[September 21, 2016] |
|
Red Hat Reports Second Quarter Results for Fiscal Year 2017
Red Hat, Inc. (NYSE: RHT), the world's leading provider of open source
solutions, today announced financial results for the second quarter of
fiscal year 2017 ended August 31, 2016.
"Red Hat's second quarter revenue results were highlighted by 18% in
year-over-year growth for our Infrastructure offerings combined with 33%
in year-over-year growth for our Application development and other
emerging technologies," said Jim Whitehurst, President and Chief
Executive Officer of Red Hat. "Digital transformation and hybrid cloud
computing are changing how applications are built, deployed, and
managed. As organizations adopt agile application development
technologies such as Linux containers, they are able to rely on Red Hat
as their strategic partner to modernize their infrastructure and
application development platforms."
"In the second quarter, we continued to benefit from solid demand and
strong overall execution," stated Frank Calderoni, Executive Vice
President, Operations and Chief Financial Officer of Red Hat. "We
continued to close a record number of deals over $1 million in our
second quarter, which are up more than 60% year over year. This further
demonstrates our customers' commitment to Red Hat and the broad demand
for our expanding technology portfolio as enterprises embrace digital
transformation and the hybrid cloud."
Revenue: Total revenue for the quarter was $600 million, up 19%
in U.S. dollars year-over-year, or 18% measured in constant currency.
Constant currency references in this release are detailed in the tables
below. Subscription revenue for the quarter was $531 million, up 20% in
U.S. dollars year-over-year, or 19% measured in constant currency.
Subscription revenue in the quarter was 89% of total revenue.
Subscription Revenue Breakout: Subscription revenue from
Infrastructure-related offerings for the quarter was $427 million, an
increase of 18% in U.S. dollars year-over-year and 17% measured in
constant currency. Subscription revenue from Application
development-related and other emerging technologies offerings for the
quarter was $104 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 $82
million, up 7% 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 second quarter was $137 million, up 11% year-over-year. Non-GAAP
references in this release are detailed in the tables below. For the
second quarter, GAAP operating margin was 13.7% and non-GAAP operating
margin was 22.8%.
Net Income: GAAP net income for the quarter was $59 million, or
$0.32 per diluted share, compared with $51 million, or $0.28 per diluted
share, in the year-ago quarter. 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
$101 million, or $0.55 per diluted share, as compared to $88 million, or
$0.47 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 $97 million for the second quarter,
a decrease of 21% on a year-over-year basis. Total cash, cash
equivalents and investments as of August 31, 2016 was $2.0 billion after
repurchasing approximately $127 million, or approximately 1.8 million
shares, of common stock in the second quarter. The remaining balance in
the current repurchase authorization as of August 31, 2016 was
approximately $901 million.
Deferred revenue: At the end of the second quarter, the company's
total deferred revenue balance was $1.68 billion, an increase of 19%
year-over-year. The full year positive impact to total deferred revenue
from changes in foreign exchange rates was $22 million year-over-year.
On a constant currency basis, total deferred revenue would have been up
17% year-over-year.
Outlook: Red Hat's outlook assumes current business conditions
and current foreign currency exchange rates.
For the full year:
-
Revenue guidance is expected to be $2.415 billion to $2.435 billion in
U.S. dollars.
-
GAAP operating margin is expected to be approximately 13.8% and
non-GAAP operating margin is expected to be approximately 23.0%.
-
Fully-diluted GAAP earnings per share (EPS) is expected to be
approximately $1.35 to $1.37 per share. Fully-diluted non-GAAP EPS is
expected to be approximately $2.23 to $2.25 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 184
million fully-diluted shares outstanding.
-
Operating cash flow guidance range is expected to be approximately
$800 million to $820 million.
For the third quarter:
-
Revenue guidance is $613 million to $623 million.
-
GAAP operating margin is expected to be approximately 13.4% and
non-GAAP operating margin is expected to be approximately 23.3%.
-
Fully-diluted GAAP EPS is expected to be approximately $0.34 per
share. Fully-diluted non-GAAP EPS is expected to be approximately
$0.58 per share. 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 184 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 $190 million, amortization of intangible assets
of approximately $32 million, and transaction costs related to business
combinations of $2 million. Estimated full year impacts of share-based
compensation expense, amortization of intangible assets, and transaction
costs related to business combinations have increased from the prior
quarter primarily due to business combinations. 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 $15 million of discrete tax benefits related to
share-based compensation that are included in full year fully-diluted
GAAP EPS.
