Verifone Systems 8-K VeriFone Files Restated Reports

Exhibit 99.1

VeriFone Files Restated Reports

     SAN JOSE, CA. – August 19, 2008 – VeriFone Holdings Inc. (NYSE: PAY) today filed its amended and restated quarterly reports on Form 10-Q/A for the fiscal quarters ended January 31, 2007, April 30, 2007 and July 31, 2007, its annual report on Form 10-K for the fiscal year ended October 31, 2007 and its quarterly reports on Form 10-Q for the fiscal quarters ended January 31, 2008 and April 30, 2008 with the Securities and Exchange Commission.

     The management of VeriFone will host a conference call, which will be simultaneously webcast, today at 2:00 pm Pacific time to discuss VeriFone’s financial results included in the reports. Management may also provide forward looking guidance on this call. To access the live conference call, the dial-in numbers are as follows:

     Domestic callers: 866-578-5784

     International callers: 617-213-8056

     Passcode: 49480395

     To access the audio webcast, please go to VeriFone’s website (http://ir.verifone.com) at least ten minutes prior to the call to register. The recorded audio webcast will be available on VeriFone’s website until August 25, 2008.

     A replay of the conference call, which can be accessed by dialing toll-free 888-286-8010, and outside the U.S. 617-801-6888, will be available until August 25, 2008. The access code for the replay is 70577399.

-ends-

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 are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the 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 Holdings, Inc. These risks and uncertainties include: our ability to identify and complete acquisitions and strategic investments and successfully integrate them into our business, our ability to protect against fraud, the status of our relationship with and condition of third parties upon whom we rely in the conduct of our business, our dependence on a limited number of customers, uncertainties related to the conduct of our business internationally, our ability to effectively hedge our exposure to foreign currency exchange rate fluctuations, our dependence on a limited number of key employees,short product cycles, rapidly changing technologies and maintaining competitive leadership position with respect to our payment solution offerings. For a further list and description of such risks and uncertainties, see our filings with the Securities and Exchange

VeriFone, Inc.
2099 Gateway Place, Suite 600 San Jose, CA, 95110 USA

Commission, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. 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.

Additional Resources:
Investor Contact:
William Nettles – Vice President Corporate Development & IR
Tel: 408-232-7979
Email: ir@verifone.com

http://ir.verifone.com/phoenix.zhtml?c=187628&p=irol-irhome

Editorial Contact:
Pete Bartolik
VeriFone, Inc.
Tel: 508-283-4112
Email: pete_bartolik@verifone.com

About VeriFone Holdings, Inc. (www.verifone.com)
VeriFone Holdings, 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.

VeriFone, Inc.
2099 Gateway Place, Suite 600 San Jose, CA, 95110 USA

FINANCIAL MEASURES

     This press release and its attachments include the following non-GAAP financial measures:

• Gross profit,as adjusted. This non-GAAP financial measure is comprised of gross profit, excluding amortization of purchased core and developed technology and stock-based compensation;

• Gross margin,as adjusted. This non-GAAP financial measure consists of gross profit, as adjusted, as a percentage of revenue;

• EBITDA, as adjusted. This non-GAAP financial measure is comprised of net income (loss) excluding interest expense, interest income, income taxes, depreciation, amortization, in-process research and development (“IPR&D”), stock-based compensation, acquisition related charges, restructuring costs, the non-cash portion of loss on debt extinguishment and write-off of capitalized software.

• EBITDA, as adjusted, as a percentage of net revenue;

• Non-GAAP net income.This non-GAAP financial measure is comprised of EBITDA, as adjusted, a non-GAAP financial measure, adjusted for interest expense, net, and restatement and other restructuring costs, presented on an after-tax basis;

• Non-GAAP net income as a percentage of net revenue;and

• Non-GAAP net income per diluted share.

Reconciliations for the non-GAAP financial measures presented in this press release are provided at the end of this press release.

     Management uses non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. Management believes that the use of the non-GAAP financial measures presented in this release, in conjunction with results presented in accordance with GAAP, helps it to evaluate VeriFone’s performance and to compare VeriFone’s current results with those for prior periods as well as with the results of other companies in VeriFone’s industry. VeriFone’s competitors may, due to differences in capital structure and investment history, have interest, tax, depreciation, amortization, and other non-cash expenses that differ significantly from VeriFone’s. Management also uses these non-GAAP financial measures in VeriFone’s budget and planning process. In addition, if VeriFone fails to maintain required levels of EBITDA, as adjusted, it could have a default under its credit agreement, potentially resulting in an acceleration of all of its outstanding indebtedness. Management believes that the presentation of these non-GAAP financial measures may be useful to investors for many of the same reasons that management finds these measures useful. These non-GAAP financial measures contain limitations and should be considered as a supplement to, and not as a substitute for, or superior to, disclosures made in accordance with GAAP.

