VMware Reports Fourth Quarter and Fiscal Year 2022 Results
VMware reported FY22 total revenue of $12.85 billion, a 9% year-over-year growth. For Q4, revenue was $3.53 billion, up 7% from Q4 FY21. Subscription and SaaS revenue reached $3.20 billion for the year, increasing 24% year-over-year. GAAP net income for Q4 was $586 million, a 26% decline per diluted share. Non-GAAP net income was $855 million, down 9%. Operating cash flow totaled $1.14 billion, with free cash flow at $1.01 billion.
VMware completed its spin-off from Dell, enhancing its operational flexibility and strategic focus.
- Subscription and SaaS revenue for FY22 increased 24% to $3.20 billion.
- Operating cash flow for FY22 was $4.36 billion.
- Free cash flow for FY22 reached $3.97 billion.
- RPO of $12 billion, up 6% year-over-year.
- GAAP net income for FY22 was $1.82 billion, a 11% decline per diluted share from FY21.
- GAAP operating income for Q4 dropped 22% compared to Q4 FY21.
- Non-GAAP net income for Q4 decreased 9% from the previous year.
FY22 total revenue of
FY22 Subscription and SaaS revenue of
Quarterly Review
-
Revenue for the fourth quarter was
, an increase of$3.53 billion 7% from the fourth quarter of fiscal 2021. -
The combination of subscription and SaaS and license revenue was
, an increase of$1.90 billion 11% from the fourth quarter of fiscal 2021. -
Subscription and SaaS revenue for the fourth quarter was
, an increase of$868 million 23% year-over-year. -
GAAP net income for the fourth quarter was
, or$586 million per diluted share, down$1.39 26% per diluted share compared to , or$791 million per diluted share, for the fourth quarter of fiscal 2021. Non-GAAP net income for the fourth quarter was$1.87 , or$855 million per diluted share, down$2.02 9% per diluted share compared to , or$936 million per diluted share, for the fourth quarter of fiscal 2021.$2.21 -
GAAP operating income for the fourth quarter was
, a decrease of$783 million 22% from the fourth quarter of fiscal 2021. Non-GAAP operating income for the fourth quarter was , flat from the fourth quarter of fiscal 2021.$1.14 billion -
Operating cash flow for the fourth quarter was
. Free cash flow for the fourth quarter was$1.14 billion .$1.01 billion -
RPO for the fourth quarter totaled
, up$12 billion 6% year-over-year.
Annual Review
-
Revenue for fiscal year 2022 was
, an increase of$12.85 billion 9% from fiscal 2021. -
The combination of subscription and SaaS and license revenue was
, an increase of$6.33 billion 13% from fiscal year 2021. -
Subscription and SaaS revenue for fiscal year 2022 was
, an increase of$3.20 billion 24% from fiscal year 2021. -
Subscription and SaaS ARR exiting fiscal year 2022 was
, an increase of$3.58 billion 24% from fiscal year 2021. -
GAAP net income for fiscal year 2022 was
, or$1.82 billion per diluted share, down$4.31 11% per diluted share compared to , or$2.06 billion per diluted share, for fiscal year 2021. Non-GAAP net income for fiscal year 2022 was$4.86 , or$3.06 billion per diluted share, up$7.25 1% per diluted share compared to , or$3.05 billion per diluted share, for fiscal year 2021.$7.20 -
GAAP operating income for fiscal year 2022 was
, flat from fiscal year 2021. Non-GAAP operating income for fiscal year 2022 was$2.39 billion , an increase of$3.92 billion 3% from fiscal year 2021. -
Operating cash flow for fiscal year 2022 was
. Free cash flow for fiscal year 2022 was$4.36 billion .$3.97 billion
“The growth in customer demand for our multi-cloud solutions was reflected in our Q4 results. We are at an exciting time in our industry, as enterprises large and small transform and modernize to become software-based, digital enterprises,” said
“Q4 was a strong finish to a transformational year in which we became a standalone company and surpassed
Business Highlights & Strategic Announcements
-
VMware completed a spin-off fromDell Technologies , gaining increased agility to execute its multi-cloud strategy, a simplified capital structure and governance model and additional operational and financial flexibility. -
Vodafone selected
VMware as its strategic technology partner to deliver a single platform to automate and orchestrate all workloads running on its core networks acrossEurope . -
VMware Tanzu and VMware Carbon Black Cloud are now available in the
AWS Marketplace , allowing AWS customers to simplify the purchase and deployment of these VMware Cross-Cloud Services, helping them drive digital innovation with enterprise control. -
VMware announced VMware Carbon Black Cloud Managed Detection and Response (MDR) for endpoints and workloads that helps fill the gaps of understaffed security teams and enables teams to respond more quickly to cyberattacks. -
VMware and Kyndryl expanded their strategic partnership focused on helping customers accelerate app modernization and multi-cloud adoption to build digital infrastructures designed for a world of distributed work. -
VMware was recognized by The Wall Street Journal as one of The Best-Managed Companies of 2021. -
For the second consecutive year,
VMware was recognized for ESG leadership by the 2021 Dow Jones Sustainability Indices. -
VMware was recognized for its ESG leadership with inclusion in the JUST 100, a comprehensive ranking of ESG and stakeholder performance, for the fifth consecutive year.VMware ranked number one overall in the environment category, leading all companies in sustainable products and pollution reduction. -
VMware was named among the Best Places to Work by Glassdoor in 2022. -
VMware was recognized by Newsweek on its list of America's Most Responsible Companies in 2022. -
In the fourth quarter,
VMware received further recognition from leading industry analysts:-
VMware positioned as a leader in The Forrester Wave™: Unified Endpoint Management, Q4 2021.1 -
For the third consecutive year,
VMware held the highest market share in terms of revenue for container infrastructure software from 2018 through 2020, according to IDC.2 -
VMware was positioned as a leader in the IDC MarketScape for Worldwide SD-WAN Infrastructure Vendor Assessment (doc #US47279821, November 2021).3 -
VMware once again was named a Leader in the Gartner Magic Quadrant forHyperconverged Infrastructure Software ,November 2021 .4
-
1 Forrester, The Forrester Wave™: Unified Endpoint Management, Q4 2021,
2 IDC, Worldwide Container Infrastructure Software Market Shares, 2020: Enterprises Continue Container Investments Despite the Pandemic, Doc # US46726421,
3 IDC, IDC MarketScape: Worldwide SD-WAN Infrastructure 2021 Vendor Assessment,
4 Gartner, Gartner® Magic Quadrant™ for
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Gartner and Magic Quadrant are registered trademarks and service marks of Gartner, Inc. and/or its affiliates and are used herein with permission. All rights reserved.
