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VMware Reports Fiscal 2018 Third Quarter Results

VMware, Inc., a global leader in cloud infrastructure and business mobility, today announced financial results for fiscal 2018 third quarter:

  • Revenue for the third quarter was $1.98 billion, an increase of 11% from the third quarter of 2016.
  • License revenue for the third quarter was $785 million, an increase of 14% from the third quarter of 2016.
  • GAAP net income for the third quarter was $443 million, or $1.07 per diluted share, up 43% per diluted share compared to $319 million, or $0.75 per diluted share, for the third quarter of 2016. Non-GAAP net income for the quarter was $553 million, or $1.34 per diluted share, up 17% per diluted share compared to $485 million, or $1.14 per diluted share, for the third quarter of 2016.
  • GAAP operating income for the third quarter was $465 million, an increase of 22% from the third quarter of 2016. Non-GAAP operating income for the third quarter was $689 million, an increase of 16% from the third quarter of 2016.
  • Operating cash flows for the third quarter were $970 million. Free cash flows for the quarter were $911 million.
  • Cash, cash equivalents and short-term investments were $11.6 billion, and unearned revenue was $5.6 billion as of November 3, 2017.
  • Total revenue plus sequential change in total unearned revenue grew 21% year-over-year.
  • License revenue plus sequential change in unearned license revenue grew 16% year-over-year.

"Coming off of a strong VMworld season, we are excited about the new products and services we have introduced this past quarter demonstrating our commitment to innovation and solving complex customer problems," commented Pat Gelsinger, chief executive officer, VMware. "We are very pleased with our Q3 results; our strategy continues to resonate with customers as they embrace and leverage our broad portfolio of products and services."

"We had a solid third quarter," said Zane Rowe, executive vice president and chief financial officer, VMware. "Our results reflect continued strength across the portfolio and customers' commitment to VMware as a strategic partner for both on-premises and hybrid-cloud software solutions."

Recent Highlights & Strategic Announcements

  • At VMworld 2017, VMware hosted over 30,000 customers, partners and influencers in Las Vegas and Barcelona and introduced a wave of new products and services focused on the key technologies across cloud, mobility, networking and security. Highlights include:
  • VMware unveiled an expanded set of products and services as part of VMware Cloud that are available through VMware and partners, including:
    • VMware Cloud on AWS is now initially available in AWS U.S. West region. VMware Cloud on AWS brings VMware's software-defined data center to the AWS Cloud, allowing customers to run applications across operationally consistent VMware vSphere-based private, public and hybrid cloud environments, with optimized access to AWS services
    • New VMware Cloud Services that enable end-to-end visibility into cloud usage, costs and networks, with consistent networking and security across public clouds and on-premises environments
  • VMware announced its breakthrough solution for securing applications running on virtualized or cloud environments -- VMware AppDefense. It helps to deliver an intent-based security model and enables least privilege environments for critical applications.
  • VMware and Pivotal Software, Inc., in collaboration with Google Cloud, unveiled Pivotal Container Service (PKS), a commercial release of the open source Cloud Foundry Container Runtime technology that, when available, will help Global 2000 companies operationalize Kubernetes.
  • VMware announced its intent to acquire VeloCloud Networks, Inc., provider of industry-leading cloud-delivered software-defined wide-area network (SD-WAN) technology for enterprises and service providers. Once the acquisition closes, VeloCloud will enable VMware to build on the success of its industry-leading network virtualization platform -- VMware NSX -- and expand its networking portfolio to address end-to-end automation, application continuity, branch transformation and security from data center to cloud to edge.
  • According to IDC's 2Q2017 Worldwide Quarterly Converged Systems Tracker, VMware, based on sales of hyperconverged solutions running VMware vSAN, was the largest hyperconverged infrastructure software vendor during the first half of calendar year 2017.

Revised Fiscal Calendar-Year-over-Year Comparisons of Quarterly Results and Sequential Change in Unearned Revenue Balances

VMware revised its fiscal calendar effective January 1, 2017. VMware's first fiscal year under its revised fiscal calendar began on February 4, 2017 and will end February 2, 2018. The period from January 1, 2017 through February 3, 2017 was recorded as a transition period and was reported as a separate period in VMware's Form 10-Q filing for the first quarter of fiscal 2018.

Year-over-year comparisons of quarterly financial results included in this press release and the attached financial tables compare results for VMware's fiscal 2018 third quarter (August 5, 2017 through November 3, 2017) to VMware's fiscal 2016 third quarter (July 1, 2016 through September 30, 2016). Sequential changes in total unearned revenue and unearned license revenue for the third quarter of fiscal 2018 compare VMware's total unearned revenue and unearned license revenue balances as of August 4, 2017, the last day of the VMware's fiscal 2018 second quarter, to the respective balances as of November 3, 2017, the last day of VMware's fiscal 2018 third quarter.

Published Friday, December 01, 2017 3:58 PM by David Marshall
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