VMware revenue lifted by maintenance fees

Services revenue and a recent update to vSphere anchored the virtualization software company's growth

Virtualization company VMware has reported a healthy increase in revenue for the fourth quarter, thanks largely to gains from software maintenance fees.

Revenue for the quarter, ended Dec. 31, came in at US$608.2 million, an 18 percent increase from the same period last year, VMware said Monday. It was also ahead of the consensus analyst estimate of $554 million for the quarter, according to Thomson Reuters.

New license sales declined slightly from last year, to $304.2 million, but services revenue jumped 52 percent to $303.9 million, thanks mostly to an increase in software maintenance revenue, VMware said. The maintenance revenue totalled $246.2 million, up from $160.5 million a year earlier.

Despite the climb in revenue, net income was down for the quarter at $56 million, or $0.14 per share, compared to $111 million, or $0.29 per share, in the same quarter a year earlier, the company said.

Excluding one-time items, net income on a pro forma basis was $127 million, or $0.31 per share, down from $142 million, or $0.36 per share, a year earlier. That was also ahead of the analyst estimate of $0.26 per share, Thomson Reuters said.

Paul Maritz, VMware president and CEO, attributed the boost in revenue to increased interest in virtualization in general, and upgrades to version 4 of VMware's vSphere software specifically.

Earlier this month, VMware set out to acquire open-source messaging software provider Zimbra from Yahoo, a deal VMware is in the process of closing. Also, VMware purchased enterprise Java vendor SpringSource last year.

For the full fiscal year, revenue was $2.0 billion, up 8 percent from 2008's $1.9 billion. The company expects annual 2010 revenue to be in the range of $2.45 billion to $2.55 billion, according to Mark Peek, chief financial officer for the EMC-owned company.

Following the earnings announcement, VMware's stock surged almost 18 percent in after-hours markets to $49.50 per share, in part because its forecast for fiscal 2010 came in higher than that of analysts. Thomson Reuters pegged the consensus analyst estimate at $2.18 billion to $2.37 billion in revenue for 2010.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags VMwarevirtualisation

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Joab Jackson

IDG News Service
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?