Red Hat Reports Third Quarter Fiscal Year 2008 Results
- Revenue of $135.4 million, up 28% year-over-year
- Net Income of $20.3 million, up 39% year-over-year
- Record Billings and Cash-flow
Red Hat, Inc. (NYSE: RHT), the world's leading provider of open source solutions, today announced financial results for its third fiscal quarter ended November 30, 2007. Red Hat's current fiscal year will end February 29, 2008.
Total revenue for the quarter was $135.4 million, an increase of 28% from the year ago quarter and 6% from the prior quarter. Subscription revenue was $115.7 million, up 30% year-over-year and 6% sequentially.
Net income for the quarter was $20.3 million, or $0.10 per diluted share, compared with $18.2 million, or $0.09 per diluted share, for the prior quarter and $14.6 million, or $0.07 per diluted share, in the year ago quarter. Non-GAAP adjusted net income for the quarter was $39.7 million, or $0.19 per diluted share, after adjusting for stock compensation and tax expense as detailed in the tables below. This compares to non-GAAP adjusted net income of $36.9 million, or $0.17 per diluted share, in the prior quarter and $30.1 million, or $0.14 per diluted share, in the year ago period.
Non-GAAP operating cash flow, as detailed in the tables below, totaled $76.7 million for the quarter, up 24% from the year ago quarter and 20% sequentially. Total cash, cash equivalents and investments as of November 30, 2007 were $1.3 billion. At quarter end, Red Hat's total deferred revenue balance was $422.6 million, an increase of 36% year-over-year and 12% sequentially.
Other highlights of the quarter included the following:
- Red Hat has been named the leader in vendor value and satisfaction by the independent Ziff Davis’ 2007 "CIO Insight Vendor Value" survey, which polls IT executives on the value and reliability delivered by vendors. This marks the third time in four years that the company has been ranked #1 among all global IT vendors, and the fourth consecutive year Red Hat has been named the most valued enterprise software vendor. Red Hat also received a remarkable 97% customer loyalty rating from the CIOs polled in the survey.
- Red Hat introduced the JBoss Advanced Partner Program, that offers value-added resellers (VARs) and systems integrators (SIs) in North America the tools, resources and support to increase their share in the middleware segment. Red Hat has already teamed with over 70 JBoss-specific channel partners worldwide.
"We are very pleased to be recognized by CIO’s for the fourth consecutive year as the most valued Enterprise Software Vendor and best overall IT Vendor for the third time in four years," stated Charlie Peters, Executive Vice President and Chief Financial Officer of Red Hat. "There is a direct correlation between our ability to deliver real business value and the loyalty of our large and growing customer base. As a result of strong market demand and solid execution from our worldwide organization, we were able to deliver another strong financial performance in the third quarter and we are optimistic about our outlook."
JBoss World Orlando, the third-annual conference and exhibition, will take place at the Marriott Orlando World Center Resort in Orlando, FL, February 12-15, 2008. The fourth-annual Red Hat Summit will take place June 18-20, 2008 at the Hynes Convention Center in Boston, MA.
Additional information on Red Hat's reported results, including a reconciliation of the non-GAAP adjusted results, are included in the financial tables below. A live webcast of Red Hat's results will begin at 5:00 pm ET today and 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 will have ended.
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 integration of acquisitions; the ability of the Company to effectively compete; 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; ineffective management of, and control over, the Company's growth and international operations; adverse results in litigation; 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, 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 the press release.
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Red Hat GmbH
Red Hat, the world's leading open source solutions provider, is headquartered in Raleigh, NC with over 50 offices spanning the globe. CIOs have ranked Red Hat first for value in Enterprise Software for four consecutive years in the CIO Insight Magazine Vendor Value study. Red Hat provides high-quality, affordable technology with its operating system platform, Red Hat Enterprise Linux, together with applications, management and Services Oriented Architecture (SOA) solutions, including the JBoss Enterprise Middleware Suite. Red Hat also offers support, training and consulting services to its customers worldwide. Learn more: www.redhat.com.