RHT
$83.17
Red Hat
$.36
.43%
Earnings Details
3rd Quarter November 2016
Wednesday, December 21, 2016 4:20:01 PM
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Summary

Red Hat Beats

Red Hat (RHT) reported 3rd Quarter November 2016 earnings of $0.63 per share on revenue of $615.3 million. The consensus earnings estimate was $0.58 per share on revenue of $618.4 million. The Earnings Whisper number was $0.59 per share. Revenue grew 17.5% on a year-over-year basis.

The company said it expects fourth quarter no-GAAP earnings of approximately $0.61 per share on revenue of $614.0 million to $622.0 million. The current consensus earnings estimate is $0.61 per share on revenue of $638.2 million for the quarter ending February 28, 2017.

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
$0.63
Earnings Whisper
$0.59
Consensus Estimate
$0.58
Reported Revenue
$615.3 Mil
Revenue Estimate
$618.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Red Hat Reports Third Quarter Results for Fiscal Year 2017

Third quarter total subscription revenue of $543 million, up 19% year-over-year or 18% in constant currency

Third quarter Application development-related and other emerging technology revenue of $112 million, up 33% year-over-year or 32% in constant currency

Red Hat, Inc. (RHT), the world’s leading provider of open source solutions, today announced financial results for the third quarter of fiscal year 2017 ended November 30, 2016.

"Enterprise and service provider customers continue to adopt a hybrid cloud strategy for developing, deploying and managing the life-cycle of their critical applications. Red Hat is uniquely positioned to address this need. In aggregate, customers utilizing our cloud-enabling technologies either on-premise or in the public cloud are spending more with Red Hat than customers that have not yet embraced our cloud-enabling technologies," said Jim Whitehurst, President and Chief Executive Officer of Red Hat.

CFO Transition: Frank Calderoni notified Red Hat of his decision to step down as Executive Vice President, Operations and Chief Financial Officer of Red Hat, effective in late January 2017, to enable him to accept a chief executive officer position at another company. Mr. Calderoni has indicated that he would make himself available to Red Hat after the effective date of the resignation for transitional support, as needed. Jim Whitehurst, President and CEO, after consulting with the Board of Directors of Red Hat, announced that upon Mr. Calderoni’s resignation in January, Red Hat intends to appoint Eric Shander, Vice President, Finance and Accounting and our principal accounting officer, to act as the CFO of Red Hat, pending a decision on a permanent replacement.

Jim Whitehurst said, "Our warm thanks to Frank for his contributions to Red Hat and for helping prepare Red Hat for the rich business opportunity we have before us."

Frank Calderoni said, "I want to thank the associates around the globe for the opportunity to be part of the Red Hat team. I am most proud of the leadership team we were able to build. We also enhanced the strong operational and financial foundation that has enabled the company’s continued growth. Red Hat is an exceptional company and well positioned to continue to leverage the broad transformation that is occurring in the IT industry."

Revenue: Total revenue for the quarter was $615 million, up 18% in U.S. dollars year-over-year, or 17% measured in constant currency. Constant currency references in this release are detailed in the tables below. Subscription revenue for the quarter was $543 million, up 19% in U.S. dollars year-over-year, or 18% 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 $431 million, an increase of 16% in U.S. dollars year-over-year and 14% measured in constant currency. Subscription revenue from Application development-related and other emerging technologies offerings for the quarter was $112 million, an increase of 33% in U.S. dollars year-over-year and 32% measured in constant currency.

Operating Income: GAAP operating income for the quarter was $81 million, up 17% 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 $143 million, up 16% year-over-year. Non-GAAP references in this release are detailed in the tables below. For the third quarter, GAAP operating margin was 13.1% and non-GAAP operating margin was 23.3%.

Net Income: GAAP net income for the quarter was $68 million, or $0.37 per diluted share, compared with $47 million, or $0.25 per diluted share, in the year-ago quarter. During the third quarter of fiscal year 2017, GAAP net income and earnings per diluted share benefited by $6 million and approximately $0.03, respectively, from the adoption of Accounting Standards Update 2016-09 ("ASU 2016-09") in the first quarter of fiscal year 2017.

