Virtualization.com

News and insights from the vibrant world of virtualization and cloud computing

financials

VMware: Fourth Quarter Disappointing But Still Better Than Expected

by Leave a Comment

VMware today announced financial results for the fourth quarter and full year 2008.

  • Revenues for the fourth quarter were $515 million, an increase of 25% from the fourth quarter of 2007.
  • GAAP operating income for the fourth quarter was $102 million, an increase of 34% from the fourth quarter of 2007. Non-GAAP operating income for the fourth quarter was $135 million, an increase of 25% from the fourth quarter of 2007.
  • GAAP net income for the fourth quarter was $111 million, or $0.29 per diluted share, compared to $78 million, or $0.19 per diluted share, for the fourth quarter of 2007. Non-GAAP net income for the quarter was $142 million, or $0.36 per diluted share, compared to $103 million, or $0.26 per diluted share, for the fourth quarter of 2007.
  • Revenues for the full year 2008 were $1.9 billion, an increase of 42% from 2007.
  • GAAP operating income for the full fiscal year 2008 was $313 million, an increase of 33% from 2007. Non-GAAP operating income for the year 2008 was $469 million, an increase of 39% from 2007.
  • GAAP net income for the full fiscal year 2008 was $290 million, or $0.73 per diluted share, compared to $218 million, or $0.61 per diluted share, for 2007. Non-GAAP net income for the year 2008 was $416 million, or $1.05 per diluted share, compared to $295 million, or $0.82 per diluted share, for 2007.
  • Cash was more than $1.8 billion and deferred revenue was $870 million as of December 31, 2008. Since the beginning of 2008, cash increased 50% and deferred revenue increased 57%.

U.S. revenues for 2008 grew 37% to $988 million from 2007. International revenues grew 48% to $893 million from 2007.

License revenues for 2008 grew 30% to $1.2 billion from 2007. Services revenues grew 67% to $703 million from 2007.

(Release)

For analysis, read Tech Trader Daily and Between The Lines.

VMware (VMW): Second-Quarter 2008 Results (Updated)

by 2 Comments

VMware reported its second-quarter 2008 results today, with an earnings conference call which was followed closely after the abrupt removal of Diane Greene two weeks ago (see our ‘the week after‘ post too for reference). Don’t feel too bad for her, we’ve just reported on her potential payout, which could be well over $50 million USD.

These are the results that were just announced, in bullet points:

  • Net income of $52.4 million, or 13 cents a share, compared with $34.2 million, or 10 cents a share, a year earlier.
  • Revenues for the second quarter were $456 million, an increase of 54% from the second quarter of 2007. Update: this is below Wall Street analysts expectations and estimates, who projected $458,6 to 460 million in revenue – (which the company also projected in April but revised later on). Shares going down.
  • GAAP operating income for the second quarter was $61 million, compared to $47 million for the same period last year.
  • Non-GAAP operating income was $112 million, an increase of 52% from the second quarter of 2007.
  • GAAP net income for the quarter was $52 million, or $0.13 per diluted share, compared to $34 million, or $0.10 per diluted share, for the second quarter of 2007.
  • Non-GAAP net income for the quarter was $92 million, or $0.23 per diluted share, compared to $52 million, or $0.16 per diluted share, for the second quarter of 2007.
  • Cash exceeded $1.5 billion and deferred revenue was $721 million as of June 30, 2008.
Second quarter U.S. revenues grew 43% to $240 million from the second quarter of 2007. International revenues grew 68% to $216 million from the second quarter of 2007 driven by strength in Europe and Australia.
Software license revenue grew 39% to $284 million from second quarter of 2007. Service revenues, which include support, subscription and professional services, were $172 million, an increase of 85% from the second quarter of 2007.
As for the financial outlook:
  • 2008 revenues are targeted to grow approximately 42% to 45% compared to 2007. Update: this is rather modest.
  • Third quarter 2008 revenues are targeted to be within a range of approximately $462 to $468 million. Update: Analysts were projecting revenue of $497.3 million
  • Third quarter GAAP operating margin is targeted to be between 11% and 13%. This guidance includes stock-based compensation, employer payroll tax on employee stock transactions, amortization of intangible assets and capitalized software development costs which are targeted at 9% of projected revenue.

VMware is hosted a conference call today reviewing its results and discussing its financial outlook. The call was scheduled to begin at 2:00 p.m. PT/ 5:00 p.m. ET.

A noteworthy statement from Paul Maritz in the call was also the fact that VMware intends to make VMware ESXi completely free. The free version, officially called ESXi 3.5, will be available to download starting July 28. Maritz believes this approach to virtualization will help bring more customers into the VMware fold and make virtualization technology ubiquitous.

VMware

A Closer Look At VMware Financials

by 1 Comment

Zachary Scheidt over at Seeking Alpha penned an excellent analysis of the current financial situation VMware is in. Scheidt correctly notes the corrent virtual monopoly the virtualization industry’s poster child holds, and dissects the company’s latest earnings releases.

A small excerpt:

In addition to the $438 million in revenue, the company announced an increase of $88 million in its deferred revenue which is essentially revenue the company has received for service not yet performed. The total is now $641 million which should help to stabilize future revenue as the company can draw on this balance during future periods. In fact, a Credit Suisse analyst had an interesting theory stating that this quarter was helped significantly by the company drawing on this deferred revenue base instead of new business actually driving the strong revenue number.

Read the whole article.