Posted on Monday, Dec 2nd 2019
Virtualization giant VMware (NYSE: VMW) recently announced a strong third quarter that beat estimates. Over the past few years, VMware has made several acquisitions that have now been integrated into its portfolio.
VMware’s third quarter revenues grew 12% over the year to $2.46 billion versus the Street estimate of $2.41 billion. Non-GAAP EPS was $1.49, ahead of the Street’s forecast of $1.41. Net income was $621 million or $1.5 per share compared with $334 million or $0.81 per share a year ago.
By segment, license revenues grew 10% over the year to $974 million and services segment grew 12.6% to $1.48 billion for the quarter. NSX license bookings were up 50%, vSAN license bookings are up over 35% and EUC license bookings once again increased over 20%. Hybrid Cloud and SaaS recurring revenue grew 40% over the year and accounted for over 13% of total revenues.
VMware reported a strong quarter across its product and solutions portfolio with six of its top 10 customers purchasing the VMware Cloud Foundation solution stack. This platform solution consists of the full software-defined data center (SDDC) stack and is offered on private clouds, public clouds as well as partner managed clouds.
For the fourth quarter, the company expects license revenue to grow 13% to $1.39 billion and
total revenue to grow 13.8% to $2.95 billion, beating analyst estimate of $2.92
billion. It expects non-GAAP EPS of $2.16, missing the analyst forecast of
$2.19 per share.
During the quarter, VMware completed its $2.1 billion acquisition of Carbon Black, a leader in cloud-native endpoint protection. Carbon Black will form the nucleus of VMware’s security offerings, focusing on helping VMware customers with advanced cyber security protection and in-depth behavioral insights to help stop sophisticated attacks and accelerate response. VMware’s Carbon Black Cloud, along with Dell Trusted Devices and Secureworks, is now the preferred endpoint security solution for Dell commercial customers.
For the full year, VMware expects total revenue to grow 12.5% to $10.1 billion including the addition of Carbon Black’s financials. It expects license revenue to grow 12% to $4.245 billion. Non-GAAP EPS is expected to be $6.58.
VMware’s New Offerings
During the quarter, VMware launched VMware Tanzu, a new Kubernetes portfolio of products and services focused on Kubernetes. VMware Tanzu Mission Control is a single point of control from which customers will manage all their Kubernetes clusters regardless of where they run. It also includes Project Pacific, which is a technology preview focused on transforming VMware vSphere into a Kubernetes-native platform in a future release. Tanzu is built with Kubernetes technologies from its recent
acquisition of Pivotal for $2.7 billion and Heptio for $550 million.
VMware continued to execute against its multi-cloud
strategy as it expanded its cloud partnerships. VMware Cloud on AWS is now available in the AWS EU
(Stockholm) region, bringing the total number of available global regions in
Europe to five, and globally to 17 in just over two years.
VMware announced the continuation of its partnership with Microsoft with many new technology initiatives. This includes introduction of VMware Workspace ONE for Microsoft Endpoint Manager to enable modern management for Windows 10 and Azure VMware Solutions, the addition of new cloud migration capabilities with VMware HCX and the ability to extend Azure to the branch and edge with VMware SD-WAN by VeloCloud. VeloCloud was acquired in December 2017 for $449 million.
VMware’s Carbon Black Cloud, along with Dell Trusted Devices and Secureworks, is now the preferred endpoint security solution for Dell commercial customers.
With the help of the recent acquisitions, VMware is building up its cloud, containers, and security portfolio to sustain its double digit growth. Its stock is trading at $155.62 with a market capitalization of $63.6 billion. It touched a 52-week high of $206.80 in May this year and a 52-week low of $128.69 in August this year.