The company will host a conference call today at
About
Additional Information
VMware’s website is located at vmware.com, and its investor relations website is located at ir.vmware.com. VMware’s goal is to maintain the investor relations website as a portal through which investors can easily find or navigate to pertinent information about
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to VMware’s financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled “About Non-GAAP Financial Measures.”
Annual Recurring Revenue (“ARR”)
ARR is an operating measure
Forward-Looking Statements
This press release contains forward-looking statements including, among other things, statements regarding the expected benefits of VMware’s spin-off from
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||
(amounts in millions, except per share amounts, and shares in thousands) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
License |
|
$ |
1,035 |
|
|
$ |
1,014 |
|
|
$ |
3,128 |
|
|
$ |
3,033 |
|
Subscription and SaaS |
|
|
868 |
|
|
|
707 |
|
|
|
3,205 |
|
|
|
2,587 |
|
Services |
|
|
1,628 |
|
|
|
1,573 |
|
|
|
6,518 |
|
|
|
6,147 |
|
Total revenue |
|
|
3,531 |
|
|
|
3,294 |
|
|
|
12,851 |
|
|
|
11,767 |
|
Operating expenses(1): |
|
|
|
|
|
|
|
|
||||||||
Cost of license revenue |
|
|
41 |
|
|
|
45 |
|
|
|
152 |
|
|
|
163 |
|
Cost of subscription and SaaS revenue |
|
|
188 |
|
|
|
187 |
|
|
|
690 |
|
|
|
588 |
|
Cost of services revenue |
|
|
378 |
|
|
|
322 |
|
|
|
1,429 |
|
|
|
1,292 |
|
Research and development |
|
|
806 |
|
|
|
757 |
|
|
|
3,057 |
|
|
|
2,816 |
|
Sales and marketing |
|
|
1,075 |
|
|
|
987 |
|
|
|
4,067 |
|
|
|
3,711 |
|
General and administrative(2) |
|
|
260 |
|
|
|
(6 |
) |
|
|
1,068 |
|
|
|
767 |
|
Realignment |
|
|
— |
|
|
|
(5 |
) |
|
|
1 |
|
|
|
42 |
|
Operating income |
|
|
783 |
|
|
|
1,007 |
|
|
|
2,387 |
|
|
|
2,388 |
|
Investment income |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
7 |
|
Interest expense |
|
|
(80 |
) |
|
|
(49 |
) |
|
|
(252 |
) |
|
|
(204 |
) |
Other income (expense), net |
|
|
(41 |
) |
|
|
7 |
|
|
|
(52 |
) |
|
|
191 |
|
Income before income tax |
|
|
662 |
|
|
|
965 |
|
|
|
2,085 |
|
|
|
2,382 |
|
Income tax provision |
|
|
76 |
|
|
|
174 |
|
|
|
265 |
|
|
|
324 |
|
Net income |
|
$ |
586 |
|
|
$ |
791 |
|
|
$ |
1,820 |
|
|
$ |
2,058 |
|
Net income per weighted-average share attributable to |
|
$ |
1.39 |
|
|
$ |
1.88 |
|
|
$ |
4.34 |
|
|
$ |
4.90 |
|
Net income per weighted-average share attributable to |
|
$ |
1.39 |
|
|
$ |
1.87 |
|
|
$ |
4.31 |
|
|
$ |
4.86 |
|
Weighted-average shares of common stock, basic |
|
|
420,089 |
|
|
|
420,090 |
|
|
|
419,504 |
|
|
|
419,841 |
|
Weighted-average shares of common stock, diluted |
|
|
422,976 |
|
|
|
422,813 |
|
|
|
422,394 |
|
|
|
423,240 |
|
__________ |
|
|
|
|
|
|
|
|
||||||||
(1) Includes stock-based compensation as follows: |
|
|
|
|
|
|
|
|
||||||||
Cost of license revenue |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
1 |
|
Cost of subscription and SaaS revenue |
|
|
5 |
|
|
|
6 |
|
|
|
21 |
|
|
|
19 |
|
Cost of services revenue |
|
|
22 |
|
|
|
25 |
|
|
|
92 |
|
|
|
99 |
|
Research and development |
|
|
126 |
|
|
|
127 |
|
|
|
528 |
|
|
|
524 |
|
Sales and marketing |
|
|
75 |
|
|
|
79 |
|
|
|
302 |
|
|
|
322 |
|
General and administrative |
|
|
34 |
|
|
|
16 |
|
|
|
131 |
|
|
|
157 |
|
(2) |
General and administrative expenses for the fourth quarter of fiscal 2021 included derecognition of a previously accrued litigation loss of |
|
(3) |
Automatically as a result of VMware’s spin-off from |
|
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
(amounts in millions, except per share amounts, and shares in thousands) |
|||||||
(unaudited) |
|||||||
|
|
|
|
||||
|
|
|
|
||||
|
2022 |
|
2021 |
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
3,614 |
|
|
$ |
4,692 |
|
Short-term investments |
|
19 |
|
|
|
23 |
|
Accounts receivable, net of allowance of |
|
2,297 |
|
|
|
1,929 |
|
Due from related parties(1) |
|
1,438 |
|
|
|
1,438 |
|
Other current assets |
|
598 |
|
|
|
530 |
|
Total current assets |
|
7,966 |
|
|
|
8,612 |
|
Property and equipment, net |
|
1,461 |
|
|
|
1,334 |
|
Deferred tax assets |
|
5,906 |
|
|
|
5,781 |
|
Intangible assets, net |
|
714 |
|
|
|
993 |
|
|
|
9,598 |
|
|
|
9,599 |
|
Due from related parties |
|
199 |
|
|
|
— |
|
Other assets |
|
2,832 |
|
|
|
2,697 |
|
Total assets |
$ |
28,676 |
|
|
$ |
29,016 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
234 |
|
|
$ |
131 |
|
Accrued expenses and other |
|
2,806 |
|
|
|
2,382 |
|
Unearned revenue |
|
6,479 |
|
|
|
5,873 |
|
Due to related parties(1) |
|
132 |
|
|
|
— |
|
Total current liabilities |
|
9,651 |
|
|
|
8,386 |
|
Note payable to |
|
— |
|
|
|
270 |
|
Long-term debt |
|
12,671 |
|
|
|
4,717 |
|
Unearned revenue |
|
4,743 |
|
|
|
4,441 |
|
Income tax payable |
|
242 |
|
|
|
805 |
|
Operating lease liabilities |
|
927 |
|
|
|
891 |
|
Due to related parties |
|
909 |
|
|
|
— |
|
Other liabilities |
|
409 |
|
|
|
455 |
|
Total liabilities |
|
29,552 |
|
|
|
19,965 |
|
Contingencies |
|
|
|
||||
Stockholders’ equity (deficit): |
|
|
|
||||
Class A common stock, par value |