     These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies and are not based on any comprehensive set of accounting rules or principles. In addition, these non-GAAP financial measures do not reflect all amounts and costs, such as employee stock-based compensation costs, periodic costs of assets used to generate net revenues and costs to replace those assets, cash expenditures or future requirements for capital expenditures or contractual commitments, cash requirements for working capital needs, interest expense or the cash requirements

VeriFone, Inc.
2099 Gateway Place, Suite 600 San Jose, CA, 95110 USA

necessary to service interest or principal payments on VeriFone’s debt, income taxes and the related cash requirements, restructuring and impairment charges and losses from discontinued operations, associated with VeriFone’s results of operations as determined in accordance with GAAP.

     Furthermore, VeriFone expects to continue to incur expenses similar to the non-GAAP adjustments described herein. Management compensates for these limitations by also relying on the comparable GAAP financial measures.

     Management excludes the following items from EBITDA as adjusted, a non-GAAP financial measure, when evaluating VeriFone’s operational performance:

• Provision for (benefit from) income taxes.While income taxes are directly related to the amount of pre-tax income, they are also impacted by tax laws and the company’s tax structure. As the tax laws and the company’s tax structure are not under the control of VeriFone’s operational managers, management believes that the provision for (benefit from) income taxes should be excluded when evaluating VeriFone’s operational performance.

• Interest expense and Interest income.While working capital supports the business, management does not believe that related interest expense or interest income is directly attributable to the operating performance of VeriFone’s business.

• Depreciation of property, plant and equipment. Management excludes depreciation because while tangible assets support the business, management does not believe the related depreciation costs are directly attributable to the operating performance of VeriFone’s business. In addition, depreciation may not be indicative of current or future capital expenditures.

• Amortization and write-off of capitalized software.Management excludes amortization and write-off of capitalized software because while capitalized software supports the business, management does not believe the related amortization and write-off costs are directly attributable to the operating performance of VeriFone’s business. In addition, amortization and write-off costs of capitalized software may not be indicative of current or future expenditures to develop software.

• Amortization of certain acquisition related items.VeriFone incurs amortization of purchased core and developed technology assets, amortization of purchased intangible assets, amortization of step-down in deferred revenue on acquisition and amortization of step-up in inventory on acquisition in connection with acquisitions. Management excludes these items because it does not believe these expenses are reflective of ongoing operating results in the period incurred. These amounts arise from prior acquisitions and management does not believe that they have a direct correlation to the operation of VeriFone’s business.

• In-process research and development. VeriFone incurs IPR&D expenses when technological feasibility for acquired technology has not been established at the date of acquisition and no future alternative use for such technology exists. These

VeriFone, Inc.
2099 Gateway Place, Suite 600 San Jose, CA, 95110 USA

	amounts arise from prior acquisitions and management does not believe they have a direct correlation to the operation of VeriFone’s business.
•	Stock-based compensation.These expenses consist primarily of expenses for employee stock options and restricted stock units under SFAS No. 123(R). Management excludes stock-based compensation expenses from non-GAAP financial measures primarily because they are non-cash expenses which management believes are not reflective of ongoing operating results.
•	Acquisition related charges and restructuring costs. This represents charges incurred for consulting services and other professional fees associated with acquisition related activities. These expenses also include charges related to acquisition related restructuring activities, including costs associated with severance, benefits and excess facilities. As management does not believe that these charges directly relate to the operation of VeriFone’s business, management believes they should be excluded when evaluating VeriFone’s operating performance.
•	Non-cash portion of loss on debt extinguishment.This represents the non-cash portion of loss incurred on the extinguishment of VeriFone’s credit facility. While this credit facility supported VeriFone’s business, management does not believe the related loss on extinguishment is a cost directly attributable to the operating performance of VeriFone’s business.

     Management uses Non-GAAP net income, a non-GAAP financial measure, to evaluate VeriFone’s overall performance. Non-GAAP net income is determined by adjusting EBITDA, as adjusted, with the following items, presented on an after-tax basis by applying VeriFone’s long-term tax rate.

• Interest expense, net.Since working capital supports the business, management does believe that related interest expense or interest income should be considered when evaluating the overall performance of VeriFone’s business.

• Restatement and other restructuring costs.This represents charges incurred for audit and consulting fees related to the restatement of VeriFone’s financial statements for the three quarters in the nine-month period ended July 31, 2007 and other restructuring costs. As management does not believe that these charges directly relate to the operation of VeriFone’s business, management believes they should be excluded when evaluating VeriFone’s operating performance.

     Historically, management used Net income as adjusted to evaluate the business. This non-GAAP financial measure was comprised of net income (loss) excluding amortization of certain acquisition related items, IPR&D, stock-based compensation, acquisition related charges, restructuring costs, the non-cash portion of loss on debt extinguishment and valuation allowance on IPR&D, all presented on an after-tax basis. As a result of changes in VeriFone’s non-cash tax valuation allowance, due largely to the acquisition of Lipman and the increasingly complex nature of various foreign tax credits, VeriFone’s GAAP tax rates have become very volatile on a quarter-to-quarter basis. Therefore, management believes that going forward a more meaningful financial measure of the business is Non-GAAP net income.

