VMware CEO Ragu Raghuram said the company is experiencing explosive growth as more companies are modernizing their systems and making the transition to the cloud. Speaking during VMware's quarterly earnings call with investors, Raghuram said that companies are turning to VMware to provide multi-cloud management and deliver a cloud infrastructure that is resilient and secure. He noted that VMware Cloud is now available on hyperscaler clouds, in data centers, in telco networks and at the edge.
The company reported fiscal fourth quarter 2022 revenue of $3.53 billion, up 7% from the same quarter in fiscal 2021. In addition, subscription and software-as-a-service (SaaS) revenue for the quarter was $868 million, up 23% year-over-year and license revenue was $1.04 billion in the quarter, a 2% increase from the prior year.
VMware also reported a net income in the fiscal fourth quarter of 2022 of $586 million compared to $791 million in same quarter of fiscal 2021 and an operating income of $783 million.
Raghuram said the company benefited from converting several of its products to a subscription and SaaS model in fiscal 2022 and will make all its products available as subscription and SaaS in fiscal 2023. He added that subscription and SaaS revenue in the fourth quarter was 25% of the company’s total revenue. “We will further accelerate the business model transformation,” Raghuram said.
The company also made its VMware Tanzu application platform generally available in the fourth quarter and Raghuram noted that there has been a lot of interest in the platform from customers that want to build applications and improve their developer experience.
Raghuram added that many enterprise customers are interested in VMware’s portfolio of cloud products including large enterprises in regulated industries such as banking that want to take their applications into the cloud. “There is great interest in it,” he said.
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For the full fiscal 2022, VMware reported revenue of $12.85 billion, up 9% from fiscal 2021. The company’s revenue from subscriptions and SaaS was $3.2 billion for the year, up 24% from the prior year.
Raghuram said that in fiscal 2023 VMware will focus on the following:
- Providing an app platform that will help customers convert their apps to a multi-cloud environment;
- Helping customers modernize and migrate their enterprise workloads to hyperscaler clouds, sovereign clouds, private clouds and the edge; and
- Delivering an “Anywhere Workspace” for the distributed workforce.
In addition, he said that the company plans to release new versions of its vSphere software in fiscal 2023.
Dell Technologies completed its spin off of VMware last November — a move that was praised by VMware management because it opened the door to new partnerships.