News

VMware Exceeds Financial Expectations in Q2

Revenue was up more than 12 percent from the previous year.

• By Keith Ward
• 08/25/2017

VMware had a very strong financial Q2 in fiscal 2018, beating expectations and seeing significant increases in license bookings in both the end user computing (EUC) and software-defined storage (SDS) spaces.

VMware reported yesterday that its second quarter revenue was $1.9 billion, a jump of 12.2 percent from the same quarter last year. Non-GAAP net income was $489 million, or $1.19 per share. Both numbers exceeded analysts’ forecasts for the period.

VMware CEO Pat Gelsinger chalked up the good numbers to his company’s continued move in the direction of current growth areas of the industry. "As we continue our multi-year journey from a compute virtualization company to offer a broad portfolio of products driving efficiency and digital transformation, customers are increasingly turning to VMware to help them run, manage, secure and connect their applications across all clouds and all devices," Gelsinger said in the press release.

One of the most encouraging statistics for VMware was undoubtedly the rise in license bookings for VSAN, its SDS technology commonly used in hyper-convergence products. Those booking grew by more than 150 percent year-over-year, to more than 10,000. That’s compared to 2,000 customers in the last quarter.

EUC license bookings, in for the form of digital workspace product Workspace ONE, also ticked up dramatically, with a 20 percent year-over-year increase. In all, license revenue for the quarter was $732 million, a bump of 13.7 percent from the same quarter of 2016.

Other highlights from the earnings report included:

• GAAP operating income for the second quarter was $338 million, an increase of 5 percent from the second quarter of 2016. Non-GAAP operating income for the second quarter was $585 million, an increase of 15 percent from the second quarter of 2016.
• Operating cash flows for the second quarter were $620 million. Free cash flows for the quarter were $563 million.
• Cash, cash equivalents and short-term investments were $8.9 billion, and unearned revenue was $5.5 billion as of August 4, 2017.
• Total revenue plus sequential change in total unearned revenue grew 18 percent year-over-year.
• License revenue plus sequential change in unearned license revenue grew 14 percent year-over-year.