|
4 |
|
|
|
1 |
|
Class B convertible common stock, par value |
|
— |
|
|
|
3 |
|
Additional paid-in capital |
|
— |
|
|
|
1,985 |
|
Accumulated other comprehensive loss |
|
(5 |
) |
|
|
(5 |
) |
Retained earnings (accumulated deficit) |
|
(875 |
) |
|
|
7,067 |
|
Total stockholders’ equity (deficit) |
|
(876 |
) |
|
|
9,051 |
|
Total liabilities and stockholders’ equity (deficit) |
$ |
28,676 |
|
|
$ |
29,016 |
|
__________ |
||
(1) |
As of |
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||||||
(in millions) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Operating activities: |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
586 |
|
|
$ |
791 |
|
|
$ |
1,820 |
|
|
$ |
2,058 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
284 |
|
|
|
268 |
|
|
|
1,110 |
|
|
|
1,025 |
|
Stock-based compensation |
|
262 |
|
|
|
253 |
|
|
|
1,075 |
|
|
|
1,122 |
|
Deferred income taxes, net |
|
12 |
|
|
|
25 |
|
|
|
(80 |
) |
|
|
(152 |
) |
(Gain) loss on equity securities and disposition of assets, net |
|
5 |
|
|
|
26 |
|
|
|
33 |
|
|
|
(148 |
) |
Loss on extinguishment of debt |
|
21 |
|
|
|
— |
|
|
|
21 |
|
|
|
8 |
|
Other |
|
4 |
|
|
|
(1 |
) |
|
|
10 |
|
|
|
(1 |
) |
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
||||||||
Accounts receivable |
|
(626 |
) |
|
|
(139 |
) |
|
|
(379 |
) |
|
|
(37 |
) |
Other current assets and other assets |
|
(385 |
) |
|
|
(258 |
) |
|
|
(852 |
) |
|
|
(879 |
) |
Due from related parties(1) |
|
(683 |
) |
|
|
(765 |
) |
|
|
95 |
|
|
|
19 |
|
Accounts payable |
|
11 |
|
|
|
(65 |
) |
|
|
98 |
|
|
|
(69 |
) |
Accrued expenses and other liabilities |
|
668 |
|
|
|
125 |
|
|
|
487 |
|
|
|
518 |
|
Income taxes payable |
|
5 |
|
|
|
(15 |
) |
|
|
28 |
|
|
|
(68 |
) |
Unearned revenue |
|
990 |
|
|
|
1,079 |
|
|
|
908 |
|
|
|
1,013 |
|
Due to related parties(1) |
|
(17 |
) |
|
|
— |
|
|
|
(17 |
) |
|
|
— |
|
Net cash provided by operating activities |
|
1,137 |
|
|
|
1,324 |
|
|
|
4,357 |
|
|
|
4,409 |
|
Investing activities: |
|
|
|
|
|
|
|
||||||||
Additions to property and equipment |
|
(123 |
) |
|
|
(82 |
) |
|
|
(386 |
) |
|
|
(329 |
) |
Sales of investments in equity securities |
|
9 |
|
|
|
26 |
|
|
|
77 |
|
|
|
26 |
|
Purchases of strategic investments |
|
(5 |
) |
|
|
(13 |
) |
|
|
(11 |
) |
|
|
(29 |
) |
Proceeds from disposition of assets |
|
9 |
|
|
|
7 |
|
|
|
14 |
|
|
|
28 |
|
Business combinations, net of cash acquired, and purchases of intangible assets |
|
(7 |
) |
|
|
(19 |
) |
|
|
(23 |
) |
|
|
(409 |
) |
Net cash used in investing activities |
|
(117 |
) |
|
|
(81 |
) |
|
|
(329 |
) |
|
|
(713 |
) |
Financing activities: |
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of common stock |
|
3 |
|
|
|
9 |
|
|
|
270 |
|
|
|
273 |
|
Proceeds from issuance of senior notes, net of issuance costs |
|
— |
|
|
|
— |
|
|
|
5,944 |
|
|
|
1,979 |
|
Borrowings under term loan, net of issuance costs |
|
3,998 |
|
|
|
— |
|
|
|
3,998 |
|
|
|
— |
|
Repayment of term loan |
|
(500 |
) |
|
|
— |
|
|
|
(500 |
) |
|
|
(1,500 |
) |
Repayment of current portion of senior notes |
|
(1,519 |
) |
|
|
— |
|
|
|
(1,519 |
) |
|
|
(1,257 |
) |
Repayment of note payable to |
|
— |
|
|
|
— |
|
|
|
(270 |
) |
|
|
— |
|
Repurchase of common stock |
|
(297 |
) |
|
|
(379 |
) |
|
|
(1,169 |
) |
|
|
(945 |
) |
Shares repurchased for tax withholdings on vesting of restricted stock |
|
(95 |
) |
|
|
(93 |
) |
|
|
(385 |
) |
|
|
(412 |
) |
Payment for Special Dividend |
|
(11,499 |
) |
|
|
— |
|
|
|
(11,499 |
) |
|
|
— |
|
Payment to acquire non-controlling interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(91 |
) |
Principal payments on finance lease obligations |
|
(1 |
) |
|
|
(1 |
) |
|
|
(5 |
) |
|
|
(4 |
) |
Net cash used in financing activities |
|
(9,910 |
) |
|
|
(464 |
) |
|
|
(5,135 |
) |
|
|
(1,957 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
(8,890 |
) |
|
|
779 |
|
|
|
(1,107 |
) |
|
|
1,739 |
|
Cash, cash equivalents and restricted cash at beginning of the period |
|
12,553 |
|
|
|
3,991 |
|
|
|
4,770 |
|
|
|
3,031 |
|
Cash, cash equivalents and restricted cash at end of the period |
$ |
3,663 |
|
|
$ |
4,770 |
|
|
$ |
3,663 |
|
|
$ |
4,770 |
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
||||||||
Cash paid for interest |
$ |
54 |
|
|
$ |
58 |
|
|
$ |
200 |
|
|
$ |
200 |
|
Cash paid for taxes, net |
|
55 |
|
|
|
150 |
|
|
|
331 |
|
|
|
543 |
|
Non-cash items: |
|
|
|
|
|
|
|
||||||||
Changes in capital additions, accrued but not paid |
$ |
(5 |
) |
|
$ |
8 |
|
|
$ |
4 |
|
|
$ |
(10 |
) |
__________ |
||
(1) |
Subsequent to the Spin-off, due from related parties and due to related parties were presented separately, as a right of setoff no longer exists. Prior to the Spin-Off, due from related parties was presented net of due to related parties. |
|
||||||
GROWTH IN REVENUE PLUS SEQUENTIAL CHANGE IN UNEARNED REVENUE |
||||||
(in millions) |
||||||
(unaudited) |
||||||
|
||||||
|
||||||
Growth in Total Revenue Plus Sequential Change in Unearned Revenue |
||||||
|
|
|
|
|||
|
Three Months Ended |
|||||
|
|
|
|
|||
|
2022 |
|
2021 |
|||
Total revenue, as reported |
$ |
3,531 |
|
|
$ |
3,294 |
Sequential change in unearned revenue(1) |
