THE Red Hat today announced its financial results for the third quarter of fiscal 2018, which ended on November 30th. Total revenue for the period was $ 847 million, up 13% year-on-year, or 15% measured in constant currency. In subscriptions, revenue for the quarter was $ 741 million, up 13% year-on-year, or 15% in constant currency.
Within the quarter, subscription revenue accounted for 87% of total revenue. Revenue from offers related to infrastructure services was $ 534 million, up 8% from last year, or 9% in constant currency. Revenue from application development and other emerging technologies was $ 207 million, an increase of 28% compared to 2017, or 30% in constant currency.
«The adoption of Red Hat technologies, which enable customers to build and deploy applications more securely and consistently in hybrid and multi-cloud environments, continued to drive our growth in the third quarter,» said Jim Whitehurst, President and CEO of Red Hat.
“For example, our Certified Cloud and Service Providers (CCSP) program reached the $ 300 million mark in annualized execution rate, with 25% growth of Red Hat Enterprise Linux on demand in public clouds. In addition, we continue to see strong customer growth on Red Hat OpenShift, our enterprise Kubernetes platform and Red Hat Ansible Automation, both of which won over 100 customers in the third quarter. ”
In the third quarter, GAAP net income was $ 94 million, or $ 0.51 of diluted earnings per share, compared to GAAP net income of $ 102 million, or $ 0.55 of earnings per share for last year. After adjustments to share-based non-monetary compensation expenses, amortization of intangible assets, transaction costs related to business combinations and expenses with non-monetary interest related to debt discount, non-GAAP net income for the quarter was $ 175 million, or $ 0.96 of diluted earnings per share, compared to net income of $ 133 million, or $ 0.73 per share, for the same quarter last year.
The non-GAAP weighted and diluted average of the outstanding shares excludes any dilution that may be overshadowed by our hedge transactions with convertible debt securities.
GAAP operating income for the quarter was $ 109 million, down 8% year-on-year. After adjustments to share-based non-monetary compensation expenses, amortization of intangible assets and transaction costs related to the business association, non-GAAP operating income for the quarter was $ 203 million, up 13% from the previous year. last year. In the third quarter, the GAAP operating margin was 12.9% and the adjusted non-GAAP operating margin was 24%. The non-GAAP references in this balance sheet are detailed below.
“In the third quarter, we closed 100 deals of more than $ 1 million and delivered double-digit revenue growth, adding 13% year-over-year or 15% in constant currency and 20% year-over-year revenue growth or 23 % in constant currency, despite the continued volatility of the exchange rate. In addition, our order book grew by 22%, to approximately $ 3.5 billion, ”said Eric Shander, executive vice president and chief financial officer, Red Hat.
“The strong pace of renewals for our main contracts also helped to guarantee these results. All of our 25 largest customers renewed, with a cross-selling rate above 120%. ”
Cashier: GAAP and non-GAAP operating cash flow was $ 137 million in the third quarter, a decrease of 15% compared to the previous year’s GAAP operating cash flow. GAAP operating cash flow adjusts to the impact of our recent adoption of ASU 2016-15: Cash Flow Statement (Topic 230): Classification of Certain Cash Revenues and Payments, which requires the portion of debt securities repayments convertibles during the third quarter that is attributable to the debt discount is classified as operating cash flow.
GAAP and non-GAAP cash flow includes approximately $ 23 million of expenses with business combinations paid in the quarter. Total cash, cash equivalents and investments as of November 30, 2018 was $ 2.2 billion after a repurchase of approximately $ 13 million, or about 0.1 million common shares in the third quarter. The remaining balance of the current authorization to buy back shares on November 30 was approximately US $ 737 million.
Deferred revenue: At the end of the third quarter, the company’s total deferred revenue balance was US $ 2.5 billion, an increase of 20% in the annual comparison. The negative impact of changes in the exchange rate for total deferred revenue was US $ 53 million. On a constant currency basis, total deferred revenue would have increased by 23% year-on-year.