RHT
$125.94
Red Hat
$.47
.37%
Earnings Details
3rd Quarter November 2017
Tuesday, December 19, 2017 4:15:00 PM
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Summary

Red Hat Reports In-line

Red Hat (RHT) reported 3rd Quarter November 2017 earnings of $0.74 per share on revenue of $748.0 million. The consensus earnings estimate was $0.70 per share on revenue of $734.4 million. The Earnings Whisper number was $0.74 per share. Revenue grew 21.6% on a year-over-year basis.

The company said it expects fourth quarter non-GAAP earnings of approximately $0.81 per share on revenue of $758.0 million to $763.0 million. The current consensus earnings estimate is $0.75 per share on revenue of $754.7 million for the quarter 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
$0.74
Earnings Whisper
$0.74
Consensus Estimate
$0.70
Reported Revenue
$748.0 Mil
Revenue Estimate
$734.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Red Hat Reports Third Quarter Results for Fiscal Year 2018

Third quarter Application Development-related and other emerging technology subscription revenue of $162 million, up 44% year-over-year, or 42% in constant currency

--Quarter-end deferred revenue balance of $2.11 billion, up 23% year-over-year

Third quarter operating cash flow of $160 million, up 18% year-over-year and year-to-date operating cash flow of $561 million, up 21% year-over-year

Red Hat, Inc. (RHT), the world’s leading provider of open source solutions, today announced financial results for the third quarter of fiscal year 2018 ended November 30, 2017.

"We again delivered over 20% year-over-year growth in both subscription revenue and total revenue due to strong customer demand for hybrid cloud technologies, including our core technologies, container platforms and solutions that enable and manage multiple cloud and private cloud environments," stated Jim Whitehurst, President and Chief Executive Officer of Red Hat. "Our growing strategic position within enterprise IT organizations is evidenced by the strong cross selling of our broad portfolio of technologies, which led to 30% year-over-year growth in deals over $1 million and over 40% growth in Application Development-related and other emerging technology subscription revenue."

"In the third quarter, strong execution contributed to a powerful combination of 22% total revenue growth, 47% GAAP operating income growth, 25% non-GAAP operating income growth, and 18% operating cash flow growth," stated Eric Shander, Executive Vice President and Chief Financial Officer of Red Hat. "Based on our third quarter results, we anticipate exiting the fiscal year with an annualized run-rate of approximately $3 billion for total revenue."

Revenue: Total revenue for the quarter was $748 million, up 22% 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 $657 million, up 21% in USD year-over-year, or 19% 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 $495 million, an increase of 15% in USD year-over-year, or 14% measured in constant currency. Subscription revenue from Application Development-related and other emerging technology offerings for the quarter was $162 million, an increase of 44% in USD year-over-year, or 42% measured in constant currency.

Operating Income: GAAP operating income for the quarter was $118 million, up 47% 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 third quarter was $179 million, up 25% year-over-year. For the third quarter, GAAP operating margin was 15.8% and non-GAAP operating margin was 23.9%. Non-GAAP references in this release are detailed in the tables below.

Net Income: GAAP net income for the quarter was $101 million, or $0.54 per diluted share, compared with $68 million, or $0.37 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 $133 million, or $0.73 per diluted share, as compared to $111 million, or $0.61 per diluted share, in the year-ago quarter. Non-GAAP diluted weighted average shares outstanding excludes dilution that is expected to be offset by our convertible note hedge transactions.

Cash: Operating cash flow was $160 million for the third quarter, an increase of 18% on a year-over-year basis. Total cash, cash equivalents and investments as of November 30, 2017 was $2.32 billion after repurchasing approximately $100 million, or 838 thousand shares, of common stock in the third quarter. The remaining balance in the current repurchase authorization as of November 30, 2017 was approximately $399 million.

Deferred revenue: At the end of the third quarter, the company’s total deferred revenue balance was $2.11 billion, an increase of 23% year-over-year. The full year impact to total deferred revenue from changes in foreign exchange rates was $69 million year-over-year. On a constant currency basis, total deferred revenue would have been up 19% 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 $2.906 billion to $2.911 billion in USD.

GAAP operating margin is expected to be approximately 16.1% and non-GAAP operating margin is expected to be approximately 23.9%.

Fully diluted GAAP earnings per share (EPS) is expected to be approximately $2.02 per share, assuming 184 million fully diluted shares outstanding. Fully diluted non-GAAP EPS is expected to be approximately $2.88 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 approximately 27% before discrete tax items. This outlook includes a one-time gain on a strategic investment which benefits GAAP and non-GAAP EPS by $0.05.