|
989 |
|
|
|
1,079 |
Total revenue plus sequential change in unearned revenue |
$ |
4,520 |
|
|
$ |
4,373 |
Change (%) over prior year, as reported |
|
3 |
% |
|
|
|
|
|
|
|
|||
Growth in License and Subscription and SaaS Revenue Plus Sequential Change in Unearned License and Subscription and SaaS Revenue |
||||||
|
|
|
|
|||
|
Three Months Ended |
|||||
|
|
|
|
|||
|
2022 |
|
2021 |
|||
Total license and subscription and SaaS revenue, as reported |
$ |
1,903 |
|
|
$ |
1,721 |
Sequential change in unearned license and subscription and SaaS revenue(2) |
|
433 |
|
|
|
406 |
Total license and subscription and SaaS revenue plus sequential change in unearned license and subscription and SaaS revenue |
$ |
2,336 |
|
|
$ |
2,127 |
Change (%) over prior year, as reported |
|
10 |
% |
|
|
__________ |
||
(1) |
Consists of the change in total unearned revenue from the preceding quarter. Total unearned revenue consists of current and non-current unearned revenue amounts presented in the consolidated balance sheets. |
|
(2) |
Consists of the change in unearned license and subscription and SaaS revenue from the preceding quarter. |
REMAINING PERFORMANCE OBLIGATIONS |
||||||
(in millions) |
||||||
(unaudited) |
||||||
|
||||||
|
||||||
Growth in Remaining Performance Obligations |
||||||
|
|
|
|
|||
|
|
|
|
|||
|
2022 |
|
2021 |
|||
Remaining performance obligations(3) |
$ |
11,996 |
|
|
$ |
11,304 |
Change (%) over prior year |
|
6 |
% |
|
|
|
|
|
|
|
|||
Remaining performance obligations, current(4) |
$ |
6,793 |
|
|
$ |
6,243 |
Change (%) over prior year |
|
9 |
% |
|
|
__________ |
||
(3) |
Remaining performance obligations represent the aggregate amount of the transaction price in contracts allocated to performance obligations not delivered, or partially undelivered, as of the end of the reporting period. Remaining performance obligations include unearned revenue, multi-year contracts with future installment payments and certain unfulfilled orders against accepted customer contracts at the end of any given period. |
|
(4) |
Current remaining performance obligations represent the amount expected to be recognized as revenue over the next twelve months. |
|
|||||||||||||||||
SUPPLEMENTAL UNEARNED REVENUE SCHEDULE |
|||||||||||||||||
(in millions) |
|||||||||||||||||
(unaudited) |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
2022 |
|
2021 |
|
2021 |
|
2021 |
|
2021 |
|
2020 |
||||||
Unearned revenue as reported: |
|
|
|
|
|
|
|
|
|
|
|
||||||
License |
$ |
19 |
|
$ |
17 |
|
$ |
20 |
|
$ |
16 |
|
$ |
15 |
|
$ |
11 |
Subscription and SaaS |
|
2,669 |
|
|
2,238 |
|
|
2,208 |
|
|
2,064 |
|
|
1,998 |
|
|
1,596 |
Services |
|
|
|
|
|
|
|
|
|
|
|
||||||
Software maintenance |
|
7,208 |
|
|
6,773 |
|
|
6,916 |
|
|
6,957 |
|
|
7,092 |
|
|
6,574 |
Professional services |
|
1,326 |
|
|
1,205 |
|
|
1,194 |
|
|
1,163 |
|
|
1,209 |
|
|
1,054 |
Total unearned revenue |
$ |
11,222 |
|
$ |
10,233 |
|
$ |
10,338 |
|
$ |
10,200 |
|
$ |
10,314 |
|
$ |
9,235 |
|
|||||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP DATA |
|||||||||||||||||||||||||||
For the Three Months Ended |
|||||||||||||||||||||||||||
(amounts in millions, except per share amounts, and shares in thousands) |
|||||||||||||||||||||||||||
(unaudited) |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
GAAP |
|
Stock-Based
|
|
Employer
|
|
Intangible
|
|
Acquisition,
Items |
|
Tax
|
|
Non-GAAP
|
||||||||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of license revenue |
$ |
41 |
|
|
|
— |
|
|
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
|
— |
|
|
$ |
32 |
|
Cost of subscription and SaaS revenue |
$ |
188 |
|
|
|
(5 |
) |
|
|
— |
|
|
|
(43 |
) |
|
|
— |
|
|
|
— |
|
|
$ |
140 |
|
Cost of services revenue |
$ |
378 |
|
|
|
(22 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
355 |
|
Research and development |
$ |
806 |
|
|
|
(126 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
$ |
678 |
|
Sales and marketing |
$ |
1,075 |
|
|
|
(75 |
) |
|
|
(3 |
) |
|
|
(20 |
) |
|
|
— |
|
|
|
— |
|
|
$ |
979 |
|
General and administrative |
$ |
260 |
|
|
|
(34 |
) |
|
|
— |
|
|
|
— |
|
|
|
(16 |
) |
|
|
— |
|
|
$ |
210 |
|
Operating income |
$ |
783 |
|
|
|
262 |
|
|
|
3 |
|
|
|
74 |
|
|
|
16 |
|
|
|
— |
|
|
$ |
1,137 |
|
Operating margin(2) |
|
22.2 |
% |
|
|
7.4 |
% |
|
|
0.1 |
% |
|
|
2.1 |
% |
|
|
0.4 |
% |
|
|
— |
|
|
|
32.2 |
% |
Other income (expense), net(3) |
$ |
(41 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
|
$ |
(39 |
) |
Income before income tax |
$ |
662 |
|
|
|
262 |
|
|
|
3 |
|
|
|
74 |
|
|
|
19 |
|
|
|
— |
|
|
$ |
1,018 |
|
Income tax provision |
$ |
76 |
|
|
|
|
|
|
|
|
|
|
|
87 |
|
|
$ |
163 |
|
||||||||
Tax rate(2) |
|
11.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
16.0 |
% |
||||||||||
Net income |
$ |
586 |
|
|
|
262 |
|
|
|
3 |
|
|
|
74 |
|
|
|
19 |
|
|
|
(87 |
) |
|
$ |
855 |
|
Net income per weighted-average share attributable to |
$ |
1.39 |
|
|
$ |
0.62 |
|
|
$ |
0.01 |
|
|
$ |
0.17 |
|
|
$ |
0.04 |
|
|
$ |
(0.21 |
) |
|
$ |
2.02 |
|
__________ |
||
(1) |
