Exhibit 99.1
Red Hat Reports Fiscal Fourth Quarter and Fiscal Year 2008 Results
- Annual Revenue up 31% from Prior Year
- Deferred Revenue up 40% from Prior Year
- Repurchased $66 Million of its Common Stock
RALEIGH, N.C.--(BUSINESS WIRE)--Red Hat, Inc. (NYSE: RHT), the world's leading provider of open source solutions, today announced financial results for its fiscal fourth quarter and fiscal year ended February 29, 2008.
“During the fourth quarter, I spent a significant amount of time meeting with customers, partners, employees and thought leaders from the open source community. The momentum of open source solutions is strong and growing, and we believe there is a significant opportunity to expand our presence with existing customers and the many companies and industries that have only just begun to adopt open source solutions in a meaningful way,“ stated Jim Whitehurst, President and Chief Executive Officer of Red Hat. “In addition, feedback I received supports why Red Hat has been rated the number one enterprise software vendor for value by CIO Insight Magazine for four consecutive years. As a result of these factors, we are optimistic about the growth outlook for the Linux market and Red Hat as we begin fiscal 2009.”
Total revenue for the quarter was $141.5 million, an increase of 27% from the year ago quarter and 5% from the prior quarter. Subscription revenue for the quarter was $121.9 million, up 27% year-over-year and 5% sequentially. For the full year, total revenue was $523.0 million, an increase of 31% over fiscal 2007 revenue, and subscription revenue was $449.8 million, up 32% from the prior year.
Net income for the quarter was $22.0 million, or $0.10 per diluted share, compared with $20.3 million, or $0.10 per diluted share, for the prior quarter and $20.5 million, or $0.10 per diluted share, in the year ago quarter. Non-GAAP adjusted net income for the quarter was $42.7 million, or $0.20 per diluted share, after adjusting for stock compensation and tax expense as detailed in the tables below. This compares to non-GAAP adjusted net income of $39.7 million, or $0.19 per diluted share in the prior quarter.
For the full year, net income was $76.7 million or $0.36 per diluted share, compared with $59.9 million or $.29 per diluted share in the prior year. Non-GAAP adjusted net income for the year was $152.9 million or $0.72 per diluted share, compared to $115.9 million and $0.56 per diluted share the year before.
Non-GAAP operating cash flow, as detailed in the tables below, totaled $71.6 million or approximately 50% of revenue for the quarter and $264.3 million for the full year. At year end, the company’s total deferred revenue balance was $472.9 million, an increase of 40% on a year-over-year basis and 12% sequentially. Total cash, cash equivalents and investments as of February 29, 2008 were $1.3 billion.
Other highlights include the following:
- During the quarter, Red Hat repurchased approximately 3.7 million shares of its common stock for approximately $66 million.
- Red Hat Enterprise Linux 5 won SearchEnterpriseLinux.com’s 'Product of the Year' Gold for leadership in virtualization.
- Strong JBoss business growth and a record number of attendees and IT decision makers at JBoss World in February.
- Subsequent to the quarter close, Red Hat announced the acquisition of Amentra, a regional provider of systems integration and consulting services around middleware, service-oriented architecture and open source solutions.
"It was an outstanding year. Our annual revenue grew over 30%, our deferred revenue grew 40% and we produced operating cash flow margins of 50%. The company’s performance was driven by growing demand for our open source solutions and the convincing value which we are able to demonstrate with our customers. We are also realizing returns on the increased investment which we have made over the past year in engineering, sales and marketing, combined with solid execution by our associates.” stated Charlie Peters, Executive Vice President and Chief Financial Officer of Red Hat.
Red Hat Summit Boston, the fourth annual conference and exhibition, will take place at the Hynes Convention Center in Boston, MA, June 18-20, 2008. Details on this year’s Red Hat Summit and registration information can be found at www.redhat.summit.2008.
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 will have ended.
About Red Hat, Inc.
