EMC secured double-digit revenue growth in its first quarter on the back of strong software sales and well above average hardware shipments.
The storage giant, which has been on a two-year long software acquisition spree, has outpaced rivals with steady gains. The first quarter was no exception to this trend with EMC reporting revenue of $2.24bn - 20 per cent higher than the $1.87bn reported in the same period one year ago. Net income surged to $270m, which marks 93 per cent growth over the $140m in 2004.
"EMC delivered its seventh quarter in a row of double-digit revenue growth, once again extending one of the strongest and steadiest growth stories in the tech industry today," said EMC's CEO, Joe Tucci. "Solid execution and the investments we have made to broaden our product and market reach played major roles in our ability to successfully navigate through a difficult first quarter."
EMC's results were a welcome respite for the battered hardware sector. IBM last week reported poor mainframe and storage sales as part of a very disappointing first quarter. Sun Microsystems did no better during its third quarter, posting a loss in the period on lower sales.
EMC, by contrast, has boosted software sales by a large margin while keeping hardware shipments steady. It has made flashy acquisitions of companies such as Legato and VMware to bolster the software unit.
EMC's hardware revenue rose 15 per cent year-over-year to $1.03bn. The Clariion, Celerra and Centera systems had the strongest growth, EMC said. Software licenses and maintenance revenue jumped 26 per cent to $832m. Software now accounts for 37 per cent of EMC's total revenue. Tucci set a goal quite awhile back to have software account for 50 per cent of revenue. EMC's services business grew 26 per cent as well to $375m.
In the second quarter, EMC is looking for revenue between $2.33bn and $2.36bn. ®