VMware Reports Third Quarter 2014 Financial Results 

VMware, Inc. today announced financial results for the third quarter of 2014.

Revenues for the third quarter were $1.52 billion, an increase of 18% from the third quarter of 2013.

Operating income for the third quarter was $242 million, a decrease of 16% from the third quarter of 2013, reflecting the impact of the AirWatch acquisition. Non-GAAP operating income for the third quarter was $460 million, an increase of 5% from the third quarter of 2013, also reflecting the impact of the AirWatch acquisition, as expected.

Net income for the third quarter was $194 million, or $0.45 per diluted share, down 26% per diluted share compared to $261 million, or $0.60 per diluted share, for the third quarter of 2013. Non-GAAP net income for the quarter was $377 million, or $0.87 per diluted share, up 3% per diluted share compared to $363 million, or $0.84 per diluted share, for the third quarter of 2013. Both GAAP and Non-GAAP results on a year-over-year basis primarily reflect the acquisition of AirWatch, completed in the first quarter of 2014, as expected

Cash, cash equivalents and short-term investments were $7.09 billion, and unearned revenues were $4.37 billion as of September 30, 2014.

"In every region of the world, customers are making a long-term bet on VMware to help them transform their businesses and embrace a new model for IT," said Pat Gelsinger, CEO of VMware. "Customers are looking to VMware for technology choices that liberate them from the constraints of hardware, and which offer a new model for security, optimized for a world of millions of applications."

"Our third-quarter revenue grew 18%, reflecting strong customer adoption of our products and services," said Jonathan Chadwick, chief financial officer. "We are especially pleased by the performance of our newer businesses such as mobility, networking, storage, and hybrid cloud, which made significant progress in delivering against our long-term strategy."

Recent Highlights & Strategic Announcements

• At VMworld 2014, VMware recently hosted over 32,000 customers, partners and influencers in San Francisco and Barcelona while announcing a wave of new products and partnerships across the company's portfolio.
• VMware introduced EVO: RAIL, a hyper-converged infrastructure appliance that helps customers streamline the deployment and scale-out of Software-Defined IT infrastructure. VMware EVO: RAIL is the first solution in a family of hyper-converged infrastructure offerings from VMware.
• VMware continues to rapidly expand the capabilities and global footprint of its vCloud Air hybrid cloud platform. At VMworld 2014 Europe last week, the company announced a new VMware-operated data center in Germany, which will help address German and EU compliance and data protection regulations.
• VMware recently unveiled the vRealize Suite 6, its cloud management platform purpose-built for managing the hybrid cloud. VMware also unveiled a major update of VMware vRealize Operations and the new VMware vRealize Code Stream to enable DevOps teams to deliver frequent, reliable software releases.
• VMware announced a joint initiative with Docker, Google and Pivotal to help enterprises run and manage container-based applications on a common platform. In addition, the company announced the VMware Integrated OpenStack offering that enables IT organizations to quickly and cost-effectively deliver developer-friendly OpenStack APIs and tools on top of their existing VMware infrastructure.
• VMware announced strategic technology and go-to-market NSX partnerships with Arista Networks, F5 and HP, as well as a technology and global reseller agreement with Dell to deliver NSX solutions worldwide. In addition, VMware announced a partnership with Palo Alto Networks to deliver unified security for the hybrid cloud and announced plans with CSC for their new web scale Infrastructure-as-a-Service platform, which will be built on OpenStack and VMware's software-defined data center solutions, including NSX.
• VMware acquired CloudVolumes, a leading provider of real-time application delivery technology. The company also unveiled VMware Workspace Suite, a new integrated platform for managing applications, data and devices, which offers a single, integrated portal to access AirWatch by VMware solutions, and VMware Horizon. In addition, VMware's end-user computing business announced key partnerships with HP, SAP, NVIDIA and Google.