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Earnings Review and Free Research Report: Red Hat's Quarterly Revenue Jumped 20%; Adjusted EPS Grew 11%

Research Desk Line-up: ARI Network Services Post Earnings Coverage

LONDON, UK / ACCESSWIRE / July 5, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Red Hat, Inc. (NYSE: RHT), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=RHT, following the Company's release of its first quarter fiscal 2018 financial results on June 20, 2017. The open-source software Company surpassed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:


Get more of our free earnings reports coverage from other constituents of the Application Software industry. Pro-TD has currently selected ARI Network Services, Inc. (NASDAQ: ARIS) for due-diligence and potential coverage as the Company reported on June 08, 2017, its financial results for Q3 FY17 which ended on April 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on ARI Network Services when we publish it.

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Earnings Reviewed

For the first quarter of fiscal year 2018 ended May 31, 2017, Red Hat's total revenue was $676.80 million compared to $567.90, up 19% in USD, or 20% in constant currency. The Company's revenue numbers exceeded analysts' estimates of $646.7 million.

During Q1 FY18, Red Hat's subscription revenue totaled $597 million, up 19% in USD year-over-year, or 20% measured in constant currency compared to revenue of $501.67 million in Q1 FY17. Subscription revenue contributed 88% of total revenue. In the reported quarter, Subscription revenue from infrastructure-related offerings was $458 million, an increase of 14% in USD on a y-o-y basis, and 14% as measured in constant currency. Subscription revenue from application development-related and other emerging technologies offerings for Q1 FY18 surged 41% in USD year-over-year, or 42% measured in constant currency, to $139 million.

Red Hat's GAAP operating income for Q1 FY18 was $87.61 million, up 16% on a y-o-y basis. Post-adjustments related to non-cash share-based compensation expense, amortization of intangible assets, and transaction costs related to business combinations, the Company's non-GAAP operating income totaled $138.62 million, up 12% compared to $123.96 million in the year ago corresponding quarter. Red Hat's GAAP operating margin was 12.9% in Q1 FY18, while non-GAAP operating margin was 20.5%.

For Q1 FY18, Red Hat's GAAP net income was $73 million, or $0.40 per diluted share, compared with $61 million, or $0.33 per diluted share, in Q1 FY17. After adjusting for non-cash share-based compensation expense, amortization of intangible assets, transaction costs and non-cash interest expense, the Company's non-GAAP net income for the reported quarter was $102 million, or $0.56 per diluted share, compared to $92 million, or $0.50 per diluted share, in the year-ago same quarter. Red Hat's net income surpassed Wall Street's expectations of $0.52 per share.

Cash Matters

Red Hat's operating cash flow was $258 million for Q1 FY18, reflecting an increase of 11% on a y-o-y basis. As of May 31, 2017, the Company's total cash, cash equivalents, and investments were $2.31 billion after repurchasing approximately $62 million, or 714,900 shares of common stock, in the reported quarter. The remaining balance in the current repurchase authorization as of May 31, 2017, was approximately $574 million.

At the end of Q1 FY18, Red Hat's total deferred revenue balance was $2.05 billion, an increase of 21% on a y-o-y basis. The full year positive impact to total deferred revenue from changes in foreign exchange rates was $13 million on a y-o-y basis.


For FY18, Red Hat is forecasting revenue in the range of approximately $2.785 billion to $2.825 billion in USD. The Company's GAAP operating margin is expected to be approximately 15.4% and non-GAAP operating margin is expected to be approximately 23.6%.

Red Hat is projecting fully diluted GAAP earnings per share (EPS) to be approximately $1.76 to $1.80 per share, while non-GAAP EPS is expected to be approximately $2.66 to $2.70 per share for FY18. Both GAAP and non-GAAP EPS assume approximately $2 million per quarter forecast for other income and an estimated annual effective tax rate of approximately 28% before discrete tax items. The Company's operating cash flow is expected to be approximately $850 million to $870 million.

For Q2 FY18, Red Hat is projecting revenue in the band of approximately $695 million to $702 million, while GAAP operating margin is expected to be approximately 15.7% and non-GAAP operating margin is expected to be approximately 24.0%. The Company is anticipating GAAP EPS to be approximately $0.43 per share and non-GAAP EPS is expected to be approximately $0.67 per share.

Stock Performance

At the closing bell, on Monday, July 03, 2017, Red Hat's stock fell 1.00%, ending the trading session at $94.79. A total volume of 755.33 thousand shares have exchanged hands. The Company's stock price skyrocketed 9.61% in the last three months, 36.00% in the past six months, and 31.67% in the previous twelve months. Moreover, the stock soared 36.00% since the start of the year. The stock is trading at a PE ratio of 65.01 and currently has a market cap of $16.97 billion.

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