Verifone Systems 8-K VeriFone Reports Third Quarter Fiscal 2007 Results

Exhibit 99.1

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

www.verifone.com

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

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

VeriFone Reports
Third Quarter Fiscal 2007 Results

Record Revenues of $232 million

Record EBITDA, as adjusted, margins of 27.3%

Record EPS, as adjusted, of 42 cents, grew 50%

Record Operating Cash Flow of $43 million

SAN JOSE, CA – September 6, 2007 – VeriFone Holdings, Inc. (NYSE: PAY), the global leader in secure electronic payment solutions, today announced financial results for the three months ended July 31, 2007.

     Net revenues, for the three months ended July 31, 2007, were $231.9 million, 57% higher than the net revenues of $147.6 million for the comparable period of 2006. Net revenues from VeriFone’s International business increased 106% while net revenues from VeriFone’s North America business increased 22%. The significant increase in net revenues was driven largely by the acquisition of Lipman Electronic Engineering Ltd., which closed November 1, 2006.

     Gross margins, excluding non-cash acquisition related charges and stock-based compensation expense, expanded to a record 48.2%, for the three months ended July 31, 2007, compared to 45.9% for the comparable period of 2006. GAAP gross margins for the three months ended July 31, 2007, declined to 44.0% from 45.0% for the three months ended July 31, 2006, primarily as a result of increased amortization of purchased technology assets.

     GAAP operating expenses for the three months ended July 31, 2007 were $65.5 million compared to $38.0 million for the comparable period of

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2006. This increase was primarily due to the Lipman acquisition and related integration expenses.

     EBITDA, as adjusted, margins for the three months ended July 31, 2007, expanded for the twelfth consecutive quarter and reached a record level of 27.3%, compared to the 22.6% recorded in the three months ended July 31, 2006.

     GAAP EPS for the three months ended July 31, 2007, was $0.16 per diluted share, compared to $0.24 per diluted share, for the comparable period of fiscal 2006. This decline resulted from acquisition related non-cash charges, higher stock-based compensation expense and a higher GAAP tax rate driven by an increase in the valuation allowance related to the Lipman acquisition. Net income, as adjusted, which excludes non-cash acquisition related charges and debt issuance costs, as well as non-cash stock-based compensation expense and Lipman integration costs, for the three months ended July 31, 2007, increased 50% to $0.42 per diluted share, compared to $0.28 per diluted share, for the comparable period in 2006.

     “I am extremely pleased to report on another outstanding quarter as we once again achieved exceptional financial results,” said Douglas G. Bergeron, Chairman and Chief Executive Officer. “During the quarter, we achieved record revenues and record gross and operating margins, all which led to strong EPS growth,” continued Bergeron. “Our North American business continued to surge, growing 9% sequentially. Our compelling portfolio of wireless solutions and our strength in emerging markets were also significant factors driving our success this quarter.”

     “We are increasing our internal expectations for the fourth quarter and now expect to repeat these record third quarter results. Our guidance for the fourth quarter, therefore, is for net revenue of $231 - $233 million and net income, as adjusted, per share of $0.41 - $0.42. As a result, we are also increasing our full year fiscal year 2007 expectations for net income, as adjusted per share to $1.59 to $1.60 per share. As well, given the out-performance in profitability that we have consistently enjoyed since the closing of the Lipman acquisition last November, we are now taking this

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opportunity to update our long term financial model. We are reaffirming our revenue growth rate projection in the 10% — 15% range and we are increasing our margin expectations as reflected in the table below.”

Long Term Model

	Prior			New
Gross Margin(1)		42% - 47	%		45% - 50	%
EBITDA Margin(2)		18% - 24	%		25% - 30	%
Net Margin(3)		12% - 17	%		15% - 20	%

(1)	Excludes non-cash acquisition related charges and stock-based compensation expense.
(2)	Includes add backs of cash and non-cash acquisition related charges, amortization of debt issuance costs and other debt related costs and stock-based compensation.
(3)	Excludes cash and non-cash acquisition related charges, debt issuance costs and stock-based compensation. Assumes long-term cash tax rate of 28 percent.

