Red Hat Reports Third Quarter Results for Fiscal Year 2017

Dec 21, 2016

Red Hat Reports Third Quarter Results for Fiscal Year 2017
  • Third quarter total revenue of $615 million, up 18% year-over-year or 17% in constant currency
  • 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

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 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® 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 EndedNine Months Ended
November 30,November 30,November 30,November 30,
2016201520162015
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 EndedNine Months Ended
November 30,November 30,November 30,November 30,
2016201520162015
 
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 securities 3,120 3,055 9,954 8,791
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 securities 113,759 235,931 408,469 589,131
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 compensation awards (25,769 ) (27,879 ) (63,245 ) (60,816 )
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 equivalents   (22,925 )   (11,489 )   (8,675 )   (23,006 )
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 EndedNine Months Ended
November 30,November 30,November 30,November 30,
2016201520162015
 
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 EndedNine Months Ended
November 30,November 30,November 30,November 30,
2016201520162015
 
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 EndedNine Months Ended
November 30,November 30,November 30,November 30,
2016201520162015
 
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 EndedNine Months Ended
November 30,November 30,November 30,November 30,
2016201520162015
 
Transaction costs related to business combinations   -   $ 3,792   $ 1,789   $ 3,844  
 
 
Three Months EndedNine Months Ended
November 30,November 30,November 30,November 30,
2016201520162015
 
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 discrete tax benefits $ 38,856 $ 36,200 $ 110,312 $ 105,337
Discrete tax expense (benefit), excluding discrete benefits related to share-based compensation   (5,696 )   -     (5,907 )   -  
Provision for income taxes on Non-GAAP adjusted net income excluding discrete benefits related to share-based compensation $ 33,160   $ 36,200   $ 104,405   $ 105,337  
 
 
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 EndedNine Months Ended
November 30,November 30,November 30,November 30,
2016201520162015
 
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 EndedNine Months Ended
November 30,November 30,November 30,November 30,
2016201520162015
 
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 EndedNine Months Ended
November 30,November 30,November 30,November 30,
2016201520162015
 
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
20162015Growth 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 currency basis $ 426,651 $ 373,091 14.4 %
 
Application development-related and other emerging technology offerings $ 112,176 $ 84,397 32.9 %
Adjustment for currency impact   (969 )   -  
Non-GAAP Application development-related and other emerging technology subscription revenue on a constant currency basis $ 111,207 $ 84,397 31.8 %
 
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 constant currency basis $ 610,279   $ 523,580   16.6 %
 
 
Nine Months Ended  
November 30,November 30,Year-Over-Year
20162015Growth Rate
 
GAAP subscription revenue by offering type
Infrastructure-related offerings $ 1,261,359 $ 1,089,758 15.7 %
Adjustment for currency impact   (10,066 )   -  

Non-GAAP Infrastructure-related subscription revenue on a constant currency basis

$ 1,251,293 $ 1,089,758 14.8 %
 
Application development-related and other emerging technology offerings $ 314,833 $ 234,049 34.5 %
Adjustment for currency impact   (1,814 )   -  
Non-GAAP Application development-related and other emerging technology subscription revenue on a constant currency basis $ 313,019 $ 234,049 33.7 %
 
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 constant currency basis $ 1,773,171   $ 1,508,728   17.5 %
 
 
RED HAT, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
(In thousands)
       
 
Change in deferred revenue balances

Current Deferred

Revenue

Long-Term

Deferred

Revenue

Total Deferred

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

AmericasEMEAAPACConsolidated
 
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 ended November 30, 2016 $ 394,195 $ 133,369 $ 82,715 $ 610,279
 
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 November 30, 2016 $ 1,151,742 $ 380,854 $ 240,575 $ 1,773,171
 
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 %
 

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

Source: Red Hat, Inc.