Tuesday, November 24, 2020

VMware sees strong growth in subscription and SaaS revenue

VMware reported revenue of $2.86 billion for its third quarter of fiscal 2021, an increase of 8% from the third quarter of fiscal 2020. GAAP net income for the third quarter was $434 million, or $1.02 per diluted share, compared to $407 million, or $0.96 per diluted share, for the third quarter of fiscal 2020. Non-GAAP net income for the third quarter was $704 million, or $1.66 per diluted share, up 17% per diluted share compared to $602 million, or $1.42 per diluted share, for the third quarter of fiscal 2020.

“Q3 was another good quarter for VMware, and we’re pleased with our results,” commented Pat Gelsinger, CEO, VMware. “As customers navigate through these unprecedented times, our focus remains on delivering the digital foundation for an unpredictable world. We continue to shape the future in areas that are top priority for every business–from app development to multi-cloud to security and digital workspaces.”

“Subscription and SaaS revenue increased 44% year-over-year in Q3 and surpassed license revenue for the first time,” said Zane Rowe, executive vice president and CFO, VMware. “VMware will continue to invest in and focus on further expanding our Subscription and SaaS portfolio, which we believe will drive company growth, customer satisfaction and shareholder value.”

Some highlights:

The combination of subscription and SaaS and license revenue was $1.32 billion, an increase of 10% from the third quarter of fiscal 2020.

Subscription and SaaS revenue for the third quarter was $676 million, an increase of 44% year-over-year, representing 24% of total revenue.

VMware is raising full-year fiscal 2021 total revenue guidance to $11.7 billion and increasing GAAP net income per diluted share to between $4.17 and $4.27 with non-GAAP net income per diluted share of $7.03.

At the virtual VMworld 2020, VMware had 200,000 registrants and introduced a wave of new offerings and partnerships.

VMware Cloud on AWS continued to grow revenue over 100% YoY in Q3.

VMware outlined VMware Workforce Anywhere solutions including end-to-end Zero Trust security controls and simplified management featuring VMware NSX Secure Access Service Edge (SASE), Workspace ONE and Carbon Black Endpoint Security capabilities.

VMware announced partnerships with Menlo Security and Zscaler to help large global enterprises simplify the adoption of a complete SASE architecture and more effectively implement Zero Trust security.

VMware acquired SaltStack, a pioneer in building intelligent, event-driven automation software. SaltStack will enable VMware to significantly broaden its software configuration management and infrastructure and network automation capabilities.

VMware unveiled updates to Tanzu support across VMware Cloud on AWS, Azure VMware Solution and Oracle Cloud VMware Solution.

VMware announced Project Monterey—a technology preview focused on evolving the architecture for the data center, cloud and edge to address the changing requirements of next-generation applications including AI, machine learning and 5G applications.

VMware and NVIDIA announced a broad partnership to deliver both an end-to-end enterprise platform for AI and a new architecture for data center, cloud and edge that uses NVIDIA DPUs (data processing units) to support existing and next-generation applications. This will help accelerate AI adoption, enabling enterprises to extend existing infrastructure for AI, manage all applications with a single set of operations and deploy AI-ready infrastructure where the data resides, across the data center, cloud and edge.

The company announced the 5G Telco Cloud Platform, a consistent cloud-first solution powered by a field-proven, carrier-grade, and high-performance cloud native infrastructure with intelligent automation. This new platform includes Tanzu Kubernetes Grid—an embedded Kubernetes distribution—that will allow Communication Service Providers to reliably build, manage and run containerized workloads across private, telco, edge and public clouds.