Red Hat (RHT) has reported 45.03 percent jump in profit for the quarter ended Nov. 30, 2016. The company has earned $67.94 million, or $0.37 a share in the quarter, compared with $46.85 million, or $0.25 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $110.75 million, or $0.61 a share compared with $88.63 million or $0.48 a share, a year ago. 

Revenue during the quarter grew 17.51 percent to $615.26 million from $523.58 million in the previous year period. Gross margin for the quarter expanded 78 basis points over the previous year period to 85.30 percent. Total expenses were 86.87 percent of quarterly revenues, up from 86.84 percent for the same period last year. That has resulted in a contraction of 3 basis points in operating margin to 13.13 percent.

Operating income for the quarter was $80.77 million, compared with $68.88 million in the previous year period.

However, the adjusted operating income for the quarter stood at $143.17 million compared to $123.06 million in the prior year period. At the same time, adjusted operating margin contracted 23 basis points in the quarter to 23.27 percent from 23.50 percent in the last year period.

"Enterprise and service provider customers continue to adopt a hybrid cloud strategy for developing, deploying and managing the life-cycle of their critical applications. Red Hat is uniquely positioned to address this need. In aggregate, customers utilizing our cloud-enabling technologies either on-premise or in the public cloud are spending more with Red Hat than customers that have not yet embraced our cloud-enabling technologies," said Jim Whitehurst, president and chief executive officer of Red Hat.

For the fourth-quarter, Red Hat forecasts revenue to be in the range of $614 million to $622 million.  It forecasts operating income to grow at 14 percent.  The company forecasts adjusted operating income to grow at 24 percent.  The company forecasts diluted earnings per share to be $0.33.  On an adjusted basis, the company forecasts diluted earnings per share to be $0.61.

For financial year 2017, Red Hat forecasts revenue to be in the range of $2,397 million to $2,405 million for fiscal year 2017.  It forecasts operating income to grow at 13.50 percent. The company forecasts adjusted operating income to grow at 23 percent, the company forecasts diluted earnings per share to be $1.33.The company forecasts diluted earnings per share to be $2.27 on adjusted basis.

The company has spent $95.34 million cash to meet investing activities during the nine month period as against cash outgo of $361.95 million in the last year period.

The company has spent $372.54 million cash to carry out financing activities during the nine month period as against cash outgo of $207.11 million in the last year period.

Cash and cash equivalents stood at $916.68 million as on Nov. 30, 2016, down 2.69 percent or $25.36 million from $942.04 million on Nov. 30, 2015.

Working capital declines
Red Hat has witnessed a decline in the working capital over the last year. It stood at $382.63 million as at Nov. 30, 2016, down 17.25 percent or $79.77 million from $462.41 million on Nov. 30, 2015. Current ratio was at 1.26 as on Nov. 30, 2016, down from 1.35 on Nov. 30, 2015.

Days sales outstanding went down to 54 days for the quarter compared with 61 days for the same period last year.