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Wednesday 24 November 2021

VMware waves farewell to Dell with 11% Q3 growth

VMware waves farewell to Dell with 11% Q3 growthVMware’s final quarter as a Dell Technologies company saw the software giant grow its revenue 11% year on year. The spin off completed on 1st November, just after VMware turnover in the three month period ending October 29th hit US$3.2bn though GAAP net income dropped 8% yoy to US$398m.

FY22 has so far delivered three strong quarters for VMware, with Q1 and Q2 both registering 9% yoy growth. The company had already turned something of a corner in Q2, when its Subscription and SaaS revenue exceeded that from the sale of software licenses for the first time. That trend shows no sign of reversing in Q3 – Subscription and SaaS revenue hit US$810m, up 21% yoy, while software revenue grew 11% yoy to US$710m.

Service revenue exhibited steady if more modest expansion, up 7% to US$1.66bn. The performance was led by a 14% rise in turnover from professional services, which contributed 9.5% of the entire VMware total in Q3, while software maintenance revenue expanded 5.6% yoy to US$1.35bn.

VMware is finding a ready market for its cloud agnostic, compute infrastructure products and services in several industry segments, most notably cloud providers, large enterprises and telecommunications. Earlier this month it was selected as a strategic technology partner for Vodafone, which announced it will deploy VMware’s Telco Cloud Platform, including Tanzu for Telco and Telco Cloud Automation, to orchestrate its network functions and services in all of the operator’s 11 European markets over the next few years.

The question now is how VMware will fare in Q4 after its split from Dell – almost certainly well at least in the short term given EUC product bookings in Q3 exhibited strong double digit expansion. Management now expect the current quarter to deliver US$3.5bn of revenue, up 7% yoy while FY22 turnover is forecast to expand 9% to US$12.8bn.

Posted by: Martin Courtney at 09:04

Tags: results   Q3   multi-cloud   FY22   cloudinfrastructure  

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