VMWARE INC. (VMW, Financial) filed Quarterly Report for the period ended 2012-09-30.
Vmware, Inc. has a market cap of $36.26 billion; its shares were traded at around $88.02 with a P/E ratio of 45.2 and P/S ratio of 9.6. Vmware, Inc. had an annual average earning growth of 26.2% over the past 5 years.
Software maintenance revenues increased by $123.9 or 29% to $550.6 in the third quarter of 2012 from $426.8 in the third quarter of 2011. Software maintenance revenues increased by $385.1 or 33% to $1,562.0 in the first nine months of 2012 from $1,176.9 in the first nine months of 2011. In the third quarter and first nine months of 2012, software maintenance revenues benefited from strong renewals, multi-year software maintenance contracts sold in previous periods, and additional maintenance contracts sold in conjunction with new software license sales. In the third quarter and first nine months of 2012, customers bought, on average, more than 24 months of support and maintenance with each new license purchased, which we believe illustrates our customers commitment to VMware as a core element of their data center architecture and hybrid cloud strategy.
Core operating expenses for sales and marketing increased by $53.6 or 18% in the third quarter of 2012 compared with the third quarter of 2011, and by $176.2 or 20% in the first nine months of 2012 compared with the first nine months of 2011. The increases were primarily due to growth in employee-related expenses of $49.2 and $149.1 in the third quarter and first nine months of 2012, respectively, driven by incremental growth in headcount. Additionally, the costs of marketing programs increased by $6.0 and $27.7 in the third quarter and first nine months of 2012, respectively. These increases were partially offset by the positive impact of $13.0 and $25.1, respectively, from fluctuations in the exchange rate between the U.S. Dollar and foreign currencies.
Other operating expenses increased by $4.8 to $27.8 in the third quarter of 2012 from $23.0 in the third quarter of 2011. The increase in the third quarter of 2012 was primarily due to an increase in intangible amortization of $7.0 resulting from new acquisitions, which was primarily recorded to costs of license revenues on our income statement. The increase was partially offset by a decrease of $3.0 in employer payroll taxes on employee stock transactions, which was primarily attributable to a decrease in the number of awards exercised, sold or vested. Other operating expenses increased by $11.2 to $75.3 in the first nine months of 2012 from $64.1 in the first nine months of 2011. The increase in the first nine months of 2012 was primarily due to an increase in intangible amortization of $14.8 resulting from new business acquisitions, which was primarily recorded to costs of license revenues on our income statement. The increase was partially offset by a decrease of $4.7 in employer payroll taxes on employee stock transactions, which was primarily attributable to a decrease in the number of awards exercised, sold or vested.
Total fixed income securities of $764.6 and $955.7 were purchased in the third quarter of 2012 and 2011, respectively. In the first nine months of 2012 and 2011, we purchased $2,719.6 and $2,083.5, respectively, of fixed income securities. All purchases of fixed income securities were classified as cash outflows from investing activities. We classified these investments as short-term investments on our consolidated balance sheets based upon the nature of the security and their availability for use in current operations or for other purposes, such as business acquisitions and strategic investments. These cash outflows were partially offset by cash inflows of $1,116.4 and $463.4 in the third quarter of 2012 and 2011, respectively, and $2,421.2 and $1,333.0 in the first nine months of 2012 and 2011, respectively, as a result of the sales and maturities of fixed income securities. In the third quarter of 2012, purchases of fixed income securities declined and sales of fixed income securities increased with the liquidation of securities in connection with the acquisition of Nicira. Activity in the fixed income portfolio increased in the first nine months of 2012 primarily from increased cash and cash equivalent and short-term investment balances available for investment, including a reallocation of funds from cash equivalents to fixed income securities.
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Vmware, Inc. has a market cap of $36.26 billion; its shares were traded at around $88.02 with a P/E ratio of 45.2 and P/S ratio of 9.6. Vmware, Inc. had an annual average earning growth of 26.2% over the past 5 years.
Highlight of Business Operations:
Total revenues increased by $191.8 or 20% to $1,133.7 in the third quarter of 2012 from $941.9 in the third quarter of 2011. Total revenues increased by $605.1 or 22% to $3,311.9 in the first nine months of 2012 from $2,706.8 in the first nine months of 2011.Software maintenance revenues increased by $123.9 or 29% to $550.6 in the third quarter of 2012 from $426.8 in the third quarter of 2011. Software maintenance revenues increased by $385.1 or 33% to $1,562.0 in the first nine months of 2012 from $1,176.9 in the first nine months of 2011. In the third quarter and first nine months of 2012, software maintenance revenues benefited from strong renewals, multi-year software maintenance contracts sold in previous periods, and additional maintenance contracts sold in conjunction with new software license sales. In the third quarter and first nine months of 2012, customers bought, on average, more than 24 months of support and maintenance with each new license purchased, which we believe illustrates our customers commitment to VMware as a core element of their data center architecture and hybrid cloud strategy.
Core operating expenses for sales and marketing increased by $53.6 or 18% in the third quarter of 2012 compared with the third quarter of 2011, and by $176.2 or 20% in the first nine months of 2012 compared with the first nine months of 2011. The increases were primarily due to growth in employee-related expenses of $49.2 and $149.1 in the third quarter and first nine months of 2012, respectively, driven by incremental growth in headcount. Additionally, the costs of marketing programs increased by $6.0 and $27.7 in the third quarter and first nine months of 2012, respectively. These increases were partially offset by the positive impact of $13.0 and $25.1, respectively, from fluctuations in the exchange rate between the U.S. Dollar and foreign currencies.
Other operating expenses increased by $4.8 to $27.8 in the third quarter of 2012 from $23.0 in the third quarter of 2011. The increase in the third quarter of 2012 was primarily due to an increase in intangible amortization of $7.0 resulting from new acquisitions, which was primarily recorded to costs of license revenues on our income statement. The increase was partially offset by a decrease of $3.0 in employer payroll taxes on employee stock transactions, which was primarily attributable to a decrease in the number of awards exercised, sold or vested. Other operating expenses increased by $11.2 to $75.3 in the first nine months of 2012 from $64.1 in the first nine months of 2011. The increase in the first nine months of 2012 was primarily due to an increase in intangible amortization of $14.8 resulting from new business acquisitions, which was primarily recorded to costs of license revenues on our income statement. The increase was partially offset by a decrease of $4.7 in employer payroll taxes on employee stock transactions, which was primarily attributable to a decrease in the number of awards exercised, sold or vested.
Total fixed income securities of $764.6 and $955.7 were purchased in the third quarter of 2012 and 2011, respectively. In the first nine months of 2012 and 2011, we purchased $2,719.6 and $2,083.5, respectively, of fixed income securities. All purchases of fixed income securities were classified as cash outflows from investing activities. We classified these investments as short-term investments on our consolidated balance sheets based upon the nature of the security and their availability for use in current operations or for other purposes, such as business acquisitions and strategic investments. These cash outflows were partially offset by cash inflows of $1,116.4 and $463.4 in the third quarter of 2012 and 2011, respectively, and $2,421.2 and $1,333.0 in the first nine months of 2012 and 2011, respectively, as a result of the sales and maturities of fixed income securities. In the third quarter of 2012, purchases of fixed income securities declined and sales of fixed income securities increased with the liquidation of securities in connection with the acquisition of Nicira. Activity in the fixed income portfolio increased in the first nine months of 2012 primarily from increased cash and cash equivalent and short-term investment balances available for investment, including a reallocation of funds from cash equivalents to fixed income securities.
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