VMware -5.5% AH on disappointing bookings; EMC -1.7%

Though VMware (VMW)'s license revenue rose 15% Y/Y in Q1 to $561M (beating guidance of $545M-$555M), the company disclosed on its CC license and total bookings growth was less than 10%, with sub-10% bookings growth in all three major geographies. Total bookings had risen at a mid-teens clip in Q4.

Nonetheless, VMware is maintaining its prior forecasts for 2014 revenue of $5.94B-$6.1B (+14%-17%) and license revenue of $2.55B-$2.63B (+12%-16%). AirWatch is expected to contribute $100M.

Q2 revenue, which assumes a $22M contribution from AirWatch, is expected to grow 15%-18% Y/Y to $1.425B-$1.465B (consensus is at $1.44B). License revenue is expected to grow 14%-16% to $605M-$615M.

Some bright spots: End-user computing license bookings (PC virtualization, will include AirWatch going forward) rose 35%, and cloud management license bookings over 30%. Also, ~50% of VMware's costly enterprise license agreements (ELAs, 25% of bookings) included its far-reaching vCloud Suite.

VMware's unearned revenue balance totaled $4.17B at the end of Q1, up 20% Y/Y. $169M was spent on buybacks.

Parent EMC, which reports tomorrow morning, is following VMware lower.

Q1 results, PR, CC slides

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Comments (1)
  • jimtech1970
    , contributor
    Comments (5) | Send Message
    I am hoping to hear more about the Pivotal spinoff timetable over the next few quarters. The Hadoop frenzy is in full effect, with significant investments recently having been made in guys like Cloudera and Hortonworks (at pretty insane valuations BTW). If EMC wants to raise capital for Pivotal, striking while valuations are at these high levels would be a good idea. They would also be the first public stand alone Hadoop player, which will draw some interest also. Hope to see an S-1 by year end....
    23 Apr 2014, 02:38 AM Reply Like
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