Total Revenue of $3.41 billion
Subscription and SaaS Revenue of $1.26 billion, an increase of 34% year-over-year
VMware, Inc. (NYSE: VMW), a leading innovator in enterprise software, today announced financial results for the second quarter of fiscal year 2024:
- evenue for the second quarter was $3.41 billion, an increase of 2% from the second quarter of fiscal 2023.
- Subscription and SaaS revenue for the second quarter was $1.26 billion, an increase of 34% year-over-year.
- Subscription and SaaS revenue constituted 37% of total revenue for the quarter.
- Subscription and SaaS ARR exiting the second quarter was $5.31 billion, an increase of 36% year-over-year.
- GAAP net income for the second quarter was $477 million, or $1.10 per diluted share, up 34% per diluted share compared to $347 million, or $0.82 per diluted share, for the second quarter of fiscal 2023. Non-GAAP net income for the second quarter was $792 million, or $1.83 per diluted share, up 11% per diluted share compared to $697 million, or $1.64 per diluted share, for the second quarter of fiscal 2023.1
- GAAP operating income for the second quarter was $547 million, a decrease of 3% from the second quarter of fiscal 2023. Non-GAAP operating income for the second quarter was $977 million, up 1% compared to the second quarter of fiscal 2023.
- Operating cash flow for the second quarter was $444 million. Free cash flow for the second quarter was $350 million.
- RPO for the second quarter totaled $12.88 billion, up 6% year-over-year.2
“We delivered solid Q2 results. Our customers continue to invest in our Multi-Cloud offerings as they modernize their infrastructure to run enterprise, cloud-native, and new AI workloads,” said Raghu Raghuram, CEO, VMware. “At the recent VMware Explore Las Vegas, we unveiled new offerings including the next evolution of VMware Cloud, NSX+, vSAN Max, and an enhanced Tanzu Application Platform, all designed to help customers innovate faster and reduce total cost of ownership. We also introduced VMware Private AI Foundation with NVIDIA to accelerate AI-enabled applications in the enterprise.”
“We are pleased with our Q2 performance, which reflects the continued strength of our Subscription and SaaS portfolio and execution of our business model transition,” said Karen Dykstra, executive vice president and CFO, VMware. “Subscription and SaaS ARR reached $5.31 billion to exit the quarter and grew 36% year-over-year, highlighting the momentum of our multi-cloud offerings.”
Business Highlights & Strategic Announcements
- Last week at VMware Explore 2023 Las Vegas, the company introduced several new offerings, including:
- The next evolution of VMware Cloud, empowering customers to invest in digital transformation and growth while helping them innovate faster, increase operational efficiency, improve threat defenses, and recover from ransomware attacks faster.
- An expanded Tanzu portfolio to help customers develop, operate, and optimize apps on any cloud with an enhanced Tanzu Application Platform, new Tanzu Intelligence Services with artificial intelligence (AI)/machine learning (ML) capabilities for deeper insights, and updates to Tanzu Hub.
- The new VMware Edge Cloud Orchestrator (formerly VMware SASE Orchestrator) which will provide unified management for VMware SASE and Edge Compute Stack—an industry-first offering to bridge the gap between edge networking and edge compute.
- New Digital Experience (DEX) Insights based on greatly expanded data and ML algorithms that enhance DEX remediation capabilities. These updates broaden access to data, help strengthen VMware Insights, and allow for remediation of more issues.
- Also at VMware Explore Las Vegas, VMware unveiled its perspective on generative AI in the enterprise with the introduction of Private AI, which serves as an architectural approach that balances the business gains from AI with the practical privacy and compliance needs of an organization.
- VMware Private AI Foundation with NVIDIA is a new integrated offering that will enable enterprises to customize models and run generative AI applications, including intelligent chatbots, assistants, search, and summarization. The fully integrated solution will feature generative AI software and accelerated computing from NVIDIA, built on VMware Cloud Foundation optimized for AI.
- VMware released VMware Cloud Foundation 5.0. This major release delivered increased scalability, security and several key enhancements that address requirements for cloud scale infrastructure as a service (IaaS), simplified deployment of on-premises clouds, and enhanced protection against cyberattacks.
- VMware Cloud on AWS continued to expand globally, with new regions opening in Melbourne, Australia and Zurich, Switzerland. This brings the total number of global regions for VMware Cloud on AWS to 25.
- VMware joined forces with AMD, Samsung, and members of the RISC-V Keystone community to simplify the development and operations of confidential computing applications, which have the potential to secure workloads no matter where they run including in Multi-Cloud and edge settings. The companies will collaborate on and contribute to the open-source Certifier Framework for Confidential Computing project.
- VMware received recognition from analyst firm Omdia3 citing that VMware’s take on SASE builds on two key strengths: its broad set of technologies and products and its strong presence in SD-WAN.
- VMware released its 2023 Environmental, Social and Governance (ESG) report, sharing its Smart Impact strategy and progress made over the last year toward the company’s 2030 Agenda. VMware also received recognition for its ongoing ESG and diversity, equity, and inclusion (DEI) leadership including:
- Awarded 100% score on the Disability Equality Index® and recognized as a DEI Best Place to Work for Disability Inclusion.
- Ranked in the top 5% on USA Today’s inaugural America’s Climate Leaders List, which ranks companies based on their emissions reductions year-over-year.
- Recognized by Newsweek as one of America’s Greatest Workplaces, receiving a 5/5 workplace score.
1 Our annual effective tax rate is based upon, among other things, current tax law, including Internal Revenue Code Section 174 relating to research and development expense capitalization, which became effective beginning in VMware’s fiscal 2023. If in the future this provision is deferred, modified or repealed, our effective tax rate may fluctuate significantly in the quarter in which such change in law becomes effective.
2 Remaining performance obligations do not include customer prepayments received for contracts that include certain cancellation rights, such as termination for convenience clauses, which are included in customer deposits on the condensed consolidated balance sheets and were $1.6 billion as of August 4, 2023.
3 On the Radar: VMware offers SASE as journey centered on SD-WAN and paints a broader picture of modern technology stacks (7 July 2023).
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