VMware (VMW) Tops Q1 EPS by 4c, Revs Beat

VMware (NYSE: VMW) reported Q1 EPS of $0.99, $0.04 better than the analyst estimate of $0.95. Revenue for the quarter came in at $1.74 billion versus the consensus estimate of $1.71 billion.

• Revenue for the first quarter was $1.74 billion, an increase of 9% from the first quarter of 2016.
• License revenue for the first quarter was $610 million, an increase of 7% from the first quarter of 2016.
• GAAP net income for the first quarter was $232 million, or $0.56 per diluted share, up 48% per diluted share compared to $161 million, or $0.38 per diluted share, for the first quarter of 2016. Non-GAAP net income for the quarter was $412 million, or $0.99 per diluted share, up 15% per diluted share compared to $366 million, or $0.86 per diluted share, for the first quarter of 2016.
• GAAP operating income for the first quarter was $238 million, an increase of 24% from the first quarter of 2016. Non-GAAP operating income for the first quarter was $495 million, an increase of 11% from the first quarter of 2016.
• Operating cash flows for the first quarter were $775 million. Free cash flows for the quarter were $726 million.
• Cash, cash equivalents and short-term investments were $8.6 billion, and unearned revenue was $5.2 billion as of May 5, 2017.
• Total revenue plus sequential change in total unearned revenue grew 10% year-over-year. Excluding the impact on unearned revenue from the sale of vCloud Air, total revenue plus sequential change in total unearned revenue grew 12% year-over-year.
• License revenue plus sequential change in unearned license revenue grew 7% year-over-year. Excluding the impact on unearned revenue from the sale of vCloud Air, license revenue plus sequential change in unearned license revenue grew 10% year-over-year.

"We are very pleased with our strong Q1 results. Our strategy is resonating across the regions and driving increased customer interest for our SDDC and cloud portfolio as well as our digital workspace offerings," said Pat Gelsinger, chief executive officer, VMware. "We also drove momentum across our partner ecosystem, featuring announcements with Dell EMC, Google, Microsoft and Oracle providing customers more complete solutions across clouds, applications and devices."

Zane Rowe, executive vice president and chief financial officer, VMware, said, "Q1 was a great start to the year. We're pleased with our performance and remain committed to providing value to our customers as they build out their private, public and hybrid cloud strategies."

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