Photo Credit: sporst/Flickr.com. This segment is a part in the series : Cloud Stocks . Smartsheet Acquiring Bootstrapped Startups to Drive Growth . Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups . Netflix Price Hike Ruffles Competition . How Will Carbon Black Differentiate? . ServiceNow Grows Through Addition of Capital-Efficient Startups . Zendesk and Freshworks Follow Different Acquisition Strategies . Tableau Grows Through Small Acquisitions . Open Platform Strategy Stands Intuit in Good Stead . Will GoDaddy Follow the PaaS Route? . Adobe Delivers Via PaaS More »» . A Look at Oracle’s 2018 M&A Activity . What Apps Will Drive More Traction for Cloudera? . Slack's App Focus Will Be Key to Post-IPO Success . IBM Counts on its Cloud and Platform for the Turnaround . Atlassian Acquires From its PaaS Marketplace . What Should SAP Acquire to Triple its Value by 2023? . Expect ServiceNow to Acquire From App Marketplace . Should Alarm.com Follow a PaaS Strategy? . 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Splunk on the Right Track with Cloud and PaaS . Veeva Sets an Example, Transitions to a Public Benefit Corporation . BlackLine is Targeting A/R Automation Market . Okta Targets $25B Customer Identity Market with Acquisition . Teradata Trying to Reinvent Itself on the Cloud . Dropbox Acquires, But Competition Remains Stiff . Smartsheet Focuses on Partners, and not on ISVs . MongoDB has Huge Room to Grow in $97B Market . Cloud and Platform Expansion Continues at Nutanix . Rapid7 Targets $1B ARR by 2025 . DocuSign Exploring Unprecedented Digital Signature Offerings . Tenable Continues its Acquisition Spree . SolarWinds Attack Driving Zscaler's Stellar Performance . Zoom Should Report Developer Ecosystem Metrics . DigitalOcean Goes Public with a Strong ISV PaaS Strategy . Dynatrace Competing with Rivals by Simplifying DevOps . Talend Becomes a Private Firm, Once Again . Everbridge Focuses on the Government Sector . Analysis of Fastly’s Signal Sciences Acquisition . 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DocuSign Sees Digital Signature Trends Here to Stay . Market Leader Tenable Leverages Acquisitions for Growth . Analysis of Zscaler's Recent Two Acquisitions . Analysis of Rapid7's Velocidex Acquisition . Dropbox Expands in International eSignature Market . MongoDB Rides High on Five Years of Atlas . RingCentral Leverages Partnerships for Growth . BlackLine Remains Focused on SAP . ON24 Expands Marketing Offerings . Analysis of Magnite's Spot X Acquisition . PagerDuty Focuses on Integrations . Analysis of Bill.com's Divvy Acquisition . C3.ai Doubles Down on Partnerships . Analysis of Coupa's Pana Acquisition . BigCommerce Eyes a Bigger Marketshare Through Walmart Tie-up . Analysis of Everbridge's xMatters Acquisition . Adobe's Digital Solutions Drive Stellar Growth . CrowdStrike Leads in Endpoint Security Through Tie-ups . Snowflake Focuses on Expanded Partner Program to Drive Growth . Analysis of Sumo Logic's Sensu Acquisition . 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RingCentral Cashing in on the Hybrid Work Environment . Splunk Tackles Decelerating Growth with Product Upgrades . MongoDB's Atlas Capabilities Expand to the Government Sector . Analysis of Bill.com's Invoice2Go Acquisition . DocuSign Banks on Agreement Cloud . Smartsheet's Expanding Use Cases . Analysis of Salesforce's Servicetrace Acquisition . Zscaler Focuses on Federal Agencies . Coupa Launches PaaS Strategy . Analysis of BlackLine’s Kyriba Partnership . PagerDuty's Expanding Integration Portfolio . Analysis of Tenable's Accurics Acquisition . Upstart’s Improving AI Algorithm in FinTech Consumer Lending . Analysis of C3.ai's Growing Partnerships . Analysis of Veeva's Learnaboutgmp Acquisition . Analysis of Adobe's Frame.io Acquisition . Snowflake Focuses on the Financial Services Sector . CrowdStrike Expands Government Offerings . Zoom Focuses on Expanding Reseller Offerings . Dropbox Focuses on Content Creators with New Product . Analysis of Okta's atSpoke Acquisition . 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