Red Hat Reports Fourth Quarter and Fiscal Year 2012 Results

• Fourth quarter revenue of $297 million, up 21% year-over-year; full fiscal year revenue of $1.13 billion, up 25% year-over-year
• Fourth quarter GAAP EPS of $0.18, up 6% year-over-year; non-GAAP EPS of $0.29, up 12% year-over-year
• Fourth quarter operating cash flow of $128 million, up 35% year-over-year; full fiscal year operating cash flow of $392 million, up 35% year-over-year

Red Hat, Inc., the world’s leading provider of open source solutions, today announced financial results for its fiscal fourth quarter and fiscal year ended February 29, 2012.

“We experienced impressive breadth and depth of demand for our technologies this quarter whether by geography or by industry vertical. This resulted in record financial metrics for both the fourth quarter and the full fiscal year 2012”

Total revenue for the quarter was $297.0 million, an increase of 21% from the year ago quarter. Subscription revenue for the quarter was $255.2 million, up 22% year-over-year. For the full fiscal year 2012, total revenue was $1.13 billion, an increase of 25% over the prior year, and subscription revenue was $965.6 million, up 25% year-over-year.
“The strength of our fourth quarter was a fitting conclusion to a remarkably strong year for our business. Our investments to expand our geographic sales footprint and add sales people with targeted industry and product knowledge has accelerated our growth,” stated Jim Whitehurst, President and Chief Executive Officer of Red Hat. “Red Hat is the first pure-play, open source company, and one of only a select few software companies, to have achieved the billion dollar revenue milestone. The open source technologies which we provide are being selected by more customers every day as they re-architect the infrastructure of their data centers for greater efficiency, agility and cloud enablement.”

GAAP operating income for the fourth quarter and the full fiscal year 2012 was $48.5 million and $199.9 million, respectively. GAAP operating margin was 16.3% in the fourth quarter and 17.6% for the full year. After adjusting for stock compensation and amortization expenses, as detailed in the tables below, non-GAAP operating income for the quarter was $77.2 million, or a 26.0% operating margin, and full year non-GAAP operating income was $298.9 million. Full year non-GAAP operating margin was 26.4%, representing an increase of 160 basis points from the prior year.

GAAP net income for the fourth quarter was $36.0 million, or $0.18 per diluted share, compared with $38.2 million, or $0.19 per diluted share, for the prior quarter and $33.5 million, or $0.17 per diluted share, in the year ago quarter. Non-GAAP adjusted net income for the fourth quarter was $57.2 million, or $0.29 per diluted share, after adjusting for stock compensation and amortization expenses as detailed in the tables below. This compares to non-GAAP adjusted net income of $55.7 million, or $0.28 per diluted share in the prior quarter and $51.4 million, or $0.26 per diluted share in the year ago quarter. Both the GAAP and non-GAAP results for the year ago fourth quarter benefited by approximately $0.02 per share as a result of the retroactive reenactment in December 2010 of the US research tax credit.

For the full year, GAAP net income was $146.6 million or $0.75 per diluted share, compared with $107.3 million or $0.55 per diluted share in the prior year. After adjusting for stock compensation and amortization expenses, as detailed in the tables below, non-GAAP adjusted net income for the year was $216.4 million or $1.10 per diluted share, compared to $162.8 million and $0.83 per diluted share for the previous fiscal year.

Operating cash flow totaled $128.0 million for the fourth quarter and $391.9 million for the full year. At the end of the fiscal year, the company’s total deferred revenue balance was $946.7 million, an increase of 23% on a year-over-year basis and 16% sequentially. Cash and investments at February 29, 2012 totaled $1.3 billion after repurchasing approximately $76.3 million, or approximately 1.8 million shares, of common stock in the fourth quarter. For the full fiscal year 2012, Red Hat repurchased approximately $133.2 million, or approximately 3.2 million shares, of common stock.

“We experienced impressive breadth and depth of demand for our technologies this quarter whether by geography or by industry vertical. This resulted in record financial metrics for both the fourth quarter and the full fiscal year 2012,” stated Charlie Peters, Executive Vice President and Chief Financial Officer of Red Hat. “Our strategy for growth, coupled with relentless day-to-day execution of the business, has been successful. We experienced a significant increase in large deals, both in Q4 and for the full year which contributed to annual organic growth of 25% in revenue, 33% in non-GAAP operating income and 35% growth in operating cash flow.”

Additional information on Red Hat’s reported results, including a reconciliation of the non-GAAP adjusted results, are included in the financial tables below. A live webcast of Red Hat’s results will begin at 5:00 pm ET today and 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.

About Red Hat, Inc.

Red Hat, the world’s leading provider of open source solutions and an S&P 500 company, is headquartered in Raleigh, NC with more than 70 offices spanning the globe. Red Hat provides high-quality, affordable technology with its operating system platform, Red Hat Enterprise Linux, together with cloud, virtualization, management, storage and service-oriented architecture (SOA) solutions, including Red Hat Enterprise Virtualization and JBoss Enterprise Middleware. Red Hat also offers support, training and consulting services to its customers worldwide. Learn more: http://www.redhat.com.

SOURCE: BUSINESSWIRE