VMware tops Q3 estimates, raises fiscal year guidance
VMware delivered better-than-expected third quarter results on Tuesday. The company reported third quarter earnings of $434 million, or 1.02 a share, on revenue of $2.86 billion, up 8% from a year ago. Non-GAAP earnings were $1.66 a share.
Wall Street was looking for revenue of $2.81 billion with non-GAAP earnings of $1.43 a share for the third quarter.
Meanwhile, VMware said subscription and SaaS revenue for the third quarter jumped 44% from a year ago to $676 million, and represented 24% of total Q3 revenue.
Combined, subscription, SaaS and license revenue rose 10% year-over-year to $1.32 billion, the company said.
"Q3 was another good quarter for VMware, and we're pleased with our results," said VMware CEO Pat Gelsinger, in prepared remarks. "As customers navigate through these unprecedented times, our focus remains on delivering the digital foundation for an unpredictable world. We continue to shape the future in areas that are top priority for every business–from app development to multi-cloud to security and digital workspaces."
On the call with analysts, Gesligner said annual recurring revenue from VMware cloud was approximately $1 billion. He also said the company was on track to make the majority of its major product offerings available as subscription and SaaS in the next calendar year.
Also on the call, VMware's chief financial officer Zane Rowe touched on the progress of VMware Cloud on AWS, which he said saw triple-digit year-over-year revenue growth in the third quarter. The growth was was driven by "continued expansion of the Amazon channel and workload expansion from large VMC customers," he said.
In terms of guidance, VMware is raising its full-year fiscal 2021 revenue outlook to $11.7 billion, with non-GAAP net income per share expected to be $7.03. Analysts expect EPS of $6.66 per share on revenue of $11.62 billion.
Shares of VMware were up just over 1% after hours.