VMware Reports Third Quarter 2011 Results
Year-Over-Year Revenue Growth of 32% to $942 Million; Operating Margin of 19.2%; Non-GAAP Operating Margin of 30.3%; EPS Growth of 105% to $0.41; Non-GAAP EPS Growth of 36% to $0.53; Trailing Twelve Months Operating Cash Flows Growth of 78% to $1.9 Billion; Free Cash Flows Growth of 72% to $1.8 Billion
(firmenpresse) - PALO ALTO, CA -- (Marketwire) -- 10/17/11 -- VMware, Inc. (NYSE: VMW), the global leader
in virtualization and cloud infrastructure, today announced financial
results for the third quarter of 2011:
Revenues for the third quarter were $942 million, an increase of 32%
from the third quarter of 2010, and an increase of 30% measured in constant
currency.
Operating income for the third quarter was $181 million. Non-GAAP
operating income for the third quarter was $285 million, an increase of 40%
from the third quarter of 2010.
Net income for the third quarter was $178 million, or $0.41 per diluted
share, compared to $85 million, or $0.20 per diluted share, for the third
quarter of 2010. Non-GAAP net income for the quarter was $230 million, or
$0.53 per diluted share, compared to $165 million, or $0.39 per diluted
share, for the third quarter of 2010.
Operating cash flows for the third quarter were $524 million. Free
cash flows for the quarter were $494 million, an increase of 108% from the
third quarter of 2010.
Trailing twelve months operating cash flows were $1.9 billion, an
increase of 78%. Trailing twelve months free cash flows were $1.8 billion,
an increase of 72%.
Cash, cash equivalents and short-term investments were $4.0 billion and
unearned revenue was $2.2 billion as of September 30, 2011.
U.S. revenues for the third quarter of 2011 grew 22% to $443 million from
the third quarter of 2010. International revenues grew 42% to $498 million
from the third quarter of 2010, and 37% in constant currency.
License revenues for the third quarter of 2011 were $444 million, an
increase of 29% from the third quarter of 2010, and an increase of 25%
measured in constant currency. Service revenues, which include software
maintenance and professional services, were $498 million for the third
quarter of 2011, an increase of 34% from the third quarter of 2010.
"VMware's third quarter results were driven by growth across all products.
Demand was especially strong in the Asia Pacific markets and we also
experienced the seasonal impact of sales to the US Federal Government,"
said Mark Peek, chief financial officer. "Fourth quarter 2011 revenues are
expected to be in the range of $1.03 billion and $1.06 billion, a
year-over-year increase of 23% to 27%."
"I'm pleased with another solid quarter for VMware illustrated by progress
with new products, growth across our portfolio and a growing community. We
are becoming a significant partner to businesses moving to the cloud," said
Paul Maritz, chief executive officer.
During the third quarter, VMware announced the industry's first cloud
infrastructure suite and the general availability of VMware vSphere® 5,
delivering nearly 200 new and enhanced capabilities to help customers
transform IT by driving greater efficiency from existing investments and
improving operational agility.
In August 2011 at VMworld® Las Vegas, VMware announced a portfolio of
new and emerging products to provide customers a cohesive path to IT as a
Service. VMware announced a simple way to help organizations break free
from device-centric legacy desktop models and work in the post-PC era.
simplifies IT manageability and control, while providing a high fidelity
desktop virtualization experience. Updates to VMware Horizon™ will
provide an open, user-centric platform for delivery of different
application types within a unified application catalog from a wide range of
devices.
VMware announced a new enterprise database as a service platform
accelerating development while automating administration of heterogeneous
database technologies. VMware vFabric Data Director™ establishes a
policy driven model for driving consistent security, data protection and
resource consumption across an enterprise's database portfolio. VMware
vFabric Postgres, the first database supported on Data Director,
dynamically adapts to changing workloads to achieve greater memory
efficiency and higher consolidation ratios.
