can be instrumental in helping us

build our business and scale our culture across teams and offices.

Performance management

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 and

track individual career development plans. They also allow us to

monitor and maintain our employee skill sets, by shedding light on

times an employee may require additional support or guidance.



Annual Report 2022		35

“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 a

chance on you. I feel so lucky to be part of a

company that encourages this culture of

possibility. As long as you give 100%, anything

can happen and things really will.”

Raquel — Head of Marketing Italy



Annual Report 2022		36

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 of

equity is included in every offer. This fosters a vested interest in our

overall business performance and motivates employees to hold a

long-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, we

match 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 career

development happens quickly, so too can salary increases.

To remain competitive, we determine salaries based on what our

peers 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 ensures

contributions are rewarded through the same lens — giving our

people 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 the

form 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 a

monthly stipend for employees to spend however they see fit. As our

people come from all walks and stages of life, we find it important to

support 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.

Through Adyen+, we do not assume which perks are most desirable,

and instead empower our people to enjoy the benefits most relevant

to 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 our

team members navigate extraordinary times with understanding and

support. Recognizing the importance of one’s personal role as a

parent, we offer all of our employees parental leave. On a country-by-

country 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, health insurance, 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		37

“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 the

world, 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



Annual Report 2022		38

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 them

into all areas of our business. Consciously designing our business in

line with these responsible practices creates a culture that embodies

our mission.



Annual Report 2022		39

Environmental sustainability

With environmental sustainability comprising a key component of

responsible business practices, Adyen is committed to further

reducing and compensating for our global footprint. Since we began

assessing our company’s environmental impact in 2019, we have

made notable improvements - from tracking our carbon emissions

and moving to renewable energy, to expanding our office

sustainability efforts. Consciously shaping our operations in line with

these responsible practices is key to realizing our ambitions.

Making progress has also come in the form of broadening our

environmental knowledge, which has matured and is contributing to

our company’s priorities. We see that although our business model

lends itself to low global emissions and is exposed in a limited way to

climate 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 line

or 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 our

customers. 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 move

away from targeting a Climate Neutral certification, which we aligned

with and reported on in the past. While we recognize the positive

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 our

environmental 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 to

procuring carbon credits going forward, we have therefore

established a list of criteria for suitable projects which includes key

qualities such as: geographical relevance, additionality and

permanence, 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 and

find innovative ways to increase our environmental accountability. We

will continue to evolve our thinking and stay close to changes in the

corporate sustainability landscape. Below we have outlined where we

currently stand across GHG emissions and renewable energy usage

across our global operations.

Adyen’s 2022 operational GHG emissions, measured in tCO2e


Scope	Emissions (tC02e)	% of total	tCO2e/ FTE
Scope 1: direct GHG emissions	112	0.19%	0.03
Scope 2: indirect GHG emissions from purchased electricity, heating and cooling	4,449	7.67%	1.34
Scope 3: other indirect GHG emissions	53,432	92.14%	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 physical

office 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 more

detailed 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 better

data.

Scope 1

Scope 1 emissions are emissions from sources owned or controlled

by us — such as refrigerants used to heat or cool our offices — and

remain 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 the

energy consumption across our offices and data centers, and this year

we expanded the calculation to include our terminal warehouses as

well. 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 our

calculations leveraging several new inputs in addition to the growth of

our company and the return to offices and business travel post-

COVID. Actual lifecycle analysis data from our hardware suppliers for

our key infrastructure purchases, such as servers, which were not

previously included in our calculations are now part of our

calculations. We have also accounted for the downstream

transportation of our POS terminals by air and ground, as well as an



Annual Report 2022		40

updated method to account for terminals sold to customers and their

lifetime energy consumption.

Environmental sustainability projects and climate

contributions

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 more

accurately 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 the

exchange rate at the time of our analysis for 2022). This follows

guidance from the UN Global Compact3 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 are

outside 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 to

use 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 residual

emissions with permanent carbon removal credits to claim net-zero

carbon.

To address Scope 2 emissions, we committed to a purchase of

unbundled energy attribute certificates (EACs) that matched our non-

renewable 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 our

data centers and warehouses. Where actual data was not possible to

collect, we made estimates based on floor areas and local emissions

grid factors.

We secured carbon removal credits based on our Scope 1 and

business 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) machines

that 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 geological

storage 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 by

2030. In particular, the commitment will help accelerate the

implementation of the technology on a large scale as well as support

research and development in making the DAC technology more

efficient and cost-effective.

2. UNDO

Mineral weathering already naturally captures CO2 at a gigaton scale

but takes a very long time (1,000+ years). UNDO accelerates this

natural process by spreading basalt on croplands to increase

dissolved inorganic carbon in the soil. Their technology uses novel soil

models 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 climate

change.

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 and

wetter conditions result in faster rock weathering rates and, thus,

faster CO2 drawdown. InPlanet is teaming with local mines and

quarries to source rocks and works with the University of Sao Paulo to

develop monitoring, reporting, and verification field stations to collect

better 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 rock

powder 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		41

3 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.

4. Sonnenerde

Sonnenerde uses pyrolysis, a process under which waste biomass is

heated without oxygen to produce carbon-rich biochar, which is

highly stable and can sequester carbon for multiple centuries. Biochar

also acts as a soil enhancer when applied, reducing erosion and

increasing 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 natural

chemical 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 of

Engineer Field Research Facility located in North Carolina on this

project, where it plans to place 8,000t of olivine sand offshore from

the Town of Duck’s shoreline.



Annual Report 2022		42

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 to

this work are the efforts to ensure Adyen remains compliant with new

and upcoming requirements, as well as to establish ethical decision-

making practices that continually inspire trust in all stakeholders. To

achieve this, the Compliance function made changes to how our

teams 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 applicable

regulations and laws regarding human rights, child labor,

and sustainability.

In the same way Adyen externally prioritizes ethical principles, it is also

expected that all employees to treat one another fairly and with

respect. 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 the

financial industry.

Adyen is collectively committed to maintaining this oversight and

encouraging people to speak up when in doubt. To facilitate this, in

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

anonymous ‘Speak Up’ reporting tool4. 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 be

safely reported.

The annual, company-wide Integrity training is a testament to Adyen’s

commitment 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 each

year for all employees. This educational refresher ensures all teams

and functions are properly informed about relevant developments and

how 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.



Annual Report 2022		43

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

Information security & data privacy

Information Security

As a company processing our customers’ data and that of their end-

consumers, information security is of vital importance to us. Securing

our data has been a top priority since our founding, which is why we

have long embedded security into each area of our platform

and organization.

In 2022, we further strengthened Adyen’s security strategy, which is

built upon the principles we deem fundamental in our mission to

remain 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 growth

stages of the company, Adyen continuously educates our global team

on 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 those

pertaining to the growth phase the organization is in. These programs

range from sharing generic security principles to scaling specific

processes such as incident handling and reporting, threat modelling,

and security penetration testing. Over the past year, we also raised the

quality and effectiveness of our annually securing training, in which we

communicate 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 of

our security posture. Throughout 2022, Adyen was committed to

increasing and improving our threat modelling activities. Our

automated, offensive security testing activities were significantly

increased to ensure our broader and richer product offering was

delivered in line with our high security standards.

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 meet

those 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 to

the scope of our regional expansion. Furthermore, Adyen maintains

compliance programs related to other PCI standards applicable to our

solutions, 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 and

controls, we remain vigilant of our environment, industry, and the

ever-evolving technology space. Over the last year, we focused on

expanding our monitoring and detection capabilities, in addition to

ensuring 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 with

the growth and transformation of our products, external threat

landscape, and additional scrutiny from regulators.

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.



	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		44

“You need to be innovative and creative at

Adyen. When I’m working with my team, I feel

like a powerful designer who can change the

world. We have a special bond that’s easy to

see from miles away. It connects our ideas and

makes our work even stronger.”

Natalia — Brand Designer



Annual Report 2022		45

Data privacy

To support the business in building the most customer-focused

financial technology platform, Adyen’s Privacy team strives for the

best possible data privacy and compliance program. Customers trust

Adyen with their shoppers’ transaction information. Given the

sensitive nature and commercial value of this data, Adyen takes our

responsibility very seriously. Ensuring data privacy and compliance

are key commitments that Adyen makes to all of its customers.

Alongside transaction information, Adyen processes and collects

employee personal data and registration information from our

customers. The privacy protection that comes with collecting such

data is therefore relevant for every facet of Adyen. Employees are

aware of the expectations to uphold our data privacy and

security measures.

Data privacy continues to grow in importance on the global agenda. In

2022, the Adyen Privacy team accordingly continued improving and

strengthening 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

customers’ data5.

Part of ethically handling means making sure our teams always work

with data in a considered manner. As part of our product compliance

focus, we established an AI & Data Ethics Working Group that will

assess new products and services that leverage AI or machine

learning. These assessments are to be included as part of Adyen’s

product approval and review process.

Knowledge & awareness

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 that

concern personal data.

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 of

privacy 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 new

markets), 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.

International data transfers and global privacy laws

The final focus area for the Adyen Privacy team in 2022 was

international data transfers and global privacy laws.

In 2022, Adyen updated the existing Standard Contractual Clauses it

had in place with its customers to the new version, as published by the

European Commission in June 2021. To ensure a smooth update

process 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, and

strengthening its privacy compliance efforts and standards to help our

customers succeed. The impact of upcoming changes in global

privacy legislation continues to be closely monitored.

Reportable data breaches and substantiated

complaints

In 2022, Adyen did not suffer any reportable data breaches, and did

not receive any substantiated complaints from regulatory bodies or

parties outside the organization concerning breaches of

customer privacy.



Annual Report 2022		46

5 This is further clarified in Adyen’s Privacy Statement.

Tax

Responsible tax behavior is an essential component of Adyen’s ethical

business practices. We pay taxes in the countries wherein we have a

taxable nexus, dependent on the laws of the respective countries. In

line with this approach and our values, we do not seek refuge in tax

havens6 and, when making decisions, we respect relevant laws and

regulations. 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 under

a 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 a

robust 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 compliance

requirements are met. Adyen’s Tax team is responsible for all of

Adyen’s tax affairs around the world. Members of the Tax team

participate in relevant external training. Compliance with the tax

control framework is effectuated through a set of internal controls for

which evidence is documented and collected on a regular basis.

Internal Control team continuously monitors and tests compliance

with 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 areas

of 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 for

their approval. The tax strategy as included in this Annual Report and

as included in the tax policy is ultimately approved by the

Management Board and Supervisory Board. We refer to our

Whistleblowing Policy for the mechanism for anyone within Adyen to

report its concerns about unethical or unlawful behavior in relation to

tax. In 2022, there have been no reports of incidents, breaches or

claims that exceeded Adyen’s tax risk appetite.

Stakeholder engagement and management of

concerns 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 is

obtained 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)

stakeholders and address any views and/or concerns. The description

of 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 the

organizational values and business strategy.



Annual Report 2022		47

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

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 to

protect and grow the company. Adyen has adopted a uniform and

systematic 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 the

size, international presence, complexity of the organization and the

risk 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 the

Management Board. The Audit and Risk Committee is charged with

supervising, monitoring, and advising the Management Board in

relation to the functioning of the internal risk management and

control 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 the

Management Board in the Risk Committee. The Corporate Risk and

Internal Control team reports its findings from monitoring Adyen’s risk

profile to the Risk Committee. The Risk Committee keeps the

Management 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 that

would 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 the

Institute of Internal Auditors (IIA), which reflects the segregation

between operations (first line management), the risk management,

security and compliance functions (second line), and the independent

internal 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 the

adequacy 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 the

relevant risk management policies, risk appetite, and independent

monitoring of key risks, limits, and controls.

Risk culture

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 of

culture through the Adyen Formula and the Adyen Way of Being

In Control.

The Adyen Way of

Being 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

If you see a problem, act on it

We all make mistakes, we seek help and

share as soon as we find out

Always look for improvement, automate

processes continually & challenge the

status quo

The Adyen Formula guides our behavior,

policies support it

Strategy, objective setting, and risk

appetite

At Adyen, risk management, strategy, and objective-setting work

together. Operational objectives put strategy into practice while

serving as a basis for identifying, assessing, and responding to risk.

Risk appetite defines the amounts and types of risk Adyen is willing to

accept in pursuit of its objectives. A low risk appetite implies a low

residual risk acceptance and therefore requires the risk response and

internal 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 and

willingness 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 appetite

statements, which set the overall tone for Adyen's approach to risk

taking. In 2022, the Management Board performed its annual review

and updated Adyen’s risk appetite statements and risk limits, which

were discussed in the Audit and Risk Committee, and approved by the

Supervisory 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 and

emerging 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 this

Annual Report. The top-down, company-wide risk assessment is

complemented by a multitude of targeted bottom-up risk

assessments. These are conducted at process level or aimed at

specific risk categories. A notable example of the latter category is

the Systemic Integrity Risk Analysis (SIRA) which focusses on

integrity risks.

Adyen has continued in 2022 with expanding the use of its

Governance, Risk management and Compliance (GRC) tooling to

support the evaluation of the effectiveness of its control framework.

This year saw a significant increase in adoption of the GRC tooling

across 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.

