Red Hat, Inc (RHT) has reported 24.07 percent rise in profit for the quarter ended Feb. 28, 2017. The company has earned $65.80 million, or $0.36 a share in the quarter, compared with $53.04 million, or $0.29 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $109.69 million, or $0.61 a share compared with $97.03 million or $0.52 a share, a year ago.

Revenue during the quarter grew 15.70 percent to $628.84 million from $543.50 million in the previous year period. Gross margin for the quarter expanded 28 basis points over the previous year period to 85.34 percent. Total expenses were 85.02 percent of quarterly revenues, down from 86.79 percent for the same period last year. This has led to an improvement of 178 basis points in operating margin to 14.98 percent.

Operating income for the quarter was $94.22 million, compared with $71.77 million in the previous year period.

However, the adjusted operating income for the quarter stood at $152.63 million compared to $124.44 million in the prior year period. At the same time, adjusted operating margin improved 137 basis points in the quarter to 24.27 percent from 22.90 percent in the last year period.

"Our strategic position with customers is evidenced by the continued growth in large commitments to Red Hat. The number of deals greater than $1 million in fiscal 2017 grew by over 30% annually, and we closed a record number of deals over $20 million, including our first-ever deal of approximately $100 million in the fourth quarter," stated Eric Shander, acting chief financial officer of Red Hat. "This performance also drove a record backlog of $2.7 billion in U.S. dollars, up 28% year-over-year which contributes to our fiscal year 2018 revenue outlook of 13% to 14% growth and should help drive expanded GAAP operating margin of 15.2% and non-GAAP operating margin of 23.6%."

For the first-quarter, Red Hat, Inc forecasts revenue to be in the range of $643 million to $650 million. The company forecasts operating income to grow at 11.70 percent.  The company forecasts adjusted operating income to grow at 20 percent. The company expects diluted earnings per share to be in the range of $0.34 to $0.35.  On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.52 to $0.53. 

For financial year 2018, Red Hat, Inc forecasts revenue to be in the range of $2,720 million to $2,760 million. The company forecasts operating income to grow at 15.20 percent, the company forecasts adjusted operating income to grow at 23.60 percent. The company expects diluted earnings per share to be in the range of $1.69 to $1.73, the company expects diluted earnings per share to be in the range of $2.60 to $2.64 on adjusted basis.

The company has spent $110.13 million cash to meet investing activities during the year as against cash outgo of $512.11 million in the last year.

The company has spent $504.19 million cash to carry out financing activities during the year as against cash outgo of $327.80 million in the last year period.

Cash and cash equivalents stood at $1,090.81 million as on Feb. 28, 2017, up 17.57 percent or $163.03 million from $927.78 million on Feb. 29, 2016.

Working capital increases sharply
Red Hat, Inc has recorded an increase in the working capital over the last year. It stood at $424.63 million as at Feb. 28, 2017, up 35.55 percent or $111.37 million from $313.26 million on Feb. 29, 2016. Current ratio was at 1.22 as on Feb. 28, 2017, up from 1.20 on Feb. 29, 2016.

Days sales outstanding went up to 45 days for the quarter compared with 43 days for the same period last year.