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VMware Earnings Up 11 Percent in Q1 2015

CEO Pat Gelsinger called the results "solid."

• By Keith Ward
• 04/22/2015

VMware had a solid, though not spectacular, first quarter of 2015 for earnings.

First quarter earnings were $196 million, or 45 cents a share. VMware noted in a press release that total revenues were $1.51 billion. The $196 million figure was up 11 percent year-over-year.

"We're pleased with our Q1 revenue growth of 13% on a constant currency basis,” Jonathan Chadwick, VMware's CEO/CFO, said in the release. What was left unsaid was that Q1 represented the first financial quarter in a year that saw a decline in quarter-over-quarter revenue. Q4 2014 revenues were $1.7 billion; that capped off a year in which revenues were up each quarter by at least $100 million.

In addition, the year-over-year percentage increase was smaller than in any quarter from 2014. Last year, the increases from the previous year ranged from a low of 14 percent to a high of 18 percent (in Q3). In 2014, VMware passed the $6 billion revenue mark for the first time.

Even though those numbers were off a bit from last year, VMware still beat Wall Street forecasts, which expected non-GAAP earnings of 84 cents per share for Q1. Its non-GAAP earnings were 86 cents per share. VMware reported that it now has more than 500,000 customers and 75,000 partners.

One interesting note from the financial breakdown is that VMware has an almost equal split between revenue from the United States and international sales. For Q1, it made $762 million from domestic sales, representing 50.4 percent, and $749 million, or 49.6 percent, from overseas sales.

The Motley Fool reported that VMware employs 18,000 people, an increase of 26 percent from the previous year. "With a 41% increase in the budget for cost of services, VMware looks serious about winning business via high-quality support services," the story opined.