Third quarter non-GAAP operating margin guidance is derived by
subtracting the estimated impact of non-cash share-based compensation
expense of approximately $53 million and amortization of intangible
assets of approximately $8 million. Third 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, third quarter
fully-diluted non-GAAP EPS excludes approximately $5 million of discrete
tax benefits related to share-based compensation that are included in
third 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 operations changes 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
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|
Six Months Ended
|
|
|
|
|
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|
|
|
|
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|
August 31,
|
|
|
August 31,
|
|
|
August 31,
|
|
|
August 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
|
2016
|
|
|
|
|
2015
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriptions
|
|
|
|
|
|
|
|
$
|
531,209
|
|
|
$
|
441,526
|
|
|
|
$
|
1,032,874
|
|
|
|
$
|
866,319
|
|
|
Training and services
|
|
|
|
|
|
|
|
68,596
|
|
|
|
62,622
|
|
|
|
|
134,829
|
|
|
|
|
118,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total subscription, training and services revenue
|
|
|
|
|
|
599,805
|
|
|
|
504,148
|
|
|
|
|
1,167,703
|
|
|
|
|
985,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriptions
|
|
|
|
|
|
|
|
|
39,678
|
|
|
|
30,996
|
|
|
|
|
76,222
|
|
|
|
|
60,843
|
|
|
Training and services
|
|
|
|
|
|
|
|
47,993
|
|
|
|
44,968
|
|
|
|
|
95,496
|
|
|
|
|
86,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of subscription, training and services revenue
|
|
|
|
|
|
87,671
|
|
|
|
75,964
|
|
|
|
|
171,718
|
|
|
|
|
147,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total gross profit
|
|
|
|
|
|
|
|
|
512,134
|
|
|
|
428,184
|
|
|
|
|
995,985
|
|
|
|
|
837,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
|
|
|
|
253,255
|
|
|
|
205,101
|
|
|
|
|
496,503
|
|
|
|
|
403,973
|
|
|
Research and development
|
|
|
|
|
|
|
121,265
|
|
|
|
102,488
|
|
|
|
|
236,281
|
|
|
|
|
199,919
|
|
|
General and administrative
|
|
|
|
|
|
|
|
55,730
|
|
|
|
44,125
|
|
|
|
|
105,954
|
|
|
|
|
86,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expense
|
|
|
|
|
|
|
|
430,250
|
|
|
|
351,714
|
|
|
|
|
838,738
|
|
|
|
|
690,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
|
|
|
|
81,884
|
|
|
|
76,470
|
|
|
|
|
157,247
|
|
|
|
|
147,399
|
|
|
Interest income
|
|
|
|
|
|
|
|
|
3,392
|
|
|
|
2,895
|
|
|
|
|
6,821
|
|
|
|
|
5,611
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
5,925
|
|
|
|
5,733
|
|
|
|
|
11,811
|
|
|
|
|
11,448
|
|
|
Other income (expense), net
|
|
|
|
|
|
|
84
|
|
|
|
(1,245
|
)
|
|
|
|
(468
|
)
|
|
|
|
(1,448
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
|
|
|
79,435
|
|
|
|
72,387
|
|
|
|
|
151,789
|
|
|
|
|
140,114
|
|
Provision for income taxes (1)
|
|
|
|
|
|
|
20,663
|
|
|
|
20,992
|
|
|
|
|
31,832
|
|
|
|
|
40,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
$
|
58,772
|
|
|
$
|
51,395
|
|
|
|
$
|
119,957
|
|
|
|
$
|
99,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
$
|
0.33
|
|
|
$
|
0.28
|
|
|
|
$
|
0.66
|
|
|
|
$
|
0.54
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
$
|
0.32
|
|
|
$
|
0.28
|
|
|
|
$
|
0.65
|
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
180,322
|
|
|
|
183,179
|
|
|
|
|
180,745
|
|
|
|
|
183,155
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
183,346
|
|
|
|
186,750
|
|
|
|
|
183,750
|
|
|
|
|
186,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Provision for income taxes for the three and six months ended August
31, 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 six months ended August 31, 2015 has not
been adjusted. The provision for income taxes for the three and six
months ended August 31, 2016 includes the effect of discrete tax
benefits of $1.0 million and $8.9 million, respectively, related to
excess tax benefits from share-based compensation.
|
RED HAT, INC.
