VMware -5.5% AH on disappointing bookings; EMC -1.7%

|By:, SA News Editor

Though VMware (VMW)'s license revenue rose 15% Y/Y in Q1 to $561M (beating guidance of $545M-$555M), the company disclosed on its CC license and total bookings growth was less than 10%, with sub-10% bookings growth in all three major geographies. Total bookings had risen at a mid-teens clip in Q4.

Nonetheless, VMware is maintaining its prior forecasts for 2014 revenue of $5.94B-$6.1B (+14%-17%) and license revenue of $2.55B-$2.63B (+12%-16%). AirWatch is expected to contribute $100M.

Q2 revenue, which assumes a $22M contribution from AirWatch, is expected to grow 15%-18% Y/Y to $1.425B-$1.465B (consensus is at $1.44B). License revenue is expected to grow 14%-16% to $605M-$615M.

Some bright spots: End-user computing license bookings (PC virtualization, will include AirWatch going forward) rose 35%, and cloud management license bookings over 30%. Also, ~50% of VMware's costly enterprise license agreements (ELAs, 25% of bookings) included its far-reaching vCloud Suite.

VMware's unearned revenue balance totaled $4.17B at the end of Q1, up 20% Y/Y. $169M was spent on buybacks.

Parent EMC, which reports tomorrow morning, is following VMware lower.

Q1 results, PR, CC slides