Total revenue growth of 9% year-over-year
Subscription and SaaS revenue growth of 44% year-over-year; 22% of total revenue
PALO ALTO, Calif.–(BUSINESS WIRE)–$VMW #earnings–VMware, Inc. (NYSE: VMW), a leading innovator in enterprise software, today announced financial results for the second quarter of fiscal 2021:
- Revenue for the second quarter was $2.88 billion, an increase of 9% from the second quarter of fiscal 2020.
- The combination of subscription and SaaS and license revenue was $1.35 billion, an increase of 11% from the second quarter of fiscal 2020.
- Subscription and SaaS revenue for the second quarter was $631 million, an increase of 44% year-over-year, representing 22% of total revenue.
- GAAP net income for the second quarter was $447 million, or $1.06 per diluted share, compared to $5.30 billion1, or $12.47 per diluted share, for the second quarter of fiscal 2020. Non-GAAP net income for the second quarter was $766 million, or $1.81 per diluted share, up 18% per diluted share compared to $650 million, or $1.53 per diluted share, for the second quarter of fiscal 2020.
- GAAP operating income for the second quarter was $534 million, an increase of 15% from the second quarter of fiscal 2020. Non-GAAP operating income for the second quarter was $950 million, an increase of 20% from the second quarter of fiscal 2020.
- Operating cash flow for the second quarter was $719 million. Free cash flow for the second quarter was $643 million.
- RPO for Q2 totaled $10.3 billion, up 17% year-over-year; total revenue plus sequential change in total unearned revenue grew 2% year-over-year.
- The combination of subscription and SaaS and license revenue plus sequential change in unearned subscription and SaaS and license revenue grew 12% year-over-year.
“In light of these uncertain times, we delivered solid execution and financial performance in Q2 FY21,” said Pat Gelsinger, VMware CEO. “With our Any Cloud, Any Application, Any Device strategy, we are helping customers solve their hardest technology challenges and meet and exceed their business objectives.”
“Our performance in Q2 reflected strength in our Subscription and SaaS product offerings, which grew 44% year-over-year,” said Zane Rowe, executive vice president and CFO, VMware. “We plan to accelerate certain product initiatives through the remainder of the year, which will further support customers’ digital transformations and grow our Subscription and SaaS product offerings.”
Business Highlights & Strategic Announcements
-
VMware continues to further the Company’s multi-cloud strategy with advancements across the cloud platform and ecosystem.
- VMware made available the second generation of VMware Cloud on Dell EMC, a VMware service that delivers simple, more secure and scalable infrastructure as-a-service to customers’ on-premises data center and edge locations.
- Google Cloud announced the general availability of Google Cloud VMware Engine, an integrated first-party offering with end-to-end support to migrate and run the VMware environment in Google Cloud.
- Microsoft previewed the next generation of Azure VMware Solution, a first-party solution designed, built and supported by Microsoft and endorsed by VMware.
- VMware announced new capabilities designed to further improve the economic value of VMware Cloud on AWS while meeting an evolving set of requirements for application modernization, business continuity and resiliency, and cloud migration.
- Oracle unveiled worldwide availability of Oracle Cloud VMware Solution, a dedicated, cloud-native VMware-based environment that enables enterprises to easily move their production VMware workloads to Oracle Cloud Infrastructure.
- DISH has chosen VMware Telco Cloud to help deploy the world’s first 5G, cloud-native Open Radio Access Network. The platform will help bring to life the first network in the U.S. to combine the efficiency of the distributed telco cloud, public cloud and private cloud environments while delivering consistent, low-latency edge computing.
- Intel and VMware announced they are collaborating on an integrated software platform for virtualized Radio Access Networks to accelerate the rollout of both existing LTE and future 5G networks.
-
VMware announced a series of technology acquisitions including:
- Lastline, a pioneer in anti-malware research and Artificial Intelligence-powered network detection and response that is being integrated into NSX to provide a complete, internal firewall capability, opening new opportunities for NSX and dramatically accelerating the customer journey towards Intrinsic Security.