Red Hat, the world's leading open source solutions provider, is headquartered in Raleigh, NC with over 50 offices spanning the globe. CIOs have ranked Red Hat first for value in Enterprise Software for four consecutive years in the CIO Insight Magazine Vendor Value study. Red Hat provides high-quality, affordable technology with its operating system platform, Red Hat Enterprise Linux, together with applications, management and Services Oriented Architecture (SOA) solutions, including the JBoss Enterprise Middleware Suite. Red Hat also offers support, training and consulting services to its customers worldwide. Learn more: 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 integration of acquisitions; the ability of the Company to effectively compete; 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; ineffective management of, and control over, the Company's growth and international operations; adverse results in litigation; 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 conditions, and governmental and public policy changes. 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 the press release.
LINUX is a trademark of Linus Torvalds. RED HAT and JBOSS are registered trademarks of Red Hat, Inc. and its subsidiaries in the US and other countries.
RED HAT, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(Unaudited) |
(In thousands - except per share amounts) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended | | | Twelve Months Ended |
| | | | | | | February 29, | | February 28, | | February 29, | | February 28, |
| | | | | | | | 2008 | | | | | 2007 | | | | | 2008 | | | | | 2007 | |
Revenue: | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | Subscriptions | $ | 121,862 | | | | $ | 95,906 | | | | $ | 449,811 | | | | $ | 341,206 | |
| | Training and services | | 19,631 | | | | | 15,215 | | | | | 73,205 | | | | | 59,418 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | Total subscription, training and services revenue | | 141,493 | | | | | 111,121 | | | | | 523,016 | | | | | 400,624 | |
| | | | | | | | | | | | | | | | |
Cost of revenue: | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | Subscriptions | | 9,389 | | | | | 7,333 | | | | | 33,581 | | | | | 27,457 | |
| | Training and services | | 12,011 | | | | | 10,096 | | | | | 47,072 | | | | | 37,279 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | Total cost of subscription, training and services revenue | | 21,400 | | | | | 17,429 | | | | | 80,653 | | | | | 64,736 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Total gross profit | | 120,093 | | | | | 93,692 | | | | | 442,363 | | | | | 335,888 | |
| | | | | | | | | | | | | | | | |
Operating expense: | | | | | | | | | | |
| Sales and marketing | | 52,093 | | | | | 39,680 | | | | | 192,049 | | | | | 145,562 | |
| Research and development | | 26,316 | | | | | 19,954 | | | | | 97,417 | | | | | 71,038 | |
| General and administrative | | 23,512 | | | | | 17,420 | | | | | 82,525 | | | | | 66,999 | |
| | | | | | | | | | | | | | | | |
| | Total operating expense | | 101,921 | | | | | 77,054 | | | | | 371,991 | | | | | 283,599 | |
| | | | | | | | | | | | | | | | |
Income from operations | | 18,172 | | | | | 16,638 | | | | | 70,372 | | | | | 52,289 | |
Other income, net | | 18,371 | | | | | 11,902 | | | | | 60,420 | | | | | 43,290 | |
Interest expense | | (1,611 | ) | | | | (1,549 | ) | | | | (6,252 | ) | | | | (6,016 | ) |
| | | | | | | | | | | | | | | | |
Income before provision for income taxes | | 34,932 | | | | | 26,991 | | | | | 124,540 | | | | | 89,563 | |
Provision for income taxes | | 12,926 | | | | | 6,504 | | | | | 47,873 | | | | | 29,656 | |
