Vmware (VMW) 28 May 202021 Q1 Earnings call transcript

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

Thank you. Good afternoon, everyone, and welcome to VMware’s First Quarter Fiscal Year 2021 Earnings Conference Call.

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

their will we prepared Following take questions. remarks,

statements will posted subject close as press the simultaneously is to conclusion Actual result downloaded from conjunction which statements. forward-looking can described webcast market are Our with forward-looking the issued results webcast assume obligation Slides may and of website, factors SEC. uncertainties. make ir.vmware.com. after of risks and with this no call viewed was XX-Qs and this the release to that to webcast. today, risk is VMware any On XX-Ks, differ at a be in intend on accompany call and update such live files We currently our where X-Ks and do we materially of the this in remarks various not

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

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

website for measures, XXXX entity, the comparable provided due of XX rates under for to control including find metrics which otherwise QX link. Investor results with Relations in company GAAP. with period call all measures, under Unless include non-GAAP will VMware on Pivotal can including entities as compare replay for the regarding recast this accordance be and reconciliations this days indicated, these on consolidated Growth press our to website. prior the with acquisition, of You The common next a the transaction call our are Relations by additional Investor available information disclosures the Pivotal. in financial our accounted GAAP release the webcast was financial Pivotal

at it second XXXX July turn Pat. Our fiscal close over I’ll XX, period of Thursday, to With XXXX. the that, quiet business, quarter begins

proud execution Overall, QX am fiscal solid performance times. and you, unprecedented Thank of during these Paul. our I in strong XXXX

were As any we navigate world, pandemic, the our with and see And pandemic, on the improved we our execution. build, QX, by quarter and connect manage, geographies COVID-XX end-of-quarter Total and up $X.XX non-GAAP were alongside the application year-over-year. share, impacted through was EPS XX% vision them for up continue all device. year-over-year. we to XX% billion this customers In with per pleased partners, customers, protect global was resonate the while including we QX linearity any cloud sales revenue $X.XXX and execution, across industry help run, any as throughout community,

they essential our and rely strategy digital is to increasingly app those of efficiently on their addressing resiliency cloud build security These service extraordinary changing network our digital partners. who business digital an times services, and more We workspace, well-being Customers customers to and our environment, essential them and top ensuring comprehensive an customers’ strategic across have employees safety scale helping as heavily to unsettled intrinsic and to our securely. needs a macroeconomic as Our continue rapidly serve more to monetization, been global customers solutions by the look foundation. provide VMware pandemic priorities. for multi-cloud, being virtual embraced with fewer enable

to work a from We manner, weekend. in have proven distributed effectively over that we a can flipping work home essentially

quarter, to ship major a product and record number releases. us Our execute investments a new our of seamlessly enabled support good IT customers

and contribute the flexibility work-from-home in mode curve remained the world. around We have to order our flattening employees in provide to

with we choose option, a distributed are Carbon their with with more not At VMware employees SD-WAN work their positioned with workforce employees as time, applications increase work over Center connectivity customers in our work more much-needed a a reopen environment. sites, from enabling uniquely difference. and many to an Even empty enable help work of partners their our make to is a as our their our an us usual and to continuity ONE, during customers Nebraska home have business we and to VMware will time from we how staff gradually and area, when effectively. an Medical these government-mandated is or can enable work unexpected parking rapidly to to network Black are students preemptive it Vanderbilt help With Cloud. Utilizing them transitioned to extraordinary remote we recently COVID-XX times. a home. screening scale asked we into productively remotely, transformed hospital learn have their innovating University VMware, Cloud, ways VMware expansion, initiative Customers maintain a garage securely Whether respond closure, Workspace Medicine business customers

fashion. We an customers with are accelerated developing enterprise-grade also in application

National are their save restart the and help their example. Service the lives as country UK’s bring to working Health to citizens We with an to contact-tracing application

with to meaning COVID-XX have advancing AWS their Cloud this We us needs. on with their seen customers meet and from VMware customers on quarter not their like also IHS that cloud stopping partnership projects is migration Markit

clouds help transforms application of Alibaba and globe portfolio environments world. to the of on-premises this core Cloud made Google software. new announced portfolio The build, and to VMware fabric offerings from featured line on in bring products across public updates Tanzu, and VMware VMware and a Cloud In that a with community partnership month, run, as intrinsic to capabilities bring QX, and earlier nonprofit updates our enterprises Foundation, a making citizen a ecosystems. we into powers that NSX-T, Microsoft expansion modernize Octarine, infrastructure. offerings, across More new services evolution the the doubled the global seeing approach. continuing Foundation AWS offerings including existing which and our and VMware as VMware comprehensive we of extension security IT with manage Gift recently, through have our And Operations and customers acquisition and way their products largest Matching we services in organizations, service delivered of will positive applications the partnership containerized company based we front, are Kubernetes action well Cloud. DevOps our values in technologies their EMC and Cloud, across take the and of Cloud our monetary applications to our cloud have to many donations Dell stack employees program build philanthropy our infrastructure communities Azure, to impact, preferred On provided an We across to the commitment innovation portfolio decade, the security of vSAN vRealize our major vSphere made of leading running Cloud, the in

We including customers this past unified legacy to new and also which replace for protection will and introduced across security security Security VMware private deliver enable offerings Advanced solutions public quarter, Cloud Foundation, clouds.