Control activities

Adyen uses COSO's Internal Control — Integrated Framework (2013)

as a reference for its design, implementation, and evaluation of

control 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 reasonable

assurance that objectives can be met. Policies and procedures ensure

that 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 internal

and 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 and

determination of the internal and external fraud risks relevant to

Adyen takes place, followed by the nature and inherent size of these

risk. Subsequently, the relevant controls that are in place are mapped

to the risks. Finally, Adyen concludes on the overall residual risk and

an 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 of

confidential information, and the misappropriation of assets. Relevant

mitigating controls mapped to these internal fraud risk scenarios vary

in origin. There are governance measures, such as oversight by the

Management 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 a

targeted 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 of

duties. 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 Adyen

with 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 the

relevant 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 our

internal 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 of

risk management and internal control systems’ paragraph below.



Annual Report 2022		49

Stress testing

Adyen uses stress testing to understand the potential impact of

adverse events on its business model, capital, and liquidity ratios.

The stress scenarios are based on exceptional but plausible events

with an sufficient degree of severity. Adyen also performs stress

testing to evaluate the adequacy of capital and liquidity plans under

stressed conditions using scenarios and risk factors prescribed by the

regulator. 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 high

financial shock absorption capacity and high capital and

liquidity ratios7.

Effectiveness of risk management and

internal control systems

In compliance with principle 1.2 of the Dutch Corporate Governance

Code, the Management Board is responsible for establishing and

maintaining an adequate system for risk management and internal

control. 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 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 and

control systems were observed, nor were significant changes to these

systems made or major improvements planned. The Management

Board has discussed the evaluation of its risk management and

control systems with the Audit and Risk Committee and

Supervisory 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 to

Adyen. Other risks, facts, or circumstances not presently known to

Adyen or that Adyen currently deems to be immaterial, could

individually or cumulatively prove to be significant and could have a

material 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 of

residual risk. We believe this approach creates most risk awareness

across all three lines as it is nested in the daily practice of running a

technology 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 and

geographies — still these four risks are key considerations whenever

we explain our risk profile to regulators, investors, customers or other

interested 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 a

comprehensive description of relevant residual risks to Adyen.

Information security

Adyen has a low risk appetite regarding information security risk and

breaches 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 the

ongoing confidentiality, integrity and availability of data, systems and

processes 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 and

the 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 the

jurisdictions 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 by

regulatory bodies or supervisory authorities, they may initiate legal

and regulatory proceedings against Adyen. To ensure that applicable

laws and regulations are identified and mapped to the activities and

services Adyen offers in local markets, Adyen performs ongoing

regulatory scanning by regulatory compliance specialists with

validation from external legal counsel.



Annual Report 2022		50

7 More 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.

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 need

to implement local deviations where required or for better fit.

Adyen maintains a proactive approach to regulation. Compared to

peers 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 complexity

and differences in supervisory approaches in a sustainable manner.

Nevertheless, accents and focus areas of supervisors within

regulatory frameworks do differ across the globe. To manage the

variety of supervisory conversations, Adyen actively invests in local

compliance and regulatory teams as well as strengthening the

relationships 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 the

financial 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 the

central role that stability and availability has across Adyen, risk

management is no exception.

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 focused

at specific platform sections, or products and services.

Adyen has a low appetite for issues in the availability, connectivity, and

performance of its platform. Adyen has built its systems and services

to avoid the presence of single points of failure, and to ensure that

sufficient capacity exists to continue 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 payment

platform is designed to withstand individual telecommunications,

systems and data center instance failures. Furthermore, the

quantitative limits monitored revolve around platform uptime and are

in 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 to

maximize platform stability and availability. Adyen invests

continuously in resources and training to maintain its high level of

performance.

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 a

payout at the right time, in the right currency in the right manner,

according to the preferences of the involved merchant. We do this

under a high degree of automation and by deploying sophisticated

processes 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 are

shared 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 the

Russian invasion of Ukraine in February of 2022. Our first and

foremost concern is the needless suffering that this casts on peaceful

societies. 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 and

volume. 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 from

global 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		51

development in the short- to medium-term. The example of China,

being mostly locked down in 2022, provides significant logistical

challenges to companies throughout the world as companies depend

on raw materials or production there. While lockdowns and

restrictions inherently affect Adyen and its personnel, Adyen has been

able to adapt to this reality and is adopting the hybrid way of working

going forward. In terms of logistics, Adyen has relatively short and

simple supply chains but is also actively diversifying where possible to

avoid logistical pressure.

In light of geopolitical tensions, financial markets, and energy price

markets 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 fresh

challenge to businesses. Discretionary spending and the purchase of

premium 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 bank

accounts and Adyen capital extend the current product offering with

financial 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

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 new

market, 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 the

new product, feature, or market.

The launch of these new products also results in an increase in

inherent risk in various categories such as credit risk, operational risk,

or integrity risk. The introduction of small business working capital

loans, 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 to

achieve its strategic objectives it will consume capital when investing

in 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 to

innovate and respond quickly to opportunities that arise. The

organizational competences of speed and decisiveness are key in

realizing 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 governance

aimed at direct co-creation and focus on growing the business

through commercial pillars and solutions. Adyen has implemented a

strategy focused on embedded financial products and platforms to

further 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 of

priority 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, and

impair 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 technological

developments and evolving industry standards, its business could be

materially and adversely affected. Adyen aims to provide best-in-class

products 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 and

actively 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 and

workstreams that continuously work on improving its service offering

based on customers’ needs and innovations. Through the setup of the

solutions 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		52

significant competitive advantages. Furthermore, Adyen is facing

competitive pressure from non-traditional payments processors and

other 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 for

competition 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 of

Apple 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 and

services, its ability to effectively manage and resolve complaints, its

privacy and security practices, litigation, regulatory activity, and the

experience 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 many

sources, 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 other

claims, employee misconduct, rumours or false stories, and

misconduct by its partners, service providers, or other counterparties.

Adyen wants to build an ethical and sustainable business and

therefore actively mitigates risks that could negatively affect the

Adyen reputation or brand.

Access to card networks

The majority of transactions processed on the Adyen platform go

through international credit and debit card networks. In order to

access 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 to

act as a local sponsor for the license. Adyen has low appetite for

failure to comply with card network rules or for any other deterioration

in its relationships with the card networks, which could result in the

restriction, suspension, or termination of Adyen's own licenses, or the

use of sponsoring banks’ licenses. In 2022, no significant

impediments in relation to the access to card networks or sponsoring

banks 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 of

access to card networks and local financial environments.

Concentration of customers

Some of Adyen's largest customers provide significant contributions

to its net revenue. Large customers typically have arrangements with

multiple payment service providers (primarily in order to mitigate their

single-point-of-failure risk). These customers could terminate their

contracts 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 to

board 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, the

diversification of customers and payment channels simultaneously

reduces the risk in concentration of customers. Given Adyen’s

continuous expansion into new markets and overall growth,

concentration of customers net revenue has decreased in 2022 in

comparison to prior years.

Macroeconomic conditions

Adyen accepts that entering and operating in markets with some

macroeconomic volatility could lead to financial losses. Uncertainty

about global and regional economic events and conditions, may result

in shoppers and customers postponing spending, which could have a

material adverse impact on the demand for Adyen's products and

services. 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 the

forecasts 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.

Intellectual property rights

As substantially all of Adyen's intellectual property is developed in-

house, the protection of such intellectual property, including Adyen's

platforms, trademarks, copyrights, domain names, trade dress, and

trade 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		53

Adyen may become subject to intellectual property infringement and

other claims. Adyen’s international growth and development of

intellectual property in new jurisdiction can also influence it’s risk of

claims. 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 has

commercial relationships. Adyen has not experienced a

materialization of this risk in 2022 which is in line with the

risk appetite.

Environmental, Social and Governance (ESG) risk

Sustainability, social responsibility, ethical business practices and

governance are topics that are becoming key to the mission and

purpose 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 on

banks’ assets and more specifically the lending activity, especially with

regards 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 and

Governance topics as well.

Climate and environment-related risks are commonly understood to

comprise two main risk drivers: physical and transition risks. Physical

risk 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 from

progressive shifts, such as increasing temperatures, sea-level rises,

water stress, biodiversity loss, land use change, habitat destruction,

and resource scarcity. This can directly result in, for example, damage

to Adyen property or reduced productivity, or indirectly lead to

subsequent 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 a

lower-carbon and more environmentally sustainable economy. This

could be triggered, for example, by a relatively abrupt adoption of

climate and environmental policies, technological progress or

changes 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 the

inherent 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 the

following 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 a

city 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 is

designed to create redundancy in its critical infrastructure and

operations, surpassing traditional back-up setups, as is detailed in the

section on availability of the platform. Adyen furthermore continues to

diversify its global customer portfolio to mitigate any reliance on

sectors and markets, which could be more vulnerable to climate-

related and environmental risks, both physical as well as transitional.

In 2022, Adyen was not materially impacted by environmental- and

climate-related events.

Social risk

Adyen also considers the risks it may encounter due to social

developments. Specifically how its own workforce develops and the

relationship to the society in which it operates, and the political

environment. Society sees a role for private companies to support

positive social change and Adyen is contributing. It would be limited to

only point at reputational risks in this context. Diversity, Equity and

Inclusion (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 monitors

social 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 well

as 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-defined

charities and initiatives. Often, these charities are in line with either



Annual Report 2022		54

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 with

respect 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 and

procedures, ethical business decisions, healthy employee relations,

well-thought remuneration and tax compliance.

Adyen sees governance risks as directly connected with the

robustness and resourcefulness of the procedures for compliance

with 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 to

voluntary frameworks such as GRI and sees the company culture as a

prime measure in mitigating governance risks.

A considerable amount of new ESG regulation, with accompanying

disclosure frameworks, approach Adyen, as explained earlier in this

Annual Report. In preparation, Adyen has further integrated ESG

during 2022 in its overall risk management framework.



Annual Report 2022		55

“What I like most about working at Adyen is

that everyone is not only willing to collaborate,

but they also really enjoy it. I feel comfortable

reaching out to anyone in the company.

No matter which team someone is a part of,

I know they’re going to do whatever they can

to help me find the answers.”

Hanya — Team Lead Product Management



Annual Report 2022		56

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, and

systems or from external events, including legal risk. Adyen has a

moderate 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 or

services 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 the

development of this risk. The team frequently discussed its

observations and recommendations with the Merchant Risk

Committee, Management and Supervisory Board throughout the

year. Despite challenging macroeconomic conditions in several key

markets in 2022, Adyen has not incurred sizeable MPL losses due to

chargebacks during the year. The cumulative MPL losses were well

within the set risk appetite. For more details on MPL reserves, please

refer to Note 16 ‘Trade, other payables, and payables to merchants

and financial institutions’ in the the 2022 Consolidated

Financial Statements.

Availability, connectivity, and performance of products and

services

Adyen has a low appetite for issues in the availability, connectivity and

performance of the platform. Adyen's systems and those of its third-

party service providers, including data center facilities and

communication networks, have experienced service interruptions in

the past and may experience significant service interruptions in the

future. Frequent or persistent availability, connectivity, or performance

issues 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 time-

consuming and costly for Adyen to address and divert management

attention. Furthermore, frequent or persistent interruptions could lead

to 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 prevent

or 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 to

continue 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 other

things, 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. Any

real or perceived breaches or improper use of, disclosure of, or access

to such data could harm Adyen's reputation as a trusted brand in the

handling and protection of this data. Although Adyen carries cyber

liability 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 to

ensure the ongoing confidentiality, integrity, and availability of data,

systems, and processes at Adyen, and to ensure that specific

information security compliance programs are maintained and

externally assessed as appropriate. Adyen undertakes background

checks for new hires. Training is undertaken on IT security on the first

day 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 as

privacy and security is mandatory for all employees. Adyen’s risk-

based approach has resulted in an efficient and flexible IT

infrastructure, which enabled a very steady and stable transition to the

work-from-home environment.

Information security will be a structural risk for Adyen, and

strengthening our capabilities to mitigate the evolving risk is therefore


Annual Report 2022		57

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 critical

processes. 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 a

framework, including clear ownership, for assessing third-party risk.

Adyen is monitoring third-party risk on a continuous basis with

support of a third-party risk management tool. In 2022, Adyen carried

out a residual risk classification on all its third parties to update their

risk 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 and

regulations, 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 and

strengthen 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 more

jurisdictions could result in proceedings or actions against Adyen by

governmental entities or others, including class action privacy

litigation in certain jurisdictions, significant fines, penalties,

judgments, and reputational damage. Adyen has a low appetite for

data privacy risks and promotes a culture of diligence and high ethical

standards with regards to the collection of information. Please refer to

the ‘Data Privacy’ section in this Annual Report for more information

on 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 to

maintain its entrepreneurial culture. If Adyen does not successfully

manage its growth, and is not able to differentiate its business from

those 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 a

beneficial 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.

Talent

Adyen'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 or

Adyen'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 in

different ways. A hybrid working situation became the default for

employees and sustainable and structural ways to develop, grow and

bind talent were implemented. Adyen has been able to grow the team

considerably during 2022 with the successful launch of two Adyen

tech hubs in Chicago and Madrid.These two locations are focused on

technically growing the platform, provide an inspiring environment for

engineers 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 of

actions 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’s

commitment to automatable and scalable Compliance, importance

continues to be placed on embedding such global compliance

standards in the heart of the technology.

