RHT
$126.59
Red Hat
($1.92)
(1.49%)
Earnings Details
2nd Quarter August 2017
Monday, September 25, 2017 4:15:00 PM
Tweet Share Watch
Summary

Red Hat Beats

Red Hat (RHT) reported 2nd Quarter August 2017 earnings of $0.78 per share on revenue of $723.4 million. The consensus earnings estimate was $0.67 per share on revenue of $699.2 million. The Earnings Whisper number was $0.70 per share. Revenue grew 20.6% on a year-over-year basis.

The company said it expects third quarter earnings of approximately $0.70 per share on revenue of $730.0 million to $737.0 million. The current consensus earnings estimate is $0.70 per share on revenue of $709.3 million for the quarter ending November 30, 2017. The company also said it expects fiscal 2018 earnings of $2.77 to $2.79 per share on revenue of $2.88 billion to $2.895 billion. The company's previous guidance was earnings of $2.66 to $2.70 per share on revenue of $2.785 billion to $2.825 billion and the current consensus earnings estimate is $2.68 per share on revenue of $2.80 billion for the year ending February 28, 2018.

Red Hat Inc is a provider of open source software solutions, using a community-powered approach to develop and offer reliable and high-performing operating system, middleware, virtualization, storage and cloud technologies.

Results
Reported Earnings
$0.78
Earnings Whisper
$0.70
Consensus Estimate
$0.67
Reported Revenue
$723.4 Mil
Revenue Estimate
$699.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Red Hat Reports Second Quarter Results for Fiscal Year 2018

Second quarter Application Development-related and other emerging technology subscription revenue of $150 million, up 44% year-over-year, or 43% in constant currency

--Quarter-end deferred revenue balance of $2.05 billion, up 22% year-over-year

Second quarter operating cash flow of $143 million, up 48% year-over-year and year-to-date operating cash flow of $401 million, up 22% year-over-year

Red Hat, Inc. (RHT), the world’s leading provider of open source solutions, today announced financial results for the second quarter of fiscal year 2018 ended August 31, 2017.

"Strong demand for our technologies that enable hybrid cloud computing has contributed to accelerated revenue growth in the first half of the fiscal year. In the second quarter, we delivered total revenue growth of 21%, fueled by over 40% growth in our Application Development-related and other emerging technology revenue," stated Jim Whitehurst, President and Chief Executive Officer of Red Hat. "IT organizations continued to turn to Red Hat as a strategic technology partner to help them transform and modernize their applications and infrastructure for the hybrid cloud."

"Strong execution and global demand for Red Hat technologies continued to drive financial results which exceeded expectations for the second quarter and the first half of fiscal year 2018," stated Eric Shander, Executive Vice President and Chief Financial Officer of Red Hat. "For the first half of fiscal 2018, Red Hat delivered a powerful combination of 20% total revenue growth, 41% GAAP operating income growth, 26% non-GAAP operating income growth, and 22% operating cash flow growth. Given our first half results and ongoing momentum, we are increasing our outlook for the full year."

Revenue: Total revenue for the quarter was $723 million, up 21% in USD year-over-year, or 20% measured in constant currency. Constant currency references in this release are detailed in the tables below. Subscription revenue for the quarter was $638 million, up 20% in USD year-over-year, and 20% measured in constant currency. Subscription revenue in the quarter was 88% of total revenue.

Subscription Revenue Breakout: Subscription revenue from Infrastructure-related offerings for the quarter was $487 million, an increase of 14% in USD year-over-year, and 14% as measured in constant currency. Subscription revenue from Application Development-related and other emerging technology offerings for the quarter was $150 million, an increase of 44% in USD year-over-year, or 43% measured in constant currency.

Operating Income: GAAP operating income for the quarter was $135 million, up 64% year-over-year. After adjusting for non-cash share-based compensation expense, amortization of intangible assets, and transaction costs related to business combinations, non-GAAP operating income for the second quarter was $191 million, up 40% year-over-year. For the second quarter, GAAP operating margin was 18.6% and non-GAAP operating margin was 26.4%. Non-GAAP references in this release are detailed in the tables below.

