Vasco, a provider of authentication technology, has issued a bullish forecast for the coming year and says it expects its full-year 2005 revenue to be 35% to 45% higher than its full-year 2004 revenues.
Shares in the the Nasdaq-listed firm hit a year high on Thursday. Earlier in the week the US Federal Deposit Insurance Corporation (FDIC) urged US banks to abandon single password-based ID systems in favour of two-factor authentication.
Vasco says its expects its growth in 2005 to acclerate due to an increase in the market for two-factor authentication. The company expects to secure more and larger orders in the retail and consumer banking markets.
Ken Hunt, chairman and CEO, Vasco, comments: "Vasco's growth rate will accelerate in 2005 reflecting the markets' increasing awareness of the need for strong authentication and the increasing recognition of the strength of Vasco's product offering."
Consistent with the increase in average order size, Vasco expects gross profit as a percentage of revenue to be in the range of 60% to 65% and operating income as a percentage of revenue to be in the range of 15% to 20%. Operating income as a percentage of revenue also reflects the vendor's plan to continue to increase its investment in sales and marketing.
The company reaffirms its full-year 2004 guidance, which includes revenue growth of 23% to 27% over full-year 2003, gross profit as a percentage of revenue of 65% to 69% and operating income as a percentage of revenue of 17% to 20%. Vasco expects fourth quarter 2004 revenue to be higher then the previous year, with lower gross profit and operating margins than in prior quarters of 2004.