Today VMware announced financial results for the third quarter of fiscal year 2023. Below are fast facts, executive quotes and highlights from the news release. Please contact Doreen Ruyak in VMware Global PR with any questions. Please find attached the results.
VMware Reports Fiscal Year 2023 Third Quarter Results
- Revenue for the third quarter was $3.21 billion, an increase of 1% from the third quarter of fiscal 2022.
- The combination of subscription and SaaS and license revenue was $1.61 billion for the third quarter, an increase of 5% from the third quarter of fiscal 2022.
- Subscription and SaaS constituted 31% of our total revenue for the quarter.
- Subscription and SaaS revenue for the third quarter was $988 million, an increase of 20% year-over-year.
- Subscription and SaaS ARR for the third quarter was $4.10 billion, an increase of 24% year-over-year.
- GAAP net income for the third quarter was $231 million, or $0.54 per diluted share, down 43% per diluted share compared to $398 million, or $0.94 per diluted share, for the third quarter of fiscal 2022. Non-GAAP net income for the third quarter was $626 million, or $1.47 per diluted share, down 15% per diluted share compared to $725 million, or $1.72 per diluted share, for the third quarter of fiscal 2022.1
- GAAP operating income for the third quarter was $390 million, a decrease of 25% from the third quarter of fiscal 2022. Non-GAAP operating income for the third quarter was $857 million, a decrease of 8% from the third quarter of fiscal 2022.
- Operating cash flow for the third quarter was $1.26 billion. Free cash flow for the third quarter was $1.16 billion.
- RPO for the third quarter totaled $11.90 billion, up 7% year-over-year.
“Q3 results met our expectations. This past quarter we demonstrated that our innovation engine is flourishing, as we unveiled many new offerings across our portfolio, including VMware vSphere 8, VMware vSAN 8 and VMware Aria,” said Raghu Raghuram, CEO, VMware. “We remain committed to and engaged in helping customers transform their businesses and unlock the full potential of multi-cloud.”
“Our Q3 subscription and SaaS ARR growth of 24% reflects increased adoption of our multi-cloud product portfolio and recently introduced customer programs,” said Zane Rowe, executive vice president and CFO, VMware. “By continuing to meet the evolving needs of our customers, we increased our mix of subscription and SaaS revenue to 31% of our total revenue this quarter.”
Business Highlights & Strategic Announcements:
- At VMware Explore U.S. 2022, the company announced new and enhanced portfolio offerings, Cross-Cloud services and expanded partnerships to deliver a faster and smarter path to cloud for digital businesses. New technology offerings included:
- VMware vSphere 8, which introduces a new era of computing by supporting DPUs (Data Processing Units) alongside CPUs and GPUs—making the future of modern infrastructure accessible to all enterprises.
- VMware vSAN 8 for breakthrough performance and hyper-efficiency.
- VMware Aria, a new multi-cloud management portfolio, which provides a set of end-to-end solutions for managing cloud native applications and infrastructure.
- VMware Cloud Foundation+, introducing a cloud-connected architecture for managing and operating full stack HCI in data centers.
- Project Northstar, a preview of a major advancement of the VMware NSX platform, for multi-cloud networking, security and end-to-end visibility.
- VMware Tanzu for Kubernetes Operations, which includes VMware Tanzu Mission Control, VMware Aria Operations for Apps and VMware Tanzu Kubernetes Grid will simplify Kubernetes delivery, management and reliability.
- The extension of Workspace ONE Freestyle Orchestrator to mobile devices and third-party apps, for multi-platform automation and orchestration.
- VMware recently announced an expansion of our partnership with IBM to help clients in regulated industries more easily move workloads to the cloud, with IBM Consulting now serving as a GSI partner for VMware.
- VMware extended its ongoing collaboration with Microsoft to help customers with an Azure-first strategy to modernize enterprise VMware vSphere workloads quickly and cost-effectively in Microsoft Azure.
- VMware and AWS announced new capabilities in the jointly engineered VMware Cloud on AWS service and broad availability of VMware Cross-Cloud services on AWS Marketplace to help customers accelerate moving VMware workloads to modern and more secure infrastructure in AWS to support enterprise cloud transformation.
- VMware introduced VMware Carbon Black Workload for AWS, which delivers advanced protection purpose-built for securing both traditional and modern workloads.
- VMware received industry analyst recognition:
- VMware was positioned by Gartner, Inc. as a Leader in the 2022 Gartner Magic Quadrant for SD-WAN.2 Previously known as the Gartner Magic Quadrant for WAN Edge Infrastructure, this year’s report marks the fifth consecutive year that Gartner has recognized VMware as a Leader in SD-WAN.
- VMware was positioned by Gartner, Inc. as a Leader in the 2022 Magic Quadrant for Unified Endpoint Management (UEM) Tools.3 This is the fifth consecutive year VMware has been named. We believe Gartner recognized VMware as a Leader in this Magic Quadrant because of our Workspace One product.
- Analyst firm IDC ranked VMware No. 1 in the worldwide IT automation and configuration management (ITACM) 4 software market for 2021. This year’s report marks the fifth consecutive year that customers have helped VMware top the list in Worldwide IT Automation and Configuration.
1 Our annual estimated tax rate is based upon, among other things, current tax law regarding the impacts of Internal Revenue Code Section 174 (“Section 174”) research and development expense capitalization, which became effective beginning VMware’s fiscal 2023. Although the U.S. Congress continues to consider various legislative options that would defer the amortization requirement to later years, the financial results for the nine months ended October 28, 2022 reflect the impact of the tax law in effect as of October 28, 2022. The provided estimated tax adjustment range, in the table accompanying this release, reflects the non-GAAP adjustment we would expect should the capitalization provisions of Section 174 be deferred or repealed with effect for fiscal 2023.
2 Gartner, Magic Quadrant for SD-WAN, By Jonathan Forest, Naresh Singh, Andrew Lerner, Karen Brown, 12 September 2022. Gartner does not endorse any vendor, product, or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Gartner and Magic Quadrant are registered trademarks of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved. This document was renamed from Magic Quadrant of WAN Edge Infrastructure to Magic Quadrant for SD-WAN in 2022.
3Gartner Magic Quadrant for Unified Endpoint Management Tools, Tom Cipolla, Dan Wilson, Chris Silva, Craig Fisler, August 1, 2022.
4 The IDC report, “Worldwide IT Automation and Configuration Management Software Market Shares, 2021: Economic Recovery Drives Growth,” (doc #US49218922, June 2022) analyzed revenue and growth rate for the total market in calendar 2021, as well as revenues, shares and growth rates of select leading vendors.