| | | | | | | | | | | | | | | | |
Net income | $ | 22,006 | | | | $ | 20,487 | | | | $ | 76,667 | | | | $ | 59,907 | |
| | | | | | | | | | | | | | | | |
Net income-diluted | $ | 22,929 | | | | $ | 21,467 | | | | $ | 80,274 | | | | $ | 63,826 | |
| | | | | | | | | | | | | | | | |
Net income per share: | | | | | | | | | | |
| Basic | $ | 0.11 | | | | $ | 0.11 | | | | $ | 0.40 | | | | $ | 0.32 | |
| Diluted | $ | 0.10 | | | | $ | 0.10 | | | | $ | 0.36 | | | | $ | 0.29 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | |
| Basic | | 193,189 | | | | | 192,303 | | | | | 193,485 | | | | | 189,347 | |
| Diluted | | 220,356 | | | | | 220,594 | | | | | 221,313 | | | | | 218,823 | |
| | | | | | | | | | | | | | | | |
Diluted net income per share computation: | | | | | | | | | | |
GAAP Net income, basic | $ | 22,006 | | | | $ | 20,487 | | | | $ | 76,667 | | | | $ | 59,907 | |
Interest expense on convertible debentures, net of related GAAP tax effects | | 449 | | | | | 477 | | | | | 1,754 | | | | | 1,906 | |
Amortization of debt issuance costs, net of related GAAP tax effects | | 474 | | | | | 503 | | | | | 1,853 | | | | | 2,013 | |
| | | | | | | | | | | | | | | | |
GAAP Net income, diluted | $ | 22,929 | | | | $ | 21,467 | | | | $ | 80,274 | | | | $ | 63,826 | |
RED HAT, INC. |
CONSOLIDATED BALANCE SHEETS |
(In thousands) |
| | | | | | | | | |
ASSETS | | | |
| | | | | | | February 29, | | February 28, |
| | | | | | | | 2008 | | | | 2007 | |
| | | | | | | (Unaudited) | | |
Current assets: | | | |
| Cash and cash equivalents | $ | 677,720 | | | $ | 527,239 | |
| Investments in debt securities | | 312,442 | | | | 350,827 | |
| Accounts receivable, net | | 127,002 | | | | 87,973 | |
| Prepaid expenses and other current assets | | 75,192 | | | | 41,026 | |
| | | | | | | | | |
| | | Total current assets | | 1,192,356 | | | | 1,007,065 | |
| | | | | | | | | |
| Property and equipment, net | | 68,557 | | | | 45,258 | |
| Goodwill | | 340,314 | | | | 328,837 | |
| Identifiable intangibles, net | | 93,823 | | | | 94,314 | |
| Investments in debt securities | | 341,781 | | | | 278,028 | |
| Other assets, net | | 43,151 | | | | 32,352 | |
| | | | | | | | | |
| | | Total assets | $ | 2,079,982 | | | $ | 1,785,854 | |
| | | | | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | |
Current liabilities: | | | |
| Accounts payable | $ | 17,341 | | | $ | 12,062 | |
| Accrued expenses | | 43,260 | | | | 38,472 | |
| Deferred revenue | | 339,088 | | | | 249,615 | |
| Convertible debentures | | 570,000 | | | | - | |
| Other current obligations | | 59 | | | | 214 | |
| | | | | | | | | |
| | Total current liabilities | | 969,748 | | | | 300,363 | |
| | | | | | | | | |
| Deferred lease credits | | 4,977 | | | | 5,235 | |
| Long term deferred revenue | | 133,805 | | | | 89,020 | |
| Other long term obligations | | 20,261 | | | | - | |
| Convertible debentures | | - | | | | 570,000 | |
Stockholders' equity: | | | |
| Common stock | | 21 | | | | 20 | |
| Additional paid-in capital | | 1,170,328 | | | | 1,040,892 | |
| Accumulated deficit | | (28,202 | ) | | | (92,092 | ) |
| Treasury stock, at cost | | (192,946 | ) | | | (125,789 | ) |
| Accumulated other comprehensive loss | | 1,990 | | | | (1,795 | ) |
| | | | | | | | | |
| | | Total stockholders' equity | | 951,191 | | | | 821,236 | |
| | | | | | | | | |
| | | Total liabilities and stockholders' equity | $ | 2,079,982 | | | $ | 1,785,854 | |
RED HAT, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Unaudited) |
(In thousands) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended | | | Twelve Months Ended |
| | | | | | | February 29, | | February 28, | | February 29, | | February 28, |
