VMware’s fourth-quarter fiscal 2022 non-GAAP earnings of $2.02 per share beat the Zacks Consensus Estimate by 2.5% but declined 8.6% year over year.
Revenues of $3.53 billion surpassed the consensus mark by 0.3% and improved 3.5% on a year-over-year basis.
Top-Line Details
Region-wise, U.S. revenues (46.6% of revenues) increased 2.2% year over year to $1.65 billion. International revenues (53.4%) grew 12% from the year-ago quarter to $1.89 billion.
Services revenues (46.1% of revenues) rose 3.5% year over year to $1.63 billion. Software Maintenance revenues (82.7% of Services revenues) climbed 3% to $1.35 billion. Professional Services revenues (17.3% of Services revenues) were $282 million, up 6% year over year.
Total License, and Subscription & SaaS revenues (53.9% of revenues) improved 10.6% from the year-ago quarter to $1.90 billion.
License revenues (54.4% of License, and Subscription & SaaS revenues) increased 2.1% year over year to $1.04 billion.
Subscription & SaaS revenues (45.6% of segment revenues) increased 22.8% year over year to $868 million.
Subscription & SaaS revenues were 25% of revenues in the reported quarter.
Operating Details
Research & development (R&D) expenses as a percentage of revenues increased 10 basis points (bps) year over year to 19.2%.
Sales & marketing (S&M) expenses as a percentage of revenues increased 90 bps on a year-over-year basis to 27.7%.
General & administrative (G&A) expenses as a percentage of revenues increased 30 bps to 5.9%.
Non-GAAP operating margin contracted 220 bps on a year-over-year basis to 32.2%.
Balance Sheet & Cash Flow
As of Jan 28, 2022, VMware’s cash & cash equivalents were $3.63 billion compared with $12.5 billion as of Oct 29, 2021.
Total debt (including the current portion of long-term debt) was $12.67 as of Jan 28, 2022 compared with $10.67 billion as of Oct 29, 2021.
Operating cash flow was $1.14 billion in fourth-quarter 2022 compared with $1.09 billion reported in the previous quarter.
Free cash flow was $1.01 billion in the reported quarter compared with $984 million reported in the previous quarter.
Revenue Performance Obligation increased 6% year over year to $11.996 billion.
Guidance
For first-quarter fiscal 2023, VMware expects revenues of roughly $3.185 billion, suggesting more than 6.5% year-over-year growth.
Subscription & SaaS and License revenues are expected to be $1.555 billion, indicating more than 12% growth year over year.
Subscription & SaaS revenues are expected to increase 23% year over year to $910 million.
Non-GAAP operating margin is anticipated to be 27%. Moreover, non-GAAP earnings are expected to be $1.56 per share for first-quarter fiscal 2023.
For fiscal 2023, VMware expects revenues of $13.75 billion, suggesting 7% year-over-year growth.
Subscription & SaaS and License revenues are expected to be $7.02 billion, indicating nearly 11% growth year over year.
Subscription & SaaS revenues are expected to increase 26% year over year to $4.040 billion.
Non-GAAP operating margin is anticipated to be 28%. Non-GAAP earnings are expected to be $6.97 per share for fiscal 2023.
Cash flow from operations, capital expenditure and free cash flow are expected to be $4.20 billion, $450 million and $3.75 billion, respectively.
Zacks Rank & Stocks to Consider
VMware has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector are HP (HPQ - Free Report) , Asana (ASAN - Free Report) and Box (BOX - Free Report) . All the three stocks carry Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
HP shares have declined 8.3% year to date compared with the Zacks Computer & Technology sector’s decline of 17%.
HPQ is set to report first-quarter fiscal 2022 results on Feb 28.
Asana’s shares have returned 57% in the past year.
Asana is scheduled to report fourth-quarter 2022 results on Mar 9.
Box’s shares are down 3.6% on a year-to-date basis.
BOX is scheduled to report fourth-quarter fiscal 2022 results on Mar 2.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
See New Top 10 Stocks >>
VMware’s fourth-quarter fiscal 2022 non-GAAP earnings of $2.02 per share beat the Zacks Consensus Estimate by 2.5% but declined 8.6% year over year.
