VMware’s Financial Results For Q1 Are In, 69 Percent Revenue Increase Beats Wall Street Expectations

VMware today announced financial results for the first quarter of 2008:

• Revenues for the first quarter were $438 million, an increase of 69% compared to the first quarter of 2007. (Analysts were expecting a top line of $422.4 million, according to Thomson Financial.)
• GAAP operating income for the first quarter was $48 million, compared to $46 million in the first quarter of 2007. Non-GAAP operating income was $106 million, an increase of 62% over the year-ago quarter.
• GAAP net income for the quarter was $43 million, or $0.11 per diluted share, compared to $41 million, or $0.12 per diluted share, in the year-ago quarter. Non-GAAP net income for the quarter was $88 million, or $0.22 per diluted share, compared to $0.16 a year ago.

From the press release:

First-quarter U.S. revenues grew 65% compared to the year-ago quarter on increased demand from large enterprises standardizing on the VMware platform and an increase in the number of smaller transactions delivered through VMware channel partners. International revenues, which increased 74%, were driven in part by triple-digit business growth across Australia and emerging markets including Brazil, China, India and Russia.

Software license revenue grew 73% compared to the same period last year to $294 million and service revenue, including support, subscription and professional services, increased 62% to $144 million.

As for the financial outlook:

• VMware continues to expect 2008 revenue growth of approximately 50% compared to 2007.

• Second quarter 2008 revenues are expected to increase approximately 55% compared to the second quarter of 2007.

The stock was up $1.95, or 3.5%, to $58.02 in after-hours trading.

“Our product suite has a very high return on investment,” Greene said. “That puts us in a very good position for getting wallet share as the economy gets a little more uncertain.” Large deals, valued at $1 million and up, made up 20% of bookings during the quarter, Greene said in an interview.

Total bookings were not disclosed.

[Source: TheStreet]