RHT
$175.47
Red Hat
($.04)
(.02%)
Earnings Details
3rd Quarter November 2018
Monday, December 17, 2018 4:20:00 PM
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Summary

Red Hat Beats

Red Hat (RHT) reported 3rd Quarter November 2018 earnings of $0.94 per share on revenue of $846.8 million. The consensus earnings estimate was $0.87 per share on revenue of $853.6 million. The Earnings Whisper number was $0.91 per share. Revenue grew 13.2% on a year-over-year basis.

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
$0.94
Earnings Whisper
$0.91
Consensus Estimate
$0.87
Reported Revenue
$846.8 Mil
Revenue Estimate
$853.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Red Hat Reports Third Quarter Results for Fiscal Year 2019

  • Third quarter total revenue of $847 million, up 13% year-over-year, or 15% in constant currency
  • Third quarter Infrastructure-related subscription revenue of $534 million, up 8% year-over-year, or 9% in constant currency
  • Third quarter Application Development-related and other emerging technology subscription revenue of $207 million, up 28% year-over-year, or 30% in constant currency
  • Quarter-end deferred revenue balance of $2.5 billion, up 20% year-over-year, or 23% in constant currency

RALEIGH, N.C.--(BUSINESS WIRE)-- Red Hat, Inc. (NYSE: RHT), the world's leading provider of open source solutions, today announced financial results for the third quarter of fiscal year 2019 ended November 30, 2018.

“Adoption of Red Hat’s technologies that enable customers to build and deploy applications more securely and consistently across hybrid and multi-cloud environments continued to drive our growth in Q3,” stated Jim Whitehurst, President and Chief Executive Officer of Red Hat. “For instance, our Certified Cloud and Service Providers (CCSP) program reached the $300 million annualized run-rate milestone in Q3 with 25% year-over-year growth of Red Hat Enterprise Linux on-demand in the public clouds. In addition, we continue to experience strong customer growth in Red Hat OpenShift, our enterprise Kubernetes platform, and Red Hat Ansible Automation, both of which added more than 100 customers in Q3.”

“In Q3, we closed 100 deals over $1 million and delivered double digit total revenue growth of 13% year-over-year, or 15% in constant currency and deferred revenue growth of 20% year-over-year, or 23% in constant currency despite continued foreign exchange volatility. Moreover, our total backlog grew 22% year-over-year to approximately $3.5 billion,” said Eric Shander, Executive Vice President and Chief Financial Officer for Red Hat. “Strong renewals of our largest deals also helped drive these results with all of our top 25 deals renewing at an upsell rate above 120%.”

Revenue: Total revenue for the quarter was $847 million, up 13% year-over-year, or 15% measured in constant currency. Constant currency references in this release are detailed in the tables below. Subscription revenue for the quarter was $741 million, up 13% year-over-year, or 15% measured in constant currency. Subscription revenue in the quarter was 87% of total revenue.

Subscription Revenue Breakout: Subscription revenue from Infrastructure-related offerings for the quarter was $534 million, an increase of 8% year-over-year, or 9% measured in constant currency. Subscription revenue from Application Development-related and other emerging technology offerings for the quarter was $207 million, an increase of 28% year-over-year, or 30% measured in constant currency.

Operating Income: GAAP operating income for the quarter was $109 million, down 8% 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 adjusted operating income for the third quarter was $203 million, up 13% year-over-year. For the third quarter, GAAP operating margin was 12.9% and non-GAAP adjusted operating margin was 24.0%. Non-GAAP references in this release are detailed in the tables below.

Net Income: GAAP net income for the quarter was $94 million, or $0.51 diluted earnings per share (“EPS”), compared with GAAP net income of $102 million, or $0.55 diluted EPS, 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 adjusted net income for the quarter was $175 million, or $0.96 diluted EPS, as compared to $133 million, or $0.73 diluted EPS, in the year-ago quarter. Non-GAAP adjusted diluted weighted average shares outstanding excludes dilution that is expected to be offset by our convertible note hedge transactions.

