We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Red Hat (RHT) Q3 Earnings Beat Estimates, Revenues Up Y/Y
Read MoreHide Full Article
Red Hat Inc. reported non-GAAP earnings of 96 cents per share in third-quarter fiscal 2019, comfortably surpassing the Zacks Consensus Estimate of 87 cents. The figure also increased 31.5% on a year-over-year basis.
Revenues increased 13.2% year over year to $846.8 million, primarily driven by strong demand for hybrid cloud technology solutions as well as aggressive cross-selling. However, the figure lagged the Zacks Consensus Estimate of $854 million.
Revenues, adjusted for currency impact, increased 15.3% year over year to $862.3 million.
Americas; Europe, Middle East & Africa (EMEA); and Asia-Pacific (APAC) revenues increased 11.8%, 14.4% and 17.8%, respectively. After adjusting for currency impact, Americas, EMEA and APAC revenues increased 13.1%, 17.5% and 21.6%, respectively.
Almost 62.3% of the bookings came from Americas, 23.5% from EMEA and 14.3% from APAC. Additionally, total backlog grew 22% from the year-ago quarter to $3.5 billion.
Subscription revenues (87.5% of revenues) increased 12.8% year over year to $740.7 million. When adjusted for currency impact, revenues increased 14.6% to $752.5 million.
Infrastructure-related subscription revenues increased 7.9% from the year-ago quarter to $534.1 million. After adjusting for currency impact, revenues increased 9.4% to $541.5 million. Moreover, Application Development-related and other emerging technology subscription revenues increased 27.6% from the year-ago quarter to $206.6 million. After adjusting for currency impact, revenues increased 30.3% to $210.9 million.
Training & services revenues (12.5% of revenues) increased 16.4% from the year-ago quarter to $106 million. When adjusted for currency impact, revenues increased 20.5% to $109.8 million.
Red Hat inked 100 deals worth more than $1 million in the quarter. Moreover, the company’s Certified Cloud and Service Providers (CCSP) program reached an annualized run-rate of $300 million, recording 25% year-over-year growth of “Red Hat Enterprise Linux on-demand in the public clouds.” Further, Red Hat OpenShift and Red Hat Ansible Automation experienced strong customer growth, adding more than 100 customers in the quarter.
On Oct 28, 2018, International Business Machines Corporation (IBM - Free Report) entered into a definitive agreement to acquire Red Hat for approximately $34 billion in cash. Following this, Red Hat set a special meeting on Jan 16, 2019 for its stockholders to vote on the proposed agreement.
Operating Details
Non-GAAP gross profit increased 13.7% year over year to $733.3 million. Non-GAAP gross margin expanded 40 basis points on a year-over-year basis to 86.6%.
Non-GAAP operating expenses increased 13.9% from the year-ago quarter to $530.5 million.
Non-GAAP operating expenses increased 13.9% from the year-ago quarter to $530.5 million.
Non-GAAP operating income increased 13.3% from the year-ago quarter to $202.9 million, while non-GAAP operating margin almost remained flat at 24%.
Balance Sheet & Cash Flow
Red Hat ended the quarter with cash, cash equivalents & investments of $1.9 billion compared with $2.2 billion at the end of the second quarter of fiscal 2019.
The company generated operating cash flow of almost $136.7 million compared with $165.4 million in the fiscal second quarter.
At the end of the third quarter, total deferred revenue balance was $2.5 billion, up 20% year over year.
Long-term earnings growth for Twitter and Alteryx is pegged at 22% and 8%, respectively.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
Image: Bigstock
Red Hat (RHT) Q3 Earnings Beat Estimates, Revenues Up Y/Y
Red Hat Inc. reported non-GAAP earnings of 96 cents per share in third-quarter fiscal 2019, comfortably surpassing the Zacks Consensus Estimate of 87 cents. The figure also increased 31.5% on a year-over-year basis.
Revenues increased 13.2% year over year to $846.8 million, primarily driven by strong demand for hybrid cloud technology solutions as well as aggressive cross-selling. However, the figure lagged the Zacks Consensus Estimate of $854 million.
Revenues, adjusted for currency impact, increased 15.3% year over year to $862.3 million.
Americas; Europe, Middle East & Africa (EMEA); and Asia-Pacific (APAC) revenues increased 11.8%, 14.4% and 17.8%, respectively. After adjusting for currency impact, Americas, EMEA and APAC revenues increased 13.1%, 17.5% and 21.6%, respectively.
Almost 62.3% of the bookings came from Americas, 23.5% from EMEA and 14.3% from APAC. Additionally, total backlog grew 22% from the year-ago quarter to $3.5 billion.
Red Hat, Inc. Price, Consensus and EPS Surprise
Red Hat, Inc. Price, Consensus and EPS Surprise | Red Hat, Inc. Quote
Quarter Details
Subscription revenues (87.5% of revenues) increased 12.8% year over year to $740.7 million. When adjusted for currency impact, revenues increased 14.6% to $752.5 million.
Infrastructure-related subscription revenues increased 7.9% from the year-ago quarter to $534.1 million. After adjusting for currency impact, revenues increased 9.4% to $541.5 million. Moreover, Application Development-related and other emerging technology subscription revenues increased 27.6% from the year-ago quarter to $206.6 million. After adjusting for currency impact, revenues increased 30.3% to $210.9 million.
Training & services revenues (12.5% of revenues) increased 16.4% from the year-ago quarter to $106 million. When adjusted for currency impact, revenues increased 20.5% to $109.8 million.
Red Hat inked 100 deals worth more than $1 million in the quarter. Moreover, the company’s Certified Cloud and Service Providers (CCSP) program reached an annualized run-rate of $300 million, recording 25% year-over-year growth of “Red Hat Enterprise Linux on-demand in the public clouds.” Further, Red Hat OpenShift and Red Hat Ansible Automation experienced strong customer growth, adding more than 100 customers in the quarter.
On Oct 28, 2018, International Business Machines Corporation (IBM - Free Report) entered into a definitive agreement to acquire Red Hat for approximately $34 billion in cash. Following this, Red Hat set a special meeting on Jan 16, 2019 for its stockholders to vote on the proposed agreement.
Operating Details
Non-GAAP gross profit increased 13.7% year over year to $733.3 million. Non-GAAP gross margin expanded 40 basis points on a year-over-year basis to 86.6%.
Non-GAAP operating expenses increased 13.9% from the year-ago quarter to $530.5 million.
Non-GAAP operating expenses increased 13.9% from the year-ago quarter to $530.5 million.
Non-GAAP operating income increased 13.3% from the year-ago quarter to $202.9 million, while non-GAAP operating margin almost remained flat at 24%.
Balance Sheet & Cash Flow
Red Hat ended the quarter with cash, cash equivalents & investments of $1.9 billion compared with $2.2 billion at the end of the second quarter of fiscal 2019.
The company generated operating cash flow of almost $136.7 million compared with $165.4 million in the fiscal second quarter.
At the end of the third quarter, total deferred revenue balance was $2.5 billion, up 20% year over year.
Zacks Rank and Stocks to Consider
Red Hat currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader computer technology sector are Twitter and Alteryx, Inc. , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Twitter and Alteryx is pegged at 22% and 8%, respectively.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>