VeriFone, Inc.
2099 Gateway Place, Suite 600 San Jose, CA, 95110 USA

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

	Year Ended			Three Months Ended
	Oct. 31, 2007			Oct. 31, 2007			Jul. 31, 2007			Apr. 30, 2007			Jan. 31, 2007
				(unaudited)
Net Revenues:
System Solutions	$	792,289		$	205,882		$	205,972		$	191,469		$	188,966
Services		110,603			32,063			25,729			25,414			27,397
Total net revenues		902,892			237,945			231,701			216,883			216,363
Cost of net revenues:
System Solutions		508,098			145,061			122,990			116,365			123,682
Amortization of purchased core and developed technology		37,897			9,424			9,278			9,586			9,609
Total cost of Systems Solutions net revenues		545,995			154,485			132,268			125,951			133,291
Services		57,665			16,093			13,837			13,286			14,449
Total cost of net revenues		603,660			170,578			146,105			139,237			147,740
Gross profit		299,232			67,367			85,596			77,646			68,623
Operating expenses:
Research and development		65,430			17,158			15,365			16,009			16,898
Sales and marketing		96,295			26,746			23,686			22,823			23,040
General and administrative		80,704			18,399			19,364			25,565			17,376
Amortization of purchased intangible assets		21,571			5,114			5,416			5,690			5,351
In-process research and development		6,752			102			—			90			6,560
Total operating expenses		270,752			67,519			63,831			70,177			69,225
Operating income		28,480			(152	)		21,765			7,469			(602	)
Interest expense		(36,598	)		(7,867	)		(9,468	)		(9,507	)		(9,756	)
Interest income		6,702			1,951			2,226			1,534			991
Other income (expense), net		(7,882	)		(3,463	)		(4,156	)		(2	)		(261	)
Income (loss) before income taxes		(9,298	)		(9,531	)		10,367			(506	)		(9,628	)
Provision for (benefit from) income taxes		24,718			(28,398	)		52,753			4,312			(3,949	)
Net income (loss)	$	(34,016	)	$	18,867		$	(42,386	)	$	(4,818	)	$	(5,679	)
Net income (loss) per share:
Basic	$	(0.41	)	$	0.23		$	(0.51	)	$	(0.06	)	$	(0.07	)
Diluted	$	(0.41	)	$	0.22		$	(0.51	)	$	(0.06	)	$	(0.07	)
Weighted average shares used in computing net income (loss) per share:
Basic		82,194			83,629			82,407			81,705			80,993
Diluted		82,194			85,216			82,407			81,705			80,993

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DISCLOSURES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)

	Year Ended			Three Months Ended
	Oct. 31, 2007			Oct. 31, 2007			Jul. 31, 2007			Apr. 30, 2007			Jan. 31, 2007
				(unaudited)
Gross Profit as reported	$	299,232		$	67,367		$	85,596		$	77,646		$	68,623
Amortization of purchased core and developed technology		37,897			9,424			9,278			9,586			9,609
Amortization of step-up in inventory on acquisition		13,823			(138	)		—			3,513			10,448
Stock-based compensation		2,998			581			570			930			917
Gross profit as adjusted (1)	$	353,950		$	77,234		$	95,444		$	91,675		$	89,597
Gross profit as a percentage of net revenues:
Gross Margin as reported		33.1	%		28.3	%		36.9	%		35.8	%		31.7	%
Gross Margin as adjusted		39.2	%		32.5	%		41.2	%		42.3	%		41.4	%
	Year Ended			Three Months Ended
	Oct. 31, 2007			Oct. 31, 2007			Jul. 31, 2007			Apr. 30, 2007			Jan. 31, 2007
				(unaudited)
Stock-based compensation included above:
Cost of net revenues — System Solutions	$	2,998		$	581		$	570		$	930		$	917
Research and development		5,937			1,595			1,443			1,433			1,466
Sales and marketing		8,942			3,456			1,974			1,683			1,829
General and administrative		11,015			1,306			1,872			4,253			3,584
	$	28,892		$	6,938		$	5,859		$	8,299		$	7,796

(1) Management uses Gross profit as adjusted and Gross margin as adjusted, both non-GAAP measures, to evaluate the Company’s gross profit and gross margin and to compare the Company’s current results with those of prior periods, but cautions that they should not be considered as substitutes for disclosures made in accordance with GAAP.