Integrity topics including anti-money laundering and counter terrorist-

financing (AML/CTF), preventing the circumvention of sanctions,

compliance with relevant laws and regulations and combatting

socially unacceptable behavior were particular points of focus in

2022. Adyen leveraged its continuous risk assessment cycle to

identify and account for new/changing integrity risks arising in

connection with changing laws and regulations and the evolution of

Adyen’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		58

application of such regulations to non-traditional market participants

such as Adyen, continues to be a key challenge. To manage the pace

of regulatory change and address nuance in regulatory interpretation,

significant investments in human resources were made in the fields of

Regulatory Compliance, AML/CTF as well as Compliance Monitoring

and Data.

A dedicated Product Compliance team was also created in 2022, to

ensure 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 by

design 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 the

financial system through the circumvention of sanctions. During

2022, 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 other

financial services to customers who are Russian residents and nor

does Adyen have any presence in Russia, Adyen has nevertheless

participated in international efforts to enforce all new sanctions

regulations stemming from national and supranational governments

in connection with the Russian-Ukraine conflict.

Tax

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, value-

added taxes, and other tax liabilities requires estimation and

significant 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, are

identified through the annual top-down and bottom-up company-

wide risk assessments. When a specific tax risk is encountered, we

may seek for professional advice and strive for open communication

towards tax authorities.

Adyen's determination of its tax liability is always subject to audit and

review 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 the

amounts recorded in its financial statements. For more information,

please refer to the ‘Tax’ section in this Annual Report.

Financial reporting

Gaps in internal controls could negatively impact the accuracy of our

financial and management reporting. Adyen has a low appetite for

errors 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 in

accordance 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 the

degree of compliance with the policies or procedures may deteriorate.


Annual Report 2022		59

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 becomes

due, nor thereafter (default risk), or the risk of losses stemming from

on- 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 and

actively 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 increase

in counterparty credit risk that can be directly related to the remnants

of the COVID-19 pandemic or the developments in macroeconomic

conditions in key markets. For markets or jurisdictions that are

considered key to successful operations, Adyen seeks to work with at

least 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 of

Adyen's net revenue generated from its international operations that

are denominated in foreign currencies into the Euro. Additionally, in

connection 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

rates or as a result of fluctuations in foreign exchange rates between

the times that Adyen sets them. Given that Adyen also holds some

customers’ 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 foreign

exchange risk, primarily natural hedges and spot trades for any net

open positions forthcoming its acquiring activities for customers, no

assurance 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 and

the assets and liabilities of its subsidiaries. The majority of these

assets 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 of

transactions done by customers. Contrary to its own long-term

balance sheet positions, Adyen does not control this FX origin directly

and during 2022 Adyen performed spot trades on a daily basis to

maintain FX positions within its risk appetite set limits. While Adyen

manages 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 and

corresponding currencies, Adyen sees this as a prudent move

towards 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 value

arises 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 to

Note 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 and

is 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 US-

government T-bills. Despite this low risk profile, in 2022 Adyen

quantified the impact of interest rate movements in its earnings as

well as market value changes of its financial instruments and their

direct effect on capital for each significant currency. The results of this

exercise 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		60

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 of

funding in the medium and long term, resulting in the current or

prospective risk that it cannot meet its financial obligations, such as

payments and collateral needs, as they fall due in the medium to long

term, either at all or without increasing funding costs unacceptably.

Adyen aims for a simple, stable, and solid funding position and the

central ratio it monitors in this context is its Net Stable Funding Ratio

(NSFR). For context, the NSFR remained stable and within acceptable

bounds 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 through

operational 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 to

business opportunities or unforeseen circumstances and may decide

to engage in equity or debt financings or enter into credit facilities for

other reasons, and may not be able to secure any such debt or equity

financing or refinancing on favorable terms in a timely manner, or at

all. 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 be

significantly limited.

Statement by the

Management Board

The Management Board of Adyen is responsible for establishing and

maintaining an adequate system for risk management and internal

control. This system is designed to manage risks effectively and

efficiently, 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 over

financial reporting is a process to provide reasonable assurance

regarding the reliability of our financial reporting for external purposes

in accordance with IFRS and IFRIC interpretations as endorsed by the

European 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 as

necessary 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 that

the controls may become inadequate because of changes in

conditions, or that the degree of compliance with the policies or

procedures may deteriorate.

The Management Board has performed a company-wide risk

assessment and described the principal risks facing the Company in

relation to its risk appetite in the section ‘Risk factors’ of this

Annual Report.

The Management Board has assessed the effectiveness of the design

and operation of the risk management and control systems as of

December 31, 2022. The results were shared with the Audit and Risk

Committee and the Supervisory Board and discussed with the

independent external auditor (hereafter “external auditor”).

Based on the assessment and with reference to best practice

provision 1.4.3 of the Dutch Corporate Governance Code, the

Management 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 that

the 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 for

the period of twelve months after the preparation of this report (see

section ‘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		61

In accordance with Article 5:25c of the Financial Supervision Act, the

Management Board confirms that to the best of its knowledge and

belief:

•The financial statements of 2022 give a true and fair view of the

assets, liabilities, financial position and profit or loss of the

Company; and

•The Annual Report 2022 gives a true and fair view of the position as

at December 31, 2022, the development and performance during

2022 of Adyen, together with a description of the principal risks

that Adyen faces.

Amsterdam, the Netherlands

March 8, 2023



P.W. van der Does CEO		K. Zaki COO

R. Prins CCO		M.B. Swart CLCO

I.J. Uytdehaage CFO		A. Matthey CTO


Annual Report 2022		62

Corporate Governance

“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’re

interested in, and then which parts of the

business can benefit from those interests. This

process can take you to different teams or

even 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 team

in our new Chicago office.”

Annemarije — Product Manager


Annual Report 2022		64

Corporate Governance

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 our

governance 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 are

closely monitored.

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.

Management structure

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 the

overall 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 general

development. 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):



Name	Year of birth	Nationality	Gender	Position	Current appointment date	Term

Pieter Willem van der Does	1969	NL	Male	CEO	June 2022	June 2026
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 2024
Mariëtte Bianca Swart	1980	NL	Female	CLCO	January 2020	January 2024
Alexander Matthey	1981	DE	Male	CTO	February 2021	February 2025

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 the

Company 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 and

objectives of the Management Board.

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 the

2023 Annual General Meeting (AGM).

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, and

Roelant 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 the

2023 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 the

Company. 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		65

Supervisory Board

The Supervisory Board functions as a separate corporate body and is fully independent from the

Management 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 capable

of 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 of

December 31, 2022:


Name	Year of birth	Nationality	Gender	Position	Current appointment date	Term
Piero Overmars	1964	NL	Male	Chairman	January 2021	January 2025
Delfin Rueda Arroyo	1964	SP	Male	Member	January 2022	January 2026
Joep van Beurden	1960	NL	Male	Member	January 2020	January 2024
Pamela Joseph	1959	US	Female	Member	May 2019	May 2023
Caoimhe Keogan	1978	IE	Female	Member	February 2021	February 2025

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 culminated

in 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 of

Allfunds Bank and Allfunds Group. Previously, he served as CFO and Vice-Chair of the Executive Board and

Management 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 the

Supervisory 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 of

Paychex. 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 degree

in 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 course

of 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 of

Adyen which includes the interests of the business connected with it, taking into consideration the interests

of the Company’s stakeholders. These interests are driven by Adyen’s focus on long-term value creation and

its implementation in Adyen’s strategy and culture. The Supervisory Board also has due regard for

environmental, social and governance (ESG) matters relevant to the Company. The Supervisory Board By-

Laws set out rules regarding the composition, responsibilities and objectives of the Supervisory Board.


Annual Report 2022		66

Supervisory Board committees

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 these

Committees has a preparatory and/or advisory role to the Supervisory Board. The Committees report their

findings to the Supervisory Board, which is ultimately responsible for all decision making. Terms of

Reference 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 and

have accepted these invitations on a frequent basis in 2022.

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 the

individual Managing Directors and Supervisory Directors. It analyses developments of the Code and other

applicable 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 the

functioning of the individual Managing Directors and Supervisory Directors and on the functioning of the

Management Board and Supervisory Board as a collective.

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.

The Nomination and Remuneration Committee meets as often as required for a proper functioning of the

Committee. 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, and

Caoimhe Keogan.

The composition and number of members of the Committee provide for sufficient capacity to carry out the

supervisory functions. The members of the 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 HR

Director also attends the meetings of the Committee.

Audit and Risk Committee

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.

It also advises the Supervisory Board on the nomination of the external auditor, who is appointed by the

General Meeting. It is in regular contact with the internal audit function and the external auditor, and

monitors the auditor’s independence. In addition to advising the Management Board on tax and finance

matters, 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 the

supervisory 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.

General Meeting, shares and shareholders

General Meetings

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 release

from 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 of

profits, (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 the

identity or character of the Company or its business. One or more shareholders representing at least the


Annual Report 2022		67

statutory threshold of 3% of the voting rights may request that the Management Board places items on the

agenda of a General Meeting. Such a request must be honoured by the Management Board provided that

the request is received in writing at least 60 days before the date of such a meeting.

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.

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 of

the 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 the

General 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 the

Management 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 or

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.

Repurchase of shares

Shares can only be repurchased by Adyen pursuant to a resolution of the General Meeting and subject to

any required regulatory approvals. The General Meeting may designate the authority to repurchase shares

to the Management Board. During the General Meeting held on June 1, 2022, the shareholders granted the

Management Board — subject to the Supervisory Board’s approval — the authority to acquire shares in the

capital of the Company, either through purchase on a stock exchange or otherwise. The authority applies for

a 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 the

Company 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 at

Euronext 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 of

shares 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		68

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 a

challenging period for global commerce. Nevertheless, Adyen’s demonstrated history of building for the

long 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 of

Adyen, 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.

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

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 and

auditor’s report on the procedures performed. These documents are first discussed in the Audit and Risk

Committee meeting prior to the Supervisory Board meeting.

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 — the

Supervisory 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 business

were held, such as cyber security, operations and reputational risks.

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, and

acted 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 the

Company 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, and

informally 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.

Nomination and Remuneration Committee

The duties and composition of the Nomination and Remuneration Committee are described in the section

‘Governance’ of this Annual Report.

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 and

Management 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 in

relation to remuneration policies, reviewed Adyen’s Remuneration Policy and its execution for compliance


Annual Report 2022		69

with 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 financieel

toezicht). For more information on the Remuneration Policy, please refer to the section ‘Remuneration

Report’ of this Annual Report.

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 the

Managing 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 to

the section ‘Remuneration Report’ for more information on the remuneration packages of the Managing and

Supervisory Directors.

Audit and Risk Committee

The duties and composition of the Audit and Risk Committee are described in the section ‘Governance’ of

this Annual Report.

In 2022, the Audit and Risk Committee convened for four meetings. The Committee discussed the

Company’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 half-

yearly 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.



	Supervisory Board committees Nomination and Remuneration Committee •Culture •Executive compensation •Remuneration •Diversity, equity and inclusion •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		70

Diversity

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 is

active. The Supervisory Board values and promotes diversity, both within the Supervisory Board and the

Management 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 the

Company 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.

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 the

Management 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 the

proposed 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.

Independence

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.

Performance assessment

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 the

Supervisory 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 fully

complies with the relevant principles and best practices as set out in the Dutch Corporate

Governance Code.

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 more

time 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 Board

and 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 of

this Annual Report. The Supervisory Board recommends that the General Meeting adopts these

financial statements.

Appreciation

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 the

interests of customers, shareholders and other stakeholders of the Company with the highest standards.


Annual Report 2022		71

Compliance with the Dutch

Corporate Governance Code

Adyen acknowledges the importance of good corporate governance. The Company agrees with the general

approach and with the provisions of the Code8. As such, it fully complies with the Code with the exception of

Best Practice provision 4.3.3 of the Code, which provides that the general meeting of shareholders of a

company not having statutory two-tier status may pass a resolution to cancel the binding nature of a

nomination 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 absolute

majority of the votes cast. It may be provided that this majority should represent a given proportion of the

issued 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.



	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 Business


Annual Report 2022		72

8 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.

Remuneration report

This remuneration report explains how the remuneration policies for the Management Board and

Supervisory 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, the

Dutch Corporate Governance Code and, where possible, inspired by the updated draft EC guidelines on the

standardized presentation of the remuneration report. It will be submitted for an advisory vote to the

shareholders 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 greater

than 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 and

Supervisory 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 development

in 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 to

ensure 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) and

the 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 and

our 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		73

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 remain

in place for 4 years. The full proposed policy will be published in combination with our 2023 AGM

convening notice.


Policy	Current	Proposed	Rationale
Peer group	Comparison against AEX constituents.	The use of a tailored peer group reflecting our level of maturity and based on predefined and objective 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 median of the peer group. In exceptional circumstances, we allow deviation from this market positioning and allow for positioning up to the 75th percentile of the peer group.	The market positioning reflects our pay philosophy and acknowledges that the peer group includes international companies from markets where pay is generally higher than in the Netherlands. The possibility to deviate from the market positioning provides us with the flexibility 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 and equity(-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 in equity 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 until the 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 external hires.	The new hire policy enables Adyen to recruit the best talent available in our global talent market.


