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VTech revenue gets leg up from Leapfrog

Despite experiencing a major data breach in 2015, Hong Kong-based VTech reported higher revenue for the sixth-month period ended September 2016.
November 10, 2016

The April acquisition of Leapfrog is paying off for Hong Kong-based electronic learning toy company VTech, which has seen its revenue rise by 5.9% to US$983 million for the sixth-month period ended September 2016.

In North America, which accounts for 48.3% of the tech company’s group revenue, sales rose by 2.8% to US$474.4 million. Higher sales of electronic learning products (ELPs) offset lower sales of telecommunication products and contract manufacturing services.

VTech’s Leapfrog product sales in North America, including new interactive learning system LeapStart (pictured), helped increase its ELP revenue by 26.2% to US$187.6 million.

For standalone products, North American growth was driven by VTech’s core infant and toddler products, including the new line of Go! Go! Smart family products, the Go! Go! Smart Friends Enchanted Princess Palace toy and its Touch & Learn Activity Desk Deluxe product.

VTech did, however, see a sales decline for its three-year-old Kidizoom Smartwatch.

Internationally, the company’s ELP revenue increased in Asia Pacific by 17.9% to US$24.4 million, and in Europe by 11.8% to US$144.5 million.

Going forward, VTech expects that its group revenue will continue to increase for the full year.

The sales bump comes as online privacy concerns continue to affect the company following last year’s hack attack that impacted more than six million children’s accounts connected to VTech’s tablet services.

The fallout from the November 2015 breach led VTech to issue controversial new terms and conditions, stating that parents must assume full responsibility for any future hacks.

About The Author
Jeremy is the Features Editor of Kidscreen specializing in the content production, broadcasting and distribution aspects of the global children's entertainment industry. Contact Jeremy at jdickson@brunico.com.

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