SUPPLEMENTAL DATA

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURE
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)

	Year Ended			Three Months Ended
	Oct. 31, 2007			Oct. 31, 2007			Jul. 31, 2007			Apr. 30, 2007			Jan. 31, 2007
				(unaudited)
GAAP net income (loss)	$	(34,016	)	$	18,867		$	(42,386	)	$	(4,818	)	$	(5,679	)
Amortization of purchased intangible assets		59,468			14,538			14,694			15,276			14,960
Amortization of step-down in deferred revenue on acquisition		3,735			647			652			922			1,514
Amortization of step-up in inventory on acquisition		13,823			(138	)		—			3,513			10,448
In-process research and development		6,752			102			—			90			6,560
Stock-based compensation		28,892			6,938			5,859			8,299			7,796
Amortization of debt issuance costs		1,756			627			469			332			328
Acquisition related charges and restructuring costs		10,234			520			2,297			6,623			794
Extinguishment of debt		4,764			—			4,764			—			—
Total adjustments		129,424			23,234			28,735			35,055			42,400
Tax effect of adjustments		36,239			6,506			8,046			9,815			11,872
Estimated long term tax rate		28	%		28	%		28	%		28	%		28	%
		93,185			16,728			20,689			25,240			30,528
Valuation allowance on IPR&D		1,782			—			—			—			1,782
Adjustments after tax		94,967			16,728			20,689			25,240			32,310
Net income as adjusted (1)	$	60,951		$	35,595		$	(21,697	)	$	20,422		$	26,631
Net income as adjusted as % of net revenue		6.8	%		15.0	%		-9.4	%		9.4	%		12.3	%
Net income as adjusted per diluted share	$	0.72		$	0.42		$	(0.26	)	$	0.24		$	0.32
Weighted average shares used in computing diluted net income as adjusted		84,409			85,216			82,407			84,300			83,609

(1) For historical periods through October 31, 2007, management used Net income as adjusted, a non-GAAP measure, to evaluate the Company’s operating performance and compare the Company’s results with those for prior periods. Management has discontinued use of this non-GAAP measure for subsequent periods and now uses non-GAAP net income as described under “Financial Measures,” for these purposes. Management cautions that these non-GAAP measures should not be considered as substitutes for disclosures made in accordance with GAAP.

SUPPLEMENTAL DATA

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)

	Year Ended			Three Months Ended
	Oct. 31, 2007			Oct. 31, 2007			Jul. 31, 2007			Apr. 30, 2007			Jan. 31, 2007
				(unaudited)
GAAP net income (loss)	$	(34,016	)	$	18,867		$	(42,386	)	$	(4,818	)	$	(5,679	)
Provision for (benefit from) income taxes		24,718			(28,398	)		52,753			4,312			(3,949	)
Income (loss) before income taxes		(9,298	)		(9,531	)		10,367			(506	)		(9,628	)
Interest expense		36,598			7,867			9,468			9,507			9,756
Interest income		(6,702	)		(1,951	)		(2,226	)		(1,534	)		(991	)
Depreciation and amortization of property, plant and equipment		7,766			1,952			2,049			1,761			2,004
Amortization of capitalized software		1,220			420			230			275			295
Amortization of purchased intangible assets		59,468			14,538			14,694			15,276			14,960
Amortization of step-down in deferred revenue on acquisition		3,735			647			652			922			1,514
Amortization of step-up in inventory on acquisition		13,823			(138	)		—			3,513			10,448
In-process research and development		6,752			102			—			90			6,560
Stock-based compensation		28,892			6,938			5,859			8,299			7,796
Acquisition related charges and restructuring costs		10,234			520			2,297			6,623			794
Extinguishment of debt		4,764			—			4,764			—			—
EBITDA as adjusted (1)	$	157,252		$	21,364		$	48,154		$	44,226		$	43,508
EBITDA as adjusted as a % of net revenue		17.4	%		9.0	%		20.8	%		20.4	%		20.1	%
EBITDA as adjusted	$	157,252		$	21,364		$	48,154		$	44,226		$	43,508
Interest expense, net		(29,896	)		(5,916	)		(7,242	)		(7,973	)		(8,765	)
Other restructuring costs		822			223			53			158			388
Non-GAAP pre-tax net income		128,178			15,671			40,965			36,411			35,131
Tax at long-term rate of 28%		35,890			4,388			11,470			10,195			9,837
Non-GAAP net income (1)	$	92,288		$	11,283		$	29,495		$	26,216		$	25,294
Non-GAAP net income as a % of net revenue		10.2	%		4.7	%		12.7	%		12.1	%		11.7	%
Non-GAAP net income per diluted share	$	1.09		$	0.13		$	0.35		$	0.31		$	0.30
Weighted average shares used in computing diluted Non-GAAP net income		84,409			85,216			84,442			84,300			83,609

(1) Management uses EBITDA as adjusted and Non-GAAP net income, both non-GAAP measures, to evaluate the Company’s operating performance and compare the Company’s current results with those for prior periods, but cautions that they should not be considered as substitutes for disclosures made in accordance with GAAP.

