FINANCIALS
VMware strong in Europe
quarter-on-quarter growth in Europe. Overall it sees 2010 as a 20-plus-percent growth year.
VMware had a good first quarter with record free cash flows, revenue, and operating profits. Business was particularly strong in Europe, but it is not yet ready to assume that the world’s economy is robust and believe that it will continue to benefit from pent up customer demand on the heels of a long dry period. Discipline on product discounting kept prices up even though the mix shifted from Enterprise Plus towards the SMB focused vSphere packages. Total revenue for the first quarter was $634m, up 35% from a year ago. Total license revenue was $312m, an increase of 21% from the first quarter of a year ago. Clearly, revenues surpassed expectations as IT spending was stronger than expected, driven by a carryover of the pent up demand witnessed in the December quarter.
It also benefited from strong sales across global regions and all customer segments. In particular, Europe was stronger than expected and it closed a deal with a larger customer that netted over $8m of licence bookings. VMware expects second quarter revenues of between $635m and $665m, flat to up 5% sequentially, and a sequential decline in licence revenue. It is currently planning on 2010 revenue of between $2.625bn and $2.725bn, or growth of 30% to 35% for the year. It will continue to invest both organically and through acquisitions, it says. While strengthening the existing enterprise relationships, it says it is making progress expanding the footprint in the government sector as well as the small and medium business market. The SMB market once it begins the virtualisation journey is progressing along at a much faster pace than enterprises partly because they have fewer servers, but also they have fewer people, processes, and cultural implications to deal with as they transform their IT departments, so it expects competitive pressures to grow in the SMB market, but as of today it continues to see good growth in this market
Autonomy has announced record first quarter revenues of $194.2m, up 50% from Q1 2009 including strong organic growth of 17%. Gross profits at $172.6m, up 48% from Q1 2009. Commenting on the results, Dr Mike Lynch, Group CEO of Autonomy says: “We entered 2010 with strong momentum after significant market share gains in 2009, aided by strong product positioning and increased marketing expenditure at a time when other companies were scaling back. This strength is now reinforced with discretionary spend being made available as companies look to invest for growth. Whilst Q1’10 reflected the expected seasonality as one of our traditionally weaker quarters, the stronger pipeline and improved closure rates mean that we are growing more confident about a possible recovery. Customers have resumed planning for larger projects, the main effects of which we expect to see in the second half.”
Teliasonera ab CEO Lars Nyberg is happy with “a very strong quarter, which I’m obviously very pleased with”. Last year, in 2009, it had flat revenue growth which probably was one of the best results among the telecom operators in Europe. “Now, this quarter we just think is the most important result of the quarter is the growth, local organic growth of 2.5%. You can see that we also improved our EBITDA margin and we’ve been doing that for several quarters; now we are clearly up to the 2.5%. What drives the growth in the first quarter? I’m extremely pleased with our results in mobility in Sweden.” It’s not only Sweden that’s growing mobility, after declining markets for a long time in Finland and Denmark, it is now growing in Finland and Denmark as well in the first quarter, only Norway is still down. “In the Baltics, we’ve had a challenge and we continue to have a challenge, we see the numbers are in terms of revenue down continues to be down, we had hoped during last year or may
30 APR 2010
SOFTWARE cont...
12.04.10 - 24.04.10
Sun Microsystems Sybase
Symantec
Price (4) % month change
33.89 12.95 -6 0
Mkt cap
4m
2814 10438
P/E ratio
24 51
IT Services
12.04.10 - 24.04.10
Beko S&T
Price (4) % month change
2.89 9.63 16 -4
Mkt cap
4m
52 148 10
P/E ratio
Basware Satama/Trainers’ House Solteq SysOpen Digia TietoEnator
18.35 0.46 1.36 5.5 16.75
9 2 -12 15 -4
211 31 17 115 1206 22 17
23
Altran Atos Origin Bull Business & Decision Capgemini Cegedim Coheris Atix Devoteam GFI Informatique Sopra Steria Umanis Valtech Cenit GFT IDS Scheer Pixelpark Plaut Siemens SinnerSchrader Synergon 17.15 0.20 0.96 71.76 1.96 2.75 0 0 3 1 0 0
Source: Thomson Financial Datastream
*Share price now shown in Euros
552 8 11 65603 23 26 32 24 18 27 38
3.80 39.20 3.4 5.18 38.36 60.32 2.82 21.03 3.2 58.15 25.63 0.79 0.41 0.05
-7 4 -2 15 5 13 3 11 6 10 14 27 0 71
546 2733 411 41 5914 844 16 214 174 683 752 20 36 1 15 17 8 31 85 340 102 31 10 10 20
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