Driven by the strong demand of virtualization, both VMWare and EMC continued to deliver strong results. In addition to organic growth, the two have used this year to acquire other players to be able to deliver a broader set of solutions for their customers.
VMWare’s (NASDAQ:VMW) Q1 revenues grew 33% to $843.7 million, beating the market’s projected $814.5 million. By segment, licensing revenues grew 34% over the year to $419 million and services revenues grew 32% to $425 million. EPS of $0.48 was also ahead of the Street’s expectations of $0.42.
For the current quarter, VMWare is expecting revenues of $860 million-$880 million, compared with the $845.5 million that analysts were projecting. For the full year, VMware is looking at revenues of $3.55 billion to $3.65 billion, ahead of analyst expectations of $3.52 billion.
VMWare’s Acquisition Spree
Last week, to strengthen its SMB offerings, VMware announced plans to acquire Minnesota-based Shavlik Technologies, a cloud-based IT solutions provider. Shavlik focuses on on-premise and SaaS-based management solutions that help small and medium sized businesses effectively manage, monitor and secure their information technology environment. VMware had an existing joint offering with Shavlik, VMWareGo, which helped SMBs deploy and manage VMware vSphere.
Last month, they also acquired San Franciso–based SlideRocket, a SaaS-based business presentation solutions provider. SlideRocket has more than 20,000 customers and 300,000 users accessing its cloud based end-user computing model that focuses on presentations, websites, and multi-media content. To expand on its cloud offerings, it acquired WaveMaker, a provider of solutions that let software developers build applications using a Web-based graphic interface. WaveMaker’s tool claims 135,000 downloads a month and is simplifies systems to let lesser technically qualified users to build applications. Through the acquisitions, VMware will be able to widen the audience it reaches with its existing Spring framework.
VMware’s stock is trading at $94.65 with a market capitalization of $39.7 billion. It touched a 52-week high of $99.19 last month.
Riding on its subsidiary’s success, parent EMC (NASDAQ:EMC) too managed to deliver good results. Q1 revenues grew 18% over the year to $4.61 billion, exceeding the Street’s projected $4.51 billion. EPS of $0.31 was in line with the Street’s targets.
EMC expects current quarter revenues of $19.6 billion and EPS of $1.46, marginally shy of the market’s projected revenues of $19.65 billion and EPS of $1.48.
EMC continued acquiring other companies and recently added Netwitness to its portfolio. Netwitness is a privately held provider of network security analysis solutions. Its solutions provide precise and pervasive network visibility and thus enable security teams to detect and fix advanced threats besides automating incident investigation process. Through the acquisition, EMC will be able to add to EMC’s ability to bring to market more innovative network monitoring solutions that focus on critical threat areas and deliver and support these solutions on a global scale.
EMC’s stock is trading at $27.32 with a market capitalization of $56.3 billion. It touched a 52-week high of $28.73 in April.