| | | | | | | | 2008 | | | | | 2007 | | | | | 2008 | | | | | 2007 | |
| | | | | | | | | | | | | | | | |
Cash flows from operating activities: | | | | | | | | | | |
Net income | $ | 22,006 | | | | $ | 20,487 | | | | $ | 76,667 | | | | $ | 59,907 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | |
| | | | | | | | | |
| | Depreciation and amortization | | 9,105 | | | | | 6,161 | | | | | 33,002 | | | | | 23,853 | |
| | Deferred income taxes | | 12,654 | | | | | (771 | ) | | | | 41,211 | | | | | 12,232 | |
| | Share-based compensation expense | | 10,035 | | | | | 8,014 | | | | | 36,457 | | | | | 32,434 | |
| | Excess tax benefits from share-based payment arrangements | | (17,041 | ) | | | | (10,745 | ) | | | | (61,247 | ) | | | | (15,988 | ) |
| | Provision for doubtful accounts | | (31 | ) | | | | 83 | | | | | 825 | | | | | 1,066 | |
| | Amortization of debt issuance costs | | 752 | | | | | 752 | | | | | 3,010 | | | | | 3,008 | |
| | Net gain on sale of strategic equity investments | | (4,799 | ) | | | | | | | (4,799 | ) | | | |
| | Other | | 103 | | | | | - | | | | | 267 | | | | | (305 | ) |
Changes in operating assets and liabilities net of effects of acquisitions: | | | | | | | | | |
| | Accounts receivable and earnings in excess of billings | | (16,999 | ) | | | | (6,674 | ) | | | | (33,741 | ) | | | | (17,301 | ) |
| | Prepaid expenses and other current assets | | (6,088 | ) | | | | (6,143 | ) | | | | (7,761 | ) | | | | (8,145 | ) |
| | Accounts payable | | 6,671 | | | | | 1,306 | | | | | 4,713 | | | | | 4,844 | |
| | Accrued expenses | | (5,678 | ) | | | | 6,409 | | | | | 1,600 | | | | | 15,846 | |
| | Deferred revenue | | 43,957 | | | | | 26,838 | | | | | 113,138 | | | | | 90,403 | |
| | Other assets | | (134 | ) | | | | (94 | ) | | | | (266 | ) | | | | (298 | ) |
| | | | | | | | | | | | | | | | |
| | Net cash provided by operating activities | | 54,513 | | | | | 45,623 | | | | | 203,076 | | | | | 201,556 | |
| | | | | | | | | | | | | | | | |
Cash flows from investing activities: | | | | | | | | | | |
| Purchase of investment securities | | (309,853 | ) | | | | (585,229 | ) | | | | (1,173,012 | ) | | | | (592,673 | ) |
| Proceeds from sales and maturities of investment securities | | 402,551 | | | | | 258,677 | | | | | 1,155,854 | | | | | 781,539 | |
| Acquisitions of businesses, net of cash acquired | | - | | | | | - | | | | | (11,784 | ) | | | | (149,864 | ) |
| Purchase of property and equipment | | (16,045 | ) | | | | (7,885 | ) | | | | (41,797 | ) | | | | (22,635 | ) |
| Proceeds from sale of strategic equity investments | | 6,199 | | | | | - | | | | | 6,199 | | | | | - | |
| Purchase of developed software and other intangible assets | | (840 | ) | | | | 319 | | | | | (5,616 | ) | | | | 319 | |
| | | | | | | | | | | | | | | | |
| | Net cash provided by (used in) investing activities | | 82,012 | | | | | (334,118 | ) | | | | (70,156 | ) | | | | 16,686 | |
| | | | | | | | | | | | | | | | |
Cash flows from financing activities: | | | | | | | | | | |
| Excess tax benefits from share-based payment arrangements | | 17,041 | | | | | 10,745 | | | | | 61,247 | | | | | 15,988 | |
| Net proceeds from issuance of common stock under Employee Stock Purchase Plan | | - | | | | | - | | | | | - | | | | | 306 | |
| Proceeds from exercise of common stock options | | 1,592 | | | | | 9,678 | | | | | 15,512 | | | | | 24,328 | |
| Purchase of treasury stock | | (66,539 | ) | | | | (66 | ) | | | | (67,157 | ) | | | | (1,664 | ) |
| Structured stock repurchase | | - | | | | | - | | | | | - | | | | | 1,514 | |
| Proceeds from other borrowings | | - | | | | | - | | | | | 2,898 | | | | | - | |