- The True Visibility Suite team and products from Blue Medora enabling VMware vRealize Operations to provide visibility and insight into customers’ broad data center and hybrid cloud environments.
- Datrium, which expands VMware Cloud on AWS’ Site Recovery offering with Datrium’s world-class cost-optimized disaster recovery as a solution.
- VMware introduced VMware vSphere BitFusion, a new integrated feature in VMware vSphere 7 that will enable enterprises to deliver elastic infrastructure on-demand for artificial intelligence (AI) and machine learning (ML) applications.
-
In the second quarter, VMware received further recognition from leading industry analysts:
- IDC has ranked VMware No. 1 in worldwide cloud system and service management software2 based on IDC calculations for calendar year 2019.
- IDC ranked VMware No. 1 in worldwide IT automation and configuration management (ITACM) based on IDC calculationsfor calendar year 2019.3
- VMware has been recognized as a Leader in the 2020 Gartner Magic Quadrant for Unified Endpoint Management4, for the third consecutive year. The report recognized VMware as a leader for overall completeness of vision and ability to execute, positioned furthest for completeness of vision.
- VMware was positioned as a Leader in “The Forrester Wave™: Infrastructure Automation Platforms, Q3 2020.”5 According to Forrester’s report, VMware achieved the highest possible score in 22 criteria.
The company will host a conference call today at 1:30 p.m. PT/ 4:30 p.m. ET 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 unearned revenue will also be made available at http://ir.vmware.com in conjunction with the conference call.
1 During the second quarter of fiscal 2020, VMware completed an intra-group transfer of certain of its intellectual property rights to its Irish subsidiary, where its international business is headquartered. A discrete tax benefit of $4.9 billion was recorded as a deferred tax asset.
2 IDC, “Worldwide Cloud System and Service Management Software Market Shares, 2019: SaaS and ITOM Drive Growth,” doc #US45083420e, May 2020
3 IDC, “Worldwide IT Automation and Configuration Management Software Market Shares, 2019: Market Expands Ahead of Coronavirus Impact,” doc #US46397520, June 2020
4 Gartner, Inc., Magic Quadrant for Unified Endpoint Management, Dan Wilson, Chris Silva, et al, August 10, 2020. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
5 Forrester, Chris Gardner, The Forrester Wave™: Infrastructure Automation Platforms, Q3 2020, August 10, 2020.
About VMware
VMware software powers the world’s complex digital infrastructure. The company’s cloud, networking and security, and digital workspace offerings provide a dynamic and efficient digital foundation to customers globally, aided by an extensive ecosystem of partners. Headquartered in Palo Alto, California, VMware is committed to being a force for good, from its breakthrough innovations to its global impact. For more information, please visit https://www.vmware.com/company.html.
Additional Information
VMware’s website is located at www.vmware.com, and its investor relations website is located at http://ir.vmware.com. VMware’s goal is to maintain the investor relations website as a portal through which investors can easily find or navigate to pertinent information about VMware, all of which is made available free of charge. The additional information includes: materials that VMware files with the SEC; announcements of investor conferences, speeches and events at which its executives talk about its products, services and competitive strategies; webcasts of its quarterly earnings calls, investor conferences and events (archives of which are also available for a limited time); additional information on its financial metrics, including reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures; press releases on quarterly earnings, product and service announcements, legal developments and international news; corporate governance information; other news, blogs and announcements that VMware may post from time to time that investors may find useful or interesting; and opportunities to sign up for email alerts and RSS feeds to have information pushed in real time.
VMware, VMware Cloud, VMware Telco Cloud, Lastline, Datrium, NSX, vRealize BitFusion, and vSphere are registered trademarks or trademarks of VMware, Inc. or its subsidiaries in the United States and other jurisdictions. All other marks and names mentioned herein may be trademarks of their respective organizations.
