VMware 2Q Numbers

2Q08 VMware numbers announced. The good: international and service revenue are up. The not as good: the street is always looking for more.

Joe Hernick, IT Director

July 22, 2008

2 Min Read
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2Q08 VMware numbers announced. The good: international and service revenue are way up. The not as good: The Street is always looking for more.Total revenue for the second quarter was $456 million, up 54% from the second quarter of 2007. Financial analysts were hoping for a bit more.

I say not so bad, especially with a 68% growth in international revenue ($216M, up by 68% vs. 2Q07, driven by success in Europe and Australia.) Looks like initiatives this year on both fronts have been paying off. Frankly, numbers are better than I expected.

Domestic revenue grew 43%, to $240M, compared with last year.

Service revenue was up 85%, bringing in $172M, while software license revenue grew 39% to $284 million from 2Q07.

GAAP net income for the quarter was $52 million, or $0.13 per diluted share, compared with $34 million, or $0.10 per diluted share, for the second quarter of 2007.

Non-GAAP net income for the quarter was $92 million, or $0.23 per diluted share, compared with $52 million, or $0.16 per diluted share, for the second quarter of 2007.

Cold cash exceeded $1.5 billion and deferred revenue was $721 million as of end of the quarter, June 30, 2008.

Other news: Product announced from the Thinstall acquisition -- general availability of ThinApp 4, an app virt offering that lets customers run multiple versions of most applications on any Windows operating system without conflict.

In a move to simplify the customer options and help ease management and provisioning of VMs, general availability also was announced for a data center management bundle -- VMware Lifecycle Manager, VMware Lab Manager, and VMware Stage Manager provide cradle-to-grave SW life cycle control.

OEM news: agreements with Lenovo and Inspur announced to bundle and market Infrastructure 3 in China, and Dell is delivering a new line of PowerEdge servers and blades with ESXi embedded.

Good news, bad news: VMware is managing expectations for year-over-year growth. The forecast: modestly below previous estimates of 50%, more likely in the low-to-mid forties. The next two quarters may be too quick to tell if Hyper-V or any of the many open source server virt offerings make a dent in VMware revenue; the next half year also will reveal if domestic jitters on the economy lead to canceled orders or deferred investment in virtualization projects.2Q08 VMware numbers announced. The good: international and service revenue are up. The not as good: the street is always looking for more.

About the Author

Joe Hernick

IT Director

Joe Hernick is in his seventh year as director of academic technology at Suffield Academy, where he teaches, sits on the Academic Committee, provides faculty training and is a general proponent of information literacy. He was formerly the director of IT and computer studies chair at the Loomis Chaffee School in Windsor, CT, and spent 10 years in the insurance industry as a director and program manager at CIGNA.

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