Red Hat Inc. (RHT, Financial) filed Quarterly Report for the period ended 2009-05-31.
Red Hat Inc. is a leading developer and provider of open source software and services including the Red Hat Linux operating system. Unlike proprietary software open source software has publicly available source code and can be copied modified and distributed with minimal restrictions. The web site REDHAT.COM is a leading online source of information and news about open source software and one of the largest online communities of open source software users and developers. Red Hat Inc. has a market cap of $3.55 billion; its shares were traded at around $19.2 with a P/E ratio of 31.4 and P/S ratio of 5.5. Red Hat Inc. had an annual average earning growth of 87.8% over the past 5 years.
Revenue by geography. We operate our business in three geographic regions: The Americas (U.S., Latin America and Canada); EMEA (Europe, Middle East and Africa); and Asia Pacific (principally Japan, Singapore, India, Australia, South Korea and China). In the three months ended May 31, 2009, approximately $71.8 million or 41.2% of our revenue was generated outside the United States compared to approximately $66.3 million or 42.3% for the three months ended May 31, 2008. Although the percentage of revenue generated from within the U.S. grew slightly for the three months ended May 31, 2009 as compared to the three months ended May 31, 2008, our international operations are expected to grow as our international sales force and channels become more mature and as we enter new locations or expand our presence in existing locations. As of May 31, 2009, we had offices in more than 65 locations throughout the world.
Gross profit margin. Primarily as a result of changes in mix with a greater proportion of revenue generated by subscription revenue, gross profit margin increased to 84.8% for the three months ended May 31, 2009 from 83.1% for the year three months ended May 31, 2008. Training and services revenue decreased as a percentage of total revenue to 14.7% for the three months ended May 31, 2009 from 16.6% for the three months ended May 31, 2008. In addition to changes in mix, gross profit margin also improved as a result of increased profit margin on training and services, which increased to 35.9% for the three months ended May 31, 2009 from 32.6% for the three months ended May 31, 2008. Additionally, gross profit margin on subscriptions continued to increase slightly, growing to 93.2% for three months ended May 31, 2009 from 93.1% for the three months ended May 31, 2008.
Income from operations. Operating income was 14.4% and 12.7% of total revenue for the three months ended May 31, 2009 and the three months ended May 31, 2008, respectively. The increase in operating income as a percentage of revenue is a result of the increase in gross profit margin primarily as a result of changes in
mix, described above. Overall operating expenses as a percentage of revenue increased slightly to 70.5% for the three months ended May 31, 2009 from 70.4% for the three months ended May 31, 2008 as efficiencies realized in our general and administrative functions were offset by additional research and development expenses related to our recent acquisition of Qumranet, Inc. (Qumranet). Research and development expenses as a percentage of revenue increased to 20.1% for the three months ended May 31, 2009 from 18.5% for the three months ended May 31, 2008.
Read the The complete ReportRHT is in the portfolios of Bill Miller of Legg Mason Value Trust.
Red Hat Inc. is a leading developer and provider of open source software and services including the Red Hat Linux operating system. Unlike proprietary software open source software has publicly available source code and can be copied modified and distributed with minimal restrictions. The web site REDHAT.COM is a leading online source of information and news about open source software and one of the largest online communities of open source software users and developers. Red Hat Inc. has a market cap of $3.55 billion; its shares were traded at around $19.2 with a P/E ratio of 31.4 and P/S ratio of 5.5. Red Hat Inc. had an annual average earning growth of 87.8% over the past 5 years.
Highlight of Business Operations:
Revenue. For the three months ended May 31, 2009 total revenue increased 11.3% or $17.8 million to $174.4 million from $156.6 million for the three months ended May 31, 2008. Subscription revenue increased 13.8% or $18.1 million, driven primarily by additional subscriptions related to our principal RHEL technologies, which have gained broader market acceptance in mission-critical areas of computing, and our international expansion. The increase is, in part, a result of the continued migration of enterprises in industries such as telecommunications, government and financial services to our open source platform from a proprietary Unix platform. Training and services revenue decreased 1.3% or $0.3 million for the three months ended May 31, 2009 as compared to the same period ended May 31, 2008. The slight decrease is driven primarily by a challenging economic environment in which enterprises are scaling back discretionary spending in areas such as training and travel.Revenue by geography. We operate our business in three geographic regions: The Americas (U.S., Latin America and Canada); EMEA (Europe, Middle East and Africa); and Asia Pacific (principally Japan, Singapore, India, Australia, South Korea and China). In the three months ended May 31, 2009, approximately $71.8 million or 41.2% of our revenue was generated outside the United States compared to approximately $66.3 million or 42.3% for the three months ended May 31, 2008. Although the percentage of revenue generated from within the U.S. grew slightly for the three months ended May 31, 2009 as compared to the three months ended May 31, 2008, our international operations are expected to grow as our international sales force and channels become more mature and as we enter new locations or expand our presence in existing locations. As of May 31, 2009, we had offices in more than 65 locations throughout the world.
Gross profit margin. Primarily as a result of changes in mix with a greater proportion of revenue generated by subscription revenue, gross profit margin increased to 84.8% for the three months ended May 31, 2009 from 83.1% for the year three months ended May 31, 2008. Training and services revenue decreased as a percentage of total revenue to 14.7% for the three months ended May 31, 2009 from 16.6% for the three months ended May 31, 2008. In addition to changes in mix, gross profit margin also improved as a result of increased profit margin on training and services, which increased to 35.9% for the three months ended May 31, 2009 from 32.6% for the three months ended May 31, 2008. Additionally, gross profit margin on subscriptions continued to increase slightly, growing to 93.2% for three months ended May 31, 2009 from 93.1% for the three months ended May 31, 2008.
Income from operations. Operating income was 14.4% and 12.7% of total revenue for the three months ended May 31, 2009 and the three months ended May 31, 2008, respectively. The increase in operating income as a percentage of revenue is a result of the increase in gross profit margin primarily as a result of changes in
mix, described above. Overall operating expenses as a percentage of revenue increased slightly to 70.5% for the three months ended May 31, 2009 from 70.4% for the three months ended May 31, 2008 as efficiencies realized in our general and administrative functions were offset by additional research and development expenses related to our recent acquisition of Qumranet, Inc. (Qumranet). Research and development expenses as a percentage of revenue increased to 20.1% for the three months ended May 31, 2009 from 18.5% for the three months ended May 31, 2008.
Read the The complete ReportRHT is in the portfolios of Bill Miller of Legg Mason Value Trust.
