Red Hat posts Q3 revenue of $847 million, up 13%

Red Hat reported revenue of $847 million, up 13% year-over-year, or 15% measured in constant currency, for its third quarter of fiscal year 2019 ended November 30, 2018. Subscription revenue for the quarter was $741 million, up 13% year-over-year, or 15% measured in constant currency. GAAP operating income for the quarter was $109 million, down 8% year-over-year. GAAP net income for the quarter was $94 million, or $0.51 diluted earnings per share (EPS), compared with GAAP net income of $102 million, or $0.55 diluted EPS, in the year-ago quarter.

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.

"Adoption of Red Hat’s technologies that enable customers to build and deploy applications more securely and consistently across hybrid and multi-cloud environments continued to drive our growth in Q3,” stated Jim Whitehurst, President and Chief Executive Officer of Red Hat. “For instance, our Certified Cloud and Service Providers (CCSP) program reached the $300 million annualized run-rate milestone in Q3 with 25% year-over-year growth of Red Hat Enterprise Linux on-demand in the public clouds. In addition, we continue to experience strong customer growth in Red Hat OpenShift, our enterprise Kubernetes platform, and Red Hat Ansible Automation, both of which added more than 100 customers in Q3."

"In Q3, we closed 100 deals over $1 million and delivered double digit total revenue growth of 13% year-over-year, or 15% in constant currency and deferred revenue growth of 20% year-over-year, or 23% in constant currency despite continued foreign exchange volatility. Moreover, our total backlog grew 22% year-over-year to approximately $3.5 billion,” said Eric Shander, Executive Vice President and Chief Financial Officer for Red Hat. “Strong renewals of our largest deals also helped drive these results with all of our top 25 deals renewing at an upsell rate above 120%."