VMware Q2 2009 Earning Call

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At the end of July VMware announced the financial results for Q2 2009.
The company is handling well the financial crisis, keeping a flat growth rate, but the profit dropped significantly and it’s evident that the new licenses revenue trend is not positive. In details:

The VMware revenue remain substantially flat compared to the Q2 2008, with a 3% loss in US and a 3% growth abroad.
In particular VMware experienced a double-digit year-over-year booking increase in China, Japan, Canada, Brazil and UK.

The positive balance depends more and more on the software maintenance and professional services (+32% revenue) as the new licenses revenue significantly drops by 20%.

VMware is also suffering a 38% loss in profit, moving from $52.3M in Q2 2008 to $32.5M.

The company hired almost 200 new employees in the last quarter (virtualization.info could track only a few executives), reaching 6900 people total, which produced a 3% increase in operating expenses.

VMware almost maintains the same level of investment for R&D (+0.3% compared to Q1) while it’s more consistently raising the investment in Sales and Marketing (+4%).

The company reports a high interest around vSphere 4.0 with almost 250,000 trials downloads in just 8 weeks.
Anyway this information is no more significant because the warez scene recently released for the first time ever an illegal key generator for the product, and this can inflate and compromise the numbers.

VMware now has $2.3 billion in cash and cash equivalent and $934 million in deferred revenue, which means it has more than enough to pursue additional, small acquisitions as it did in the past.

The total amount of Enterprise License Agreements (ELAs) booked in Q2 are 15% down from Q1 and from Q2 2008.
Despite that VMware sees an improvement in the global economy conditions and forecasts the Q3 2009 revenues between $456M and $480M, while it expects a full 2009 revenue growth of 3%.

The earnings call full transcript is available here, courtesy of Seeking Alpha.