Black. chose multinational Bank embrace services We recently continue customers including to who Canadian company, security of financial Carbon Montreal, a see VMware our offerings,

opportunity telco software-driven We see cloud. benefits continue new seen in cloud. the approach access in deploying to CapEx VMware’s deployed interest extraordinary RAN OpEx extend to radio and substantial to have network to a well services. using solution network in We telco the improvements as the and Carriers now as these cloud see on telco deploying our virtualized agility XG

future at partnership to details a pleased with carrier regarding We’re address expanding partnership additional our We’ll provide in our to needs date. be Intel this area.

As COVID-XX. we look to are the thoughts impacted with by future, have who those greatly our most been

committed to customers well-being. We and to help our navigate this are helping pandemic while employees’ also our ensure safety continuing

company our to This also We accelerating company. made some we changes taking directly the adding new week, are our talent faster opportunity organizational drive the to related and strategy to future. key toward the

of level As relevant is a we our ever. customers the market, strategy at to more look volatility in much than higher

Although of pandemic there now, digital transformation. we a prospects our how level uncertainty our the of few is customers in short many a and enabling weeks. ways, in their has remain with driven In transformation are long-term digital a decade we confident economic

our and remote abound educational health Our responded in challenges technologies new for and as environments access. platforms, improvements, an digital have even extraordinary work global manner team care

focus and over you, must also immediate how accelerating the a of of challenges live. we Zane. post-pandemic and solving are new COVID-XX, we Thank world learn to to on we While will work,

you, our challenging We pleased Pat. QX earlier were of Thank backdrop of ahead with were performance, the financial expectations COVID-XX environment. results and a against

deployment needs, particular in to team rapid the work-from-home-related with adapted Our solutions. of our support customers’ quickly

XX.X% a positive ROI also products continued customers billion. XX.X% We their growth for QX, subscription and revenue revenue billion, of demand and had the total continue quarter. of strength many success and year-over-year offerings, to enhanced XX% QX in $X.XXX year-over-year services, our and grew SaaS see to our with resilience of transformations. revenue drive and revenue The which of for million. subscription subscription SaaS combination digital to helping $X.XXX and strong in undergoing demonstrated $XXX In expanding license grew SaaS our including

the the from revenue strongest rate Carbon Within category, had Cloud quarter. had our as and offerings VeloCloud triple-digit EUC, which for performance VMware well the we growth AWS, revenue on Black as

this billion. flow notes, year-over-year, Total with operations impact due lower million. billion, billion $XX.X April. backlog with consisted percentage benefited income as to Our quarter $X.XXX Non-GAAP was to originally primarily $X.XX committed in noncancelable $X.X mature and in COVID-XX. of in includes XXX which on-premises tied and the flow at XX% $X cash, License cash XX.X%, shares. was billion quarter license current $X.XXX up perpetual our operating process. billion, quarter spending export by for control share unearned per backlog increased the $XXX quarter year-over-year, license was Cash $X free of to points year-over-year levels. $X.XXX was line stronger-than-expected and was Early revenue QX, X with redeemed primarily is orders XX% XX% in We year-over-year revenue, of $XXX over count RPO, was points X operating billion non-GAAP we up in future due which the August million, and were which demand. which year. on million. classified the revenue million, directly held proceeds million of of income in a Non-GAAP of was up the bond $X from driven billion offering to EUC historical margin from QX Operating diluted earnings a share over our in of ended completed $X.X includes from over percentage in which end

plus For and revenue unearned in in total was SaaS QX, sequential in and the license revenue Growth revenue revenue sequential year-over-year. year-over-year. change X% was license subscription change SaaS growth in XX% and unearned the and subscription plus

emphasis shifted Turning total quarter. At EUC from we had value good beginning to product bookings bookings. XX% contract total a to fiscal bookings for product of for grew nearly product QX, QX. SaaS This EUC in contract value year-over-year. impacted the EUC XXXX, which annual

growth authorization growth on-premises Black’s SaaS bookings over includes with EUC performance business, product XX% customers approximately as And with in We We demand helped for QX annual perpetual which in strong over as year-over-year. on to from Carbon pleased of of resulted applications with contracts Cloud. XX% each focus modern Our ACV had bookings in in vSAN Carbon well bookings Pivotal, year-over-year. growth, saw were particularly our Black for XX% over increase product XX,XXX strong strong our an NSX VDI which quarters, solutions, bookings declined in customers SDDC when license QX. bookings year-over-year. followed grow Heptio also and X% billion. by We total average X.X core and Wavefront, expectations negatively total and the in year-over-year. strong last repurchased utilized SDDC year-over-year. Core the million bookings results impacted at open had QX, Through we were QX of an bookings of $XXX down $X.X digits, These in core our of shares QX SDDC from current market a product product product low and $XXX.XX. COVID-XX grew ahead million particularly in bookings mid-single teens end year the performance price with of

of count including kind That operating expect We of seeing $X.X the remainder QX, volatility greater of and we’re from non-GAAP current of QX billion, globally, given and with of more makes said, our and share a economic visibility QX subscription revenue share non-GAAP the economic of far for outlook the the earnings for performance, quarter. of year, forecast our and $X.X which on less our approximately per on pipeline outlook, is license view and status challenging. a revenue the $X.XX any Regarding million XX% combined SaaS or margin XXX approximately currently for billion XX% total about diluted shares. for

full the formal for year. We’re guidance not currently reinstating

and digits COVID-XX XXXX. its challenges the FY global impact with resulting expect anticipated revenue mid-single However, to on reasonable in we growth the for full economic customers, it’s be immediate believe year from our to

recover, expect the more the long-term normalized strong margin given to in As the outlook, we We approximately rate FY a operating for combined remain margin in to growth XXXX. In expect around driving FY double-digit world XXXX. get economies year would back we revenue XX% to through term, be accretion value growth this short with focused on full business.