|
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
August 31,
|
|
|
February 29,
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
2016 (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
970,569
|
|
|
|
$
|
927,778
|
|
|
Investments in debt and equity securities
|
|
|
365,128
|
|
|
|
|
281,142
|
|
|
Accounts receivable, net
|
|
|
|
|
359,893
|
|
|
|
|
509,715
|
|
|
Prepaid expenses
|
|
|
|
|
149,226
|
|
|
|
|
150,877
|
|
|
Other current assets
|
|
|
|
|
3,404
|
|
|
|
|
2,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
1,848,220
|
|
|
|
|
1,872,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
172,312
|
|
|
|
|
166,886
|
|
|
Goodwill
|
|
|
|
|
|
|
1,053,872
|
|
|
|
|
1,027,277
|
|
|
Identifiable intangibles, net
|
|
|
|
142,794
|
|
|
|
|
146,071
|
|
|
Investments in debt securities
|
|
|
|
706,948
|
|
|
|
|
786,470
|
|
|
Deferred tax assets, net
|
|
|
|
|
122,131
|
|
|
|
|
111,456
|
|
|
Other assets, net
|
|
|
|
|
54,479
|
|
|
|
|
44,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
$
|
4,100,756
|
|
|
|
$
|
4,155,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
273,568
|
|
|
|
$
|
284,802
|
|
|
Deferred revenue
|
|
|
|
|
1,233,762
|
|
|
|
|
1,272,908
|
|
|
Other current obligations
|
|
|
|
|
1,950
|
|
|
|
|
1,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
1,509,280
|
|
|
|
|
1,559,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible notes
|
|
|
|
|
734,700
|
|
|
|
|
723,942
|
|
|
Long term deferred revenue
|
|
|
|
446,890
|
|
|
|
|
449,636
|
|
|
Other long term obligations
|
|
|
|
91,490
|
|
|
|
|
87,912
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
24
|
|
|
|
|
23
|
|
|
Additional paid-in capital
|
|
|
|
|
2,215,856
|
|
|
|
|
2,162,264
|
|
|
Retained earnings
|
|
|
|
|
1,219,246
|
|
|
|
|
1,099,738
|
|
|
Treasury stock, at cost
|
|
|
|
|
(2,047,008
|
)
|
|
|
|
(1,853,144
|
)
|
|
Accumulated other comprehensive loss
|
|
|
(69,722
|
)
|
|
|
|
(74,449
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
1,318,396
|
|
|
|
|
1,334,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
4,100,756
|
|
|
|
$
|
4,155,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Derived from audited financial statements
|
|
|
|
|
|
|
|
|
|
|
|
|
RED HAT, INC.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
$
|
58,772
|
|
|
|
|
$
|
51,395
|
|
|
|
|
$
|
119,957
|
|
|
|
|
$
|
99,481
|
|
Adjustments to reconcile net income to net cash provided by
|
|
|
|
|
|
|
|
|
|
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
21,160
|
|
|
|
|
|
18,538
|
|
|
|
|
|
41,862
|
|
|
|
|
|
37,085
|
|
|
Share-based compensation expense
|
|
|
|
|
45,357
|
|
|
|
|
|
40,537
|
|
|
|
|
|
86,632
|
|
|
|
|
|
77,059
|
|
|
Deferred income taxes
|
|
|
|
|
(5,467
|
)
|
|
|
|
|
(3,843
|
)
|
|
|
|
|
(7,619
|
)
|
|
|
|
|
(1,929
|
)
|
|
Excess tax benefits from share-based payment arrangements
|
|
|
|
|
1,185
|
|
|
|
|
|
2,812
|
|
|
|
|
|
9,135
|
|
|
|
|
|
9,231
|
|
|
Net amortization of bond premium on available-for-sale debt
securities
|
|
|
|
|
3,294
|
|
|
|
|
|
3,139
|
|
|
|
|
|
6,834
|
|
|
|
|
|
5,736
|
|
|
Accretion of debt discount and amortization of debt issuance costs
|
|
|
|
|
5,393
|
|
|
|
|
|
5,222
|
|
|
|
|
|
10,758
|
|
|
|
|
|
10,417
|
|
|
Other
|
|
|
|
|
|
|
|
|
328
|
|
|
|
|
|
1,078
|
|
|
|
|
|
(437
|
)
|
|
|
|
|
1,908
|
|
Changes in operating assets and liabilities net of effects of
acquisitions:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
(30,684
|
)
|
|
|
|
|
(17,908
|
)
|
|
|
|
|
159,645
|
|
|
|
|
|
161,479
|
|
|
Prepaid expenses
|
|
|
|