Net Income: GAAP net income for the quarter was $97 million, or $0.53 per diluted share, compared with $59 million, or $0.32 per diluted share, in the year-ago quarter.

After adjusting for non-cash share-based compensation expense, amortization of intangible assets, transaction costs related to business combinations and non-cash interest expense related to the debt discount, non-GAAP net income for the quarter was $138 million, or $0.77 per diluted share, as compared to $101 million, or $0.55 per diluted share, in the year-ago quarter. Non-GAAP diluted weighted average shares outstanding excludes any dilution resulting from our convertible notes because any potential dilution is expected to be offset by our convertible note hedge transactions.

Cash: Operating cash flow was $143 million for the second quarter, an increase of 48% on a year-over-year basis. Total cash, cash equivalents and investments as of August 31, 2017 was $2.31 billion after repurchasing approximately $75 million, or 765 thousand shares, of common stock in the second quarter. The remaining balance in the current repurchase authorization as of August 31, 2017 was approximately $499 million.

Deferred revenue: At the end of the second quarter, the company’s total deferred revenue balance was $2.05 billion, an increase of 22% year-over-year. The full year positive impact to total deferred revenue from changes in foreign exchange rates was $37 million year-over-year. On a constant currency basis, total deferred revenue would have been up 20% year-over-year.

Outlook: Red Hat’s outlook assumes current business conditions and current foreign currency exchange rates.

For the full year:

Revenue is expected to be approximately $2.880 billion to $2.895 billion in USD.

GAAP operating margin is expected to be approximately 15.9% and non-GAAP operating margin is expected to be approximately 23.8%.

Fully diluted GAAP earnings per share (EPS) is expected to be approximately $1.89 to $1.91 per share, assuming 183 million fully diluted shares outstanding. Fully diluted non-GAAP EPS is expected to be approximately $2.77 to $2.79 per share, assuming 180 million fully diluted shares outstanding. Both GAAP and non-GAAP EPS assume a $1 million to $2 million per quarter forecast for other income and an estimated annual effective tax rate of approximately 28% before discrete tax items.

Operating cash flow is expected to be approximately $880 million to $900 million.

For the third quarter:

-- Revenue is expected to be approximately $730 million to $737 million.

GAAP operating margin is expected to be approximately 15.2% and non-GAAP operating margin is expected to be approximately 23.7%.

Fully diluted GAAP EPS is expected to be approximately $0.48 per share, assuming 184 million fully diluted shares outstanding. Fully diluted non-GAAP EPS is expected to be approximately $0.70 per share, assuming 181 million fully diluted shares outstanding. Both GAAP and non-GAAP EPS assume a $2 million per quarter forecast for other income and an estimated annual effective tax rate of 28% before discrete tax items.

GAAP to non-GAAP reconciliation:

Full year non-GAAP operating margin guidance is derived by subtracting the estimated full year impact of non-cash share-based compensation expense of approximately $200 million, amortization of intangible assets of approximately $30 million and transaction costs related to business combinations of approximately $1.4 million. Full year fully diluted non-GAAP EPS guidance is derived by subtracting the expenses listed in the previous sentence and the full year impact of non-cash interest expense related to the debt discount of approximately $20 million and an estimated annual effective tax rate of approximately 28% before discrete tax items. Additionally, full year fully diluted non-GAAP EPS excludes approximately $26 million of discrete tax benefits related to share-based compensation that are included in full year fully diluted GAAP EPS. Full year fully diluted non-GAAP EPS excludes approximately 3 million diluted shares resulting from the convertible notes because any potential dilution is expected to be offset by our convertible note hedge transactions.