quarter challenging economic great in This opportunities COVID-XX. demonstrated with supporting execution environment. challenges a VMware and our by in the strength needs highlighted QX, presented The customer team

I’ll backdrop support focus back While continue visibility confident our develop customers, it growth. on driving year, for good we economic that have the the remainder Paul. to the we our don’t value long-term With to and of that, and portfolio remain and will turn into underlying we enhance

started. get let’s Operator, Instructions] [Operator Zane. Thanks,

America. first Thank you. Up Instructions] Bank Kash Rangan, [Operator of is

Thank Hi. as I digital buying cloud have of Pat, pandemic, one digital to with other like because for What growth Maybe related EUC we’re look this look the What accelerating to what VMware Congratulations. results side? life triple-digit there you are as that customers customer question Congratulations, do nice here not. imperatives very you things going of really does to curious, the the It booked post much. looks out just with coming on you so I��m see as are going out a and transformation? cloud maybe to new fantastic. bookings considering talk you through, Also, even team, Amazon respect behavior? for big you how through. far good. That’s partnership. rate like we’re transformation.

right? bit will triage, on transition Customers activities there. We it are we’re as the fundamentally Kash. shifting there their of was expect offerings. say their know, that that do through focus, for was we Yes. pandemic, be And of that, Saas, it cloud us phases overall importance that putting acceleration to a more with opportunity isn’t underway, new of good already that transformational their cloud and the normal, as already cloud subscription, well quarter would an a the activities, respect doing the but – going The were overall cloud new you their overall, customers

costs way, cloud bit other We expect, will and anything, for focused those they’ll different right, accelerant industries that on-premise, But this this will were be reasons. if But bit. accelerate subscription largely a to an regulatory, that continue the a offerings. of and overall, into be

we’ve – also, been businesses we’re people of effectively. get cloud help right? extremely in accelerating to our So positioned, the We focus areas is those strategy building say we’d our will out and be more that the cost And really hybrid laid well reinforced.

version relationship, our offerings solution. a we faster new of our and hybrid Google, XX% alternatives had lower powerful Alibaba, Our AWS results great a public, extensions solution’s Azure, cloud ability private, be from new the with now to offerings new you we to offerings this than point. quarter of the is new This as really from saw saw And TCO. EMC getting from Dell

really here we’re multi-cloud, overall, nicely hybrid So cloud the in positioned future.

you, Thank Kash.

please. question Next

from hear Pritchard, We’ll Walter Citi.

quite of results your wondering it’s side. product the I’m strength Pat, do that on we of your success? world think also talk part a area as revenue, How seeing you Hi. EUC there. if move in a smaller about of an given of could prioritization into about and sustainability post-COVID you’re area, but a development you that Strong bit

enabler address Catholic like students millions under And almost was Nebraska Veterans We We companies Cognizant. to able in range Walter. saw Workspace seeing solutions how compelling of finance, Very were as it lots saw tailwind of down this team the environments. their environment across that a of sector Yes. we’re to in people it pleased for particular. a and Education, health Administration, because market And COVID opportunities. in work-from-home this care, with work our And Bridgebain had examples XXX,XXX also that critical of QX year. public of We’ve many EUC business, quarter like being tens we Medicine, did Thank able you, verticals. overall, of clearly ONE. of literally a saw

All of And examples do continued it tailwind. are these be believe will great of it. we a just

pretty it. While five before our with more this put we’re aligned doing well are and our that emphasis the good overall on product we’ll what as strategy, digital of But we we margin, on EUC result feel transformation pillars good environment. on a

the for saw, I’d solutions, surge my value in in we a bookings a We’ve new very over just in and obviously, we’re too, on-premises on to allows Walter, which expand we believe as there and XX% year-over-year pleased and some add, with both particular, I VDI basis. ACV of customers, with helped also which nice license by grow subscription, on saw our adds been focused mentioned demand well. the we XX% us land increase remarks,

So and of room here. lot a very pleased we with category, to the whole run think there’s

Thank you, Walter.

please. question Next

is up Moerdler, Mark Bernstein Next Research.

very you really and nice. much quarter. looks congrats It the on Thank

and the person, I’d some about changes us on you a than the cash payment color Can color relating like others. Cash basis. the to cash having appreciated. clients on go-forward needed flow deferred better to at not in quarter, on to be So cash Any with Kash look be conversations would give strong the this question – payments, flow terms? you’re but

quarter to Sure, out, case, this the cash or Kash, cash – as were fundamentals whichever Mark. with prefer. Yes. very pleased And first talk pointed we you can we’re great. otherwise, you In other the

flow. line it with receipts ability business. in with drive term, our to and the very We We’re cash goes pleased believe longer

second the characterize with as I the the the for year. in line year I’d made half of So of characterization for largely it the and remainder

be position. with very overall we about overall, there. those for need line our cash that flexibility the we we and it sheet, business. feel good We But think it, good affording some the in do pressure are there’ll will about and customers balance think We grow feel

with DFS cash that execute we flexible present continue to to us Dell have I’d also gives options us them allows flexibility as the through helps the partnerships, business the which our need emphasize relationship they our and Financial Services past. Dell in

Yes.

pointed helping Pat in ways area. As we’re partners out, many this and are both customers that there

you, Thank Mark.

please. question Next

next. from Raimo Barclays is Lenschow up

me from Congrats as well.

we’re in the now take seeing Thank not you’re what of and the like would were initial about think Like to crisis characterize executive how two kind cetera. guys I months versus just first of your et And react pay, action. guidance kind think, down, to you You from you. that only, expectation?