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 $111 million, or $0.61 per diluted share, as compared to $89 million, or $0.48 per diluted share, in the year-ago quarter. Non-GAAP diluted weighted average shares outstanding excludes any dilution resulting from the convertible notes because any potential dilution is expected to be offset by our convertible note hedge transactions.

Cash: Operating cash flow was $136 million for the third quarter, a decrease of 8% on a year-over-year basis. Total cash, cash equivalents and investments as of November 30, 2016 was $2.0 billion after repurchasing approximately $125 million, or approximately 1.6 million shares, of common stock in the third quarter. The remaining balance in the current repurchase authorization as of November 30, 2016 was approximately $775 million.

Deferred revenue: At the end of the third quarter, the company’s total deferred revenue balance was $1.7 billion, an increase of 15% year-over-year. The full year positive impact to total deferred revenue from changes in foreign exchange rates was $9 million year-over-year. On a constant currency basis, total deferred revenue would have been up 14% year-over-year.

Outlook: Red Hat’s outlook assumes current foreign currency exchange rates, which have weakened since the outlook provided on September 21, 2016, and current business conditions.

For the full year:

Revenue guidance is expected to be $2.397 billion to $2.405 billion in U.S. dollars.

GAAP operating margin is expected to be approximately 13.5% and non-GAAP operating margin is expected to be approximately 23.0%.

Fully diluted GAAP earnings per share (EPS) is expected to be approximately $1.33 per share. Fully diluted non-GAAP EPS is expected to be approximately $2.27 per share. Both GAAP and non-GAAP EPS assume a $1 million to $2 million per quarter forecast for other income. Both GAAP and non-GAAP EPS also assume an estimated annual effective tax rate of 27% before discrete tax items and 183 million fully diluted shares outstanding.

Operating cash flow guidance range is expected to be approximately $770 million to $785 million.

For the fourth quarter:

-- Revenue guidance is $614 million to $622 million.

GAAP operating margin is expected to be approximately 14.0% and non-GAAP operating margin is expected to be approximately 24.0%.

Fully diluted GAAP EPS is expected to be approximately $0.33 per share. Fully diluted non-GAAP EPS is expected to be approximately $0.61. Both GAAP and non-GAAP EPS assume a $1 million to $2 million forecast for other income. Both GAAP and non-GAAP EPS also assume an estimated annual effective tax rate of 27% before discrete tax items and 181 million fully diluted shares outstanding.

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 $32 million, and transaction costs related to business combinations of $2 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 $19 million and an estimated annual effective tax rate of 27% before discrete tax items. Additionally, full year fully diluted non-GAAP EPS excludes approximately $16 million of discrete tax benefits related to share-based compensation that are included in full year fully diluted GAAP EPS.

Fourth 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. 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.

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 data and information security vulnerabilities; the ability to meet financial and operational challenges encountered in our international operations; ineffective management of, and control over, the Company’s growth and international operations; and changes in and a dependence on key personnel, 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,
2016
2015
2016
2015
Revenue:
Subscriptions
$ 543,318
$ 457,488
$ 1,576,192
$ 1,323,807
Training and services
71,942
66,092
206,771
184,921
Total subscription, training and services revenue
615,260
523,580
1,782,963
1,508,728
Cost of revenue:
Subscriptions
40,660
32,246
116,882
93,088
Training and services
49,793
48,802
145,289
135,321
Total cost of subscription, training and services revenue
90,453
81,048
262,171
228,409
Total gross profit
524,807
442,532
1,520,792
1,280,319
Operating expense:
Sales and marketing
267,080
215,784
763,583
619,757
Research and development
122,469
104,906
358,750
304,824
General and administrative
54,485
52,965
160,439
139,462
Total operating expense
444,034
373,655
1,282,772
1,064,043
Income from operations
80,773
68,877
238,020
216,276
Interest income
3,346
2,874
10,167
8,484
Interest expense
6,009
5,817
17,820
17,265
Other income (expense), net
(1,392 )
49
(1,860 )
(1,398 )
Income before provision for income taxes
76,718
65,983
228,507
206,097
Provision for income taxes (1)
8,775
19,135
40,607
59,768
Net income
$
67,943
$
46,848
$
187,900
$
146,329
Net income per share:
Basic
$
0.38
$
0.26
$
1.04
$
0.80
Diluted
$
0.37
$
0.25
$
1.02
$
0.78
Weighted average shares outstanding:
Basic
179,233
182,850
180,245
183,054
Diluted
182,682
186,094
183,453
186,414