Revenues of $3.53 billion surpassed the consensus mark by 0.3% and improved 3.5% on a year-over-year basis.
Top-Line Details
Region-wise, U.S. revenues (46.6% of revenues) increased 2.2% year over year to $1.65 billion. International revenues (53.4%) grew 12% from the year-ago quarter to $1.89 billion.
Services revenues (46.1% of revenues) rose 3.5% year over year to $1.63 billion. Software Maintenance revenues (82.7% of Services revenues) climbed 3% to $1.35 billion. Professional Services revenues (17.3% of Services revenues) were $282 million, up 6% year over year.
Total License, and Subscription & SaaS revenues (53.9% of revenues) improved 10.6% from the year-ago quarter to $1.90 billion.
License revenues (54.4% of License, and Subscription & SaaS revenues) increased 2.1% year over year to $1.04 billion.
Subscription & SaaS revenues (45.6% of segment revenues) increased 22.8% year over year to $868 million.
Subscription & SaaS revenues were 25% of revenues in the reported quarter.
Operating Details
Research & development (R&D) expenses as a percentage of revenues increased 10 basis points (bps) year over year to 19.2%.
Sales & marketing (S&M) expenses as a percentage of revenues increased 90 bps on a year-over-year basis to 27.7%.
General & administrative (G&A) expenses as a percentage of revenues increased 30 bps to 5.9%.
Non-GAAP operating margin contracted 220 bps on a year-over-year basis to 32.2%.
Balance Sheet & Cash Flow
As of Jan 28, 2022, VMware’s cash & cash equivalents were $3.63 billion compared with $12.5 billion as of Oct 29, 2021.
Total debt (including the current portion of long-term debt) was $12.67 as of Jan 28, 2022 compared with $10.67 billion as of Oct 29, 2021.
Operating cash flow was $1.14 billion in fourth-quarter 2022 compared with $1.09 billion reported in the previous quarter.
Free cash flow was $1.01 billion in the reported quarter compared with $984 million reported in the previous quarter.
Revenue Performance Obligation increased 6% year over year to $11.996 billion.
Guidance
For first-quarter fiscal 2023, VMware expects revenues of roughly $3.185 billion, suggesting more than 6.5% year-over-year growth.
Subscription & SaaS and License revenues are expected to be $1.555 billion, indicating more than 12% growth year over year.
Subscription & SaaS revenues are expected to increase 23% year over year to $910 million.
Non-GAAP operating margin is anticipated to be 27%. Moreover, non-GAAP earnings are expected to be $1.56 per share for first-quarter fiscal 2023.
For fiscal 2023, VMware expects revenues of $13.75 billion, suggesting 7% year-over-year growth.
Subscription & SaaS and License revenues are expected to be $7.02 billion, indicating nearly 11% growth year over year.
Subscription & SaaS revenues are expected to increase 26% year over year to $4.040 billion.
Non-GAAP operating margin is anticipated to be 28%. Non-GAAP earnings are expected to be $6.97 per share for fiscal 2023.
Cash flow from operations, capital expenditure and free cash flow are expected to be $4.20 billion, $450 million and $3.75 billion, respectively.
Zacks Rank & Stocks to Consider
VMware has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector are HP (HPQ - Free Report) , Asana (ASAN - Free Report) and Box (BOX - Free Report) . All the three stocks carry Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
HP shares have declined 8.3% year to date compared with the Zacks Computer & Technology sector’s decline of 17%.
HPQ is set to report first-quarter fiscal 2022 results on Feb 28.
Asana’s shares have returned 57% in the past year.
Asana is scheduled to report fourth-quarter 2022 results on Mar 9.
Box’s shares are down 3.6% on a year-to-date basis.
BOX is scheduled to report fourth-quarter fiscal 2022 results on Mar 2.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
See New Top 10 Stocks >>
Get the latest research report on HPQ - FREE
Get the latest research report on BOX - FREE
Get the latest research report on ASAN - FREE