The company will officially announce its second quarter earnings on August 24.
According to the pre-announcement, VMware expects its revenue for the second quarter to be between $1.894 billion and $1.906 billion, an increase of 11.9 percent to 12.6 percent from the second quarter of 2016. It puts license revenue for the second quarter between $727 million and $737 million, an increase of 12.9 percent to 14.4 percent year-over-year. Non-GAAP net income per diluted share will be between $1.15 and $1.19 per diluted share, according to the estimates.
VMware also raised its full fiscal year 2018 outlook, putting total revenue at about $7.830 billion. This is about a 10 percent jump compared to fiscal year 2016.
VMware shares were up 6 percent at the close of market on Monday. Dell Technologies’ shares were up 5 percent.
BMO Capital Markets raised its VMware price target from $105 to $110 following the pre-announcement. The analyst firm also hiked its fiscal year 2018 revenue estimate to $7.83 billion from $7.63 billion. But it questioned if VMware can make good on its hybrid-cloud goals.
“VMW aspires to be the glue of the hybrid cloud,” BMO Capital Markets analyst Keith Bachman wrote in a research note. “However, based on our checks, we think VMW remains predominantly an on-premise solution. Further, while we think the Amazon Web Services (AWS) partnership can help near term, we think AWS is likely to benefit more than VMW over the medium and longer term.”
The two former rivals first partnered last year. The joint service, called VMware Cloud on AWS, lets customers run their vSphere private clouds from VMware alongside their applications in AWS’s public cloud.
Analysts expect VMware will announce more details about the AWS partnership at its annual VMworld event later this month.