* Year-over-year revenue growth of 5% to $1.59 billion.
* Board authorises share repurchase of up to $1.2 billion in 2016.
VMware, a leader in cloud infrastructure and business mobility, today announced financial results for the first quarter of 2016:
* Revenues for the first quarter were $1.59 billion, an increase of 5% from the first quarter of 2015, or up 6% year over year in constant currency.
* Licence revenues for the first quarter were $572 million, a decrease of 1% from the first quarter of 2015, or up 1% year over year in constant currency.
* GAAP net income for the first quarter was $161 million, or $0.38 per diluted share, down 17% per diluted share compared to $196 million, or $0.45 per diluted share, for the first quarter of 2015. Non-GAAP net income for the quarter was $366 million, or $0.86 per diluted share, flat per diluted share compared to $369 million, or $0.86 per diluted share, for the first quarter of 2015.
* GAAP operating income for the first quarter was $192 million, a decrease of 12% from the first quarter of 2015. Non-GAAP operating income for the first quarter was $446 million, a decrease of 1% from the first quarter of 2015.
* Operating cash flows for the first quarter were $720 million. Free cash flows for the quarter were $679 million.
* Cash, cash equivalents and short-term investments were $8.25 billion, and unearned revenues were $4.98 billion as of 31 March 2016.
* Total revenues plus sequential change in total unearned revenues grew 5% year over year, and grew 6% year over year when adjusted for constant currency.
* Licence revenues plus sequential change in unearned license revenues grew 1% year over year, and grew 2% year over year when adjusted for constant currency.
VMware announced that its Board of Directors has authorised VMware to repurchase up to an aggregate of $1.2 billion of its Class A common stock through 31 December 2016 in the open market, subject to market conditions. VMware plans to repurchase $1.2 billion of its Class A common stock in 2016.
"Q1 was a good start to 2016. We made solid progress with our strategic goal of building momentum for our newer growth businesses and in the cloud," said Pat Gelsinger, chief executive officer, VMware. "We continue to see momentum across our portfolio of growth products and businesses, including NSX, Virtual SAN and End-User Computing."
"I'm pleased with the team's ability to execute according to our Q1 plan," commented Zane Rowe, executive vice-president and chief financial officer, VMware. "Our intent to repurchase $1.2 billion of stock this year underscores the confidence we have in the business and reinforces our capital allocation strategy, which includes returning capital to shareholders."
Recent highlights, strategic announcements
* In February, as part of VMware's strategy to help customers extend their private cloud into the public cloud, VMware and IBM announced a strategic partnership designed to enable enterprise customers to easily extend their existing workloads from their on-premises software-defined data centre to the cloud. Customers will be able to leverage VMware's proven technologies with IBM's growing footprint of 45 cloud data centres worldwide to help them scale globally and manage their data locally and securely.
* The company launched VMware Workspace ONE, a new platform designed to deliver a digital workspace that integrates device management, application delivery and identity management technologies. These combined benefits, on a single mobile platform, enable secure management and delivery of business-critical resources to employees for corporate IT, and consumer simple access for end-users.
* VMware advanced its cloud management platform with the introduction of VMware vRealize Suite 7. The suite's new product updates, together with pricing and packaging enhancements, are designed to help customers readily address the most common use cases VMware has identified in customers' journey to the cloud.
* In CEO Pat Gelsinger's keynote at RSA, VMware demonstrated a technical preview of Distributed Network Encryption, powered by NSX. This is a unique new technology, which enables the encryption of data and applications across clouds.
* For the second year in a row, VMware has ranked on Fortune magazine's list of "100 Best Companies to Work for in the US", competing among hundreds of companies for the honour. VMware was also highlighted as number eight of companies located in the San Francisco Bay Area, and number seven of IT companies.
* VMware continues to rapidly evolve its hyper-converged software with VMware Virtual SAN 6.2, the fourth generation of VMware's simple, enterprise-grade native storage for vSphere. The new features will help customers to achieve a more cost-efficient performance, improve support for any application and accelerate time-to-value.
* At Mobile World Congress, IBM, JAMF, MobileIron and AirWatch announced the formation of the AppConfig Community. With more than 60 member companies, the community's mission is to establish a common approach for enterprise app configuration and security based on OS native standards, including the extensive frameworks available in iOS.
* VMware was positioned as a leader in both "The Forrester Wave: Hybrid Cloud Management Solutions, Q1 2016" and "The Forrester Wave: Private Cloud Software Suites, Q1 2016". According to Forrester's reports, VMware achieved the highest score for cloud operations among the 11 hybrid cloud management vendors evaluated and the highest score for current offerings among the nine private cloud vendors evaluated.
The company will host a conference call today at 11pm to review financial results and business outlook. A live Web broadcast of the event will be available on the VMware investor relations Web site at http://ir.vmware.com. Slides will accompany the Web broadcast. The replay of the Webcast and slides will be available on the Web site for two months. In addition, six quarters of historical data for revenues, which include year-over-year comparisons, will also be made available at http://ir.vmware.com in conjunction with the conference call.
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VMware is a global leader in cloud infrastructure and business mobility. Built on VMware's industry-leading virtualisation technology, its solutions deliver a brave new model of IT that is fluid, instant and more secure. Customers can innovate faster by rapidly developing, automatically delivering and more safely consuming any application. With 2015 revenue of $6.6 billion, VMware has more than 500 000 customers and 75 000 partners. The company is headquartered in Silicon Valley with offices throughout the world, and can be found online at www.vmware.com.
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VMware's Web site is located at www.vmware.com, and its investor relations Web site is located at http://ir.vmware.com. VMware's goal is to maintain the investor relations Web site as a portal through which investors can easily find or navigate to pertinent information about VMware, all of which is made available free of charge. The additional information includes materials that VMware files with the SEC; announcements of investor conferences and events at which its executives talk about its products, services and competitive strategies; Webcasts of its quarterly earnings calls, investor conferences and events (archives of which are also available for a limited time); additional information on its financial metrics, including reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures; press releases on quarterly earnings, product and service announcements, legal developments and international news; corporate governance information; and other news, blogs and announcements that VMware may post from time to time that investors may find useful or interesting.
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