Verifone Systems 8-K Financial Results for the Quarter

Financial Results for the Quarter

Ended July 31, 2011

1

1

Exhibit 99.1

Today’s

discussion

may

include

“forward-looking

statements”

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995.

Such

statements relate to future events and expectations and involve known

and unknown risks and uncertainties. VeriFone’s actual results or

actions may differ materially from those projected in the forward-looking

statements. For a summary of the specific risk factors that could cause

results to differ materially from those expressed in the forward-looking

statements, please refer to VeriFone’s filings with the Securities and

Exchange Commission, including its annual report on Form 10-K and

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.

2

2

F

O

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W

A

R

D

-

L

O

O

K

I

N

G

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A

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M

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A

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S

With respect to any Non-GAAP financial measures presented in the

information, reconciliations of Non-GAAP to GAAP financial

measures may be found in VeriFone’s quarterly earnings release as

filed with the Securities and Exchange Commission as well as the

Appendix to these slides. Management uses Non-GAAP financial

measures only in addition to and in conjunction with results

presented in accordance with GAAP. Management believes that

these Non-GAAP financial measures help 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

peer

companies.

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.

3

3

N

O

N

-

G

A

A

P

P

R

O

F

I

T

&

L

O

S

S

O

V

E

R

V

I

E

W *

4

4

* A reconciliation of our GAAP to Non-GAAP profit & loss can be found on slides 14 and 15

($ in thousands, except EPS)

Q310

Q211

Q311

% SEQ

Inc(Dec)

% YoY 

Inc(Dec)

Revenue

261,455

292,776

317,155

8.3%

21.3%

Gross Margin

101,005

127,191

135,037

6.2%

33.7%

Gross Margin %

38.6%

43.4%

42.6%

Operating Expense

58,298

71,034

74,321

4.6%

27.5%

Operating Expense %

22.3%

24.3%

23.4%

Operating Profit

42,707

56,157

60,716

8.1%

42.2%

Operating Margin %

16.3%

19.2%

19.1%

Net Interest and Other

(2,803)

(2,527)

(3,139)

24.2%

12.0%

Pre-tax Profit

39,904

53,630

57,577

7.4%

44.3%

Taxes

7,981

10,726

11,515

7.4%

44.3%

Net Income

31,923

42,904

46,062

7.4%

44.3%

Net Income %

12.2%

14.7%

14.5%

EPS

0.36

0.46

0.49

6.5%

36.1%

Q311

N

O

N

-

G

A

A

P

R

E

V

E

N

U

E

P

R

O

F

I

L

E *

Services

20.0%

System

Solutions

80.0%

Q311 Revenue

LAC

20.5%

NA 

38.4%

Asia

10.5%

Europe

30.6%

5

5

* A reconciliation of our GAAP to Non-GAAP revenue can be found on slide 16

($ in thousands)

Q310

Q211

Q311

% SEQ

Inc(Dec)

% YoY 

Inc(Dec)

North America

123,211

120,628

121,836

1.0%

-1.1%

Europe

62,120

93,697

97,206

3.7%

56.5%

Latin America

52,806

56,217

64,961

15.6%

23.0%

Asia

23,318

22,234

33,152

49.1%

42.2%

Total

261,455

292,776

317,155

8.3%

21.3%

Q311

M

A

N

A

G

I

N

G

M

U

L

T

I

P

L

E

N

E

W

S

E

R

V

I

C

E

S

A

T

C

H

E

C

K

O

U

T

…

while continuing to run existing

electronic payment methods.

Cards

6

6

Wallets

F

F

I

I

N

N

A

A

N

N

C

C

I

I

A

A

L

L

R

R

E

E

S

S

U

U

L

L

T

T

S

S

A

A

N

N

D

D

G

G

U

U

I

I

D

D

A

A

N

N

C

C

E

E

7

7

N

O

N

-

G

A

A

P

G

R

O

S

S

M

A

R

G

I

N

*

8

8

* A reconciliation of our GAAP to Non-GAAP gross margin can be found on slide 17

Q310

Q211

Q311

System Solutions

37.4%

43.2%

41.8%

Services

44.3%

44.5%

45.7%

Total

38.6%

43.4%

42.6%

% of Revenue

N

O

N

-

G

A

A

P

O

P

E

R

A

T

I

N

G

E

X

P

E

N

S

E

S

*

9

9

* A reconciliation of our GAAP to Non-GAAP operating expenses can be found on slide 18

