VMware Reports Fiscal 2019 Third Quarter Results
PALO ALTO, Calif., Nov. 29, 2018 — VMware, Inc., a leading innovator in enterprise software, today announced financial results for the third quarter of fiscal year 2019:
- Revenue for the third quarter was $2.20 billion, an increase of 14% from the third quarter of fiscal 2018.
- License revenue for the third quarter was $884 million, an increase of 17% from the third quarter of fiscal 2018.
- GAAP net income for the third quarter was $334 million, including a loss of $161 million on an investment in Pivotal Software (PVTL), or $0.81 per diluted share, down 16% per diluted share compared to $395 million, or $0.96 per diluted share, for the third quarter of fiscal 2018. Non-GAAP net income for the third quarter was $645 million, or $1.56 per diluted share, up 26% per diluted share compared to $509 million, or $1.23 per diluted share, for the third quarter of fiscal 2018.
- GAAP operating income for the third quarter was $495 million, an increase of 21% from the third quarter of fiscal 2018. Non-GAAP operating income for the third quarter was $741 million, an increase of 17% from the third quarter of fiscal 2018.
- Operating cash flows for the third quarter were $769 million. Free cash flows for the third quarter were $712 million.
- Total revenue plus sequential change in total unearned revenue grew 11% year-over-year.
- License revenue plus sequential change in unearned license revenue grew 15% year-over-year.
“Q3 was another strong quarter, and we’re pleased with our results, which continue to be driven by broad-based strength across our diverse product portfolio and in all three geographies,” commented Pat Gelsinger, chief executive officer, VMware. “Our successful annual VMworld events featured many new product, partnership and acquisition announcements—demonstrating continued innovation and investment in our strategy for the future.”
“We had solid Q3 performance on top of a strong Q3 last year,” said Zane Rowe, executive vice president and chief financial officer, VMware. “We are increasing our full-year fiscal 2019 guidance as a result of our strength in Q3 and outlook for Q4.”
VMware is raising full-year fiscal 2019 total revenue guidance to $8.882 billion (up from prior guidance of $8.820 billion), updating GAAP net income per diluted share to between $5.95 and $6.07, and updating non-GAAP net income per diluted share to $6.22 (up from prior guidance of $6.14 per diluted share).
Quarterly Business Highlights & Strategic Announcements
- VMware Cloud on AWS saw further momentum with data center expansion across multiple regions globally including the U.S., Europe and now Asia-Pacific, including Sydney and Tokyo.
- VMware expanded its integrated hybrid cloud offering, VMware Cloud Foundation 3.5, to deliver greater deployment flexibility and choice, including new Kubernetes support. Other enhancements to the VMware hybrid cloud portfolio included the new VMware vSphere Platinum Edition, along with updates to VMware vSAN and the VMware vRealize Cloud Management Platform.
- VMware acquired CloudHealth Technologies, a cloud operations platform across AWS, Microsoft Azure, Google Cloud and VMware environments enabling the delivery of a consistent and actionable view into cost and resource management, security and performance for applications across multiple clouds.
- VMware signed a definitive agreement to acquire Heptio, a leader in the open Kubernetes ecosystem, to accelerate enterprise adoption of Kubernetes on-premises and across multi-cloud environments.
- IBM and VMware announced a major partnership expansion, including a new IBM Services offering to help migrate and extend mission-critical VMware workloads to the IBM Cloud and new integrations to help enterprises to modernize applications with Kubernetes and containers.
- VMware announced innovations across its intelligence-driven Workspace ONE platform to embrace technology heterogeneity in the workplace, while extending modern management and security across the platform
- VMware NSX SD-WAN by VeloCloud is targeting integration with Microsoft Azure Virtual WAN in the first half of 2019, enabling customers across all industries that have business resources in Azure to gain simple, automated and high-performance connectivity to the branch. This new solution will extend customers’ current ability to connect workloads running in Azure using VMware NSX SD-WAN and VMware NSX Data Center and will enable customers to deliver pervasive connectivity and intrinsic security from branch locations to Azure.
- In the inaugural Gartner Magic Quadrant for WAN Edge Infrastructure (published on 18 October 2018), VMware was recognized as a Leader. The report, profiling 20 vendors, recognized VMware as a Leader in both ability to execute and completeness of vision, and VMware’s position was placed furthest for completeness of vision.
- In September, the company was positioned as a Leader in “The Forrester Wave™: Hyperconverged Infrastructure, Q3 2018.” According to Forrester’s report, VMware achieved the highest possible score in the product strategy criterion, which is comprised of the sub-criteria of value proposition and planned product enhancements, and which appears in the strategy category.
- In October, IDC ranked VMware No. 1 in market share in both worldwide cloud systems management and IT automation and configuration management software based on 2017 revenues. Additionally, VMware was named a Leader in the IDC MarketScape: Unified Endpoint Management Software 2018 Vendor Assessment.
- VMware announced it achieved carbon neutrality in global operations two years ahead of its scheduled 2020 goal. Additionally, VMware and the City of Palo Alto plans to work together on a joint exploration of a community microgrid. Beginning as a proof-of-concept on the VMware headquarters campus, the microgrid will serve as a testbed to explore the potential of community microgrids for controlling distributed energy resources and integrating renewable energy in order to maintain resilience at the corporate and community level.
- VMware, with Women Who Code, have launched Project Taara, an initiative in India that will give an opportunity to 15,000 women, who have taken a break in their careers to return to work. The program aims at upskilling women with free training and certification on advanced digital transformation solutions by VMware.
The company will host a conference call today at 2:00 p.m. PT/ 5:00 p.m. ET to review financial results and business outlook. A live web broadcast of the event will be available on the VMware investor relations website at http://ir.vmware.com. Slides will accompany the web broadcast. The replay of the webcast and slides will be available on the website for two months. In addition, six quarters of historical data for unearned revenue will also be made available at http://ir.vmware.com in conjunction with the conference call.
VMware software powers the world’s complex digital infrastructure. The company’s compute, cloud, mobility, networking and security offerings provide a dynamic and efficient digital foundation to over 500,000 customers globally, aided by an ecosystem of 75,000 partners. Headquartered in Palo Alto, California, this year VMware celebrates twenty years of breakthrough innovation benefiting business and society. For more information please visit https://www.vmware.com/company.html.