Third quarter non-GAAP operating margin guidance is derived by subtracting the estimated impact of non-cash share-based compensation expense of approximately $54 million and amortization of intangible assets of approximately $8 million. Third quarter fully diluted non-GAAP EPS guidance is derived by subtracting the expenses listed in the previous sentence and non-cash interest expense related to the debt discount of approximately $5 million and an estimated annual effective tax rate of 28% before discrete tax items. Additionally, third quarter fully diluted non-GAAP EPS excludes approximately $12 million of discrete tax benefits related to share-based compensation that are included in third quarter fully diluted GAAP EPS. Third quarter fully diluted non-GAAP EPS excludes approximately 3 million diluted shares resulting from the convertible notes because any potential dilution is expected to be offset by our convertible note hedge transactions.

Webcast and Website Information

A live webcast of Red Hat’s results will begin at 5:00 pm ET today. The webcast, in addition to a copy of our prepared remarks and slides containing financial highlights and supplemental metrics, can be accessed by the general public at Red Hat’s investor relations website at http://investors.redhat.com. A replay of the webcast will be available shortly after the live event has ended. Additional information on Red Hat’s reported results, including a reconciliation of the non-GAAP adjusted results, are included in the financial tables below.

About Red Hat, Inc.

Red Hat is the world’s leading provider of open source software solutions, using a community-powered approach to provide reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies. Red Hat also offers award-winning support, training, and consulting services. As a connective hub in a global network of enterprises, partners, and open source communities, Red Hat helps create relevant, innovative technologies that liberate resources for growth and prepare customers for the future of IT. Learn more at http://www.redhat.com.

Forward-Looking Statements

Certain statements contained in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: risks related to the ability of the Company to compete effectively; the ability to deliver and stimulate demand for new products and technological innovations on a timely basis; delays or reductions in information technology spending; the integration of acquisitions and the ability to market successfully acquired technologies and products; fluctuations in exchange rates; the effects of industry consolidation; uncertainty and adverse results in litigation and related settlements; the inability to adequately protect Company intellectual property and the potential for infringement or breach of license claims of or relating to third party intellectual property; risks related to the security of our offerings and other data security vulnerabilities; changes in and a dependence on key personnel; the ability to meet financial and operational challenges encountered in our international operations; and ineffective management of, and control over, the Company’s growth and international operations, as well as other factors contained in our most recent Quarterly Report on Form 10-Q (copies of which may be accessed through the Securities and Exchange Commission’s website at http://www.sec.gov), including those found therein under the captions "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations." In addition to these factors, actual future performance, outcomes, and results may differ materially because of more general factors including (without limitation) general industry and market conditions and growth rates, economic and political conditions, governmental and public policy changes and the impact of natural disasters such as earthquakes and floods. The forward-looking statements included in this press release represent the Company’s views as of the date of this press release and these views could change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this press release.

Red Hat and the Shadowman logo are trademarks or registered trademarks of Red Hat, Inc. or its subsidiaries in the U.S. and other countries. Linux(R) is the registered trademark of Linus Torvalds in the U.S. and other countries.

