VMware Doubles Revenue Flow over Q2 2009

By Chris Preimesberger  |  Posted 2010-07-20

Virtualization software market leader VMware, which wasn't affected all that much by the 2008 and 2009 global economy setbacks, reported July 20 that its second-quarter 2010 net income more than doubled over the same period a year ago.

Net income for the Palo Alto, Calif.-based company rocketed to $74.5 million -- or 18 cents per share -- from the Q2 2009 total of $32.5 million, or 8 cents per share. Revenue rose 48 percent to $673.9 million from $455.7 million a year ago.

The company attributed the revenue rise to a rebounding general economy, improved sales of new licenses and an increase in sales at the mid-range enterprise level.

"Overall, we continue to execute well on our three main businesses -- infrastructure, applications and end-use computing," President and CEO Paul Maritz told listeners on the earnings conference call. "We're generally behaving in a more businesslike way.

"vSphere is now among the most sophisticated pieces of software in the world. We're very proud of the 4.1 version we just released."

VMware released vSphere 4.1 on July 13, about 14 months after v4.0 started shipping; VMware hadn't updated the platform for three years prior to Version 4. It also has lowered its prices to attract more midrange and smaller businesses.

VMware on July 20 changed its guidance, saying that in the third quarter it expects total revenues to be between $680 million and $705 million. For the full year, it raised its revenue outlook to between $2.73 billion and $2.8 billion.

Earlier the company had predicted annual revenue between $2.63 billion and $2.73 billion.

Shares jumped 4 percent, or about $3, to $75 in after-hours trading July 20 following the announcement.

For the last five years, VMware has been the wizard of the virtualization castle. VMware has deployments in nearly 90 percent of the Fortune 1000 companies and in many other large enterprises. The company now is casting its nets over a wider area, planning on nabbing high numbers of smaller business fish.

eWEEK recently published an interview with Raghu Raghuram, VMware's senior vice president and general manager of Virtualization and Cloud Platforms, who outlined the company's short- and long-term roadmap regarding cloud computing, which is now a main focus.

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