EMC Corporation (NYSE:EMC) today reported second-quarter 2015 financial results. Consolidated second-quarter GAAP revenue was $6 billion, up 2% year over year. GAAP revenue was reduced by the amount of a VMware settlement with the DOJ and the GSA, which was entered into and paid in cash by VMware in the second quarter. Consolidated second-quarter non-GAAP1 revenue was $6.1 billion, up 3% year over year and up 8% on a constant currency basis2. GAAP earnings per weighted average diluted share was $0.25, down 11% year over year. Non-GAAP1 earnings per weighted average diluted share was $0.43, flat compared with the year-ago quarter.
EMC generated $1 billion in operating cash flow and $647 million in free cash flow3 in the second quarter, and ended the quarter with $14.8 billion in cash and investments. EMC repurchased approximately $2 billion worth of its common stock year-to-date and returned $225 million to shareholders in the second quarter via a quarterly dividend.
Second-Quarter 2015 Summary:
- GAAP revenue up 2% year over year, non-GAAP revenue up 3% (up 8% on a constant currency basis) year over year
- GAAP revenue was reduced by the amount of a VMware settlement with the Department of Justice (“DOJ”) and the General Service Administration (“GSA”), which was entered into and paid in cash by VMware in the second quarter
- GAAP and non-GAAP EPS of $0.25 and $0.43, respectively
- EMC Information Infrastructure revenue up 1% year over year (up 6% on a constant currency basis); Emerging Storage revenue up 49% year over year – led by XtremIO, Isilon and Software-Defined Storage – reached nearly a $3 billion revenue run-rate
- Full-year 2015 outlook now: GAAP revenues of $25.2 billion and non-GAAP revenues of $25.3 billion; GAAP EPS of $1.17 and non-GAAP EPS of $1.87
1 Items excluded from the non-GAAP results for the second quarters of 2015 and 2014 are amounts relating to stock-based compensation expense, intangible asset amortization, restructuring charges, acquisition and other related charges, a fair value adjustment on asset held for sale, the VMware GSA settlement, a gain on previously held interests in strategic investments, an impairment of strategic investment and VMware litigation and other contingencies. A benefit of the U.S. research and development (“R&D”) tax credit for the second quarters of 2015 and 2014 is included in the non-GAAP results for the second quarters of 2015 and 2014 as if the credit had been enacted. See attached schedules for GAAP to non-GAAP reconciliations.
2 This press 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.
3 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 and six months ended June 30, 2015 and 2014 and for the full year 2015 business outlook.