Revenue from the cloud business was lower than expected.
Yury Cherenkov/Dreamstime.com
VMware shares are trading lower late Thursday after the enterprise software provider posted mixed results for its fiscal second quarter.
For the quarter ended July 30, VMware (ticker: VMW) reported revenue of $3.14 billion, in line with Street estimates. But investors may not have liked the component parts.
License revenue, from the company’s traditional on premise software business,- was $738 million, up 3%, and ahead of the Street consensus forecast of $699 million. But subscription and software-as-a-service revenue—basically the company’s cloud business—was $776 million, up 23%, but below the Street consensus call for $790 million.
Investors likely would have preferred to see the two elements moving in the opposite directions, with revenue from the cloud, rather than from the on-premise business, the star.
The company said remaining performance obligations—a measure of future work—stood at $11.2 billion at quarter end, up 8% from a year earlier. The company said subscription and SaaS annualized recurring revenue rose 26% to over $3.2 billion.
Profits on a non-GAAP basis were $1.75 a share, ahead of the Street consensus at $1.64 a share. Under generally accepted accounting principles, the company earned $411 million, or 97 cents a 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 this afternoon posted better-than-expected results for the quarter.
In late trading, VMware was off 4.7%, to $151.40.
Write to Eric J. Savitz at [email protected]
