VeriFone Systems Inc.’s strategic efforts to improve its core foundation under new leadership paid off in the company’s fiscal second quarter with nearly a 10 percent boost in revenue and a halving of its net loss for the period year over year.
“I’m very pleased with our second quarter financial results, which exceeded our guidance, and the continued progress in our operational initiatives,” Paul Galant, VeriFone CEO, said in the company’s earnings release. “We continue to work to drive the next evolution of commerce for our clients by becoming their most trusted partner for terminals, Payment-as-a-Service and commerce enablement solutions.”
Galant took over as CEO last year, replacing Doug Bergeron.
Net revenues for the quarter totaled $466.4 million, up 9.4 percent from $426.3 million for the same three-month period ended April 30 last year and exceeding company guidance. The $23.5 million consolidated net loss for the quarter compared with $57 million loss a year earlier.
System Solutions revenue totaled $290.7 million, up 5.1 percent from 276.6 million, while Services revenue grew 17.4 percent, to $175.7 million from $149.7 million. The Services unit now represents 40 percent of net revenues, up from 35 percent a year ago.
Regionally, North American net revenues totaled $125.3 million, up 2.7 percent from $122 million a year earlier. Outside the U.S., revenues in the Latin America/Caribbean region totaled $83.3 million, up 0.6 percent from $82.8 million; Europe/Middle East /Africa revenues rose 10.6 percent, to $190.2 million from $171.9 million; Asia Pacific revenues totaled $67.6 million, up 36.3 percent from $49.6 million.
Key highlights for the quarter included upgrading 15 top U.S. retailers to the MX 900 EMV-capable platform and adding 17 end-to-end encryption clients. The company also launched the portable VX 690, the first of several new EMV-capable devices with a new consumer design methodology.
Last month, Joe Majka, VeriFone vice president and chief security officer, sat down with MPD CEO Karen Webster to examine how the security conversation has changed with the industry’s move to mobile, and how merchants of all sizes, without being proactive, could turn into fraudster prey.
In April, VeriFone and First Data Corp. announced the launch of the VeriFone edition of the First Data TransArmor solution for U.S. multi-lane and petroleum merchants.
In connection with restructuring plans approved in April and June this year, VeriFone said will reduce headcount by approximately 500 by the end of the calendar year. The company said it expects to reinvest a substantial portion of the savings to improve its operational infrastructure and invest in its strategic growth initiatives.
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