- The Securities and Exchange Commission said it had charged the cloud computing giant VMware Inc VMW for “misleading investors about its order backlog management practices.
- The alleged order backlog management practices enabled the company to push revenue into future quarters by delaying customer product deliveries, concealing its slowing performance relative to its projections.”
- An investigation by the agency found that “beginning in the fiscal year 2019, VMware began delaying the delivery of license keys on some sales orders until just after quarter-end so that it could recognize revenue from the corresponding license sales in the following quarter.”
- More said the SEC in a news release, “VMware shifted tens of millions of dollars in revenue into future quarters, building a buffer in those periods and obscuring the company’s financial performance as its business slowed relative to projections in the fiscal year 2020.”
- “Although VMware publicly disclosed that its backlog was ‘managed based upon multiple considerations,’ it did not reveal to investors that it used the backlog to manage the timing of the company’s revenue recognition.”
- According to the SEC, VMWare fudged the numbers.
- The SEC has already settled with a mere $8 million in a penalty for the company that boasts a $52 billion market cap right now.
- VMware confirmed in a statement of its own that it settled with the SEC, adding that it “believes this settlement is the right course of action for the company and continues to be committed to operating at the highest level of integrity, including for its public filings and communications with investors.”
- Price Action: VMW shares closed at $117.82 on Monday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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