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3 Large-Cap Software Companies Release 4th-Quarter Financial Results

- By Alberto Abaterusso

These large-cap tech stocks released fourth-quarter fiscal 2019 earnings results on Thursday.

Shares of VMware Inc. (VMW) jumped 3.6% to $178 in after-hours trading on Thursday after beating consensus estimates for fourth-quarter non-GAAP earnings by 10 cents, having posted earnings of $1.98 per share.

Revenue grew 16.1% year-over-year to $2.59 billion, beating expectations by $90 million. License revenue soared 21% year-over-year to $1.23 billion, and services revenue rose 12.6% from the prior-year quarter to $1.36 billion in the final quarter of fiscal 2019 which ended Feb. 1.


The Palo Alto, California-based computer software provider also noted approximately 0.6 percentage points of year-over-year growth in non-GAAP operating margin to 37.34%.

VMware also reported the following changes in the financial results for full fiscal 2019.

Total revenue increased 14% to $8.98 billion, which is shared between license revenue of $3.79 billion and services revenue of $5.19 billion. GAAP net income soared 267.2% to $2.42 billion, non-GAAP net income jumped 20.7% to $2.62 billion and operating cash flow rose 13.8% to $3.66 billion. The non-GAAP operating margin was flat at 33.9%. The GAAP net income for fiscal 2019 included a $813 million gain on an investment in Pivotal Software (PVTL).

In addition, the free cash flow was $3.42 billion in fiscal 2019 versus $2.96 in fiscal 2018.

The balance sheet had $2.85 billion in cash on hand and short-term securities, $3.97 billion in long-term debt and $6.98 billion in unearned revenues as of Feb. 1. During the last quarter of fiscal 2019, VMware Inc. recorded total billings of $3.37 billion compared to $2.87 billion in the prior-year quarter.

The stock closed at $171.8 per share on Thursday for a market capitalization of about $70.42 billion. The share price is substantially above the 200-, 100- and 50-day simple moving average lines. The 52-week range is $113.30 to $176.66.

The share price of Autodesk Inc. (ADSK) jumped 1.4% to $165.30 in after-hours trading on Thursday after beating consensus estimates for fourth-quarter non-GAAP earnings by 4 cents per share and GAAP earnings by 16 cents per share. Autodesk Inc. posted non-GAAP earnings of 46 cents per share and GAAP earnings of 29 cents per share.

For the final trimester of fiscal 2019, which ended Jan. 31, 2019, total revenue totaled $737.3 million, up 33.1% from the prior-year quarter, beating consensus estimates by $29.95 million.

For full fiscal 2019, Autodesk recorded a 25% year-over-year increase in total revenue to $2.57 billion and a 22% increase in billings to $2.71 billion, as 452,000 customers shifted from maintenance to subscription and more than 4 million active subscriptions were made.

Autodesk also noted an 18% increase in total deferred revenues to $2.68 billion, a positive reversal in the free cash flow to $310 million from negative free cash flow of 50 million in fiscal 2018 and 95% increase in recurring revenue.

For fiscal 2020, which will end on Jan. 31, 2020, Autodesk guided for 27-29% growth in total annualized recurring revenue to $3.5 billion to $3.55 billion, 50-53% surge in billings to $4.05 billion to $4.15 billion and 26-28% growth in total revenue to $3.25 billion to $3.3 billion. The company also anticipated non-GAAP earnings of $2.71 to $2.9 per share, GAAP earnings of $1.12 to $1.31 per share and free cash of roughly $1.35 billion.

The balance sheet had approximately $954 million in cash on hand and short-term securities, $2.09 billion in total debt and $2.09 billion in total unearned revenues as of Jan. 31.

The share price was $171.8 at close on Thursday for a market capitalization of about $35.7 billion. The share price is substantially above the 200-, 100- and 50-day simple moving average lines. The 52-week range is $111.05 to $166.29.

Shares of Workday Inc. (WDAY) jumped 1.18% to $200.26 in after-hours trading on Thursday after beating consensus estimates for fourth-quarter non-GAAP earnings by 9 cents per share and GAAP earnings by 8 cents per share. Workday posted non-GAAP earnings of 41 cents per share and GAAP loss of 47 cents per share.

Fourth-quarter revenue soared 35.4% to $788.6 million, beating expectations by $11.74 million. Revenue was shared between subscription at $673.5 million and services at $115 million.

For full fiscal 2019, Workday noted 31.7% growth in total revenue to $2.82 billion, 0.2 percentage-point growth in non-GAAP operating income margin to 10.3% of revenues, 32% growth in non-GAAP net profit of $1.36 per diluted share and 30.3% growth in operating cash flow to $606.7 million.

Looking ahead, the Pleasanton, California-based provider of management software forecasted 27-28% growth in subscription revenue to $3.03 billion to $3.045 billion for full fiscal year 2020 which will end on Jan. 31, 2020.

The balance sheet had $1.78 billion in cash on hand and short-term securities, $1.2 billion in total debt and $1.95 billion in total unearned revenues as of Jan. 31.

The share price was $197.93 at close on Thursday for a market capitalization of about $43.15 billion. The share price is far above the 200-, 100- and 50-day simple moving average lines. The 52-week range is $117.24 to $199.45.

Disclosure: I have no position in any securities mentioned.

This article first appeared on GuruFocus.