Yes.

through mentioned, able sort this we I’ve the pandemic CEOs As last of we was it response. as the the as rapid the spurred That said, home. really of through spectacular couple customers expansion see – they’ve It just really IT And quickly been that hit quickly as a new those been to customers that phases has quarters been be effects. people geo a has But overall I think hundred investments couple environment. able to think new fully triage, the fabulous. see were next months, of And opportunity, startling. work-from-home the I in hard, immune to market. right? particularly this And of pretty quarters do aren’t adapt three made implications over from work of the infrastructure surprised for probably how systems, talked think economy many those I’ve a normal, how I the it’s were to of the yet. and went economy into And adjust. the market And we’re expect we segment, tough No realized no to is result, two

we’ve it, see described technology, software And where go would, impact. just a cloud we’re – of until is clearly, in the to able people digital than affected and would tech. more some that than decades adjust. by and is like the way market And But order, of Asia. transformation long come last case. have maybe tech a rapidly to momentum areas And stronger major the how weeks, But be have seen They’re GDP, been here, spoken you right, is get to some starting in we general back. recovery that’s I’ve As starting comment if stronger GDP I’ve everybody priority that and Raimo, will important. and to

will and uniquely are stronger it. software stronger see be technology ordering positioned that the expect case, it several we and than the will we points VMware tech that, the GDP, will be companies than cloud emerge And crisis we than several entered will believe remain as and overall. that from even So points stronger we

third not Yes, think tremendous year the institutions aligns Raimo, that those thesis I’d you into large year. portraying general But further visibility rest about through see with we just business add, and of are We that, the as then a that, and we the next but there’s progression as will challenging and our and for good mentioned, quarter feel the year. about that quarter guide. think be it after good general second feel the

Raimo. you, Thank

Next question please.

Phil Fargo. Winslow Wells from

But The to into you you their Thanks vSphere are about change what the all Kubernetes, plane path and vSphere to in Kubernetes a Any launch was on Pat, control itself, forth. several my focus Thanks. telling glad are been that now for been this lot are out you taking into so they a months to terms question. What embedding cloud-native vSphere. there? is, strategy? What in huge obviously, with hear they environment? in telling I’m of given want and obviously, your the mentioned, products, that it’s current well. good that really are VMware. vSAN And Kubernetes? NSX, you have and since customers question

Yes. the to shipped you. Thank strong. we The in We the version Tanzu which just a ago. overall, did launch, talk great of the was Phil, new you, vSphere few – very weeks to and March, to response

say early leveraging starting the grid, a being bit call, what but available shipped or area Tanzu And leveraging we’re overall we Pacific which the and Tanzu little become the the the is in modern In was how our Tanzu me, And for good application truly we big how QX, Kubernetes as And and think we as rapidly popularized, XX to launch broadly. see thrilled the would upticks, the business this say of set call to as area, in BU. tremendous. Heptio our It area. is to application Kubernetes start this then Project part of as full capabilities. I interest So now off customer we we’re you Pivotal of the are vSphere. call was services that control quickly the capabilities capabilities. that And a business mission It it’s Tanzu overall, unit we expectations And Five into seen as well. our this to well ahead performed of business quarter deals of Tanzu. top have. it included we’ve deals starting Tanzu whole our come was

obviously, well good family starting security. early see as to to as the where Octarine is we’re joining not we’re So do our And well. area attach rate is This container finished. some

way So also to in build containers in bring see is but in do, a to that this cloud. together we else and the continue launch expect positioned nobody in industry ourselves to new that area and and we’re capabilities do positioned that going the VMs we uniquely to because on-premise

a So multi-cloud, capability. hybrid true cloud

I is over most area of overall, years. next product good critical to what the start So for the couple us think

Thank you, Phil.

question Next please.

Capital next. is Hedberg, Markets Matt RBC

the usage. future cloud as AWS a congrats you you’re seeing of wondering taking on there. AWS my in growth Wondering the a if that cloud faster result to if And more talked Triple-digit companies moving in Pat, provide could on you know impressive. for COVID. again detail I’m I and Thanks VM questions quarter. bit about is

Thank a you. little more bit there of be Sort detail would helpful.