|
|
8,883
|
|
|
|
|
|
13,077
|
|
|
|
|
|
(490
|
)
|
|
|
|
|
12,651
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
18,578
|
|
|
|
|
|
34,415
|
|
|
|
|
|
(19,558
|
)
|
|
|
|
|
(17,932
|
)
|
|
Deferred revenue
|
|
|
|
|
|
(26,953
|
)
|
|
|
|
|
(25,017
|
)
|
|
|
|
|
(73,046
|
)
|
|
|
|
|
(56,579
|
)
|
|
Other
|
|
|
|
|
|
|
|
|
(3,044
|
)
|
|
|
|
|
(356
|
)
|
|
|
|
|
(4,574
|
)
|
|
|
|
|
(340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
96,802
|
|
|
|
|
|
123,089
|
|
|
|
|
|
329,099
|
|
|
|
|
|
338,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of available-for-sale debt securities
|
|
|
|
|
(163,043
|
)
|
|
|
|
|
(196,613
|
)
|
|
|
|
|
(297,644
|
)
|
|
|
|
|
(602,824
|
)
|
|
Proceeds from sales and maturities of available-for-sale debt
securities
|
|
|
|
|
177,528
|
|
|
|
|
|
170,617
|
|
|
|
|
|
294,710
|
|
|
|
|
|
353,200
|
|
|
Acquisition of businesses, net of cash acquired
|
|
|
|
|
(28,667
|
)
|
|
|
|
|
(1,700
|
)
|
|
|
|
|
(28,667
|
)
|
|
|
|
|
(1,700
|
)
|
|
Purchase of other intangible assets
|
|
|
|
|
(3,521
|
)
|
|
|
|
|
(2,068
|
)
|
|
|
|
|
(6,389
|
)
|
|
|
|
|
(5,997
|
)
|
|
Purchase of property and equipment
|
|
|
|
|
(15,539
|
)
|
|
|
|
|
(10,277
|
)
|
|
|
|
|
(33,192
|
)
|
|
|
|
|
(20,973
|
)
|
|
Other
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
(1,159
|
)
|
|
|
|
|
(111
|
)
|
|
|
|
|
(3,158
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
|
(33,242
|
)
|
|
|
|
|
(41,200
|
)
|
|
|
|
|
(71,293
|
)
|
|
|
|
|
(281,452
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of common stock options
|
|
|
|
|
689
|
|
|
|
|
|
480
|
|
|
|
|
|
2,068
|
|
|
|
|
|
2,589
|
|
|
Purchase of treasury stock
|
|
|
|
|
(127,386
|
)
|
|
|
|
|
(70,079
|
)
|
|
|
|
|
(193,864
|
)
|
|
|
|
|
(70,079
|
)
|
|
Payments related to net settlement of employee share-based
compensation awards
|
|
|
|
|
(6,398
|
)
|
|
|
|
|
(7,726
|
)
|
|
|
|
|
(37,477
|
)
|
|
|
|
|
(32,937
|
)
|
|
Payments on other borrowings
|
|
|
|
|
(463
|
)
|
|
|
|
|
(385
|
)
|
|
|
|
|
(906
|
)
|
|
|
|
|
(737
|
)
|
|
Other
|
|
|
|
|
|
|
|
|
415
|
|
|
|
|
|
-
|
|
|
|
|
|
914
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
|
|
(133,143
|
)
|
|
|
|
|
(77,710
|
)
|
|
|
|
|
(229,265
|
)
|
|
|
|
|
(101,164
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency exchange rates on cash and cash
equivalents
|
|
|
|
|
8,587
|
|
|
|
|
|
(3,494
|
)
|
|
|
|
|
14,250
|
|
|
|
|
|
(11,517
|
)
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
|
(60,996
|
)
|
|
|
|
|
685
|
|
|
|
|
|
42,791
|
|
|
|
|
|
(55,866
|
)
|
|
Cash and cash equivalents at beginning of the period
|
|
|
|
|
1,031,565
|
|
|
|
|
|
990,922
|
|
|
|
|
|
927,778
|
|
|
|
|
|
1,047,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
970,569
|
|
|
|
|
$
|
991,607
|
|
|
|
|
$
|
970,569
|
|
|
|
|
$
|
991,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
|
|
$
|
4,054
|
|
|
|
|
$
|
4,151
|
|
|
|
|
$
|
8,359
|
|
|
|
|
$
|
7,877
|
|
|
Sales and marketing
|
|
|
|
|
|
20,361
|
|
|
|
|
|
16,782
|
|
|
|
|
|
38,802
|
|
|
|
|
|
32,194
|
|
|
Research and development
|
|
|
|
|
12,969
|
|
|
|
|
|
12,022
|
|
|
|
|
|
24,971
|
|
|
|
|
|
22,897
|
|
|
General and administration
|
|
|
|
|
7,973
|
|
|
|
|
|
7,582
|
|
|
|
|
|
14,500
|
|
|
|
|
|
14,091
|
|
|
Total share-based compensation expense
|
|
|
|
$
|
45,357
|
|
|
|
|
$
|
40,537
|
|
|
|
|
$
|
86,632
|
|
|
|
|
$
|
77,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets expense included in Consolidated
Statements of Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
|
|
$
|
3,846
|
|
|
|