Use of Non-GAAP Financial Measures
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.”
Forward-Looking Statements
This press release contains forward-looking statements including, among other things, statements regarding plans for the acceleration of certain product initiatives and their expected benefits to customers and the growth of our Subscription and SaaS product offerings; and the implementation of the following programs and their benefits to customers: the release of the next generation of Azure VMware Solution; new capabilities of VMware Cloud on AWS; Oracle Cloud VMware Solution; the future implementation of VMware Telco Cloud platform for DISH; the rollout of virtualized Radio Access Networks with Intel; the integration with VMware offerings of the acquisitions of Lastline and Datrium and technology acquired from Blue Medora. 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: (1) the impact of the COVID-19 pandemic on our operations, financial condition, our customers, the business environment and the global and regional economies; (2) adverse changes in general economic or market conditions; (3) delays or reductions in consumer, government and information technology spending; (4) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into the virtualization software and cloud, end user and mobile computing, and security industries, as well as new product and marketing initiatives by VMware’s competitors; (5) the ability to successfully integrate into VMware acquired companies and assets and smoothly transition services related to divested assets from VMware; (6) rapid technological changes in the virtualization software and cloud, end user, security and mobile computing industries; (7) VMware’s customers’ ability to transition to new products, platforms, services, solutions and computing strategies in such areas as containerization, modern applications, intrinsic security and networking, cloud, digital workspaces, virtualization and the software defined data center, and the uncertainty of their acceptance of emerging technology; (8) VMware’s ability to enter into, maintain and extend strategically effective partnerships and alliances; (9) the continued risk of litigation and regulatory actions; (10) VMware’s ability to protect its proprietary technology; (11) changes to product and service development timelines; (12) VMware’s relationship with Dell Technologies and Dell’s ability to control matters requiring stockholder approval, including the election of VMware’s board members and matters relating to Dell’s investment in VMware; (13) the potential impact of Dell’s investigation of strategic alternatives with respect to its interest in VMware, including a potential spinoff and related special cash dividend; (14) VMware’s ability to attract and retain highly qualified employees; (15) the ability of VMware to utilize our relationship with Dell to leverage go-to-market and product development activities; (16) risks associated with cyber-attacks, information security and data privacy; (17) disruptions resulting from key management changes; (18) risks associated with international sales such as fluctuating currency exchange