EMC Reports Third-Quarter 2015 Financial Results

Story Highlights

Third-Quarter 2015 Summary:

  • Revenue up 1% year over year and up 5% year over year on a constant currency basis
  • GAAP and non-GAAP EPS of $0.25 and $0.43, respectively
  • EMC Emerging Storage, Pivotal and VMware revenues up 27%, 16% and 10% year over year, respectively; up 32%, 18% and 14% year over year on a constant currency basis, respectively

HOPKINTON, Mass. , October 21, 2015 - EMC Corporation (NYSE:EMC) today reported third-quarter 2015 financial results. Consolidated third-quarter revenue was $6.08 billion, up 1% year over year and up 5% year over year on a constant currency basis1. GAAP and non-GAAP2 earnings per weighted average diluted share were $0.25 and $0.43, respectively.

EMC generated $1.4 billion in operating cash flow and $1.03 billion in free cash flow3 in the third quarter, and ended the quarter with $14.3 billion in cash and investments. EMC returned $229 million to shareholders in the third quarter via a quarterly dividend.

Joe Tucci, EMC Chairman and CEO, said,

“This is an historic time for EMC and the entire IT industry. EMC combining with Dell, two highly complementary companies, will create a tech industry powerhouse – a new company with more than $80 billion in revenue that is extremely well positioned for a new era. We firmly believe that this compelling combination is the best strategic option for all our stakeholders. Our customers are sharing overwhelmingly positive feedback about the potential of having a strategic partner with more heft and relevance to drive their digital transformations.”

Zane Rowe, EMC CFO, said,

“EMC Emerging Storage, Pivotal and VMware generated positive momentum in the third quarter, thanks to the hard work of the entire EMC team. We continue to be relentlessly focused on building upon the strength of our portfolio and being more efficient. More specifically, the $850 million cost reduction and business transformation plans are on track, and the team is working on many initiatives in areas such as SKU simplification, facilities and manufacturing optimization, and direct material procurement that span EMC's global operations.”

David Goulden, CEO of EMC Information Infrastructure, said,

“As the broader market shifts toward cloud, mobile, social and Big Data, we continue to expect newer storage technologies revenue to grow at high teens while traditional stand-alone storage systems revenue to decline at low teens. We anticipated this trend ahead of the broader market and evolved to a wider and deeper portfolio that has reached an interesting inflection point. For the first time in Q3, our newer storage products6 now make up more than half of our strategic storage business7. This is a good indicator of the progress we've made in transitioning the portfolio, setting EMC up nicely for the future.”

Business Highlights

  • EMC Information Infrastructure: Third-quarter revenue was down 3% year over year and up 2% year over year on a constant currency basis1. Information Storage revenue was down 2% year over year and up 3% on a constant currency basis1, a result of a higher than expected number of unshipped orders of approximately $100 million. Emerging Storage4 revenue was up 27% year over year and up 32% on a constant currency basis 1. Within Emerging Storage in the quarter, XtremIO had another quarter of strong triple-digit revenue growth and is on track for more than $1 billion in bookings in 2015.
  • Pivotal: Third-quarter revenue was up 16% year over year and up 18% on a constant currency basis1. Pivotal continues its transition to a subscription business model, with annual recurring revenue5 at the end of the third quarter of $75 million, up 26% quarter over quarter.
  • VMware: Third-quarter revenue was up 10% year over year and up 14% on a constant currency basis1. VMware continues to be a central player in the transformation of IT and its influence continues to grow with key technologies in the software-defined datacenter, end-user computing and hybrid cloud. VMware continues to be integral to EMC's success as demonstrated by the companies' aligned strategies, technology integration and financial results, with VMware representing 27% of EMC consolidated third-quarter revenue and 44% of EMC consolidated third-quarter non-GAAP2 operating income.

Global Highlights

EMC's consolidated third-quarter revenue from North America and Latin America was up 4% and 1% year over year, respectively, and up 4% and 14% on constant currency basis1, respectively. EMEA and Asia Pacific and Japan revenue in the third quarter was down 3% and 4% year over year, respectively, and up 7% and 3% on a constant currency basis1, respectively.

Given the announcement made on October 12, 2015 regarding EMC's entry into a definitive merger agreement, the company will no longer be providing outlook for its 2015 financial results.

Details will be provided during today's  8:30 a.m. ET live webcast for investors, which is available on the EMC Investor Relations website (http://www.emc.com/ir).


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