Verifone Reports Results for the First Quarter of Fiscal 2014

Revenues and Earnings per Share Exceed Guidance March 11, 2014 SAN JOSE, CA

Verifone Systems, Inc. (NYSE:PAY):

First Quarter Financial Highlights

  • GAAP net revenues of $436 million
  • Non-GAAP net revenues of $437 million
  • GAAP net loss per share of $0.15
  • Non-GAAP net income per diluted share of $0.31
  • Operating cash flow of $32 million

Verifone Systems, Inc. (NYSE:PAY), the global leader in secure electronic payment solutions, today announced financial results for the three months ended January 31, 2014 (“Q1 FY14”). GAAP net revenues were $436 million, compared to $429 million a year ago, a 2% increase. Non-GAAP net revenues for Q1 FY14 were $437 million, compared to $430 million a year ago, a 2% increase. GAAP net loss per diluted share was $0.15, compared to net income of $0.11 a year ago. Non-GAAP net income per diluted share was $0.31, compared to $0.51 a year ago.

The table below provides additional summary GAAP and non-GAAP financial information and comparisons.

Q114 Earnings

“Our first quarter financial results exceeded our guidance, and I am pleased with our progress in our operational initiatives launched in Q1,” said Paul Galant, Chief Executive Officer of Verifone. “Verifone is well poised to meet our clients’ needs for payment technology to better protect consumer data, while at the same time pushing the envelope on innovative payment as a service and commerce enablement solutions across the physical, on-line, and mobile channels.”

Additional Financial and Business Highlights

  • Service businesses achieved record non-GAAP net revenues of $176 million
  • Extinguished remaining Term B debt of $48 million and improved cash conversion cycle by 12 days sequentially
  • Continued rollout of EMV-capable MX devices in the U.S. and secured several competitive wins
  • Increased installed base of U.S. end-to-end encryption customers to 170 national merchants
  • Successfully introduced mobile ECR solution in Turkey, capitalizing on new government mandate
  • Continued regional growth of the company’s payment as a service solutions
  • Began rollout of LiftRetail interactive marketing solution at a leading national petroleum retailer
  • Launched digital taxi-top advertising displays to the New York City market

Guidance

Guidance for the second fiscal quarter of 2014 is as follows:

  • Non-GAAP net revenues of $440 million to $445 million
  • Non-GAAP net income per diluted share of $0.30 to $0.32

Guidance for the full fiscal year 2014 is as follows:

  • Non-GAAP net revenues of $1,780 million to $1,810 million
  • Non-GAAP net income per diluted share of $1.40

Conference Call

Verifone will hold its earnings conference call today at 1:30 pm (PT). To listen to the call and view the slides, visit Verifone’s website http://ir.verifone.com. To listen to the call over the phone, dial (877) 474-9504 within the U.S., or (857) 244-7557 outside the U.S., and use conference passcode 8963 0296. The recorded audio webcast will be available on Verifone's website until March 18, 2014.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs and on currently available competitive, financial and economic data and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the forward-looking statements herein due to changes in economic, business, competitive, technological, and/or regulatory factors, and other risks and uncertainties affecting the operation of the business of Verifone Systems, Inc., including many factors beyond our control. These risks and uncertainties include, but are not limited to, those associated with: execution of our strategic plan and business and operational initiatives, and whether the expected benefits of our plan and initiatives are achieved, short product cycles and rapidly changing technologies, our ability to maintain competitive leadership position with respect to our payment solution offerings, our assumptions, judgments and estimates regarding the impact on our business of the continued uncertainty in the global economic environment and financial markets, our ability to successfully integrate acquired businesses into our business and operations, our ability to protect against fraud, the status of our relationship with and condition of third parties such as our contract manufacturers, distributors and key suppliers upon whom we rely in the conduct of our business, our dependence on a limited number of customers, the conduct of our business and operations internationally, our ability to effectively hedge our exposure to foreign currency exchange rate fluctuations, and our dependence on a limited number of key employees. For a further list and description of the risks and uncertainties affecting the operations of our business, see our filings with the Securities and Exchange Commission, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. The forward-looking statements speak only as of the date such statements are made. Verifone is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

About Verifone Systems, Inc. (www.verifone.com)

Verifone Systems, Inc. (“Verifone”) (NYSE: PAY) is the global leader in secure electronic payment solutions. Verifone provides expertise, solutions and services that add value to the point of sale with merchant-operated, consumer-facing and self-service payment systems for the financial, retail, hospitality, petroleum, government and healthcare vertical markets. Verifone solutions are designed to meet the needs of merchants, processors and acquirers in developed and emerging economies worldwide.

Additional Resources: http://ir.verifone.com

Download the complete earnings release