- VMware (NYSE:VMW) guides in its Q1 earnings CC slides (.pdf) for Q2 revenue of $1.58B-$1.6B (+8%-10% Y/Y) and EPS of $0.90-$0.92, unfavorable to a consensus of $1.6B and $0.92.
- Likewise, full-year guidance is for revenue of $6.57B-$6.69B (9%-11%) and EPS of $3.94-$4.02 vs. a consensus of $6.69B and $4.00. However, with forex already expected to have a big impact - it's respectively expected to hurt Q2 and full-year sales growth by 4% and 3% - the numbers are being taken in stride.
- License revenue rose 3% Y/Y in Q1 to $576M, down from Q4's 13% growth but in-line with guidance of 2%-3%. 3%-4% license growth is expected in Q2, and 4%-7% growth in 2015. Services revenue (driven by past license deals) rose 17% in Q1 to $935M.
- As was the case in Q4, products other than standalone vSphere server virtualization licenses (hurt by high penetration rates and low-cost rivals) fared well. End-user computing (PC virtualization, AirWatch's enterprise mobility management offerings) license bookings rose over 50% in constant currency, with desktop licenses rising 15%. Hybrid cloud/SaaS revenue, which includes the vCloud Air cloud infrastructure platform, now makes up over 6% of revenue.
- Enterprise license agreements (ELAs - they cover a variety of products, and don't come cheap) made up 30% of bookings, down from 39% in seasonally strong Q4. CRN recently reported VMware is thinking of hiring a global sales chief in part to boost ELA sales.
- $438M was spent on buybacks, giving a boost to EPS. The unearned (deferred) revenue balance rose a healthy 14% Y/Y to $4.74B. Costs/expenses (non-GAAP) rose 13% to $1.06B.
- VMW -0.5% AH to $85.00. Q1 results, PR.