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VMware Reports Fiscal Year 2023 First Quarter Results

VMware, Inc., a leading innovator in enterprise software, announced financial results for the first quarter of fiscal year 2023:

Quarterly Review

  • Revenue for the first quarter of fiscal 2023 was $3.09 billion, an increase of 3% from the first quarter of fiscal 2022.

  • Continued momentum in the subscription and SaaS business, constituting 29% of total revenue for the quarter.

  • While license revenue was impacted by the transition to subscription and SaaS, the combination of subscription and SaaS and license revenue was $1.47 billion, an increase of 6% from the first quarter of fiscal 2022.

  • Subscription and SaaS revenue for the first quarter was $899 million, an increase of 21% year-over-year.

  • When excluding the impact associated with the suspension of business operations in Russia and foreign currency, total revenue for the first quarter was $3.14 billion, representing year-over-year growth of 5%, and subscription and SaaS revenue was $912 million, representing year-over-year growth of 23%.

  • Subscription and SaaS ARR for the first quarter was $3.66 billion, an increase of 21% year-over-year.

  • GAAP net income for the first quarter was $242 million, or $0.57 per diluted share, down 43% per diluted share compared to $425 million, or $1.01 per diluted share, for the first quarter of fiscal 2022. Non-GAAP net income for the first quarter was $542 million, or $1.28 per diluted share, down 27% per diluted share compared to $744 million, or $1.76 per diluted share, for the first quarter of fiscal 2022.

  • GAAP operating income for the first quarter was $408 million, a decrease of 27% from the first quarter of fiscal 2022. Non-GAAP operating income for the first quarter was $771 million, a decrease of 16% from the first quarter of fiscal 2022.

  • Operating cash flow for the first quarter was $1.01 billion. Free cash flow for the first quarter was $899 million.

  • RPO for the first quarter totaled $11.56 billion, up 5% year-over-year.

"We are focused on accelerating growth of our subscription and SaaS portfolio as we provide customers the flexibility and choice they seek," said Raghu Raghuram, CEO, VMware. "In this multi-cloud environment, we are committed to delivering a comprehensive technology platform spanning critical customer requirements for our hundreds of thousands of customers who trust our software as the foundation for their most critical applications."

"In the quarter, we saw continued progress with our subscription and SaaS go-to-market motion, which resulted in a higher-than-expected mix versus our license offerings in total revenue," said Zane Rowe executive vice president and CFO, VMware.

Business Highlights & Strategic Announcements

  • Google Cloud and VMware expanded their partnership to help customers accelerate application modernization and cloud transformation. Customers will now be able to use the VMware Cloud Universal program to take advantage of Google Cloud VMware Engine, gaining greater financial flexibility, choice and the ability to accelerate their cloud migrations and modernize their enterprise applications in Google Cloud.

  • VMware expanded the VMware Sovereign Cloud initiative with new partners, as well as new cloud-native, developer-centric capabilities that bring more value to all VMware Cloud provider offerings. The VMware Sovereign Cloud initiative helps customers identify and engage with trusted national or regional cloud service providers to meet their unique sovereign cloud requirements.

  • Deloitte and VMware created the Deloitte VMware Distributed Cloud (DVDC) practice to help clients transform their businesses and the industries they serve by more effectively implementing and utilizing distributed cloud architectures.

  • DISH will trial VMware's RAN Intelligent Controller (RIC) as the platform on top of which RAN applications will run. The RIC is a new layer of software that makes the RAN a software platform programmable and accessible by developers. Through the RIC, ISVs and developers can build exciting new applications enabling a dynamic new marketplace for new consumer and business applications.

  • VMware was recognized for its continued Environmental, Social and Governance (ESG) leadership and sustainability initiatives with inclusion on Barron's list of the 100 Most Sustainable Companies in 2022 and on the Clean 200 list for the third consecutive year.

  • VMware was named by Forbes to its list of America's Best Employers for Diversity in 2022 for the fourth consecutive year. VMware ranked number two on the overall list-and was the top ranked technology company-among the 500 employers Forbes ranked most dedicated to diversity, equity and inclusion.

  • VMware was recognized by Newsweek in its first annual ranking of America's Most Trustworthy Companies. VMware was ranked fourth in the software and telecommunications category.

Entry into Definitive Agreement to be Acquired by Broadcom

VMware's results are provided in conjunction with today's announcement that VMware has entered into a definitive agreement to be acquired by Broadcom Inc.

Due to the Company's pending acquisition by Broadcom, the Company is canceling its May 26 conference call and webcast to discuss its fiscal year 2023 first quarter financial results. Additionally, VMware will not be providing financial guidance for Q2 2023 and is suspending its financial guidance for the full fiscal year 2023.

Published Thursday, May 26, 2022 8:44 AM by David Marshall
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