VMware Inc.: VMware Reports Fourth Quarter and Full Year 2016 Results
Record Annual Revenue Exceeds $7 Billion; Q4 Revenue $2.03 billion, up 9% y-y; Additional $1.2B in Stock Repurchases Authorized through February 2018 PALO ALTO, CA — (Marketwired) — 01/26/17 — VMware, Inc.(NYSE: VMW), a leader in cloud infrastructure and business mobility, today announced financial results for the fourth quarter and full year of 2016:
Revenue for the fourth quarter was $2.03 billion, an increase of 9% from the fourth quarter of 2015.
License revenue for the fourth quarter was $887 million, an increase of 8% from the fourth quarter of 2015.
GAAP net income for the fourth quarter was $441 million, or $1.04 per diluted share, up 18% per diluted share compared to $373 million, or $0.88 per diluted share, for the fourth quarter of 2015. Non-GAAP net income for the quarter was $597 million, or $1.43 per diluted share, up 13% per diluted share compared to $534 million, or $1.26 per diluted share, for the fourth quarter of 2015.
GAAP operating income for the fourth quarter was $543 million, an increase of 21% from the fourth quarter of 2015. Non-GAAP operating income for the fourth quarter was $747 million, an increase of 14% from the fourth quarter of 2015.
Operating cash flows for the fourth quarter were $463 million. Free cash flows for the quarter were $419 million.
Total revenue plus sequential change in total unearned revenue grew 13% year-over-year.
License revenue plus sequential change in unearned license revenue grew 14% year-over-year.
Revenue for 2016 was $7.09 billion, an increase of 8% from 2015 on a GAAP basis and up 7% on a non-GAAP basis.
License revenue for 2016 was $2.79 billion, an increase of 3% from 2015.
GAAP net income for 2016 was $1.19 billion, or $2.78 per diluted share, up 19% per diluted share compared to $997 million, or $2.34 per diluted share, for 2015. Non-GAAP net income for 2016 was $1.86 billion, or $4.39 per diluted share, up 8% per diluted share compared to $1.73 billion, or $4.06 per diluted share, for 2015.
GAAP operating income for 2016 was $1.44 billion, an increase of 20% from 2015. Non-GAAP operating income for 2016 was $2.29 billion, an increase of 9% from 2015.
Operating cash flows for 2016 were $2.38 billion. Free cash flows for 2016 were $2.23 billion.
Cash, cash equivalents and short-term investments were $7.99 billion, and unearned revenue was $5.62 billion as of December 31, 2016.
The company also announced that its Board of Directors has authorized the repurchase of up to $1.2 billion of its Class A common stock through the end of fiscal 2018, ending on February 2, 2018. Stock will be purchased from time to time, in the open market or through private transactions, subject to market conditions. The stock repurchase authorization is in addition to the Company’s ongoing $500 million stock repurchase program announced in December 2016.
‘Q4 closed out a strong fiscal 2016 and was one of the most balanced quarters for VMware in years,’ said Pat Gelsinger, chief executive officer, VMware. ‘We’re very pleased with our strong product momentum and customer enthusiasm for our Cloud strategy. We believe we have the world’s most complete and capable hybrid cloud architecture, uniquely offering customers freedom and control in their infrastructure decisions.’
Zane Rowe, executive vice president and chief financial officer, VMware, said, ‘This was a very good year for VMware demonstrated by strong revenue, earnings and cash flow growth, as well as a significant amount of capital returned to shareholders in the form of stock repurchases. We’re pleased to announce the authorization of an additional $1.2 billion of stock repurchases to be completed during fiscal 2018.’
Recent Highlights & Strategic Announcements
In October, VMware and Amazon Web Services announced a partnership to provide a new VMware vSphere®-based cloud service running on AWS. VMware Cloud™ on AWS will make it easier to run any application, using a common set of familiar software and tools, in a consistent hybrid cloud environment. This new service will be delivered, sold and supported by VMware and will be available later in 2017.
VMware hosted over 75,000 customers, partners and influencers at VMworld® 2016, VMworld 2016 Europe and across APJ vForums in 17 cities across 13 countries.
At VMworld 2016 Europe, the company introduced a wave of new products and services designed to help customers accelerate their digital transformation:
Now generally available, the new releases of VMware vSphere®, VMware vSAN™ and VMware vRealize® Automation™ all introduced support for containers, enabling developers to become more productive and IT to easily run containerized applications in production.
VMware further expanded the company’s growing ecosystem of VMware Ready™ for Network Functions Virtualization (NFV) certified solutions, with 22 Virtual Network Functions now certified from 19 vendors worldwide. VMware’s growing set of NFV partners helps global communications service providers adopt and deploy NFV to transform their operations and service portfolio with speed and confidence.
VMware was positioned as a leader in the ‘IDC MarketScape: Worldwide Virtual Client Computing Software 2016 Vendor Assessment (doc # US40700016, November 2016).’ The report evaluated eight vendors based on criteria that span across strategies and capabilities. VMware was recognized for the second consecutive year for having the most complete mix of business and solution strategies and capabilities for delivering virtual desktops and applications through its VMware Horizon® portfolio of solutions and services that includes VMware Horizon® 7, Horizon Air™, Horizon FLEX™ and VMware App Volumes™.
The company will host a conference call today at 2:00 p.m. PT/ 5:00 p.m. ET to review financial results and business outlook. A live web broadcast of the event will be available on the VMware investor relations website at http://ir.vmware.com. Slides will accompany the web broadcast. The replay of the webcast and slides will be available on the website for two months. In addition, six quarters of historical data for revenues which include year-over-year comparisons will also be made available at http://ir.vmware.com in conjunction with the conference call.