VMware's quarterly revenue appears to have fallen by $600 million in the first full quarter of Broadcom's ownership, revealing strong growth in forward bookings and massive cost-cutting at the virtualization giant.
The End Is Here – VMware by Broadcom
On Broadcom's Q2 2024 earnings call, CEO Hock Tan announced that VMware's revenue for the quarter was $2.7 billion. Broadcom's quarter ended May 5 — as did VMware's first quarter 2024 for the pre-purchase, when in June 2023 it reported [PDF] revenue of $3.28 billion for the period.
Hock Tan did not compare the results or explain whether they reflect changes such as blending Carbon Black from VMware to Symantec, or the impending spin-out of VMware's end-user computing products into a new entity — a deal expected to close this fiscal year. Broadcom has said those two companies produced $2 billion in annual revenue, meaning the decline in VMware's pre-acquisition quarterly revenue could be around $100 million — a change that may be attributable to seasonality. Or the cut could be around $500 million, given estimates that Carbon Black's annual revenue was around $320 million and that the end-user computer divestment hasn't happened.
The CEO told investors that Broadcom is "making good progress in transitioning all VMware products to a subscription licensing model" and that 3,000 of the top 10,000 VMware customers have signed on to multi-year contracts.
