VMware bucks recession with sizzling Q4 but wary about 2009

Stan Beer
Tuesday, 27 January 2009 06:36

IT Industry - Strategy

Virtualisation market leader VMware, like IBM and Apple before it, has demonstrated that not all IT companies were hit hard by the global recession in the final quarter of 2008, posting an impressive set of numbers for Q4 and the full year. However, the company tempered the good news by expressing trepidation about the coming year.

Revenues for the fourth quarter were US$515 million, an increase of 25% from the fourth quarter of 2007.

Earnings growth was equally impressive. GAAP net income for the fourth quarter was US$111 million, an increase of 42% from the fourth quarter of 2007.

For the full year, revenues were US$1.9 billion, an increase of 42% from 2007, while GAAP net income of US$290 million was 33% above the 2007 figure.

License revenues for 2008 grew 30% to US$1.2 billion from 2007. Services revenues grew 67% to US$703 million from 2007.

“VMware delivered a solid fourth quarter to cap off a successful 2008. We have been executing well in a difficult economy,” said Paul Maritz, president and chief executive officer of VMware.

“Customers continue to make VMware a strategic priority because our solutions – used by more than 130,000 customers – help reduce capital and operational costs.”

Despite the upbeat tone of the results announcement, however, VMware sounded an ominous warning about its expectations for the coming year due to the financial tsunami that hit the developed world in 2008:

"Current uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters and makes it more likely that VMware’s actual results could differ materially from expectations. Because of this uncertainty, VMware is not providing revenue guidance for the full year 2009.

"For the first quarter of 2009, VMware is planning for total revenues of approximately $475 million."