Non-GAAP financial information for the quarter is adjusted for a tax rate equal to our annual estimated tax rate on non-GAAP income. This rate is based on our estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating the non-GAAP financial measures presented above as well as significant tax adjustments. Our estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses, changes to our corporate structure and other significant events. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates as described above, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities. |
|
(2) |
Totals may not sum, due to rounding. Operating margin, tax rate and net income per weighted average share information are calculated based upon the respective underlying, non-rounded data. |
|
(3) |
Non-GAAP adjustment to other income (expense), net includes gains or losses on investments in equity securities, whether realized or unrealized. |
|
(4) |
Calculated based upon 422,976 diluted weighted-average shares of common stock. |
|
|||||||||||||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP DATA |
|||||||||||||||||||||||||||||||||||
For the Three Months Ended |
|||||||||||||||||||||||||||||||||||
(amounts in millions, except per share amounts, and shares in thousands) |
|||||||||||||||||||||||||||||||||||
(unaudited) |
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
GAAP |
|
Stock-Based
|
|
Employer
|
|
Intangible
|
|
Realignment
|
|
Acquisition,
|
|
Certain
|
|
Tax
|
|
Non-GAAP
|
||||||||||||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Cost of license revenue |
$ |
45 |
|
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
33 |
|
Cost of subscription and SaaS revenue |
$ |
187 |
|
|
|
(6 |
) |
|
|
— |
|
|
|
(48 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
133 |
|
Cost of services revenue |
$ |
322 |
|
|
|
(25 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
296 |
|
Research and development |
$ |
757 |
|
|
|
(127 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
628 |
|
Sales and marketing |
$ |
987 |
|
|
|
(79 |
) |
|
|
(2 |
) |
|
|
(24 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
884 |
|
General and administrative |
$ |
(6 |
) |
|
|
(16 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(27 |
) |
|
|
237 |
|
|
|
— |
|
|
$ |
187 |
|
Realignment |
$ |
(5 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
— |
|
Operating income |
$ |
1,007 |
|
|
|
253 |
|
|
|
3 |
|
|
|
84 |
|
|
|
(5 |
) |
|
|
27 |
|
|
|
(237 |
) |
|
|
— |
|
|
$ |
1,133 |
|
Operating margin(2) |
|
30.6 |
% |
|
|
7.7 |
% |
|
|
0.1 |
% |
|
|
2.5 |
% |
|
|
(0.1 |
) % |
|
|
0.8 |
% |
|
|
(7.2 |
) % |
|
|
— |
|
|
|
34.4 |
% |
Other income (expense), net(3) |
$ |
7 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
25 |
|
|
|
— |
|
|
|
— |
|
|
$ |
30 |
|
Income before income tax |
$ |
965 |
|
|
|
253 |
|
|
|
3 |
|
|
|
84 |
|
|
|
(5 |
) |
|
|
52 |
|
|
|
(237 |
) |
|
|
— |
|
|
$ |
1,114 |
|
Income tax provision |
$ |
174 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
|
|
$ |
178 |
|
||||||||||||
Tax rate(2) |
|
18.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.0 |
% |
||||||||||||||
Net income |
$ |
791 |
|
|
|
253 |
|
|
|
3 |
|
|
|
84 |
|
|
|
(5 |
) |
|
|
52 |
|
|
|
(237 |
) |
|
|
(5 |
) |
|
$ |
936 |
|
Net income per weighted-average share, diluted for Classes A and B(2)(4) |
$ |
1.87 |
|
|
$ |
0.60 |
|
|
$ |
0.01 |
|
|
$ |
0.20 |
|
|
$ |
(0.01 |
) |
|
$ |
0.12 |
|
|
$ |
(0.56 |
) |
|
$ |
(0.01 |
) |
|
$ |
2.21 |
|
__________ |
||
(1) |
Non-GAAP financial information for the quarter is adjusted for a tax rate equal to our annual estimated tax rate on non-GAAP income. This rate is based on our estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating the non-GAAP financial measures presented above as well as significant tax adjustments. Our estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses, changes to our corporate structure and other significant events. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates as described above, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities. |
|
(2) |
Totals may not sum, due to rounding. Operating margin, tax rate and net income per weighted average share information are calculated based upon the respective underlying, non-rounded data. |
|
(3) |
Non-GAAP adjustment to other income (expense), net includes gains or losses on investments in equity securities, whether realized or unrealized. |
|
(4) |
Calculated based upon 422,813 diluted weighted-average shares for Classes A and B. |
|
(5) |
Reflects derecognition of a |
|
|||||||||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP DATA |
|||||||||||||||||||||||||||||||
For the Twelve Months Ended |
|||||||||||||||||||||||||||||||
(amounts in millions, except per share amounts, and shares in thousands) |
|||||||||||||||||||||||||||||||
(unaudited) |
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
GAAP |
|
Stock-Based
|
|
Employer
|
|
Intangible
|
|
Realignment
|
|
Acquisition,
|
|
Tax
|
|
Non-GAAP
|
||||||||||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of license revenue |
$ |
152 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(39 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
112 |
|
Cost of subscription and SaaS revenue |
$ |
690 |
