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Emc Reports First-Quarter 2016 Financial Results

The following excerpt is from the company's SEC filing.

- EMC Corporation today reported first-quarter 2016 financial results. First-quarter consolidated revenue was $5.5 billion, down 2% year over year. GAAP net income attributable to EMC was $268 million in the first quarter, and GAAP earnings per weighted average diluted share was $0.14 in the first quarter, up 8% year over year. Non-GAAP

net income attributable to EMC was $603 million in the first quarter, and non-GAAP

earnings per weighted average diluted share in the first quarter was $0.31, flat year over year.

EMC generated $932 million in operatin g cash flow and $588 million in free cash flow

in the first quarter, and ended the quarter with $15 billion in cash and investments. EMC returned $227 million to shareholders via a quarterly dividend.

Joe Tucci, EMC Chairman and CEO, said, “We had a solid first quarter, generally in-line with our expectations when adjusted for an excess of unfulfilled orders at the end of the quarter. The broad secular IT trends reshaping our industry continue playing out as we expected. Our investments in growth platforms are increasingly gaining momentum, and we are confident in the depth and breadth of our product portfolio.”

Tucci added, “We continue to make progress on our combination with Dell. Integration planning has accelerated to ensure we begin at full speed upon closing, the leadership team has been established, and we've received the vast majority of anti-trust approvals required. We expect the transaction to happen on the original terms and within the originally announced timeframe.”

Denis Cashman, EMC CFO, said, “While overall we executed well in the first quarter, we did experience a higher than expected build in unshipped storage product orders of approximately $75 million due to the timing of bookings within the quarter. We are pleased that EMC Information Infrastructure operating expenses were down 8 percent as our $850 million cost reduction and business transformation plans announced last year are on track.”

David Goulden, CEO of EMC Information Infrastructure, said, “IT and digital business transformation initiatives require a modern data center utilizing flash, scale-out, software-defined and cloud-enabled technologies that are protected and trusted. Anticipating this, we have been actively innovating to transform our portfolio, well ahead of our peers. We are very encouraged by the increasing customer adoption of these technologies and had an exciting start to the year with major converged infrastructure and storage product launches. Looking forward, the upcoming merger with Dell and the broader technology and solutions portfolio of the combined company will enable us to become an even more strategic partner for our customers and partners.”

First-Quarter Highlights

first-quarter revenue was down 6% year over year (down 4% on a constant currency basis

). In the first quarter EMC significantly expanded its all-flash storage portfolio with the introduction of VMAX All Flash and the DSSD Rack-Scale Flash solution. EMC also introduced a new Hyper-Converged VCE VxRail Appliance family in the first quarter, complemented by reseller agreements with Dell.


first-quarter revenue within EMC was up 5% year over year (up 6% on a constant currency basis


first-quarter revenue was up 56% year over year. Pivotal continues to have success with its cloud and big data subscription software, with annual recurring revenue

up over 200% year over year.

Global Highlights

Consolidated first-quarter revenue from North America was down 3% year over year. Consolidated first-quarter revenue in the Europe, Middle East and Africa region and in Latin America were down 1% and 14% year over year, respectively (up 2% and down 4% on a constant currency basis

, respectively). Asia Pacific and Japan first-quarter revenue was up 2% year over year (up 4% on a constant currency basis

Given the announcement made on October 12, 2015 regarding EMC’s entry into a definitive merger agreement, the company will not be providing outlook for its 2016 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 (


A replay of today’s webcast will be available

EMC financial results are available on the U.S. Securities and Exchange Commission

For more information about Dell and EMC combining visit

Visit the VMware Investor Relations

for more detail on its first-quarter results

Connect with EMC on Twitter (


@EMC_News), LinkedIn and


About EMC

EMC Corporation (NYSE:EMC) is a global leader in enabling businesses and service providers to transform their operations and deliver IT as a service. Fundamental to this transformation is cloud computing. Through innovative products and services, EMC accelerates the journey to cloud computing, helping IT departments to store, manage, protect and analyze their most valuable asset - information - in a more agile, trusted and cost-efficient way. Additional information about EMC can be found at

Items excluded from the non-GAAP results for the first quarters of 2016 and 2015 are amounts relating to stock-based compensation expense, intangible asset amortization, restructuring charges, acquisition and other related charges, VMware litigation and other contingencies, merger-related costs and Venezuela currency devaluation. A benefit of the U.S. research and development (“R&D”) tax credit for the first quarter of 2015 was included in the non-GAAP results for the first quarter of 2015 as if the credit had been enacted. See attached schedules for GAAP to non-GAAP reconciliations.

This release refers to growth rates at constant currency or adjusting for currency so that business results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of EMC's business performance. To present this information, current period results for entities reporting in currencies other than US dollars are converted into US dollars at the exchange rate applied in each month of the prior year quarter. Constant currency includes the impacts from EMC's hedging program.

Free cash flow is a non-GAAP financial measure which is defined as net cash provided by operating activities, less additions to property, plant and equipment and capitalized software development costs. See attached schedules for a reconciliation of net cash provided by operating activities to free cash flow for the three months ended March 31, 2016 and 2015.

Annual Recurring Revenue (“ARR”) is an operational performance metric used to assess the health and trajectory of our Pivotal segment. We calculate ARR as the value of contracted recurring revenue of term subscriptions which includes both current subscriptions and contracted subscriptions with a future start date, adjusted by the actual churn in the period. ARR should be viewed independently of revenue and any other GAAP measure.

EMC, VMAX, DSSD and VCE are either registered trademarks or trademarks of EMC Corporation in the United States and/or other countries. All other trademarks used are the property of their respective owners.

EMC Corporation Disclosure Regarding Forward Looking Statements

This communication contains forward-looking information about EMC Corporation and the proposed transaction that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) the failure to obtain the approval of EMC shareholders in connection with the proposed transaction; (ii) the failure to consummate or delay in consummating the proposed...