VMware announced the beta availability of VMware Micro Cloud
Foundry™ as a free download. Cloud Foundry is the industry's first open
Platform as a Service (PaaS) solution, designed to deliver access to
modern, high productivity frameworks and a rich ecosystem of application
services from VMware, third parties and the open source community.
VMware plans to host a conference call today to review its third quarter
2011 results and to discuss its financial outlook. The call is scheduled
to begin at 2:00 p.m. PT/ 5:00 p.m. ET and can be accessed at VMware's
Investor Relation's page at . The webcast will be
available live, and a replay will be available following completion of the
live broadcast for approximately 30 days.
VMware is the leader in virtualization and cloud infrastructure solutions
that enable businesses to thrive in the Cloud Era. Customers rely on
VMware to help them transform the way they build, deliver and consume
Information Technology resources in a manner that is evolutionary and based
on their specific needs. With 2010 revenues of $2.9 billion, VMware has
more than 300,000 customers and 25,000 partners. The company is
headquartered in Silicon Valley with offices throughout the world and can
be found online at .
VMware, VMware vSphere, VMware View, VMworld, VMware vFabric Data Director
and VMware Micro Cloud Foundry are registered trademarks or trademarks of
VMware, Inc. in the United States and/or other jurisdictions. Other marks
mentioned herein are trademarks which are proprietary to VMware, Inc. or
another company.
Reconciliations of non-GAAP financial measures to VMware's financial
results as determined in accordance with GAAP are included at the end of
this press release following the accompanying financial data. For a
description of these non-GAAP financial measures, including the reasons
management uses each measure, please see the section of the tables titled
"About Non-GAAP Financial Measures."
This press release contains forward-looking statements including, among
other things, statements regarding VMware's expected fourth quarter
revenues, the features and benefits of VMware vCloud Connector, VMware
Horizon, and VMware Micro Cloud Foundry and the role of VMware products and
services in customer adoption of cloud computing and the transition to the
post-PC era. These forward-looking statements are subject to the safe
harbor provisions created by the Private Securities Litigation Reform Act
of 1995. Actual results could differ materially from those projected in the
forward-looking statements as a result of certain risk factors, including
but not limited to: (i) adverse changes in general economic or market
conditions; (ii) delays or reductions in consumer or information technology
spending; (iii) competitive factors, including but not limited to pricing
pressures, industry consolidation, entry of new competitors into the
virtualization and cloud computing markets, and new product and marketing
initiatives by our competitors; (iv) factors that affect timing of license
revenue recognition such as product announcements, beta programs and
product promotions that can cause revenue recognition of certain orders to
be deferred; (v) our customers' ability to develop, and to transition to,
new products and computing strategies such as cloud computing and desktop
virtualization; (vi) the uncertainty of customer acceptance of emerging
technology; (vii) changes in the willingness of customers to enter into
longer term licensing and support arrangements; (viii) rapid technological
and market changes in virtualization software and platforms for cloud and
desktop computing; (ix) changes to product development timelines; (x)
VMware's relationship with EMC Corporation and EMC's ability to control
matters requiring stockholder approval, including the election of VMware's
board members; (xi) our ability to protect our proprietary technology;
(xii) our ability to attract and retain highly qualified employees; (xiii)
the successful integration of acquired companies and assets into VMware;
and (xiv) fluctuating currency exchange rates. These forward looking
statements are based on current expectations and are subject to
uncertainties and changes in condition, significance, value and effect as
well as other risks detailed in documents filed with the Securities and
Exchange Commission, including our most recent reports on Form 10-K and
Form 10-Q and current reports on Form 8-K that we may file from time to
time, which could cause actual results to vary from expectations. VMware
assumes no obligation to, and does not currently intend to, update any such
forward-looking statements after the date of this release.