Annual Report 2022		74

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 not

believe variable remuneration is required to maintain this performance-focused culture. This does not

necessarily 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 the

scope of responsibilities and experience of each individual Management Board member. If a member of the

Management 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.


Category	Description	Rationale
Payment platforms	Combination of our direct (business) competitors and (FinTech) companies active in the payment, cryptocurrency and banking platform sector.	Comparison against companies operating in similar industry dynamics as Adyen.
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 within similar Dutch stakeholder environment.


Annual Report 2022		75

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 to

this absence of variable remuneration, all scenarios resulted in the same outcome.

We believe the remuneration approach for our Management Board mitigates short-term orientation and

contribute 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 our

company. The purpose hereof is to ensure a financial ownership-like position where shares are concerned

and for them to obtain an economic interest in the pursuit of Adyen’s long-term objectives such as

sustainable 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 the

average 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 was

made 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 line

with 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 base

salary 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.

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 or

previous years.

Pension & Benefits

We deeply believe in treating our Management Board members the same as other employees. Therefore, we

offer them pension and benefits arrangements in line with typical market practice and in accordance with

what 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 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 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 match

of 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 the

insurance premiums.


Annual Report 2022		76

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 CEO

compared 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 reasonable

considering 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, share-

based compensation refers to share-based fixed remuneration awarded in depository receipts. As explained

in previous sections of this remuneration report, total remuneration consists of fixed remuneration only.


Managing Director	Reported Year	Base salary	Pension and benefits	Share-based compensation	Variable income	Total Remuneration
Pieter van der Does	2022	671,530	20,044	—	—	691,574
Pieter van der Does	2021	612,710	15,975	—	—	628,685
Roelant Prins	2022	545,124	20,044	—	—	565,168
	2021	497,376	15,975	—	—	513,351
Ingo Uytdehaage	2022	632,028	20,044	—	—	652,072
	2021	576,668	15,975	—	—	592,643
Kamran Zaki	2022	830,328	24,465	—	—	854,793
	2021	727,510	17,217	—	—	744,727
Mariëtte Swart	2022	500,000	20,044	250,000	—	770,044
	2021	347,625	15,975	115,863	—	479,463
Alexander Matthey*	2022	411,000	104,186	189,000	—	704,186
	2021	375,000	15,975	125,000	—	515,975
Total	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		77

Stock options awarded in previous years

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	Grant date	Grant price	Final vesting date	Number of options vested	Expiry date	Outstanding 31 December 2022	Exercised in 2022
Mariëtte 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

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	287,309	287,309
Ingo Uytdehaage	195,182	195,182
Kamran Zaki	47,168	47,168
Mariëtte Swart	158	79
Alexander Matthey	164	84

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, 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

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 Governance

Code. In the financial year 2022, no severance payment has been paid to any Managing Director.

Loans

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	2022 vs 2021	2021 vs 2020
Director's remuneration (in EUR)
Pieter van der Does	62,889	15,921
Roelant Prins	51,817	12,561
Ingo Uytdehaage	59,429	14,871
Kamran Zaki	110,066	73,110
Mariëtte Swart	290,581	11,583
Alexander Matthey	188,211	515,975
Company Performance (in EUR ‘000)
Net revenues	328,649	317,317
EBITDA	98,296	227,512
Average remuneration comparative on FTE basis (in EUR)
Wages and Salaries / FTE	7,185	4,663

The difference in Mariëtte Swart and Alexander Matthey’s salary compared with previous years is the result

of their increased total remuneration they receive per January 1, 2022 and as explained in the previous

sections of this remuneration report.


Annual Report 2022		78

Our Supervisory Board remuneration policy

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.


Element	Current	Proposed	Rationale
Peer group	Comparison against remuneration observed within AEX constituents.	The use of a tailored peer group, reflecting our transformation and based on predefined and objective selection criteria such as size and industry.	The use of a tailored peer group will better reflect our Non- Executive Director talent market, which is broader than only AEX constituents.
Peer group	Adyen’s Supervisory Board remuneration is positioned below the median of the benchmark against the AEX.	We aim that the Base and Committee fees for our Supervisory Board members are not positioned above the median of the peer group.	The market positioning reflects our pay philosophy.
Base Fee	Fixed fee for Chair and Member	We will closely monitor the current levels against the developments of our Board’s role, time commitment, responsibilities and the external market during the term of the new policy.	Any future adjustments of the base fees will be separately brought to the AGM for shareholder approval.
Committee Fee	Fixed fee for the Chair and Member of the Audit & Risk Committee and the Nomination & Remuneration Committee

Determination of the remuneration package

The level of Supervisory Board remuneration is based on various factors, including their role, associated

time 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 relevant

market 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-tier

and two-tier boards, especially for the role of the Chair.

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 and

European peers with one-tier boards from the Management Board peer group in our Supervisory Board

peer group.

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.


Annual Report 2022		79

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 the

base and committee fees, expenses incurred by the members of the Supervisory Board in the performance

of their duties are reimbursed in full. Supervisory Board members do not receive variable remuneration of

share-based remuneration.


Role	2022 (in EUR)
Chair	80,000
Member	60,000
Chair Audit and Risk Committee	15,000
Member Audit and Risk Committee	10,000
Chair Nomination & Remuneration Committee	10,000
Member Nomination & Remuneration Committee	7,000


	2022		2021
(in EUR)	Remuneration in cash	Total Remuneration	Remuneration in cash	Total Remuneration
Piero Overmars	97,000	97,000	97,000	97,000
Delfin Rueda Arroyo	75,000	75,000	75,000	75,000
Joep van Beurden	70,000	70,000	70,000	70,000
Pamela Joseph	77,000	77,000	77,000	77,000
Caoimhe Keogan	67,000	67,000	67,000	67,000
Total	386,000	386,000	386,000	386,000


Annual Report 2022		80

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 as

part 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	—	—

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.

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 Supervisory Directors.

Loans

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

Supervisory 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

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 applicable

for 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 and

experience 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

Variable remuneration

We award variable remuneration, if any, in accordance with our remuneration principles, applicable

legislation and our general remuneration policy.

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		81

Financial Statements 2022


Annual Report 2022		82

Consolidated Financial Statements


Consolidated Statement of Comprehensive Income	85
Consolidated Balance Sheet	86
Consolidated Statement of Changes in Equity	87
Consolidated Statement of Cash Flows	89
Notes to the Consolidated Financial Statements	90
Key Disclosures	92
2. Revenue and segment reporting	92
3. Inventories	98
4. Employee benefit expense	98
5. Other operating expenses	102
6. Other financial results	103
7. Income tax	105
8. Capital management	108
9. CRR/CRD IV Regulatory Capital	108
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
15. Trade, other receivables, and receivables from merchants and financial institutions	118
16. Trade, other payables, and payables to merchants and financial institutions	119
17. Leases	120
18. Other contingent assets, liabilities and commitments	121
19. Related party transactions	121
20. New and amended standards adopted	121
21. Audit fees	122
22. Compensation of key management	122
23. Share information	124
24. Tax reporting	124

Company Financial Statements


Company Statement of Comprehensive Income	129
Company Balance Sheet	130
Company Statement of Changes in Equity	131
Company Statement of Cash Flows	133
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 and financial 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
38. Audit fees	139
39. Contingencies and commitments	140
40. Proposed profit appropriation	140
41. Events after balance sheet date	140


Annual Report 2022		83

Consolidated Financial

Statements


Annual Report 2022		84

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
Revenue	2	8,935,611	5,995,419
Costs incurred from financial institutions	2	(7,550,960)	(4,960,951)
Costs of goods sold	2, 3	(54,485)	(32,951)
Net revenue		1,330,166	1,001,517

Wages and salaries	4	(328,316)	(199,141)
Social securities and pension costs	4	(52,271)	(41,398)
Amortization and depreciation	13,14,17	(63,613)	(35,011)
Other operating expenses	5	(221,237)	(131,236)
Other income/(expense)		(54)	250
Income before net finance income/(expense) and income taxes		664,675	594,981

Finance income	10	29,323	1,039
Finance expense	17,10	(11,963)	(12,788)
Other financial results	6	37,904	(2,385)
Net finance income/(expense)		55,264	(14,134)


	Note	2022	2021
Income before income taxes		719,939	580,847
Income taxes	7	(155,800)	(111,130)
Net income for the year		564,139	469,717
Net income attributable to owners of Adyen N.V.		564,139	469,717

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)
–Net profit per share - Basic	23	18.21	15.40
–Net profit per share - Diluted	23	18.17	15.31

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


Annual Report 2022		85

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
Intangible assets	13	8,140	9,841
Plant and equipment	14	140,796	72,981
Right-of-use assets	17	181,676	128,063
Other financial assets at FVPL	11	12,264	22,504
Contract assets	2.2	48,612	79,341
Deferred tax assets	7	143,727	127,782
Total non-current assets		535,215	440,512

Inventories	3	87,891	22,138
Receivables from merchants and financial institutions	15	369,104	633,249
Trade and other receivables	15	89,350	56,852
Current income tax receivables	7	12,445	6,761
Cash and cash equivalents	10	6,522,345	4,616,094
Total current assets		7,081,135	5,335,094
Total assets		7,616,350	5,775,606


	Note	December 31, 2022	December 31, 2021
Share capital	8	310	310
Share premium	8	352,399	335,725
Other reserves		156,552	137,457
Retained earnings		1,902,857	1,336,922
Total equity attributable to owners of Adyen N.V.		2,412,118	1,810,414

Derivative liabilities	11	35,000	81,700
Deferred tax liabilities	7	11,345	16,401
Lease liability	17	169,873	119,968
Cash-settled share-based payment plan	4.3	6,742	5,601
Total non-current liabilities		222,960	223,670

Payables to merchants and financial institutions	16	4,795,804	3,608,531
Trade and other payables	16	147,827	100,116
Lease liability	17	33,200	22,996
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		86

Consolidated Statement of Changes in Equity

For the years ended December 31, 2022 and 2021

(all amounts are in EUR thousands unless otherwise stated)



	Note	Share capital	Share premium	Other reserves			Retained earnings	Total equity
	Note	Share capital	Share premium	Legal reserves	Share-based payment reserve	Warrant reserve	Retained earnings	Total equity

Balance - January 1, 2021		304	194,608	(1,504)	98,034	53,401	873,291	1,218,134

Net income for the year							469,717	469,717
Currency translation adjustments				11,373				11,373
Total comprehensive income for the year		—	—	11,373	—	—	469,717	481,090

Adjustments:
Intangible assets				(129)			129	—
Other adjustments							59	59
		—	—	(129)	—	—	188	59
Transactions with owners in their capacity as owners:
Equity transfer on exercise of warrant	2.1		34,100			(26,700)	(7,400)	—
Deferred tax on share-based compensation	7		—		5,548			5,548
Options exercised			1,732		(1,732)			—
Proceeds on issuing shares	8	6	105,285					105,291
Share-based payments	4.3				292			292
Other adjustments						(1,126)	1,126	—
		6	141,117	—	4,108	(27,826)	(6,274)	111,131
Balance - December 31, 2021		310	335,725	9,740	102,142	25,575	1,336,922	1,810,414


Annual Report 2022		87



	Note	Share capital	Share premium	Other reserves			Retained earnings	Total equity
	Note	Share capital	Share premium	Legal reserves	Share-based payment reserve	Warrant reserve	Retained earnings	Total equity

Balance - January 1, 2022		310	335,725	9,740	102,142	25,575	1,336,922	1,810,414

Net income for the year							564,139	564,139
Currency translation adjustments				(1,326)				(1,326)
Total comprehensive income for the year		—	—	(1,326)	—	—	564,139	562,813

Adjustments:
Intangible assets				(2,160)			2,160	—
Other adjustments					161		(364)	(203)
		—	—	(2,160)	161	—	1,796	(203)
Transactions with owners in their capacity as owners:
Deferred tax on share-based compensation	7		6,180		22,979			29,159
Options exercised			568		(568)			—
Proceeds on issuing shares	8	—	9,926					9,926
Share-based payments	4.3				9			9
		—	16,674	—	22,420	—	—	39,094
Balance - December 31, 2022		310	352,399	6,254	124,723	25,575	1,902,857	2,412,118

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


Annual Report 2022		88

Consolidated Statement of Cash Flows

For the years ended December 31, 2022 and 2021

(all amounts are in EUR thousands unless otherwise stated)



	Note	2022	2021

Income before income taxes		719,939	580,847
Adjustments for:
–Finance income	10	(29,323)	(1,039)
–Finance expenses	17,10	11,963	12,788
–Other financial results	6	(37,904)	2,385
–Depreciation of plant and equipment	14	28,354	15,315
–Amortization of intangible fixed assets	13	5,224	3,088
–Depreciation of right-of-use assets	17	30,035	16,608
–Equity-settled share-based compensation	4.3	9	292
–Cash-settled share-based payment plan		1,141	5,601
Changes in working capital:
–Inventories	3	(65,753)	(3,851)
–Trade and other receivables	15	(32,650)	19,780
–Receivables from merchants and financial institutions	15	264,145	250,690
–Payables to merchants and financial institutions	16	1,187,273	1,019,668
–Trade and other payables	16	40,155	(11,048)
–Amortization and additions of contract assets	2.2	30,763	48,198
Cash generated from operations		2,153,371	1,959,322



	Note	2022	2021

Interest received	10	29,323	1,039
Interest paid	17,10	(11,963)	(12,788)
Income taxes paid		(149,573)	(127,427)
Net cash flows from operating activities		2,021,158	1,820,146
Purchases of financial assets at FVPL		—	(211)
Redemption of financial assets at amortized cost	11	—	12,427
Redemption of financial assets at FVPL	11	11,407	—
Purchases of plant and equipment	14	(95,575)	(51,387)
Capitalization of intangible assets	13	(3,523)	(2,959)
Net cash used in investing activities		(87,691)	(42,130)
Proceeds from issues of shares	8	9,926	105,285
Lease payments	17	(22,144)	(9,045)
Net cash flows from financing activities		(12,218)	96,240
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
Exchange gains/(losses) on cash, cash equivalents and bank overdrafts		(14,998)	4,352
Cash, cash equivalents and bank overdrafts at end of the year	10	6,522,345	4,616,094

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


Annual Report 2022		89

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 the

European 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 set-

up 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). All

amounts in the notes to the consolidated financial statements are stated in thousands of EUR, unless

otherwise 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 and

liabilities 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 group companies are eliminated.