|
$
|
2,618
|
|
|
|
|
$
|
7,468
|
|
|
|
|
$
|
5,192
|
|
|
Sales and marketing
|
|
|
|
|
|
1,905
|
|
|
|
|
|
2,010
|
|
|
|
|
|
3,821
|
|
|
|
|
|
4,014
|
|
|
Research and development
|
|
|
|
|
34
|
|
|
|
|
|
292
|
|
|
|
|
|
69
|
|
|
|
|
|
542
|
|
|
General and administration
|
|
|
|
|
1,848
|
|
|
|
|
|
1,160
|
|
|
|
|
|
3,601
|
|
|
|
|
|
2,212
|
|
|
Total amortization of intangible assets expense
|
|
|
|
$
|
7,633
|
|
|
|
|
$
|
6,080
|
|
|
|
|
$
|
14,959
|
|
|
|
|
$
|
11,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash interest expense related to the debt discount included in
Consolidated Statements of Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-cash interest expense related to the debt discount
|
|
|
|
$
|
4,753
|
|
|
|
|
$
|
4,620
|
|
|
|
|
$
|
9,484
|
|
|
|
|
$
|
9,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs related to business combinations included in
Consolidated Statements of Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs related to business combinations
|
|
|
|
$
|
1,789
|
|
|
|
|
$
|
51
|
|
|
|
|
$
|
1,789
|
|
|
|
|
$
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
August 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
|
|
|
|
$
|
58,772
|
|
|
|
|
$
|
51,395
|
|
|
|
|
$
|
119,957
|
|
|
|
|
$
|
99,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP provision for income taxes
|
|
|
|
|
20,663
|
|
|
|
|
|
20,992
|
|
|
|
|
|
31,832
|
|
|
|
|
|
40,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income before provision for income taxes
|
|
|
|
$
|
79,435
|
|
|
|
|
$
|
72,387
|
|
|
|
|
$
|
151,789
|
|
|
|
|
$
|
140,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Non-cash share-based compensation expense
|
|
|
|
|
45,357
|
|
|
|
|
|
40,537
|
|
|
|
|
|
86,632
|
|
|
|
|
|
77,059
|
|
Add: Amortization of intangible assets
|
|
|
|
|
7,633
|
|
|
|
|
|
6,080
|
|
|
|
|
|
14,959
|
|
|
|
|
|
11,960
|
|
Add: Non-cash interest expense related to the debt discount
|
|
|
|
|
4,753
|
|
|
|
|
|
4,620
|
|
|
|
|
|
9,484
|
|
|
|
|
|
9,219
|
|
Add: Transaction costs related to business combinations
|
|
|
|
|
1,789
|
|
|
|
|
|
51
|
|
|
|
|
|
1,789
|
|
|
|
|
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted income before provision for income taxes
|
|
|
|
$
|
138,967
|
|
|
|
|
$
|
123,675
|
|
|
|
|
$
|
264,653
|
|
|
|
|
$
|
238,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP provision for income taxes (1)
|
|
|
|
|
37,739
|
|
|
|
|
|
35,866
|
|
|
|
|
|
71,245
|
|
|
|
|
|
69,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net income (basic and diluted)
|
|
|
|
$
|
101,228
|
|
|
|
|
$
|
87,809
|
|
|
|
|
$
|
193,408
|
|
|
|
|
$
|
169,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted diluted weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted weighted average shares outstanding
|
|
|
|
|
183,346
|
|
|
|
|
|
186,750
|
|
|
|
|
|
183,750
|
|
|
|
|
|
186,493
|
|
|
Dilution offset from convertible note hedge transactions
|
|
|
|
|
(195
|
)
|
|
|
|
|
(585
|
)
|
|
|
|
|
(82
|
)
|
|
|
|
|
(329
|
)
|
|
Non-GAAP diluted weighted average shares outstanding
|
|
|
|
|
183,151
|
|
|
|
|
|
186,165
|
|
|
|
|
|
183,668
|
|
|
|
|
|
186,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
$
|
0.56
|
|
|
|
|
$
|
0.48
|
|
|
|
|
$
|
1.07
|
|
|
|
|
$
|
0.92
|
|
|
Diluted
|
|
|
|
|
|
|
|
$
|
0.55
|
|
|
|
|
$
|
0.47
|
|
|
|
|
$
|
1.05
|
|
|
|
|
$
|
0.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP provision for income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted income before provision for income taxes
|
|
|
|