RED HAT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands - except per share amounts)
Three Months Ended
Six Months Ended
August 31,
August 31,
August 31,
August 31,
2017
2016
2017
2016
Revenue:
Subscriptions
$ 637,562
$ 531,209
$ 1,234,070
$ 1,032,874
Training and services
85,793
68,596
166,081
134,829
Total subscription and training and services revenue
723,355
599,805
1,400,151
1,167,703
Cost of revenue:
Subscriptions
46,324
39,678
89,957
76,222
Training and services
60,393
47,993
117,456
95,496
Total cost of subscription and training and services revenue
106,717
87,671
207,413
171,718
Gross profit
616,638
512,134
1,192,738
995,985
Operating expense:
Sales and marketing
278,548
253,255
575,007
496,503
Research and development
141,809
121,265
278,972
236,281
General and administrative
61,722
55,730
116,592
105,954
Total operating expense
482,079
430,250
970,571
838,738
Income from operations
134,559
81,884
222,167
157,247
Interest income
4,612
3,392
8,605
6,821
Interest expense
6,081
5,925
12,166
11,811
Other income (expense), net
(1,260 )
84
(1,846 )
(468 )
Income before provision for income taxes
131,830
79,435
216,760
151,789
Provision for income taxes
34,971
20,663
46,711
31,832
Net income
$
96,859
$
58,772
$
170,049
$
119,957
Net income per share:
Basic
$
0.55
$
0.33
$
0.96
$
0.66
Diluted
$
0.53
$
0.32
$
0.93
$
0.65
Weighted average shares outstanding:
Basic
177,257
180,322
177,250
180,745
Diluted
183,021
183,346
182,460
183,750
RED HAT, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
August 31,
February 28,
2017
2017 (1)
ASSETS
Current assets:
Cash and cash equivalents
$
1,210,308
$
1,090,808
Investments in debt securities, short-term
448,981
369,983
Accounts receivable, net
418,449
634,821
Prepaid expenses
213,273
200,609
Other current assets
41,352
19,481
Total current assets
2,332,363
2,315,702
Property and equipment, net
206,195
189,629
Goodwill
1,121,602
1,040,709
Identifiable intangibles, net
156,659
137,767
Investments in debt securities, long-term
655,127
672,440
Deferred tax assets, net
101,778
104,833
Other assets, net
65,660
74,105
Total assets
$
4,639,384
$
4,535,185
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
323,245
$
376,957
Deferred revenue, short-term
1,471,434
1,512,762
Other current obligations
1,147
1,354
Total current liabilities
1,795,826
1,891,073
Deferred revenue, long-term
581,077
557,194
Convertible notes
756,743
745,633
Other long-term obligations
105,391
93,965
Stockholders’ equity:
Common stock
24
24
Additional paid-in capital
2,335,518
2,294,462
Retained earnings
1,523,040
1,352,991
Treasury stock, at cost
(2,425,059 )
(2,311,805 )
Accumulated other comprehensive loss
(33,176 )
(88,352 )
Total stockholders’ equity
1,400,347
1,247,320
Total liabilities and stockholders’ equity
$
4,639,384
$
4,535,185
(1) Derived from audited financial statements
RED HAT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended
Six Months Ended
August 31,
August 31,
August 31,
August 31,
2017
2016
2017
2016
Cash flows from operating activities:
Net income
$
96,859
$
58,772
$
170,049
$
119,957
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
24,136
21,160
45,953
41,862
Amortization of debt discount and transaction costs
5,570
5,393
11,110
10,758
Share-based compensation expense
46,947
45,357
90,665
86,632
Deferred income taxes
(359 )
(5,467 )
7,558
(7,619 )
Net amortization of bond premium on debt securities available for
2,439
3,294
4,875
6,834
sale
Other
571
328
1,532
(437 )
Changes in operating assets and liabilities:
Accounts receivable
17,036
(30,684 )
225,797
159,645
Prepaid expenses
(11,562 )