Cash: GAAP and non-GAAP operating cash flow was $137 million for the third quarter, down 15% on a year-over-year basis compared to GAAP operating cash flow. Non-GAAP operating cash flow adjusts for the impact of our recent adoption of ASU 2016-15: Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which requires the portion of repayments of convertible notes during the third quarter that is attributable to debt discount to be classified as operating cash flow. GAAP and non-GAAP operating cash flow include approximately $23 million of business combinations expenses paid in the quarter. Total cash, cash equivalents and investments as of November 30, 2018 was $2.2 billion after repurchasing approximately $13 million, or approximately 0.1 million shares, of common stock in the third quarter. The remaining balance in the current repurchase authorization as of November 30, 2018 was approximately $737 million.

Deferred revenue: At the end of the third quarter, the Company’s total deferred revenue balance was $2.5 billion, an increase of 20% year-over-year. The negative impact to total deferred revenue from changes in foreign exchange rates was $53 million year-over-year. On a constant currency basis, total deferred revenue would have increased 23% year-over-year.

Due to the pending transaction with International Business Machines Corporation, Red Hat will not be updating its outlook for fiscal 2019 and will not be hosting a conference call for its third quarter 2019 business results.

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 enterprise open source software solutions, using a community-powered approach to deliver reliable and high-performing Linux, hybrid cloud, container, and Kubernetes technologies. Red Hat helps customers integrate new and existing IT applications, develop cloud-native applications, standardize on our industry-leading operating system, and automate, secure, and manage complex environments. Award-winning support, training, and consulting services make Red Hat a trusted adviser to the Fortune 500. As a strategic partner to cloud providers, system integrators, application vendors, customers, and open source communities, Red Hat can help organizations prepare for the digital future. Learn more at 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; risks related to errors or defects in our offerings and third-party products upon which our offerings depend; risks related to the security of our offerings and other data security vulnerabilities; fluctuations in exchange rates; changes in and a dependence on key personnel; 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; 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® 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,
2018 2017 (1) 2018 2017 (1)
Revenue:
Subscriptions $ 740,661 $ 656,832 $ 2,174,881 $ 1,890,902
Training and services 106,134   91,146   308,191   257,227  
Total revenue 846,795   747,978   2,483,072   2,148,129  
 
Cost of revenue:
Subscriptions 53,441 47,277 157,545 137,234
Training and services 70,676   64,482   208,201   181,938  
Total cost of revenue 124,117   111,759   365,746   319,172  
 
Gross profit 722,678 636,219 2,117,326 1,828,957
 
Operating expense:
Sales and marketing 353,592 308,083 1,036,787 880,723
Research and development 164,267 145,580 497,081 424,552
General and administrative 95,861   63,838   227,788   180,430  
Total operating expense 613,720   517,501   1,761,656   1,485,705  
 
Income from operations 108,958 118,718 355,670 343,252
Interest income 7,334 4,864 23,023 13,469
Interest expense 4,299 6,180 15,426 18,346
Other expense, net (464 ) (1,187 ) (5,115 ) (3,033 )
 
Income before provision for income taxes 111,529 116,215 358,152 335,342
Provision for income taxes 17,079   14,606   63,658   61,331  
Net income $ 94,450   $ 101,609   $ 294,494   $ 274,011  
 
Net income per share:
Basic $ 0.54 $ 0.57 $ 1.67 $ 1.55
Diluted $ 0.51 $ 0.55 $ 1.57 $ 1.49
Weighted average shares outstanding:
Basic 176,231 177,063 176,762 177,188
Diluted 186,062 186,160 187,501 183,397
 
(1) As adjusted to reflect the impact of the retrospective application of ASC 606.
 