     Third Quarter Highlights

• VeriFone was selected as the sole provider of payment solutions to China Postal Savings bank, the fifth largest bank in the country, further solidifying VeriFone’s leadership position in this important market.

• Cara, the largest operator of full service restaurants in Canada, has selected VeriFone’s ON THE SPOT pay at the table system designed exclusively for the hospitality industry. With this multi-million dollar rollout, Cara becomes the largest restaurant operator and the first in Canada to provide its customers with the convenience and security of payment at the table.

• VeriFone now has more than 5,000 New York City taxicabs signed or committed to comprehensive multi-year agreements for in-taxi acceptance of credit cards. VeriFone also has 100% of the

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Philadelphia taxi fleet equipped for the acceptance of credit cards and has made inroads in Mexico City and Singapore as well. This business holds considerable promise for the future, including in the case of New York City, a share of the lucrative advertising revenue and per-transaction processing fees.

• In North America, VeriFone’s retail business had yet another outstanding quarter signing a number of top tier customers. The TJX Companies, one of the top apparel and merchandise retailers in the United States with over 2,000 stores, chose to roll out the MX 870 to the entire enterprise to proactively meet industry PCI requirements and introduce new functionality to their customers. Rent-A-Center, the leading rent to own retailer in the United States, chose the new MX 850 system to provide debit and credit functionality to all of their stores. The MX 870 was also selected by Bon-Ton Department Stores, one of the largest regional department store chains in the United States.

Note: The Company’s third quarter results reflect the November 1, 2006 acquisition of Lipman and, because of the integration of Lipman’s products and distribution channels as well as the lack of comparable quarter ends of VeriFone and Lipman, are compared to pre-acquisition results of prior fiscal periods.

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Financial Measures

     Reconciliations for the non-GAAP measures presented in this press release are provided at the end of this press release. Management uses the non-GAAP measures presented in this release to help them 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, but cautions investors that these non-GAAP measures should not be considered as substitutes for disclosures made in accordance with GAAP.

Conference Call

     The management of VeriFone will host a conference call, which will be simultaneously webcast, on September 6, 2007, at 1:30 p.m. (PST) to discuss VeriFone’s third quarter results. 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: 800-638-5495
International callers: 617-614-3946
Passcode: 86374659

     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 September 13, 2007.

     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 September 13, 2007. The access code for the replay is 42419276.

-ends-

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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.

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 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.

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

	Three Months Ended July 31,									Nine Months Ended July 31,
	2007			2006			Change			2007			2006			Change
	(unaudited)
Net revenues:
System Solutions	$	206,216		$	131,960			56	%	$	587,245		$	378,781			55	%
Services		25,729			15,657			64			78,539			45,656			72
Total net revenues		231,945			147,617			57			665,784			424,437			57
Cost of net revenues:
System Solutions		107,373			71,633			50			324,964			207,501			57
Amortization of purchased core and developed technology assets		9,249			1,071		nm				28,417			4,083		nm
Total cost of System Solutions net revenues		116,622			72,704			60			353,381			211,584			67
Services		13,312			8,452			58			38,812			23,391			66
Total cost of net revenues		129,934			81,156			60			392,193			234,975			67
Gross profit		102,011			66,461			53			273,591			189,462			44
Operating expenses:
Research and development		15,560			11,726			33			48,604			35,354			37
Sales and marketing		23,644			14,181			67			69,490			42,786			62
General and administrative		21,134			10,936			93			66,721			30,627			118
Amortization of purchased intangible assets		5,167			1,159		nm				16,555			3,477		nm
In-process research and development		—			—		nm				6,640			—		nm
Total operating expenses		65,505			38,002			72			208,010			112,244			85
Operating income		36,506			28,459			28			65,581			77,218			-15
Interest expense		(9,584	)		(3,438	)		179			(28,935	)		(9,914	)		192
Interest income		2,226			938			137			4,751			2,552			86
Other income and expense, net		(4,386	)		(195	)	nm				(4,417	)		71		nm
Income before income taxes		24,762			25,764			-4			36,980			69,927			-47
Provision for income taxes		11,323			9,009			26			19,666			24,342			-19
Net income	$	13,439		$	16,755			-20	%	$	17,314		$	45,585			-62	%
Net income per share:
Basic	$	0.16		$	0.25					$	0.21		$	0.69
Diluted	$	0.16		$	0.24					$	0.20		$	0.66
Weighted-average shares used in computing net income per common share:
Basic		82,407			66,284						81,699			65,936
Diluted		84,374			69,079						84,507			68,906

