VMware reports second quarter 2015 results

LOGO1VMware has announced financial results for the second quarter of 2015.

GAAP total revenues for the second quarter were $1.52 billion, an increase of 4% from the second quarter of 2014, or up 8% year-over-year in constant currency.  GAAP revenues were reduced by the amount of a settlement with the Department of Justice (“DOJ”) and the General Service Administration (“GSA”) for $75.5 million, which was entered into and paid in cash in Q2.

Non-GAAP total revenues for the second quarter were $1.60 billion, an increase of 10% from the second quarter of 2014, or up 13% year-over-year in constant currency.

  • License revenues for the second quarter were $638 million, an increase of 4% from the second quarter of 2014, or up 9% year-over-year in constant currency.

 

  • GAAP net income for the second quarter was $172 million, or $0.40 per diluted share, up 5% per diluted share compared to $167 million, or $0.38 per diluted share, for the second quarter of 2014. Non-GAAP net income for the quarter was $396 million, or $0.93 per diluted share, up 15% per diluted share compared to $351 million, or $0.81 per diluted share, for the second quarter of 2014.

 

GAAP operating income for the second quarter was $206 million, an increase of 3% from the second quarter of 2014. Non-GAAP operating income for the second quarter was $479 million, an increase of 12% from the second quarter of 2014.

  • Operating cash flows for the second quarter were $316 million. Free cash flows for the quarter were $238 million. Both figures were negatively impacted by the $75.5 million paid in connection with the GSA settlement in Q2.

 

  • Cash, cash equivalents and short-term investments were $7.00 billion, and unearned revenues were $4.81 billion as of June 30, 2015.

 

  • Non-GAAP total revenues plus sequential change in total unearned revenues were flat year-over-year, and grew 5% year-over-year when adjusted for constant currency.

 

  • License revenues plus sequential change in unearned license revenues increased 3% year-over-year, and grew 9% year-over-year when adjusted for constant currency.

 

 

 

“Our second quarter results are solid, building on our solid start to the year in Q1,” said Pat Gelsinger, chief executive officer, VMware. “We experienced strong industry validation from industry analysts, partners and customers throughout the quarter and also unveiled our Business Mobility strategy and key announcements enabling organisations to transform their business processes.”

 

 

 

“We’re pleased with our Q2 non-GAAP total revenues growth of 13% on a constant currency basis,” said Jonathan Chadwick, chief financial officer and chief operating officer, VMware. “We continue to expand our portfolio to deliver new technologies, solutions and transformational opportunities to our customers.”

 

 

 

Recent highlights & strategic announcements

 

  • In June, VMware outlined its Business Mobility strategy highlighting new solutions, services and partnerships to enable organisations to transform their business processes. New announcements included:

 

o    The industry’s first identity-as-a-service offering integrated with a leading, enterprise-class mobility management and security platform;

 

o    Further commitment to Apple devices and the iOS platform, with new application configuration templates and vertical solutions; and

 

o    15 new ISV partners, including DocuSign, Dropbox and MicroStrategy, announced support for the ACE program, which provides a simplified approach to developing secure mobile applications.

 

 

 

  • In partnership with Telstra, VMware announced the general availability of a new VMware-operated location in Australia, which provides customers with a local Asia Pacific hybrid cloud service that helps address local compliance and data locality needs.

 

 

 

  • Intel Security and VMware announced an integrated solution, based on the VMware NSX network virtualisation platform, to provide Intelligent Intrusion Prevention services for the protection of east-west traffic within the data centre.

 

 

 

  • VMware unveiled two new technology previews designed to streamline cloud native application development and deployment. VMware AppCatalyst delivers an API-driven environment to developer laptops and Project Bonneville will enable seamless integration of Docker Containers onto VMware vSphere.

 

 

 

  • In the second quarter, VMware received further recognition from leading industry analysts.

 

o    Gartner recognised AirWatch by VMware as a Leader with the highest Ability to Execute, in its June 2015 Magic Quadrant for Enterprise Mobility Management Suites, and VMware as a Visionary in their May 2015 Magic Quadrant for Data Center Networking and in their Magic Quadrant for Cloud Infrastructure as a Service, Worldwide.

 

o    For the sixth year in a row, Gartner has placed VMware as a leader in its July 2015 Magic Quadrant for x86 Server Virtualisation Infrastructure, with both the highest Ability to Execute and highest Completeness of Vision.

 

o    IDC recognised VMware in a number of reports including positioning VMware as a leader in their 2015 MarketScape for worldwide virtual client computing software.  IDC also identified VMware as the number one vendor in both market share and revenue in their Cloud Systems Management Software and Datacenter Automation Software vendor share reports for 2014.  Finally, AirWatch by VMware was named the number one vendor in IDC’s Enterprise Mobility Management vendor share report for 2014.

 

 

 

The company will host a conference call today at 11:00 p.m 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 revenues which include year over year comparisons will also be made available at http://ir.vmware.com in conjunction with the conference call.