VMware posted disappointing financial results for the third quarter of its 2023 fiscal year, though it’s unlikely to matter much as the vendor remains betrothed to Broadcom.

VMware’s total revenues were basically flat year over year at around $3.2 billion for the quarter. A dip in license and service revenues was offset by growth in subscription and software-as-a-service (SaaS) revenues. Those subscription and SaaS revenues were up 20% year over year, but the overall revenue numbers were below expectations.

Operating costs for the quarter, on the other hand, increased compared to last year, which stung VMware’s bottom line. Net income was down nearly 42% to $231 million for the latest quarter, which also came in below analyst forecasts.

Those results had little impact on VMware’s stock price, which was trading up around 1% at approximately $120 per share following the news. The company’s stock is basically tied to the approximately $138 per share price Broadcom has on the table to acquire VMware, though it has yet to hit that mark since the deal was announced in late May.

VMware Awaits Broadcom Close

VMware stockholders earlier this month voted to approve the deal. It’s set to close during Broadcom’s 2023 fiscal year, which began this month. Broadcom is scheduled to announce its 2022 full fiscal-year results on December 8.

VMware stopped conducting earnings calls or providing forward-looking guidance when the $69 billion deal was announced. Though it did conduct its annual VMware Explore (formerly VMworld) event in August where the Broadcom deal hung heavily over the proceedings.

During that event, VMware CEO Raghu Raghuram stressed calm and time in wading through the morass of questions about the deal. He expressed optimism during his opening keynote speech and following press conference about the deal and that it’s business as usual until the deal closes.

Analyst reactions have been mixed on the deal, with many concerned Broadcom’s traditional heavy hand post-acquisitions could stymie VMware’s innovation.

“For acquired companies, a Broadcom acquisition sparks fear of price hikes, diminished support, and stunted innovation,” Forrester Senior Analyst Tracy Woo bluntly stated in a report. “At a time when VMware customers need to re-establish confidence in the company’s strategy and innovation plans after beloved ex-CEO Pat Gelsinger’s departure, this would be a notable departure from that course.”

Woo cited Broadcom’s past acquisition “playbook” as a cautious path forward should the deal be completed. She specifically noted Broadcom’s $18.9 billion purchase of CA Technologies in late 2018, and its subsequent acquisition of Symantec for $10.7 billion in 2019.

“Following these purchases, CA and Symantec customers saw massive price hikes, worsening support, and stalled development,” Woo wrote. “Symantec redirected its focus to its biggest resellers and customers. The company largely abandoned its customer base of 100,000 to prioritize its top 2,000.”

Broadcom CEO Hock Tan late last month put out a blog post attempting to alleviate concerns about the deal. He noted that in recent visits to Broadcom customers, multicloud, cloud-native applications, and pricing have been the three topics “top of mind for customers as it relates to the VMware-Broadcom transaction.”

“Ultimately, what I’ve stressed to them has been straightforward: our customers are and will remain the most important part of our business,” Tan wrote.