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ADDITIONAL CONSOLIDATED STATEMENTS OF OPERATIONS DISCLOSURES
(IN THOUSANDS, EXCEPT PERCENTAGES)

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
	2007			2006			2007			2006
	(unaudited)
GAAP net revenues	$	231,945		$	147,617		$	665,784		$	424,437
Gross profit as reported		102,011			66,461			273,591			189,462
Amortization of purchased core and developed technology assets		9,249			1,071			28,417			4,083
Amortization of step-up in inventory on acquisition		—			—			13,732			—
Stock-based compensation		597			204			2,560			519
Gross profit excluding amortization of purchased core and developed technology assets, other non-cash acquisition costs and stock-based compensation	$	111,857		$	67,736		$	318,300		$	194,064
As a percentage of net revenues:
Gross profit as reported		44.0	%		45.0	%		41.1	%		44.6	%
Gross profit excluding amortization of purchased developed technology assets, other non-cash acquisition costs and stock-based compensation(2)		48.2	%		45.9	%		47.8	%		45.7	%

	Three Months Ended				Nine Months Ended
	July 31,				July 31,
	2007		2006		2007		2006
	(unaudited)
Stock-based compensation included above:
Cost of net revenues — System Solutions	$	597	$	204	$	2,560	$	519
Research and development		1,637		326		4,673		716
Sales and marketing		1,931		569		5,426		1,309
General and administrative		2,659		587		12,642		1,254
	$	6,824	$	1,686	$	25,301	$	3,798

(1)	“nm” means not meaningful
(2)	Management uses gross profit excluding non-cash acquisition related charges and stock-based compensation, a non-GAAP measure, to evaluate the Company’s gross profit and to compare the Company’s current results with those of prior periods, but cautions that it should not be considered as a substitute for disclosures made in accordance with GAAP.

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

	July 31,		October 31,
	2007		2006
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	212,946	$	86,564
Accounts receivable, net of allowances of $5,276 and $2,364		183,096		119,839
Inventories		145,398		86,631
Other current assets		45,743		26,210
Total current assets		587,183		319,244
Property, plant and equipment		42,857		7,300
Purchased intangible assets, net		180,835		16,544
Goodwill		564,718		52,689
Other assets		108,662		57,168
Total assets	$	1,484,255	$	452,945
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	97,810	$	66,685
Income taxes payable		5,489		5,951
Deferred revenue, net		39,271		23,567
Other current liabilities		111,870		54,480
Current portion of long-term debt		5,367		1,985
Total current liabilities		259,807		152,668
Deferred revenue		10,310		7,371
Long-term debt, less current portion		549,006		190,904
Other long-term liabilities		81,273		3,261
Minority interest		3,299		—
Total stockholders’ equity		580,560		98,741
Total liabilities and stockholders’ equity	$	1,484,255	$	452,945

