Red Hat Inc (NYSE: RHT) stock rose over 0.3% on 18th December, 2018 (as of 10:58 am GMT-5; Source: Google finance) after the company posted better than expected results third quarter of FY 19. After adjusting for non-cash share-based compensation expense, amortization of intangible assets, transaction costs related to business combinations and non-cash interest expense related to the debt discount, non-GAAP adjusted net income for the quarter was $175 million as compared to $133 million. Total cash, cash equivalents and investments as of November 30, 2018 was $2.2 billion after repurchasing approximately $13 million, or approximately 0.1 million shares, of common stock in the third quarter. The remaining balance in the current repurchase authorization as of November 30, 2018 was approximately $737 million. GAAP and non-GAAP operating cash flow was $137 million for the third quarter, down 15% on a year-over-year basis compared to GAAP operating cash flow. GAAP and non-GAAP operating cash flow include approximately $23 million of business combinations expenses paid in the quarter.
Red Hat said it isn’t providing further guidance for its 2019 fiscal year, because it is being acquired by International Business Machines Corp. for about $33 billion, a deal that is expected to close in the second half of 2019. Previously, the company said it expected $3.36 billion to $3.39 billion in sales for its fiscal year and per-share profit of $2.29 to $2.33.
RHT in the third quarter of FY 18 has reported the adjusted earnings per share of 96 cents, beating the analysts’ estimates for the adjusted earnings per share of 87 cents. The company had reported the adjusted revenue growth of 13 percent to $847 million in the third quarter of FY 18, beating the analysts’ estimates for revenue of $823 million. Subscription revenue for the quarter was $741 million, up 13% year-over-year, or 15% measured in constant currency. Subscription revenue in the quarter was 87% of total revenue. Subscription revenue from Infrastructure-related offerings for the quarter was $534 million, an increase of 8% year-over-year, or 9% measured in constant currency. Subscription revenue from Application Development-related and other emerging technology offerings for the quarter was $207 million, an increase of 28% year-over-year, or 30% measured in constant currency. At the end of the third quarter, the Company’s total deferred revenue balance was $2.5 billion, an increase of 20% year-over-year. The negative impact to total deferred revenue from changes in foreign exchange rates was $53 million year-over-year. On a constant currency basis, total deferred revenue would have increased 23% year-over-year.