Vmware (VMW) 27 Feb 202020 Q4 Earnings call transcript

Good day and welcome to the Q4 and Fiscal Year 2020 Conference Call. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Mr. Paul Ziots, Vice President, Investor Relations. Please go ahead, sir.

you. Thank and Conference Fourth Call. everyone, Year and to Earnings XXXX welcome afternoon, Quarter VMware's Fiscal Good

and On Chief Zane President Executive call, Officer; Financial the we and Rowe, have Executive Pat Gelsinger, Chief Officer. Vice

we remarks, questions. prepared their will Following take

webcast remarks Our conclusion can and posted ir.vmware.com. press conjunction be from call being viewed on market which of Slides live this is simultaneously where in release webcast. after and website, accompany of the issued is was the downloaded close at our this with webcast

On and may forward-looking of do such not to as obligation this files in will that statements update VMware the forward-looking to make statements. intend result X-Ks described with call today, no uncertainties. to we SEC. the and are subject and assume any XX-Ks, various a differ currently risks risk factors results XX-Qs Actual materially We

call, in certain financial of addition, will GAAP considered be measures, In not in measures. for, isolation are from or financial non-GAAP VMware's used which we today's as measures as a addition measures. should These substitution during discuss to, performance, non-GAAP

and acquisition, our certain rate. exclude our non-GAAP tax on results transactions, of employee amortization Our tax other items, payroll as effect of well discrete acquired items stock employer the compensation, stock-based matters intangible measures litigation as GAAP assets, on GAAP disposition, impacting

in find additional release press the and measures, reconciliations including website. on GAAP can You Investor comparable disclosures regarding measures, these with our Relations non-GAAP

due common Pivotal information of on all XXXX for financial transaction was and with this year including the as provided GAAP. full which under are to period control QX recast entities include the financial Growth prior with VMware indicated, our acquisition, in Pivotal. accordance metrics the results Unless by accounted compare otherwise entity, call to a consolidated rates Pivotal for fiscal

revenue presenting between and Previously the a was item titled is SaaS line and subscription subscription three new revenue services. of services components, SaaS following, and as revenue subscription hybrid consists SaaS license and allocated revenue. cloud Accordingly, SaaS was and Revenue. revenue and reported referred Also, to license, Subscription VMware and

this quarter, is subscription prior license which and product the to term product This used has term to license the beginning and Accordingly, use been bookings bookings, quarters. refer we for combination groups. to equivalent will particular of SaaS bookings in

of Relations on The webcast link. replay the will the available this under be call Investor XX company for next website our days

Our fiscal of the first quiet business, period begins Thursday, XXXX XX, XXXX. quarter at close January

over to With Pat. that, it I'll turn

fiscal to good joining Thank you, was Paul, It year. thank today. and us a to everyone you record a finish

$XX revenue per $X.XX full with milestone thrilled are In XX% with billion than share. for VMware. QX, deliver growth, XXXX in increased fiscal line to revenue more earnings non-GAAP year-over-year significant We year top total double-digit for a of

fiscal $X.XX earnings share. increased year-over-year For to non-GAAP per with total of year XX% XXXX, revenue

revenue performance end bookings challenges, mix in subscription short good had the volume at the as a and deals execution quarter particular to we deal and Although, a bit higher expectations of of the year, came well of the linked for of regard quarter due quarter. as with in SaaS, to

had global large betting on closed see we $XXX financial their to above major We brands customers future In deals continue million. QX, two VMware. services

VMware top fiscal commitments the their than major Within of more to banks have last XX global infrastructure. made years, the half IT to two modernize

This services their $XX experiences. VMware foundation very choose to broadly, app year. Customers XX strong across to compares a million XX last in deals over help deliver QX More closed in a we and industries. power deals QX the with record to many digital continue

customers acquisitions welcome with as We're and to VMware we Customers transformations. Pivotal family. the that digital Black value offer help thrilled have their to Pivotal affirmed both resoundingly tremendous Carbon

security and multi-cloud strategy XX the we am strategy momentous have modernization with months I'm strategy and XXXX Black, our over taking what opportunities in Carbon of our with the importance last year year our strategic accomplished I all of Fiscal was by Pivotal, extremely energized app hyperscalers form. a ahead. tremendous proud across the

continues the them across cloud any and in CIO strengths on protect and run, XXXX security, connect help as sitting their build, Our as foundation, vision modernization, any of build list. application resonate we manage, customers play app priorities to device. to companies digital with any And multi-cloud with their our at top

every With portion only top address CIO's each their budget. touch now our also portfolio of expansions, we of we not recent priorities, the almost

make acquisitions VMware applications. of Pivotal acquisition, completion we developers offerings are the who Heptio up the run with native the and recently and positioned the are Kubernetes way of empower and manage The transform multi-cloud use to the native Pivotal software designed the services announced Cloud to cloud application a build, products well Tanzu, modern With a simplify portfolio combined in environment. and of enterprise-ready building enterprises

transform forward Tanzu shifting Kubernetes as first as Pacific help to We highly initial offerings well enterprises their looking Project environments, and to VMware platform, enabling Kubernetes will into sets. seamlessly applications, provide on Project more detail imminently. vSphere skill soon be native innovations will unveiling existing Pacific release. add I'm to the anticipated operations, these

data on and our continue and balanced recovery; as distribution migration. customers two, AWS, use cloud we we're drive application-specific We cases against our three, offer multi-cloud expansion; expand and disaster With choice partnerships to center across, flexibility. strategy VMware and seeing execute our one, to cloud Cloud a

past the increased channel seeing has than accelerate the in We more and the overall are year. count Xx AWS node