9

VERIFONE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
	2007			2006			2007			2006
Cash flows from operating activities
Net income	$	13,439		$	16,755		$	17,314		$	45,585
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of purchased intangibles		14,478			2,230			45,035			7,560
Depreciation and amortization of property, plant and equipment		2,049			881			5,814			2,532
Amortization of capitalized software		230			294			800			892
In-process research and development		—			—			6,640			—
Amortization of interest rate caps		5			97			5			236
Amortization of debt issuance costs		469			280			1,129			819
Stock-based compensation		7,451			1,686			25,928			3,798
Non-cash portion of loss on debt extinguishment		4,764			—			4,764			—
Minority interest		(111	)		—			(86	)		—
Other		(21	)		6			(11	)		(75	)
Net cash provided by operating activities before changes in working capital		42,753			22,229			107,332			61,347
Changes in operating assets and liabilities:
Accounts receivable, net		(15,076	)		542			(28,211	)		(19,097	)
Inventories, net		(14,705	)		(25,919	)		9,772			(40,369	)
Deferred tax assets		(5,189	)		(792	)		(5,748	)		(2,663	)
Prepaid expenses and other current assets		9,737			(597	)		(9,066	)		(1,204	)
Other assets		(2,145	)		(966	)		(1,618	)		(924	)
Accounts payable		26,129			(1,675	)		16,532			15,421
Income taxes payable		185			(4,162	)		1,985			431
Tax benefit from stock-based compensation		(2,210	)		(1,292	)		(6,891	)		(2,666	)
Accrued compensation		(1,645	)		821			(4,186	)		200
Accrued warranty		(2,339	)		(212	)		(3,538	)		(886	)
Deferred revenue, net		4,750			376			10,282			5,509
Deferred tax liabilities		5,880			—			11,050			—
Accrued expenses and other liabilities		(3,088	)		623			(4,448	)		(1,460	)
Net cash provided by operating activities		43,037			(11,024	)		93,247			13,639
Cash flows from investing activities
Software development costs capitalized		(1,609	)		(653	)		(4,532	)		(1,731	)
Purchase of property, plant and equipment		(8,606	)		(619	)		(21,085	)		(2,780	)
Purchase of other assets		(500	)		441			(500	)		(673	)
Purchases of marketable securities		—			(22,526	)		—			(125,034	)
Sales and maturities of marketable securities		—			20,700			—			127,325
Transaction costs, pending acquisitions		—			(2,497	)		—			(2,497	)
Acquisition of business, net of cash and cash equivalents acquired		(1,199	)		—			(275,469	)		—
Net cash used in investing activities		(11,914	)		(5,154	)		(301,586	)		(5,390	)
Cash flows from financing activities
Proceeds from long-term debt, net of costs		308,302			—			613,252			—
Purchase of convertible note hedge		(80,236	)		—			(80,236	)		—
Sale of warrants		31,188			—			31,188			—
Repayment of long-term debt		(261,304	)		(461	)		(262,554	)		(1,386	)
Tax benefit of stock-based compensation		2,210			1,292			6,891			2,666
Repayments of capital leases		(39	)		(18	)		(43	)		(125	)
Investment by minority interest		1,050			—			1,050			—
Proceeds from exercises of stock options and other		5,995			1,527			24,565			2,120
Net cash provided by financing activities		7,166			2,340			334,113			3,275
Effect of foreign currency exchange rate changes on cash		(1,103	)		221			608			1,011
Net increase in cash and cash equivalents		37,186			(13,617	)		126,382			12,536
Cash and cash equivalents, beginning of period		175,760			91,218			86,564			65,065
Cash and cash equivalents, end of period	$	212,946		$	77,601		$	212,946		$	77,601
Supplemental disclosures of cash flow information
Cash paid for interest	$	7,322		$	3,138		$	25,369		$	9,013
Cash paid for taxes	$	398		$	13,592		$	13,779		$	26,881
Supplemental schedule of non-cash transactions:
Issuance of common stock and stock options for business acquisition		—			—			429,692			—