Operating cash flow is expected to be approximately $900 million to $910 million.

For the fourth quarter:

-- Revenue is expected to be approximately $758 million to $763 million.

GAAP operating margin is expected to be approximately 16.7% and non-GAAP operating margin is expected to be approximately 24.6%.

Fully diluted GAAP EPS is expected to be approximately $0.54 per share, assuming 186 million fully diluted shares outstanding. Fully diluted non-GAAP EPS is expected to be approximately $0.81 per share, assuming 182 million fully diluted shares outstanding. Both GAAP and non-GAAP EPS assume a $2 million forecast for other income and an estimated annual effective tax rate of 27% before discrete tax items. This outlook includes a one-time gain on a strategic investment which benefits GAAP and non-GAAP EPS by $0.05.

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 $195 million, amortization of intangible assets of approximately $30 million and transaction costs related to business combinations of approximately $1.3 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 27% before discrete tax items. Additionally, full year fully diluted non-GAAP EPS excludes approximately $30 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 related to the convertible notes which are expected to be offset by our convertible note hedge transactions.

Fourth quarter non-GAAP operating margin guidance is derived by subtracting the estimated impact of non-cash share-based compensation expense of approximately $52 million and amortization of intangible assets of approximately $8 million. Fourth 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 27% before discrete tax items. Additionally, fourth quarter fully diluted non-GAAP EPS excludes approximately $1 million of discrete tax benefits related to share-based compensation that are included in fourth quarter fully diluted GAAP EPS. Fourth quarter fully diluted non-GAAP EPS excludes approximately 4 million diluted shares related to the convertible notes which are 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
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2017
2016
2017
2016
Revenue:
Subscriptions
$ 656,832
$ 543,318
$ 1,890,902
$ 1,576,192
Training and services
91,146
71,942
257,227
206,771
Total subscription and training and services revenue
747,978
615,260
2,148,129
1,782,963
Cost of revenue:
Subscriptions
47,277
40,660
137,234
116,882
Training and services
64,482
49,793
181,938
145,289
Total cost of subscription and training and services revenue
111,759
90,453
319,172
262,171
Gross profit
636,219
524,807
1,828,957
1,520,792
Operating expense:
Sales and marketing
308,388
267,080
883,395
763,583
Research and development
145,580
122,469
424,552
358,750
General and administrative
63,838
54,485
180,430
160,439
Total operating expense
517,806
444,034
1,488,377
1,282,772
Income from operations
118,413
80,773
340,580
238,020
Interest income
4,864
3,346
13,469
10,167
Interest expense
6,180
6,009
18,346
17,820
Other income (expense), net
(1,187 )
(1,392 )
(3,033 )
(1,860 )
Income before provision for income taxes
115,910
76,718
332,670
228,507
Provision for income taxes
14,604
8,775
61,315
40,607
Net income
$ 101,306
$
67,943
$
271,355
$
187,900
Net income per share:
Basic
$
0.57
$
0.38
$
1.53
$
1.04
Diluted
$
0.54
$
0.37
$
1.48
$
1.02
Weighted average shares outstanding:
Basic
177,063
179,233
177,188
180,245
Diluted
186,160
182,682
183,397
183,453
RED HAT, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
November 30, 2017
February 28, 2017 (1)
ASSETS
Current assets:
Cash and cash equivalents
$ 1,331,172
$ 1,090,808
Investments in debt securities, short-term
384,717
369,983
Accounts receivable, net
531,509
634,821
Prepaid expenses
216,036
200,609
Other current assets
41,276
19,481
Total current assets
2,504,710
2,315,702
Property and equipment, net
201,807
189,629
Goodwill
1,120,957
1,040,709
Identifiable intangibles, net
151,450
137,767
Investments in debt securities, long-term
605,284
672,440
Deferred tax assets, net
108,235
