VMware shares are modestly higher in late trading after the enterprise software company posted financial results for the fiscal third quarter ended Oct. 31 that edged past Street estimates.
For the quarter, VMware (ticker: VMW) reported revenue of $3.19 billion, up 11% from a year earlier, and slightly above the Street consensus at $3.1 billion. Non-GAAP profits were $1.72 a share, up 3% from a year earlier, and ahead of consensus at $1.54.
VMware’s outperformance came largely from its legacy software licensing segment, which had revenue of $710 million, which was ahead of the Street consensus forecast of $649 million, and from services, which were $1.658 billion, ahead of the consensus at $1.646 billion.
Revenue from the subscription and software-as-a-service (SaaS) segment was $820 million, shy of the Street consensus at $828 million.
“Our performance in Q3 reflects strong year-over-year growth in major product categories as we deliver compelling value to our customers,” VMware chief financial officer Zane Rowe said in a statement. He pointed out that the subscription and SaaS segment had annualized recurring revenue of $3.31 billion, up 25%.
This is the company’s first earnings report since Dell’s recent spinout of its controlling position in VMware to Dell (DELL) shareholders.
VMware shares in after-hours trading rose 1.7%, to $118.40. The S&P 500 closed up 0.2% on Tuesday, while the Nasdaq fell 0.5%.
Write to Eric J. Savitz at eric.savitz@barrons.com
