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Virtualization leader VMware reported Wall Street-besting results Tuesday when it posted its Q1 revenues.

The company said its revenues were $634 million, up 35% year-over-year. It earned $78 million (GAAP), or 19 cents a share, up 12%. Before charges the number was $133 million, or 32 cents a share.

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The punters were expecting 28 cents on $592.5 million.

Total deferred revenues were $1.4 billion, up 48%.

VMware's non-GAAP operating income in the quarter was $175 million, up 45%.

It's got $2.8 billion in the bank, up 36% year-over-year.

U.S. revenues were up 30% to $317 million; international revenues were up 40% to $317 million.

License revenues came to $312 million, up 21%. Services revenues, including software maintenance and professional services, were up 51% to $322 million.

CEO Paul Maritz said in a canned statement that the strong performance indicates "virtualization is becoming a cornerstone for customers' IT strategy, particularly since it enables them an evolutionary path forward to cloud computing."

The results were attributed to pent-up demand, carried over from last quarter, and a strong showing in Europe, China and Japan.

The company guided to lower license revenues this quarter but figures total revenues should increase to between $635 million and $665 million because of its acquisition of Zimbra and the Ionix assets it got from EMC.

It said revenues for the year should be in the range of $2.625 billion and $2.725 billion, up 30%-35% compared to 2009.

Its forecasts were more aggressive than the Street anticipated.