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Gemalto announces Q3 earnings ahead of major Q4 contract deliveries

Gemalto has reported third quarter earnings of €727 million (US$823 million) for 2018, down 3 percent from the same quarter a year ago, though its identity, IoT and cybersecurity business was down only 1 percent.

The company’s smart cards and issuance segment, which contributed 53 percent of revenue, declined four percent, on a constant exchange rate basis. The year-to-date revenue for Gemalto’s identity, IoT and cybersecurity segment reached €989 million ($1.12 billion), a 12 percent increase over from Q1-Q3 2018.

“As expected, Gemalto’s third quarter revenue was slightly lower as large programs in both the Governments and Cybersecurity businesses are being delivered in the fourth quarter of 2018,” comments Gemalto CEO Philippe Vallée. “In parallel, Gemalto recorded a strong increase in deployments of its secure connectivity solutions for IoT industrial applications. In the Smart cards & Issuance segment, the Payment business posted a solid performance driven by the first EMV renewal campaigns in the US and strong payment card deployments across other regions. The recent Apple announcement introducing eSIM technology in its new generation of iPhones was an important milestone. It should trigger an acceleration in the rate of activations that will benefit Gemalto’s eSIM solutions with Mobile Network Operators.”

Vallée also noted that with the company’s traditional fourth quarter momentum and adjustments to its cost base, Gemalto is confidant of achieving its full-year outlook. That outlook calls for mid to high single digits growth overall, with double-digit revenue growth in the identity, IoT and cybersecurity segment.

Gemalto formed a partnership with R3 in September to launch a self-sovereign digital ID network. The company’s merger with Thales also approached the midway point during September, and is expected to close in Q1 2019.

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