VMW Q & FY-2015 Earnings Conference Call VMware Inc. All rights reserved.

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Pearl Willis
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2 Speakers Slide 2 Paul Ziots VP, Investor Relations Pat Gelsinger CEO Carl Eschenbach President & COO Jonathan Chadwick CFO & COO

3 Pat Gelsinger, CEO Slide 3 FY-15 total Non-GAAP revenues (1) grew 13% YoY in constant currency Increased Non-GAAP earnings (1) to four dollars and six cents per share EUC business crossed a billion dollars of total bookings for 2015 NSX total bookings annual run rate well over $600M VSAN total bookings annual run rate well over $100M (1) See Appendix for reconciliation to GAAP

4 Pat Gelsinger, CEO Slide 4 VMware cloud strategy connecting multiple clouds and multiple devices Extend leadership in private cloud; significant increase in 2015 full SDDC deployments vs 2014 Extend private cloud workloads into public cloud via vcloud Air Network and vcloud Air Unparalleled connectivity, security and visibility across multiple clouds, including AWS and Azure with NSX and vrealize For 2016, expect total bookings and license bookings to exceed revenue growth by 3-5 percentage points

5 Carl Eschenbach, President & COO Slide 5 EMEA performed best, followed by the Americas & Asia Pacific Continued weakness in China, Russia and Brazil Enterprise Agreements (EAs) approximately 42% of total Q4 bookings Six deals at or above $10 million EUC now over $1.2B annual bookings run rate Desktop Q4 license business grew double digits YoY

6 Carl Eschenbach, President & COO Slide 6 AirWatch grew Q4 license and subscription bookings nearly 50% YoY Cloud management penetration over 17% of installed base NSX total bookings more than doubled 2H-15 versus 1H-15 Over 1,200 NSX paying customers; 9 of top 10 EAs included NSX Total Q4 VSAN bookings grew nearly 200% YoY; 6 of top 10 EAs included VSAN Total Q4 bookings for vcloud Air Network grew in the low-teens YoY

7 Overview of Results: Revenue Highlights Slide 7 (1) See Appendix for reconciliation to GAAP

Q4-15 & FY-15 Income Statement Highlights Slide 8 Q4-14 Q4-15 FY-14 FY-15 License Revenues ($M) 777 825 2,591 2,720 Services Revenues ($M) 926 1,043 3,444 3,927 GSA Settlement ($M) - - - (76) Total

8 Q4-15 & FY-15 Income Statement Highlights Slide 8 Q4-14 Q4-15 FY-14 FY-15 License Revenues ($M) ,591 2,720 Services Revenues ($M) 926 1,043 3,444 3,927 GSA Settlement ($M) (76) Total Revenues ($M) 1,703 1,868 6,035 6,571 Non-GAAP Operating Margin (1) 33.3% 35.1% 31.1% 31.8% Non-GAAP Net Income per Diluted Share ($) (1) (1) See Appendix for reconciliation to GAAP

9 FY-2015 Select Financial Measures Slide 9 FY-14 FY-15 Headcount 17,979 19,187 Cash & Short-Term Investments ($M) 7,075 7,509 Operating Cash Flow ($M) 2,180 1,899 CapEx ($M) Unearned Revenues Total ($M) 4,833 5,076 Long-Term Unearned Revenues ($M) (1) 1,851 1,831 (1) Non-current Unearned Revenues as reported on VMware s consolidated balance sheet

10 Hybrid Cloud and SaaS Slide 10

11 FY-2016 Revenue Guidance Slide 11 (1) See Appendix for reconciliation to GAAP

12 Q Revenue Guidance Slide 12

13 2016 vcloud Air (vca) Disclosures Slide 13 (1) See Appendix for reconciliation to GAAP