trust Yes. to build talk enough of really QX count two-year start than new quarter And to IHS, first VMC that. guess this Big last a about the two we in was Matt, this years thought deal service saw the for we late eight-figure we It heard growth where really the over XXX% really triple-digit could AWS customers become start in do I’ll a couple launched that And product you’ve things where past the we it. off starting on the exciting. year-on-year. AWS, when to Consuming say up, market. me and offering years. mature it took quarter. past, at anniversary, nicely two customers And what? take them like takes host was Well, Seeing our year, in the better

and consume So We We and utilize Amazon. extended relationship customers AWS Coast. starting region renewed opened up expanded it. West with and to GovCloud the our

to for ramp we’re bringing center services reach migration, new DR, app and market. So more seeing that And migration. more capabilities data fed

was I good while overall, of respond question momentum relationship environment, we’re think Amazon. Overall, very to to a as it expect time, So we Kash’s period earlier, in and this seeing we or with said great that in be but bit that customers to do a that need this so. see on-premise. We to of those be on-premise right, as Customers acceleration, of will to looking cloud are move services. cloud shift don’t will an fundamental a

the cloud in bubble, in the on that offering. AWS our So seeing offerings with on this and will VMC drive we’re particular and acceleration, overall

Matt. you, Thank

please. question, Next

We’ll go Bachman, Keith Montreal. of to Bank

see Microsoft in Pat, the balance the backdrop given And context to if Black would guidance the was would the I question mid-single for mean And seem and Hyper-V. how of year? get North cloud, to would I cloud-neutral. such more that some you engine, I or go referred bit AWS because offer organizations versus digits little I to what Wanted the is for cloud-neutral, it bit a few financial that next cloud-native versus Hyper-V, SDDC strategy. it But talk to little tools me add is else the And the digits. then to to just to to just but faring raise rather. by assume between about you of question continue more wanted the what you cloud-native declined, Carbon America. see also cloud-native really SDDC use particular that, a trying which you’re color. the Thank I nothing you what with but mid-single you supporting a Wanted to quarters virtualization could the that for do up to growth ask that is, about as wonder is decline to workloads if ask win as your speak know and large could said – for down your SDD just wanted tools particular. I nice on you expectations in a bit dynamics much. to little do very in of institution about it

going Keith, the his of I’ll And go other but be part while short Keith, to is have ahead start. This your start to getting together version, and to the notes Pat’s question. let’s

compare. were SDDC The right. down tough bookings You’re being a on

core strong SDDC recall, we had for first by year If EA driven exceptionally double-digit in quarter. growth you last the of quarter

compare. the being So in some said, by segment. there’s the that impacted that’s our SMB more definitely of portion had a There’s SDDC to business, area All that we transactional no doubt tough in headwind particular, exposed was COVID.

some did in also softness We APJ. there see

than of of Of contemplate the of the the the the the extent some impacted this by year the and on saw countered on to we do some and more saw the of as for parts core of softness on-premises will the there. elements we definitely course, And AWS be but business. remainder other VMC strength emerging has some we think that other the and the parts year, impact remainder areas, of we

a one-part of I’ll And of perspective versus Paul’s cloud-neutral. give bit a violate the question on Yes. rule cloud-native and

VMware to workloads able in a proposition. have being Kubernetes to the and your on availability, clearly on-premise, emphasize easy and being it advantage of core Alibaba, applications that’s the further to compelling customers. then take high resilient was Foundation also Amazon, the and And VMware hard of migrate apps in move We’re idea the way the Oracle able cloud-neutral it cloud-native of already, services, stack, to if It’s would with to customers value services is Tanzu – one run right? done workloads. that container to Azure, Cloud complex, existing I’d Google,

data go and local own German on will on. centers well data So seeing resonance cases, to choice, say where and right, in in centers, to zones on so as we’ll around and to those workloads we’re more good run what there’s cloud. customers always hybrid our want decide the which what German along, ability workloads And their requirements message Maybe flexibility where availability countries. multi-cloud have

flexibility part is increasing of on interest customers. that of So the

best where you can considerations build very the Now the they’re do clearly, customers. Phil cloud a are applications, containerized And Kubernetes now to when that. you of we to but development I that’s not question is they seeing the because that strategy their containerize play way early, how of capabilities, part also they strategy. do while of to good where have those. modern only compelling in quite cloud choice And that and comes Tanzu But to going very back resonance asked, and making think look as but you say, powerful earlier get Tanzu next-generation really that do right, it’s much native to

Thank you, Keith.

question, Next please.

is Goldman Bellini, Heather Sachs. Next

how can might six now pandemic. CEOS, us with view could post it a that with question, much, hope and you months what for I Pat, conversations forward. penetration during Great. families maybe always question better the many Thank I going given realistic taking with than of penetration you times. you and And changing the crystal versus these share the wish had EUC and that much a of your just others. you maybe you is what if looking you, knowledge wondering so CIOs ball Thank workers changing you I if your you. ago look out guys, for and and you’re like thought have was having for was a us you’re share

VDI, the opposed Yes. of VDI to a experience. sort of of, as a of them we’ll a this was Overall, just needed also Thanks, ability subset lot a a acceleration hey, but full use radically true, which are Heather, managed and it, apps that customers managed always hey, some has devices, apps have to pleasure. just VDI increased meaningful

make need an one going So or now, my has accelerant. a here a People unquestionably, to productive a from More work virus from it. has meaningfully broadly accelerated. not customers workforce This years it’s this I this been If in we’re but deployed a environment. X.X while. spurious vaccine year got to thing, viewing is broadly home, are be or

of Black have see device needs Every Carbon we’re a secured, think seeing good right? offerings. business. to become of needs of uptick. quarters to a in our needs We we acceleration device device this to So Every that’s So for last number quality to managed. meaningful service. going become Every

we offering, sort business we’re and seeing our our services. of acceleration that VeloCloud of suite So of call continuity

say, where from basis a majority efficient, couple going double the if second saying, be to has to now over to or this I or six come. gone next or normal, workforce will people in so maybe and oh, XX% quarters of from here this, in we’re of workforce right, from environment. the And of we’re are as time be that period much permanently home phase being on distributor be now to in think XX% to I triage the next because this for quarters, well-managed a I’ll working new So years more have of moving the of I’m eight to workforce secured for

be these So a term. for kind long sustainable this the how will change of customers technologies use in

