VeriFones second quarter revenue increases signal the company is heading in the direction CEO Paul Galant envisioned when becoming the head of the terminal maker in October 2013.
The combination of some early adoption to EMV terminals in the U.S. and strong sales in Africa and Australia boosted the companys revenue to $466.4 million for the second quarter, a 9% increase over the $426 million it brought in during the same quarter for 2013.
In the past eight months, Galant has openly discussed VeriFones various woes. The companys problems included disappointing financial performance and rocky relationships with vendors and clients.
In March, he told attendees at a Barclays Emerging Payments conference that VeriFone had to overcome self-inflicted wounds stemming from late certifications, shipments and product launches, while also dealing with deteriorated customer relationships.
At a JPMorgan technology conference last month, Galant stressed that the push to EMV-enabled terminals in the U.S. and unifying its research and development department were keys to the companys future.
Quarter by quarter we are making progress on becoming one VeriFone, Galant said during a June 5 earnings conference call. As work to fix our foundation is well under way, we are now starting to draft our next chapter of strategy to deliver growth.
That strategy will focus on VeriFones payment-as-a-service technology as well as more integrated payments and commerce at the point of sale as a core extension of our ubiquitous and secure terminals, Galant said.
In the United States, VeriFone continues to see an increased sense of urgency among large retailers and merchants to accelerate a technology refresh in advance of any EMV-related liability shifts, Galant said.
U.S. merchants who do not meet an October 2015 timeline for accepting EMV chip-based cards would carry the financial burden associated with any incidents involving fraud.
VeriFone began rollouts of EMV-capable terminals at Kohls and CVS stores throughout the U.S. during the quarter, Galant said.
EMV sales in the U.S. are just starting to help VeriFone, says Gil Luria, analyst with Los Angeles-based Wedbush Securities.
It may not have been a big contributor in this most recent quarter, but its starting to show up and thats a good sign because it is going to last a couple of years as retailers upgrade their systems to EMV standards, Luria says.
Most importantly, VeriFone has kind of gotten back on its feet after struggling for a few periods, he says.
Theyve gotten everything straightened out in the business and are getting their products out on a global basis while also mending a lot fences, Luria contends.
Verifones recent deal with Apple Inc. to provide Near Field Communication and EMV chip-and-PIN technology in Apple stores indicates the company is looking ahead to opportunities that embrace future POS scenarios, Luria says.
And they will have other deals where they provide the mobile devices, or provide the applications as EMV and NFC grows, he notes.
VeriFone reported revenue of $191 million in Europe, the Middle East and Africa, aided by strong sales in Nigeria and a stronger demand and faster-than-expected terminal rollout in Australia, Marc Rothman, chief financial officer, said during the earnings call.
Net loss attributable to the company fell to $23.9 million during the quarter, a 40% drop from $58.4 million a year earlier.
As part of its ongoing restructuring, the company plans to cut 500 jobs by the end of the year, from the 5,800 employees it had at the start of the year. VeriFone cut 150 jobs during the second quarter.