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VMware, Inc. Message Board

  • traderlp traderlp May 19, 2010 1:32 AM Flag

    Remember the conference call?

    2010 was never a slam dunk...


    "During the first quarter we were the beneficiary of pent up customer demands that carried over from the fourth quarter. We did not forecast the eight-figure ELA and we don’t have anything of this size in our current second quarter pipeline."

    "The second half of 2010 is a much more difficult comparable than the first half particularly in the first quarter, which in 2009 included the impact of our promotion to upgrade customers to Enterprise Plus. We continue to set six month quarter plans and operate our business in a half yearly rhythm, but expect Q3 license revenue to be flat to slightly down from Q2 reflecting seasonality. We also expect a currency headwind on revenue in the second half as we have the anniversary of our local currency billing and collection."

    "Things look positive as we look forward, but as Mark commented, I am not sure if we have sufficient data points to accurately predict the slope of the curve coming out of the recession and to banish the uncertainty that persists in the macroeconomic picture.
    You know the fact is that we believe we benefited in Q1 from pent up demand that we saw in the fourth quarter and that there were significant surges in buying in the first quarter. On top of that we – it’s been a year since we have had an eight-figure enterprise license agreement as you saw our ELA percentage as a total of bookings was in the mid teens this quarter in a times that’s crossed the 20% or 25% range that accelerates the recognition of license revenue. We are also just in the throws of planning the back half of 2010 and as we look ahead although we are optimistic, we are still cautious with respect to what the economy has in store for us as well as the fact that we do have competitors who are willing to throw money at the market and so we are just approaching 2010 with caution and assuming that both the economy and IT spending will improve gradually."

    "we expect back maintenance for the balance of 2010 to be lower compared to the same period of 2009."

    and from EMC:

    But some of it was driven by "pent-up demand" as the corporate customers that are EMC's bread and butter return to IT investments after a few lean years. But that trend is short-lived: "We're expecting to move to a more seasonal pattern after Q1," Goulden said, meaning business as usual with higher sales approaching the fourth quarters of the fiscal year, but flatter sales in the second and third quarters.

    But during a conference call, EMC Chief Financial Officer David Goulden wasn't optimistic that the trend would continue.

    QUESTION: Do you have any insight as to how long you think the pent-up demand spending will last before we move into "normal" purchasing patterns, not catch-up mode?

    RESPONSE: "We really are not anticipating a lot of that pent-up demand kind of running forward into the rest of the year. ... You will see that because of pent-up demand we are expecting Q1 (the first quarter) to be higher than our usual percentage of the total. So we are expecting to move to a more seasonal pattern kind of after Q1, which would mean essentially that you wouldn't see quite as big a jump.

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    • Another choad who doesn't know the difference between "to" and "too" speaks. Go get a fifth grade education dumba$$.

    • Are you the same clairvoyant?

    • I said "real sellers" which don't include shorters. It can bounce back very quickly, as always.

      All the shares owned by outside individuals are shorted.

    • Another 100 a share buyer speaks..............

    • If there aren't many sellers, why is it down 1.75?

    • Forward P/E is only about 37. EMC absorbed all the 1.65 million additional shares shorted, and also the selling. It has bought about 3 million shares in 2 months. There aren't really many real sellers left around here.

    • I wouldn't feel to bad buying at 100 I bought kind of high myself.

    • You conveniently OMITTED this most important projection immediately following the part that you quoted.

      "We are currently planning on 2010 revenue of between $2.625 billion and $2.725 billion, or growth of 30% to 35% for the year. From a margin perspective we will continue to invest both organically and through acquisitions. Our current expectation for the full year non-GAAP operating margin is a range of 25% to 27%, but this could be disrupted by M&A activity. We expect our 2010 GAAP operating margin to be approximately 14 to 15 percentage points lower than our non-GAAP operating margin.

      To summarize, Q1 was a great quarter and we were pleased with our execution and solid performance. We are planning for the future assuming the economic recovery will be gradual. We continue to manage our resources prudently while making the key investments necessary to maximize our long term growth in free cash flow per share."

    • To be more negative, you could have added some other companies' projections as well. But to almost all companies as VMware's (potential or not) customers, using VMware products is SPENDING MONEY TO SAVE MORE MONEY. Why did you miss these?

      Software maintenance and support revenue was $267 million, an increase of 52% from last year. Our maintenance recovery program has now been in place for a full year, and although down sequentially from Q4 back maintenance revenue almost doubled from Q1 a year ago. As the program will see its anniversary in Q2, we expect back maintenance for the balance of 2010 to be lower compared to the same period of 2009. In total, renewal bookings grew approximately 56% compared to the first quarter of 2009.

      Professional services revenue was $54 million, an increase of 44% from last year, and stronger than our expectations. Customers consumed professional service credits primarily for training and to assist in planning and implementation of vSphere deployments. Our deferred revenue related to professional services declined sequentially by $7 million.

      U.S. revenues increased 30% from a year ago to $317 million, representing half of total revenue. International revenue grew 40% to $317 million driven by strong demand across geographies, particularly Europe, China, and Japan.

      Enterprise license agreements were in the mid-teens as a percentage of total bookings and transactions with order values less than $50,000 represented approximately half of total orders.

      Now onto our balance sheet and cash flow statements. Our balance sheet remains strong with cash at quarter-end of nearly $2.8 billion, a sequential increase of $270 million driven primarily by the seasonal collection of accounts receivable from the December quarter billings. During the March quarter, we used nearly $200 million for capital spending, M&A activity, and our share repurchase program."

    • I have a bad feeling that investors are pulling out of this stock. It had a huge run but we just saw a major top last week. They are readjusting their portfolios and I think the software sector had a good run but it will cool off and investors will go in another sector. I hope I am wrong because I am kicking my butt for not selling at 64.00.

72.91-0.35(-0.48%)Oct 21 4:02 PMEDT