Verifone Systems 8-K/A Results of Operations and Financial Condition

Exhibit 99.1

VERIFONE SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)
							Change
		Q1 2011		Q4 2010		Q1 2010	% SEQ Inc	% YoY Inc
United States and Canada	$	128,304	$	122,110	$	89,613	5.1%	43.2%
Europe		78,707		70,165		69,374	12.2%	13.5%
Latin America		50,131		53,887		40,623	-7.0%	23.4%
Asia		26,623		29,809		23,790	-10.7%	11.9%
GAAP Total net revenues	$	283,765	$	275,971	$	223,400	2.8%	27.0%
Amortization of step-down in deferred revenue on acquisition
United States and Canada		175		29		-
United States and Canada	$	128,479	$	122,139	$	89,613	5.2%	43.4%
Europe		78,707		70,165		69,374	12.2%	13.5%
Latin America		50,131		53,887		40,623	-7.0%	23.4%
Asia		26,623		29,809		23,790	-10.7%	11.9%
Non-GAAP Total net revenues	$	283,940	$	276,000	$	223,400	2.9%	27.1%

VERIFONE SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)
		Q4 2010
GAAP Net revenues - System Solutions	$	228,296
Amortization of step-down in deferred revenue on acquisition		11
Non-GAAP Net revenues - System Solutions	$	228,307
GAAP Net revenues - Services	$	47,675
Amortization of step-down in deferred revenue on acquisition		18
Non-GAAP Net revenues - Services	$	47,693
GAAP Net revenues	$	275,971
Amortization of step-down in deferred revenue on acquisition		29
Non-GAAP Net revenues	$	276,000
GAAP Cost of net revenues - System Solutions	$	146,393
Stock-based compensation		(327)
Acquisition related and Restructuring costs		(171)
Reversal of warranty liability established at acquisition
Amortization of purchased intangible assets		(5,903)
Non-GAAP Cost of net revenues - System Solutions	$	139,992
GAAP Cost of net revenues - Services	$	25,877
Stock-based compensation		(22)
Acquisition related and Restructuring costs		(6)
Amortization of purchased intangible assets		(103)
Non-GAAP Cost of net revenues - Services	$	25,746
GAAP Gross profit - System Solutions	$	81,903
Amortization of step-down in deferred revenue on acquisition		11
Stock-based compensation		327
Acquisition related and Restructuring costs		171
Reversal of warranty liability established at acquisition		-
Amortization of purchased intangible assets		5,903
Non-GAAP Gross profit - System Solutions	$	88,315
GAAP System Solutions gross margins		35.9%
Amortization of step-down in deferred revenue on acquisition as a % of System
Solutions net revenues		0.0%
Stock-based compensation as a % of System Solutions net revenues		0.1%
Acquisition related and Restructuring costs as a % of System Solutions net
revenues		0.1%
Reversal of warranty liability established at acquisition as a % of System Solutions
net revenues		0.0%
Amortization of purchased intangible assets as a % of System Solutions net
revenues		2.6%
Non-GAAP System Solutions gross margins		38.7%
GAAP Gross profit - Services	$	21,798
Amortization of step-down in deferred revenue on acquisition		18
Stock-based compensation		22
Acquisition related and Restructuring costs		6
Amortization of purchased intangible assets		103
Non-GAAP Gross profit - Services	$	21,947

VERIFONE SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)
		Q4 2010
GAAP Services gross margins		45.7%
Amortization of step-down in deferred revenue on acquisition as a % of Services
net revenues		0.0%
Stock-based compensation as a % of Services net revenues		0.0%
Acquisition related and Restructuring costs as a % of Services net revenues		0.0%
Amortization of purchased intangible assets as a % of Services net revenues		0.2%
Non-GAAP Services gross margins		46.0%
GAAP Gross profit	$	103,701
Amortization of step-down in deferred revenue on acquisition		29
Stock-based compensation		349
Acquisition related and Restructuring costs		177
Reversal of warranty liability established at acquisition		-
Amortization of purchased intangible assets		6,006
Non-GAAP Gross profit	$	110,262
GAAP Gross margins		37.6%
Amortization of step-down in deferred revenue on acquisition as a % of net
revenues		0.0%
Stock-based compensation as a % of net revenues		0.1%
Acquisition related and Restructuring costs as a % of net revenues		0.1%
Reversal of warranty liability established at acquisition as a % of net revenues		0.0%
Amortization of purchased intangible assets as a % of net revenues		2.2%
Non-GAAP Gross margins		40.0%
GAAP Research and development	$	20,427
Stock-based compensation		(757)
Acquisition related and Restructuring costs		(1)
Non-GAAP Research and development	$	19,669
Non-GAAP Research and development as a % of net revenues		7.1%
GAAP Sales and marketing	$	27,632
Stock-based compensation		(2,942)
Acquisition related and Restructuring costs		(779)
Non-GAAP Sales and marketing	$	23,911
Non-GAAP Sales and marketing as a % of net revenues		8.7%
GAAP General and administrative and amortization of purchased intangible assets	$	25,867
Stock-based compensation		(2,872)
Other charges - SOX remediation		-
Acquisition related and Restructuring costs		(1,895)
Amortization of purchased intangible assets		(2,983)
Non-GAAP General and administrative	$	18,117
Non-GAAP General and administrative as a % of net revenues		6.6%

