Virtualization software giant VMware Inc. delivered solid second-quarter results that beat expectations on profit and revenue, in what is likely to be one of its last earnings reports as a public company.

The company reported a net profit for the quarter of $347 million, down slightly from the $411 million profit it recorded in the same quarter last year. Earnings before certain costs such as stock compensation came to $1.64 per share, with revenue rising just over 6% to $3.34 billion.

It was a solid if unspectacular performance, with Wall Street modeling earnings of just $1.57 per share on sales of $3.3 billion.

Not surprisingly, VMware’s stock barely moved in extended trading, since the company is on the verge of being acquired by the chipmaker Broadcom Inc. in a blockbuster $61.2 billion deal that’s likely to be completed in the coming months. Although the exact date for closing isn’t known, Broadcom has said it should get the deal done during its fiscal year 2023, which starts in November.

VMware looks set to be a useful acquisition for Broadcom. Founded in 1998, the company has become synonymous with virtualization software, which enables applications and other computing workloads to be consolidated onto a smaller number of servers. In his way, servers can run multiple applications at once, increasing data center efficiency.

The company is by far and away the most dominant player in the virtualization software space, but many believe that the company could be much more successful than it currently is. VMware’s trouble is that it’s firmly rooted in corporate, on-premises data centers.

With the rise of cloud computing, its value proposition became somewhat uncertain. The company tried and failed to launch its own cloud offerings, and ultimately went on to do deals with public cloud leaders such as Amazon Web Services Inc. However, those efforts haven’t sparked much growth at VMware.

Broadcom is best known for making computer chips but it also has a growing data center software business and analysts believe that’s where VMware’s assets will come in handy. Broadcom says the deal will help ensure it becomes a leader in enterprise and cloud computing markets, offering hardware and software for a broad range of customers. For instance, analysts say VMware NSX platform can help Broadcom to strengthen its position in the networking industry.

Given the pending acquisition, VMware executives did not hold a conference call relating to today’s earnings results, a common practice for public companies waiting to be acquired. Instead, VMware Chief Executive Raghu Raghuram (pictured) offered a short statement, saying he was pleased with the company’s second-quarter performance.

“Our momentum continues next week at VMware Explore where we will showcase new innovative offerings while also highlighting how we are helping customers continue to transform their businesses,” he said. “We remain committed to helping organizations unlock the full potential of multi-cloud.”

The company provided a breakdown of its revenue. It said software-as-a-service and license revenue rose 15% from  a year ago, to $1.74 billion in the quarter. Subscription and SaaS revenue rose 22%, to $943 million. The company also reported subscription and SaaS annual recurring revenue rose 24%, to $3.89 billion.

Holger Mueller of Constellation Research Inc. said VMware had a fairly pedestrian quarter. However, he was encouraged by the transformation of its SaaS business, which is now the company’s primary revenue source.

“The challenge VMware faces is that both subscription and SaaS business are slow moving,” Mueller added. “The question is where VMware will find growth next? It is not struggling for a lack of innovation or strategic partnerships, as they are happening like a constant drumbeat, but there’s definitely a need for more excitement to grow the company again.”

“Our Q2 financial results reflect the continued commitment of the entire VMware team to accelerate innovation for our customers as they move to a multicloud environment,” said VMware Executive Vice President and Chief Financial Officer Zane Rowe.

Photo: VMware