VMware International Sales Boost Q1 Earnings

By Chris Preimesberger  |  Posted 2010-04-20 Print this article Print

International and U.S. domestic revenues for VMware were dead even at $317 million each, the virtualization company reports, for a total of $634 million. International income was up 40 percent over the first quarter of 2009, while U.S. revenue increased 30 percent for the same period.

VMware, maker of a hypervisor and virtualized desktops that have been selling particularly well in some far-flung worldwide markets, reported a bang-up first quarter in its April 20 earnings call.

International and U.S. domestic revenues for VMware were dead even, with each bringing in $317 million for a total of $634 million. The company's international income was up 40 percent over first-quarter 2009, while U.S. revenue increased 30 percent for the same period.

The company also reported a GAAP (Generally Accepted Accounting Principles) operating margin of 16.1 percent, a non-GAAP margin of 27.6 percent and operating cash flow growth of 37 percent, to $355 million.

Chief Financial Officer Mark Peek said on the call that quarterly sales were particularly strong in Europe, China and Japan.

License revenues came in at $312 million, an increase of 21 percent from a year ago. Services revenues, which include software maintenance and professional services, were $322 million, an increase of 51 percent.

"Our revenue was stronger than expected, but we're not ready to say that the recession has come to an end," Peek said. "We do know there is pent-up demand, that IT budgets are improving and that our execution was excellent."

CEO Paul Maritz agreed, saying, "It's too soon to say we're back in normal waters."

Peek said VMware expects its final 2010 revenues to come in between $2.65 billion and $2.75 billion, and increase of between 30 and 35 percent over 2009.

Chief Operating Officer Tod Nielsen told listeners on the earnings call that the desktop PC market is "aging" and that many enterprises are looking closely at adding some VDI (virtual desktop infrastructure) installations to go along with their client/server machines.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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