Net revenues, for the three months ended October 31, 2005, were $130.5 million, an increase of 20% over net revenues of $108.6 million for the comparable period of 2004. The increase was driven by a 34% increase in net revenues from VeriFone's International business and a 13% increase in net revenues in VeriFone's North America business.

Gross margins, under generally accepted accounting principles (GAAP), for the three months ended October 31, 2005 were 42.7%, compared with 36.5% for the fourth quarter of 2004. Gross margins, excluding non-cash amortization of purchased intangibles and stock-based compensation expense, expanded for the fourth consecutive quarter and reached a record level of 44.0% compared with 38.3% for the fourth quarter of 2004.

Net income, for the three months ended October 31, 2005, was $12.1 million, or $0.18 per diluted share, compared to $2.8 million, or $0.05 per diluted share, for the comparable period of 2004. Net Income, as adjusted, which excludes non-cash amortization of purchased intangibles and debt issuance costs, as well as non-cash stock-based compensation expense, for the three months ended October 31, 2005 was $14.9 million, or $0.22 per diluted share, compared to $6.0 million, or $0.11 per diluted share, for the comparable period of 2004.

EBITDA, as adjusted, which excludes non-cash amortization of purchased intangibles and debt issuance costs, as well as non-cash stock-based compensation expense, expanded for the fifth consecutive quarter and reached a record level of $26.5 million, a 70% increase compared with the $15.5 million earned in the three months ended October 31, 2004. As a percent of net revenues, EBITDA for the three months ended October 31, 2005 reached a record level of 20.3%, compared to the 14.3% recorded in the three months ended October 31, 2004.

Net revenues, for the fiscal year ended October 31, 2005, were $485.4 million, an increase of 24% over net revenues of $390.1 million for the comparable period of 2004.

Net income, attributable to common stockholders, for the fiscal year ended October 31, 2005 was $33.2 million, compared to $0.65 million for the fiscal year ended 2004. Net Income as adjusted for the fiscal year end October 31, 2005 was $49.7 million, compared to $24.6 million, for the fiscal year ended 2004.

EBITDA, as adjusted, for the fiscal year ended October 31, 2005, was $86.4 million, an increase of 51% over EBITDA, as adjusted of $57.2 million for the comparable period of 2004. As a percent of net revenues, EBITDA for the fiscal year ended October 31, 2005 was 17.8%, compared to 14.7% for the comparable period of 2004.

"VeriFone had another outstanding quarter and an excellent 2005. We successfully executed our strategic objectives and achieved record revenue, operating margins and earnings growth," said Douglas G. Bergeron, Chairman and Chief Executive Officer.

"The world-wide market acceptance of our industry leading product offering remains very strong. We look forward to continuing to grow as we take advantage of the key drivers in our industry - including accelerating demand for wireless payment solutions, the proliferation of IP, increasingly complex security standards and the proliferation of first use payment systems in many new and emerging markets worldwide," continued Bergeron.

Fourth Quarter Highlights

VeriFone completed its follow-on offering on September 23, 2005, raising gross proceeds of approximately $272 million; VeriFone's portion of the proceeds were approximately $49 million net of expenses and underwriting discounts.

VeriFone recently announced the formation of VeriFone Transportation Systems ("VTS"), a joint venture between VeriFone and TaxiTronic. TaxiTronic has an estimated two-thirds market share of metering systems in New York City taxi cabs. VTS is addressing the emerging market for government mandated credit card acceptance in taxi cabs. The MX870, the industry's only full motion video payment solution, will form part of the VTS offering.

VeriFone continued to experience rapid growth in its IP business on a worldwide basis and to further support this effort recently announced the availability of McAfee VirusScan Mobile for Verix, the first virus protection for payment solutions at the point of sale (POS) in the U.S.

VeriFone announced on November 29, as part of the Mexican Terminalization initiative, a second major order from a major Mexican bank for a combination of IP, Wi-Fi and GPRS systems.

In November, VeriFone introduced the VeriFone Vx 670 wireless system, ideal for the table-service restaurant industry and other mobile payment applications. The Vx 670 is the smallest and lightest fully-functional handheld payment platform in the mobile payments industry and represents a new generation in form factor, ergonomics and overall usability.

VeriFone received the CB5.2 certification from Groupement des Cartes Bancaires in France for our Vx 510 countertop payment solution. The CB5.2 standard, managed by GIE Cartes Bancaires, complies with the latest French smart card payment specifications. This certification paves the way for VeriFone to begin selling counter-top solutions in the key French market for the first time in several years.Download the document now 50.9 kb (Adobe Acrobat Document)