VMWare this week reported $608.2 million in revenue for the quarter ended December 31, 2009, representing an 18 percent increase the same quarter one year ago. It was also considerably higher than what most analysts were expecting, which had the company pegged at about $554 million.

Playing a big role in VMWare’s strong quarter performance was services revenue, which catapulted 52 percent to $303.9 million. This was enough to offset declines in new licenses sales.

It wasn’t all good news, though. Net income for the quarter took a steep backwards slide to $56 million, or $0.14 per share, compared to $111 million, or $0.29 per share in the same quarter one year ago. When looking at the full fiscal year, however, revenue was $2 billion, up 8 percent from $1.9 billion in 2008.