- The Securities and Exchange Commission said it has indicted the cloud computing giant VMware Inc VMW for “misleading investors about its backlog management practices.
- The alleged backlog management practices allowed the company to push revenue into future quarters by delaying shipments of customer products and obscuring its slowing performance compared to its forecasts.”
- An investigation by the agency found that “Starting in fiscal 2019, VMware began deferring the delivery of license keys for some sales orders until shortly after the end of the quarter so that it could recognize revenue from the related license sales in the following quarter.”
- More said the SEC in a press release“VMware shifted tens of millions of dollars in revenue into future quarters, building a buffer during those periods and obscuring the company’s financial performance as its business slowed compared to guidance in fiscal 2020.”
- “Although VMware publicly stated that its backlog was ‘managed based on multiple considerations,’ it has not disclosed to investors that it has used the backlog to manage the timing of the company’s revenue recognition.”
- According to the SEC, VMWare falsified the numbers.
- The SEC has already settled a fine of just $8 million for the company, which currently has a market cap of $52 billion.
- VMware confirms in a own statement that it has reached an agreement with the SEC, adding that it “believes this settlement is the right course of action for the company and remains committed to operating to the highest level of integrity, including in its public filings and communications with Investors”.
- Price promotion: VMW shares closed at $117.82 on Monday.
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