 

RED HAT, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

   

November 30,
2018

February 28,
2018 (1)

ASSETS
Current assets:
Cash, cash equivalents and restricted cash $ 1,539,272 $ 1,724,132
Investments in debt and equity securities, short-term 387,885 318,358
Accounts receivable, net 732,833 806,744
Prepaid expenses 241,145 267,197
Other current assets 69,356   25,666  
Total current assets 2,970,491 3,142,097
 
Property and equipment, net 195,249 206,105
Goodwill 1,285,503 1,288,830
Identifiable intangibles, net 203,613 224,953
Investments in debt securities, long-term 295,870 430,442
Deferred tax assets, net 80,958 92,606
Other assets, net 71,330   89,460  
Total assets $ 5,103,014   $ 5,474,493  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 432,662 $ 427,139
Deferred revenue, short-term 1,738,547 1,853,719
Other current obligations 404 843
Convertible notes 191,972   23,806  
Total current liabilities 2,363,585 2,305,507
 
Deferred revenue, long-term 790,577 741,453
Convertible notes 324,153 744,194
Other long-term obligations 201,068 205,215
Stockholders’ equity:
Common stock 24 24
Additional paid-in capital 2,614,768 2,416,080
Retained earnings 1,914,574 1,619,688
Treasury stock, at cost (3,058,598 ) (2,525,072 )
Accumulated other comprehensive loss (47,137 ) (32,596 )
Total stockholders’ equity 1,423,631   1,478,124  
Total liabilities and stockholders’ equity $ 5,103,014   $ 5,474,493  
 
(1) Derived from audited financial statements except for line items adjusted by the retrospective application of ASC 606.
 

 
RED HAT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

   
Three Months Ended Nine Months Ended

November 30,
2018

 

November 30,
2017 (1)

November 30,
2018

 

November 30,
2017 (1)

Cash flows from operating activities:
Net income $ 94,450 $ 101,609 $ 294,494 $ 274,011
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 26,775 25,588 80,495 71,541
Amortization of debt discount and transaction costs 4,062 5,630 14,470 16,740
Repayments of convertible notes attributable to debt discount (552 ) (33,115 )
Deferred income taxes 1,983 273 (1,705 ) 7,831
Share-based compensation expense 56,278 52,318 154,969 142,983
Net amortization of bond premium on debt securities available for sale 256 2,113 1,542 6,988
Other 274 (214 ) 3,924 1,318
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable (219,184 ) (113,898 ) 58,206 111,899
Other receivables (23,310 ) 135 (43,555 ) (20,211 )
Prepaid expenses 2,903 (7,062 ) 34,565 (6,831 )
Accounts payable and accrued expenses 40,325 35,562 38,620 (17,754 )
Deferred revenue 153,111 57,275 14,733 (29,017 )
Other (643 ) 978   (1,964 ) 1,577  
Net cash provided by operating activities 136,728   160,307   615,679   561,075  
 
Cash flows from investing activities:
Purchase of investment in debt securities available for sale (99,890 ) (26,580 ) (217,951 ) (285,773 )
Proceeds from maturities of investment in debt securities available for sale 66,406 130,941 259,460 348,285
Proceeds from sales of investment in debt securities available for sale 5,293 8,491 19,617
Proceeds from sales of strategic equity investments 1,300
Acquisition of businesses, net of cash acquired (11,550 ) (11,550 ) (83,965 )
Purchase of developed software and other intangible assets (1,003 ) (3,426 ) (7,127 ) (12,871 )
Purchase of property and equipment (18,229 ) (16,587 ) (44,845 ) (68,268 )
Other   84   (986 ) (105 )
Net cash (used in) provided by investing activities (64,266 ) 89,725   (13,208 ) (83,080 )
 
