VMware Reports Fiscal Year 2022 First Quarter Results

Rhea-AI Summary

VMware, Inc. (NYSE: VMW) reported Q1 fiscal 2022 revenue of $2.99 billion, up 9% year-over-year. Subscription and SaaS revenue reached $741 million, a 29% increase. GAAP net income grew to $425 million ($1.01 per diluted share), while non-GAAP net income rose to $744 million ($1.76 per diluted share). Operating income was $559 million (up 34% GAAP). The company will undergo a spin-off from Dell Technologies with a special cash dividend of up to $12 billion. Innovations in multi-cloud and SaaS offerings were also launched.

Positive

• Q1 revenue increased by 9% to $2.99 billion.
• Subscription and SaaS revenue rose 29% year-over-year to $741 million.
• GAAP net income increased to $425 million from $386 million.
• GAAP operating income rose 34% to $559 million.
• Special cash dividend of $11.5B to $12.0B planned prior to spin-off.

Negative

• None.

VMware, Inc. (NYSE: VMW), a leading innovator in enterprise software, today announced financial results for the first quarter of fiscal year 2022:

• Revenue for the first quarter was $2.99 billion, an increase of 9% from the first quarter of fiscal 2021.
• The combination of subscription and SaaS and license revenue was $1.39 billion, an increase of 12% from the first quarter of fiscal 2021.
• Subscription and SaaS revenue for the first quarter was $741 million, an increase of 29% year-over-year.
• GAAP net income for the first quarter was $425 million, or $1.01 per diluted share, compared to $386 million, or $0.92 per diluted share, for the first quarter of fiscal 2021. Non-GAAP net income for the first quarter was $744 million, or $1.76 per diluted share, up 16% per diluted share compared to $640 million, or $1.52 per diluted share, for the first quarter of fiscal 2021.
• GAAP operating income for the first quarter was $559 million, an increase of 34% from the first quarter of fiscal 2021. Non-GAAP operating income for the first quarter was $923 million, an increase of 13% from the first quarter of fiscal 2021.
• Operating cash flow for the first quarter was $1.27 billion. Free cash flow for the first quarter was $1.20 billion.
• RPO for the first quarter totaled $11.0 billion, up 9% year-over-year.

“We are pleased with our Q1 financial performance as we delivered solutions for customers in strategic areas like multi-cloud, application modernization and digital workspaces, while focusing on providing a broader set of consumption choices with our Subscription and SaaS offerings,” said Zane Rowe, CFO and Interim CEO, VMware. “We are excited to welcome Raghu Raghuram as the next CEO of VMware. This milestone, along with the proposed Dell spin-off, sets the stage for the company’s next innovative chapter.”

Business Highlights & Strategic Announcements

• The VMware Special Committee of independent directors and Dell Technologies have agreed to terms in which VMware will be spun-off from Dell Technologies. The terms include significant simplification to the corporate ownership structure and an $11.5B to $12.0B special cash dividend recommended by the independent Special Committee and declared by the VMware Board to all VMware stockholders immediately prior to the spin-off and subject to the satisfaction of all closing conditions. The two companies have also finalized a commercial agreement that preserves and enhances their strategic partnership to deliver joint customer value.
• VMware unveiled VMware Cloud, a distributed, multi-cloud platform that enables organizations to accelerate application modernization across the data center, edge, and any cloud. With the launch of VMware Cloud, VMware announced new offerings that bring a more integrated experience to customers, including VMware Cloud Universal, a flexible subscription that simplifies the purchase and consumption of VMware multi-cloud infrastructure and management services.
• VMware announced innovations across its VMware vRealize Cloud Management portfolio of on-premises and Software as a Service (SaaS) solutions. The new and enhanced capabilities combine to enable customers to more securely deploy and operate their hybrid and multi-cloud environments.
• VMware announced portfolio updates to help customers modernize their applications and infrastructure. The new releases of vSphere 7 and vSAN 7 will help IT teams support new and

FAQ

What were VMware's Q1 fiscal 2022 earnings?

VMware reported Q1 fiscal 2022 earnings of $2.99 billion in revenue, with a GAAP net income of $425 million.

What is VMware's guidance after the Dell spin-off?

VMware plans to issue a special cash dividend of $11.5 to $12 billion to shareholders before the spin-off from Dell Technologies.

How did VMware's subscription and SaaS revenue perform?

VMware's subscription and SaaS revenue increased by 29% year-over-year, totaling $741 million.

What new products did VMware announce?

VMware introduced VMware Cloud for application modernization and new innovations in its vRealize Cloud Management portfolio.