Q310

Q211

Q311

Research and Development

7.0%

8.4%

8.3%

Sales and Marketing

8.4%

9.4%

8.9%

G&A

6.9%

6.5%

6.2%

Total

22.3%

24.3%

23.4%

% of Revenue

C

A

S

H

F

L

O

W

A

N

D

B

A

L

A

N

C

E

S

H

E

E

T

10

10

($ in thousands, except Days)

$

$

$

Cash Flow from Operations before

Changes in Working Capital

36,662

46,454

44,786

Cash Flow from Operations

25,994

38,422

52,823

Key Balance Sheet Items:

Cash

400,462

531,542

584,200

Accounts Receivables, net

137,705

49

208,373

66

221,028

65

Accounts Receivables Reserves

(4,671)

(5,333)

(5,450)

Inventories, net

111,415

62

106,411

59

109,861

54

Inventories Reserves

(22,332)

(28,270)

(28,434)

Accounts Payable

71,252

40

93,367

51

104,238

52

Deferred Revenue, net

71,981

82,232

84,538

Note:      Accounts Receivable Days Sales Outstanding is calculated based on Gross Accounts Receivable Net

of Reserve for Product Returns.

Days in Inventory is calculated as Average Net Inventory divided by Total Cost of Goods Sold.

Days in Accounts Payable is calculated as Accounts Payable divided by Total Cost of Goods Sold.

Q311

Days

Q211

Days

Q310

Days

G

U

I

D

A

N

C

E

•

For the fourth quarter ending October 31, 2011, VeriFone expects

Non-GAAP net revenues to be between $395 million and $400

million. Non-GAAP net income per share is projected to be in the

range of $0.49 to $0.50.

•

For the full year of fiscal 2011, VeriFone expects Non-GAAP net

revenues to be between $1,289 million and $1,294 million. 

Non-GAAP net income per share is projected to be in the range of

$1.88 to $1.89 for the same time period.

11

11

Q

Q

&

&

A

A

S

S

E

E

S

S

S

S

I

I

O

O

N

N

12

12

A

A

P

P

P

P

E

E

N

N

D

D

I

I

X

X

13

13

R

E

C

O

N

C

I

L

I

A

T

I

O

N

O

F

G

A

A

P

T

O

N

O

N

-

G

A

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&

L

O

S

S

(

P

A

G

E

1

)

14

14

($ in thousands, except Share Count and EPS)

Q310

Q211

Q311

GAAP Net Revenue

261,455

292,446

316,951

Amortization of step-down in Deferred revenue on

Acquisition

0

330

204

Non-GAAP Net Revenue

261,455

292,776

317,155

GAAP Gross Margin

95,495

122,585

131,612

Amortization of step-down in Deferred revenue on

Acquisition

0

330

204

Stock-based Compensation

312

392

433

Acquisition Related and Restructuring Costs

74

719

101

Amortization of Purchased Intangible Assets

5,124

3,165

2,687

Non-GAAP Gross Margin

101,005

127,191

135,037

GAAP Operating Expense

67,904

85,247

90,863

Stock-based Compensation

(5,150)

(8,924)

(7,917)

Acquisition Related and Restructuring Costs

(912)

(3,624)

(6,645)

Amortization of Purchased Intangible Assets

(3,544)

(1,665)

(1,980)

Non-GAAP Operating Expense

58,298

71,034

74,321

Non-GAAP Operating Profit

42,707

56,157

60,716

R

E

C

O

N

C

I

L

I

A

T

I

O

N

O

F

G

A

A

P

T

O

N

O

N

-

G

A

A

P

P

R

O

F

I

T

&

L

O

S

S

(

P

A

G

E

2

15

15

($ in thousands, except Share Count and EPS)

Q310

Q211

Q311

Non-GAAP Operating Profit (from page 1)

42,707

56,157

60,716

GAAP Net Interest and Other

(5,657)

(9,052)

(1,330)

Acquisition Related Costs and Interest Charges

(823)

2,763

(574)

Non-Cash Interest Expense

3,677

3,762

3,961

Non-Operating Gains

0

0

(5,196)

Non-GAAP Net Interest and Other

(2,803)

(2,527)

(3,139)

Non-GAAP Pre-tax Profit

39,904

53,630

57,577

GAAP Provision for (Benefit from) Income Taxes

3,396

3,086

13,072

Income Tax Effect of Non-GAAP Exclusions

4,586

7,640

(1,557)

Non-GAAP Provision for Income Taxes

7,982

10,726

11,515

Non-GAAP Net Income

31,922

42,904

46,062

GAAP Share count

87,671

93,434

93,322

Hedged Shares

0

(387)