$
|
138,967
|
|
|
|
|
$
|
123,675
|
|
|
|
|
$
|
264,653
|
|
|
|
|
$
|
238,403
|
|
|
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
|
|
|
|
$
|
37,521
|
|
|
|
|
$
|
35,866
|
|
|
|
|
$
|
71,456
|
|
|
|
|
$
|
69,137
|
|
|
Discrete tax expense (benefit), excluding discrete benefits related
to share-based compensation
|
|
|
|
|
218
|
|
|
|
|
|
-
|
|
|
|
|
|
(211
|
)
|
|
|
|
|
-
|
|
Provision for income taxes on Non-GAAP adjusted net income excluding
discrete benefits related to share-based compensation
|
|
|
|
$
|
37,739
|
|
|
|
|
$
|
35,866
|
|
|
|
|
$
|
71,245
|
|
|
|
|
$
|
69,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
|
|
August 31,
|
|
|
|
August 31,
|
|
|
|
August 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
|
|
$
|
512,134
|
|
|
|
|
$
|
428,184
|
|
|
|
|
$
|
995,985
|
|
|
|
|
$
|
837,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Non-cash share-based compensation expense
|
|
|
|
|
4,054
|
|
|
|
|
|
4,151
|
|
|
|
|
|
8,359
|
|
|
|
|
|
7,877
|
|
Add: Amortization of intangible assets
|
|
|
|
|
3,846
|
|
|
|
|
|
2,618
|
|
|
|
|
|
7,468
|
|
|
|
|
|
5,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit
|
|
|
|
$
|
520,034
|
|
|
|
|
$
|
434,953
|
|
|
|
|
$
|
1,011,812
|
|
|
|
|
$
|
850,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross margin
|
|
|
|
|
86.7
|
%
|
|
|
|
|
86.3
|
%
|
|
|
|
|
86.6
|
%
|
|
|
|
|
86.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
|
|
August 31,
|
|
|
|
August 31,
|
|
|
|
August 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses
|
|
|
|
$
|
430,250
|
|
|
|
|
$
|
351,714
|
|
|
|
|
$
|
838,738
|
|
|
|
|
$
|
690,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deduct: Non-cash share-based compensation expense
|
|
|
|
|
(41,303
|
)
|
|
|
|
|
(36,386
|
)
|
|
|
|
|
(78,273
|
)
|
|
|
|
|
(69,182
|
)
|
Deduct: Amortization of intangible assets
|
|
|
|
|
(3,787
|
)
|
|
|
|
|
(3,462
|
)
|
|
|
|
|
(7,491
|
)
|
|
|
|
|
(6,768
|
)
|
Deduct: Transaction costs related to business combinations
|
|
|
|
|
(1,789
|
)
|
|
|
|
|
(51
|
)
|
|
|
|
|
(1,789
|
)
|
|
|
|
|
(51
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted operating expenses
|
|
|
|
$
|
383,371
|
|
|
|
|
$
|
311,815
|
|
|
|
|
$
|
751,185
|
|
|
|
|
$
|
614,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
|
|
August 31,
|
|
|
|
August 31,
|
|
|
|
August 31,
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
|
|
|
|
$
|
81,884
|
|
|
|
|
$
|
76,470
|
|
|
|
|
$
|
157,247
|
|
|
|
|
$
|
147,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Non-cash share-based compensation expense
|
|
|
|
|
45,357
|
|
|
|
|
|
40,537
|
|
|
|
|
|
86,632
|
|
|
|
|
|
77,059
|
|
Add: Amortization of intangible assets
|
|
|
|
|
7,633
|
|
|
|
|
|
6,080
|
|
|
|
|
|
14,959
|
|
|
|
|
|
11,960
|
|
Add: Transaction costs related to business combinations
|
|
|
|
|
1,789
|
|
|
|
|
|
51
|
|
|
|
|
|
1,789
|
|
|
|
|
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted operating income
|
|
|
|
$
|
136,663
|
|
|
|
|
$
|
123,138
|
|
|
|
|
$
|
260,627
|
|
|
|
|
$
|
236,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted operating margin
|
|
|
|
|
22.8
|
%
|
|
|
|
|
24.4
|
%
|
|
|
|
|
22.3
|
%
|
|
|
|
|
24.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
|
|
August 31,
|
|
|
|
Year-Over-Year
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
Growth Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP subscription revenue by offering type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infrastructure-related offerings
|
|
|
|
$
|
427,035
|
|
|
|
|
$
|