Vanguard. to more like We and continued presence customers market expand reach including capabilities customers, to

In VMware premises. AWS on model addition, managed we the infrastructure bringing on Cloud for programs AWS VMware announced Outposts beta for

capacity solution to turned VMware wealth recently Cloud firms expand global one We VMware center management are specific seeing the to powered using skills, processes. largest solutions, their existing with Foundation Azure of and data chose also tool by of world's Azure sets VMware requirements the customers existing

part is in take the Carbon the significant for the modern is VMware brands largest to clouds. integrated now of are leadership of age Foundation family. cloud on private many the role Black, and multi-cloud, customers, that VMware security offering both new including public Cloud a of for the apps and standardizing modern VMware infrastructure world's devices. With poised

simplify common an customer's Carbon partnership for throughout intrinsic early also This offerings with Dell, our have security seen enhanced and cloud, making Dell the security customers. success operations. our we it we as thread view commercial as the endpoint with solution past of element Black quarter, making an We security by preferred essential

to Intelligence well challenges. about We exploits intrinsic doubling Conference, cybersecurity the who keynote is solve Threat more talked and the XX,XXX. of customers a Response sophistication alongside Carbon Head and Sanjay X,XXX have help RSA of those Carrie Southwest presented Black counts Mills, added new total at the today's role Together than over of security the Poonen Yesterday, they of customer Airlines. of the to

is is The Cloud a requirements proponent now solutions key including use VMware cases crucial and networking NSX and portfolio and in foundation app modernization VMware comprehensive and across security.

in NSX This advanced solution. quarter our weren't balancer we strong selling load particularly

large driving In the network strength their in retail are addition, transformation digital application organizations. SD-WAN achieving particular saving brands scale, significantly VMware costs with platform on at customers real-time in and deploying performance, better

self-healing portfolio of an This VMware and enable will within acquisition solution will VMware’s enable existing and ability month, security network This deliver the network SD-WAN. to announced VMware remediation of AI/ML networks. further VMware’s end-to-end capabilities to Nyansa addition which VMware monitoring visibility Nyansa, to

computing QX very execution experienced end-user across the strong We business.

than management solution of transform to in devices. across and Workspace largest of UK the more base their institutions One modernize employee a XXX,XXX the the our ONE experience chose

And recognition a that's virtual resilience. based our platforms provide the Company, and significant and and to agility to Fargo fourth VMware's by computing size quadrupling workforce from received their committed Workspace further financial Wells community virtual quarter, desktops diversified end-user analysts. in services for technology ONE transformation company industry of the

was workspace three ONE which as leader as the top XX strategy platform, reports VMware related to Forrester VMware was VMware's Workspace a MarketScape space. Wave: VMware was also in ranked QX unified Management, in end-user digital a evaluated management offering positioned Endpoint IDC endpoint positioned intelligence-driven vendors. The recent the computing current in leader and Unified categories. XXXX

We continue telco our partner customer with experience offerings. to and cloud momentum

a O-RAN power the Intel. future an built networks. Just for networks bring of with and time This Telecom platform and for will the LTE collaboration reference British radio jointly announced first access to existing and yesterday, compliant virtualization intelligent both collaboration design ever on open XG we

key approach. with offerings. automation and Rogers, this We're efforts. leading to Rogers working innovation Canadian company to effort telco expansion milestone a new software-defined their core accelerate service time-to-market telecom and be transforming Using a solution, the We pleased towards cloud and industry media technology help network in their for a is VMware's believe enable will

enable to We're opportunity ahead digital transformations. as of our continue us about customers’ excited we the

us for in underway building of the as will and well our that one, the foundation next the up next are decade. the required well for services offerings growth, We phase set portfolio

in our all solutions VMware partners help while our with transformations. course, are as scale technologies we We milestone employees their SaaS are committed deliver to want business customers our year invest continue subscription of now build and executing thank to team and and we XXXX. for I and to fiscal our to digital customers, at growth,

it turn Zane more about over performance. I’ll to our business to talk

solutions Carbon QX strong closing in XXXX of expansion in the with including QX fiscal respectively. Thank Pat. product concluded broad and significant a portfolio, you, our Pivotal and QX Black successful and

well resonate customers. our to with continued which of All

growth bookings had EMEA we Americas. and and strength the QX, overall In continued saw good in

Asia had year. region Pacific Our a strong

QX some basis due growth tough a compare quarter saw with last year-over-year we to a in However, in the weakness XX% on year.

revenue full and in close to quarter performance fell was bookings due short. expectations, for total year primarily the reasons. While to our license quarter This came three the

recognized in product mix which On XX% is of over booking year-over-year greater as the a QX our product growth side, ratably. revenue than strength SaaS expected, far EUC had

and deals the expected mix Second than of quarter. SaaS we subscription larger stronger saw in a our for

mix which on expectations. example, believe SaaS especially mentioned, deals the saw third, as year, could had where and also in have we better transactions, close seen For end we towards executed strong against top the which times exceeded is we’ve last of QX we the historically XX Pat our our pipeline closing and rates. subscription quarter, two sales than our And of

As this high we year, as well to which previously reported, QX we’re in strong for accomplish rates, year, didn’t last had very that utilize. able we we backlog as close example,

we however, of our are, strategic and delivering $XX subscription value a completed our demand offerings record demonstrates the QX we’re and customer most above for to that increased largest deals and number base. million in the pleased We SaaS

we expect Our SaaS continue. on trend the delivered has focus this to quarters over of and significant last and growth number bookings subscription

financial we’ve we the metrics Before highlight. report to like year, changes key for I’d made to quarter that and of the a moving couple in way the

and combined QX mentioned by QX and were consolidated we and recast periods prior VMware required Pivotal GAAP. as entities presented been statements for the the for the as As if calls, on financial of have entity

