HOPKINTON, Mass. - EMC Corporation, reported third-quarter 2009 consolidated revenue that exceeded company expectations for the quarter. The company achieved third-quarter revenue of US$3.52 billion, an increase of 8 per cent compared with the second quarter of 2009. The results exceeded previous company outlook of 4 per cent to 5 per cent sequential revenue growth. Third-quarter GAAP net income attributable to EMC reached US$298.2 million, an increase of 45 per cent sequentially, and GAAP diluted earnings per share were US$0.14, an increase of 40 per cent sequentially. Third-quarter 2009 non-GAAP* net income attributable to EMC increased 34 per cent sequentially, reaching US$480.3 million or US$0.23 per diluted share, an increase of 28 per cent sequentially.

Highlights

* Third-quarter consolidated revenue up 8 per cent sequentially; Ahead of prior company outlook of 4 per cent to 5 per cent sequential growth

* Third-quarter GAAP net income up 45 per cent sequentially; Non-GAAP net income

* up 34 per cent sequentially

* Third-quarter GAAP diluted EPS up 40 per cent sequentially; Non-GAAP diluted EPS up 28 per cent sequentially

* Strong sequential increase in gross and operating margins

* Year-to-date operating cash flow - US$2.3 billion; Year-to-date free cash flow - US$1.8 billion

Third-quarter consolidated revenue of US$3.52 billion declined 5 per cent compared with the year-ago period. Third-quarter 2009 GAAP net income attributable to EMC compares with US$393.4 million or US$0.19 per diluted share for the third quarter of 2008 and third-quarter 2009 non-GAAP net income attributable to EMC compares with US$510 million or US$0.24 per diluted share achieved in the third quarter of 2008.**

In the third quarter, EMC generated operating cash flow of US$888 million and free cash flow of US$745 million and ended the quarter with cash and investments of US$8.4 billion. Year to date, EMC has generated operating cash flow of US$2.3 billion and free cash flow of US$1.8 billion.

Joe Tucci, EMC Chairman and Chief Executive Officer, said, “I am very pleased with EMC’s solid financial performance in a challenging economic climate. While remaining closer than ever to customers, we made additional progress optimizing our cost structure, expanded our product portfolio, strengthened our partner ecosystem and positioned EMC to capitalize on four of the higher-growth, multi-billion-dollar market opportunities around fully virtualized data centres, cloud computing, virtualized desktops and clients, and next-generation backup and recovery. I am extremely proud of the EMC and VMware people around the world who achieved these results.”

Commenting further, Tucci said, “Customers are signaling more comfort spending their IT budgets, which gives EMC confidence in our ability to perform well and achieve our full-year 2009 targets. We are strategically aligned with the major technology shifts and well positioned to play a pivotal role in the IT industry for the next decade.”

David Goulden, EMC Executive Vice President and Chief Financial Officer, said, “EMC achieved solid sequential revenue and profit growth while continuing to generate strong free cash flow. Combined with a continued disciplined focus on cost control, this helped EMC deliver improved gross and operating margins, highlighting the resilience of our financial model and our crisp execution. We remain committed to driving growth and operating leverage through our business, while continuing to invest in strategic growth opportunities to further extend EMC’s market leadership.”

Third-Quarter Business Highlights

EMC’s Information Infrastructure business for the third quarter - comprising product and services revenue from Information Storage, RSA Security, and Content Management and Archiving - reached US$3.03 billion, an increase of 8 per cent sequentially. The Information Infrastructure business was driven by strong sequential growth of the market-leading EMC Symmetrix high-end storage systems including strong adoption of the new EMC Symmetrix V-Max line, EMC next-generation backup and recovery solutions and EMC Celerra unified storage systems. Further third-quarter highlights included customer demand for EMC’s RSA information security solutions, consumer and small business-focused Iomega products, content management and archiving solutions, and EMC’s broad consulting and professional services portfolio.

VMware (NYSE: VMW), which is majority-owned by EMC, contributed third-quarter revenue of US$489 million.

EMC consolidated third-quarter revenue from the United States reached US$1.90 billion, up 13 per cent sequentially, and represented 54 per cent of total third-quarter revenue. Revenue from EMC’s operations outside of the United States reached US$1.62 billion, up 3 per cent sequentially, and represented 46 per cent of total third-quarter revenue.