Company Of The Day: VMware
VMware (NYSE:VMW) posted a mixed set of Q2 results, with revenue rising 9% year-over-year to $3.14 billion, roughly in line with Street estimates. Adjusted EPS beat estimates, coming in at $1.75 per share. This was partly due to a better than expected performance of the company’s on-premise business. However, the company’s subscription and software-as-a-service revenue growth figures were weaker than expected. Subscription and SaaS revenue grew 23% year-over-year, compared to 29% reported in Q1. Growth is expected to cool further in Q3.
VMWare stock declined by about 7% in Friday’s trading, as investors are usually more focused on the cloud side of the business, rather than the on-premise side, as subscription revenues are more predictable and margins also have more upside in the long run.
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