104,833
Other assets, net
67,041
74,105
Total assets
$ 4,759,484
$ 4,535,185
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
341,596
$
376,957
Deferred revenue, short-term
1,482,428
1,512,762
Other current obligations
1,022
1,354
Total current liabilities
1,825,046
1,891,073
Deferred revenue, long-term
623,150
557,194
Convertible notes
762,367
745,633
Other long-term obligations
115,781
93,965
Stockholders’ equity:
Common stock
24
24
Additional paid-in capital
2,350,740
2,294,462
Retained earnings
1,624,346
1,352,991
Treasury stock, at cost
(2,506,075 )
(2,311,805 )
Accumulated other comprehensive loss
(35,895 )
(88,352 )
Total stockholders’ equity
1,433,140
1,247,320
Total liabilities and stockholders’ equity
$ 4,759,484
$ 4,535,185
(1) Derived from audited financial statements
RED HAT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2017
2016
2017
2016
Cash flows from operating activities:
Net income
$
101,306
$
67,943
$
271,355
$ 187,900
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
25,588
21,870
71,541
63,732
Amortization of debt discount and transaction costs
5,630
5,453
16,740
16,211
Share-based compensation expense
52,318
54,741
142,983
141,373
Deferred income taxes
273
13,818
7,831
6,199
Net amortization of bond premium on debt securities available for
2,113
3,120
6,988
9,954
sale
Other
(214 )
986
1,318
549
Changes in operating assets and liabilities, net of effects of
acquisitions:
Accounts receivable
(113,898 )
(73,149 )
111,899
86,496
Prepaid expenses
(6,756 )
(18,897 )
(26,026 )
(19,387 )
Accounts payable and accrued expenses
35,559
(4,413 )
(17,771 )
(14,836 )
Deferred revenue
57,275
64,181
(29,017 )
(8,865 )
Other
1,113
706
3,234
(3,868 )
Net cash provided by operating activities
160,307
136,359
561,075
465,458
Cash flows from investing activities:
Purchase of investment in debt securities available for sale
(26,580 )
(118,152 )
(285,773 )
(415,796 )
Proceeds from maturities of investment in debt securities available
130,941
108,722
348,285
378,264
for sale
Proceeds from sales of investment in debt securities available for
5,293
5,037
19,617
30,205
sale
Acquisition of businesses, net of cash acquired
--
--
(83,965 )
(28,667 )
Purchase of developed software and other intangible assets
(3,426 )
(2,323 )
(12,871 )
(8,712 )
Purchase of property and equipment
(16,587 )
(17,244 )
(68,268 )
(50,436 )
Other
84
(92 )
(105 )
(203 )
Net cash provided by (used in) investing activities
89,725
(24,052 )
(83,080 )
(95,345 )
Cash flows from financing activities:
Proceeds from exercise of common stock options
711
1,205
4,541
3,273
Proceeds from employee stock purchase program
10,575
7,155
33,288
7,155
Payments related to net settlement of share-based compensation awards
(37,807 )
(25,769 )
(86,230 )
(63,245 )
Purchase of treasury stock
(100,000 )
(125,318 )
(237,002 )
(319,182 )
Payments on other borrowings
(346 )
(462 )
(1,207 )
(1,368 )
Other
(6 )
(84 )
(6 )
829
Net cash used in financing activities
(126,873 )
(143,273 )
(286,616 )
(372,538 )
Effect of foreign currency exchange rates on cash and cash
(2,295 )
(22,925 )
48,985
(8,675 )
equivalents
Net increase (decrease) in cash and cash equivalents
120,864
(53,891 )
240,364
(11,100 )
Cash and cash equivalents at beginning of the period
1,210,308
970,569
1,090,808
927,778
Cash and cash equivalents at end of the period
$ 1,331,172
$ 916,678
$ 1,331,172
$ 916,678
RED HAT, INC.
RECONCILIATION OF CERTAIN GAAP RESULTS TO NON-GAAP ADJUSTED
RESULTS
(Unaudited)
(In thousands - except per share amounts)
Three Months Ended
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2017
2016
2017
2016
Reconciliation items included in Consolidated Statements of
Operations:
Non-cash share-based compensation expense:
Cost of revenue
$
4,199
$
4,037
$
12,408
$
12,396
Sales and marketing
23,278
26,624
64,708
65,426
Research and development
14,937
13,814
42,603
38,785
General and administrative
9,904
10,266
23,264
24,766
Total share-based compensation expense
$
52,318
$
54,741
$ 142,983
$ 141,373
Amortization of intangible assets expense:
