Broadcom's turnaround plan for VMware appears to be working, as the silicon and software slinger reported 47 percent year-over-year revenue growth — but also posted a loss.
The End Is Here – VMware by Broadcom
The acquired conglomerate today announced third-quarter revenue of $13.07 billion — $7.25 billion of which came from its Semiconductor Solutions business. Of the $5.8 billion earned by its Infrastructure Software equipment, $3.8 billion came from VMware.
VMware last year [PDF] reported revenue of $3.4 billion for a quarter that ended the same day — Aug. 4 — that Broadcom stops counting cash. Broadcom's revenue spread could be even more impressive, given that VMware's pre-acquisition numbers included the end-user computing and Carbon Black products that were respectively spun off into a new organization called Omnissa and shunted off to Symantec. Omnissa has disclosed that its annual revenue exceeds $1.5 billion, and Carbon Black is believed to have been a $320 million deal — meaning it added perhaps $450 million to VMware's quarterly revenue.
On the earnings call, Broadcom CEO Hock Tan told investors that VMware bookings "continue to accelerate" and disclosed that expenses for the virtualization giant fell from $1.6 billion in the second quarter to $1.3 billion this quarter. "When we acquired VMware, our goal was to deliver an adjusted EBITDA of $8.5 billion within three years of the acquisition," Tan recalled. "We are well on track to meet or even exceed this EBITDA target in the next financial year 25." Sales of VMware Cloud Foundation — its flagship private cloud suite — grew sharply, seemingly validating Broadcom's contentious licensing and business model changes.