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES

GEOGRAPHIC REVENUE INFORMATION
(IN THOUSANDS)

	Year Ended			Three Months Ended
	Oct. 31, 2007			Oct. 31, 2007			Jul. 31, 2007			Apr. 30, 2007			Jan. 31, 2007
				(unaudited)
North America	$	400,433		$	111,534		$	103,961		$	95,857		$	89,081
Latin America		160,867			36,026			42,673			41,497			40,671
Europe		281,628			71,753			69,912			68,808			71,155
Asia		63,700			19,280			15,806			11,643			16,971
Corporate		(3,736	)		(648	)		(651	)		(922	)		(1,515	)
	$	902,892		$	237,945		$	231,701		$	216,883		$	216,363

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)

	Three Months Ended January 31,
	2008			2007			Change (1)
Net Revenues:
System Solutions	$	155,601		$	188,966			-18	%
Services		29,920			27,397			9	%
Total net revenues		185,521			216,363			-14	%
Cost of net revenues:
System Solutions		101,429			123,682			-18	%
Amortization of purchased core and developed technology		8,175			9,609			-15	%
Total cost of Systems Solutions net revenues		109,604			133,291			-18	%
Services		18,553			14,449			28	%
Total cost of net revenues		128,157			147,740			-13	%
Gross profit		57,364			68,623			-16	%
Operating expenses:
Research and development		22,462			16,898			33	%
Sales and marketing		24,643			23,040			7	%
General and administrative		26,066			17,376			50	%
Amortization of purchased intangible assets		5,890			5,351			10	%
In-process research and development		—			6,560			-100	%
Total operating expenses		79,061			69,225			14	%
Operating loss		(21,697	)		(602	)		3504	%
Interest expense		(6,440	)		(9,756	)		-34	%
Interest income		2,088			991			111	%
Other income (expense), net		(4,520	)		(261	)		1632	%
Income (loss) before income taxes		(30,569	)		(9,628	)		218	%
Provision for (benefit from) income taxes		2,929			(3,949	)		-174	%
Net income (loss)	$	(33,498	)	$	(5,679	)		490	%
Net income (loss) per share:
Basic	$	(0.40	)	$	(0.07	)
Diluted	$	(0.40	)	$	(0.07	)
Weighted average shares used in computing net income (loss) per share:
Basic		84,153			80,993
Diluted		84,153			80,993

(1) “nm” means not meaningful

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DISCLOSURES
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)

	Three Months Ended January 31,
	2008			2007
Gross Profit as reported	$	57,364		$	68,623
Amortization of purchased core and developed technology		8,175			9,609
Amortization of step-up in inventory on acquisition		—			10,448
Stock-based compensation		626			917
Gross profit as adjusted (1)	$	66,165		$	89,597
Gross profit as a percentage of net revenues:
Gross Margin as reported		30.9	%		31.7	%
Gross Margin as adjusted (1)		35.7	%		41.4	%

	Three Months Ended January 31,
	2008		2007
Stock-based compensation included above:
Cost of net revenues — System Solutions	$	626	$	917
Research and development		1,496		1,466
Sales and marketing		1,803		1,829
General and administrative		1,545		3,584
	$	5,470	$	7,796

(1) Management uses Gross profit as adjusted and Gross margin as adjusted, both non-GAAP measures, to evaluate the Company’s gross profit and gross margin and to compare the Company’s current results with those of prior periods, but cautions that they should not be considered as substitutes for disclosures made in accordance with GAAP.

SUPPLEMENTAL DATA

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)

	Three Months Ended January 31,
	2008			2007			Change (1)
GAAP net income (loss)	$	(33,498	)	$	(5,679	)		490	%
Provision for (benefit from) income taxes		2,929			(3,949	)		-174	%
Income (loss) before income taxes		(30,569	)		(9,628	)		218	%
Interest expense		6,440			9,756			-34	%
Interest income		(2,088	)		(991	)		111	%
Depreciation and amortization of property, plant and equipment		3,027			2,004			51	%
Amortization of capitalized software		471			295			60	%
Amortization of purchased intangible assets		14,065			14,960			-6	%
Amortization of step-down in deferred revenue on acquisition		218			1,514			-86	%
Amortization of step-up in inventory on acquisition		—			10,448			-100	%
In-process research and development		—			6,560			-100	%
Stock-based compensation		5,470			7,796			-30	%
Acquisition related charges and restructuring costs		—			794		nm
Write-off of capitalized software		2,700			—		nm
EBITDA as adjusted (2)	$	(266	)	$	43,508			-101	%
EBITDA as adjusted as % of net revenue		-0.1	%		20.1	%		-101	%
EBITDA as adjusted	$	(266	)	$	43,508			-101	%
Interest expense, net		(4,352	)		(8,765	)		-50	%
Restatement and other restructuring costs		8,168	(3)		388	(4)	nm
Non-GAAP pre-tax net income		3,550			35,131			-90	%
Tax at long-term rate of 28%		994			9,837			-90	%
Non-GAAP net income (2)	$	2,556		$	25,294			-90	%
Non-GAAP net income as % of net revenue		1.4	%		11.7	%		-88	%
Non-GAAP net income per diluted share	$	0.03		$	0.30			-90	%
Weighted average shares used in computing diluted Non-GAAP net income		84,910			83,609

(1)	“nm” means not meaningful
(2)	Management uses EBITDA as adjusted and Non-GAAP net income, both non-GAAP measures, to evaluate the Company’s operating performance and compare the Company’s current results with those for prior periods, but cautions that they should not be considered as substitutes for disclosures made in accordance with GAAP.
(3)	Restatement and other restructuring costs for the three months ended January 31, 2008 consists of $6.1 million of restatement costs and $2.1 million of other restructuring costs.
(4)	Restatement and other restructuring costs for the three months ended January 31, 2007 consists of $388,000 of other restructuring costs.