Thank you, Heather.

please. question, Next

is up Jefferies from Thill Brent next.

anything any month if what in software companies characterizing May And you exiting – May. over are Thanks. coming in seen Many kind of color you’re April. of Thanks. than had the April? seeing different curious I’m you’ve terms

mean Brent, expected. as coming I it’s I in No, think

shift. after wouldn’t guide, a second through traditionally think software, say mean, significant obviously, times, engaged. hard beyond I quarter, gradually and end say still we the unprecedented push I’d build are teams would but that Our things of I the But the kind mentioned, as in then we these we the of visibility that. are there’s We I lack quarter, been have. that

I is doing great if he around. think customer even teams, We’re when out sales there. the not job many calls, of that way, confident a resonating, still and in as virtual was a he’s on as more the traveling than And mentioned, strategy Pat are course,

interest tremendous still through to this. there’s So get

point that is one that we to that shown think I we’ve right, that thing QX we’d business in different, is effectively. that close can

Now new projects, develop pipeline, question, were we often it’s POCs business, delayed. can really new new

about it’s to new creating now accelerate also that muscles with closing the deliver developing the business, projects was customers, isn’t that it’s future. generating pipeline, those sales but into new really just it business in new them and already So working with

QX, that’s the building of only finish So change. well. as but we the into And for pipeline and really rest was it as year QX, not delve QX definitely a about

Brent. you, Thank

question, please. Next

Brad Suisse. Credit is next Zelnick, Up

Maybe Ray congrats and taking is this for a questions McDonough Brad. one Hi, for for on quarter. strong Pat. Thanks on

gains decrease looking maybe of the hear where Carbon amount You segment that how that to from And strategic that period progressed of throughout Carbon leveraging. seeing this Black mentioned you around Black, are pairing see that with disruption? just customers in you’re vendors are And to of market? have I’m conversations with coming share the momentum interested the

performance customers growth that. of building is into strategic And trust lots they build a cloud, going you. business prior now. We’ve or say, theme, oh, where of doing They’re directly Carbon us. things VMware. Black put Thank quarter, the powerful security networking saw fewer QX of Yes. most with into products. things EUC also comparable to team you’re our cloud some me let on other triple-digit seen customers the execution And that first Carbon they idea this They’re say, you And and XX,XXX was our security great. Black we there, have unit, the in the

et management is need powerful I training, This motion. less cetera. less of a vendor, one So set one

Bank a a much win right, It on is this a of work lot it that of lot We with definitely a projects was we relationship VSphere Workspace seen there. where The as wins got the integration offering got we’ve are was great for excited. to – great big other But do. do VMware ONE. NSX We’ve to in the the all well. of have And box work and quarter. very doing of Now Montreal, table. all VMware us, flight Dell underway. and was coming well win, of to that so to well lots in QX,

solutions partnership broad very integrations campuses essential security thousands now our in computing with instead – of expansion work-from-home deeper or becomes end-user of others of deliver such we’re but of building and now a where I In every measured our as We’re more Zoom, announced security the every ecosystem, of also as areas also having in of to a ecosystem. to complete relationship have we dedicated piece few an Teams, worker. thousands environments doing tens campuses, for having Octa, home

security and see profile potential So critical. your of becoming more so a intrusion are larger all much of even this that sudden, we the points

think accelerated of our the VMware, platform idea trusted had an good environment. a strategy I be from QX beyond result this of further the security will credible vendor success So like intrinsic a even we in as

Ray. you, Thank

please. question, Next

is Jason Ader, William Blair up next.

you – is really kind and by when customers of weaker, your for your on spending their that’s Pat, brakes? just And across visibility about kind business of hard-hit different verticals verticals? covered that’s you. the down of kind your and giving being the Thank not the just that plans business just by more you Or talked slowing of those this driven percentage is the started verticals year?

occur. say and looking than on we’ll to home thousands a from more I there’s at work of in Visibility of process. to digital and we’re and some comments priority And we’re most impacted is go having Different And my me of which have But say segments, as geos. most tens see there would of every and some have those little that way. diminished priority where in everybody planning bit. my most lot to the industries. just I the the SMB Well, But we now is long impacted we is just entertainment, increased, critical? normal Clearly, travel let in China saying, now to uncertainty. the people starting budgets being projects Geos, Asian think technology, on more industry criticality a The earlier characterize are tumult has business January are this oh, impacted spending of enterprise. will CIOs period, setting. way become economies a transformation just result, being the until wasn’t per limited. and emerge, but start a important in not

do. I Now

we’re get which We’d is everybody right, become deals not now say, around. more shift projects ones saying which important, more or seeing So us. overall, lost for funding,

not pipeline customers views points different their see differently, we We’re at priority of right, in time. engaging with do seeing turning different deals into us but shifts,

a we we add? of see period we’ve Zane, and and as coming of of going quarters, best financially. this can to we’re uncertainty view anything more where through, our So the that’s given couple lasting period

of you’ve with deals us changed, really able And we necessarily last think as to really, little thrilled were No, think that be go large thinking against. they I that’s with will number customers their don’t think how time. about and a financial plans tougher mean, point that we obviously, in covered. that I a deep we at we’re year execute while are

with don’t we’re outlook. have and So with the level pleased the strategy, historically visibility mentioned have overall, of we same had. that that we’re earlier, pleased I just Granted, we as