Q1-2016 and FY-2016 Additional Guidance Slide

14 Q and FY-2016 Additional Guidance Slide 14 (1) See Appendix for reconciliation to GAAP

15 Q&A Slide 15

16 Appendix Slide 16

17 Appendix Slide 17

18 Appendix Slide 18

19 Appendix Slide 19

20 Appendix Slide 20

21 Appendix Slide 21 Full Year Fiscal 2016 (Projected) YoY YoY in Constant Currency Non-GAAP Total Revenues Growth 2-4% 2-5% GSA Settlement (1) 1% 1% GAAP Total Revenues Growth 3-6% 3-6% Totals may not sum, due to rounding. Total revenues growth are calculated based on the respective underlying, non-rounded data. (1) Reflects impact of Fiscal 2015 revenues due to GSA settlement in Q2-15

22 Appendix Slide 22 Reconciliation of Non-GAAP to GAAP Operating Margin Guidance First Quarter Fiscal 2016 (Projected) Full Year Fiscal 2016 (Projected) Non-GAAP Operating Margin ~28.0% Expected ~31.5% Expected Stock-based compensation 10.4% Estimated 10.2% Estimated Employer payroll tax on employee stock transactions 0.2% Estimated 0.2% Estimated Intangible Amortization 2.1% Estimated 1.8% Estimated Realignment Charges 3.8% Estimated 0.9% Estimated Acquisition and other related items 1.2% Estimated 0.3% Estimated GAAP Operating Margin 9% - 11% Expected to be 17 to 19 percentage points less than Non-GAAP margin 17% - 19% Expected to be 13 to 15 percentage points less than Non-GAAP margin

23 Appendix Slide VMW Non-GAAP Operating Margin excluding vca Full Year Fiscal 2016 (Projected) Non-GAAP Operating Margin ~33.5% Expected Stock-based compensation 9.9% Estimated Employer payroll tax on employee stock transactions 0.2% Estimated Intangible Amortization 1.8% Estimated Realignment Charges 0.8% Estimated Acquisition and other related items 0.3% Estimated GAAP Operating Margin 19% - 21% Expected to be 13 to 15 percentage points less than Non-GAAP margin

24 Appendix Slide 24 Reconciliation of Non-GAAP to GAAP Diluted Earnings per Share Guidance First Quarter Fiscal 2016 (Projected) Full Year Fiscal 2016 (Projected) Non-GAAP Diluted Earnings per Share $ $0.85 Expected $ $4.16 Expected Stock-based compensation 0.39 Estimated 1.65 Estimated Employer payroll tax on employee stock transactions 0.01 Estimated 0.03 Estimated Intangible Amortization 0.08 Estimated 0.29 Estimated Realignment Charges 0.14 Estimated 0.14 Estimated Acquisition and other related items 0.04 Estimated 0.05 Estimated Tax Adjustment (0.13) Estimated (0.43) Estimated GAAP Diluted Earnings per Share $ $0.33 Expected to be 50 to 58 cents less than Non-GAAP Diluted Earnings per Share $ $2.53 Expected to be 154 to 198 cents less than Non-GAAP Diluted Earnings per Share