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES

GEOGRAPHIC REVENUE INFORMATION
(IN THOUSANDS, EXCEPT PERCENTAGES)

	Three Months Ended January 31,
	2008			2007			Change
North America	$	67,720		$	89,081			-24	%
Latin America		44,609			40,671			10	%
Europe		57,683			71,155			-19	%
Asia		15,727			16,971			-7	%
Corporate		(218	)		(1,515	)		-86	%
	$	185,521		$	216,363

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)

	Three Months Ended April 30,									Six Months Ended April 30,
	2008			2007			Change (1)			2008			2007			Change (1)
Net Revenues:
System Solutions	$	203,711		$	191,469			6	%	$	359,312		$	380,435			-6	%
Services		29,290			25,414			15	%		59,210			52,811			12	%
Total net revenues		233,001			216,883			7	%		418,522			433,246			-3	%
Cost of net revenues:
System Solutions		133,782			116,365			15	%		235,211			240,047			-2	%
Amortization of purchased core and developed technology		8,124			9,586			-15	%		16,299			19,195			-15	%
Total cost of Systems Solutions net revenues		141,906			125,951			13	%		251,510			259,242			-3	%
Services		17,743			13,286			34	%		36,296			27,735			31	%
Total cost of net revenues		159,649			139,237			15	%		287,806			286,977			0	%
Gross profit		73,352			77,646			-6	%		130,716			146,269			-11	%
Operating expenses:
Research and development		17,159			16,009			7	%		39,621			32,907			20	%
Sales and marketing		22,762			22,823			0	%		47,405			45,863			3	%
General and administrative		31,254			25,565			22	%		57,320			42,941			33	%
Amortization of purchased intangible assets		6,782			5,690			19	%		12,672			11,041			15	%
In-process research and development		—			90			-100	%		—			6,650			-100	%
Total operating expenses		77,957			70,177			11	%		157,018			139,402			13	%
Operating income		(4,605	)		7,469			-162	%		(26,302	)		6,867			-483	%
Interest expense		(8,990	)		(9,507	)		-5	%		(15,430	)		(19,263	)		-20	%
Interest income		1,395			1,534			-9	%		3,483			2,525			38	%
Other income (expense), net		(1,914	)		(2	)		95600	%		(6,434	)		(263	)		2346	%
Income (loss) before income taxes		(14,114	)		(506	)		2689	%		(44,683	)		(10,134	)		341	%
Provision for income taxes		3,873			4,312			-10	%		6,802			363			1774	%
Net income (loss)	$	(17,987	)	$	(4,818	)		273	%	$	(51,485	)	$	(10,497	)		390	%
Net income (loss) per share:
Basic	$	(0.21	)	$	(0.06	)				$	(0.61	)	$	(0.13	)
Diluted	$	(0.21	)	$	(0.06	)				$	(0.61	)	$	(0.13	)
Weighted average shares used in computing net income (loss) per share:
Basic		84,194			81,705						84,174			81,343
Diluted		84,194			81,705						84,174			81,343

(1) “nm” means not meaningful

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DISCLOSURES
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)

	Three Months Ended April 30,						Six Months Ended April 30,
	2008			2007			2008			2007
Gross Profit as reported	$	73,352		$	77,646		$	130,716		$	146,269
Amortization of purchased core and developed technology		8,124			9,586			16,299			19,195
Amortization of step-up in inventory on acquisition		—			3,513			—			13,961
Stock-based compensation		(78	)		930			548			1,847
Gross profit as adjusted(1)	$	81,398		$	91,675		$	147,563		$	181,272
Gross profit as a percentage of net revenues:
Gross Margin as reported		31.5	%		35.8	%		31.2	%		33.8	%
Gross Margin as adjusted (1)		34.9	%		42.3	%		35.3	%		41.8	%
	Three Months Ended April 30,						Six Months Ended April 30,
	2008			2007			2008			2007
Stock-based compensation included above:
Cost of net revenues — System Solutions	$	(78	)	$	930			548		$	1,847
Research and development		729			1,433			2,225			2,899
Sales and marketing		1,517			1,683			3,320			3,512
General and administrative		862			4,253			2,407			7,837
	$	3,030		$	8,299		$	8,500		$	16,095

(1) Management uses Gross profit as adjusted and Gross margin as adjusted, both non-GAAP measures, to evaluate the Company’s gross profit and gross margin and to compare the Company’s current results with those of prior periods, but cautions that they should not be considered as substitutes for disclosures made in accordance with GAAP.

