Post-Earnings Coverage - Red Hat

LONDON, January 13, 2015 /PRNewswire/ --

Investor-Edge.com has issued free post-earnings coverage on Red Hat Inc. (NYSE: RHT). On December 18, 2014, the company reported financial results for Q3 FY15 (period ended November 30, 2014). Click on www.investor-edge.com/FreeReports to read our free earnings review on Red Hat Inc. (Red Hat). During Q3 FY15, the company's total revenue and subscription revenue in U.S. dollars increased 15% Y-o-Y, each. Red Hat's operating cash flow for Q3 FY15 surged 40% Y-o-Y. President and CEO of Red Hat, Jim Whitehurst, said that the company's strong Q3 results marked the eleventh straight quarter of mid-to-high teens revenue growth as Red Hat continued to reinforce and expand strategic relationship with its customers. Our free coverage report can be accessed at:

www.investor-edge.com/register

Earnings Overview  

During Q3 FY15, Red Hat's total revenue increased to $455.90 million from $396.54 million in Q3 FY14. Analysts from Bloomberg were anticipating the company to report total revenue of $451.04 million for Q3 FY15. The company's subscription revenue for Q3 FY15 improved to $394.70 million from $342.77 million in Q3 FY14. Further, Red Hat's training and services revenue during the reported quarter increased to $61.20 million from $53.77 million in Q3 FY14. The free research on RHT can be downloaded as in PDF format at:

http://get.Investor-Edge.com/pdf/?c=Red%20Hat&d=13-Jan-2015&s=RHT

Red Hat's GAAP operating income for Q3 FY15 improved 11% Y-o-Y to $67.20 million. The company's non-GAAP adjusted operating income increased 10% Y-o-Y to $108.53 million in Q3 FY15. The company's GAAP and non-GAAP operating margin for the reported quarter stood at 14.7% and 23.8%, respectively.

For Q3 FY15, Red Hat's GAAP net income stood at $47.93 million, or $0.26 per diluted share, compared to $52.03 million, or $0.27 per diluted share, in the Q3 FY14. The reported quarter's GAAP net income outperformed Bloomberg analysts' forecasts of $44.88 million, or $0.24 per diluted share. After adjusting for stock compensation, amortization expenses, certain facility exit costs, transaction costs related to business combinations, and non-cash interest expense related to the convertible debt, the company's Q3 FY15 non-GAAP adjusted net income came at $79.22 million, or $0.42 per diluted share, as compared to $80.88 million, or $0.42 per diluted share, in Q3 FY14. Sign up and read the free analyst's notes on RHT at:

http://get.Investor-Edge.com/pdf/?c=Red%20Hat&d=13-Jan-2015&s=RHT

In Q3 FY15, Red Hat generated operating cash flow of $132.99 million compared with $95.15 million in Q3 FY14. The company's total cash, cash equivalents and investments as of November 30, 2014 was $1.65 billion. During Q3 FY15, the company also completed a convertible debt offering of $805 million.  The company used a portion of the proceeds to enter into convertible note hedge transactions for net cost of approximately $68 million and an accelerated stock repurchase transaction of approximately 5.3 million shares of common stock worth approximately $375 million.

Mr. Whitehurst stated that Cloud computing and big data trends are driving increased demand for open source technologies. He added that the company believes that its leadership position in the open source industry and broad portfolio of Open Hybrid Cloud technologies creates a strong position for Red Hat to capture market share in the cloud-enabled data center.

Charlie Peters, Executive Vice President and CFO of Red Hat, stated that the outstanding sales execution in Q3 FY15 drove strong performance across the board. He said that Red Hat excelled on virtually every key financial metric the company tracks. Mr. Peters further said that the company has had sequential quarterly revenue growth every quarter for 51 straight quarters. Mr. Peters asserted that the sales performance this quarter with large deals was exceptional, setting new records in number of deals over $5 million in a quarter and deals over $10 million in a Q3. Visit Investor-Edge and access the latest research on RHT at:

http://get.Investor-Edge.com/pdf/?c=Red%20Hat&d=13-Jan-2015&s=RHT

Stock Performance  

On the day following the earnings release, December 19, 2014, Red Hat's stock rallied 10.63 % to end the session at $68.04. The stock has moved both ways since then with losses outweighing gains so far. On the last close, Monday, January 12, 2015, the stock finished at $67.62, down 1.63%, after vacillating between $67.44 and $69.25. A total of 1.48 million shares were traded which was below its three months average volume of 1.89 million shares. Over the last one month and the previous three months, the company's shares have surged 16.85% and 21.84%, respectively. Further, the stock has gained 19.03% in past one year. Shares in Red Hat closed above their 50-day and 200-day moving averages of $63.09 and $56.89, respectively. Furthermore, the stock traded at a PE ratio of 70.44 and has a Relative Strength Index (RSI) of 63.26.

Sneak Peek to Corporate Insider Trading  

In the last one month, Red Hat has not reported any share transactions by insiders to the U.S. Securities and Exchange Commission (SEC). Complimentary in-depth research on RHT is available at:

http://get.Investor-Edge.com/pdf/?c=Red%20Hat&d=13-Jan-2015&s=RHT

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