Revenue came in at the high end of expectations, though expanded product line "will take time to ramp."
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VMware turned in "solid" second quarter 2014 results with revenue growth of 17.2% and order bookings growth of 24%.
Enterprise license agreements, in which VMware sells more products to the same customer, moved up to 37% of total bookings, the company said Tuesday, compared to 25% for the same quarter the year before.
The results represented revenue of $1.46 billion for the quarter, higher than the $1.43 billion estimated by Wells Fargo equities analyst Jason Maynard, and at the high end of VMware's own quarterly projection. Net income was $167 million or 38 cents per share, compared to $245 million or 57 cents per share for the same quarter last year. VMware has $6.64 billion in cash, cash equivalents, and short-term investments on hand.
VMware CFO Jonathan Chadwick said it had made eight deals worth more than $10 million in Q2, some of which slipped into the second quarter when they didn't close during the first quarter.
"We continue to see strong performance across our business, further evidence that VMware is uniquely positioned as IT transitions from client-server computing to the mobile-cloud era," said CEO Pat Gelsinger.
Maynard termed the quarter a solid one for VMware but predicted its stock would grow in value at a "low double-digit" rate "whereas the consensus view is mid-teens or better," he wrote in a research note about the earnings call. "We think adjacencies like management tools and vSAN and acquired products, such as AirWatch and NSX, have great promise but will take time to ramp."
VMware just announced its vCloud Hybrid Service will expand into Asia Pacific through partnerships in both Japan and China. It will offer vCloud-based services through a China Telecom partnership from a data center in Beijing and through SoftBank in Japan. VCloud Hybrid Service is meant to offer a compatible environment in cloud data centers for enterprise VMware product users who want to move some of their work into the cloud.
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