VMware raises Q4 outlook on heels of strong Q3 earnings

VMware is quickly becoming a cash cow as license and maintenance revenue grow at a healthy clip.

VMware reported strong third quarter results and upped the outlook for the fourth quarter.

VMware reported third quarter earnings of $178 million, or 41 cents a share, on revenue of $942 million, up 32 percent from a year ago. Non-GAAP earnings were 53 cents a share.

Wall Street, which bases its estimates on non-GAAP earnings, was looking for third quarter earnings of 50 cents a share on $929.4 million.

As for the outlook, VMware projected fourth quarter sales between $1.03 billion to $1.06 billion, up 23 percent to 27 percent from a year ago. That range is better than the $1.03 billion Wall Street analysts were projecting.

VMware is quickly becoming a cash cow. In the third quarter, VMware delivered operating cash flow of $524 million and $1.9 billion of operating cash flow for the trailing 12 months. The company ended the quarter with $4 billion in cash, cash equivalents and short term investments.

By the numbers:

  • U.S. revenue in the third quarter was $443 million, up 22 percent from a year ago. International revenue was $498 million in the third quarter, up 42 percent from a year ago.
  • License revenue in the third quarter was up 29 percent from a year ago. Service revenue was up 34 percent in the quarter.
  • Research and development spending for the nine months ended Sept. 30 was $558 million, up from $475.3 million for the same period a year ago.

This story originally appeared on ZDNet under the headline "VMware reports strong Q3, raises Q4 outlook."

About the author

    Larry Dignan is editor in chief of ZDNet and editorial director of CNET's TechRepublic. He has covered the technology and financial-services industries since 1995.

     

    ARTICLE DISCUSSION

    Conversation powered by Livefyre

    Don't Miss
    Hot Products
    Trending on CNET

    Hot on CNET

    CNET's giving away a 3D printer

    Enter for a chance to win* the Makerbot Replicator 3D Printer and all the supplies you need to get started.