VMware revenues appear to plummet – but Broadcom says everything is fine
VMware revenues appear to plummet – but Broadcom says everything is fine
The first full quarter under Broadcom's ownership has seen revenue fall by $600 million, but larger customers are signing multi-year deals.
Published on 17th June 2024
VMware’s quarterly revenue fell by $600 million in its first full quarter under Broadcom’s ownership, according to its recent Q2 2024 earnings call – but the company has reassured customers it is not a serious issue.
During the earnings call, Broadcom CEO Hock Tan confirmed that VMware’s revenue had fallen to $2.7 billion, down from $3.28 billion in the previous quarter.
However, Tan indicated that the quarterly results were nothing to worry about, acknowledging the challenges faced by the business in recent months but sharing positive insights about the future of VMware.
VMware revenues plummet
Tan emphasized the transition of VMware products to subscription-based models, with 3,000 of VMware’s largest 10,000 customers signing multi-year deals.
Annualized booking values, reflecting commitment to long-term contracts, increased from $1.2 billion last quarter to $1.9 billion in the last three months.
Following months of significant policy and pricing changes, and a shakeup to the broader VMware portfolio, dissatisfied customers took to the internet to complain about Broadcom. A handful of the company’s execs even took to the web themselves in an attempt to pacify customers.
Although the frustration appears to continue, the reality is that many VMware customers are set to stay with Broadcom, as illustrated by a CloudBolt Software study.
Just this week, it was also confirmed that Dell had resigned its contract with VMware after terminating a distribution deal it had with the virtualization giant in the early days of its Broadcom takeover.
More broadly, VMware looks to be in good hands. California-headquartered Broadcom reported a quarterly revenue of $12.5 billion, up a staggering 43% year-on-year.
Tan summarized: “Broadcom’s second quarter results were once again driven by AI demand and VMware.”