SaaS SaaS, Previously, license this was and earnings new and referred allocated and Pivotal these of line a acquisitions the Black. revenue line category presenting now on and are offerings to cloud We as for revenue Carbon hybrid was item separate revenue had services. following It the subscription a remarks. historically between titled and income subscription not and we statement

prior two included financial as for webcast, subscription the with years, Recast including as in accompanying revenue press statements the are on financial the deck the QX our well slide SaaS line website. and this additional for statements release

this item revenue line Pivotal, I statements, and year-over-year are the include based I financial as unless on as Metrics million. discussed XX.X% call otherwise. $X,XXX new total revenue SaaS, which for In well QX, grew subscription on indicate recast to the

XX.X% year-over-year. revenue total Pivotal, growth was Excluding

of year-over-year subscription grew million. XX.X% license $X,XXX revenue combination SaaS The and and to

Pivotal, grew XX.X% subscription license and of the combination for and Excluding year-over-year. SaaS revenue

increased two it Subscription it revenue a year-over-year. combination and of in these License subscription be revenue, of and now as how XX% growing the on for cloud items, revenue. represents X% revenue million across revenue year-over-year SaaS managing guidance line. rate to line total or our expected have has are line rose offerings historically for that reporting QX on-premise’s to We’ll SaaS $XXX portfolio. revenue XX% aggregate license reflects revenue growth of our providing captured we’re item which offerings now than perpetual now This is license on-premise’s fast the slower the

and subscription as than between revenue is more basis what large that a of seen being a percent well by have license to fluctuate on We also deals previously. quarter-by-quarter a large on-premise’s expect This SaaS higher we’ve variability driven as historically revenue impact. the had quarters sold of license

operations $X.XX Non-GAAP million. points AX XX.X% $X,XXX earnings a share XX counts up was non-GAAP QX on And per margin free quarter million XXXX. basis XXX the and unearned revenue of was billion in non-GAAP operating share ended $X.X We cash to was was for cash. shares. income billion rose XX.X% $X.X $X,XXX flow diluted flow versus from and operating in XXXX with $X,XXX fiscal Cash million. million

QX compare we’ve FYXXXX our on call, with results included that the excluded this also unearned revenue and plus XX% in change in Pivotal. and and and to unearned QX call, revenue. year-over-year In XX.X% in for accompanies The total grew license year-over-year. sequential We the subscription sequential QX slide revenue growth QX and in subscription revenue prior deck change guidance provided SaaS which was the license and plus SaaS

with year-over-year growth QX. quarter, to license we for how forecasted revenue growth definition unearned revenue prior in revenue for sequential change the plus plus total Reflecting sequential revenue in for Excluding revenue pivotal in level of our set QX. license revenue in year-over-year Pivotal, revenue license the XX.X% was XX.X% and growth was excluding change unearned

quarter was orders of end end and committed which held Total RPO, the QX, million. consisted to requirements. was billion. was million, non-cancelable primarily our due export At $XX.X at revenue License of backlog includes future $X backlog $XX which

NSX license includes groups. full SaaS for bookings which product over XX% over to XXXX. bookings, and QX XX% for Turning year and the grew QX year-over-year on-premise’s product both fiscal bookings for

year-over-year for over bookings grew QX in product vSAN full the the for year. mid-teens and XX%

As added growth. we mentioned adoption. has near-term price we vSAN this had on will SKUs believe to customer growth to licenses, We previously, We’ve strategy cover also customers purchase drive market long-term a enabled more previously which points utilize segments. multiple impact and at

EUC increase for bookings Workspace SaaS for over their product the bookings the to full quarter increased two-thirds product continue of ONE. sold of QX. as year purchases than EUC over More were customers SaaS and as in XX% XX%

compute in for mid-single-digits low-single-digits in up XXXX. flat combined mid-single-digits for were and Total Core full QX, SDDC the decreased the the increased Core XXXX. product for and fiscal include year-over-year bookings SDDC fiscal year QX bookings which and management for

call. Additional are this details in for contained product slide accompanying bookings the deck

of stock repurchased quarter $XX current in ended with end QX, and repurchase fiscal through billion the the extends our XXXX. In which we authorization, remaining $X million under

on growth years, billion approximately the This rate rate our in to for on call. the outlook for PaaS part version we $XX.XXX in not of pivotal a of expect it our fiscal forecast includes does expect to which material expected contribution XXXX business. fiscal applications our and impact becomes a XXXX, VMware’s for the we Turning XX.X%, guidance total growth of will Pivotal Pivotal’s for revenue provided with growth consistent process of Kubernetes creating increase we future is is as which a fiscal XXXX. acquisition, last have in

business, that guidance results includes the visibility Based our is from COVID-XX our impact incorporated view on on we into have Asia the an current in our Pacific in QX.

or closely We’re QX not impact included and monitoring the have year situation any further at the full for time. this for

of to We versus over with XXXX SaaS amount subscription currently expect an license and increase from and million generate subscription the in and combination fiscal of of from approximately XX.X% XXXX XX% or revenue SaaS. this fiscal $X,XXX

count share margin operating We of share on expect non-GAAP non-GAAP of earnings fiscal XXX XXXX shares. XX.X% diluted the of for per with million $X.XX

X% we expect versus cash $X.X $X.XX of from up billion. billion flow For expect flow XXXX. of fiscal free full cash we XXXX, year fiscal operations And

total $X,XXX of or million of approximately expect rate XX.X%. a we revenue growth QX, For

in for the As I for earlier, estimate QX. this a our COVID-XX factors Asia in Pacific mentioned preliminary region

from approximately subscription combined SaaS We this or expect of year-over-year $X,XXX with and in license subscription over increase revenue million and from QX XX% XX.X% an amount of SaaS. and

count share QX non-GAAP a XX.X% for per of operating margin share $X.XX of expect diluted on We shares. million with non-GAAP of earnings XXX

was fiscal QX year to conclusion, for a successful In ending good a VMware.