VERIFONE SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)
		Q4 2010
GAAP Operating expenses	$	73,926
Stock-based compensation		(6,571)
Other charges - SOX remediation		-
Acquisition related and Restructuring costs		(2,675)
Amortization of purchased intangible assets		(2,983)
Non-GAAP Operating expenses	$	61,697
Non-GAAP Operating expenses as a % of net revenues		22.4%
GAAP Operating income	$	29,775
Amortization of step-down in deferred revenue on acquisition		29
Stock-based compensation		6,920
Other charges - SOX remediation		-
Acquisition related and Restructuring costs		2,852
Reversal of warranty liability established at acquisition		-
Amortization of purchased intangible assets		8,989
Non-GAAP Operating income	$	48,565
GAAP Operating margin		10.8%
Amortization of step-down in deferred revenue on acquisition as a % of net
revenues		0.0%
Stock-based compensation as a % of net revenues		2.5%
Other charges - SOX remediation as a % of net revenues		0.0%
Acquisition related and Restructuring costs as a % of net revenues		1.0%
Reversal of warranty liability established at acquisition as a % of net revenues		0.0%
Amortization of purchased intangible assets as a % of net revenues		3.3%
Non-GAAP Operating margin		17.6%
GAAP Interest expense	$	(6,487)
Acquisition related interest charges		(608)
Non-cash interest expense		3,745
Non-GAAP Interest expense	$	(3,350)
GAAP Interest income	$	390
Non-GAAP Interest income	$	390
GAAP Other income (expense), net	$	2,186
Other charges - acquisitions related and other		(2,614)
Non-GAAP Other expense, net	$	(428)

VERIFONE SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)
		Q4 2010
Non-GAAP Income before income taxes	$	45,177
GAAP Provision for (benefit from) income taxes	$	(23,577)
Income tax effect of non-GAAP exclusions		32,612
Non-GAAP Provision for income taxes (1)	$	9,035
Non-GAAP Income tax rate (1)		20%
GAAP Net income	$	49,441
Amortization of step-down in deferred revenue on acquisition		29
Stock-based compensation		6,920
Other charges - SOX remediation, acquisitions related and other		(3,222)
Acquisition related and Restructuring costs		2,852
Reversal of warranty liability established at acquisition		-
Amortization of purchased intangible assets		8,989
Non-cash interest expense		3,745
Income tax effect of non-GAAP exclusions		(32,612)
Total Non-GAAP Net income	$	36,142
Non-GAAP Net income per share:
Basic	$	0.42
Diluted	$	0.40
Weighted average shares used in computing Non-GAAP net	income per share:
Basic		85,895
Diluted		89,318
GAAP Net income as a % of net revenues		17.9%
Amortization of step-down in deferred revenue on acquisition as a % of net
revenues		0.0%
Stock-based compensation as a % of net revenues		2.5%
Other charges - SOX remediation, acquisitions related and other as a % of net
revenues		-1.2%
Acquisition related and Restructuring costs as a % of net revenues		1.0%
Reversal of warranty liability established at acquisition as a % of net revenues		0.0%
Amortization of purchased intangible assets as a % of net revenues		3.3%
Non-cash interest expense as a % of net revenues		1.4%
Income tax effect of non-GAAP exclusions as a % of net revenues		-11.8%
Total Non-GAAP Net income as a % of non-GAAP net revenues		13.1%

(1) The Non-GAAP tax rate used in our Non-GAAP reconciliation was changed beginning the fiscal third quarter 2010 from 28% to 20%.