VMware reported strong third quarter results and upped the outlook for the fourth quarter.
VMware reported third quarter earnings of $178 million, or 41 cents a share, on revenue of $942 million, up 32 percent from a year ago. Non-GAAP earnings were 53 cents a share.
Wall Street, which bases its estimates on non-GAAP earnings, was looking for third quarter earnings of 50 cents a share on $929.4 million.
As for the outlook, VMware projected fourth quarter sales between $1.03 billion to $1.06 billion, up 23 percent to 27 percent from a year ago. That range is better than the $1.03 billion Wall Street analysts were projecting.
VMware is quickly becoming a cash cow. In the third quarter, VMware delivered operating cash flow of $524 million and $1.9 billion of operating cash flow for the trailing 12 months. The company ended the quarter with $4 billion in cash, cash equivalents and short term investments.
By the numbers:
- U.S. revenue in the third quarter was $443 million, up 22 percent from a year ago. International revenue was $498 million in the third quarter, up 42 percent from a year ago.
- License revenue in the third quarter was up 29 percent from a year ago. Service revenue was up 34 percent in the quarter.
- Research and development spending for the nine months ended Sept. 30 was $558 million, up from $475.3 million for the same period a year ago.