rates and increased trade barriers; (19) changes in VMware’s financial condition; (20) geopolitical changes such as Brexit and increased tariffs and trade barriers that could adversely impact our non-U.S. sales; and (21) other business effects, including those related to industry, market, economic, political, regulatory and global health conditions. These forward-looking statements are made as of the date of this press release, 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 VMware’s 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.
|
VMware, Inc. |
||||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||
|
(amounts in millions, except per share amounts, and shares in thousands) |
||||||||||||||||
|
(unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
July 31, |
|
August 2, |
|
July 31, |
|
August 2, |
||||||||
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
Revenue: |
|
|
|
|
|
|
|
|
||||||||
|
License |
|
$ |
719 |
|
|
$ |
773 |
|
|
$ |
1,379 |
|
|
$ |
1,419 |
|
|
Subscription and SaaS |
|
631 |
|
|
439 |
|
|
1,204 |
|
|
850 |
|
||||
|
Services |
|
1,525 |
|
|
1,420 |
|
|
3,026 |
|
|
2,813 |
|
||||
|
Total revenue |
|
2,875 |
|
|
2,632 |
|
|
5,609 |
|
|
5,082 |
|
||||
|
Operating expenses(1): |
|
|
|
|
|
|
|
|
||||||||
|
Cost of license revenue |
|
35 |
|
|
38 |
|
|
74 |
|
|
74 |
|
||||
|
Cost of subscription and SaaS revenue |
|
132 |
|
|
97 |
|
|
258 |
|
|
191 |
|
||||
|
Cost of services revenue |
|
321 |
|
|
306 |
|
|
639 |
|
|
605 |
|
||||
|
Research and development |
|
679 |
|
|
614 |
|
|
1,344 |
|
|
1,204 |
|
||||
|
Sales and marketing |
|
897 |
|
|
888 |
|
|
1,814 |
|
|
1,756 |
|
||||
|
General and administrative |
|
277 |
|
|
223 |
|
|
523 |
|
|
432 |
|
||||
|
Realignment and loss on disposition |
|
— |
|
|
— |
|
|
4 |
|
|
— |
|
||||
|
Operating income |
|
534 |
|
|
466 |
|
|
953 |
|
|
820 |
|
||||
|
Investment income |
|
1 |
|
|
14 |
|
|
7 |
|
|
28 |
|
||||
|
Interest expense |
|
(55 |
) |
|
(34 |
) |
|
(104 |
) |
|
(68 |
) |
||||
|
Other income (expense), net |
|
15 |
|
|
41 |
|
|
8 |
|
|
58 |
|
||||
|
Income before income tax |
|
495 |
|
|
487 |
|
|
864 |
|
|
838 |
|
||||
|
Income tax provision (benefit) |
|
48 |
|
|
(4,798 |
) |
|
31 |
|
|
(4,812 |
) |
||||
|
Net income |
|
447 |
|
|
5,285 |
|
|
833 |
|
|
5,650 |
|
||||
|
Less: Net loss attributable to non-controlling interests |
|
— |
|
|
(18 |
) |
|
— |
|
|
(33 |
) |
||||
|
Net income attributable to VMware, Inc. |
|
$ |
447 |
|
|
$ |
5,303 |
|
|
$ |
833 |
|
|
$ |
5,683 |
|
|
Net income per weighted-average share attributable to VMware, Inc. common stockholders, basic for Classes A and B |
|
$ |
1.06 |
|
|
$ |
12.72 |
|
|
$ |
1.99 |
|
|
$ |
13.62 |
|
|
Net income per weighted-average share attributable to VMware, Inc. common stockholders, diluted for Classes A and B |
|
$ |
1.06 |
|
|
$ |
12.47 |
|
|
$ |
1.97 |
|
|
$ |
13.34 |
|
|
Weighted-average shares, basic for Classes A and B |
|
420,031 |
|
|
416,983 |
|
|
419,208 |
|
|
417,310 |
|
||||
|
Weighted-average shares, diluted for Classes A and B |
|
423,050 |
|
|
425,091 |
|
|
422,428 |
|
|
426,044 |
|
||||
|
__________ |
|
|
|
|
|
|
|
|
||||||||
|
(1) Includes stock-based compensation as follows: |