| Payments on other borrowings | | - | | | | | (144 | ) | | | | (756 | ) | | | | (400 | ) |
| | | | | | | | | | | | | | | | |
| | Net cash provided by (used in) financing activities | | (47,906 | ) | | | | 20,213 | | | | | 11,744 | | | | | 40,072 | |
| | | | | | | | | | | | | | | | |
Effect of foreign currency exchange rates on cash and cash equivalents | | 2,142 | | | | | (471 | ) | | | | 5,817 | | | | | 1,378 | |
Net increase in cash and cash equivalents | | 90,761 | | | | | (268,753 | ) | | | | 150,481 | | | | | 259,692 | |
Cash and cash equivalents at beginning of the period | | 586,959 | | | | | 795,992 | | | | | 527,239 | | | | | 267,547 | |
| | | | | | | | | | | | | | | | |
Cash and cash equivalents at end of period | $ | 677,720 | | | | $ | 527,239 | | | | $ | 677,720 | | | | $ | 527,239 | |
RED HAT, INC. |
NON CASH SHARE-BASED COMPENSATION AND RECONCILIATION OF 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 | | | Twelve Months Ended |
| | | | | | | February 29, | | February 28, | | February 29, | | February 28, |
| | | | | | | | 2008 | | | | 2007 | | | | 2008 | | | | 2007 |
| | | | | | | | | | | | | | | | |
| Cost of revenue | $ | 657 | | | $ | 610 | | | $ | 2,393 | | | $ | 2,216 |
| Sales and marketing | | 2,606 | | | | 2,280 | | | | 10,193 | | | | 9,033 |
| Research and development | | 2,265 | | | | 2,056 | | | | 8,717 | | | | 7,206 |
| General and administration | | 4,507 | | | | 3,068 | | | | 15,154 | | | | 13,979 |
| Total stock based compensation expense | $ | 10,035 | | | $ | 8,014 | | | $ | 36,457 | | | $ | 32,434 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Reconciliation of GAAP results to non-GAAP adjusted results |
| | | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended | | | Twelve Months Ended |
| | | | | | | February 29, | | February 28, | | February 29, | | February 28, |
| | | | | | | | 2008 | | | | 2007 | | | | 2008 | | | | 2007 |
| | | | | | | | | | | | | | | | |
GAAP net income | $ | 22,006 | | | $ | 20,487 | | | $ | 76,667 | | | $ | 59,907 |
| | | | | | | | | | | | | | | | |
GAAP provision for income taxes | | 12,926 | | | | 6,504 | | | | 47,873 | | | | 29,656 |
| | | | | | | | | | | | | | | | |
GAAP income before provision for income taxes | $ | 34,932 | | | $ | 26,991 | | | $ | 124,540 | | | $ | 89,563 |
| | | | | | | | | | | | | | | | |
Add: Non-cash share-based compensation expense per FAS 123R | | 10,035 | | | | 8,014 | | | | 36,457 | | | | 32,434 |
| | | | | | | | | | | | | | | | |
Non-GAAP adjusted income before provision for income taxes | $ | 44,967 | | | $ | 35,005 | | | $ | 160,997 | | | $ | 121,997 |
| | | | | | | | | | | | | | | | |
Non-GAAP cash provision for income taxes | $ | 2,248 | | | $ | 1,750 | | | $ | 8,050 | | | $ | 6,100 |
| | | | | | | | | | | | | | | | |
Non-GAAP adjusted net income | $ | 42,719 | | | $ | 33,255 | | | $ | 152,947 | | | $ | 115,897 |
| | | | | | | | | | | | | | | | |
Non-GAAP adjusted net income-diluted | $ | 44,111 | | | $ | 34,647 | | | $ | 158,514 | | | $ | 121,464 |
| | | | | | | | | | | | | | | | |
Non-GAAP adjusted net income per share: | | | | | | | | | | |
| Basic | $ | 0.22 | | | $ | 0.17 | | | $ | 0.79 | | | $ | 0.61 |
| Diluted | $ | 0.20 | | | $ | 0.16 | | | $ | 0.72 | | | $ | 0.56 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Non-GAAP diluted net income per share computation: | | | | | | | | | | |
Non-GAAP adjusted net income | $ | 42,719 | | | $ | 33,255 | | | $ | 152,947 | | | $ | 115,897 |
Interest expense on convertible debentures, net of related 5% cash tax effects | | 677 | | | | 677 | | | | 2,708 | | | | 2,708 |
Amortization of debt issuance costs, net of related 5% cash tax effects | | 715 | | | | 715 | | | | 2,859 | | | | 2,859 |