VMware, franchise We’re strategic strengthens Pivotal Carbon and with positioning as have platforms. our pleased part our security now applications to and Black along of which

continue SaaS offerings expected contributor fiscal and overall and XXXX to fiscal to been well XXXX. a perform to in significant throughout are Our have performance subscription company

Paul. I’ll turn that, it to With back

Zane. Thanks,

I’ll question to the we to begin one you consisting one yourselves many ask get can of limit get to as we started. let’s so Operator, Q&A, people part possible. Before as

go you. of first Thank Kash Bank Of will [Operator America. Instructions] we And Rangan to

you could as contend go wondering little talk Hi. a my if finish to it Thank making fiscal the year. for is? grown and much I Is as a through next as go-to-market have was just strategy that you year. is tweaks to taking execution. a bit portfolio much company so for with the It’s you action rich too question the product what and it you Pat, nice deep probably about, to plan the

if give cloud putting little partnerships these other calling also embed into Amazon, at cloud business you more partnerships. bit business providers. depth the could And percentage know a and the us the been you’ve certain a revenues to would into I out of that

can That we us next the as well. Thank a progresses more other down the Amazon partnership providers much. – you bit little any give. conviction key that curious more I’m give to cloud wins So as customer talk should drill so as the about

pillar Great. vision, a that as we’ve of Kash. have five we’ve framing by digital the VMware start And our, strategy seen Tanzu, new with strategy, virtual capabilities On Carbon our Black that, platform out what consistent, the of portfolio, as Thank as of our well Foundation. cloud. products added which top and you, have says do developer result our I our is as three our to security with that maybe capabilities have workspace, that, we what just the laid lot intrinsic portfolio now we the But that NSX, other the of And Cloud offerings is Cloud now. call, unchanged. network plus cloud offerings I’ll we VMware the a

is five, just going market. on, all reach these we’re focusing the we’re attention how our And this And right. to

the increasingly sales VMware and to franchise our efficiency go market. more portfolio drive to the a offering execution view of and through as going these We’re simplify to

the we done of and finished had we while finish you many As deals and to an XX at we execution compared saw done XX deals mentioned, year as quarter. And quarter. so quarter. simply too we a good have get the had of end quarter didn’t big at to over the exceptional the we had which deals, was We ago, number the and extraordinary that million, much to of simply an was too XX get as

to get lines simply in allow plans quarter. deal our are our those too and Sanjay things Sanjay just hour well our had executing kind our are And business much execution Jean-Pierre have large the better off. timing after We steps deal of time And just taking in cut came execution. an to very over on get improve And deal, to can’t and execution. happen a of we particular, Jean-Pierre are the with bookings to done. underway to and linearity improvement one

You cloud also years asked number a mentioned me say about Any Amazon need you’ve I really enterprise cloud major of cloud and two as about the the Kash. the partnerships. our we’re nodes bit seeing get in we acceleration before, year-on-year. And offering that to new heard – Xx mature.

QX can really that we And last customers of on So in two-year it. year. betting start milestone crossed

the the seeing We’re acceleration relationship. of

Amazon Vanguard, with who much plans evacuations, as bigger I couple a mentioned of VMware a hybrid data the but customer in for to a on deployment traction. are center example, reseller great a if term. is a is well their do gaining brand betting great execute us near we

financial up. major we’re pick momentum Azure deal services, a major with We’ve the first that services So VMware seeing our institution. seen

key all our momentum. of with IBM offerings, multi-cloud partner, preferred we the now overall, Microsoft, is our the those the gaining momentum Oracle, partnerships, of Alibaba, Google, Amazon strategy So have that

the like where feel exactly the future. strategy So our we into to wants market is head

Thank you, Kash.

please? question Next

Markets. RBC of Hedberg Matt Capital to go we’ll And

Thanks for you. my I taking question. Pat, guys. with wanted to Hey, start

happened the your You QX like there thus strong. COVID-XX. for great think, what a are positioning the a perspective demand of But always the month think mentioned, of sort sounds feel? end you buying curious, environment impacting QX your the how the your overall market. small I close is It I process. more seeing environment. your on view Obviously, have to impact, does sort the of into is competitive was Zane quarter? maybe guide But anything far such own sort overall on though, demand of I’m at a

Yes.

and in unchanged, Let’s say, we would company transformation. technology, before, I The the like And activity. every not And result, Matt. and CEO view you’ve It’s three as thanks digital heard of a the an central right? picture say theme picture, cycle bigger become as question, a priority. XX-year say, the of every priority. we’re for me – it’s of C-suite think IT transformation, is bigger with a it’s and year digital transformation, a digital The

well to And see spend. and as spend And exceed tech expect a to result, expect well GDP. we tech we software exceed enterprise overall software

So and agenda a impact obviously, scenario see for and overall, tell ultimate but we probably that continue to IT year, robust early too overall future. into effect spend and for for core its years of have as of that’s COVID-XX, some several And lasting years view the future. to against digital the moderation a into transformation the tech