Cost of revenue
$
4,329
$
4,234
$
12,491
$
11,702
Sales and marketing
1,592
1,695
4,634
5,515
Research and development
34
34
103
103
General and administrative
2,084
1,690
6,137
5,291
Total amortization of intangible assets expense
$
8,039
$
7,653
$
23,365
$
22,611
Total non-cash interest expense related to the debt discount
$
4,936
$
4,800
$
14,693
$
14,284
Transaction costs related to business combinations
$
(52 )
$ --
$
1,310
$
1,789
Reconciliation of GAAP results to non-GAAP adjusted results:
GAAP net income
$
101,306
$
67,943
$ 271,355
$ 187,900
GAAP provision for income taxes
14,604
8,775
61,315
40,607
GAAP income before provision for income taxes
$
115,910
$
76,718
$ 332,670
$ 228,507
Add: Non-cash share-based compensation expense
52,318
54,741
142,983
141,373
Add: Amortization of intangible assets expense
8,039
7,653
23,365
22,611
Add: Non-cash interest expense related to the debt discount
4,936
4,800
14,693
14,284
Add: Transaction costs related to business combinations
(52 )
--
1,310
1,789
Non-GAAP adjusted income before provision for income taxes
$
181,151
$
143,912
$ 515,021
$ 408,564
Non-GAAP provision for income taxes (1)
48,075
33,160
141,980
104,405
Non-GAAP adjusted net income (basic and diluted)
$
133,076
$
110,752
$ 373,041
$ 304,159
Non-GAAP adjusted diluted weighted average shares outstanding:
GAAP diluted weighted average shares outstanding
186,160
182,682
183,397
183,453
Dilution offset from convertible note hedge transactions
(4,109 )
(514 )
(2,928 )
(228 )
Non-GAAP diluted weighted average shares outstanding
182,051
182,168
180,469
183,225
Non-GAAP adjusted net income per share:
Basic
$
0.75
$
0.62
$
2.11
$
1.69
Diluted
$
0.73
$
0.61
$
2.07
$
1.66
RED HAT, INC.
RECONCILIATION OF CERTAIN GAAP RESULTS TO NON-GAAP ADJUSTED
RESULTS
(Unaudited)
(In thousands - except per share amounts)
Three Months Ended
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2017
2016
2017
2016
(1) Non-GAAP provision for income taxes:
Non-GAAP adjusted income before provision for income taxes
$ 181,151
$ 143,912
$
515,021
$
408,564
GAAP estimated annual effective tax rate
26.0 %
27.0 %
27.0 %
27.0 %
Provision for income taxes on non-GAAP adjusted income before
$
46,908
$
38,856
$
139,056
$
110,312
discrete tax benefits
Discrete tax expense (benefit), excluding discrete benefits related
1,167
(5,696 )
2,924
(5,907 )
to share-based compensation
Provision for income taxes on non-GAAP adjusted income, excluding
$
48,075
$
33,160
$
141,980
$
104,405
discrete tax benefits related to share-based compensation
GAAP gross profit
$ 636,219
$ 524,807
$ 1,828,957
$ 1,520,792
Add: Non-cash share-based compensation expense
4,199
4,037
12,408
12,396
Add: Amortization of intangible assets expense
4,329
4,234
12,491
11,702
Non-GAAP gross profit
$ 644,747
$ 533,078
$ 1,853,856
$ 1,544,890
Non-GAAP gross margin
86.2 %
86.6 %
86.3 %
86.6 %
GAAP operating expenses
$ 517,806
$ 444,034
$ 1,488,377
$ 1,282,772
Deduct: Non-cash share-based compensation expense
(48,119 )
(50,704 )
(130,575 )
(128,977 )
Deduct: Amortization of intangible assets expense
(3,710 )
(3,419 )
(10,874 )
(10,909 )
Deduct: Transaction costs related to business combinations
52
--
(1,310 )
(1,789 )
Non-GAAP adjusted operating expenses
$ 466,029
$ 389,911
$ 1,345,618
$ 1,141,097
GAAP operating income
$ 118,413
$
80,773
$
340,580
$
238,020
Add: Non-cash share-based compensation expense
52,318
54,741
142,983
141,373
Add: Amortization of intangible assets expense
8,039
7,653
23,365
22,611
Add: Transaction costs related to business combinations
(52 )
--
1,310
1,789
Non-GAAP adjusted operating income
$ 178,718
$ 143,167
$
508,238
$
403,793
Non-GAAP adjusted operating margin
23.9 %
23.3 %
23.7 %
22.6 %
RED HAT, INC.
RECONCILIATION OF CERTAIN GAAP RESULTS TO NON-GAAP ADJUSTED
RESULTS
(Unaudited)
(In thousands - except per share amounts)
Three Months Ended
November 30,
November 30,
Year-Over-Year
2017
2016
Growth Rate
Subscription and services revenue:
GAAP subscription revenue by offering type:
Infrastructure-related offerings
$
494,974
$
431,142
14.8 %