| | | | | | | | | | | | | | | | |
Non-GAAP adjusted net income-diluted | $ | 44,111 | | | $ | 34,647 | | | $ | 158,514 | | | $ | 121,464 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Reconciliation of GAAP cash flows from operating activities to non-GAAP adjusted cash flows from operating activities |
| | | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended | | | Twelve Months Ended |
| | | | | | | February 29, | | February 28, | | February 29, | | February 28, |
| | | | | | | | 2008 | | | | 2007 | | | | 2008 | | | | 2007 |
| | | | | | | | | | | | | | | | |
GAAP net cash provided by operating activities | $ | 54,513 | | | $ | 45,623 | | | $ | 203,076 | | | $ | 201,556 |
| | | | | | | | | | | | | | | | |
Add: Excess tax benefits from share-based payment arrangements | | 17,041 | | | | 10,745 | | | | 61,247 | | | | 15,988 |
| | | | | | | | | | | | | | | | |
Non-GAAP net cash provided by operating activities | $ | 71,554 | | | $ | 56,368 | | | $ | 264,323 | | | $ | 217,544 |
RED HAT, INC. |
RECONCILIATION OF GAAP RESULTS TO NON-GAAP ADJUSTED RESULTS |
(Unaudited) |
(In thousands - except per share amounts) |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Reconciliation of GAAP results to non-GAAP adjusted results |
| | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended | | Twelve Months Ended |
| | | | | | | February 29, | | February 28, | February 29, | | February 28, |
| | | | | | | | 2008 | | | | | 2007 | | | | 2008 | | | | | 2007 | |
| | | | | | | | | | | | | | | |
GAAP Gross profit | $ | 120,093 | | | | $ | 93,692 | | | $ | 442,363 | | | | $ | 335,888 | |
| | | | | | | | | | | | | | | |
Add: Non-cash share-based compensation expense per FAS 123R | | 657 | | | | | 610 | | | | 2,393 | | | | | 2,216 | |
| | | | | | | | | | | | | | | |
Non-GAAP gross profit | $ | 120,750 | | | | $ | 94,302 | | | $ | 444,756 | | | | $ | 338,104 | |
| | | | | | | | | | | | | | | |
Non-GAAP gross margin | | 85 | % | | | | 85 | % | | | 85 | % | | | | 84 | % |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended | | Twelve Months Ended |
| | | | | | | February 29, | | February 28, | February 29, | | February 28, |
| | | | | | | | 2008 | | | | | 2007 | | | | 2008 | | | | | 2007 | |
| | | | | | | | | | | | | | | |
GAAP operating expenses | $ | 101,921 | | | | $ | 77,054 | | | $ | 371,991 | | | | $ | 283,599 | |
| | | | | | | | | | | | | | | |
Deduct: Non-cash share-based compensation expense per FAS 123R | | (9,378 | ) | | | | (7,404 | ) | | | (34,064 | ) | | | | (30,218 | ) |
| | | | | | | | | | | | | | | |
Non-GAAP adjusted operating expenses | $ | 92,543 | | | | $ | 69,650 | | | $ | 337,927 | | | | $ | 253,381 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended | | Twelve Months Ended |
| | | | | | | February 29, | | February 28, | February 29, | | February 28, |
| | | | | | | | 2008 | | | | | 2007 | | | | 2008 | | | | | 2007 | |
| | | | | | | | | | | | | | | |
GAAP operating income | $ | 18,172 | | | | $ | 16,638 | | | $ | 70,372 | | | | $ | 52,289 | |
| | | | | | | | | | | | | | | |
Add: Non-cash share-based compensation expense per FAS 123R | | 10,035 | | | | | 8,014 | | | | 36,457 | | | | | 32,434 | |
| | | | | | | | | | | | | | | |
Non-GAAP adjusted operating income | $ | 28,207 | | | | $ | 24,652 | | | $ | 106,829 | | | | $ | 84,723 | |
| | | | | | | | | | | | | | | |
Non-GAAP adjusted operating margin | | 19.9 | % | | | | 22.2 | % | | | 20.4 | % | | | | 21.1 | % |
CONTACT:
Red Hat
Corporate Communications
Kerrin Catallozzi, 919-754-4268
kcatallo@redhat.com
or
Investor Relations
Tom McCallum, 919-754-4630
investors@redhat.com