We customers And we completely overall, commitments mentioned to the XX particular we even half we the is have major commitments examples. as top to us. business made Fargo – strength Wells saw didn’t we huge the now. Major finish the one major saw our the world execute highlighted year, making financial in we of and of with banks though brands essentially And VMware. services

other from our many value service is major strong numerous continue back and Europe, the top sort growth tour, got quite brands on providers bring value we was affirmation to met It World Again, we to portfolio. and And of for with tremendous. that and there. believe of like Mobile creation the customers. long-term our customers Congress Just meeting the

just is I’ll Zane. add. this Hey, Matt,

APJ obviously, Pat expected guide, have to our closely. that impact As a pointed Within out, did moderate COVID-XX this region. mention at very we monitoring we’re our we time

beyond that. extended haven’t We that

we’re closely, it’s obviously, the as and element for full So well. into as potentially quarter well. then and monitoring and first for early in days our the that’s early taken account the quarter year that into virus But

please. next The Thank you, question Matt.

of And Citi. we’ll Pritchard Walter move to

same went roughly overall about were included the ago, you Hi, we twice business impact thanks. I understanding as VMware, rate. the they it’s looks about, and our it ask little sort bit about to detail. be what’s to think a If to to help the could wanted Tanzu accretive revenue? like has you see in the of do to that to we what back growing of a that line the container growth the think start of between happen help start and but Pacific, Zane product that holding and growing you strategy when and us Pivotal, from Pat, perspective, understand you product into year from really expect Maybe

Yes.

of me So get did that augment able infrastructure Tanzu closed, impacts. and help and portfolio strategy, of the year. the let VMware just imminent frame before financial being overall, what Zane acquisition of But is and the on specific portfolio, the some ask This of to we developer the idea to I’ll about. to the the we’re very the is the all end with happy portfolio which this launch platform,

Pacific the good gives really cloud. we customers there’s architecture in important with And in The launch in since for believe us our was well. QX shifts expectations. to enterprise a of Kubernetes, Pivotal this tremendous the most of with help their a of anticipation position line And as applications one performance modern the

well it We and process its are as accelerating component of Tanzu to integrating and building operationalizing portfolio. it a a of framework really VMware common move the overall in the into Kubernetes as key as

services year portfolio. XXXX business year well integrated it Tanzu that of a the with and in So for we transition the a our it is point key to VMware of complete year this that fiscal overall Kubernetes as really set component get really a is

been highlighted, exactly a as Walter, headwind with And base. on do the you’re that, obviously slight and And part has this be we you performance the financials recast of it our expect right. as year along to is

roll believe, that PaaS to Pat portion and trajectory, significantly about as add elements we you our it’ll we of of the our FY we to business. do articulated, think that As beyond think XXXX, out this bookings

about in So short have we’re term. renewal the do think strength that the continue, and to work business will prospects We the however. excited long-term do

So to see Pivotal. pleased for continue that we’re strength

you, Thank Walter.

please. Next question

of Raimo next And we’ll Barclays. go Lenschow to

there like, part help subscription, more which I Can had issues mix. – question. what was also had us SaaS understand was my quarter, was the in about taking more question for you. you you Thanks more but you the said on The you that the Thank important? part talked was

our start. happened it very the with year-over-year I’ll on prepared case in a I out in very SaaS. about elements, a those XX% which a in with with had with balance that, fourth EUC subscription-SaaS that remarkable seeing our over pointed were think nice But the which SaaS, we It Yes. go-to-market We business, saw And so the just pleased we of I few as mix. efforts, we’re obviously, mean quarter, to growth quarters with. basis. get on revenue as we particular shift remarks, pleased of more you a touched ago my that ratably.

actually EUC, if off over you And bookings were look at total product grew bookings XX%, and license yet XX%.

doesn’t element that out. that and include of we’re subscription about think you line license now the which any SaaS item, when component, stripping So

see those be go-to-market SaaS the shift net module So in or towards you license in otherwise SaaS decline particular, perpetual. the a products that with do could a item, line otherwise or

with actually larger these we’ve particular in the deals. we’re pleased with generally overall seen, growth So

I well. amount XX X we’ve that top we had for subscription historically, seen deals, and of the was that times the mentioned, SaaS As unexpected and as

in So speaking, had to generally guide. comfortable the we We we’re with execute. revenue our ability bookings the license are. still it had disappointed in where where Obviously,

So element. by we we’re But seeing we’re SaaS. speaking, trends that the disappointed with and subscription like generally

Thank you, Raimo.

Next please. question

Fargo. question Phil Wells And Winslow of comes next from our

question. for taking Thanks Hey, guys. my

sort that. are bookings the full for And Thanks. that then over you this how in Then from coming still in deviation as SDDC Wondering quarters. called you been in can in bookings. as on if out the of strong Just SDDC deviation Obviously, year, you definitely course of and the – QX? a that? few we’ve just about them for the seeing what product on fiscal focus but some maybe to on in Obviously, – side negative year? thinking of the on wanted good this trend definitely color just a prior focus quarter, – very the sort the

to customers our Yes. customers. commitment customers we in And marquee cloud to at see – that’s And obviously, well VMware platform. making quarter if year-on-year, number particular, commitments happening of as doubled of platform, mentioned to excited logos we we’re as just a that that a they’re very And overall, combination continue like doing offerings. platform. And the space, major major was see offering in on-premises doubled a their with Foundation, are as we Cloud look JPMorgan, major what the now the the to running what’s VMware the last

is idea more that And that what for Azure, center my platform becoming I VMware exactly offerings. Oracle, to this on is Cloud stack transformation. are powerful for we’re what Google standardize data same and and running software and our Alibaba saying, seeing we’re people VMware And more the want

We imminent. excitement that’s there’s a launch the in of also vSphere see great that X

new a infrastructure security the part and customers And of most the more that importantly, that with capabilities, that, lot of making as has major for that refresh Project operated VM we and of that. today. around this capability and Pacific. A is build And exactly equal Kubernetes excitement containers

