VeriFone Announces App Marketplace: H’App’ier Times Ahead?

VeriFone Systems Inc., the world’s leading payment and commerce solutions provider, is ‘going app’.

As the company announced, it plans to unveil an app marketplace for its products and services in Q2 2016. This will enable VeriFone clients and third-party app developers to create and deploy payment and commerce applications on VeriFone devices, per the company’s CEO, Paul Galant.

The VeriFone app marketplace won’t be particularly pivotal for the industry, as there are strong players in that space already. However, the company seems to be confident in its potential.

VeriFone`s financial statements demonstrate a 5% growth of net revenues in Q3 2015 compared to Q3 2014. For fiscal 2016, the company expects non-GAAP net revenues of $2.090 billion to $2.110 billion, which at the mid­point is 5% annual growth or 9% annual growth on a constant currency basis, said Marc Rothman, Executive Vice President and Chief Financial Officer in the release on financial results.

The company also expects fiscal 2016 non-GAAP net income per diluted share of $2.15 to $2.17, representing growth of 18% at the mid­point over fiscal 2015 results, reflecting revenue growth, higher gross margins, and improved operating leverage, he added.

Yesterday, VeriFone held a Q4 2015 Earnings Conference Call with investors, where VeriFone Systems CEO Paul Galant shared his insights on three industry trends that led to the revenue growth of the company and will boost new app success.

US migration to EMV

So, the first trend I want to highlight is of course, the ongoing US migration to EMV, where 60% of devices in the United States still need to be upgraded. This upgrade cycle will provide tailwinds for the next several years. Last quarter, we projected Verifone revenue growth of 3% in North America for FY16. Given the acceleration in North America's sequential growth in Q4 for Verifone, our continued momentum with SMB clients, our petroleum and services momentum, and our strong backlog and increased pipeline visibility, we are today announcing that we're increasing our projection for FY16 North America revenue growth to 5%, said Galant.

Global acceleration of cash and electronic payments

The second trend that we see is the global acceleration of cash to electronic payments. Our on-the-ground presence in so many different markets around the globe gives us insight and confidence that the world's move from cash to electronic payments is in fact accelerating, and will gain further momentum throughout 2016. Evidence of this includes the move to terminal fiscalization by several governments around the globe, demand for 3G portable and mPOS devices, the global growth in mobile wallets, and programs for the unbanked, he continued.

Convergence of payments and commerce

And finally, the third trend is the convergence of payments and commerce, which we're capitalizing on with Verifone's next generation of devices and services, including gateways and solutions that help our clients to reduce security risks and drive sales, Galant shared.

Company announced its new Engage family of devices, and demonstrated several revolutionary new consumer identity and security solutions at the Money 20/20 conference in October, which VeriFone expects to bring to market throughout 2016.

Galant also said that VeriFone began shipping its e355 mPOS solution in September, and will soon bring additional new mobile products to market globally. The delivery of these devices will help accelerate the growth of Verifone's Services business.