This story has been updated with additional information on VMware's enterprise license agreements, license bookings, AirWatch and the company's guidance.
NEW YORK (TheStreet) -- Virtualization and cloud infrastructure firm VMware (VMW) beat first-quarter earnings by a penny and exceeded on the top line. But shares slipped as the company maintained guidance during its conference call.
"Our strong financial results reflect VMware's unique position in helping customers transform their IT infrastructure," CEO Pat Gelsinger said in the earnings statement. "As the industry shifts from client server computing to the mobile-cloud era, customers are choosing our solutions because we have the most complete vision and offering for navigating this evolving world."
First-quarter net income was $199 million, up 14% from the first quarter of 2013. Meanwhile non-GAAP net income for the quarter was $348 million, or 80 cents per share, compared with 74 cents a share a year ago.
Revenues for the first quarter were $1.36 billion, an increase of 14% from the same time last year. Analysts, on average, were expecting first-quarter EPS of 79 cents on revenue of $1.353 billion, according to Thomson Reuters.The company said during its earnings call that during the quarter, renewal rates on enterprise license agreements (ELA) reached a record, in-quarter. License bookings for end-user computing were up over 35%, including those of mobile device management provider AirWatch, which the company bought for $1.54 billion in January. First-quarter cloud management license bookings were up more than 30% year over year in the first quarter, while the hybrid cloud business grew greater than 100%. The company also noted growing demand for its network virtualization solutions and security platform NSX on increasing demand for datacenter security. VMware is maintaining its second-quarter and full-year guidance. It expects full-year 2014 revenue growth between 14% and 17% year-over-year to between $5.94 billion and $6.1 billion. For the year, license revenues are expected to increase 12% to 16%, to between $2.55 billion and $2.63 billion. For the second quarter, the company is guiding for 15% to 18% growth to between $1.425 billion and $1.465 billion. License revenues are forecast to increase 14% to 16%, to between $605 million and $615 million. Going into the second quarter, the company expects to accelerate AirWatch's expansion into various markets by leveraging VMware's strong relationship with enterprise customers, wide network of distributors and channels, and huge footprint in Asia Pacific and Japan, as well Europe. It's also encouraged by the ELA pipeline going forward, saying that the size and scope of ELAs continue to grow. Some close on time, some go out a quarter or two, and some close ahead. But there's been no change in the business model or interactions with customers. The company says that the competitive landscape hasn't changed much and that sales cycles on average are unchanged, with no elongations. Shares were down 5.85% in afterhours trading. -- Written by Andrea Tse in New York Follow @atwtse
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