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Alberto Abaterusso
Alberto Abaterusso
Articles (1520) 

3 Large-Cap Software Companies Release 4th-Quarter Financial Results

VMware, Autodesk and Workday beat consensus on earnings

March 01, 2019 | About:

These large-cap tech stocks released fourth-quarter fiscal 2019 earnings results on Thursday.

Shares of VMware Inc. (NYSE:VMW) jumped 3.6% to $178 in after-hours trading on Thursday after beating consensus estimates for fourth-quarter non-GAAP earnings by 10 cents, having posted earnings of $1.98 per share.

Revenue grew 16.1% year-over-year to $2.59 billion, beating expectations by $90 million. License revenue soared 21% year-over-year to $1.23 billion, and services revenue rose 12.6% from the prior-year quarter to $1.36 billion in the final quarter of fiscal 2019 which ended Feb. 1.

The Palo Alto, California-based computer software provider also noted approximately 0.6 percentage points of year-over-year growth in non-GAAP operating margin to 37.34%.

VMware also reported the following changes in the financial results for full fiscal 2019.

Total revenue increased 14% to $8.98 billion, which is shared between license revenue of $3.79 billion and services revenue of $5.19 billion. GAAP net income soared 267.2% to $2.42 billion, non-GAAP net income jumped 20.7% to $2.62 billion and operating cash flow rose 13.8% to $3.66 billion. The non-GAAP operating margin was flat at 33.9%. The GAAP net income for fiscal 2019 included a $813 million gain on an investment in Pivotal Software (PVTL).

In addition, the free cash flow was $3.42 billion in fiscal 2019 versus $2.96 in fiscal 2018.

The balance sheet had $2.85 billion in cash on hand and short-term securities, $3.97 billion in long-term debt and $6.98 billion in unearned revenues as of Feb. 1. During the last quarter of fiscal 2019, VMware Inc. recorded total billings of $3.37 billion compared to $2.87 billion in the prior-year quarter.

The stock closed at $171.8 per share on Thursday for a market capitalization of about $70.42 billion. The share price is substantially above the 200-, 100- and 50-day simple moving average lines. The 52-week range is $113.30 to $176.66.

The share price of Autodesk Inc. (NASDAQ:ADSK) jumped 1.4% to $165.30 in after-hours trading on Thursday after beating consensus estimates for fourth-quarter non-GAAP earnings by 4 cents per share and GAAP earnings by 16 cents per share. Autodesk Inc. posted non-GAAP earnings of 46 cents per share and GAAP earnings of 29 cents per share.

For the final trimester of fiscal 2019, which ended Jan. 31, 2019, total revenue totaled $737.3 million, up 33.1% from the prior-year quarter, beating consensus estimates by $29.95 million. 

For full fiscal 2019, Autodesk recorded a 25% year-over-year increase in total revenue to $2.57 billion and a 22% increase in billings to $2.71 billion, as 452,000 customers shifted from maintenance to subscription and more than 4 million active subscriptions were made.

Autodesk also noted an 18% increase in total deferred revenues to $2.68 billion, a positive reversal in the free cash flow to $310 million from negative free cash flow of 50 million in fiscal 2018 and 95% increase in recurring revenue.

For fiscal 2020, which will end on Jan. 31, 2020, Autodesk guided for 27-29% growth in total annualized recurring revenue to $3.5 billion to $3.55 billion, 50-53% surge in billings to $4.05 billion to $4.15 billion and 26-28% growth in total revenue to $3.25 billion to $3.3 billion. The company also anticipated non-GAAP earnings of $2.71 to $2.9 per share, GAAP earnings of $1.12 to $1.31 per share and free cash of roughly $1.35 billion.

The balance sheet had approximately $954 million in cash on hand and short-term securities, $2.09 billion in total debt and $2.09 billion in total unearned revenues as of Jan. 31.

The share price was $171.8 at close on Thursday for a market capitalization of about $35.7 billion. The share price is substantially above the 200-, 100- and 50-day simple moving average lines. The 52-week range is $111.05 to $166.29.

Shares of Workday Inc. (NASDAQ:WDAY) jumped 1.18% to $200.26 in after-hours trading on Thursday after beating consensus estimates for fourth-quarter non-GAAP earnings by 9 cents per share and GAAP earnings by 8 cents per share. Workday posted non-GAAP earnings of 41 cents per share and GAAP loss of 47 cents per share.

Fourth-quarter revenue soared 35.4% to $788.6 million, beating expectations by $11.74 million. Revenue was shared between subscription at $673.5 million and services at $115 million.

For full fiscal 2019, Workday noted 31.7% growth in total revenue to $2.82 billion, 0.2 percentage-point growth in non-GAAP operating income margin to 10.3% of revenues, 32% growth in non-GAAP net profit of $1.36 per diluted share and 30.3% growth in operating cash flow to $606.7 million.

Looking ahead, the Pleasanton, California-based provider of management software forecasted 27-28% growth in subscription revenue to $3.03 billion to $3.045 billion for full fiscal year 2020 which will end on Jan. 31, 2020.

The balance sheet had $1.78 billion in cash on hand and short-term securities, $1.2 billion in total debt and $1.95 billion in total unearned revenues as of Jan. 31.

The share price was $197.93 at close on Thursday for a market capitalization of about $43.15 billion. The share price is far above the 200-, 100- and 50-day simple moving average lines. The 52-week range is $117.24 to $199.45.

Disclosure: I have no position in any securities mentioned.

About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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