real-time news and commentary for investors
Monday, Oct 21
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