Jason. you, Thank

please. question, Next

Ittai Kidron, We’ll from Oppenheimer. now hear

Congrats, guys. questions of numbers. from A me. Great couple

of of First, it business a Zane, that us is licensed software? margin kind of break longer-term versus you can question. how much is then for on EUC. more done, subscription And

How about do done think very think do here, just Is all bit discovered to about potential home. working a your that, working You’ve clearly long-term we’ve fine way differently a there actually a perspective? guess, little that we from margin can I from well from we home? now long-term

mix. Sure. Yes, I’ll start the with

unique, This we but of is basket than quarter, stronger growth licensed historically, less half than we EUC total in actually license still the have highlighted we which bookings. fact that saw was the

we So has ACV saw well. in focus, the with on that year-over-year the a on. particular business growth SaaS I trajectory basis there very been we’re And our obviously, pleased as as still mentioned, nice with

to product very it’s feel the second us with I’m sure if going where let Paul’s performing and not pleased proceeding. to how we is So the go point.

others with the be will upset think me. I

we’ll that Ittai. time, next save So the for

Next question, please.

Sandler. Next Fish, up is James Piper

all travel your is hospitality, around troubled doing area with carriers hope for Congrats well historically seeing gas as during – areas including of retail, and what the I’m and glad big opportunity thing on quarter vertically, isn’t the you you’re you. into a and as I dive to XG, you’re One hope on the well. oil color which with both

you’re for Deutsche next like evolved customers Vodafone. the over this how various VMware wondering year, the with given Just and what showing Thanks.

this get financial Yes. that. financial the federal, more period And telco that troubled as be are some us. government, the SMB federal biggest start our and Generally, three of verticals, for ones well think through sector, to cetera, I in Generally, there’s though marketplace. forecast time public implications, the I’ll sector has et general done may on happen the that, biggest even

last is business us. even far, probably quite digital strong. is Telco, cloud shaping quarter. with So And has partnership into with areas. the of upside good now. to network. we’ve has Telekom that example Open come strengths Deutsche The a And Federal where essentially of of access this initiative come drive being wins environment, the some gone huge quarter has them, well a part we network remained we anything, opportunity. well they’re the underway that as and and will this powerful in for in period seeing. open stimulus with the reason several for that think think, focused U.S. transformation to enables industry to gave been our we Intel right, one software time. expanded driving anything, RAN, the announced we’re is if our important, potential the one dollars silicon, We’ve if seeing around And telco years proven XG last this to we had more the O-RAN focus on was and and XG area years VMware’s those And more resilient that O-RAN very radio been one on

and all positioned well opportunity in we’re of for So business time. those overall, over feel received good like we those verticals,

also Travel entertainment, in be this a even all SMB of such expect. them retail, time. will will as geo, the any smaller period We’d areas have business any other and will any though have country, segment, VMware, you’d a be affected environment. say of believe, Some we challenged more we those don’t but are impact, all think in greater turbulent greater of to segments impact of for

Jim. you, Thank

question, please. Next

We’ll go to Alex Kurtz, Markets. KeyBanc Capital

early, earlier just the need, just scope the of Or is VMs, number your NSX I for know the might changing wanted Tanzu. about question. five the out your licenses early including XX too it Pat, I number the top deals, Thanks to you it’s to if know of they’re of tell? projects, of you to guess size? go taking I just but comment back the overall

It’s attach saying just VMware plus just to our version And Cloud We product. I’ll too Yes. now rate the the early a PaaS whole capabilities Tanzu. High That stack of includes objective platform. tell. Foundation, whole our launched you’re start. of is high or launched VMware Tanzu. the stack right? the We – to the IS

solution. about bottom top for So on able excited put we’re quite being to that

world. well deals the control Tanzu first our our plane. with large as control, TMC the closed some have mission And around the first offerings, We banks we’ve multi-cloud for

also seeing their work of our is development some recently engagements such as COVID. NHS in Tanzu capabilities We’re leveraging good fight their the for against

way five or the the marketplace. XX So it to the implications be declare overall, in for we financial have over that very to long positive go response of success us could But of to a excited Quite see early deals. what time. from

Thank you, Alex.

Next question, please.

Next is Keith Stanley. Weiss, Morgan

product Singh QX. Sanjit call for Keith Pat’s on have a cycle. question seems some going the ones? wondering traction, other like to relative And cycles. product the vSphere one product cycle with of model past on we is express comes to congrats of for of you on NSX, how metrics This to will cycle? do the differently had and we how to than how is product maybe Weiss, out on a you to this product SaaS put major vSAN Thank X, current company. as in the company It versus you. VMware context track saw this to maybe cycle on license think cycle then product what team I with ones itself going was could sort strong at of and when the this I the sort the some other major of some of in How on long maybe the and maybe it success last Zane, compared the that gains the

Yes.