|
|
|
|
|
|
|
|
||||||||
|
Cost of license revenue |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
1 |
|
|
Cost of subscription and SaaS revenue |
|
5 |
|
|
3 |
|
|
9 |
|
|
6 |
|
||||
|
Cost of services revenue |
|
26 |
|
|
20 |
|
|
48 |
|
|
38 |
|
||||
|
Research and development |
|
132 |
|
|
109 |
|
|
257 |
|
|
211 |
|
||||
|
Sales and marketing |
|
88 |
|
|
68 |
|
|
159 |
|
|
129 |
|
||||
|
General and administrative |
|
42 |
|
|
34 |
|
|
91 |
|
|
64 |
|
||||
|
|
||||||||||||||||
|
VMware, Inc. |
|||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
|
(amounts in millions, except per share amounts, and shares in thousands) |
|||||||
|
(unaudited) |
|||||||
|
|
|
|
|
||||
|
|
July 31, |
|
January 31, |
||||
|
|
2020 |
|
2020 |
||||
|
ASSETS |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
4,703 |
|
|
$ |
2,915 |
|
|
Accounts receivable, net of allowance for doubtful accounts of $6 and $7 |
1,970 |
|
|
1,883 |
|
||
|
Due from related parties, net |
897 |
|
|
1,457 |
|
||
|
Other current assets |
457 |
|
|
436 |
|
||
|
Total current assets |
8,027 |
|
|
6,691 |
|
||
|
Property and equipment, net |
1,302 |
|
|
1,280 |
|
||
|
Other assets |
2,381 |
|
|
2,266 |
|
||
|
Deferred tax assets |
5,809 |
|
|
5,556 |
|
||
|
Intangible assets, net |
1,109 |
|
|
1,172 |
|
||
|
Goodwill |
9,547 |
|
|
9,329 |
|
||
|
Total assets |
$ |
28,175 |
|
|
$ |
26,294 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
216 |
|
|
$ |
208 |
|
|
Accrued expenses and other |
2,195 |
|
|
2,151 |
|
||
|
Current portion of long-term debt and other borrowings |
1,500 |
|
|
2,747 |
|
||
|
Unearned revenue |
5,215 |
|
|
5,218 |
|
||
|
Total current liabilities |
9,126 |
|
|
10,324 |
|
||
|
Note payable to Dell |
270 |
|
|
270 |
|
||
|
Long-term debt |
4,714 |
|
|
2,731 |
|
||
|
Unearned revenue |
4,170 |
|
|
4,050 |
|
||
|
Income tax payable |
783 |
|
|
817 |
|
||
|
Operating lease liabilities |
781 |
|
|
746 |
|
||
|
Other liabilities |
424 |
|
|
347 |
|
||
|
Total liabilities |
20,268 |
|
|
19,285 |
|
||
|
Contingencies |
|
|
|
||||
|
Stockholders’ equity: |
|
|
|
||||
|
Class A common stock, par value $0.01; authorized 2,500,000 shares; issued and outstanding 113,248 and 110,484 shares |
1 |
|
|
1 |
|
||
|
Class B convertible common stock, par value $0.01; authorized 1,000,000 shares; issued and outstanding 307,222 shares |
3 |
|
|
3 |
|
||
|
Additional paid-in capital |
2,070 |
|
|
2,000 |
|
||
|
Accumulated other comprehensive loss |
(9 |
) |
|
(4 |
) |
||
|
Retained earnings |
5,842 |
|
|
5,009 |
|
||
|
Total stockholders’ equity |
7,907 |
|
|
7,009 |
|
||
|
Total liabilities and stockholders’ equity |
$ |
28,175 |
|
|
$ |
26,294 |
|
|
VMware, Inc. |
|||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||||||
|
(in millions) |
|||||||||||||||
|
(unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
July 31, |
|
August 2, |
|
July 31, |
|
August 2, |
||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
Operating activities: |
|
|
|
|
|
|
|
||||||||
|
Net income |
$ |
447 |
|
|
$ |
5,285 |
|
|
$ |
833 |
|
|
$ |
5,650 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
|
Depreciation and amortization |
252 |
|
|
206 |
|
|
496 |
|
|
407 |
