VMware delivered strong first quarter financial results Thursday that beat market expectations. The virtualization giant reported a net income of $505 million, or $1.21 per share. The income includes an unexpected gain of $132 million from VMware's investment in Pivotal Software, the company said.
Non-GAAP earnings were $1.32 per share on revenue of $2.27 billion, up 13% year over year. Wall Street was looking for earnings of $1.28 a share and revenue of $2.24 billion.
VMware, a Dell Technologies portfolio company, said license revenue for the quarter was $869 million. Operating cash flows came to $1.27 billion, while free cash flows for the quarter were $1.2 billion.
In terms of guidance, VMware is maintaining its fiscal 2020 forecast, with expected revenue of $10.03 billion. Analysts are expecting revenue of $10.02 billion with earnings of $6.53 a share. VMware also said that its board has authorized up to $1.5 billion in stock repurchases through fiscal 2021.
"Q1 was a good start to fiscal 2020 with strength across our comprehensive solutions portfolio," said VMware chief executive Pat Gelsinger. "We were especially pleased to announce a number of agreements during the quarter with key partners Amazon Web Services, Dell and Microsoft as customers continue to turn to VMware's cloud infrastructure technology to enable their digital transformations."