Adyen N.V. directly or indirectly owns 100% of the shares of, and therefore controls, all entities included in

these 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 the

United 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		90

1.2.Significant accounting policies, estimates and judgements and new and

amended standards Adopted by the Group

The table below provides an overview of the significant and new accounting policies and where they are

included 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 these

financial 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. Details

of the overall impact assessment of the first-time application on January 1, 2022 of new amendments is

disclosed 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 was

considered: the amount in question is significant in size and/or nature, importance for understanding the

results of Adyen or explaining the impact of significant changes in Adyen’s business and whether judgement

is involved.


	Accounting Policies		Significant Accounting Estimates or Judgments
What it is	Accounting policies considered relevant for understanding the financial statements, or required to be disclosed by law or IFRS		These accounting policies involve a higher degree of judgement or complexity. The estimates applied are more likely to be materially 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 users of the financial statements consider most relevant;	2. Revenue and segment reporting 3. Inventories 4. Employee benefit expense (including share- based payments) 5. Other operating expenses 6. Other financial results 7. Income taxes	2. Revenue - Principal versus agent for revenue out of settlement fees 7. Income taxes – Recognition of deferred taxes related to share- based compensation
	Capital, investment and financial risk management: key information relating to Adyen’s capital management, 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 be disclosed to be compliant with EU- IFRS and other legal requirements.	Notes 13 – 41


Annual Report 2022		91

Key Disclosures

In relation to our strategy, as outlined in the Management report, Adyen’s management considers the

following 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, acquiring

and settlement) with a common back-end infrastructure for authorizing. The company derives revenue from

settling and processing payments, sales of goods such as the sale of point of sale (POS) terminals, and other

payment 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 a payment transaction has been completed by means of settlement with a merchant. Settlement fees include interchange and payment network fees and other costs incurred from financial institutions. Adyen adopts a transparent pricing model and charges fees to merchants 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 the merchant. 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 are recognized at that point in time (IV) Other services: Includes foreign exchange service fees, third party commission and issuing 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 as part of the merchant contract (note 2.1) and terminal services fees as part of the unified commerce offering.


Annual Report 2022		92

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	55,710	33,042
Other 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)
Costs of goods sold	(54,485)	(32,951)
Net revenue	1,330,166	1,001,517

Net revenue

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 from

financial institutions), and costs of goods sold) as a performance indicator. Adyen considers net revenue to

provide additional insight to its users to evaluate the nature and financial effects of the business activities in

which 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.



	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 the Company is acting as agent or principal in relation to the settlement fees charged to merchants. 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. Adyen contracts with third parties (financial institutions and network scheme providers) that provide services to enable Adyen’s payment processing and acquiring services to merchants, 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. Based on existing terms and conditions, Adyen is considered primarily responsible for fulfilling the promise to provide payment transaction services. Although Adyen contracts with third parties to facilitate the interchange of funds between the issuer and merchant, Adyen is ultimately responsible for ensuring that the services are performed and are acceptable to the merchant. 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. 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 and payment 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		93



	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 as revenue 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 which revenue is recognized over a period of time. Adyen recognizes revenue for these services on a straight-line basis over the contract term.

The breakdown of revenue from contracts with customers based on timing is as follows:


Timing of revenue recognition	2022	2021
Goods and services transferred at a point in time	8,923,199	5,985,474
Services transferred over time	12,412	9,945
Total revenue from contracts with customers	8,935,611	5,995,419

2.1.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.


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 line with the fulfilment of the expected payment services performance obligation. The contract assets are separated into a monetary and non-monetary component and are assessed for impairment annually with reference to the remaining (net) benefits from the long-term merchant contract.	2.2.Contract assets
	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 (other financial results). The monetary component has been fully repaid and amortized in 2022.
Settled by:
1. Cash advance	Cash consideration is treated as part of incremental costs of obtaining the merchant contract ('contract assets').	2.2. Contract assets
2. Warrants	Derivative liabilities relating to the warrants are recognized initially at fair value and are subsequently 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 to a milestone of processed payments volume. Each milestone is deemed achieved at the moment that the processed merchant volume exceeds the milestone amount in a single 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 the warrant 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) was reflected 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 of deferred tax)) while the derivative liabilities relating to tranches 3 and 4 were carried at fair value on Adyen's balance sheet.


Annual Report 2022		94

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 a customer. 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 the carrying amount of the contract assets are higher than the estimated remaining benefits in the merchant contract, net of directly attributable costs to fulfil the remaining payment service obligations. The contract assets are amortized and booked to revenue (settlement fees) 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.

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	Monetary component	Non-monetary component	Other contract assets	Total contract assets

Balance - 1 January, 2021	47,657	76,456	—	124,113
Movements:
Additions			8,946	8,946
Amortization for the year	(42,112)	(14,395)	(637)	(57,144)
Exchange differences	3,426			3,426
Balance - December 31, 2021	8,971	62,061	8,309	79,341
Movements:
Additions			1,791	1,791
Amortization for the year	(9,094)	(20,397)	(3,063)	(32,554)
Exchange differences (note 6)	123		(89)	34
Balance - December 31, 2022	—	41,664	6,948	48,612


Annual Report 2022		95

2.3.Segment reporting



	Accounting policy – Segment Reporting An operating segment is a component of an entity that engages in business activities from which 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 to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. Adyen has identified the Management Board as the CODM who is responsible for the assessment 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 a performance 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 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.

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	2022	2021

Europe, the Middle East, and Africa (EMEA)	3,430,434	2,351,662
North America	4,289,241	2,899,788
Asia-Pacific	784,189	436,185
Latin America	431,747	307,784
Total revenue from contracts with customers	8,935,611	5,995,419

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 level

accounted 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 non-

current 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		96

2.4.Non-IFRS financial measures

Non-IFRS financial measures are disclosed in addition to the statement of comprehensive income, in order

to 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 the

following additional financial measures that are directly derived from the consolidated statement of

comprehensive 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 growth	2022	YoY%	2021	YoY%

Europe, the Middle East, and Africa (EMEA)	746,823	25%	599,332	41%
North America	343,158	48%	231,406	74%
Asia-Pacific	142,346	48%	96,086	48%
Latin America	97,839	31%	74,693	24%
Total net revenue from contracts with customers	1,330,166	33%	1,001,517	46%

–EBITDA: “Income before net finance income/(expense) and income taxes” less “Amortization and

depreciation” 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.



Selected non-IFRS financial measures	2022	2021

Income before net finance income/(expense) and income taxes	664,675	594,981
Amortization and depreciation	63,613	35,011
EBITDA	728,288	629,992

Net revenue	1,330,166	1,001,517
EBITDA margin (%)	55%	63%

Purchases of plant and equipment	95,575	51,387
Capitalization of intangible assets	3,523	2,959
CapEx	99,098	54,346

EBITDA	728,288	629,992
CapEx	(99,098)	(54,346)
Lease payments	(22,144)	(9,045)
Free cash flow	607,046	566,601

Free cash flow	607,046	566,601
EBITDA	728,288	629,992
Free cash flow conversion ratio (%)	83%	90%


Annual Report 2022		97

3.Inventories

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

Commerce strategy.



	Accounting policy – Inventories Inventories are measured at the lower of cost or net realizable value. The cost of inventories is based 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 and condition. Net realizable value is defined by Adyen as the estimated re-sell price in the ordinary 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	22,138	19,548
Purchases 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)	—	(3,093)
Expense recognized in other operating expenses	(655)	(1,180)
Balance - December 31	87,891	22,138

During 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 purchases

of 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.

4.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:



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
Berlin	67	48
Madrid	64	32
Stockholm	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		98

4.1.Employee benefits



	Accounting policy – Employee benefits 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 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)	10,499	12,008
Total wages and salaries	328,316	199,141

Social securities	43,811	35,413
Pension costs - defined contribution plans	8,460	5,985
Total social securities and pension costs	52,271	41,398

Reference is made to note 22 ‘Compensation of key management’ for the remuneration of the Management

Board and Supervisory Board.

4.2.Post-employment benefit obligations



	Accounting policy – Post-employment benefit obligations Post-employment benefits are employee benefits (other than termination benefits and short- term employee benefits) that are payable after the completion of employment. The Adyen group companies operate various pension schemes. The entitlement of the employees under the company’s pension plans are all classified as defined contribution plans. 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		99

4.3.Share-based payments

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	2022	2021

Equity-settled	9	292
Cash-settled	10,490	11,716
Total share-based compensation	10,499	12,008

Adyen 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); and

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

salaries and wages.

The change in cash-settled share-based compensation expense was mainly linked to the Adyen share price

decrease over the period.

These plans are described in more detail below:

I.Equity-settled option plan



	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 the first anniversary of the grant date. The remaining 75% of the options will then vest monthly, in equal 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.

The maximum aggregate number of Depository Receipts in respect to which options shall be granted is

1,312,5009. All of the outstanding options are exercisable as at year end (2021: 84,306). The exercise price

of 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		100

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

Movements in the number of share options outstanding and their related weighted average exercise prices

are as follows:


	2022		2021
Share options outstanding	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)
Exercised	66.71	(16)	28.05	(196)
Balance - December 31	47.51	107	53.63	147

II.Cash-settled share-based payment plan



	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 shares are granted at the underlying market price of Adyen shares at grant date. Subject to the employees’ 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 each anniversary 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 the market 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 on each 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 of the phantom share plan is presented in wages and salaries in the statement of comprehensive income.

In 2022 a total of 41,20610 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).


Annual Report 2022		101

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

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 an

administration 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 the

plan 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 the

number of Depositary Receipts expected to vest or relating income statement impact in 2022.

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	55,630	36,384
Travel and other staff expenses	44,086	10,102
IT costs	33,086	23,190
Advisory costs	27,722	15,711
Contractor costs	13,489	10,384
Housing costs	10,914	6,427
Office costs	8,186	4,308
Miscellaneous operating expenses	14,822	24,730
1% 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 result

of our increased investment in brand awareness on a global level and the ability to host events to meet our

customers in-person.


Annual Report 2022		102

6.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)	11,375
Fair value re-measurement of financial instruments:
Derivative liabilities (note 6.2)	46,700	(13,300)
Other financial assets at FVPL (note 6.3)	(153)	(322)
Loss on redemption of other financial assets at amortized cost	—	(138)
Total other financial results	37,904	(2,385)

6.1.Exchange gains/(losses)

The exchange gains/(losses) recognized during the year relate to realized and unrealized translation

differences 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 a functional 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 a reasonable approximation of the actual rates prevailing at the transaction dates). Foreign currency differences are recognized in other comprehensive income and are presented 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 the rates prevailing on the balance sheet date. Exchange rate differences resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement 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 are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities that are measured at fair value through profit or loss are retranslated at the date that the fair value is determined.


Annual Report 2022		103

6.2.Derivative liabilities

As part of the merchant contract referred to in note 2.1, Adyen recognized derivative liabilities measured at

fair 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 ‘other

financial results’ due to the re-measurement of the fair value of the derivative liabilities. The change in fair

value 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 through

profit 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.


Annual Report 2022		104

7.Income taxes

7.1.Income tax expense



	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.

The 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.


Effective tax calculation	2022	2021
Income before income taxes	719,939	580,847
Statutory tax rate in the Netherlands (%)	25.8%	25%
Income taxes based on statutory tax rate in the Netherlands	185,744	145,212

Tax effects of:
Innovation box	(37,306)	(31,163)
Change in tax rate		209
Other adjustments (such as prior year and non-deductible amounts)	7,362	(3,128)
Effective tax amount	155,800	111,130

The breakdown between current and deferred income taxes for the year ended December 31, 2022 and

2021 is disclosed below:


Income taxes	2022	2021
Current income tax expense	153,656	126,898
Deferred income tax expense/(income)	2,144	(15,768)
Total income taxes	155,800	111,130

The breakdown between current income tax receivables and payables as at December 31, 2022 and 2021 is

disclosed 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		105

7.2.Deferred income taxes



	Accounting policy – Deferred income taxes Deferred income taxes arise, in general, as a result of temporary differences between tax and commercial 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 is settled. 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 future taxable 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 on these items are in-substance linked to the merchant contract, and are presented on a gross basis in the balance sheet.

