VMware beats by $0.02, revenues in-line
- VMware (VMW): Q3 EPS of $0.84 beats by $0.02.
- Revenue of $1.29B (+14% Y/Y) in-line.
VMware's Q3 license growth beats expectations; unearned revenue jumps
- VMware's (VMW) Q3 license revenue (drives future services revenue) rose 15% Y/Y to $564M. That's well above Q2's 2.6% growth, and also guidance for 9%-13% growth. Services revenue +13% to $725M.
- Total revenue growth was 14%, or 19% if excluding assets that were either sold or are part of the Pivotal spinoff. VMware's unearned revenue balance rose 21% Y/Y to $3.64B. That's one reason free cash flow rose 50% Y/Y to $543M, easily surpassing net income of $261M.
- R&D spend only rose 2% Y/Y to $266M, thanks to restructuring moves. Sales/marketing +9% to $449M.
- Guidance will be provided on the CC (starts at 5PM ET).
- VMW +4% AH. EMC also +4%. EMC reports tomorrow morning.
- Q3 results,
VMware Q4 revenue guidance light, but license guidance strong
- VMware (VMW) guides on its Q3 CC for Q4 revenue of $1.45B-$1.48B, largely below a $1.48B consensus. However, license growth is expected to remain healthy, rising 12%-16% Y/Y after accelerating to 15% in Q3
- In addition, VMware now expects 2013 operating cash flow of $2.3B-$2.5B vs. prior guidance of $2.1B-$2.35B.
- The company does expect its Q1 2014 Q/Q revenue and license revenue drops to be 100 bps greater than the drop it saw in Q1 2013. However, full-year revenue is still expected to grow 15% Y/Y vs. a 14.5% consensus.
- VMware also mentioned its bookings were strong in all three major geographies, including Asia-Pac, where peers have stumbled. Costly enterprise license agreements (ELAs) now account for 1/3 of total bookings, and over 40% of bookings involved something besides standalone vSphere licenses, up from 35% in Q2 and 30% a year ago.
- End-user computing (PC virtualization, mobile software) bookings fell slightly Y/Y after rising at a mid-teens rate in Q2. That could be a sign Citrix's (CTXS) troubles are due to broader demand weakness.
- VMW now +8.3% AH. IBM and Citrix had led investors to expect bad news. EMC +4.5%. JPMorgan's upgrade was well-timed.
- Q3 results, details
For the latest updates on the stock market, visit,
http://daytradingstock-blog.blogspot.com