|
|
|
(21 |
) |
|
|
— |
|
|
|
(171 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
498 |
|
Cost of services revenue |
$ |
1,429 |
|
|
|
(92 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
1,334 |
|
Research and development |
$ |
3,057 |
|
|
|
(528 |
) |
|
|
(2 |
) |
|
|
(8 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
2,519 |
|
Sales and marketing |
$ |
4,067 |
|
|
|
(302 |
) |
|
|
(7 |
) |
|
|
(85 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
3,676 |
|
General and administrative |
$ |
1,068 |
|
|
|
(131 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
(142 |
) |
|
|
— |
|
|
$ |
794 |
|
Realignment |
$ |
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
$ |
— |
|
Operating income |
$ |
2,387 |
|
|
|
1,075 |
|
|
|
11 |
|
|
|
303 |
|
|
|
1 |
|
|
|
142 |
|
|
|
— |
|
|
$ |
3,918 |
|
Operating margin(2) |
|
18.6 |
% |
|
|
8.4 |
% |
|
|
0.1 |
% |
|
|
2.4 |
% |
|
|
— |
% |
|
|
1.1 |
% |
|
|
— |
|
|
|
30.5 |
% |
Other income (expense), net(3) |
$ |
(52 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
31 |
|
|
|
— |
|
|
$ |
(21 |
) |
Income before income tax |
$ |
2,085 |
|
|
|
1,075 |
|
|
|
11 |
|
|
|
303 |
|
|
|
1 |
|
|
|
173 |
|
|
|
— |
|
|
$ |
3,647 |
|
Income tax provision |
$ |
265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
318 |
|
|
$ |
583 |
|
||||||||||
Tax rate(2) |
|
12.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.0 |
% |
||||||||||||
Net income |
$ |
1,820 |
|
|
|
1,075 |
|
|
|
11 |
|
|
|
303 |
|
|
|
1 |
|
|
|
173 |
|
|
|
(318 |
) |
|
$ |
3,064 |
|
Net income per weighted-average share attributable to |
$ |
4.31 |
|
|
$ |
2.54 |
|
|
$ |
0.03 |
|
|
$ |
0.72 |
|
|
$ |
— |
|
|
$ |
0.41 |
|
|
$ |
(0.75 |
) |
|
$ |
7.25 |
|
__________ |
||
(1) |
Non-GAAP financial information for the quarter is adjusted for a tax rate equal to our annual estimated tax rate on non-GAAP income. This rate is based on our estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating the non-GAAP financial measures presented above as well as significant tax adjustments. Our estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses, changes to our corporate structure and other significant events. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates as described above, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities. |
|
(2) |
Totals may not sum, due to rounding. Operating margin, tax rate and net income per weighted average share information are calculated based upon the respective underlying, non-rounded data. |
|
(3) |
Non-GAAP adjustment to other income (expense), net includes gains or losses on investments in equity securities, whether realized or unrealized. |
|
(4) |
Calculated based upon 422,394 diluted weighted-average shares of common stock. |
|
|||||||||||||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP DATA |
|||||||||||||||||||||||||||||||||||
For the Twelve Months Ended |
|||||||||||||||||||||||||||||||||||
(amounts in millions, except per share amounts, and shares in thousands) |
|||||||||||||||||||||||||||||||||||
(unaudited) |
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
GAAP |
|
Stock-Based
|
|
Employer
|
|
Intangible
|
|
Realignment
|
|
Acquisition,
|
|
Certain
|
|
Tax
|
|
Non-GAAP
|
||||||||||||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Cost of license revenue |
$ |
163 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(44 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
118 |
|
Cost of subscription and SaaS revenue |
$ |
588 |
|
|
|
(19 |
) |
|
|
— |
|
|
|
(186 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
383 |
|
Cost of services revenue |
$ |
1,292 |
|
|
|
(99 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
1,190 |
|
Research and development |
$ |
2,816 |
|
|
|
(524 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
$ |
2,286 |
|
Sales and marketing |
$ |
3,711 |
|
|
|
(322 |
) |
|
|
(8 |
) |
|
|
(94 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
$ |
3,288 |
|
General and administrative |
$ |
767 |
|
|
|
(157 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
(132 |
) |
|
|
237 |
|
|
|
— |
|
|
$ |
713 |
|
Realignment |
$ |
42 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(42 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
— |
|
Operating income |
$ |
2,388 |
|
|
|
1,122 |
|
|
|
11 |
|
|
|
328 |
|
|
|
42 |
|
|
|
135 |
|
|
|
(237 |
) |
|
|
— |
|
|
$ |
3,789 |
|
Operating margin(2) |
|
20.3 |
% |
|
|
9.5 |
% |
|
|
0.1 |
% |
|
|
2.8 |
% |
|
|
0.4 |
% |
|
|
1.1 |
% |
|
|
(2.0 |
) % |
|
|
— |
|
|
|
32.2 |
% |
Other income (expense), net(3) |
$ |
191 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(157 |
) |
|
|
— |
|
|
|
— |
|
|
$ |
34 |
|
Income before income tax |
$ |
2,382 |
|
|
|
1,122 |
|
|
|
11 |
|
|
|
328 |
|
|
|
42 |
|
|
|
(22 |
) |
|
|
(237 |
) |
|
|
— |
|
|
$ |
3,626 |
|
Income tax provision |
$ |
324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
256 |
|
|
$ |
580 |
|
||||||||||||
Tax rate(2) |
|
13.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.0 |
% |
||||||||||||||
Net income |
$ |
2,058 |
|
|
|
1,122 |
|
|
|
11 |
|
|
|
328 |
|
|
|
42 |
|
|
|
(22 |
) |
|
|
(237 |
) |
|
|
(256 |
) |
|
$ |
3,046 |
|