To provide investors and others with additional information regarding
VMware's results, we have disclosed in this press release the following
non-GAAP financial measures: non-GAAP operating income, non-GAAP net
income, non-GAAP operating margin, free cash flows and trailing
twelve-month free cash flows. VMware has provided a reconciliation of each
non-GAAP financial measure used in this earnings release to the most
directly comparable GAAP financial measure. These non-GAAP financial
measures differ from GAAP in that they exclude stock-based compensation,
employer payroll tax on employee stock transactions, amortization of
intangible assets, acquisition related items, the net effect of the
amortization and capitalization of software development costs and the gain
that VMware realized upon its sale of its investment in Terremark
Worldwide, Inc. during the second quarter of fiscal 2011, each as discussed
below.
VMware's management uses these non-GAAP financial measures to understand
and compare operating results across accounting periods, for internal
budgeting and forecasting purposes, for short- and long-term operating
plans, to calculate bonus payments and to evaluate VMware's financial
performance, the performance of its individual functional groups and the
ability of operations to generate cash. Management believes these non-GAAP
financial measures reflect VMware's ongoing business in a manner that
allows for meaningful period-to-period comparisons and analysis of trends
in VMware's business, as they exclude expenses and gains that are not
reflective of ongoing operating results. Management also believes that
these non-GAAP financial measures provide useful information to investors
and others in understanding and evaluating VMware's operating results and
future prospects in the same manner as management and in comparing
financial results across accounting periods and to those of peer companies.
Additionally, management believes information regarding free cash flows
provides investors and others with an important perspective on the cash
available to make strategic acquisitions and investments, to repurchase
shares, to fund ongoing operations and to fund other capital expenditures.
Management believes these non-GAAP financial measures are useful to
investors and others in assessing VMware's operating performance due to the
following factors:
Stock-based compensation. Although stock-based compensation is an
important aspect of the compensation of VMware's employees and executives,
determining the fair value of the stock-based instruments involves a high
degree of judgment and estimation and the expense recorded may bear little
resemblance to the actual value realized upon the future exercise or
termination of the related stock-based awards. Furthermore, unlike cash
compensation, the value of stock-based compensation is determined using a
complex formula that incorporates factors, such as market volatility, that
are beyond our control. Management believes it is useful to exclude
stock-based compensation in order to better understand the long-term
performance of our core business and to facilitate comparison of our
results to those of peer companies. In addition, we account for stock-based
compensation under GAAP, which requires that we report the excess income
tax benefit from stock-based compensation as a financing cash flow rather
than as an operating cash flow. We have added this benefit back to our
calculation of free cash flows in order to generally classify cash flows
arising from income taxes as operating cash flows.
Employer payroll tax on employee stock transactions. The amount of
employer payroll taxes on stock-based compensation is dependent on VMware's
stock price and other factors that are beyond our control and do not
correlate to the operation of the business.
Amortization of intangible assets. A portion of the purchase price of
VMware's acquisitions is generally allocated to intangible assets, such as
intellectual property, and is subject to amortization. However, VMware does
not acquire businesses on a predictable cycle. Additionally, the amount of
an acquisition's purchase price allocated to intangible assets and the term
of its related amortization can vary significantly and are unique to each
acquisition. Therefore, VMware believes that the presentation of non-GAAP
financial measures that adjust for the amortization of intangible assets,
provides investors and others with a consistent basis for comparison across
accounting periods.
Acquisition related items. Acquisition related items include direct
costs of acquisitions, such as transaction fees, which vary significantly
and are unique to each acquisition. Additionally, VMware does not acquire
businesses on a predictable cycle.
Capitalized software development costs. Capitalized software
development costs encompasses capitalization of development costs and the
subsequent amortization of the capitalized costs over the useful life of
the product. Amortization and capitalization of software development costs
can vary significantly depending upon the timing of products reaching
technological feasibility and being made generally available. In addition,
we exclude the capitalization of software from our free cash flows to
better convey management's view of operating cash flows. If we did not
capitalize costs under generally accepted accounting guidance, our GAAP
operating cash flows would be lower as a result of additional expense
recognized within net income and paid out in cash during the period.