8,883
(19,270 )
(490 )
Accounts payable and accrued expenses
2,008
19,763
(53,330 )
(10,423 )
Deferred revenue
(40,575 )
(26,953 )
(86,292 )
(73,046 )
Other
(174 )
(3,044 )
2,121
(4,574 )
Net cash provided by operating activities
142,896
96,802
400,768
329,099
Cash flows from investing activities:
Purchase of investment in debt securities available for sale
(109,669 )
(163,043 )
(259,193 )
(297,644 )
Proceeds from maturities of investment in debt securities available
105,303
170,510
217,344
269,542
for sale
Proceeds from sales of investment in debt securities available for
--
7,018
14,324
25,168
sale
Acquisition of businesses, net of cash acquired
(83,965 )
(28,667 )
(83,965 )
(28,667 )
Purchase of developed software and other intangible assets
(7,671 )
(3,521 )
(9,445 )
(6,389 )
Purchase of property and equipment
(25,781 )
(15,539 )
(51,681 )
(33,192 )
Other
(189 )
--
(189 )
(111 )
Net cash used in investing activities
(121,972 )
(33,242 )
(172,805 )
(71,293 )
Cash flows from financing activities:
Proceeds from exercise of common stock options
862
689
3,830
2,068
Proceeds from employee stock purchase program
10,952
--
22,713
--
Payments related to net settlement of share-based compensation awards
(7,413 )
(6,398 )
(48,423 )
(37,476 )
Purchase of treasury stock
(75,015 )
(127,386 )
(137,002 )
(193,864 )
Payments on other borrowings
(418 )
(463 )
(861 )
(906 )
Other
--
415
--
913
Net cash used in financing activities
(71,032 )
(133,143 )
(159,743 )
(229,265 )
Effect of foreign currency exchange rates on cash and cash
29,959
8,587
51,280
14,250
equivalents
Net increase (decrease) in cash and cash equivalents
(20,149 )
(60,996 )
119,500
42,791
Cash and cash equivalents at beginning of the period
1,230,457
1,031,565
1,090,808
927,778
Cash and cash equivalents at end of the period
$
1,210,308
$
970,569
$
1,210,308
$
970,569
RED HAT, INC.
RECONCILIATION OF CERTAIN GAAP RESULTS TO NON-GAAP ADJUSTED
RESULTS
(Unaudited)
(In thousands - except per share amounts)
Three Months Ended
Six Months Ended
August 31,
August 31,
August 31,
August 31,
2017
2016
2017
2016
Reconciliation items included in Consolidated Statements of
Operations:
Non-cash share-based compensation expense:
Cost of revenue
$
4,261
$
4,054
$
8,209
$
8,359
Sales and marketing
20,817
20,361
41,430
38,802
Research and development
14,220
12,969
27,666
24,971
General and administrative
7,649
7,973
13,360
14,500
Total share-based compensation expense
$
46,947
$
45,357
$
90,665
$
86,632
Amortization of intangible assets expense:
Cost of revenue
$
4,326
$
3,846
$
8,162
$
7,469
Sales and marketing
1,583
1,905
3,042
3,820
Research and development
35
34
69
69
General and administrative
2,227
1,848
4,053
3,601
Total amortization of intangible assets expense
$
8,171
$
7,633
$
15,326
$
14,959
Total non-cash interest expense related to the debt discount
$
4,890
$
4,753
$
9,757
$
9,484
Transaction costs related to business combinations
$
1,220
$
1,789
$
1,362
$
1,789
Reconciliation of GAAP results to non-GAAP adjusted results:
GAAP net income
$
96,859
$
58,772
$ 170,049
$ 119,957
GAAP provision for income taxes
34,971
20,663
46,711
31,832
GAAP income before provision for income taxes
$ 131,830
$
79,435
$ 216,760
$ 151,789
Add: Non-cash share-based compensation expense
46,947
45,357
90,665
86,632
Add: Amortization of intangible assets expense
8,171
7,633
15,326
14,959
Add: Non-cash interest expense related to the debt discount
4,890
4,753
9,757
9,484
Add: Transaction costs related to business combinations
1,220
1,789
1,362
1,789
Non-GAAP adjusted income before provision for income taxes
$ 193,058
$ 138,967
