VMware, Inc. (NYSE:VMW) Q3 2019 Earnings Conference Call Transcript

Nov 29, 2018 • 05:00 pm ET


VMware, Inc. (NYSE:VMW) Q3 2019 Earnings Conference Call Transcript


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Good day and welcome to the VMware Third Quarter Fiscal Year 2019 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Paul Ziots, VP, IR. Please go ahead, sir.

Paul Ziots

Thank you. Good afternoon, everyone and welcome to VMware's third quarter fiscal 2019 earnings conference call. On the call we have Pat Gelsinger, CEO; and Zane Rowe, EVP and CFO. Following their prepared remarks, we will take questions. Our press release was issued after the close of market and is posted on our website where this call is being simultaneously webcast. Slides which accompany this webcast can be viewed in conjunction with live remarks and can also be downloaded at the conclusion of the webcast from ir.vmware.com.

(Forward-Looking Cautionary Statements)

In addition, during today's call, we will discuss certain non-GAAP financial measures. These non-GAAP financial measures which are used as measures of VMware's performance should be considered in addition to not as a substitute for or in isolation from GAAP measures. Our non-GAAP measures exclude the effect on our GAAP results of stock-based compensation, amortization of acquired intangible assets, employer payroll tax on employee stock transactions, acquisition, disposition and other related items, including the gains or losses on Pivotal Software and discrete items impacting our GAAP tax rate. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP measures in the press release in on our Investor Relations website.

The webcast replay of this call will be available for the next 60 days on our Company website under the Investor Relations link. Our fourth quarter fiscal 2019 quiet period begins at the close of business Thursday, January 17, 2019. In addition, VMware adopted ASC 606 on a full retrospective basis effective February 3, 2018. Accordingly, the financial results for the third quarter of fiscal 2019 presented in our press release and discussed on this call have been prepared under ASC 606. In order to provide meaningful comparisons to prior periods, VMware has included statements of income and cash flows for the three and nine months ended November 3, 2017 adjusted for ASC 606 and the balance sheet as of the end of fiscal 2018 adjusted for ASC 606 in our press release. All year-over-year comparisons discussed on this call, including third quarter fiscal 2019 results and our forward-looking guidance fiscal 2019 are comparisons to the corresponding periods of fiscal 2018 as adjusted for ASC 606.

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

Patrick Gelsinger

Thank you, Paul. Q3 was another strong quarter for VMware and we're pleased with our results, which continued to be driven by broadbased strength across our diverse product portfolio in all three geographies. In Q3, total revenue increased 14% year-over-year with non-GAAP earnings per share growth of 26% to $1.56 per share. Customers continue to turn to VMware to help them run, manage, secure and connect their applications in this multi-cloud multi-device world. The increasing importance of hybrid cloud and expectations for IT