10

SUPPLEMENTAL DATA

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

	Three Months Ended July 31,									Nine Months Ended July 31,
	2007			2006			Change			2007			2006			Change
GAAP net income	$	13,439		$	16,755			-20	%	$	17,314		$	45,585			-62	%
Provision for income taxes		11,323			9,009			26			19,666			24,342			-19
Income before income taxes		24,762			25,764			-4			36,980			69,927			-47
Interest expense excluding acquisition related charges		8,309			3,438			142			26,842			9,914			171
Interest income		(2,226	)		(938	)		137			(4,751	)		(2,552	)		86
Depreciation and amortization of equipment and improvements		2,049			881			133			5,814			2,532			130
Amortization of capitalized software		230			294			-22			800			892			-10
Amortization of purchased intangible assets		14,478			2,230		nm				45,035			7,560		nm
Amortization of step-down in deferred revenue on acquisition		652			76		nm				3,088			399		nm
Amortization of step-up in inventory on acquisition		—			—		nm				13,732			—		nm
In-process research and development		—			—		nm				6,640			—		nm
Stock-based compensation		6,824			1,686		nm				25,301			3,798		nm
Acquisition related charges and restructuring costs		3,572			—		nm				11,807			—		nm
Non-cash portion of loss on debt extinguishment		4,764			—		nm				4,764			—		nm
EBITDA as adjusted	$	63,414		$	33,431			90	%	$	176,052		$	92,470			90	%
% of revenue		27.3	%		22.6	%		21			26.4	%		21.8	%		21
GAAP net income	$	13,439		$	16,755			-20	%	$	17,314		$	45,585			-62	%
Amortization of purchased intangible assets		14,478			2,230		nm				45,035			7,560		nm
Amortization of step-down in deferred revenue on acquisition		652			76		nm				3,088			399		nm
Amortization of step-up in inventory on acquisition		—			—		nm				13,732			—		nm
In-process research and development		—			—		nm				6,640			—		nm
Stock-based compensation		6,824			1,686		nm				25,301			3,798		nm
Acquisition related charges and restructuring costs		3,572			—		nm				11,807			—		nm
Amortization of debt issuance costs		469			280			68			1,129			819			38
Non-cash portion of loss on debt extinguishment		4,764			—		nm				4,764			—		nm
Total adjustments		30,759			4,272		nm				111,496			12,576		nm
Tax effect of adjustments		8,613			1,367		nm				31,219			4,024		nm
Estimated long term tax rate		28.0	%		32.0	%		-13			28.0	%		32.0	%		-13
		22,146			2,905		nm				80,277			8,552		nm
Valuation allowance on IPR&D (3)		—			—		nm				1,782			—		nm
Adjustments after tax		22,146			2,905		nm				82,059			8,552		nm
Net Income as Adjusted (2)	$	35,585		$	19,660			81	%	$	99,373		$	54,137			84	%
% of net revenue		15.3	%		13.3	%		15	%		14.9	%		12.8	%		16	%
Net Income as Adjusted per diluted share	$	0.42		$	0.28			50	%	$	1.18		$	0.79			49	%
Weighted-average shares used in computing diluted net income as adjusted per common share		84,374			69,079						84,507			68,906

(1)	“nm” means not meaningful
(2)	Management uses EBITDA as Adjusted and Net Income as Adjusted, 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)	The tax effect of in-process research and development is treated as a discrete item resulting in an increase in the non-cash valuation allowance and tax rate for the nine months ending July 31, 2007.

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GEOGRAPHIC REVENUE INFORMATION
(IN THOUSANDS, EXCEPT PERCENTAGES)

	Three Months Ended July 31,									Nine Months Ended July 31,
	2007			2006			Change			2007			2006			Change
North America	$	104,570		$	85,404			22	%	$	289,680		$	243,045			19	%
Latin America		42,672			23,981			78			124,840			74,426			68
Europe		69,549			31,554			120			209,931			80,754			160
Asia		15,806			6,754			134			44,421			26,611			67
Corporate		(652	)		(76	)	nm				(3,088	)		(399	)	nm
	$	231,945		$	147,617			57	%	$	665,784		$	424,437			57	%

12

VERIFONE HOLDINGS, INC.
RECONCILIATION OF GUIDANCE FOR NON-GAAP FINANCIAL MEASURES
TO PROJECTED GAAP NET INCOME
(In $ million, except per share data; unaudited)

	Three months ending October 31, 2007
	Non-GAAP						GAAP
	Range of Estimates						Range of Estimates
	From		To		Adjustments		From		To
Net income	$	34.6	$	35.5		($17.5) [a]	$	17.1	$	18.0
Net income per share — diluted	$	0.41	$	0.42			$	0.20	$	0.21
Shares used to compute net income per share (millions)		85.2		85.2				85.2		85.2

[a]   Reflects estimated adjustments as follows:

					After Tax
			Before Tax		@28%
(i)		Amortization of purchased intangible assets	$	13.9	$	10.0
(ii)		Stock-based compensation		7.5		5.4
(iii	)	Acquisition related charges		1.5		1.1
(iv	)	Amortization of step-down in deferred revenue		0.8		0.6
(v)		Amortization of debt issuance costs		0.6		0.4
		Total adjustments	$	24.3	$	17.5

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