$ 333,870
$ 264,653
Non-GAAP provision for income taxes (1)
54,790
37,739
93,905
71,245
Non-GAAP adjusted net income (basic and diluted)
$ 138,268
$ 101,228
$ 239,965
$ 193,408
Non-GAAP adjusted diluted weighted average shares outstanding:
GAAP diluted weighted average shares outstanding
183,021
183,346
182,460
183,750
Dilution offset from convertible note hedge transactions
(2,706 )
(195 )
(2,189 )
(82 )
Non-GAAP diluted weighted average shares outstanding
180,315
183,151
180,271
183,668
Non-GAAP adjusted net income per share:
Basic
$
0.78
$
0.56
$
1.35
$
1.07
Diluted
$
0.77
$
0.55
$
1.33
$
1.05
RED HAT, INC.
RECONCILIATION OF CERTAIN GAAP RESULTS TO NON-GAAP ADJUSTED
RESULTS
(Unaudited)
(In thousands - except per share amounts)
Three Months Ended
Six Months Ended
August 31,
August 31,
August 31,
August 31,
2017
2016
2017
2016
(1)
Non-GAAP provision for income taxes:
Non-GAAP adjusted income before provision for income taxes
$ 193,058
$ 138,967
$
333,870
$
264,653
GAAP estimated annual effective tax rate
27.6 %
27 %
27.6 %
27 %
Provision for income taxes on non-GAAP adjusted income before
$
53,425
$
37,521
$
92,148
$
71,456
discrete tax benefits
Discrete tax expense (benefit), excluding discrete benefits related
1,365
218
1,757
(211 )
to share-based compensation
Provision for income taxes on non-GAAP adjusted income, excluding
$
54,790
$
37,739
$
93,905
$
71,245
discrete tax benefits related to share-based compensation
GAAP gross profit
$ 616,638
$ 512,134
$ 1,192,738
$
995,985
Add: Non-cash share-based compensation expense
4,261
4,054
8,209
8,359
Add: Amortization of intangible assets expense
4,326
3,846
8,162
7,469
Non-GAAP gross profit
$ 625,225
$ 520,034
$ 1,209,109
$ 1,011,813
Non-GAAP gross margin
86.4 %
86.7 %
86.4 %
86.6 %
GAAP operating expenses
$ 482,079
$ 430,250
$
970,571
$
838,738
Deduct: Non-cash share-based compensation expense
(42,686 )
(41,303 )
(82,456 )
(78,273 )
Deduct: Amortization of intangible assets expense
(3,845 )
(3,787 )
(7,164 )
(7,490 )
Deduct: Transaction costs related to business combinations
(1,220 )
(1,789 )
(1,362 )
(1,789 )
Non-GAAP adjusted operating expenses
$ 434,328
$ 383,371
$
879,589
$
751,186
GAAP operating income
$ 134,559
$
81,884
$
222,167
$
157,247
Add: Non-cash share-based compensation expense
46,947
45,357
90,665
86,632
Add: Amortization of intangible assets expense
8,171
7,633
15,326
14,959
Add: Transaction costs related to business combinations
1,220
1,789
1,362
1,789
Non-GAAP adjusted operating income
$ 190,897
$ 136,663
$
329,520
$
260,627
Non-GAAP adjusted operating margin
26.4 %
22.8 %
23.5 %
22.3 %
RED HAT, INC.
RECONCILIATION OF CERTAIN GAAP RESULTS TO NON-GAAP ADJUSTED
RESULTS
(Unaudited)
(In thousands - except per share amounts)
Three Months Ended
August 31,
August 31,
Year-Over-Year
2017
2016
Growth Rate
Subscription and services revenue:
GAAP subscription revenue by offering type:
Infrastructure-related offerings
$
487,447
$
427,035
14.1 %
Adjustment for currency impact
(1,485 )
--
Non-GAAP Infrastructure-related subscription revenue on a constant
$
485,962
$
427,035
13.8 %
currency basis
Application Development-related and other emerging technology
$
150,115
$
104,174
44.1 %
offerings
Adjustment for currency impact
(969 )
--
Non-GAAP Application Development-related and other emerging
$
149,146
$
104,174
43.2 %
technology subscription revenue on a constant currency basis
GAAP subscription revenue
$
637,562
$
531,209
20.0 %
Adjustment for currency impact
(2,454 )
--
Non-GAAP subscription revenue on a constant currency basis
$
635,108
$
531,209
19.6 %
GAAP training and services revenue
$
