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New words:
AI, approach, Apptio, architectural, ASC, beta, biased, Codification, content, controversial, CSRD, differentiate, expedient, flawed, genAI, Horizon, incompatible, inconsistently, Interbank, leakage, LIBOR, London, ML, offensive, Overnight, perspective, referenced, reuse, SOFR, spanning, striving, temporary, unexpected, unveiled, usage, violative
Removed:
deadline, depressed, observed, transformative, worsen
Financial report summary
?Competition
International Business Machines • AT&T • Microsoft • Gen Digital • Cisco Systems • NVIDIA • F5 • PC Connection • Absolute Software • QualysRisks
- The pendency of our acquisition by Broadcom may have an adverse effect on our business, results of operations, cash flows and financial position.
- Completion of the transaction is subject to the conditions contained in the Merger Agreement, including regulatory approvals, which may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that cannot be met, and if these conditions are not satisfied or waived, the transaction will not be completed.
- Lawsuits have been and may in the future be filed against us and our directors challenging the transaction, and an adverse ruling in any such lawsuit may delay or prevent the consummation of the transaction and result in substantial costs to us.
- The failure to complete the planned acquisition of us by Broadcom could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price.
- A significant decrease in demand for our data center virtualization products would adversely affect our operating results.
- Our subscription and SaaS offerings, which constitute a growing portion of our business, and our initiatives to extend our data center virtualization and container platforms into the public cloud involve various risks, including, among others, reliance on third-party providers for data center space and colocation services and on public cloud providers to prevent service disruptions.
- Our success depends upon our ability to adapt our business and pricing models to a subscription and SaaS model appropriately.
- We face intense competition that could adversely affect our operating results.
- Our commercial relationship with Dell could adversely impact our business, stock price, market share and ability to build and maintain other strategic relationships.
- Our success depends increasingly on customer acceptance of our newer products and services.
- Our AI strategy and offerings introduce risks, which, if realized, could adversely impact our business.
- Competition for our highly skilled employees is intense and costly, and our business and growth prospects may suffer if we cannot attract and retain them.
- The loss of key management personnel could harm our business.
- Our current research and development efforts may not produce significant revenue for several years, if at all.
- Acquisitions and divestitures could materially harm our business and operating results.
- Disruptions to our distribution channels, including our various routes to market through Dell, could harm our business.
- The evolution of our business requires more complex go-to-market strategies, which involve significant risk.
- We may not be able to respond to rapid technological changes with new solutions and services offerings.
- We operate a global business that exposes us to additional risks.
- Russia’s military actions in Ukraine have affected and may continue to affect our business.
- Our success depends on the interoperability of our products and services with those of other companies.
- Failure to effectively manage our product and service lifecycles could harm our business.
- Our operating results may fluctuate significantly.
- Adverse economic conditions may harm our business.
- We have substantial indebtedness, and we may incur other debt in the future, which may adversely affect our financial condition and future financial results.
- We have potential tax liabilities as a result of our former controlling ownership by Dell, which could have an adverse effect on our operating results and financial condition.
- Our operating results may be adversely impacted by exposure to additional tax liabilities and higher than expected tax rates.
- Cybersecurity breaches of our systems or the systems of our vendors, partners and suppliers could materially harm our business.
- Our products and services are highly technical and may contain, or be subject to our own or suppliers’, errors, defects or security vulnerabilities.
- Problems with our information systems could interfere with our business and could adversely impact our operations.
- We are involved in litigation, investigations and regulatory inquiries and proceedings that could negatively affect us.
- We may not be able to adequately protect our intellectual property rights.
- Actual or perceived non-compliance with privacy and data protection laws, regulations and standards could adversely impact our business.
- Our use of “open source” software in our products could negatively affect our ability to sell our products and subject us to litigation.
- If we fail to comply with government contracting regulations, our business could be adversely affected.
- Some of our directors have potential conflicts of interest with Dell.
- The MSD Stockholders and the SLP Stockholders have significant influence over us, and their interests may conflict with our interests and the interests of our other stockholders.
- The price of our Common Stock has fluctuated significantly in recent years and may fluctuate significantly in the future.
- Anti-takeover provisions in Delaware law and our charter documents could discourage takeover attempts.
- Our bylaws provide for an exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
- We are exposed to foreign exchange risks.
- If our goodwill or amortizable intangible assets become impaired, we may be required to record a significant charge to earnings.
- Changes in accounting principles and guidance could result in unfavorable accounting charges or effects.
- Natural disasters, catastrophic events or geo-political conditions could disrupt our business.
- Climate change may have a long-term negative impact on our business.
- Social and ethical issues, including our ability to make progress on our ESG goals and commitments, may result in reputational harm and liability.
Management Discussion
- Approximately 70% of our sales are denominated in the U.S. dollar. In certain countries, however, we also invoice and collect in various foreign currencies, principally euro, British pound, Japanese yen, Australian dollar and Chinese renminbi. In addition, we incur and pay operating expenses in currencies other than the U.S. dollar. As a result, our financial statements, including our revenue, operating expenses, unearned revenue and the resulting cash flows derived from the U.S. dollar equivalent of foreign currency transactions, are affected by foreign exchange fluctuations.
- License revenue relating to the sale of on-premises licenses that are part of a multi-year contract is generally recognized upon delivery of the underlying license, whereas revenue derived from our subscription and SaaS offerings is generally recognized over time as customers consume the services or ratably over the term of the subscription, commencing upon provisioning of the service. Our subscription offerings consisted primarily of our VMware Cloud Provider Program (“VCPP”) and VMware Tanzu offerings, and our SaaS offerings consisted primarily of our VMware Aria, Workspace ONE, VMware Carbon Black Cloud and VMware Cloud on AWS offerings. Subscription and SaaS offerings generally have a duration of one month, one-year, or three-years and are invoiced to the customers either upfront, annually, quarterly or monthly.
- As customers adopt our subscription and SaaS offerings, license and software maintenance revenue has been, and may continue to be, lower and subject to greater fluctuation in the future, driven by a higher proportion of our sales occurring through our subscription and SaaS offerings as well as the variability of large deals between fiscal quarters. Such large deals historically have had a large license revenue impact.