Adjustment for currency impact
(5,477 )
--
Non-GAAP Infrastructure-related subscription revenue on a constant
$
489,497
$
431,142
13.5 %
currency basis
Application Development-related and other emerging technology
$
161,858
$
112,176
44.3 %
offerings
Adjustment for currency impact
(2,652 )
--
Non-GAAP Application Development-related and other emerging
$
159,206
$
112,176
41.9 %
technology subscription revenue on a constant currency basis
GAAP subscription revenue
$
656,832
$
543,318
20.9 %
Adjustment for currency impact
(8,129 )
--
Non-GAAP subscription revenue on a constant currency basis
$
648,703
$
543,318
19.4 %
GAAP training and services revenue
$
91,146
$
71,942
26.7 %
Adjustment for currency impact
(1,433 )
--
Non-GAAP training and services revenue on a constant currency basis
$
89,713
$
71,942
24.7 %
GAAP total subscription and training and services revenue
$
747,978
$
615,260
21.6 %
Adjustment for currency impact
(9,562 )
--
Non-GAAP total subscription and training and services revenue on a
$
738,416
$
615,260
20.0 %
constant currency basis
Nine Months Ended
November 30,
November 30,
Year-Over-Year
2017
2016
Growth Rate
GAAP subscription revenue by offering type:
Infrastructure-related offerings
$ 1,440,383
$
1,261,359
14.2 %
Adjustment for currency impact
(3,599 )
--
Non-GAAP Infrastructure-related subscription revenue on a constant
$ 1,436,784
$
1,261,359
13.9 %
currency basis
Application Development-related and other emerging technology
$
450,519
$
314,833
43.1 %
offerings
Adjustment for currency impact
(2,491 )
--
Non-GAAP Application Development-related and other emerging
$
448,028
$
314,833
42.3 %
technology subscription revenue on a constant currency basis
GAAP subscription revenue
$ 1,890,902
$
1,576,192
20.0 %
Adjustment for currency impact
(6,090 )
--
Non-GAAP subscription revenue on a constant currency basis
$ 1,884,812
$
1,576,192
19.6 %
GAAP training and services revenue
$
257,227
$
206,771
24.4 %
Adjustment for currency impact
(996 )
--
Non-GAAP training and services revenue on a constant currency basis
$
256,231
$
206,771
23.9 %
GAAP total subscription and training and services revenue
$ 2,148,129
$
1,782,963
20.5 %
Adjustment for currency impact
(7,086 )
--
Non-GAAP total subscription and training and services revenue on a
$ 2,141,043
$
1,782,963
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 November 30, 2016
$ 1,225,421
$ 482,557
$ 1,707,978
Constant currency change in deferred revenue
210,575
117,832
328,407
Impact from foreign currency translation
46,432
22,761
69,193
Balance at November 30, 2017
$ 1,482,428
$ 623,150
$ 2,105,578
Year-over-year growth rate
21.0 %
29.1
%
23.3
%
Year-over-year growth rate on a constant currency basis
17.2 %
24.4
%
19.2
%
RED HAT, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
(In thousands)
Revenue growth by geographical segment:
Americas
EMEA
APAC
Consolidated
Total revenue for the three months ended November 30, 2017
$
471,773
$ 173,718
$ 102,487
$
747,978
Adjustment for currency impact
(85 )
(11,478 )
2,001
(9,562 )
Total revenue on a constant currency basis for the three months
$
471,688
$ 162,240
$ 104,488
$
738,416
ended November 30, 2017
Total revenue for the three months ended November 30, 2016
$
393,589
$ 132,568
$
89,103
$
615,260
Year-over-year growth rate
19.9 %
31.0 %
15.0 %
21.6 %
Year-over-year growth rate on a constant currency basis
19.8 %
22.4 %
17.3 %
20.0 %
Total revenue for the nine months ended November 30, 2017
$ 1,373,512
$ 477,110
$ 297,507
$ 2,148,129
Adjustment for currency impact
(953 )
(10,758 )
4,625
(7,086 )
Total revenue on a constant currency basis for the nine months ended
$ 1,372,559
$ 466,352
$ 302,132
$ 2,141,043
November 30, 2017
Total revenue for the nine months ended November 30, 2016
$ 1,144,841
$ 384,334
$ 253,788
$ 1,782,963
Year-over-year growth rate
20.0 %
24.1 %
17.2 %
20.5 %
Year-over-year growth rate on a constant currency basis
19.9 %
21.3 %
19.0 %
20.1 %

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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