Zane breaking that of that large some we that the that. coming overall deals see do the our year over variability communicating the rate way So obviously, well. now growth out let that is revenue see how view and, and as we’re and the I’ll we restatement out quarter-to-quarter, the there of plays add

rates we very element with and subscription in to then VMC license expect Pat and category, pointed this And was in historically what I pleased booking VCPP, which in now see as mean, having those in as an even SaaS, is on well. side. out, Yes. is growth the we’re

the changed haven’t outlook at as we think midterm. – pleased our about we���re we in category all this So

Phil. Thank you,

please. question Next

go we to Group. Thill And Jefferies Brent of

Thanks. just I’m those just had Pat, that been to a Thanks. They that the subsequent one or matter deals still in like if mentioned sounds the deals end. color anything lost. could little deals closed a of give quarter had more else to slipped? It’s time, did – you of the these curious you it pipeline. are haven’t about happened

closures, acquisition a lot we number acceleration thanks, simply Brent. of should large lot a of executed just of of the that deals, with going on them too And And better. have Yes. the the in said put, we late quarter, deals. And many

and as major deals, bookings execution. of off, the enough and overall, more our literally we business and get taking the meet of this to one done. hour pipeline in an we Jean-Pierre steps Sanjay’s deal that a mentioned, unacceptable, had focus to is linearity, get key Obviously, it didn’t drive goals, we we those our simply after got part driving closes But I As a harder. financial cut

we’re our of major opportunity And go well deal we completed to business, well the over The the we execute where as pipeline go look and to has We partners feel in to it’s underway. year, out us, underway half to it’s able Zane enough any in pipeline as deals always for getting our do we be we’re deals part had and QX pipeline, time, the close QX, We at value would in look execute but to finish to expect is as now more announced. already major have well have than that us. QX. guidance point we that presented you the and again, of that at we

we communicated we’ve do about feel good So far today. what so

of Brent, beyond. nicely on in which of RPO subscription, a we what to think the the shift some also even with we of is earlier and in on year-over-year these about our up course basis expect and highlighted see can revenue I that line, deals which to through larger that are some deferred captured year deferred numbers, as be the touched

Yes. any deals of brands, some in didn’t that us to world’s has broad to It’s no betting any a executing these right? And of away, other like We just the on maybe us just very competitors. pipeline biggest It’s have lose now and losses. really about add, point one ways. gone not strategic

you, Thank Brent.

Next please. question

And our Research. next is question Moerdler Mark of Bernstein from

much SaaS very the and the you in you Thank numbers. details breaking and and out subscription the additional for of thank

I think it’ll people. help

due to it the Thank Black? of appreciated. us individual understand give financials estimated full next you XX.X% are you to so margins Can that any from the you. moving a parts higher Carbon this would operating a Is the color subscription XX.X? and impact mix down, the recast be You us was year margins. you for Is bigger cloud? help a including the percentage due bringing year, Can of Pivotal,

you’re impact we of recast Mark, the a – on Yes, actually highlighted so track. two Sure. of be mentioned right couple there’d points, points the just We the when acquisitions, we with Pivotal.

are quarter, As that you there Pivotal line see on you fourth the at on the look actually some improvements year-over-year a basis.

trend impact So results. our we’re the albeit did positive, points see to that two pleased

of good have impact on the year-over-year Black also as the investments the some our and but those growth VeloCloud of has businesses, well, progress SaaS as and would investments much and of the we’ve an areas some subscription Carbon like VMC on continued some all seen a side it basis. CloudHealth impact on We also of consuming key the are that mentioned and in Black areas. as year, well an Carbon other

weighted the impact the we'd continued on areas margin. if pleased, we're the with anything, average, operating was thought line we a are of trajectory in obviously, broader where And very company for and But a having positive, a earlier number the albeit, line We're returns. the is category. those to seeing top than with can in progress more be we're we as investing, an on trajectory and, the little see on you businesses we tell, where expect expected seeing aggregate in

that's happy we've for as been well very trade quarters right, see and say creation of We that's quarter, We're as we'd quite overall, few a up being combination and that business. SaaS and rate, we balancing now about accelerating, And the margin the this Yes. talking over something carefully had growth seeing been see long-term managing the to good building as subscription XX% off growth growth. building accelerating value we're driving we're for. that this the we're as

the a best good the for versus company our term our growth very shareholders. customers outcome So long-term the I the longer well. and the another for quarter, for think, you up get of very Zane And sets for strategically margin area, growth manage that in company profile carefully we and value creation

you, Thank Mark.

please. question, Next

We'll Morgan Stanley. Keith from hear from Weiss

going basis. from for help or us like where there's operating going of to bottom continue you could kind Black frame any start perspective to level levels maybe Thank a guys was out margin, understanding give those Zane, taking give revenue it. bit when Carbon is and indication subscription, and if place economics? kind of us margin is discussion cloud I hoping could understand of to a I time kind of any forward-looking on unit from or anything that there when in head extend some that the there could to you starts even But perhaps a pressure understand impacts we little margins some question. that of Pivotal, breakeven acquisition Or upwards? out? Excellent. on are I bottom on the to you're

that you levels What is margin the maturity subscription very off about when I we're of of I'd margin in within Pat a say there Keith, Yes. SaaS disciplined profile, general, that on mentioned, trading And we as closely. always will the – track aggregate. growth about tell in quite VMware obviously different and and think side. that thinking particular, number revenue aggregate, are and and in it between we're businesses at are about you