Net income per weighted-average share, diluted for Classes A and B(2)(4) |
$ |
4.86 |
|
|
$ |
2.65 |
|
|
$ |
0.03 |
|
|
$ |
0.77 |
|
|
$ |
0.10 |
|
|
$ |
(0.05 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.61 |
) |
|
$ |
7.20 |
|
__________ |
||
(1) |
Non-GAAP financial information for the quarter is adjusted for a tax rate equal to our annual estimated tax rate on non-GAAP income. This rate is based on our estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating the non-GAAP financial measures presented above as well as significant tax adjustments. Our estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses, changes to our corporate structure and other significant events. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates as described above, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities. |
|
(2) |
Totals may not sum, due to rounding. Operating margin, tax rate and net income per weighted average share information are calculated based upon the respective underlying, non-rounded data. |
|
(3) |
Non-GAAP adjustment to other income (expense), net includes gains or losses on investments in equity securities, whether realized or unrealized. |
|
(4) |
Calculated based upon 423,240 diluted weighted-average shares for Classes A and B. |
|
(5) |
Reflects derecognition of a |
|
||||||||||||||||
REVENUE BY TYPE |
||||||||||||||||
(in millions) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
License |
|
$ |
1,035 |
|
|
$ |
1,014 |
|
|
$ |
3,128 |
|
|
$ |
3,033 |
|
Subscription and SaaS |
|
|
868 |
|
|
|
707 |
|
|
|
3,205 |
|
|
|
2,587 |
|
Total license and subscription and SaaS |
|
|
1,903 |
|
|
|
1,721 |
|
|
|
6,333 |
|
|
|
5,620 |
|
Services: |
|
|
|
|
|
|
|
|
||||||||
Software maintenance |
|
|
1,346 |
|
|
|
1,307 |
|
|
|
5,356 |
|
|
|
5,105 |
|
Professional services |
|
|
282 |
|
|
|
266 |
|
|
|
1,162 |
|
|
|
1,042 |
|
Total services |
|
|
1,628 |
|
|
|
1,573 |
|
|
|
6,518 |
|
|
|
6,147 |
|
Total revenue |
|
$ |
3,531 |
|
|
$ |
3,294 |
|
|
$ |
12,851 |
|
|
$ |
11,767 |
|
Percentage of revenue: |
|
|
|
|
|
|
|
|
||||||||
License |
|
|
29.3 |
% |
|
|
30.8 |
% |
|
|
24.3 |
% |
|
|
25.8 |
% |
Subscription and SaaS |
|
|
24.6 |
% |
|
|
21.5 |
% |
|
|
25.0 |
% |
|
|
22.0 |
% |
Total license and subscription and SaaS |
|
|
53.9 |
% |
|
|
52.3 |
% |
|
|
49.3 |
% |
|
|
47.8 |
% |
Services: |
|
|
|
|
|
|
|
|
||||||||
Software maintenance |
|
|
38.1 |
% |
|
|
39.7 |
% |
|
|
41.7 |
% |
|
|
43.4 |
% |
Professional services |
|
|
8.0 |
% |
|
|
8.0 |
% |
|
|
9.0 |
% |
|
|
8.8 |
% |
Total services |
|
|
46.1 |
% |
|
|
47.7 |
% |
|
|
50.7 |
% |
|
|
52.2 |
% |
Total revenue |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|||||||||||||||
REVENUE BY GEOGRAPHY |
|||||||||||||||
(in millions) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
|
$ |
1,645 |
|
|
$ |
1,610 |
|
|
$ |
6,232 |
|
|
$ |
5,878 |
|
International |
|
1,886 |
|
|
|
1,684 |
|
|
|
6,619 |
|
|
|
5,889 |
|
Total revenue |
$ |
3,531 |
|
|
$ |
3,294 |
|
|
$ |
12,851 |
|
|
$ |
11,767 |
|
Percentage of revenue: |
|
|
|
|
|
|
|
||||||||
|
|
46.6 |
% |
|
|
48.9 |
% |
|
|
48.5 |
% |
|
|
50.0 |
% |
International |
|
53.4 |
% |
|
|
51.1 |
% |
|
|
51.5 |
% |
|
|
50.0 |
% |
Total revenue |
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|||||||||||||||
RECONCILIATION OF GAAP CASH FLOWS FROM OPERATING ACTIVITIES |
|||||||||||||||
TO FREE CASH FLOWS |
|||||||||||||||
(A NON-GAAP FINANCIAL MEASURE) |
|||||||||||||||
(in millions) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
GAAP cash flows from operating activities |
$ |
1,137 |
|
|
$ |
1,324 |
|
|
$ |
4,357 |
|
|
$ |
4,409 |
|
Capital expenditures |
|
(123 |
) |
|
|
(82 |
) |
|
|
(386 |
) |
|
|
(329 |
) |
Free cash flows |
$ |
1,014 |
|
|
$ |
1,242 |
|
|
$ |
3,971 |
|
|
$ |
4,080 |
|
About Non-GAAP Financial Measures
To provide investors and others with additional information regarding VMware’s results,
VMware’s management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, to calculate bonus payments and to evaluate VMware’s financial performance, the performance of its individual functional groups and the ability of operations to generate cash. Management believes these non-GAAP financial measures reflect VMware’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in VMware’s business, as they exclude charges and gains that are not reflective of ongoing operating results. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating VMware’s operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. Additionally, management believes information regarding free cash flow provides investors and others with an important perspective on the cash available to make strategic acquisitions and investments, to repurchase shares, to fund ongoing operations and to fund other capital expenditures.
Management believes these non-GAAP financial measures are useful to investors and others in assessing VMware’s operating performance due to the following factors:
-
Stock-based compensation. Stock-based compensation is generally fixed at the time the stock-based instrument is granted and amortized over a period of several years. Although stock-based compensation is an important aspect of the compensation of VMware’s employees and executives, the expense for the fair value of the stock-based instruments