362,926
|
|
|
|
|
|
17.7
|
%
|
|
|
|
|
|
Adjustment for currency impact
|
|
|
|
|
(3,824
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Infrastructure-related subscription revenue on a constant
currency basis
|
|
|
|
$
|
423,211
|
|
|
|
|
$
|
362,926
|
|
|
|
|
|
16.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Application development-related and other emerging technology
offerings
|
|
|
|
$
|
104,174
|
|
|
|
|
$
|
78,600
|
|
|
|
|
|
32.5
|
%
|
|
|
|
|
|
Adjustment for currency impact
|
|
|
|
|
(629
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Application development-related and other emerging
technology subscription revenue on a constant currency basis
|
|
|
|
$
|
103,545
|
|
|
|
|
$
|
78,600
|
|
|
|
|
|
31.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP subscription revenue
|
|
|
|
|
531,209
|
|
|
|
|
|
441,526
|
|
|
|
|
|
20.3
|
%
|
|
|
|
|
Adjustment for currency impact
|
|
|
|
|
(4,453
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Non-GAAP subscription revenue on a constant currency basis
|
|
|
|
$
|
526,756
|
|
|
|
|
$
|
441,526
|
|
|
|
|
|
19.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP training and services revenue
|
|
|
|
$
|
68,596
|
|
|
|
|
$
|
62,622
|
|
|
|
|
|
9.5
|
%
|
|
|
|
|
Adjustment for currency impact
|
|
|
|
|
974
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Non-GAAP training and services revenue on a constant currency basis
|
|
|
|
$
|
69,570
|
|
|
|
|
$
|
62,622
|
|
|
|
|
|
11.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP total subscription, training and services revenue
|
|
|
|
$
|
599,805
|
|
|
|
|
$
|
504,148
|
|
|
|
|
|
19.0
|
%
|
|
|
|
|
Adjustment for currency impact
|
|
|
|
|
(3,479
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Non-GAAP total subscription, training and services revenue on a
constant currency basis
|
|
|
|
$
|
596,326
|
|
|
|
|
$
|
504,148
|
|
|
|
|
|
18.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
|
|
August 31,
|
|
|
|
Year-Over-Year
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
Growth Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP subscription revenue by offering type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infrastructure-related offerings
|
|
|
|
$
|
830,216
|
|
|
|
|
$
|
716,667
|
|
|
|
|
|
15.8
|
%
|
|
|
|
|
|
Adjustment for currency impact
|
|
|
|
|
(5,572
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Infrastructure-related subscription revenue on a constant
currency basis
|
|
|
|
$
|
824,644
|
|
|
|
|
$
|
716,667
|
|
|
|
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Application development-related and other emerging technology
offerings
|
|
|
|
$
|
202,658
|
|
|
|
|
$
|
149,652
|
|
|
|
|
|
35.4
|
%
|
|
|
|
|
|
Adjustment for currency impact
|
|
|
|
|
(894
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Application development-related and other emerging
technology subscription revenue on a constant currency basis
|
|
|
|
$
|
201,764
|
|
|
|
|
$
|
149,652
|
|
|
|
|
|
34.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP subscription revenue
|
|
|
|
|
1,032,874
|
|
|
|
|
|
866,319
|
|
|
|
|
|
19.2
|
%
|
|
|
|
|
Adjustment for currency impact
|
|
|
|
|
(6,466
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Non-GAAP subscription revenue on a constant currency basis
|
|
|
|
$
|
1,026,408
|
|
|
|
|
$
|
866,319
|
|
|
|
|
|
18.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP training and services revenue
|
|
|
|
$
|
134,829
|
|
|
|
|
$
|
118,830
|
|
|
|
|
|
13.5
|
%
|
|
|
|
|