SUPPLEMENTAL DATA

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)

	Three Months Ended April 30,									Six Months Ended April 30,
	2008 (1)			2007			Change (1)			2008 (2)			2007			Change (1)
GAAP net income (loss)	$	(17,987	)	$	(4,818	)		273	%	$	(51,485	)	$	(10,497	)		390	%
Provision for income taxes		3,873			4,312			-10	%		6,802			363			1774	%
Income (loss) before income taxes		(14,114	)		(506	)		2689	%		(44,683	)		(10,134	)		341	%
Interest expense		8,989			9,507			-5	%		15,429			19,263			-20	%
Interest income		(1,395	)		(1,534	)		-9	%		(3,483	)		(2,525	)		38	%
Depreciation and amortization of property, plant and equipment		3,340			1,761			90	%		6,367			3,765			69	%
Amortization of capitalized software		249			275			-9	%		720			570			26	%
Amortization of purchased intangible assets		14,907			15,276			-2	%		28,972			30,236			-4	%
Amortization of step-down in deferred revenue on acquisition		373			922			-60	%		591			2,436			-76	%
Amortization of step-up in inventory on acquisition		—			3,513			-100	%		—			13,961			-100	%
In-process research and development		—			90			-100	%		—			6,650			-100	%
Stock-based compensation		3,030			8,299			-63	%		8,500			16,095			-47	%
Acquisition related charges and restructuring costs		—			6,623			-100	%		—			7,417			-100	%
Write-off of capitalized software		—			—		nm				2,700			—		nm
EBITDA as adjusted (2)	$	15,379		$	44,226			-65	%	$	15,113		$	87,734			-83	%
EBITDA as adjusted as % of net revenue		6.6	%		20.4	%		-68	%		3.6	%		20.3	%		-82	%
EBITDA as adjusted	$	15,379		$	44,226			-65	%	$	15,113		$	87,734			-83	%
Interest expense, net		(7,594	)		(7,973	)		-5	%		(11,946	)		(16,738	)		-29	%
Restatement and other restructuring costs		14,392	(3)		158	(4)	nm				22,560	(5)		546	(6)	nm
Non-GAAP pre-tax net income		22,177			36,411			-39	%		25,727			71,542			-64	%
Tax at long-term rate of 28%		6,210			10,195			-39	%		7,204			20,032			-64	%
Non-GAAP net income (2)	$	15,967		$	26,216			-39	%	$	18,523		$	51,510			-64	%
Non-GAAP net income as % of net revenue		6.9	%		12.1	%		-43	%		4.4	%		11.9	%		-63	%
Non-GAAP net income per diluted share	$	0.19		$	0.31			-39	%	$	0.22		$	0.61			-64	%
Weighted average shares used in computing diluted Non-GAAP net income		84,645			84,300						84,779			83,947

(1)	“nm” means not meaningful
(2)	Management uses EBITDA as adjusted and Non-GAAP net income, both non-GAAP measures, to evaluate the Company’s operating performance and compare the Company’s current results with those for prior periods, but cautions that they should not be considered as substitutes for disclosures made in accordance with GAAP.
(3)	Restatement and other restructuring costs for the three months ended April 30, 2008 consist of $12.1 million of restatement costs and $2.3 million of other restructuring costs.
(4)	Restatement and other restructuring costs for the three months ended April 30, 2007 consist of $158,000 of other restructuring costs.
(5)	Restatement and other restructuring costs for the six months ended April 30, 2008 consist of $18.1 million of restatement costs and $4.4 million of other restructuring costs.
(6)	Restatement and other restructuring costs for the six months ended April 30, 2007 consist of $546,000 of other restructuring costs.

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES

GEOGRAPHIC REVENUE INFORMATION
(IN THOUSANDS, EXCEPT PERCENTAGES)

	Three Months Ended April 30,									Six Months Ended April 30,
	2008			2007			Change			2008			2007			Change
North America	$	100,286		$	95,857			5	%	$	168,007		$	184,938			-9	%
Latin America		40,658			41,497			-2	%		85,267			82,168			4	%
Europe		75,870			68,808			10	%		133,553			139,963			-5	%
Asia		16,560			11,643			42	%		32,287			28,614			13	%
Corporate		(373	)		(922	)		-60	%		(592	)		(2,437	)		-76	%
	$	233,001		$	216,883					$	418,522		$	433,246

