VASCO Data Security International, Inc. Q2 2010 Earnings Call Transcript
VASCO's non-banking business is growing steadily. For the first two quarters of 2010, our enterprise security business grew 6%, compared to the first two quarters of 2009. Non-banking revenue was 33% in Q2 and 30% of the first six months of 2010. This compares to 32% in Q2 a year ago and 29% for the first six months of 2009. Although our banking business is recovering more slowly than anticipated the longer-term still looks bright and visibility is improving.
The RFPs that we have described to you in past calls are indeed materializing in the firm orders. Our order intake was up significantly in Q2, this is contributing to a growing backlog which will give us the visibility that we have been missing for a while. We do believe that banking market is recovering and will lead us to strong growth in 2011. The competitive landscape ahs changed dramatically, but some of our historic competitors have been acquired by private equity firms of larger corporations.
Others have shifted their attention to activities outside of VASCO's traditional markets. This is bringing growing business opportunities for VASCO particularly in the enterprise security market. Our improved product range including the IDENTIKEY Server allows us to approach markets prospects and applications that were previously out of reach. We have realized many competitive wins and replacements with our new product portfolio.
Our DIGIPASS as a service strategy looks very promising. We believe that our services offering will prove to be an important additional source of revenue and income in the longer term. Historically VASCO is not a company that likes to hide. We have always tried to under promise and over deliver. We are doing our very best to continue that tradition. Although we expect the recovery of our traditional banking market will happen, results might continue to be lumpy in the short term. This is driven not only by the timing of our customers purchasing decisions but also by manufacturing challenges such as scarcity of parts due to a general ramp up by the recovering electronics industry.Read the rest of this transcript for free on seekingalpha.com
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