Gain on sale of Terremark investment. In the second quarter of 2011, we
sold our investment in Terremark Worldwide, Inc., which was acquired by
Verizon in a cash transaction, and realized a gain of $56.0 million. Our
investment in Terremark was made in connection with a business and
technical collaboration and was not made to seek an investment gain or to
fund our business operations. To the extent that sizeable gains or losses
are realized on such investments, they do not occur on a predictable cycle.
Additionally, the timing of the event that triggered our divestment and
whether or not we realized a gain or loss, was not under our control.
Tax Adjustment. Non-GAAP financial information for the quarter is
adjusted for a tax rate equal to our annual estimated tax rate on
non-GAAP income. This rate is based on our estimated annual GAAP income tax
rate forecast, adjusted to account for items excluded from GAAP income in
calculating our non-GAAP income. Our estimated tax rate on non-GAAP income
is determined annually and may be re-calculated during the year to take
into account events or trends that we believe materially impact the
estimated annual rate including, but not limited to, significant changes
resulting from tax legislation, tax audit closures, material changes in the
geographic mix of revenues and expenses and other significant events. Due
to the differences in the tax treatment of items excluded from non-GAAP
earnings, as well as the methodology applied to our estimated annual tax
rates as described above, our estimated tax rate on non-GAAP income may
differ from our GAAP tax rate and from our actual tax liabilities.
Additionally, we believe that the non-GAAP financial measure, free cash
flows, is meaningful to investors because we review cash flows generated
from operations after taking into consideration capital expenditures due to
the fact that these expenditures are considered to be a necessary component
of ongoing operations. As discussed above, we also exclude capitalization
of software development costs and the excess income tax benefit from
stock-based compensation from our measure of free cash flows.
The use of non-GAAP financial measures has certain limitations because they
do not reflect all items of income and expense that affect VMware's
operations. Specifically, in the case of stock-based compensation, if
VMware did not pay out a portion of its compensation in the form of
stock-based compensation and related employer payroll taxes, the cash
salary expense included in costs of revenues and operating expenses would
be higher, which would affect VMware's cash position. VMware compensates
for these limitations by reconciling the non-GAAP financial measures to the
most comparable GAAP financial measures. These non-GAAP financial measures
should be considered in addition to, not as a substitute for or in
isolation from, measures prepared in accordance with GAAP and should not be
considered measures of VMware's liquidity. Further, these non-GAAP measures
may differ from the non-GAAP information used by other companies, including
peer companies, and therefore comparability may be limited. Management
encourages investors and others to review VMware's financial information in
its entirety and not rely on a single financial measure.
We have invoiced and collected in the Euro, the British Pound, the Japanese
Yen, and the Australian Dollar in their respective regions since May 2009.
As a result, our total revenues are affected by changes in the U.S. Dollar
against these currencies. In order to provide a comparable framework for
assessing how our business performed excluding the effect of foreign
currency fluctuations, management analyzes year-over-year revenue growth on
a constant currency basis. Since all of our entities operate with the U.S.
Dollar as their functional currency, revenues for orders booked in
currencies other than U.S. Dollars are converted into unearned revenue at
the exchange rate in effect for the month in which each order is booked. We
calculate constant currency on license revenues recognized during the
current period that were originally booked in currencies other than U.S.
Dollars by comparing the exchange rates at which the revenue was recognized
against the exchange rate that was used in the comparable period. We do not
calculate constant currency on services revenues, which include software
maintenance revenues and professional services revenues.
Michael Haase
VMware Investor Relations
650-427-2875
Gloria Lee
VMware Investor Relations
650-427-3267
Joan Stone
VMware Global Communications
650-427-4436
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Datum: 17.10.2011 - 20:01 Uhr
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