VMware utilizes may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards. Management believes it is useful to exclude stock-based compensation in order to better understand the long-term performance of VMware’s core business. - Employer payroll taxes on employee stock transactions. The amount of employer payroll taxes on stock-based compensation is dependent on VMware’s stock price and other factors that are beyond VMware’s control and do not correlate to the operation of the business.
-
Amortization of acquired intangible assets. A portion of the purchase price of VMware’s acquisitions is generally allocated to intangible assets, such as intellectual property, and is subject to amortization. However,
VMware does not acquire businesses on a predictable cycle. Additionally, the amount of an acquisition’s purchase price allocated to intangible assets and the term of its related amortization can vary significantly and are unique to each acquisition. Therefore,VMware believes that the presentation of non-GAAP financial measures that adjust for the amortization of intangible assets provides investors and others with a consistent basis for comparison across accounting periods. - Realignment charges. Realignment charges include workforce reductions, asset impairments, losses on asset disposals and costs to exit facilities. VMware’s management believes it is useful to exclude these items, when significant, as they are not reflective of VMware’s core business and operating results.
-
Acquisition, disposition and other items. As
VMware does not acquire or dispose of businesses on a predictable cycle and the terms of each transaction can vary significantly and are unique to each transaction,VMware believes it is useful to exclude acquisition, disposition and other items when looking for a consistent basis for comparison across accounting periods. These items include:- Direct costs of acquisitions and dispositions, such as transaction and advisory fees.
- Costs associated with integrating acquired businesses.
-
Accruals for the portion of merger consideration payable in installments that may be paid in cash or
VMware stock, at the option ofVMware . - Gains or losses on investments in equity securities, whether realized or unrealized.
- Charges recognized for non-recoverable strategic investments or gains recognized on the disposition of strategic investments.
- Gains or losses on sale or disposal of distinct lines of business or product offerings, or transactions with features similar to discontinued operations, including recoveries or charges recognized to adjust the fair value of assets that qualify as “held for sale.”
-
Certain costs incurred related to
VMware's spin-off from its former parent company,Dell Technologies Inc. , completed onNovember 1, 2021 , such as legal and advisory fees.
-
Certain litigation and other contingencies.
VMware , from time to time, may incur charges or benefits that are outside of the ordinary course of VMware’s business related to litigation and other contingencies.VMware believes it is useful to exclude such charges or benefits because it does not consider such amounts to be part of the ongoing operation of VMware’s business and because of the singular nature of the claims underlying such matters. -
Tax adjustment. Non-GAAP financial information for the quarter is adjusted for a tax rate equal to VMware’s annual estimated tax rate on non-GAAP income. This rate is based on VMware’s estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating VMware’s non-GAAP income as well as significant tax adjustments. VMware’s estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that
VMware management believes materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses, changes to our corporate structure and other significant events. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to VMware’s estimated annual tax rates as described above, the estimated tax rate on non-GAAP income may differ from the GAAP tax rate and from VMware’s actual tax liabilities.
Additionally, VMware’s management believes that the non-GAAP financial measure of free cash flow is meaningful to investors because management reviews cash flow generated from operations after taking into consideration capital expenditures due to the fact that these expenditures are considered to be a necessary component of ongoing operations.
The use of non-GAAP financial measures has certain limitations because they do not reflect all items of income and expense that affect VMware’s operations. Specifically, in the case of stock-based compensation, if
Management encourages investors and others to review VMware’s financial information in its entirety and not rely on a single financial measure.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220224005875/en/
VMware Investor Relations
pziots@vmware.com
650-427-3267
VMware Global PR
mthacker@vmware.com
650-427-4454
Source:
FAQ
What were VMware's revenue results for FY22?
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