Cash flows from financing activities:
Proceeds from exercise of common stock options 767 711 1,831 4,541
Proceeds from employee stock purchase program 14,409 10,575 43,356 33,288
Payments related to net settlement of share-based compensation awards (32,873 ) (37,807 ) (127,605 ) (86,230 )
Purchase of treasury stock (12,791 ) (100,000 ) (412,845 ) (237,002 )
Payments on other borrowings (201 ) (346 ) (750 ) (1,207 )
Repayments of convertible notes attributable to principal (4,036 ) (6 ) (241,979 ) (6 )
Net cash used in financing activities (34,725 ) (126,873 ) (737,992 ) (286,616 )
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash (1,980 ) (2,295 ) (49,339 ) 48,985  
Net increase (decrease) in cash, cash equivalents and restricted cash 35,757 120,864 (184,860 ) 240,364
Cash, cash equivalents and restricted cash at beginning of the period 1,503,515   1,210,308   1,724,132   1,090,808  
Cash, cash equivalents and restricted cash at end of the period $ 1,539,272   $ 1,331,172   $ 1,539,272   $ 1,331,172  
 
(1) As adjusted to reflect the impact of the retrospective application of ASC 606.
 

 
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,
2018 2017 (1) 2018 2017 (1)
 
Reconciliation items included in Consolidated Statements of Operations:
 
Non-cash share-based compensation expense:
Cost of revenue $ 4,803 $ 4,199 $ 14,678 $ 12,408
Sales and marketing 25,218 23,278 67,562 64,708
Research and development 17,003 14,937 48,091 42,603
General and administrative 9,254   9,904   24,638   23,264  
Total share-based compensation expense $ 56,278   $ 52,318   $ 154,969   $ 142,983  
 
Amortization of intangible assets expense:
Cost of revenue $ 5,864 $ 4,329 $ 17,880 $ 12,491
Sales and marketing 1,396 1,592 4,158 4,634
Research and development 34 34 103 103
General and administrative 2,386   2,084   7,139   6,137  
Total amortization of intangible assets expense $ 9,680   $ 8,039   $ 29,280   $ 23,365  
 
Total non-cash interest expense related to the debt discount $ 3,347   $ 4,936   $ 12,223   $ 14,693  
 
Transaction costs related to business combinations $ 27,968   $ (52 ) $ 28,086   $ 1,310  
 
Reconciliation of GAAP results to non-GAAP adjusted results:
 
GAAP net income $ 94,450 $ 101,609 $ 294,494 $ 274,011
GAAP provision for income taxes 17,079   14,606   63,658   61,331  
GAAP income before provision for income taxes $ 111,529 $ 116,215 $ 358,152 $ 335,342
 
Add: Non-cash share-based compensation expense 56,278 52,318 154,969 142,983
Add: Amortization of intangible assets expense 9,680 8,039 29,280 23,365
Add: Non-cash interest expense related to the debt discount 3,347 4,936 12,223 14,693
Add: Transaction costs related to business combinations 27,968   (52 ) 28,086   1,310  
Non-GAAP adjusted income before provision for income taxes $ 208,802 $ 181,456 $ 582,710 $ 517,693
Non-GAAP provision for income taxes (2) 33,487   48,116   117,704   141,666  
Non-GAAP adjusted net income (basic and diluted) $ 175,315   $ 133,340   $ 465,006   $ 376,027  
 
Non-GAAP adjusted diluted weighted average shares outstanding:
GAAP diluted weighted average shares outstanding 186,062 186,160 187,501 183,397
Dilution offset from convertible note hedge transactions (3,648 ) (4,109 ) (3,730 ) (2,928 )
Non-GAAP diluted weighted average shares outstanding 182,414   182,051   183,771   180,469  
 
Non-GAAP adjusted net income per share:
Basic $ 0.99 $ 0.75 $ 2.63 $ 2.12
Diluted $ 0.96 $ 0.73 $ 2.53 $ 2.08
 
(1) As adjusted to reflect the impact of the retrospective application of ASC 606.
 