The below movement schedule includes the changes in deferred taxes with the respective impact in equity

and profit or loss:


	Balance January 1, 2021	Recognized in Profit or Loss	Recognized in equity	Effects of foreign exchange	Balance December 31, 2021
Deferred tax assets:
Derivative liabilities	17,100	3,979			21,079
Windfall tax benefit	43,934		(33,384)	2,258	12,808
Tax losses carried forward	43,085	(939)	38,932	5,394	86,472
Temporary differences	2,218	5,205			7,423
Total deferred tax assets	106,337	8,245	5,548	7,652	127,782

Deferred tax liabilities:
Other financial assets at FVPL	(4,527)	4,527			—
Contract assets	(19,114)	3,104			(16,010)
Temporary differences	(283)	(108)			(391)
Total deferred tax liabilities	(23,924)	7,523	—	—	(16,401)
Net deferred tax assets / (liabilities)	82,413	15,768	5,548	7,652	111,381


Annual Report 2022		106



	Balance January 1, 2022	Recognized in Profit or Loss	Recognized in equity	Effects of foreign exchange	Balance December 31, 2022

Deferred tax assets:
Derivative liabilities	21,079	(12,049)			9,030
Windfall tax benefit	12,808		(4,990)	(2,493)	5,325
Tax losses carried forward	86,472	1,737	34,149	(3,521)	118,837
Temporary differences	7,423	3,112			10,535
Total deferred tax assets	127,782	(7,200)	29,159	(6,014)	143,727

Deferred tax liabilities:
Other financial assets at FVPL	—	—			—
Contract assets	(16,010)	5,261			(10,749)
Temporary differences	(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

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 the

derivative 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 to options 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 and recognised 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 these carry forward losses on a Federal level have no expiration date. In addition, during 2022, Adyen reassessed its position relating to the recoverability of deferred 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 result of obtaining Federal Foreign Branch and acquiring licenses, leading to increased transactions recorded on a local level and an expectation that tax losses will be utilized against future taxable income. The recoverability of the deferred tax asset in the US is not impacted by the liquidation of Adyen 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		107

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 of equity instruments are shown in equity as a deduction, net of tax, from the proceeds.

In 2022, 29,21311 (2021: 600,850) additional shares were issued. The additional issued shares were a result

of 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 1

of 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.

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 gross

equity balance relating to tranche 1 (vested and exercised in 2021) presented within ‘share premium’, and

tranche 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 to

equity. 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 closing

balance of EUR 35,000 as per end of December 2022 (2021: EUR 81,700). Fair value movements are

presented 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.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)
Regulatory adjustments:
Warrant reserve	(25,575)	(25,575)
Intangible assets	(8,140)	(9,841)
Deferred tax assets that rely on future profitability	(124,162)	(99,084)
Prudent valuation	(47)	(104)
Total own funds	1,972,192	1,410,926


Annual Report 2022		108

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

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



	Accounting policy – Cash and cash equivalents Adyen’s cash and cash equivalents are measured at amortized cost and are included in current 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 with original 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.



Cash and cash equivalents	2022	2021

Cash held at central banks	4,407,540	2,565,875
Cash held at banks, other than central banks	2,114,805	2,050,219
Total	6,522,345	4,616,094

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) are

restricted and are therefore not available for general use by the Company. The restricted cash mainly relates

to deposits required under the US Federal Foreign Branch license as well as deposits held as guarantee for

leased 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 a

positive 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.

11.Financial instruments



	Accounting policy – Financial instruments Classification Adyen classifies its financial assets in the following measurement categories, those to be measured: •subsequently at fair value through profit or loss (‘FVPL’), and •at amortized cost. The classification depends on Adyen’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at FVPL, gains and losses are recorded in profit or loss.


Annual Report 2022		109



	Financial liabilities Adyen initially classifies financial instruments as a liability or equity instrument based on the terms 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 merchant contract'). 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. Measurement At initial recognition, Adyen measures a financial asset at its fair value plus, in the case of a financial asset not at FVPL, transaction costs that are directly attributable to the acquisition of 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 in order 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 finance income 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 other comprehensive 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.



	Impairment 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 and contract assets, the group applies the simplified approach, which requires expected lifetime losses to be recognized from initial recognition of the assets. 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, and throughout 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 the outstanding amount.


Annual Report 2022		110



	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: •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. •Level 2: The fair value of financial instruments that are not traded in an active market is determined 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. •Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The financial instruments as at each balance sheet date are summarized in the table below. For those

measured at fair value, to provide an indication about the reliability of the inputs used in determining fair

value, 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 is

in line with risk management strategies and how this is reported to key management. Adyen’s exposure to

various risks associated with the financial instruments is discussed in note 12.



Financial instruments	Note	Measurement policy	2022	2021

Financial assets:
Other financial assets at FVPL		FVPL – level 2	12,264	22,504
Contract assets – monetary component	2.2	Amortized cost	—	8,971
Receivables from merchants and financial institutions	15	Amortized cost	369,104	633,249
Trade and other receivables	15	Amortized cost	89,350	56,852
Cash and cash equivalents	10	Amortized cost	6,522,345	4,616,094
Total			6,993,063	5,337,670

Financial liabilities:
Derivative liabilities		FVPL – level 2	35,000	81,700
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
Total			5,181,704	3,933,311

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 preferred

shares into common shares. The conversion rate may be updated in the future. The adjustment for lack of

marketability is determined using an option pricing model technique which relies on observable market data

of the underlying Visa Inc. common shares, as well as a presumed length of holding period restriction on the

preferred shares.

During 2022, Visa Inc. effected a partial conversion of the Series C preferred stock into Series A preferred

stock. The Series A preferred stock were converted into Visa Inc. common stock and sold prior to the end of

2022 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		111

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 fair

value 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 fulfilment

of the payment services to be provided to the merchant. A sensitivity analysis to Adyen’s share price is

provided in note 12 ‘Financial risk management’.

The change in fair value of the derivative liabilities is mainly linked to the Adyen share price decrease and

revision of valuation input related to time to maturity. Refer to note 6 ‘Other financial results’ for the

recognition of the movement of the derivative liabilities.


Annual Report 2022		112

12.Financial risk management

Adyen’s activities bring exposure to a variety of financial risks. Risk management is the responsibility of

Adyen’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	Remaining risk
Liquidity risk		Minimal
Liquidity risk is the risk that Adyen is not able to meet its short-term payment obligations.	Adyen actively monitors its liquidity risk. The majority of the balance sheet, for both assets and liabilities not related to merchant funds, has a maturity date of less than three months on an undiscounted contractual basis. The portion of the balance sheet that is merchant related has a very 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 and related 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 liquidity from 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 basis of 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 well as Adyen's liquidity buffer and survival period metric, the Company has sufficiently mitigated liquidity risk.	Adyen’s balance sheet is by nature short-term basis and in general, cash is received prior to payout to merchants. The remaining liquidity risk remains within risk appetite evidenced by a high LCR.


Source of risk and risk description	Risk mitigation				Remaining risk
Market risks					Minimal
Foreign exchange risk
Adyen operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises on recognized assets and liabilities (principally trade and merchant flow related receivables and payables) and investments in foreign operations.	Adyen actively manages the foreign exchange risk resulting in limited exposure to foreign exchange risks. USD is the most significant non- functional 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 during 2022 (refer to note 2.1 for further details) and sale of Visa Inc. common stock (refer to note 11 for further details).				Adyen has limits on its open FX position per individual currency and for Adyen as a whole. The open positions including the impact of an immediate 10% shock remain within Adyen’s risk appetite.

		Currency	Net exposure	10% shock
		31/12/2021
		USD	EUR 32 million	EUR 3.2 million
		31/12/2022
		USD	EUR 12 million	EUR 1.2 million
	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.


Annual Report 2022		113


Source of risk and risk description	Risk mitigation	Remaining risk
Interest rate risk
Interest rate risk on financial instruments is the risk of adverse impact of movements of the interest rates of underlying financial assets.	Interest rate risk arising from maturity and tenor mismatches in assets and liabilities is limited and therefore considered not to be material to Adyen. Some assets are interest bearing, whereas all liabilities are non- interest-bearing. Adyen is not financed with external debt, which excludes that origin of interest rate risk. Although significant liabilities towards merchants are present, these liabilities 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 to Adyen’s incremental borrowing rate) and nominal value of outstanding leases. Adyen could be considered to be exposed to interest rate risk in the banking 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 of Adyen are not significantly exposed to interest rate risk because that cash is used to settle the current liabilities towards the merchants at short notice. The nominal values of the money-market funds are minimal 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 the interest rate risk exposure we have on our cash and cash equivalent balances 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 and liabilities, Adyen experiences low interest rate risk and maintains within its risk appetite.


Source of risk and risk description	Risk mitigation				Remaining risk
Equity price risk
The risk that the fair value of equities changes as a result of changes in the value of individual stocks.	The Group’s exposure to equity securities price risk arises from investment 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 the share price of Visa Inc. Two tranches of the long-term merchant contract with eBay are classified in the balance sheet as derivative liabilities. The exposure is affected by share price movements of Adyen shares. Adyen carried out a sensitivity analysis on the Visa Inc. preferred shares and derivative liabilities, respectively. A 5% increase (decrease) in the underlying 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 considered limited as Adyen has no other equity instruments on its balance sheet. The risk appetite on equity price risk is low and therefore the residual risk is within risk appetite.

		Balance sheet item	Carrying amount	5% underlying share price movement
		31/12/2021
		Visa Inc. preferred shares	EUR 23 million	EUR 1 million
		Derivative liabilities	EUR 82 million	EUR 4 million (5%)
		31/12/2022
		Visa Inc. preferred shares	EUR 12 million	EUR 1 million
		Derivative liabilities	EUR 35 million	EUR 2 million (5%)
		In addition, Adyen’s Treasury policy does not allow purchasing additional equity positions (excluding treasury shares).


Annual Report 2022		114


Credit risks		Minimal
Counterparty default risk
The counterparty default (credit) risk relates to receivables from financial institutions regarding settled payment transactions. A default of financial institution counterparties could have a negative impact on Adyen’s financial results.	Financial assets subject to credit risk: Cash and cash equivalents, and receivables from merchants and financial institutions: Adyen’s cash held at banks, other than central banks, is exposed to credit 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 a credit rating in the A categories of Moody’s/S&P or, if not available, its equivalent from other rating agencies Adyen has conservatively translated 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-as- usual 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 to regulatory requirements, in order to mitigate the counterparty exposure to one of its partners in Brazil, Adyen has setup a collateral account in which 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 non- performance by these counterparties. Contract assets: Refer to note 2.2 for detail on credit risk exposure resulting from the monetary component of the contract assets The remaining financial asset credit risk exposure (such as trade and other receivables) is considered to be limited.	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.

Concentration risk
Risk of losses stemming from on- and off-balance sheet positions arising from concentrations in exposures to a counterparty or a group of connected counterparties.	Concentration risk at Adyen originates primarily at banking partners in locations where there are no own direct acquiring licenses. In 2021 and 2022, Adyen has reduced its concentration risk in exposures held at financial institutions evident by the low proportion of top 10 exposures within Adyen’s total financial assets. The residual credit risk is mitigated by the short-term maturity of these balances of less than 7 days. Adyen actively manages this concentration risk by distributing its cash over bank accounts at multiple banks. If needed, excess cash can be held at accounts with central banks. Adyen continues to monitor its merchant funds flows at partner banks that are not settled through accounts held at the central bank, to ensure compliance with the large exposure limit.	The remaining credit risk remains is low where Adyen’s risk appetite for concentration risk is moderate. Therefore, the residual risk is within risk appetite.


Annual Report 2022		115

Other disclosures

13.Intangible assets

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

platform.



	Accounting policy – Intangible assets The intangible assets are stated at cost less accumulated amortization and include internally generated 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 period with 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 be recoverable. The useful life is assessed on an annual basis.


Intangible assets	2022	2021
Internally generated software
Cost	22,776	19,817
Accumulated amortization	(12,935)	(9,847)
Balance - January 1	9,841	9,970

Additions	3,523	2,959
Amortization for the year	(5,224)	(3,088)
Total as at December 31	8,140	9,841

Cost	23,029	22,776
Accumulated amortization	(14,889)	(12,935)
Total as at December 31	8,140	9,841


Annual Report 2022		116

14.Plant and equipment



	Accounting policy – Plant and equipment Plant and equipment are stated at cost less accumulated depreciation. Repairs and maintenance 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 be recoverable. The useful life is assessed on an annual basis.

Computer Hardware and Software additions during the year mainly relate to servers for data centers and

equipment such as laptops for employees. Leasehold improvements additions during the year relate to the

capitalization 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.