(1) Provision for income taxes for the three and nine months ended November 30, 2016 includes the impact of early adoption of ASU 2016-09. ASU 2016-09 requires that the amendment related to accounting for income taxes be adopted on a prospective basis. Accordingly, the provision for income taxes for the three and nine months ended November 30, 2015 has not been adjusted. The provision for income taxes for the three and nine months ended November 30, 2016 includes the effect of discrete tax benefits of $6.2 million and $15.2 million, respectively, related to excess tax benefits from share-based compensation.

RED HAT, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS
November 30,
February 29,
2016
2016 (1)
Current assets:
Cash and cash equivalents
$
916,678
$
927,778
Investments in debt and equity securities
378,189
281,142
Accounts receivable, net
427,436
509,715
Prepaid expenses
156,603
150,877
Other current assets
1,666
2,921
Total current assets
1,880,572
1,872,433
Property and equipment, net
174,450
166,886
Goodwill
1,042,396
1,027,277
Identifiable intangibles, net
142,425
146,071
Investments in debt securities
676,503
786,470
Deferred tax assets, net
108,955
111,456
Other assets, net
59,792
44,506
Total assets
$
4,085,093
$
4,155,099
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
270,763
$
284,802
Deferred revenue
1,225,421
1,272,908
Other current obligations
1,754
1,467
Total current liabilities
1,497,938
1,559,177
Convertible notes
740,153
723,942
Long term deferred revenue
482,557
449,636
Other long term obligations
92,643
87,912
Stockholders’ equity:
Common stock
24
23
Additional paid-in capital
2,246,034
2,162,264
Retained earnings
1,287,188
1,099,738
Treasury stock, at cost
(2,172,326 )
(1,853,144 )
Accumulated other comprehensive loss
(89,118 )
(74,449 )
Total stockholders’ equity
1,271,802
1,334,432
Total liabilities and stockholders’ equity
$
4,085,093
$
4,155,099
(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,
2016
2015
2016
2015
Cash flows from operating activities:
Net income
$
67,943
$
46,848
$
187,900
$
146,329
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
21,870
19,858
63,732
56,944
Share-based compensation expense
54,741
43,407
141,373
120,466
Deferred income taxes
13,818
5,841
6,199
3,912
Excess tax benefits from share-based payment arrangements
6,362
8,756
15,497
17,987
Net amortization of bond premium on available-for-sale debt
3,120
3,055
9,954
8,791
securities
Accretion of debt discount and amortization of debt issuance costs
5,453
5,279
16,211
15,697
Other
986
853
549
2,761
Changes in operating assets and liabilities net of effects of
acquisitions:
Accounts receivable
(73,149 )
(96,964 )
86,496
64,515
Prepaid expenses
(18,897 )
(9,032 )
(19,387 )
3,618
Accounts payable and accrued expenses
(10,775 )
21,886
(30,333 )
3,954
Deferred revenue
64,181
96,664
(8,865 )
40,085
Other
706
1,908
(3,868 )
1,567
Net cash provided by operating activities
136,359
148,359
465,458
486,626
Cash flows from investing activities:
Purchase of available-for-sale debt securities
(118,152 )
(180,744 )
(415,796 )
(783,568 )
Proceeds from sales and maturities of available-for-sale debt
113,759
235,931
408,469
589,131
securities
Acquisition of businesses, net of cash acquired
-
(125,011 )
(28,667 )
(126,711 )
Purchase of other intangible assets
(2,323 )
(2,097 )
(8,712 )
(8,094 )
Purchase of property and equipment
(17,244 )
(8,486 )
(50,436 )
(29,458 )
Other
(92 )
(90 )
(203 )
(3,249 )
