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In addition, during today’s call we will discuss certain non-GAAP financial measures. These non-GAAP financial measures, which are used as measures of VMware’s performance, should be considered in addition to, not as a substitute for or an isolation from GAAP measures. Our GAAP measures exclude the effect on our GAAP results for stock-based compensation, amortization of intangible assets, employer payroll tax and employee stock transactions, the net effect of amortization and capitalization of software, and acquisition related items. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP measures, in the press release and on the investor relations page of our website.Our Q2 quiet period begins at the close of business September 16, 2010. Also, unless otherwise stated, all financial comparisons in this call will be in reference to our results of the comparable period of 2009. For your planning purposes, VMworld 2010, the industry’s leading virtualization conference, takes place at San Francisco’s Moscone Center August 30 th through September 2 nd. As part of this we will be hosting our first Analyst Day on August 31 st at the same location. We plan on sending more details around registration, agenda, and logistics next week. With that, let me hand it over to Mark. Mark Peek Thanks, Mike, and good afternoon, everyone. VMware had a great Q2 with record revenue, operating profit, and trailing 12-month free cash flow. Our business was strong across all geographies, transaction types and products. During the quarter we continued to see strong demand in the SMB-focused vSphere packages, which were a factor in achieving a record number of transactions in the quarter. With this increase in transaction volume, driven by small- and medium-sized business, the blended ASP per vSphere unit declined sequentially by $100. However, we displayed strong discipline around discounting as ASPs in our enterprise products increased modestly.
Customers continued to adopt the vSphere platform as a strategic investment that delivers substantial cost savings, improved efficiency, and flexibility for their business. Our message is clear and is resonating with our customers, as they begin the journey to the private cloud: Cloud computing is not a destination, it is an architecture. The foundation of that architecture is vSphere, which enables customers to leverage their existing IT investment and greatly simply their data centers while providing the flexibility to take advantage of the offerings from vCloud providers.In early April, we acquired certain of the management, products, technology, and people from EMC’s Ionix Group. We’re very pleased with the integration process and recently announced the integration of two of Ionix’s products into our management portfolio. We also closed the acquisition of Gemstone and RabbitMQ. We want to welcome the more then 400 people from these acquisitions to VMware. In addition to acquisitions, we are continuing to invest in our core virtualization products to maintain and extend our multi-generational lead over commodity virtualization offerings. Last week we released vSphere 4.1. With this release we not only added functionality and performance to our enterprise SKUs, but we introduced vMotion to the SMB packages. So today, at very low price points, customers have the advantage of this mature, robust technology. We also introduced per-virtual-machine pricing for our management products. This will allow customers to scale into management offerings more aligned to their specific usage. We do not expect a material near-term financial impact from these changes. We ended the quarter with $2.8 billion of cash, cash equivalents and short-term investments, and $1.5 billion of deferred revenue. Strong operating performance and capital efficiency led to trailing 12-month free cash flows of just over $1 billion, growth year-over-year of 33%. We are pleased with the quarter and want to thank all of the people of VMware, our partners, and our customers. Read the rest of this transcript for free on seekingalpha.com