|
||||
|
Stock-based compensation |
293 |
|
|
234 |
|
|
565 |
|
|
449 |
|
||||
|
Deferred income taxes, net |
(98 |
) |
|
(4,937 |
) |
|
(196 |
) |
|
(4,955 |
) |
||||
|
Unrealized (gain) loss on equity securities, net |
— |
|
|
(23 |
) |
|
(6 |
) |
|
(20 |
) |
||||
|
(Gain) loss on disposition of assets, revaluation and impairment, net |
1 |
|
|
— |
|
|
7 |
|
|
(4 |
) |
||||
|
Loss on extinguishment of debt |
8 |
|
|
— |
|
|
8 |
|
|
— |
|
||||
|
Other |
2 |
|
|
2 |
|
|
(2 |
) |
|
2 |
|
||||
|
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
||||||||
|
Accounts receivable |
(432 |
) |
|
(323 |
) |
|
(79 |
) |
|
116 |
|
||||
|
Other current assets and other assets |
(173 |
) |
|
(229 |
) |
|
(345 |
) |
|
(356 |
) |
||||
|
Due to/from related parties, net |
(130 |
) |
|
(316 |
) |
|
560 |
|
|
298 |
|
||||
|
Accounts payable |
21 |
|
|
(4 |
) |
|
11 |
|
|
7 |
|
||||
|
Accrued expenses and other liabilities |
455 |
|
|
361 |
|
|
207 |
|
|
9 |
|
||||
|
Income taxes payable |
(66 |
) |
|
33 |
|
|
(51 |
) |
|
(11 |
) |
||||
|
Unearned revenue |
139 |
|
|
352 |
|
|
86 |
|
|
443 |
|
||||
|
Net cash provided by operating activities |
719 |
|
|
641 |
|
|
2,094 |
|
|
2,035 |
|
||||
|
Investing activities: |
|
|
|
|
|
|
|
||||||||
|
Additions to property and equipment |
(76 |
) |
|
(91 |
) |
|
(163 |
) |
|
(163 |
) |
||||
|
Purchases of strategic investments |
(6 |
) |
|
(8 |
) |
|
(11 |
) |
|
(8 |
) |
||||
|
Proceeds from disposition of assets |
18 |
|
|
— |
|
|
21 |
|
|
22 |
|
||||
|
Business combinations, net of cash acquired, and purchases of intangible assets |
(296 |
) |
|
(340 |
) |
|
(335 |
) |
|
(384 |
) |
||||
|
Net cash paid on disposition of a business |
— |
|
|
1 |
|
|
— |
|
|
(5 |
) |
||||
|
Net cash used in investing activities |
(360 |
) |
|
(438 |
) |
|
(488 |
) |
|
(538 |
) |
||||
|
Financing activities: |
|
|
|
|
|
|
|
||||||||
|
Proceeds from issuance of common stock |
36 |
|
|
18 |
|
|
142 |
|
|
152 |
|
||||
|
Net proceeds from issuance of long-term debt |
(5 |
) |
|
— |
|
|
1,979 |
|
|
— |
|
||||
|
Repayment of current portion of long-term debt |
(1,257 |
) |
|
— |
|
|
(1,257 |
) |
|
— |
|
||||
|
Repurchase of common stock |
(130 |
) |
|
(446 |
) |
|
(311 |
) |
|
(1,037 |
) |
||||
|
Shares repurchased for tax withholdings on vesting of restricted stock |
(161 |
) |
|
(148 |
) |
|
(276 |
) |
|
(351 |
) |
||||
|
Payment to acquire non-controlling interests |
(91 |
) |
|
— |
|
|
(91 |
) |
|
— |
|
||||
|
Principal payments on finance lease obligations |
(1 |
) |
|
(1 |
) |
|
(1 |
) |
|
(1 |
) |
||||
|
Net cash provided by (used in) financing activities |
(1,609 |
) |
|
(577 |
) |
|
185 |
|
|
(1,237 |
) |
||||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
1 |
|
|
— |
|
|
— |
|
|
— |
|
||||
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
(1,249 |
) |
|
(374 |
) |
|
1,791 |
|
|
260 |
|
||||
|
Cash, cash equivalents and restricted cash at beginning of the period |
6,071 |
|
|
4,230 |
|
|
3,031 |
|
|
3,596 |
|
||||
|
Cash, cash equivalents and restricted cash at end of the period |
$ |
4,822 |
|
|
$ |
3,856 |
|
|
$ |
4,822 |
|
|
$ |
3,856 |
|
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
||||||||
|