 
RED HAT, INC.
RECONCILIATION OF CERTAIN GAAP RESULTS TO NON-GAAP ADJUSTED RESULTS

(Unaudited)

(In thousands)

       
Three Months Ended Nine Months Ended
November 30, November 30, November 30, November 30,
2018 2017 (1) 2018 2017 (1)
(2) Non-GAAP provision for income taxes:
Non-GAAP adjusted income before provision for income taxes $ 208,802 $ 181,456 $ 582,710 $ 517,693
GAAP estimated annual effective tax rate 21.1 % 25.9 % 22.7 % 26.8 %
Provision for income taxes on non-GAAP adjusted income before adjustments $ 44,781 $ 46,949 $ 132,275 $ 138,742
Certain non-deductible share-based compensation (3,535 ) (8,508 )
Non-deductible merger related costs (8,566 ) (8,566 )
Discrete tax expense, excluding discrete benefits related to share-based compensation 807   1,167   2,503   2,924  
Provision for income taxes on non-GAAP adjusted income, excluding impact from certain non-deductible share-based compensation, non-deductible merger related costs and discrete tax benefits related to share-based compensation $ 33,487   $ 48,116   $ 117,704   $ 141,666  
 
GAAP gross profit $ 722,678 $ 636,219 $ 2,117,326 $ 1,828,957
Add: Non-cash share-based compensation expense 4,803 4,199 14,678 12,408
Add: Amortization of intangible assets expense 5,864   4,329   17,880   12,491  
Non-GAAP gross profit $ 733,345   $ 644,747   $ 2,149,884   $ 1,853,856  
 
Non-GAAP gross margin 86.6 % 86.2 % 86.6 % 86.3 %
 
GAAP operating expenses $ 613,720 $ 517,501 $ 1,761,656 $ 1,485,705
Deduct: Non-cash share-based compensation expense (51,475 ) (48,119 ) (140,291 ) (130,575 )
Deduct: Amortization of intangible assets expense (3,816 ) (3,710 ) (11,400 ) (10,874 )
Deduct: Transaction costs related to business combinations (27,968 ) 52   (28,086 ) (1,310 )
Non-GAAP adjusted operating expenses $ 530,461   $ 465,724   $ 1,581,879   $ 1,342,946  
 
GAAP operating income $ 108,958 $ 118,718 $ 355,670 $ 343,252
Add: Non-cash share-based compensation expense 56,278 52,318 154,969 142,983
Add: Amortization of intangible assets expense 9,680 8,039 29,280 23,365
Add: Transaction costs related to business combinations 27,968   (52 ) 28,086   1,310  
Non-GAAP adjusted operating income $ 202,884   $ 179,023   $ 568,005   $ 510,910  
 
Non-GAAP adjusted operating margin 24.0 % 23.9 % 22.9 % 23.8 %
 
GAAP net cash provided by operating activities $ 136,728 $ 160,307 $ 615,679 $ 561,075
Repayments of convertible notes attributable to debt discount 552         33,115      
Non-GAAP net cash provided by operating activities $ 137,280   $ 160,307   $ 648,794   $ 561,075  
 
(1) As adjusted to reflect the impact of the retrospective application of ASC 606.
 

 
RED HAT, INC.
RECONCILIATION OF CERTAIN GAAP RESULTS TO NON-GAAP ADJUSTED RESULTS

(Unaudited)

(In thousands)

 
Three Months Ended
November 30,   November 30,   Year-Over-Year
2018 2017 Growth Rate
Subscription and services revenue:
GAAP subscription revenue by offering type:
Infrastructure-related offerings $ 534,051 $ 494,974 7.9%
Adjustment for currency impact 7,479    
Non-GAAP Infrastructure-related subscription revenue on a constant currency basis $ 541,530 $ 494,974 9.4%
 
Application Development-related and other emerging technology offerings $ 206,610 $ 161,858 27.6%
Adjustment for currency impact 4,340    
Non-GAAP Application Development-related and other emerging technology subscription revenue on a constant currency basis $ 210,950 $ 161,858 30.3%
 