Plant and equipment	Computer Hardware and Software	Leasehold Improvements	Other	Total

2021
Cost	59,016	9,060	1,964	70,040
Accumulated depreciation	(28,826)	(4,045)	(1,423)	(34,294)
Balance - January 1	30,190	5,015	541	35,746

Additions	39,964	9,391	2,032	51,387
Disposals	(19)	—	—	(19)
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	57,940	12,758	2,283	72,981

2022
Cost	98,379	18,738	4,002	121,119
Accumulated depreciation	(40,439)	(5,980)	(1,719)	(48,138)
Balance - January 1	57,940	12,758	2,283	72,981

Additions	81,848	12,555	1,172	95,575
Disposals	(100)	—	—	(100)
Depreciation for the year	(23,176)	(4,464)	(714)	(28,354)
Other changes (e.g. exchange differences)	255	379	60	694
Balance - December 31	116,767	21,228	2,801	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	21,228	2,801	140,796


Annual Report 2022		117

15.Trade, other receivables, and receivables from merchants

and financial institutions



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

15.1.Trade, other receivables, and receivables from merchants and financial

institutions



Trade and other receivables	2022	2021

Trade and other receivables	93,399	61,294
Less: Allowance for expected credit losses	(4,049)	(4,442)
Balance - Trade receivables - Net	89,350	56,852
Receivables from merchants and financial institutions	369,104	633,249
Total	458,454	690,101

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	89,998	71,671
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 to

merchants before the funds from financial institutions are fully received. Therefore, Adyen is entitled to a

receivable from all merchants which have opted to use this form of settlement. The receivable relates to

balances of merchants to be settled by schemes, with an average duration of less than 10 days. As at


Annual Report 2022		118

December 31, 2022, the receivables from accelerated Sales Day Payout have a balance of EUR 89,998

(2021: 71,671).

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.

15.2.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 the

calculations 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 and

financial institutions



	Accounting policy – Trade and other payables Payables are obligations initially recognized at fair value and subsequently measured at amortized cost to pay for goods or services that have been acquired in the ordinary course of business 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	2022	2021
Trade payables	19,922	8,989
Taxes and social security	55,593	51,418
Accrued employee benefits	30,041	26,269
Accrued liabilities and other debts	33,105	5,996
Cash-settled share-based payment plan - current portion	9,166	7,444
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 to

merchants, estimated as the amount of transaction volume for which issuers could potentially submit a

chargeback 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 cash-

settled share-based payment plan (refer to note 4.3 ‘Share-based payments’).


Annual Report 2022		119

17.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 the lease 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 the contract. At initial recognition, the right-of-use-asset amounts to the initial lease liability. Right-of-use- assets 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 be recoverable. Interest on lease liability is recognized as an expense in the statement of comprehensive income. Short-term (less than 12 months) and small value lease contracts are expensed in the statement of comprehensive income on a straight-line basis over the lease term.


Right-of-use assets	2022	2021
Offices and data centers
Cost	168,630	149,732
Accumulated depreciation	(40,567)	(25,404)
Balance - January 1	128,063	124,328

Additions	81,060	19,114
Depreciation for the period	(30,035)	(16,608)
Other movements (e.g. exchange differences)	2,588	1,229
Balance - December 31	181,676	128,063

Recognized right-of-use asset	249,760	168,630
Accumulated depreciation	(68,084)	(40,567)
Balance - December 31	181,676	128,063


Lease liability	2022	2021
Balance - January 1	142,964	131,485
Additions	81,060	19,114
Lease instalments	(25,516)	(11,541)
Interest expense	3,372	2,496
Other movements (e.g. exchange differences)	1,193	1,410
Balance - December 31	203,073	142,964
Current portion	33,200	22,996
Non-current portion	169,873	119,968

Additions during the year mainly relate to new lease contracts for data centres in the Netherlands, United

States and India.


Annual Report 2022		120

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	34,460	20,327
Between 1 and 2 years	35,103	21,326
Between 2 and 3 years	33,135	21,331
Between 3 and 4 years	27,890	20,979
Between 4 and 5 years	21,748	14,780
Later than 5 years	49,870	71,564
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 not

recognized 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 for

services 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, and

concluded that the amendments do not have a material impact on the financial statements.


Annual Report 2022		121

20.2.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

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 by

accounting 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.

21.2.Summary of services rendered by the auditor, in addition to the audit of

the financial statements

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

during 2022 and 2021:


	2022			2021
	PwC Accountants	Other PwC firms*	Total	PwC Accountants	Other PwC firms*	Total
Audit of financial statements	842	713	1,555	655	541	1,196
Other audit services	333	—	333	292	—	292
Total	1,175	713	1,888	947	541	1,488

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

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

Union.



	2022	2021
Other audit services required by law or regulatory requirement
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
Other audit services
Assurance engagement ISAE 3402 report	101	101
Assurance engagement SOC 2 report	131	55
Total for the year	1,175	1,488

22.Compensation of key management

22.1 Remuneration Management Board

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).



	2022	2021

Salaries and short-term employee benefits	3,590	3,137
Share-based payments	439	241
Post-employment benefits	209	97
Total	4,238	3,475


Annual Report 2022		122

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 a

competent 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).

Pension12

As from January 2017, all Dutch members of the Management Board 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 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.

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 the

insurance 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.

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 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

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

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		123

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

23.Share information



	Accounting policy – Earnings per share 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. 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 to share options granted to employees (refer to note 4.3).



Share information	2022	2021

Net income attributable to owners of Adyen N.V. (in EUR '000)	564,139	469,717
Weighted average number of ordinary shares for the period	30,975,325	30,499,194
Dilutive effect of share options	70,704	176,621
Weighted average number of ordinary shares for diluted net profit for the period	31,046,029	30,675,815
Net profit per share – basic	18.21	15.40
Net profit per share - diluted	18.17	15.31

24.Tax reporting

24.1.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.

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.

24.2.Country-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 be

found in note 32 ‘Investments in consolidated subsidiaries on equity method’ of the company financial

statements.


Annual Report 2022		124



		Amounts accrued on IFRS Consolidated basis					Taxes received/ (paid) on cash basis
Country	Main activity	Ending FTE	Total Operating Expense	Income Before Tax	Income Tax Expense	ETR%	Income Tax	Indirect Tax	Payroll Tax	Grants / Incentives	Total tax contribution

The Netherlands	Head office - Payment service provider	1,941	(357,254)	652,771	(138,739)	21%	(138,952)	(103,158)	(86,943)	642	(328,411)
United Kingdom	Sales office	135	(27,085)	9,517	(163)	—	81	178	(12,395)	—	(12,136)
France	Sales office	75	(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)
Sweden	Sales 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 office	23	(4,889)	43	—	—	—	(564)	—	—	(564)
Poland	Sales office	14	(1,914)	391	(83)	21%	(82)	—	(529)	—	(611)
Norway	No office	—	—	—	—	—%		(186)			(186)
United States	Sales and support office	462	(133,121)	29,723	(7,808)	26%	(1,068)	(1,348)	(28,800)	—	(31,216)
Brazil	Sales office	164	(30,553)	3,300	(2,432)	74%	(3,369)	(19,668)	(7,017)	—	(30,054)
Mexico	Sales office	17	(3,346)	383	(171)	45%	(87)	(3,594)	(506)	—	(4,187)
Canada	Sales office	20	(2,833)	835	(215)	26%	—	(16,349)	(629)	—	(16,978)
Singapore	Sales and support office	127	(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	—				—		(39)	—		(39)
Total		3,332	(665,439)	719,939	(155,800)	22%	(149,573)	(216,180)	(165,744)	754	(530,743)


Annual Report 2022		125

24.3.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 office lease, 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 of an accounting difference (IFRS vs. statutory).
Income tax paid	Income tax paid is close to income tax expense	With our rapid growth, there are (significant) differences between income tax expense and income tax paid, because the amount paid can regard both current year or previous year.
	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 to customers (revenue), minus deduction of any input tax (expenses)	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	NL grants a wage tax deduction based on innovation performed (WBSO).
	We are reluctant to apply grants and incentives


Annual Report 2022		126

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 and

development (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 the

innovation box in order to reinvest those benefits in the further development of the platform and growth of the

company.

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 profit

of Adyen N.V. qualifying for the innovation box is directly linked with the number of hours spent by developers

on R&D projects.


Annual Report 2022		127

Company Financial Statements


Annual Report 2022		128

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
Revenue	26	7,575,105	5,233,538
Costs incurred from financial institutions	26	(6,340,102)	(4,387,767)
Costs of goods sold	26	(46,564)	(29,177)
Net revenue		1,188,439	816,594

Wages and salaries	27	(269,641)	(112,618)
Social securities and pension costs	27	(39,700)	(22,560)
Amortization and depreciation	13,30,31	(46,720)	(25,752)
Other operating expenses	28	(182,750)	(99,529)
Other income		(54)	250
Income before net finance expense and income taxes		649,574	556,385

Finance income		27,048	62
Finance expense		(11,251)	(12,379)
Other financial results	29	27,107	(3,436)
Net finance expense		42,904	(15,753)


	Note	2022	2021
Share of the profit of investments in subsidiaries	32	21,351	38,002
Income before income taxes		713,829	578,634
Income taxes		(149,690)	(108,917)
Net income for the year		564,139	469,717
Net income attributable to owners of Adyen N.V.		564,139	469,717

Other comprehensive income/ (expense)
Items that may be reclassified to profit or loss
Currency translation adjustments subsidiaries		(1,326)	11,373
Other comprehensive income/ (expense) for the year		(1,326)	11,373
Total comprehensive income for the year (attributable to owners of Adyen N.V.)		562,813	481,090

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


Annual Report 2022		129

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
Plant and equipment	30	113,596	52,070
Right-of-use assets	31	153,329	110,604
Other financial assets at FVPL	11	12,264	22,504
Contract assets	2	47,916	78,091
Deferred tax assets		134,767	22,534
Investments in consolidated subsidiaries on equity method	32	115,030	212,318
Total non-current assets		585,042	507,962

Inventories		78,788	19,059
Receivables from merchants and financial institutions	33	222,009	503,647
Trade and other receivables	33	241,630	287,108
Current income tax receivables		5,640	—
Cash and cash equivalents		5,964,798	4,150,440
Total current assets		6,512,865	4,960,254
Total assets		7,097,907	5,468,216


	Note	December 31, 2022	December 31, 2021
Share capital	8	310	310
Share premium	8	352,399	335,725
Legal reserves		18,518	32,244
Other reserves		150,298	127,717
Retained earnings		1,326,454	844,701
Net income for the year		564,139	469,717
Total equity attributable to owners of Adyen N.V.		2,412,118	1,810,414

Derivative liabilities	11	35,000	81,700
Deferred tax liabilities		10,749	16,010
Lease liability	31	150,278	106,622
Total non-current liabilities		196,027	204,332

Payables to merchants and financial institutions	36	4,336,872	3,352,592
Trade and other payables	36	126,274	74,772
Lease liability	31	23,442	17,260
Current 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		130

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	Share capital	Share premium	Legal reserves	Share-based payment reserve	Warrant reserve	Retained earnings	Total equity
Balance - January 1, 2021		304	194,608	14,853	98,034	53,401	856,934	1,218,134

Net income for the year							469,717	469,717
Currency translation adjustments				11,373				11,373
Total comprehensive income for the year		—	—	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							59	59
		—	—	6,018	—	—	(5,959)	59
Transactions with owners in their capacity as owners:
Equity transfer on exercise of warrant	2.1		34,100		—	(26,700)	(7,400)	—
Deferred tax on share-based compensation	7		—		5,548			5,548
Options exercised			1,732		(1,732)			—
Proceeds on issuing shares	8	6	105,285					105,291
Share-based payments	4.3				292			292
Other adjustments						(1,126)	1,126	—
		6	141,117	—	4,108	(27,826)	(6,274)	111,131
Balance - December 31, 2021		310	335,725	32,244	102,142	25,575	1,314,418	1,810,414


Annual Report 2022		131



				Other reserves
	Note	Share capital	Share premium	Legal reserves	Share-based payment reserve	Warrant reserve	Retained earnings	Total equity

Balance - January 1, 2022		310	335,725	32,244	102,142	25,575	1,314,418	1,810,414

Net income for the year							564,139	564,139
Currency translation adjustments				(1,326)				(1,326)
Total comprehensive income for the year		—	—	(1,326)	—	—	564,139	562,813

Adjustments:
Other financial assets at FVPL movement (net of deferred tax)				(10,240)			10,240	—
Intangible assets				(2,160)			2,160	—
Other adjustments					161		(364)	(203)
		—	—	(12,400)	161	—	12,036	(203)
Transactions with owners in their capacity as owners:
Deferred tax on share-based compensation	7		6,180		22,979		—	29,159
Options exercised			568		(568)			—
Proceeds on issuing shares	8	—	9,926					9,926
Share-based payments	4.3				9			9
Other adjustments							—
		—	16,674	—	22,420	—	—	39,094
Balance - December 31, 2022		310	352,399	18,518	124,723	25,575	1,890,593	2,412,118

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


Annual Report 2022		132

Company Statement of Cash Flows

For the years ended December 31, 2022 and 2021

(all amounts in EUR thousands unless otherwise stated)



	Note	2022	2021

Income before income taxes		713,829	578,634
Adjustments for:
–Finance income		(27,048)	(62)
–Finance expenses		11,251	12,379
–Other financial results	29	(27,107)	3,436
–Depreciation of plant and equipment	30	21,725	11,733
–Amortization of intangible fixed assets	13	5,224	3,088
–Depreciation of right-of-use assets	31	19,771	10,931
–Share of the profit of investments in subsidiaries	32	(21,351)	(38,002)
–Share-based payments		7	114
Changes in working capital:
–Inventories		(60,016)	(4,262)
–Trade and other receivables	33	(120,662)	(86,573)
–Receivables from merchants and financial institutions	33	281,638	286,624
–Payables to merchants and financial institutions	36	1,150,418	945,941
–Trade and other payables		51,490	(1,918)
–Amortization and additions of contract assets	2.2	30,210	49,448
Cash generated from operations		2,029,379	1,771,511



