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Post Earnings Coverage as Red Hat's Quarterly Revenue Jumped 16%

Upcoming AWS Coverage on Synaptics

LONDON, UK / ACCESSWIRE / April 6, 2017 / Active Wall St. announces its post-earnings coverage on Red Hat, Inc. (NYSE: RHT). The Company posted its fourth quarter and fiscal 2017 financial results on March 23, 2017. The open-source software Company earnings numbers met market expectations. Register with us now for your free membership at:

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One of Red Hat's competitors within the Application Software space, Synaptics Inc. (NASDAQ: SYNA), is estimated to report earnings on April 27, 2017. AWS will be initiating a research report on Synaptics following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on RHT; touching on SYNA. Get our free coverage by signing up to

http://www.activewallst.com/register/

Earnings Reviewed

For the three months ended February 28, 2017, Red Hat's total revenue was $629 million, up 16% y-o-y both in US dollars and measured in constant currency. The Company's reported numbers exceeded analysts' consensus of $618.5 million. Red Hat's FY17 total revenue was $2.4 billion, up 18% in US dollars, or 17% measured in constant currency.

For Q4 FY17, Red Hat's GAAP operating income was $94 million, up 31% y-o-y. 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 fourth quarter was $153 million, up 23% on y-o-y basis. For the reported quarter, GAAP operating margin was 15.0% and non-GAAP operating margin was 24.3%. Full fiscal year GAAP operating income was $332 million, up 15% y-o-y.

Red Hat's GAAP net income for Q4 FY17 was $66 million, or $0.36 per diluted share, compared with $53 million, or $0.29 per diluted share, in Q4 FY16. Post 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, the Company's non-GAAP net income for the reported quarter was $110 million, or $0.61 per diluted share, compared to $97 million, or $0.52 per diluted share, in the year-ago same quarter. Red Hat's earnings number met Wall Street's expectations of $0.61 per share.

Red Hat's FY17 GAAP net income was $254 million, or $1.39 per diluted share, compared with $199 million, or $1.07 per diluted share, in FY16. On an adjusted basis, the Company posted non-GAAP net income for FY17 of $414 million, or $2.27 per diluted share, compared to $355 million, or $1.91 per diluted share, in the prior fiscal year.

Red Hat's operating cash flow was $318 million for Q4 FY17, an increase of 27% on a y-o-y basis. Full fiscal year operating cash flow was $784 million. As of February 28, 2017, Red Hat's total cash, cash equivalents and investments were $2.1 billion after repurchasing approximately $139 million, or approximately 1.9 million shares, of common stock in Q4. The remaining balance in the current repurchase authorization as of February 28, 2017, was approximately $636 million.

Segment Results

Red Hat's subscription revenue for Q3 FY17 was $560 million, up 17% y-o-y both in US dollars and measured in constant currency. Subscription revenue in the reported quarter was 89% of total revenue. The Company's Subscription revenue for FY17 was $2.1 billion, up 18% y-o-y both in US dollars and measured in constant currency. Subscription revenue in the full fiscal year was 89% of total revenue.

During Q4 FY17, Red Hat's Subscription revenue from Infrastructure-related offerings was $435 million, an increase of 11% in US dollars and 12% in constant currency. The Company generated Subscription revenue from Application development-related and other emerging technologies offerings of $125 million for the reported quarter, an increase of 40% y-o-y in US dollars and measured in constant currency.

Deferred revenue and backlog:

Red Hat's total backlog for FY17 was in excess of $2.7 billion, up 28% on a y-o-y basis. At the end of the fiscal year, the Company's total deferred revenue balance was $2.1 billion, an increase of 20% year-over-year. The full year negative impact to total deferred revenue from changes in foreign exchange rates was approximately $1 million y-o-y.

The portion of total backlog to be billed in the future not reflected in Red Hat's financial statements was in excess of $650 million as of February 28, 2017, compared with the ending balance in excess of $410 million reported for FY16.

Outlook

For Q1 FY17, Red Hat's revenue is expected to be $643 million to $650 million. The Company's GAAP operating margin is expected to be approximately 11.7% and non-GAAP operating margin is expected to be approximately 20.0%.

Red Hat is forecasting fully diluted GAAP EPS to be approximately $0.34 to $0.35 per share, while gully diluted non-GAAP EPS are expected to be approximately $0.52 to $0.53 per share

For FY17, Red Hat estimates revenue to be in the range of $2.720 billion to $2.760 billion in US dollars. Fully diluted GAAP earnings per share (EPS) is expected to be approximately $1.69 to $1.73 per share, while fully diluted non-GAAP EPS is expected to be approximately $2.60 to $2.64 per share. The Company expects operating cash flow to be in the band of $850 million to $870 million.

Stock Performance

On Wednesday, April 05, 2017, the stock closed the trading session at $84.68, falling 1.09% from its previous closing price of $85.61. A total volume of 2.63 million shares have exchanged hands, which was higher than the 3-month average volume of 1.90 million shares. Red Hat's stock price advanced 15.84% in the last three months, 6.32% in the past six months, and 13.28% in the previous twelve months. Furthermore, on a year to date basis, the stock surged 21.49%. Shares of the company have a PE ratio of 61.01 and have a market cap of $15.24 billion as per its last closing price.

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SOURCE: Active Wall Street