Net cash used in investing activities
(24,052 )
(80,497 )
(95,345 )
(361,949 )
Cash flows from financing activities:
Proceeds from exercise of common stock options
1,205
723
3,273
3,312
Proceeds from employee stock purchase program
7,155
-
7,155
-
Purchase of treasury stock
(125,318 )
(78,172 )
(319,182 )
(148,251 )
Payments related to net settlement of employee share-based
(25,769 )
(27,879 )
(63,245 )
(60,816 )
compensation awards
Payments on other borrowings
(462 )
(395 )
(1,368 )
(1,132 )
Other
(84 )
(220 )
829
(220 )
Net cash used in financing activities
(143,273 )
(105,943 )
(372,538 )
(207,107 )
Effect of foreign currency exchange rates on cash and cash
(22,925 )
(11,489 )
(8,675 )
(23,006 )
equivalents
Net decrease in cash and cash equivalents
(53,891 )
(49,570 )
(11,100 )
(105,436 )
Cash and cash equivalents at beginning of the period
970,569
991,607
927,778
1,047,473
Cash and cash equivalents at end of period
$
916,678
$
942,037
$
916,678
$
942,037
RED HAT, INC.
RECONCILIATION OF CERTAIN GAAP RESULTS TO NON-GAAP ADJUSTED
RESULTS
(Unaudited)
(In thousands - except per share amounts)
Non cash share-based compensation expense included in Consolidated
Statements of Operations:
Three Months Ended
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2016
2015
2016
2015
Cost of revenue
$
4,037
$
4,074
$
12,396
$
11,952
Sales and marketing
26,624
17,192
65,426
49,386
Research and development
13,814
13,059
38,785
35,955
General and administration
10,266
9,082
24,766
23,173
Total share-based compensation expense
$
54,741
$
43,407
$ 141,373
$ 120,466
Amortization of intangible assets expense included in Consolidated
Statements of Operations:
Three Months Ended
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2016
2015
2016
2015
Cost of revenue
$
4,233
$
3,100
$
11,701
$
8,291
Sales and marketing
1,695
2,330
5,516
6,345
Research and development
34
312
103
854
General and administration
1,690
1,238
5,291
3,450
Total amortization of intangible assets expense
$
7,652
$
6,980
$
22,611
$
18,940
Non-cash interest expense related to the debt discount included in
Consolidated Statements of Operations:
Three Months Ended
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2016
2015
2016
2015
Total non-cash interest expense related to the debt discount
$
4,800
$
4,664
$
14,284
$
13,883
Transaction costs related to business combinations included in
Consolidated Statements of Operations:
Three Months Ended
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2016
2015
2016
2015
Transaction costs related to business combinations
-
$
3,792
$
1,789
$
3,844
Three Months Ended
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2016
2015
2016
2015
GAAP net income
$
67,943
$
46,848
$ 187,900
$ 146,329
GAAP provision for income taxes
8,775
19,135
40,607
59,768
GAAP income before provision for income taxes
$
76,718
$
65,983
$ 228,507
$ 206,097
Add: Non-cash share-based compensation expense
54,741
43,407
141,373
120,466
Add: Amortization of intangible assets
7,652
6,980
22,611
18,940
Add: Non-cash interest expense related to the debt discount
4,800
4,664
14,284
13,883
Add: Transaction costs related to business combinations
-
3,792
1,789
3,844
Non-GAAP adjusted income before provision for income taxes
$ 143,911
$ 124,826
$ 408,564
$ 363,230
Non-GAAP provision for income taxes (1)
33,160
36,200
104,405
105,337
Non-GAAP adjusted net income (basic and diluted)
$ 110,751
$
88,626
$ 304,159
$ 257,893
Non-GAAP adjusted diluted weighted average shares outstanding:
GAAP diluted weighted average shares outstanding
182,682
186,094
183,453
186,414
Dilution offset from convertible note hedge transactions
(514 )
(390 )
(228 )
(349 )
Non-GAAP diluted weighted average shares outstanding
182,168
185,704
183,225
186,065
Non-GAAP adjusted net income per share:
Basic
$
0.62
$
0.48
$
1.69
$
1.41
Diluted
$
0.61
$
0.48
$
1.66
$
1.39
(1) Non-GAAP provision for income taxes:
Non-GAAP adjusted income before provision for income taxes
$ 143,911
$ 124,826
$ 408,564
$ 363,230
GAAP estimated annual effective tax rate
27.0 %
29.0 %
27.0 %
29.0 %
Provision for income taxes on Non-GAAP adjusted net income before
$
38,856
$
36,200
$ 110,312
$ 105,337
discrete tax benefits
Discrete tax expense (benefit), excluding discrete benefits related
(5,696 )
-
(5,907 )
-
to share-based compensation
Provision for income taxes on Non-GAAP adjusted net income excluding
$
33,160
$
36,200
$ 104,405
$ 105,337
discrete benefits related to share-based compensation
RED HAT, INC.
RECONCILIATION OF CERTAIN GAAP RESULTS TO NON-GAAP ADJUSTED
RESULTS
(Unaudited)
(In thousands)
Reconciliation of GAAP results to non-GAAP adjusted results
Three Months Ended
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2016
2015
2016
2015
GAAP gross profit
$
524,807
$
442,532
$ 1,520,792
$ 1,280,319
Add: Non-cash share-based compensation expense
4,037
4,074
12,396
11,952
Add: Amortization of intangible assets
4,233
3,100
11,701
8,291
Non-GAAP gross profit
$
533,077
$
449,706
$ 1,544,889
$ 1,300,562
Non-GAAP gross margin
86.6 %
85.9 %
86.6 %
86.2 %
Three Months Ended
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2016
2015
2016
2015
GAAP operating expenses
$
444,034
$
373,655
$ 1,282,772
$ 1,064,043
Deduct: Non-cash share-based compensation expense
(50,704 )
(39,333 )
(128,977 )
(108,514 )
Deduct: Amortization of intangible assets
(3,419 )
(3,880 )
(10,910 )
(10,649 )
Deduct: Transaction costs related to business combinations
-
(3,792 )
(1,789 )
(3,844 )
Non-GAAP adjusted operating expenses
$
389,911
$
326,650
$ 1,141,096
$
941,036
Three Months Ended
Nine Months Ended
November 30,
November 30,
November 30,
November 30,
2016
2015
2016
2015
GAAP operating income
$
80,773
$
68,877
$
238,020
$
216,276
Add: Non-cash share-based compensation expense
54,741
43,407
141,373
120,466
Add: Amortization of intangible assets
7,652
6,980
22,611
18,940
Add: Transaction costs related to business combinations
-
3,792
1,789
3,844
Non-GAAP adjusted operating income
$
143,166
$
123,056
$
403,793
$
359,526
Non-GAAP adjusted operating margin
23.3 %
23.5 %
22.6 %
23.8 %
Three Months Ended
November 30,
November 30,
Year-Over-Year
2016
2015
Growth Rate
GAAP subscription revenue by offering type
Infrastructure-related offerings
$
431,142
$
373,091
15.6 %
Adjustment for currency impact
(4,491 )
-
Non-GAAP Infrastructure-related subscription revenue on a constant
$
426,651
$
373,091
14.4 %
currency basis
Application development-related and other emerging technology
$
112,176
$
84,397
32.9 %
offerings
Adjustment for currency impact
(969 )
-
Non-GAAP Application development-related and other emerging
$
111,207
$
84,397
31.8 %
technology subscription revenue on a constant currency basis
GAAP subscription revenue
$
543,318
$
457,488
18.8 %
Adjustment for currency impact
(5,460 )
-
Non-GAAP subscription revenue on a constant currency basis
$
537,858
$
457,488
17.6 %
GAAP training and services revenue
$
71,942
$
66,092
8.9 %
Adjustment for currency impact
479
-
