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GuruFocus has detected 3 Warning Signs with Red Hat Inc $RHT.
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Red Hat Inc (NYSE:RHT)
Net Margin %
10.46% (As of Feb. 2017)

Net margin is calculated as net income divided by its revenue. Red Hat Inc's net income for the three months ended in Feb. 2017 was $66 Mil. Red Hat Inc's revenue for the three months ended in Feb. 2017 was $629 Mil. Therefore, Red Hat Inc's net margin for the quarter that ended in Feb. 2017 was 10.46%.

RHT' s Net Margin % Range Over the Past 10 Years
Min: 9.71   Max: 14.66
Current: 10.52

9.71
14.66
RHT's Net Margin % is ranked higher than
74% of the 1863 Companies
in the Global Software - Application industry.

( Industry Median: 3.19 vs. RHT: 10.52 )

Definition

Net margin - also known as net profit margin is the ratio of Net Income divided by net sales or Revenue, usually presented in percent.

Red Hat Inc's Net Margin for the fiscal year that ended in Feb. 2017 is calculated as

Net Margin=Net Income (A: Feb. 2017 )/Revenue (A: Feb. 2017 )
=253.703/2411.803
=10.52 %

Red Hat Inc's Net Margin for the quarter that ended in Feb. 2017 is calculated as

Net Margin=Net Income (Q: Feb. 2017 )/Revenue (Q: Feb. 2017 )
=65.803/628.84
=10.46 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

Although Net Income and Earnings-per-Share (EPS) are the most widely used parameter in measuring a company’s profitability and valuation, it is the least reliable. The reason is that reported earnings can be manipulated easily by adjusting any numbers such as Depreciation, Depletion and Amotorization and non-recurring items.

But the long term trend of the net margin is a good indicator of the competitiveness and health of the business.


Related Terms

Net Income, Revenue, Cost of Goods Sold, Selling, General, & Admin. Expense, Research & Development, Depreciation, Depletion and Amortization, Interest Expense, Non-Recurring Items, Tax Expense


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Red Hat Inc Annual Data

Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16Feb17
netmargin 14.6612.0611.6611.8012.9411.3011.6210.079.7110.52

Red Hat Inc Quarterly Data

Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16Feb17
netmargin 10.5110.2810.0010.198.959.7610.779.8011.0410.46
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