We're the and majority where margin the we're But right want is starve optimize because with do and that trying investment talking been that of we've I the economics. around optimize them what these to then Pivotal are for the and about level. to haul we So are trajectory. capital pleased on wouldn't internally very dollars Pivotal businesses around

the even our leaned example, I that, think headwind just is optimize value but to with more a around point as have. you putting about business, an probably generating on we which is about you EUC to wanted of margin, candidly, And or EUC, element that even portfolio wouldn't we As a see compare the If we SaaS one little is growth. headwind apples-to-apples. of the when we're it revenue if in bit into long-term of were have very pleased

lever way pull longer-term SaaS, which answer. would that a quick on think we be is to versus margin the to the improving So perpetual get

these are side, not it's ahead the we're that very think if producing a key ourselves update right margin on number of thoughtfully, I how going we're profile. What year will we'll actually progresses businesses, way is the on And expected, elements balancing say a to get in the of as recognize long is that you for the levels the about and to that of and the years. growth So we saying more. upcoming on not trajectory I the margin

it SaaS want of tell acquisitions time. at and pulling Carbon back by portfolio. we too start the and wouldn't we are growing consolidated where early given with It's just where Pivotal with the I to dollars growth in to this are investment Black

Keith. you, Thank

Next question, please.

And we’ll Bank Bachman of go Keith of next Montreal. to

to I Pat, EUC. Hi, wanted revisit on

of security thinking how should of those XX with including in some the the should mention a EUC, transitions. around Zane and to the Product months? But some opportunities like some surrounding EUC. the You next on security it over about looked really the activities be RSA, comments there. quarter, we, be could speaking little flesh did in even EUC within context seem growth XX we what on, how as growth about some there out thinking just in But good investors, and revisit bookings does could if there's you just bit was you potential of

Yes. It the deals Fargo And in delighted number I those Zane a I'm script Wells QX, an indicated, rate EUC and exceptional. like with really team's really major subscription. was in called category. as out quite growth just the of acceleration in of execution that XX% was SaaS that a

perpetual business area. So seen that to particular, customers in we offer in subscription both and we've that and

more the has that particular, a characteristics SaaS describing of we're going in offering. seen to of business, customers that So

where even into customers. for the a consistent computing, home Conference of solutions talked Intrinsic about management set Security we're also singular RSA about bring is with the secure strategy of integrated a environment. at are end-user the with about anxious end-user good accelerates It's entirely very offering right, in category at it we strategy today's that isn't computing. and redefine resilience I and going feel really saying I'd to and do our security point more we work today's coronavirus, overall. for how But again, EUC even EUC. with customers have out And And what can

many And an the really to to to together, the and And intrinsically categories, need validate, the redefine operationalize idea platforms, core already that the test, of that this fragmented, this too is complexity by industry end. strategy validating bring making customers that and these security right, pieces we've running. of, customers manage out into highly to part has that's to highly come space these bespoke, they're products, minimize putting today laid is environments security the for way it

simplifying Southwest was the QX we we're of the exceptional, Dell channel. doubled and quite at X,XXX keynote and piece acutely Black Dell the resonance received And most that security a Airlines And and on said, tremendous channel, quite excited added with seen this and there. that client customers strategy Carbon the the benefits. the other his really cloud, management the as really idea was quite joining outcome just of quite together Conference number Sanjay And by have had of well over was with the the by about that approximately RSA the customers platform. security we of to early The bringing success this exceptional customers the was of idea with

Keith. you, Thank

Next please. question,

hear of next Sachs. Goldman Heather we’ll And from Bellini

what's factored made telling to most Great, compared are on QX are they're the so quarter? deal And obviously remarks know And some I offering you wanted question. prepared Kind being of market if, guys But But a and taking early – to how feedback? just since I anybody's kind obviously kind you're competition? I Thank taking they versus much, comments it integrated it. deals thank what basis conversations you your the little a that Black. you stacking appreciate wondering look? guys bit about or you especially an up I when of saw conversations choosing Carbon the are ask team. was you of about happen, you. clients it's you in early that just often know when closed. in who into the and the you – renewal And in

the question, in deal very VMware like very about that they The case as I is Carbon but Heather. And were said, always out seemed in that out of And what quarters, quickly. Thank feel absolutely into And Yes. laid two true. it good is we A us. integrating probably itself you Black. part within coming overall, lot we team we laid

had everything opportunity, They So being in focus XXX% the the growth realized Carbon QX. quickly. of in Black is culture, ARR about values,

So very good performance. business

That Obviously, we three I Dell just days. performing covered the that these we numbers going big is isn't in ONE And are large that talked well that last channel, business then mentioned, is so to the and overall Workspace nicely integrations very momentum still NSX in quite affect customer dramatically. as about, of the sort vSphere underway. its conversation, early and Huge well.

the with that, can In terms is we've EDR about new going strategy, how a laid resonating platform. to very bigger is guys, very the move customers. But rapidly that's much message rapidly. that as of guys. And two VMware just And competition, it environment, modern and out, so it fast is versus really its in intrinsic building an old CrowdStrike customers is new Carbon very virus old replacing EDR, Black with than the much

platform, Black seeing a Carbon We're and to strategy. appeal are in the have And how plus quite plus Dell together. executing our they we're nicely. teams VMware good great said, might it's about that Black, CrowdStrike, Carbon it I sales feel coming

strategy. very this feel our good about we of So piece

Heather. you, Thank

please. question, Next

James. Raymond from hear we’ll Next, Michael Turits with

SaaS What sure and is Hey, Zane. the Keith. on had already I'm and on impact answered if XXXX? flow on with in subscription this mix cash revenues, fiscal margins not of the you

