VeriFone Reports Results for the Fourth Quarter an VeriFone Reports Results for the Fourth Quarter and Fiscal 2012
SAN JOSE, Calif.--(BUSINESS WIRE)-- VeriFone Systems, Inc. (NYSE: PAY), the global leader in secure electronic payment solutions, today announced financial results for the three months (“Q4 FY12”) and fiscal year ended October 31, 2012.
Non-GAAP net income per diluted share for Q4 FY12 was $0.76, compared to $0.75 in the prior quarter and $0.53 for the three months ended October 31, 2011 (“Q4 FY11”), a 43% year-over-year increase. Non-GAAP net income per diluted share for the full year ended October 31, 2012 (“FY12”) was $2.74, a 43% year-over-year increase over the $1.92 figure for the full year ended October 31, 2011 (“FY11”). GAAP net income per diluted share for the latest quarter was $0.24, compared to $0.34 in the prior quarter and $1.84 in Q4 FY11. GAAP net income per diluted share was $0.59 for FY12 and $2.92 for FY11.
Non-GAAP net revenues for Q4 FY12 were $489 million, compared to $493 million in the previous quarter and $416 million for Q4 FY11, an 18% year-over-year increase. Non-GAAP net revenues for FY12 were $1.886 billion, a 44% increase over the $1.310 billion result for FY11. GAAP net revenues were $485 million for the latest quarter, $489 million for the prior quarter and $411 million for Q4 FY11. For FY12, GAAP net revenues totaled $1.866 billion, a 43% increase over the $1.304 billion total for FY11.
In Q4 FY12, Organic non-GAAP net revenues, which exclude net revenues from businesses acquired in the past 12 months, increased 4% from the year-ago quarter and 8% at constant currency, which assumes currency exchange rates remained the same from a year ago. North America Organic non-GAAP net revenues grew 22% both unadjusted and at constant currency, while international Organic non-GAAP net revenues declined 3% from the year-ago quarter but increased 2% at constant currency. Organic non-GAAP net revenues increased 11% in FY12 compared to FY11 and 14% at constant currency. For FY12, North America Organic non-GAAP net revenues grew 4% from FY11 both unadjusted and at constant currency, while international Organic non-GAAP net revenues grew 15% from FY11 and 20% at constant currency.
Non-GAAP gross margins were 44% for Q4 FY12, compared to 45% in the prior quarter and 40% in Q4 FY11. Non-GAAP gross margins were 44% for FY12 and 42% for FY11. GAAP gross margins were 41% for the latest quarter, 42% for the prior quarter and 31% for Q4 FY11. GAAP gross margins were 41% for FY12, compared to 38% for FY11.
Net cash provided by operating activities was $73 million in Q4 FY12 as the total cash balance grew by $44 million in the quarter.
“We are very pleased with our earnings leverage in 2012, with non-GAAP earnings per share growing over 40% for the third consecutive year,” said Douglas G. Bergeron, Chief Executive Officer. “Our investments in the next generation of payment services and systems are paying off in North America, which grew organically by 22% in Q4. Our plans for 2013 are to replicate these investments in our international markets in order to enjoy accelerated international growth later in 2013 and into 2014.”
Highlights Since Last Earnings Release
VeriFone has announced several significant in-store mobility wins in recent months. On November 7, VeriFone announced that it has entered a partnership agreement to offer retailers sophisticated mobile retailing solutions powered by VeriFone GlobalBay and integrated with the Fujitsu GlobalSTORE® solution, or as a standalone mobile point of sale. The co-branded solutions provide Fujitsu retail customers with a sophisticated mobile POS, enabling them to serve consumers from anywhere in the store and include acceptance of digital wallets and alternative payments. On September 25, VeriFone announced that The Finish Line, Inc., is enhancing the consumer buying experience with the deployment of VeriFone’s latest mobile checkout and multimedia-driven countertop payment solutions. Following a successful trial, the premium retailer of athletic shoes, apparel and accessories is in the process of deploying VeriFone systems – including 1,600 countertop multimedia MX 915 systems and 3,200 PAYware Mobile Enterprise secure mobile card acceptance devices for the iPod touch® – chain-wide with the goal of equipping all 638 locations for the holiday buying season. On September 19, VeriFone announced that Oracle’s Retail Mobile Point-of-Service was developed using the PAYware Mobile Enterprise solution and software development kit. PAYware Mobile Enterprise provided Oracle with support for the most forms of payment acceptance – including regular magnetic stripe credit and debit cards, chip-and-PIN (EMV) and contactless/NFC-enabled cards and phones – and also includes a barcode scanner for product-scanning, couponing and inventory.
VeriFone is also moving forward with its gas station media business. VeriFone’s media-enabled payment systems and services provide a state-of-the-art solution for secure payments, targeted advertising, coupons and special offers, and delivering real-time, relevant information such as weather and safety warnings. PAYMEDIA content is managed by VeriFone Media and broadcast via the VeriFone Digital Network (VNET). On October 8, VeriFone announced an agreement with Valero Retail Holdings, Inc. to implement PAYMEDIA for Secure PumpPAY in an initial pilot at corporate-operated sites in the Austin, Texas area. Secure PumpPAY solutions enable gasoline retailers and distributors to retrofit gasoline dispensers with EMV-capable, PCI-compliant payment systems that meet the latest payment security standards. The VeriFone modules incorporate full-color digital display and audio that improves the fueling experience. On October 1, VNET unveiled the next evolution of media at gas stations, providing advertisers and marketers with new promotional capabilities including on-demand coupons at the pump and transaction-specific promotions at the convenience store checkout counter. After a successful 12-month pilot, where coupon redemption rates in excess of 10% far exceeded industry norms for freestanding inserts, VeriFone is rolling out couponing to its PAYMEDIA customers.
Guidance for First Quarter 2013 and Fiscal Year 2013
For the first fiscal quarter ending January 31, 2013, VeriFone expects to report total non-GAAP net revenues in the range of $490 million to $500 million and non-GAAP net income per diluted share in the range of $0.70 to $0.73.
For the full year of fiscal 2013, the company continues to expect to report total non-GAAP net revenues in the range of $2.05 billion to $2.10 billion and non-GAAP net income per diluted share in the range of $3.25 to $3.30. Free cash flow, defined as cash flow from operations as presented under GAAP less capital expenditures, is expected in the range of $285 million to $315 million.
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Q4 FY12 Earnings Call Script with Slides