85,793
$
68,596
25.1 %
Adjustment for currency impact
(328 )
--
Non-GAAP training and services revenue on a constant currency basis
$
85,465
$
68,596
24.6 %
GAAP total subscription and training and services revenue
$
723,355
$
599,805
20.6 %
Adjustment for currency impact
(2,782 )
$ --
Non-GAAP total subscription and training and services revenue on a
$
720,573
$
599,805
20.1 %
constant currency basis
Six Months Ended
August 31,
August 31,
Year-Over-Year
2017
2016
Growth Rate
GAAP subscription revenue by offering type:
Infrastructure-related offerings
$
945,408
$
830,216
13.9 %
Adjustment for currency impact
1,846
--
Non-GAAP Infrastructure-related subscription revenue on a constant
$
947,254
$
830,216
14.1 %
currency basis
Application Development-related and other emerging technology
$
288,662
$
202,658
42.4 %
offerings
Adjustment for currency impact
112
--
Non-GAAP Application Development-related and other emerging
$
288,774
$
202,658
42.5 %
technology subscription revenue on a constant currency basis
GAAP subscription revenue
$ 1,234,070
$
1,032,874
19.5 %
Adjustment for currency impact
1,958
--
Non-GAAP subscription revenue on a constant currency basis
$ 1,236,028
$
1,032,874
19.7 %
GAAP training and services revenue
$
166,081
$
134,829
23.2 %
Adjustment for currency impact
378
--
Non-GAAP training and services revenue on a constant currency basis
$
166,459
$
134,829
23.5 %
GAAP total subscription and training and services revenue
$ 1,400,151
$
1,167,703
19.9 %
Adjustment for currency impact
2,336
--
Non-GAAP total subscription and training and services revenue on a
$ 1,402,487
$
1,167,703
20.1 %
constant currency basis
RED HAT, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
(In thousands)
Change in deferred revenue balances:
Deferred Revenue
Current
Long-Term
Total
Balance at August 31, 2016
$ 1,233,762
$ 446,890
$ 1,680,652
Constant currency change in deferred revenue
213,061
122,252
335,313
Impact from foreign currency translation
24,611
11,935
36,546
Balance at August 31, 2017
$ 1,471,434
$ 581,077
$ 2,052,511
Year-over-year growth rate
19.3 %
30.0 %
22.1 %
Year-over-year growth rate on a constant currency basis
17.3 %
27.4 %
20.0 %
Revenue growth by geographical segment:
Americas
EMEA
APAC
Consolidated
Total revenue for the three months ended August 31, 2017
$
463,359
$ 159,722
$
100,274
$
723,355
Adjustment for currency impact
65
(5,111 )
2,264
(2,782 )
Total revenue on a constant currency basis for the three months
$
463,424
$ 154,611
$
102,538
$
720,573
ended August 31, 2017
Total revenue for the three months ended August 31, 2016
$
385,529
$ 127,467
$
86,809
$
599,805
Year-over-year growth rate
20.2 %
25.3 %
15.5 %
20.6 %
Year-over-year growth rate on a constant currency basis
20.2 %
21.3 %
18.1 %
20.1 %
Total revenue for the six months ended August 31, 2017
$
901,739
$ 303,392
$
195,020
$ 1,400,151
Adjustment for currency impact
(867 )
567
2,636
2,336
Total revenue on a constant currency basis for the six months ended
$
900,872
$ 303,959
$
197,656
$ 1,402,487
August 31, 2017
Total revenue for the six months ended August 31, 2016
$
751,252
$ 251,766
$
164,685
$ 1,167,703
Year-over-year growth rate
20.0 %
20.5 %
18.4 %
19.9 %
Year-over-year growth rate on a constant currency basis
19.9 %
20.7 %
20.0 %
20.1 %

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170925006224r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170925006224/en/

SOURCE: Red Hat, Inc.

Media Contact:
Red Hat, Inc.
Stephanie Wonderlick, 571-421-8169
swonderl@redhat.com
or
Investor Relations:
Red Hat, Inc.
Tom McCallum, 919-754-4630
tmccallum@redhat.com