Cash paid for interest |
$ |
17 |
|
|
$ |
2 |
|
|
$ |
91 |
|
|
$ |
64 |
|
|
Cash paid for taxes, net |
206 |
|
|
100 |
|
|
282 |
|
|
188 |
|
||||
|
Non-cash items: |
|
|
|
|
|
|
|
||||||||
|
Changes in capital additions, accrued but not paid |
$ |
(1 |
) |
|
$ |
(7 |
) |
|
$ |
(7 |
) |
|
$ |
(5 |
) |
|
VMware, Inc. |
||||||||
|
GROWTH IN REVENUE PLUS SEQUENTIAL CHANGE IN UNEARNED REVENUE |
||||||||
|
(in millions) |
||||||||
|
(unaudited) |
||||||||
|
|
||||||||
|
|
||||||||
|
Growth in Total Revenue Plus Sequential Change in Unearned Revenue |
||||||||
|
|
|
|
|
|
||||
|
|
|
Three Months Ended |
||||||
|
|
|
July 31, |
|
August 2, |
||||
|
|
|
2020 |
|
2019 |
||||
|
Total revenue, as reported |
|
$ |
2,875 |
|
|
$ |
2,632 |
|
|
Sequential change in unearned revenue(1) |
|
167 |
|
|
360 |
|
||
|
Total revenue plus sequential change in unearned revenue |
|
$ |
3,042 |
|
|
$ |
2,992 |
|
|
Change (%) over prior year, as reported |
|
2 |
% |
|
|
|||
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Growth in License and Subscription and SaaS Revenue Plus Sequential Change in Unearned License and Subscription and SaaS Revenue |
||||||||
|
|
|
|
|
|
||||
|
|
|
Three Months Ended |
||||||
|
|
|
July 31, |
|
August 2, |
||||
|
|
|
2020 |
|
2019 |
||||
|
Total license and subscription and SaaS revenue, as reported |
|
$ |
1,350 |
|
|
$ |
1,212 |
|
|
Sequential change in unearned license and subscription and SaaS revenue(2) |
|
36 |
|
|
23 |
|
||
|
Total license and subscription and SaaS revenue plus sequential change in unearned license and subscription and SaaS revenue |
|
$ |
1,386 |
|
|
$ |
1,235 |
|
|
Change (%) over prior year, as reported |
|
12 |
% |
|
|
|||
|
__________ |
|
|
|
|
||||
|
(1) Consists of the change in total unearned revenue from the preceding quarter. Total unearned revenue consists of current and non-current unearned revenue amounts presented in the condensed consolidated balance sheets. |
||||||||
|
(2) Consists of the change in unearned license and subscription and SaaS revenue from the preceding quarter. |
||||||||
|
VMware, Inc. |
|||||||||||||||||||||||
|
SUPPLEMENTAL UNEARNED REVENUE SCHEDULE |
|||||||||||||||||||||||
|
(in millions) |
|||||||||||||||||||||||
|
(unaudited) |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
July 31, |
|
May 1, |
|
January 31, |
|
November 1, |
|
August 2, |
|
May 3, |
||||||||||||
|
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
||||||||||||
|
Unearned revenue as reported: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
License |
$ |
11 |
|
|
$ |
15 |
|
|
$ |
19 |
|
|
$ |
19 |
|
|
$ |
19 |
|
|
$ |
19 |
|
|
Subscription and SaaS |
1,619 |
|
|
1,579 |
|
|
1,534 |
|
|
1,199 |
|
|
976 |
|
|
953 |
|
||||||
|
Services |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Software maintenance |
6,696 |
|
|
6,611 |
|
|
6,700 |
|
|
6,106 |
|
|
6,042 |
|
|
5,754 |
|
||||||
|
Professional services |
1,059 |
|
|
1,013 |
|
|
1,015 |
|
|
893 |
|
|
851 |
|
|
802 |
|
||||||
|
Total unearned revenue |
$ |
9,385 |
|
|
$ |
9,218 |
|
|
$ |
9,268 |
|
|
$ |
8,217 |
|
|
$ |
7,888 |
|
|
$ |
7,528 |
|
|
VMware, Inc. |
|||||||||||||||||||||||||||
|
RECONCILIATION OF GAAP TO NON-GAAP DATA |