	Note	2022	2021

Interest received		27,048	62
Interest paid		(11,251)	(12,379)
Income taxes paid		(140,910)	(127,679)
Net cash flows from operating activities		1,904,266	1,631,515
Purchases of financial assets at FVPL		—	(211)
Redemption of financial assets at amortized cost	11	—	12,427
Redemption of other financial assets at FVPL	11	11,407	—
Investments in consolidated subsidiaries on equity method	32	(106)	(17,918)
Net cash from liquidation of Adyen Inc.	32	6,643	—
Purchases of plant and equipment	30	(83,099)	(36,138)
Capitalization of intangible assets	13.0	(3,523)	(2,958)
Net cash used in investing activities		(68,678)	(44,798)
Proceeds from issues of shares	8	9,926	105,285
Lease payments	31	(12,907)	(3,346)
Net cash flows from financing activities		(2,981)	101,939
Net increase in cash, cash equivalents and bank overdrafts		1,832,607	1,688,656
Cash, cash equivalents and bank overdrafts at beginning of the year		4,150,440	2,458,038
Exchange gains on cash, cash equivalents and bank overdrafts		(18,249)	3,746
Cash, cash equivalents and bank overdrafts at end of the period		5,964,798	4,150,440

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


Annual Report 2022		133

Notes to the Company financial

statements

25.Basis 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.Company - Revenue



Types of goods or service	2022	2021

Settlement fees	7,042,045	4,838,701
Processing fees	302,052	238,621
Sales of goods	50,958	29,186
Other services	180,050	127,030
Total revenue from contracts with customers	7,575,105	5,233,538
Costs incurred from financial institutions	(6,340,102)	(4,387,767)
Costs of goods sold	(46,564)	(29,177)
Net revenue	1,188,439	816,594

27.Company - Employee benefits



Employee benefits	2022	2021

Salaries and wages	260,246	107,353
Share-based compensation	9,395	5,265
Total wages and salaries	269,641	112,618

Social securities	32,743	18,076
Pension costs - defined contribution plans	6,957	4,484
Total social securities and pension costs	39,700	22,560

28.Company - Other operating expenses



Other operating expenses	2022	2021

Sales and marketing costs	43,263	23,363
Travel and other staff expenses	35,458	7,133
IT costs	27,163	18,659
Advisory costs	24,271	12,213
Contractor costs	12,828	10,264
Housing costs	8,483	3,403
Office costs	6,974	2,453
Miscellaneous operating expenses	11,008	22,041
1% for the UN SDGs	13,302
Total other operating expenses	182,750	99,529


Annual Report 2022		134

29.Company - Other financial results



Other financial results	2022	2021

Exchange gains/(losses) (note 6.1)	(19,440)	10,324
Fair value re-measurement of financial instruments:
Derivative liabilities (note 6.2)	46,700	(13,300)
Other financial assets at FVPL (note 6.3)	(153)	(322)
Loss on redemption of other financial assets at amortized cost	—	(138)
Total other financial results	27,107	(3,436)

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 foreign-

denominated 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)’.

30.Company - Plant and equipment


Plant and equipment	Computer Hardware and Software	Leasehold Improvements	Other	Total
2021
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	36,138
Disposals	(19)	—	—	(19)
Depreciation for the year	(10,879)	(713)	(141)	(11,733)
Other changes (e.g. exchange differences)	—	(2)	—	(2)
Balance - December 31	42,703	7,828	1,539	52,070

2022
Cost	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	52,070

Additions	68,994	12,901	1,204	83,099
Disposals	(100)	—	—	(100)
Depreciation for the year	(17,666)	(3,464)	(595)	(21,725)
Other changes (e.g. exchange differences)	80	89	83	252
Balance - December 31	94,011	17,354	2,231	113,596

Cost	142,791	25,030	4,314	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		135

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 the lease 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 the contract. 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 indicates that the carrying amount may not be recoverable. Short-term (less than 12 months) and small value lease contracts are expensed in statement of comprehensive income on a straight-line basis over the lease term.


Right-of-use assets	2022	2021
Offices and data centers
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)
Other movements	(249)	52
Balance - December 31	153,329	110,604

Recognized right-of-use asset	203,727	133,908
Accumulated depreciation	(50,398)	(23,304)
Balance - December 31	153,329	110,604


Lease liability	2022	2021
Balance - January 1	123,882	109,996
Additions	62,745	17,232
Lease instalments	(15,672)	(5,461)
Interest expense	2,765	2,115
Balance - December 31	173,720	123,882
Current portion	23,442	17,260
Non-current portion	150,278	106,622


Annual Report 2022		136

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


Minimum future lease payments	2022	2021
Within 1 year	24,107	15,070
Between 1 and 2 years	25,981	16,168
Between 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	45,750	64,381
Total	165,194	139,547

32.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 are recognized as a reduction in the carrying amount of the investment. Goodwill is currently not applicable. Adyen’s share of the results of the investees is reported in the company statement of comprehensive income and its share of movements in other comprehensive income is recognized in other comprehensive income. Investments are reviewed for impairment at least annually or whenever events or circumstances indicate that the carrying amount may not be recoverable.


Investments in consolidated subsidiaries on equity method	2022	2021
Balance - January 1	212,318	139,510
Investments in consolidated subsidiaries	27,174	17,918
Liquidation of Adyen Inc.	(141,658)	—
Share of the profit of investments in subsidiaries	21,351	38,002
Currency translation adjustments subsidiaries	(1,326)	11,373
Share of changes in equity of investments in subsidiaries	(2,829)	5,875
Balance - December 31	115,030	212,318

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		137

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 to

note 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	Ownership percentage
Adyen International B.V.	Amsterdam, The Netherlands	100%

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

Adyen International B.V. – Subsidiaries


Name	Legal Seat	Direct and indirect ownership percentage
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, Japan	100%
Adyen Middle East Limited	Dubai, United Arab Emirates	100%
Adyen MEA FZ-LLC	Dubai, United Arab Emirates	100%


Annual Report 2022		138

33.Company – Trade, other receivables, and receivables from

merchants and financial institutions

Receivables fall due in less than one year except for deposits transferred to financial institutions.


Trade and other receivables	2022	2021
Trade and other receivables	245,025	290,970
Less: Allowance for expected credit losses	(3,395)	(3,862)
Trade receivables - Net	241,630	287,108
Receivables from Merchants and Financial Institutions	222,009	503,647
Total	463,639	790,755

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 a

result, the impact of expected credit losses on intercompany balances is not significant.

34.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.

36.Company – Trade, other payables, and payables to

merchants and financial institutions


Trade and other payables	2022	2021
Trade payables	17,080	7,014
Taxes and social security	43,777	41,988
Accrued employee benefits	22,565	17,579
Accrued liabilities and other debts	29,660	2,571
Cash-settled share-based payment plan	13,192	5,620
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

All current liabilities fall due in less than one year. The fair value of the current liabilities approximates the

book value due to its short-term character.

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

37.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		139

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 the

fiscal 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 to

retained earnings in shareholder’s equity.

41.Events after balance sheet date

Prior to publishing the 2022 Annual Report, Adyen updated its terms and conditions applicable to merchant

agreements in order to clarify the responsibilities of the services provided by financial institutions and

network 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 and

company 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 Does CEO	R. Prins CCO	I.J. Uytdehaage CFO
M.B. Swart CLCO	K. Zaki COO	A. Matthey CTO


Annual Report 2022		140

Other Information


Annual Report 2022		141

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.


Annual Report 2022		142

GRI Index

In the following table, we make reference to where in this report we disclose our environmental, social and

governance (ESG) programs, policies and metrics. These disclosures are mapped in reference to the

voluntary 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 table

below. As we prepare to become compliant with CSRD, we will continue to evaluate opportunities for future

reporting 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	90
2-3	Reporting period, frequency and contact point	Other information (ir@adyen.com)	142
2-5	External assurance	Independent Auditor's report	143
Activities and workers
Disclosure	Description	Location in report	Section page Ref.
2-7-a	Total number of employees, breakdown by gender and region	Investing in the team	29


Governance
Disclosure	Description	Location in report	Section page Ref.
2-9	Governance structure and composition	Corporate governance	65
2-10-a	Nomination and selection of the highest governance body	Corporate governance	65
2-11-a	Chair of the highest governance body	Corporate governance	65
2-12-a	Role of the highest governance body in overseeing the management of impacts	ESG governance & oversight	15
2-13	Delegation of responsibility of managing impacts	ESG governance & oversight	15
2-14-a	Role of the highest governance body in sustainability reporting	ESG governance & oversight	15
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
Strategy, policies, and practices
Disclosure	Description	Location in report	Section page Ref.
2-22	Statement on sustainable development strategy	Our approach to accelerating positive change	16
2-23-a-iv	Policy commitments	Responsible practices	39
2-24	Embedding policy commitments	Responsible practices	39
Stakeholder engagement
Disclosure	Description	Location in report	Section page Ref.
2-29	Approach to stakeholder engagement	ESG governance & oversight	15
Anti-corruption
Disclosure	Description	Location in report	Section page Ref.
205-2-b to e	Communication and training about anti- corruption policies and procedures	Information security & data privacy	44


Annual Report 2022		158


Tax
Disclosure	Description	Location in report	Section page Ref.
207-1	Approach to tax	Tax	47
207-2	Tax governance, control, and risk management	Tax	47
207-3	Stakeholder engagement and management of concerns related to tax	Tax	47
207-4-a	Country-by-country reporting	Tax	47
Emissions
Disclosure	Description	Location in report	Section page Ref.
305-1	Direct (Scope 1) GHG emissions	Environmental sustainability	40
305-2	Energy indirect (Scope 2) GHG emissions	Environmental sustainability	40
305-3	Other indirect (Scope 3) GHG emissions	Environmental sustainability	40
Employment
Disclosure	Description	Location in report	Section page Ref.
401-1-a	New employee hires and employee turnover	People & culture	24
401-2	Benefits provided to full-time employees that are not provided to temporary or part-time employees	Employment & benefits	37
401-3	Parental leave	Employment & benefits	37
Training and education
Disclosure	Description	Location in report	Section page Ref.
404-2	Programs for upgrading employee skills and transition assistance programs	People & culture	24
404-3	Percentage of employees receiving regular performance and career development reviews	People & culture	24


Diversity and equal opportunity
Disclosure	Description	Location in report	Section page Ref.
405-1	Diversity of governance bodies and employees	Report of the Supervisory Board	69
Customer privacy
Disclosure	Description	Location in report	Section page Ref.
418-1-c	Substantiated complaints concerning breaches of customer privacy and losses of customer data	Information security & data privacy	44


Annual Report 2022		159

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 to

provide 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.

As a credit institution, from January 1, 2022 to December 31, 2023, Adyen is required to report on the

following items :

•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;

•The total exposure to non-NFRD companies, referring to companies that do not fall under the scope

of the Non Financial Reporting Directive (Directive 2014/95/EU).

As at 31 December 2022, Adyen is required to disclose on the Taxonomy eligibility. Eligibility indicates that

an activity is in scope for screening under the Taxonomy regulation. In the future, eligible activities will be

tested against the Technical Screening Criteria to determine Taxonomy alignment. The methodology for the

computation of the KPIs is FinRep-driven, while the exposure is expressed in terms of carrying amount and

with 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 best-

effort approach and available data. To facilitate the disclosures required by the Delegated Act Article 10, the

template 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 the

Taxonomy KPIs.


	Gross carrying amount	Exposures to EU Taxonomy eligible economic activities	Exposures to EU Taxonomy non- eligible economic activities	% Coverage (over total assets )
Total Asset Covered	3,208,810	9,513	3,199,297	0.1%
Total trading portfolio and on-demand inter-bank loans	—		—	—%
Total Derivatives	—		—	—%
Total exposures to non- NFRD companies	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			100%

Qualitative information

As per Annex XI of the EU Taxonomy delegated Act, a number of qualitative disclosures to support the

quantitative 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.

Scope of the assets covered by the KPIs

•Total Assets Covered: include Adyen’s loans and advances (trade receivables and receivables from

merchants 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		160

•Total exposures to non- NFRD Companies: exposures towards companies that do not fall within the

scope 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-of-

use 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 in

which 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, is

well 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 scope

of 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 a

counterparty is subjected to the NFRD regulation making it a challenge to distinguish between the type of

undertakings. As such, all EU exposures were assessed for eligibility, irrespective of the legal form of

counterparty. 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.


Annual Report 2022		161


Message from the CEO	3
Highlights	5
Adyen at a glance	6
Business strategy	7
Discussion of financial results	10
Financial objectives	11


Building a responsible business	14
Our approach to accelerating positive change	16
Impact technology	19
People & culture	24
Responsible business practices	39
Risk management	48
Statement by the Management Board	61


Corporate governance	65
Report of the Supervisory Board	69
Compliance with the Dutch Corporate Governance Code	72
Remuneration report	73


Financials statements table of contents	82