Positives for VMWare, but Shares Pricey

For the fourth quarter, total revenue rose 14% year over year to $2.3 billion, driven by license growth across nearly all of the company’s technologies. License revenue grew 20% in the quarter to $1.1 billion. License bookings for NSX grew 24% year over year, which implies a $1.4 billion run rate based on annualized fourth-quarter total bookings. Further, vSAN license bookings increased by 100% year over year in the fourth quarter and were up over 100% for the full year. EUC license bookings improved by over 30% in both the quarter and for the full fiscal year. Compute license bookings fell 4% versus the previous fourth quarter due to a tough comp (up 11% last year) and were up low single digits for the full year. Non-GAAP operating margin improved by 50 basis points year-over-year to 37.3% as revenue growth more than offset continued investment in new products.

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