VMware, Inc. (NYSE:VMW) Q3 2021 Earnings Conference Call - Final Transcript

Nov 24, 2020 • 04:30 pm ET

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VMware, Inc. (NYSE:VMW) Q3 2021 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the VMware's Q3 FY 2021 Earnings Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Mr. Paul Ziots, Vice President of Investor Relations. Please go ahead.

Executive
Paul Ziots

Thank you. Good afternoon, everyone, and welcome to VMware's third quarter fiscal 2021 earnings conference call. On the call we have Pat Gelsinger, Chief Executive Officer; and Zane Rowe, Executive Vice President and Chief Financial Officer. Following their prepared remarks, we will take questions.

Our press release was issued after 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 downloaded at the conclusion of the webcast from ir.vmware.com.

On this call today, we will make forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially as a result of various risk factors described in the 10-Ks, 10-Qs and 8-Ks VMware files with the SEC. We assume no obligation to and do not currently intend to update any such forward-looking 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, certain litigation matters and other items, as well as 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 and on our Investor Relations website. Unless otherwise indicated, all financial metrics provided on this call are for the consolidated VMware entity, including Pivotal. Growth rates compare our Q3 FY'21 results with the recast of prior period financial information to include Pivotal due to the Pivotal acquisition, which was accounted for as a transaction by entities under common control in accordance with GAAP.

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 '21 quiet period begins at the close of business Thursday, January 14, 2021.

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

Executive
Patrick Gelsinger

Thank you, Paul, and welcome, everyone. We are pleased with our Q3 financial performance as we continue to navigate through the global pandemic, our any cloud, any application, anywhere strategy continues to resonate with our customers as they manage through these unprecedented times. Our performance was again driven by revenue growth of 44% year-over-year in subscription and SaaS to $676 million surpassing on-premise license revenue for the first time.

As we anticipated, we saw continued COVID-19 impact on large transformational on-premises projects in Q3, even as our pipeline suggest some level of recovery in this area in Q4.