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January 25, 2010

VMware Q4 revenue up 18% to $608m

Services revenue up 52% on year-ago quarter

By CBR Staff Writer

VMware has reported revenue of $608.2m in the fourth quarter of 2009, up 18% compared to $514.6m in the same period last year.

The company has posted an operating income of $71m, down 30% compared to $102.11m in the same period a year ago. The company posted an operating margin of 11%. Operating cash flows were $284m, an increase of 4% from the fourth quarter of 2008. Free cash flows for the quarter were $259m, an increase of 45% year-over-year.

For the quarter ended December 31, 2009, Net income was $56.4m, or $0.14 per diluted share, compared to $111.4m, or $0.29 per diluted share, in the same period last year.

Geographically, US revenue grew 5% to $1.04bn while international revenue grew 10% to $985m, compared to the same period last year.

Services revenue, which include software maintenance and professional services, were $304m, an increase of 52% from the fourth quarter of 2008.

For the full year 2009, the company reported revenue of $2bn, an increase of 8%, compared to $1.88bn for 2008. Operating income decreased by 30% to $219m from $312.5m in 2008. Net income was $197m, or $0.49 per diluted share, compared to $290m, or $0.73 per diluted share, for 2008.

Paul Maritz, president and chief executive officer, said: “The quarter’s strong performance, anchored by demand for vSphere , signals that virtualisation is a key technology for customers who need to save money today, yet invest in a strategy that is central to the emerging cloud computing model.

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“We believe that VMware is well positioned to help take our customers on this evolutionary path forward, and our strategy is to expand our portfolio to better serve our customers who are looking to remove complexity from IT.”

Looking ahead , the company expects first quarter revenues to be in the range of $580m and $600m, an increase of 23% to 28% from the first quarter 2009. We expect annual 2010 revenue to be in the range of $2.45bn and $2.55bn, an increase of 21% to 26% from 2009.

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