VMware’s 4Q15 Results Beat Analyst Expectations

VMware’s 4Q15 results beat analyst expectations

After technology players like IBM (IBM), SAP (SAP), and Intel (INTC) announced their recent earnings in January 2016, it was VMware’s (VMW) turn to release its fiscal 4Q15 results. VMW reported revenues of $1.9 billion and non-GAAP (generally accepted accounting principles) EPS (earnings per share) of $1.26 in fiscal 4Q15, which beat analyst expectations by $20 million and $0.01 cent per share, respectively. For fiscal 2015, VMW reported revenues of $6.6 billion and non-GAAP EPS of $4.06.

VMware’s 4Q15 Results Beat Analyst Expectations

VMware’s segment performance

The chart above shows the revenue contributions of VMW’s operating segments in fiscal 2015. Licensing and services revenues contributed close to 41% and 59% towards overall revenues in 2015. Licensing revenues stood at $825 million and $2.7 billion in fiscal 4Q15 and 2015, respectively. On a YoY basis, licensing revenues grew by 6% in fiscal 4Q15. However, in constant currency terms, this growth was 12%, indicating that appreciation of the US dollar (UUP) significantly impacted VMware just like its other technology peers.

Service revenues stood at $1.0 billion and $3.9 billion in fiscal 4Q15 and 2015, respectively. On a YoY basis, it grew by 12.6% in fiscal 4Q15. In the later part of the series, we will discuss major factors that led to VMware’s growth in 2015 as well as announcements that accompanied fiscal 4Q15 and 2015 earnings.