(31)

Non-GAAP Share Count

87,671

93,047

93,291

Non-GAAP EPS

0.36

0.46

0.49

R

E

C

O

N

C

I

L

I

A

T

I

O

N

O

F

G

A

A

P

T

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N

O

N

-

G

A

A

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R

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V

E

N

U

E

16

16

($ in thousands)

Q310

Q211

Q311

GAAP Net Revenue:  North America

123,211

120,734

121,807

Amortization of step-down in Deferred revenue on

Acquisition

0

(106)

29

Non-GAAP Net Revenue:  North America

123,211

120,628

121,836

GAAP Net Revenue:  Europe

62,120

93,263

97,032

Amortization of step-down in Deferred revenue on

Acquisition

0

434

174

Non-GAAP Net Revenue:  Europe

62,120

93,697

97,206

GAAP Net Revenue:  Latin America

52,806

56,217

64,961

Non-GAAP Net Revenue:  Latin America

52,806

56,217

64,961

GAAP Net Revenue:  Asia

23,318

22,232

33,151

Amortization of step-down in Deferred revenue on

Acquisition

0

2

1

Non-GAAP Net Revenue:  Asia

23,318

22,234

33,152

GAAP Net Revenue

261,455

292,446

316,951

Amortization of step-down in Deferred revenue on

Acquisition

0

330

204

Non-GAAP Net Revenue

261,455

292,776

317,155

R

E

C

O

N

C

I

L

I

A

T

I

O

N

O

F

G

A

A

P

T

O

N

O

N

-

G

A

A

P

G

R

O

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S

M

A

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G

I

N

17

17

($ in thousands, except Gross Margin Percentage)

Q310

Q211

Q311

GAAP Gross Margin -

System Solutions

74,761

97,738

103,038

Stock-based Compensation

307

351

380

Acquisition Related and Restructuring Costs

76

586

134

Amortization of Purchased Intangible Assets

4,455

2,937

2,483

Non-GAAP

Gross

Margin

-

System

Solutions

79,599

101,612

106,035

Non-GAAP

Gross

Margin

%

-

System

Solutions

37.4%

43.2%

41.8%

GAAP

Gross

Margin

-

Services

20,734

24,847

28,574

Amortization

of

step-down

in

Deferred

revenue

on

Acquisition

0

330

204

Stock-based Compensation

5

41

53

Acquisition Related and Restructuring Costs

(2)

133

(33)

Amortization of Purchased Intangible Assets

669

228

204

Non-GAAP

Gross

Margin

-

Services

21,406

25,579

29,002

Non-GAAP

Gross

Margin

%

-

Services

44.3%

44.5%

45.7%

Total Non-GAAP Gross Margin

101,005

127,191

135,037

Total Non-GAAP Gross Margin %

38.6%

43.4%

42.6%

R

E

C

O

N

C

I

L

I

A

T

I

O

N

O

F

G

A

A

P

T

O

N

O

N

-

G

A

A

P

O

P

E

R

A

T

I

N

G

E

X

P

E

N

S

E

S

18

18

($ in thousands, except Percentage)

Q310

Q211

Q311

Non-GAAP Net Revenue

261,455

292,776

317,155

GAAP R&D

18,888

25,402

27,457

Stock-based Compensation

(659)

(939)

(1,001)

Acquisition Related and Restructuring Costs

10

(7)

(12)

Non-GAAP R&D

18,239

24,456

26,444

Non-GAAP R&D as % of Revenue

7.0%

8.4%

8.3%

GAAP S&M

24,145

31,139

32,769

Stock-based Compensation

(2,201)

(3,550)

(3,330)

Acquisition Related and Restructuring Costs

(10)

(93)

(1,096)

Non-GAAP S&M: % of Revenue

21,934

27,496

28,343

Non-GAAP S&M as % of Revenue

8.4%

9.4%

8.9%

GAAP G&A

24,871

28,706

30,637

Stock-based Compensation

(2,290)

(4,435)

(3,586)

Acquisition Related and Restructuring Costs

(912)

(3,524)

(5,537)

Amortization of Purchased Intangible Assets

(3,544)

(1,665)

(1,980)

Non-GAAP G&A

18,125

19,082

19,534

Non-GAAP G&A as % of Revenue

6.9%

6.5%

6.2%

Total Non-GAAP Operating Expenses

58,298

71,034

74,321

Total Non-GAAP Operating Expenses as % of Revenue

22.3%

24.3%

23.4%

Financial Results for the Quarter

Ended July 31, 2011

19

19