VeriFone Systems (PAY, Financial) has made a comeback this year as its shares have gained 30%. The company's revenue growth is back on track, and it is likely that it will continue getting better in the long run. Let's see why.
Improvements in the cards
The credit card payment terminal provider has been enjoying a double-digit increase in revenues continuously for more than a year now. In fact, the company’s bottom line came in the green after it had registered losses in its fourth-quarter results. Getting into the financial performance a little further, there are some more good numbers to be seen. The total revenue growth was contributed by both the system solutions product sales and service revenue.
In spite of all the positive factors working for the company, the outlook for VeriFone’s results was not very favorable, leading to disappointment among investors. Weakening of other currencies, especially the euro, might also affect VeriFone’s revenue from the overseas markets.
Host of acquisitions – a key strategy
VeriFone has been engaged in a number of acquisitions in the last year in order to expand its geographical presence and product offerings. Among the most recent ones are the acquisition of Hypercom Corporation and Point. Hypercom’s acquisition last August was made to expand VeriFone’s presence in the European market and to accelerate its efforts to expand globally. With the acquisition of Point, an e-payment giant in Europe, the electronic payment solutions provider expanded its payment and gateway services to make it easy for retailers to accept all types of payments. The aim here, again, was to increase its footprint in the European market.
The mPOS (mobile point of sale) technology market leader has also announced that it will partner with PayPal, a subsidiary of eBay (EBAY, Financial), to bring PayPal to all of its retailers’ checkout lanes. This will give customers an additional option to pay through PayPal card at the checkout counter. The partnership is made in direct competition with Google (GOOG, Financial) which had launched a similar payment service in partnership with VeriFone last year.
Conclusion
VeriFone’s performance has been remarkable and the company has impressively managed to bring its results at record making highs and that too the recovery was made from huge losses. All thanks to its acquisition spree which has expanded company’s presence. Also, the increasing popularity of mobile point of sale technology has driven the revenues north. I don’t mind to have an eye on the stock.
