Shares Trade Lower Late Thursday After Enterprise Software Vendor Posted mixed results for the fiscal second quarter.
For the quarter ended July 30, VMware (ticker: VMW) reported revenue of $3.14 billion, in line with Street’s estimates. But investors may not have liked the parts.
Licensing revenue from the company’s traditional on-premise software business was $738 million, up 3%, ahead of Street’s consensus forecast of $699 million. But its subscription and software-as-a-service revenues — essentially the company’s cloud business — were $776 million, up 23%, but below Street’s consensus call at $790 million.
Investors probably would have preferred to see the two elements move in opposite directions, with revenue coming from the cloud, rather than the on-premise business, the star.
The company said its remaining performance commitments — a measure of future work — totaled $11.2 billion at the end of the quarter, up 8% from a year earlier. The company said annual recurring revenue from subscriptions and SaaS grew 26% to more than $3.2 billion.
Earnings on a non-GAAP basis were $1.75 per share, ahead of the Street consensus at $1.64 per share. According to generally accepted accounting principles, the company made $411 million, or 97 cents per share.
VMware is majority owned by Dell Technologies (DELL), which has announced plans to distribute its shares to current Dell holders. VMware said it expects the deal to close in early November. Dell released better-than-expected results for the quarter this afternoon.
In late trading, VMware fell 4.7% to $151.40.
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