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EMC has reported quarterly financial results that were highlighted by year-over-year revenue growth for EMC’s Information Infrastructure business, and accelerated year-over-year revenue growth for VMware and Pivotal.
Third-quarter consolidated revenue was $5,5-billion, an increase of 5% compared with the year-ago quarter. Third-quarter GAAP net income attributable to EMC was $586-million and GAAP earnings per weighted average diluted share were $0.27. Non-GAAP1 net income attributable to EMC was $860-million and non-GAAP1 earnings per weighted average diluted share were $0.40.

During the quarter, operating cash flow grew 25% year-over-year, generating $4,7-billion year to date. Free cash flow grew 26% year-over-year in the third quarter, generating $3,7-billion year to date. The company ended the third quarter with $17,5-billion in cash and investments.

Joe Tucci, EMC chairman and CEO, says. “The EMC federation across EMC Information Infrastructure, VMware and Pivotal continues to be well positioned in our target markets and very well received by customers and partners.

“We leveraged the unique power of our business model in the quarter to expand our technology portfolio, strengthen our partner ecosystem and extend our leadership in cloud computing, Big Data and trusted IT. Despite our disappointment with our quarterly results, our confidence in the success of our strategy over the long term has never been stronger.”

David Goulden, EMC president and chief operating officer, says, “While our financial results for the third quarter were impacted by a decline in US federal spending and a backend-loaded quarter, we achieved almost all of our strategic and operational goals.

“We were pleased to see storage demand accelerate in the third quarter excluding US federal, and we think this is an encouraging sign for the storage market overall. Going forward, we remain confident EMC will continue to grow and gain market share.”

In the third quarter, EMC’s Information Infrastructure business once again grew revenue year-over-year. Within this, EMC’s Emerging Storage business3 increased revenue 66% year-over-year.

Highlights within Emerging Storage included: continued strong year-over-year growth and a record number of new customers for the EMC Isilon scale-out NAS portfolio, solid demand for EMC Atmos object-based storage, and greater than 50% year-over-year revenue growth for EMC VPLEX virtual storage.

Other achievements in the storage business in the quarter included the refresh of the mid-tier Data Domain product line in July and the successful launches of the next-generation VNX and ViPR in September.

EMC’s RSA Information Security business increased revenue 11% year-over-year, the result of year-on-year revenue growth for both the Identity and Data Protection and Security Management and Compliance businesses.

VCE had an excellent third quarter as demand for Vblock systems showed accelerated year-over-year growth, outpacing the fast-growing market for converged infrastructure. EMC VSPEX reference architecture solutions saw continued strong growth with rapid adoption and growing popularity with customers and among partners.

Additionally, third-quarter revenue from EMC’s Cloud Service Provider Partner program, the company’s fastest-growing vertical market segment, increased well over 50% year-over-year.

In the third quarter, VMware (NYSE: VMW) achieved accelerated double-digit year-over-year revenue growth. The company continues to excel because it is uniquely positioned to help customers move from the client-server era to the mobile-cloud era of computing. As VMware helps customers bridge to this new world, it is enabling them to capture new levels of efficiency, control and agility.

Pivotal – the new company that unites strategic technology, people and programs from EMC and VMware – continued to execute well in the third quarter as it builds a next generation platform comprising new data fabrics, application fabrics and a cloud-independent platform-as-a-service.

Pivotal’s recent acquisition of Xtreme Labs adds an important dimension to this effort, as Xtreme Labs’ advances in mobile application development are highly complementary to the expertise of Pivotal Labs, the agile development services unit within Pivotal.

EMC’s consolidated third-quarter revenue from the United States increased 2% year-over-year to $3-billion, representing 53% of consolidated third-quarter revenue. Revenue from EMC’s business operations outside of the United States increased 8% year-over-year to $2,6-billion and represented 47% of consolidated third-quarter revenue.

Within this, on a year-over-year basis, revenue from EMC’s Europe, Middle East and Africa region grew 8%, revenue from EMC’s Asia Pacific and Japan region increased 8%, and revenue from EMC’s Latin American region grew 13%. Revenue from EMC’s BRIC+13 markets increased 19% year-over-year.