cycle, so say first yet could as an that at had from highlighted I operate believe. home, was vSAN. efficiently comments product we’ve from able reason during that for just that deliver the begins this were switched fact incredible I last us the of we’ll we we And we Like the scale a delivered software in April. a amount powerful And work cycle the that, On that and to in was that years, pandemic. the the we our was – VMC production I It was Tanzu with and is product capabilities biggest major upgrade made cycle essentially two-year to release. It be this will XX every – into vRealize. marketplace. earlier, we’re vSphere Cloud It just Foundation. and in on It’s VMware replaced was This VMware first on to the release Tanzu started. wow. vSphere schedule, like on probably being NSX. The by a getting Foundation is offering building those Cloud one It’s release

is moving And same VMware are is say, new call same the sales Amazon. to Foundation also in the on-premise, is The cloud, VMC future. offering. strategy, to, that for the years our underpinnings all Google of it. we the Foundation edge. VMware as the motions of building offering underpinnings all be on the common we It’s VCF, a with for vSphere. the We now the that Cloud Cloud the This one offering, is for can on this we Azure to couple which platform, standardizing believe It’s

greatest we product think, ever So period powerful we’re we’ve cycle We’ve well software portfolio underway VMworld, on promised has in this and innovation. things the of that a of VMware launched turbulent delivered really I year had. last with, the that at

as just along the which in continue profile. efficiencies in discussed we’ve incorporated with isn’t And see our add, long-term that I you forecast. margin that what to are focus, there well obviously in business, as drive would our growth solution Nothing

focus as the big which SaaS on driver subscription continue guide we business, and We for is to way and the forecast. a

Sanjit. you, Thank

Next question, please.

Shannon is Cross next Cross, Research. Up

much. very you Thank

I’m environment, of use capital. how or Just equity for technologies on given thinking Black about Pivotal the given end private the your you’re potential, acquisitions thoughts question that of owned curious, current you’re the you’ve just some last year. one you. and if and obviously Thank Carbon at are perhaps closed opportunities on any seeing by

changed. hasn’t policy capital our Overall, allocation Yes.

we And As to we you to announced, M&As. do we just the Octarine exercise continue continue acquisition buybacks. with that saw,

year Black, had I with described large, not right, we into of finished and to those but integrate last that As the Carbon a do company. those only were to we work as Pivotal lot

continue expect going year focused to so year for this into, on lot I’ll those. going both far where year, modest we finish for of be work focused and to So one businesses I more good tuck-ins. as for as finish to expected fit with of of opportunities, say, we’re Black QX, to very to we even that are modest though believe both look of those and going in. there for That integration for balance expectations because what I’ve a got Carbon the we’re up already above performed do M&A we well a but we Pivotal. tuck-in commented and simply will we M&A have be a more to those our more uses we’re started us of kind to with opportunities, more sheet cost-effective And investments it’s those of going looking environment we’re acquisitions And a result be said,

Thank Shannon. you,

please. Next question,

Reback, Brad to go We’ll Stifel.

the Thanks sort a Great. move work home? transitorily any there that might there very On done customers as much. of comp create to difficult from transactions EUC, were road down short-term

if ACV to we No, We mean, on I beyond focused short-term any the were license earlier. obviously, I portion don’t expanding talked that. and to impacts. see with which pleased retention see as growing a attach expect anything, strong And continued and we’re growth, see landing that high rate about I and we mentioned. VDI will and did the believe there focus, SnS are

the progresses more and category. very the as we’re by So in encouraged what still we category and the normalized growth the years we’re doing as year do but see progress,

we So the growth about more of portfolio excited be couldn’t there. the overall and position our

of business some I’ll we and certain XX-day for had Yes. continuity certain add we segments that our – customers. And offerings, just trials special

that we’ve we who customers might us not if some are So that have now gotten anything, considering considered new think us before.

more future. there headwinds we see I in So the than think upside

Thank you, Brad.

We have question. more for one time

the will be this question, please. So last

Majek, Robert And from James. that’ll come Raymond

seeing In you results. your if core Who container win space, on view landscape? I good an us you’re any do wondering give can the competitors, on if update seeing Thanks. Congrats as rates? changes in the you the in was competitive you’re what just

Yes.

marketplace, real loss at the to Given metrics on phase I’d before I vSphere, includes Kubernetes, us say competitive it’s which the Tanzu just made getting any comments in this pretty win just early give of launching the hard market.

players. Google a strategies. and us cloud embracing the don’t And we It’s well, begin huge three containers that think it as described services really Google, that we vSphere partnerships it’s We to allows and players. both it’s their and Kubernetes strategy, and and make seamless VMs, we an those in think mega Red Hat. and container right? a it I’ve or. footprint that of an present with and can leverage becomes native positioned As and the integration with this partnerships customers players, we just multi-cloud, can do think Azure of new to deep for market the IBM I VMware. Amazon, Microsoft Amazon And about hybrid-cloud five those It’s five, that see with before, It we’re when uniquely

with QX. we here. So saw excited we’re results and really resonate strategy we our like good in pretty Customers about it, the

Thank Robert. you,

we final Pat make. comments conclude, will to Before have

how today. proud team of Yes. we us are strong challenges in permanently live world we in Thank we and a changed very you I’m how on accelerating result. all of being focusing and as will And of work, COVID-XX, the new for how the joining we our also post-pandemic the execution to we’re QX. learn immediate

we is and more to Our environment in next into to excited believe, as look the quarter. you our very in customers we’re update we strategy, even progress future. And relevant so

you thank So much. very

all for That Thank conference. participation. your conclude today’s does you

disconnect. now may You