25 Q4-15 Revenues + Sequential Change in Unearned Revenues Slide 25

26 Forward Looking Statements Slide 26 This presentation contains forward-looking statements including, among other things, the annualized bookings run rate forecasts for specified business; VMware s cloud strategy; expectations regarding total and license bookings as compared to revenue growth in FY 2016; expectations regarding total and license revenue growth in Q and FY 2016, including expected impacts of currency exchange rates; expectations regarding the vcloud Air business in FY 2016, including vcloud Air revenue, VMware s non-gaap operating margin excluding vcloud Air and the vcloud Air impact on VMware s operating and free cash flows; expectations regarding Q and FY 2016 non- GAAP operating margin, diluted non-gaap earnings per share and diluted share count; expectations regarding FY 2016 GAAP and non-gaap tax rates, cash flow from operations, capital expenditures and free cash flow; expectations related to VMware s non-gaap to GAAP reconciliations for each of operating margin and diluted earnings per share for Q and FY2016. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 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) adverse changes in general economic or market conditions; (ii) delays or reductions in consumer, government and information technology spending; (iii) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into the virtualization software and cloud, end user and mobile computing industries, and new product and marketing initiatives by VMware s competitors; (iv) VMware s customers ability to transition to new products and computing strategies such as cloud computing, desktop virtualization and the software defined data center; (v) factors that affect timing of license revenue recognition such as product announcements and promotions and beta programs; (vi) the uncertainty of customer acceptance of emerging technology; (vii) changes in the willingness of customers to enter into longer term licensing and support arrangements; (viii) rapid technological changes in the virtualization software and cloud, end user and mobile computing industries; (ix) changes to product and service development timelines; (x) VMware s relationship with EMC Corporation and EMC s ability to control matters requiring stockholder approval, including the election of VMware s board members and matters relating to EMC s investment in VMware, and any changes that Dell may implement following the completion of the Dell-EMC merger; (xi) VMware s ability to protect its proprietary technology; (xii) VMware s ability to attract and retain highly qualified employees; (xiii) the unsuccessful integration of acquired companies and assets into VMware; (xiv) disruptions to VMware s business resulting from the pendency of EMC s acquisition by Dell and the potential for loss of VMware customers due to uncertainty that the Dell-EMC transaction could have on VMware s business;(xv) the potential negative impact on VMware s stock price due to any confusion or uncertainty caused by the VMware tracking stock that is expected to be issued by Dell to EMC stockholders in the transaction; (xvi) disruptions resulting from key management changes; (xvii) pending or future stockholder litigation related to the Dell-EMC transaction; (xviii) VMware s ability to implement workforce reductions and other components of the plan in various geographies; (xix) possible changes in the size and components of the expected restructuring charges and cash expenditures; (xx) fluctuating currency exchange rates; (xxi) fluctuations and volatility in VMware s stock price; (xxii) changes in VMware s financial condition; (xxiii) changes in business opportunities and priorities that could cause VMware to consider alternative uses of cash; (xxiv) fluctuations in the level of cash held in the United States that is available for stock repurchases; and (xxv) changes in the dilutive impact in 2016 of shares issuable through VMware s equity compensation programs. These forward-looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including VMware s most recent reports on Form 10-K and Form 10-Q and current reports on Form 8-K that VMware may file from time to time, which could cause actual results to vary from expectations. VMware assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this presentation.

27 Growth in Constant Currency Slide 27 Revenue numbers in this presentation are provided in constant currency where indicated. Bookings growth metrics in this presentation are provided in constant currency. A majority of VMware s sales are denominated in the U.S. dollar; however, VMware also invoices and collects in the euro, the British pound, the Japanese yen, the Australian dollar and the Chinese renminbi in their respective regions. The U.S. dollar is the functional currency for all of VMware s legal entities. At the time a non-u.s. dollar transaction is recorded, the value of the transaction is converted into U.S. dollars at the exchange rate in effect for the month in which each order is booked. As a result, the amount of license and total revenues and unearned revenues derived from these transactions will be impacted by foreign exchange fluctuations. In order to provide a comparable framework for assessing how VMware s business performed adjusted for the impact of foreign currency fluctuations, management analyzes year-over-year license and total revenue growth on a constant currency basis. Revenue Growth in Constant Currency and Sequential Change in Unearned Revenues License and total revenues recognized during the current period derived from non-u.s. dollar based transactions were converted into U.S. dollars using the exchange rates that were effective in the comparable prior year period. The calculated current period license and total revenues, adjusted for foreign currency fluctuations, is compared to the license and total revenues of the comparable prior year period, as reported, in calculating license and total revenue growth in constant currency. Unearned license revenues and unearned total revenues at the end of the period, derived from non-u.s. dollar transactions recorded during the current period, were adjusted for foreign currency fluctuations using the exchange rates that were effective in the comparable prior year period. Unearned license revenues and unearned total revenues, adjusted for foreign currency fluctuations at the end of the period, are compared to unearned license revenues and unearned total revenues at the beginning of the period, as reported, in determining the sequential change in unearned revenues.

VMware Reports Third Quarter 2015 Results

VMware Reports Third Quarter 2015 Results - Year-over-Year Revenue Growth of 10% to $1.67 Billion; up 14% on a constant currency basis - GAAP net income per diluted share of $0.60, up 35% YoY; Non-GAAP