|||||||||||||||||||||||||||
|
For the Three Months Ended July 31, 2020 |
|||||||||||||||||||||||||||
|
(amounts in millions, except per share amounts, and shares in thousands) |
|||||||||||||||||||||||||||
|
(unaudited) |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
GAAP |
|
Stock-Based |
|
Employer |
|
Intangible |
|
Acquisition, |
|
Tax |
|
Non-GAAP |
||||||||||||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Cost of license revenue |
$ |
35 |
|
|
— |
|
|
— |
|
|
(9 |
) |
|
— |
|
|
— |
|
|
$ |
25 |
|
|||||
|
Cost of subscription and SaaS revenue |
$ |
132 |
|
|
(5 |
) |
|
— |
|
|
(48 |
) |
|
— |
|
|
— |
|
|
$ |
79 |
|
|||||
|
Cost of services revenue |
$ |
321 |
|
|
(26 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
$ |
294 |
|
|||||
|
Research and development |
$ |
679 |
|
|
(132 |
) |
|
(1 |
) |
|
— |
|
|
(1 |
) |
|
— |
|
|
$ |
545 |
|
|||||
|
Sales and marketing |
$ |
897 |
|
|
(88 |
) |
|
(3 |
) |
|
(24 |
) |
|
— |
|
|
— |
|
|
$ |
784 |
|
|||||
|
General and administrative |
$ |
277 |
|
|
(42 |
) |
|
— |
|
|
— |
|
|
(37 |
) |
|
— |
|
|
$ |
198 |
|
|||||
|
Operating income |
$ |
534 |
|
|
293 |
|
|
4 |
|
|
81 |
|
|
38 |
|
|
— |
|
|
$ |
950 |
|
|||||
|
Operating margin(2) |
18.6 |
% |
|
10.2 |
% |
|
0.1 |
% |
|
2.8 |
% |
|
1.3 |
% |
|
— |
|
|
33.0 |
% |
|||||||
|
Other income (expense), net(3) |
$ |
15 |
|
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
|
$ |
16 |
|
|||||
|
Income before income tax |
$ |
495 |
|
|
293 |
|
|
4 |
|
|
81 |
|
|
39 |
|
|
— |
|
|
$ |
912 |
|
|||||
|
Income tax provision |
$ |
48 |
|
|
|
|
|
|
|
|
|
|
98 |
|
|
$ |
146 |
|
|||||||||
|
Tax rate(2) |
9.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
16.0 |
% |
||||||||||||
|
Net income |
$ |
447 |
|
|
293 |
|
|
4 |
|
|
81 |
|
|
39 |
|
|
(98 |
) |
|
$ |
766 |
|
|||||
|
Net income per weighted-average share, diluted for Classes A and B(2)(4) |
$ |
1.06 |
|
|
$ |
0.69 |
|
|
$ |
0.01 |
|
|
$ |
0.19 |
|
|
$ |
0.09 |
|
|
$ |
(0.23 |
) |
|
$ |
1.81 |
|
|
__________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
(1) 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 the non-GAAP financial measures presented above as well as significant tax adjustments. Our estimated tax rate on non-GAAP income is determined annually and may be adjusted 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, material changes in the geographic mix of revenue and expenses, changes to our corporate structure 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. |
|||||||||||||||||||||||||||
|
(2) Totals may not sum, due to rounding. Operating margin, tax rate and net income per weighted average share information are calculated based upon the respective underlying, non-rounded data. |
|||||||||||||||||||||||||||
|
(3) Non-GAAP adjustment to other income (expense), net includes gains or losses on equity investments, whether realized or unrealized. |
|||||||||||||||||||||||||||
|
(4) Calculated based upon 423,050 diluted weighted-average shares for Classes A and B. |
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Contacts
Paul Ziots
VMware Investor Relations
pziots@vmware.com
650-427-3267
Michael Thacker
VMware Global PR
mthacker@vmware.com
650-427-4454
