VMware (VMW) to Report Q2 Earnings: What's in the Cards?
VMware VMW is slated to release second-quarter fiscal 2023 results on Aug 25.
The Zacks Consensus Estimate for quarterly earnings has been unchanged over the past 30 days at $1.61 per share, suggesting an 8% decline from the figure reported in the year-ago fiscal quarter.
The consensus mark for revenues is pegged at $3.31 billion, indicating a 5.48% increase from the year-ago fiscal quarter’s reported number.
Earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark once, the average surprise being 0.95%.
Let’s see how things have shaped up before this announcement.
VMware, Inc. Price and EPS Surprise
VMware, Inc. price-eps-surprise | VMware, Inc. Quote
Key Factors to Note
VMware’s strong product portfolio along with the robust uptake of cloud and security solutions is expected to have driven its top line in the second quarter of fiscal 2023.
VMW’s top line is expected to have gained in the to-be-reported quarter from the ongoing cloud-based digital transformation and the increasing traction witnessed for subscription and software-as-a-service (SaaS) offerings. The subscription and SaaS business is being driven by the robust uptake of modern applications, namely VMware Cloud Provider Program, End-User Computing, Carbon Black and VMware Cloud on Amazon’s AMZN Amazon Web Services (AWS).
VMware is currently available on the AWS marketplace and is offering its solutions at flexible purchasing and consumption options, which might have attracted new customers in the second quarter of 2023.
VMW’s widening cloud customer base is also being driven by partnerships with major tech companies like Alphabet’s GOOGL Google Cloud and one of the major big four audit firms, Deloitte.
Google Cloud and VMWare expanded their partnership to help customers with rapid cloud transformation by using the VMware cloud universal program to take advantage of the Google Cloud VMWare engine. VMWare’s partnership with Google Cloud and Deloitte is also expected to have won more customers and aided its top-line growth. This, in turn, is expected to have impacted its stock performance positively.
VMware currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
VMWare’s top-line performance in the to-be-reported quarter is expected to have benefited from the 5G megatrend, as major big companies like Dish Network DISH are building their 5G network from scratch and selected VMW to build the foundation for its radio access network (RAN).
DISH’s RAN workloads will run on the VMWare Telco cloud platform. Management at DISH Network decided to trial VMW’s RAN intelligent controller (RIC) as the platform on which DISH’s RAN applications will run.
VMware is likely to have benefited from continued momentum on its Tanzu platform across key verticals like financial services.
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