Non-GAAP training and services revenue on a constant currency basis
$
72,421
$
66,092
9.6 %
GAAP total subscription, training and services revenue
$
615,260
$
523,580
17.5 %
Adjustment for currency impact
(4,981 )
-
Non-GAAP total subscription, training and services revenue on a
$
610,279
$
523,580
16.6 %
constant currency basis
Nine Months Ended
November 30,
November 30,
Year-Over-Year
2016
2015
Growth Rate
GAAP subscription revenue by offering type
Infrastructure-related offerings
$ 1,261,359
$ 1,089,758
15.7 %
Adjustment for currency impact
(10,066 )
-
$ 1,251,293
$ 1,089,758
14.8 %
Non-GAAP Infrastructure-related subscription revenue on a constant
currency basis
Application development-related and other emerging technology
$
314,833
$
234,049
34.5 %
offerings
Adjustment for currency impact
(1,814 )
-
Non-GAAP Application development-related and other emerging
$
313,019
$
234,049
33.7 %
technology subscription revenue on a constant currency basis
GAAP subscription revenue
$ 1,576,192
$ 1,323,807
19.1 %
Adjustment for currency impact
(11,880 )
-
Non-GAAP subscription revenue on a constant currency basis
$ 1,564,312
$ 1,323,807
18.2 %
GAAP training and services revenue
$
206,771
$
184,921
11.8 %
Adjustment for currency impact
2,088
-
Non-GAAP training and services revenue on a constant currency basis
$
208,859
$
184,921
12.9 %
GAAP total subscription, training and services revenue
$ 1,782,963
$ 1,508,728
18.2 %
Adjustment for currency impact
(9,792 )
-
Non-GAAP total subscription, training and services revenue on a
$ 1,773,171
$ 1,508,728
17.5 %
constant currency basis
RED HAT, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
(In thousands)
Change in deferred revenue balances
Current Deferred
Long-Term
Total Deferred
Revenue
Deferred
Revenue
Revenue
Balance at November 30, 2015
$ 1,080,572
$ 406,562
$ 1,487,134
Constant currency change in deferred revenue (1)
138,563
73,340
211,903
Impact from foreign currency translation
6,286
2,655
8,941
Balance at November 30, 2016
$ 1,225,421
$ 482,557
$ 1,707,978
Year-over-year growth rate
13.4 %
18.7 %
14.9 %
Year-over-year growth rate on a constant currency basis
12.8 %
18.0 %
14.2 %
(1) Change in deferred revenue includes approximately $0.4 million
acquired as part of business combinations.
Revenue growth by geographical segment
Americas
EMEA
APAC
Consolidated
Total revenue for the three months ended November 30, 2016
$
393,589
$ 132,568
$
89,103
$
615,260
Adjustment for currency impact
606
801
(6,388 )
(4,981 )
Total revenue on a constant currency basis for the three months
$
394,195
$ 133,369
$
82,715
$
610,279
ended November 30, 2016
Total revenue for the three months ended November 30, 2015
$
342,368
$ 114,909
$
66,303
$
523,580
Year-over-year growth rate
15.0 %
15.4 %
34.4 %
17.5 %
Year-over-year growth rate on a constant currency basis
15.1 %
16.1 %
24.8 %
16.6 %
Total revenue for the nine months ended November 30, 2016
$ 1,144,841
$ 384,334
$
253,788
$ 1,782,963
Adjustment for currency impact
6,901
(3,480 )
(13,213 )
(9,792 )
Total revenue on a constant currency basis for the nine months ended
$ 1,151,742
$ 380,854
$
240,575
$ 1,773,171
November 30, 2016
Total revenue for the nine months ended November 30, 2015
$
996,405
$ 320,836
$
191,487
$ 1,508,728
Year-over-year growth rate
14.9 %
19.8 %
32.5 %
18.2 %
Year-over-year growth rate on a constant currency basis
15.6 %
18.7 %
25.6 %
17.5 %

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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