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

	April 30,		January 31,		October 31,		July 31,		April 30,		January 31,
	2008		2008		2007		2007		2007		2007
	(unaudited)		(unaudited)				(unaudited)		(unaudited)		(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	215,039	$	209,310	$	215,001	$	212,946	$	175,760	$	161,889
Accounts receivable, net		171,958		182,559		194,146		182,920		168,199		155,719
Inventories		133,461		116,711		107,168		104,784		101,449		117,481
Other current assets		99,883		100,673		87,267		51,429		60,886		53,989
Total current assets		620,341		609,253		603,582		552,079		506,294		489,078
Property, plant and equipment, net		51,825		50,600		48,293		40,290		33,492		30,467
Purchased intangible assets, net		140,429		155,365		170,073		180,396		193,606		201,396
Goodwill		615,213		612,489		611,977		610,351		583,038		565,222
Other assets		118,172		118,902		113,384		91,664		57,416		55,506
Total assets	$	1,545,980	$	1,546,609	$	1,547,309	$	1,474,780	$	1,373,846	$	1,341,669
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	106,914	$	100,610	$	105,215	$	97,296	$	72,558	$	69,378
Income taxes payable		16,437		9,041		19,530		41,687		4,573		4,573
Deferred revenue, net		48,528		59,857		43,049		39,552		36,599		34,366
Other current liabilities		146,234		136,637		133,587		108,760		90,628		78,492
Current portion of long-term debt		5,044		5,202		5,386		5,367		5,416		5,058
Total current liabilities		323,157		311,347		306,767		292,662		209,774		191,867
Deferred revenue		11,578		11,691		11,274		10,310		9,807		12,324
Long-term debt, less current portion		545,960		547,211		547,766		549,006		494,036		495,065
Other long-term liabilities		126,600		124,311		98,093		89,588		86,724		83,770
Minority interest		2,051		2,164		2,487		2,620		437		—
Total stockholders’ equity		536,634		549,885		580,922		530,594		573,068		558,643
Total liabilities and stockholders’ equity	$	1,545,980	$	1,546,609	$	1,547,309	$	1,474,780	$	1,373,846	$	1,341,669

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

	Six Months Ended						Year Ended
	April 30, 2008			April 30, 2007			October 31, 2007
	(unaudited)			(unaudited)
Cash flows from operating activities
Net loss	$	(51,485	)	$	(10,497	)	$	(34,016	)
Adjustments to reconcile net loss to net cash provided by operating activities
Amortization of purchased intangibles		28,971			30,236			59,468
Depreciation and amortization of property, plant, and equipment		6,367			3,765			7,766
Amortization of capitalized software		721			570			1,220
In-process research and development		—			6,650			6,752
Write-off of capitalized software development costs		2,700			—			—
Disposal of property, plant and equipment		248			(56	)		271
Amortization of debt issuance costs		1,293			660			1,756
Stock-based compensation		8,500			16,095			28,892
Non-cash portion of loss on debt extinguishment		—			—			4,764
Minority interest and equity in earnings of affiliates		(224	)		63			(136	)
Other		21			(13	)		1
Net cash provided by operating activities before changes in working capital		(2,888	)		47,473			76,738
Changes in operating assets and liabilities:
Accounts receivable, net		22,304			(13,490	)		(39,493	)
Inventories		(26,293	)		52,228			45,133
Deferred tax assets		10,105			(3,366	)		(29,092	)
Prepaid expenses and other current assets		(15,915	)		(21,405	)		(41,512	)
Other assets		(14,748	)		(3,034	)		(5,136	)
Accounts payable		1,699			(5,251	)		28,144
Income taxes payable		15,557			151			20,391
Tax benefit from stock-based compensation		(939	)		(4,672	)		(11,464	)
Accrued compensation		218			(3,030	)		(2,975	)
Accrued warranty		(2,344	)		(1,037	)		(1,910	)
Deferred revenue, net		5,783			6,532			14,495
Deferred tax liabilities		5,665			9,206			38,295
Accrued expenses and other liabilities		19,427			(20,179	)		(2,344	)
Net cash provided by operating activities		17,631			40,126			89,270
Cash flows from investing activities
Software development costs capitalized		(2,038	)		(2,921	)		(7,740	)
Purchases of property, plant and equipment, net		(9,529	)		(12,045	)		(30,225	)
Purchases of other assets		—			(500	)		(500	)
Purchases of equity investments		—			—			(5,700	)
Acquisition of business, net of cash and cash equivalents acquired		(2,985	)		(264,334	)		(267,531	)
Net cash used in investing activities		(14,552	)		(279,800	)		(311,696	)
Cash flows from financing activities
Proceeds from long-term debt, net of costs		286			305,335			613,197
Purchase of hedge on convertible debt		—			—			(80,236	)
Sale of warrants		—			—			31,188
Repayments of long-term debt		(2,500	)		(1,250	)		(263,804	)
Payment of debt amendment fee		(1,420	)		—			—
Tax benefit of stock-based compensation		939			4,672			11,464
Investment in subsidiary by minority stockholder		—			—			1,050
Proceeds from issuance of common stock		1,704			18,412			37,088
Other		(70	)		(11	)		(27	)
Net cash provided by financing activities		(1,061	)		327,158			349,920
Effect of foreign currency exchange rate changes on cash		(1,980	)		1,712			943
Net increase in cash and cash equivalents		38			89,196			128,437
Cash and cash equivalents, beginning of period		215,001			86,564			86,564
Cash and cash equivalents, end of period	$	215,039		$	175,760		$	215,001