GAAP subscription revenue $ 740,661 $ 656,832 12.8%
Adjustment for currency impact 11,819    
Non-GAAP subscription revenue on a constant currency basis $ 752,480 $ 656,832 14.6%
 
GAAP training and services revenue $ 106,134 $ 91,146 16.4%
Adjustment for currency impact 3,668    
Non-GAAP training and services revenue on a constant currency basis $ 109,802 $ 91,146 20.5%
 
GAAP total revenue $ 846,795 $ 747,978 13.2%
Adjustment for currency impact 15,487    
Non-GAAP total revenue on a constant currency basis $ 862,282   $ 747,978   15.3%
 
Nine Months Ended
November 30, November 30, Year-Over-Year
2018 2017 Growth Rate
GAAP subscription revenue by offering type:
Infrastructure-related offerings $ 1,583,154 $ 1,440,383 9.9%
Adjustment for currency impact (5,212 )  
Non-GAAP Infrastructure-related subscription revenue on a constant currency basis $ 1,577,942 $ 1,440,383 9.6%
 
Application Development-related and other emerging technology offerings $ 591,727 $ 450,519 31.3%
Adjustment for currency impact (890 )  
Non-GAAP Application Development-related and other emerging technology subscription revenue on a constant currency basis $ 590,837 $ 450,519 31.1%
 
GAAP subscription revenue $ 2,174,881 $ 1,890,902 15.0%

 

 

RED HAT, INC.

RECONCILIATION OF CERTAIN GAAP RESULTS TO NON-GAAP ADJUSTED RESULTS

(Unaudited)
(In thousands)
     
Adjustment for currency impact (6,102 )  
Non-GAAP subscription revenue on a constant currency basis $ 2,168,779 $ 1,890,902 14.7%
 
GAAP training and services revenue $ 308,191 $ 257,227 19.8%
Adjustment for currency impact 2,696    
Non-GAAP training and services revenue on a constant currency basis $ 310,887 $ 257,227 20.9%
 
GAAP total revenue $ 2,483,072 $ 2,148,129 15.6%
Adjustment for currency impact (3,406 )  
Non-GAAP total revenue on a constant currency basis $ 2,479,666   $ 2,148,129   15.4%
 

 
RED HAT, INC.
SUPPLEMENTAL INFORMATION

(Unaudited)

(In thousands)

   
Change in deferred revenue balances:
  Deferred Revenue
Current Long-Term Total
Balance at November 30, 2017 $ 1,482,428 $ 623,150 $ 2,105,578
Constant currency change in deferred revenue 288,895 187,871 476,766
Impact from foreign currency translation (32,776 ) (20,444 ) (53,220 )
Balance at November 30, 2018 $ 1,738,547   $ 790,577   $ 2,529,124  
 
Year-over-year growth rate 17.3 % 26.9 % 20.1 %
Year-over-year growth rate on a constant currency basis 19.5 % 30.1 % 22.6 %
 
   
Revenue growth by geographical segment:
Americas   EMEA APAC Consolidated
Total revenue for the three months ended November 30, 2018 $ 527,367 $ 198,730 $ 120,698 $ 846,795
Adjustment for currency impact 6,194   5,354   3,939   15,487  
Total revenue on a constant currency basis for the three months ended November 30, 2018 $ 533,561   $ 204,084   $ 124,637   $ 862,282  
 
Total revenue for the three months ended November 30, 2017 $ 471,773   $ 173,718   $ 102,487   $ 747,978  
 
Year-over-year growth rate 11.8 % 14.4 % 17.8 % 13.2 %
Year-over-year growth rate on a constant currency basis 13.1 % 17.5 % 21.6 % 15.3 %
 
