VMware Profit Shoots Up 25 Percent in Q1 Report

Strong demand for cloud system-related software drives total income for Q1 2012 to $1.06 billion, an increase of 52 percent from the first quarter of 2011.

Virtualization king VMware, long one of the most successful software companies on the planet, reported another banner financial quarter April 18, adding 52 percent more income and 25 percent more profit year over year based on strong license revenue and services.

Total income for Q1 2012 was $1.06 billion, an increase of 52 percent from the first quarter of 2011. Net income was $191 million (44 cents per diluted share), up 25.1 percent over $126 million from a year ago.


Operating income for the first quarter was $217 million, an increase of 41 percent from the first quarter 2011. License revenue rose 15 percent to $481.9 million.

Strong demand for cloud system-related software -- especially for private clouds -- and good repeat licensing business are driving the increase in sales, COO Mark Peek told analysts on a conference call.

"We continue to invest first and foremost in products for the back end or the data center," Chief Executive Paul Maritz said on the call. "We are anticipating further significant enhancements in all three major areas during the course of the year."

International revenue made up 54 percent of total revenue for the period, the highest level for any quarter reported by the Palo Alto, Calif.-based company.

The stock price rose 2.8 percent to $114.38 in extended trading after the report. Earlier, the stock added 0.7 percent to $111.29 at the close. The shares have risen 34 percent in value this year, Peek said.

For the full year, VMware said sales will be $4.53 billion to $4.63 billion, in line with analysts€™ estimates of $4.56 billion. Operating margin for the year will be 30.25 percent to 31.25 percent of sales.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...