Image Source: VMware.

What: Shares of VMware (NYSE:VMW) jumped on Wednesday following the company's first-quarter earnings report. The company beat analyst estimates across the board, and announced a $1.2 billion share-repurchase program for 2016. At 11:30 a.m. EST Wednesday, the stock was up about 12.5%.

So what: VMware reported quarterly revenue of $1.59 billion, up 5% year over year, or up 6% adjusted for currency, and $10 million higher than the average analyst estimate. License revenue declined by 1%, but 8.8% growth in services revenue picked up the slack.

Non-GAAP EPS came in at $0.86, flat year over year, and $0.02 higher than analysts expected. On a GAAP basis, EPS declined 15.6% year over year, to $0.38, driven by higher costs and realignment charges. The company's headcount dropped by about 3% compared to the fourth quarter of 2015 due to the company's previously announced restructuring plan.

In addition to reporting earnings, VMware announced that it had authorized $1.2 billion for additional share buybacks. The company has long been a buyer of its own shares, spending $1.3 billion on buybacks during 2015 alone. All of the $1.2 billion authorization is expected to be used in 2016.

Now what: VMware expects second-quarter revenue between $1.66 billion and $1.71 billion, up 4%-7% year over year, with non-GAAP EPS expected between $0.94 and $0.97. For the full year, VMware's revenue guidance remained unchanged, between $6.785 billion and $6.935 billion. The non-GAAP EPS guidance was increased slightly to a range of $4.09 to $4.18, up from $4.07 to $4.16.

Overall, the first quarter was a solid one for VMware, despite the drop in license revenue. The company beat analyst estimates, committed to continue buying back shares at a rapid pace, and was able to boost its full-year earnings guidance. With the stock down considerably during the past year, this good news gave investors a reason to push shares higher on Wednesday.