Total revenue for the nine months ended November 30, 2018 $ 1,541,996 $ 583,181 $ 357,895 $ 2,483,072
Adjustment for currency impact 12,733   (17,992 ) 1,853   (3,406 )
Total revenue on a constant currency basis for the nine months ended November 30, 2018 $ 1,554,729   $ 565,189   $ 359,748   $ 2,479,666  
 
Total revenue for the nine months ended November 30, 2017 $ 1,373,512   $ 477,110   $ 297,507   $ 2,148,129  
 
Year-over-year growth rate 12.3 % 22.2 % 20.3 % 15.6 %
Year-over-year growth rate on a constant currency basis 13.2 % 18.5 % 20.9 % 15.4 %
 

 

RED HAT, INC.

SUPPLEMENTAL INFORMATION

(Unaudited)
(In thousands - except per share amounts)
 
The primary impact of adopting ASC 606 related to the deferral of incremental commission and other costs of obtaining contracts with customers. Certain unaudited financial statement information as adjusted to reflect the Company’s adoption of ASC 606 is set forth below. The adjustments resulting from ASC 606 are reflected in presentations of both GAAP and non-GAAP financial information.
 

Consolidated balance sheets:

February 28, 2018
As Reported (1)   Adjustments   As Adjusted
Prepaid expenses $ 260,092 $ 7,105 $ 267,197
Deferred tax assets, net $ 93,300 $ (694 ) $ 92,606
Other assets, net $ 87,924 $ 1,536 $ 89,460
Accounts payable and accrued expenses $ 427,086 $ 53 $ 427,139
Retained earnings $ 1,611,794 $ 7,894 $ 1,619,688
 
(1) Derived from audited financial statements.
 
Consolidated statements of operations:
Three Months Ended May 31, 2017
As Reported Adjustments As Adjusted
Operating expense:
Sales and marketing $ 296,459 $ (2,136 ) $ 294,323
Net income $ 73,190 $ 2,124 $ 75,314
Net income per share:
Basic $ 0.41 $ 0.01 $ 0.42
Diluted $ 0.40 $ 0.01 $ 0.41
 
Three Months Ended August 31, 2017
As Reported Adjustments As Adjusted
Operating expense:
Sales and marketing $ 278,548 $ (231 ) $ 278,317
Net income $ 96,859 $ 229 $ 97,088
Net income per share:
Basic $ 0.55 $ $ 0.55
Diluted $ 0.53 $ $ 0.53
 
Three Months Ended November 30, 2017
As Reported Adjustments As Adjusted
Operating expense:
Sales and marketing $ 308,388 $ (305 ) $ 308,083
Net income $ 101,306 $ 303 $ 101,609
Net income per share:
Basic $ 0.57 $ $ 0.57
Diluted $ 0.54 $ 0.01 $ 0.55
 

 

RED HAT, INC.

SUPPLEMENTAL INFORMATION

(Unaudited)

(In thousands - except per share amounts)
     
Three Months Ended February 28, 2018
As Reported Adjustments As Adjusted
Operating expense:
Sales and marketing $ 315,181 $ (618 ) $ 314,563
Net loss $ (12,552 ) $ 392 $ (12,160 )
Net loss per share:
Basic $ (0.07 ) $ $ (0.07 )
Diluted $ (0.07 ) $ $ (0.07 )
 
Twelve Months Ended February 28, 2018
As Reported (1) Adjustments As Adjusted
Operating expense:
Sales and marketing $ 1,198,576 $ (3,290 ) $ 1,195,286
Net income $ 258,803 $ 3,048 $ 261,851
Net income per share:
Basic $ 1.46 $ 0.02 $ 1.48
Diluted $ 1.40 $ 0.02 $ 1.42
 
(1) Derived from audited financial statements.
 

Media Contact:
Stephanie Wonderlick
Red Hat, Inc.
(571) 421-8169
swonderl@redhat.com

Investor Relations:
Tom McCallum
Red Hat, Inc.
(919) 754-4630
tmccallum@redhat.com

Source: Red Hat, Inc.