Adjustment for currency impact
|
|
|
|
|
1,577
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Non-GAAP training and services revenue on a constant currency basis
|
|
|
|
$
|
136,406
|
|
|
|
|
$
|
118,830
|
|
|
|
|
|
14.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP total subscription, training and services revenue
|
|
|
|
$
|
1,167,703
|
|
|
|
|
$
|
985,149
|
|
|
|
|
|
18.5
|
%
|
|
|
|
|
Adjustment for currency impact
|
|
|
|
|
(4,889
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Non-GAAP total subscription, training and services revenue on a
constant currency basis
|
|
|
|
$
|
1,162,814
|
|
|
|
|
$
|
985,149
|
|
|
|
|
|
18.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 August 31, 2015
|
|
|
|
|
$
|
1,047,732
|
|
|
|
|
$
|
365,708
|
|
|
|
|
$
|
1,413,440
|
|
|
|
|
Constant currency change in deferred revenue (1)
|
|
169,269
|
|
|
|
|
|
75,469
|
|
|
|
|
|
244,738
|
|
|
|
|
Impact from foreign currency translation
|
|
|
|
|
|
16,761
|
|
|
|
|
|
5,713
|
|
|
|
|
|
22,474
|
|
|
|
Balance at August 31, 2016
|
|
|
|
|
$
|
1,233,762
|
|
|
|
|
$
|
446,890
|
|
|
|
|
$
|
1,680,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year growth rate
|
|
|
|
|
|
17.8
|
%
|
|
|
|
|
22.2
|
%
|
|
|
|
|
18.9
|
%
|
|
|
Year-over-year growth rate on a constant currency basis
|
|
16.2
|
%
|
|
|
|
|
20.6
|
%
|
|
|
|
|
17.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Change in deferred revenue includes approximately $0.7 million
acquired as part of business combinations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue growth by geographical segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
EMEA
|
|
|
|
APAC
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue for the three months ended August 31, 2016
|
$
|
385,529
|
|
|
|
|
$
|
127,467
|
|
|
|
|
$
|
86,809
|
|
|
$
|
599,805
|
|
|
Adjustment for currency impact
|
|
|
|
|
|
2,997
|
|
|
|
|
|
(578
|
)
|
|
|
|
|
(5,898
|
)
|
|
|
(3,479
|
)
|
Total revenue on a constant currency basis for the three months
ended August 31, 2016
|
$
|
388,526
|
|
|
|
|
$
|
126,889
|
|
|
|
|
$
|
80,911
|
|
|
$
|
596,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue for the three months ended August 31, 2015
|
$
|
332,204
|
|
|
|
|
$
|
108,454
|
|
|
|
|
$
|
63,490
|
|
|
$
|
504,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year growth rate
|
|
|
|
|
|
16.1
|
%
|
|
|
|
|
17.5
|
%
|
|
|
|
|
36.7
|
%
|
|
|
19.0
|
%
|
Year-over-year growth rate on a constant currency basis
|
|
17.0
|
%
|
|
|
|
|
17.0
|
%
|
|
|
|
|
27.4
|
%
|
|
|
18.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue for the six months ended August 31, 2016
|
$
|
751,252
|
|
|
|
|
$
|
251,766
|
|
|
|
|
$
|
164,685
|
|
|
$
|
1,167,703
|
|
|
Adjustment for currency impact
|
|
|
|
|
|
6,248
|
|
|
|
|
|
(4,256
|
)
|
|
|
|
|
(6,881
|
)
|
|
|
(4,889
|
)
|
Total revenue on a constant currency basis for the six months ended
August 31, 2016
|
$
|
757,500
|
|
|
|
|
$
|
247,510
|
|
|
|
|
$
|
157,804
|
|
|
$
|
1,162,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue for the six months ended August 31, 2015
|
$
|
654,037
|
|
|
|
|
$
|
205,927
|
|
|
|
|
$
|
125,185
|
|
|
$
|
985,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year growth rate
|
|
|
|
|
|
14.9
|
%
|
|
|
|
|
22.3
|
%
|
|
|
|
|
31.6
|
%
|
|
|
18.5
|
%
|
Year-over-year growth rate on a constant currency basis
|
|
15.8
|
%
|
|
|
|
|
20.2
|
%
|
|
|
|
|
26.1
|
%
|
|
|
18.0
|
%
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160921005388/en/
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|