year-over-year. it the it's and to EUC easily specifically. that's SaaS otherwise towards because that on our is still with example the very with – either example having is use doing We're out that say I towards we've the what shifted point product headwind a roughly seen the most perpetual broken I sort We of probably or pleased best And SaaS. subscription revenues. where mean haven't growth the significant is bucket

as expect in the portion be light aggregating XX% of shy we've and year, which doing we with we're a subscription what portion, we then is good the license just the And of the fact both guide help SaaS component got to growth. on-prem for the combination that to license, indicated of the

markets. pleased with the and aggregate. entering is opportunity. new Subscription a very new It's SaaS we're So growth

it's tremendous products that if about we've another you a an perpetual say that So what versus to overall sort is subscription license example seen one environment overall. are of the SaaS towards think grow. growth what of VMC you cloud some have to in as bucket go you continue the that and could difficult has is to now would be VCPP that from done one environment. doing of shifted will categorized and versus

I net sort another. more on talk it's than it say, So sort incorporated of taking overall to products we or all when we The the mean, for element business I Keith see about that portfolio of add with a I'd from of impact margins. the same, have. one of an

pleased incorporated So the We're we're the for we're seeing guide pleased with with the our investments we're making. and returns portfolio, within year. that that's in

you, Thank Michael.

question, please. Next

Brad We’ll go Credit of Suisse. Zelnick to

much, Great. Thanks so guys.

together about that from Pivotal, commentary, Carbon As you selling for about is all all you and same year? changing And the all the account Pat, we all at and sheet? as to execution sing sales at SaaS, one earlier? portfolio with year subscription QX and are about last Thanks. these song versus talked the this should into this continue And can the think Black to from you how coming sales talk for getting well, the shifting that to more Does other? them integrate how incentive organizations

we're together portfolio. AppDefense of on focused we've the area that, sales dedicated core our customers. And brought Brad. security directly integrated to force. value as pillars sales as sales a these to be solution propositions we've security is and pieces particular, a being dedicated the a security of you, into BU now force portfolio. specialty In the that And force dedicated thank the with represent Yes, going laid to presenting the five out, Clearly, singular that there's

force. those the that into a native single teams were of sales Similarly, Heptio, Pivotal a sales perspective, bringing we we've cloud with all what integrated of from together that with solutions of doing

now particular on so force then sales they each team, operate sales a areas. globally. specialists we sales specialty focused Sanjay, each under VMware the these of So team have And the global and these account of

to gone as across now as that's license split quotas have we're accentuate one model was further to us will of that puck And quotas for And seller saw subscription you saw, to that needing And they're in model specific every well well execute. believe this is And area we've but business. sides exceptional together. the where these is everybody teams performance the where we'll to So subscription of to the need of to teams this SaaS, we that give respect bringing QX as now and VMware. quotas SaaS business, as take be both driving also with incentive move specific going. and the underway represented SaaS, for our that

you, Thank Brad.

we’ll have for one now I time question. think last

be the So the next will last. question

our from Evercore ISI. of to Materne Kirk go we’ll And question last

and talk if could just funding you wondering I about you bit most from Thanks. of you're engagements the is of little the sort bigger a taking of deals? are sort platform Thanks other was fitting for very Or type away? in. much vendors seeing Pat, in those And of coming share the the of able of fact deals of incremental sort those in market me for terms from take now much get competitors of trying Thanks. this market? reach? areas people sense your spend on have other of XX consistently the gentle fueled sort that you're sort a to that just to versus to of dollars is by to being share ability how parts the I'm

Clearly, seeing and we're you. be have what might management say, when we'd to Thank including we're portfolio, of and where consolidation cases, complete this centers, case, Foundation, And some is and and storage. business the move that data where overall, that gone scattered many those. is Yes. from many consolidating networking they're data share build of they gain they Cloud a having center VMware we've able to vSphere in to

gaining So share, sort of in right, bucket. infrastructure the clearly, we're

cloud we're we're overall, gaining now who've of we've we're from now seen consistently seen we've of hundreds the offerings, VMware this that down range gone pathway XX% budget. with Also, in as having And that the us, producing with of to a portion XX% the acceleration operations. savings Cloud customers

Capital savings.

part vSAN of of six of VMware quarter deals of all had saw had that largest of them all XX You them Cloud as them, had our and management. this Foundation, NSX

of Other just significant us our ways. in JPMorgan, big So enormous very last couple cases, some of Wells fabulous. wallet this of And in are we're clearly IT talk are America, us are the These quarter. Comcast, share. the And deals. cases, about return gained ROI budget, brands of you've seeing brands coming betting heard quarters investments we're on and over who These Fargo yes, on gaining with we short always those share in definitely periods it's very and time. major Bank

huge with key telco major we of like people announcements but some Clearly, strategic the momentum Vodafone. and saw It's with quarter, also a success very announcements partner, telco, also become this of of space. some telecommunications are these, we just in again, relationship the most Telekom, entire of week saw customers of Singtel important like this with our Telstra, the expansions Telia, Deutsche and

exciting where world at great brands the some these are VMware execution, us betting in phase the overall, brands on of So largest overall, of great so momentum, a scale.

question. So that last for thank you

transformation. I'll And by infrastructure software digital excited in the the just is powering front motivated closing, of proud role the our us. we're playing in in opportunities of I'm and say, world's

with year you company. Thank just strategy that's for much. particular what the helping this at demonstrates close the you broad-based of that truly resonating again scale us these and Our portfolio, in to right, milestone unimaginable. team partners, our VMware power Thank is customers, we've in and discussed, our some of progress customers very a is

call. does to your participation. this conclude for thank would that And like We everyone

You may now disconnect.