Gemalto Reports 3Q 2013 Revenue

Gemalto announced its revenue for the third quarter of 2013. For the period, revenue for ongoing operations was up by 10% year-on-year at constant exchange rates to €596 million, growing in all regions and in all main segments. The Mobile sector grew by 9%, with an identical increase in both Mobile Communication and Machine-to-Machine segments. The Payment & Identity sector grew by 13%, on the back of an excellent performance in Secure Transactions (18%) and a lower increase (5%) recorded in Security this quarter.

“Gemalto’s diversified businesses and geographic footprint led to another quarter of strong revenue growth,” said CEO Olivier Piou. “A key component of our new multi-year plan is the development of our Platforms & Services activity, and its performance, expanding nearly +30% since the beginning of the year, evidences the trust our customers place in us. Our Embedded software & Products activity also develops rapidly, as expected, with +8% in year-to-date revenue growth. With this progress and despite the adverse currency environment we are on track to deliver on our outlook for 2013, which remains unchanged.”

Platforms & Services activities posted €113 million in revenue, an increase of 37% compared to the third quarter of 2012. All segments contributed to this remarkable expansion, which accounted for 55% of the total company revenue increase of the quarter. In Embedded software and Products activities, revenue reached €483 million, up 5%, with solid developments in all main segments.

Total company revenue expansion was 10% at constant exchange rates and 4% at historical exchange rates.

The Mobile Communication segment posted revenue of €287 million for the quarter, growing by 9% at constant exchange rates compared to the third quarter of 2012. Revenue from Platforms & Services grew by 25%, reaching €53 million. This growth came mainly from core subscriber services with LTE subscription management and other remote management services as well as operator billing services, which complemented the solid momentum in mobile payment activities.

Embedded software & Products grew by 5% as deployments of LTE programs continue and demand for multi-tenant SIM cards increases, driving further mix improvement.

The Machine-to-Machine segment posted revenue of €49 million, an increase of 9% at constant exchange rates. The increase in activity was driven by improving demand in the Americas and Europe. The demand for Cinterion modules and data management services stems from industrial sectors that are integrating mobile connectivity into their product offerings to reduce costs, improve data collection and deliver higher levels of service.

Secure Transactions posted a 18% revenue increase at constant exchange rates to €162 million, extending the strong growth momentum started during the first semester of 2013. A large part of the revenue increase this quarter came from Asian countries that have begun their migration to EMV technology. More globally, the deployment of contactless and dual-interface electronic payment cards continues to grow in proportion, representing close to half of the quarter’s deliveries.

Revenue in Security grew in both the Government Programs and Identity & Access Management businesses, reaching EUR98 million, up 5% on top of the 22% growth posted for the same quarter of 2012. Contracts related to voter registration and post issuance drove a strong increase in Platforms & Services sales, and the Embedded software & Products activity captured new ePassport contracts that were up for renewal in Europe and Africa.

For the full year 2013 Gemalto anticipates double-digit expansion in both profit from operations and revenue at constant exchange rates. Increased investment in operations to drive business development beyond 2013 should lead to a more pronounced seasonality in profit from operations between the two semesters.