Red Hat Inc. (RHT)
F3Q2011 Earnings Call Transcript
December 21, 2010 5:00 pm ET
Tom McCallum – VP, IR
Jim Whitehurst – President and CEO
Charlie Peters – EVP and CFO
Kash Rangan – Merrill Lynch
Adam Holt – Morgan Stanley
Matt Hedberg – RBC Capital
Sarah Friar – Goldman Sachs
John DiFucci – JP Morgan
Heather Bellini – ISI Group
Michael Turits – Raymond James
Trip Chowdhry – Global Equities Research
Ignatius Njoku – Jefferies
Todd Raker – Deutsche Bank
Bhavan Suri – William Blair
Steven Ashley – Robert W. Baird
Mark Murphy – Piper Jaffray
Brent Thill – UBS
Tim Klasell – Stifel Nicolaus
Richard Williams – Cross Research
Derrick Wood – Susquehanna
Edward Maguire – CLSA
Nabil Elsheshai – Pacific Crest Securities
Brad Whitt – Gleacher & Company
Brad Reback – Oppenheimer
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Good afternoon. My name is Martin and I will be your conference operator. At this time, I would like to welcome everyone to Red Hat Q3 2011 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator instructions) Thank you.
I'll now turn the call over to our host Mr. Tom McCallum, Vice President of Investor Relations. Sir, you may begin conference.
Thank you. Hello everyone and welcome to Red Hat's earnings call for Q3 fiscal year 2011. Speakers for today's call will be Jim Whitehurst, President and CEO; and Charlie Peters, Executive Vice President and CFO. Our earnings press release was issued after the market close today, and may be downloaded from Redhat.com on the Investor Relations page. Also on this page will be, you will find a historic reconciliation schedule of GAAP to non-GAAP financial metrics, as well as a schedule on currency rates.
Various remarks we may make about the Company's future expectations, plans and prospects including the statements containing the words believe, anticipate, plan, project, estimate, expect, intend, or will constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements, as a result of various important factors including those discussed in the Company's most recent Quarterly Report on Form 10-Q filed with the SEC.
In addition, any forward-looking statements represent our estimates or views only as of today, December 21, 2010, and these views or estimates may change. While the Company may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates or views do change, and therefore, you should not rely on these forward-looking statements as representing our estimates or views at any date subsequent to today.
With that, I'd like to turn the call over to Jim.
Thank you, Tom and let me add my welcome to all of you joining us on today's call. Strong market demand and sales execution combined with the compelling value proposition led to another quarter in which we drove exceptional financial results that were well above our expectations. In fact, we saw momentum in our business accelerate driving 20 plus percent year-over-year organic growth in a number of key financial metrics including billings, revenue, operating income and cash flow.
Also this quarter, we continue to deliver innovation that will allow our customers to take advantage of the major shifts in the data center around virtualization and cloud computing. Before Charlie discusses our results and growth outlook for the full year in greater detail, let me provide you with some additional highlights for the quarter.
First, we launched the latest version of our flagship operating system Red Hat Enterprise Linux 6. The launch of RHEL 6 was ushered in with tremendous support from strategic partners. RHEL 6 provides core improvements for enterprise customers including enhanced security, scalability, resource management, performance, power management and virtualization. RHEL 6 is the result of collaborated efforts from many of the top global technology companies and the vast Linux community.
With our open source development model, we are able to bring together the collective contributions of thousands of partners, customers, community members and our own team of Red Hat engineers, who are some of the best and brightest in the world to deliver a great platform for next-generation IT architectures. First and foremost, RHEL 6 enables customers to reap the benefit they have come to expect from us, a high-performance secure platform on either a physical or a virtual server. This latest version of RHEL was specifically build with cloud infrastructure in mind.
We have included functionality that provides an on-rent [ph] to the cloud-oriented data center of tomorrow. Some of the world's largest public and private clouds are already running on Red Hat technologies and as we look ahead, our customers will have a proven platform for cloud enabling with RHEL 6. The positive reaction to RHEL 6 by customers, partners, industry analysts and the press has been impressive. Technology advancement and the new packaging and pricing which gives customers more choice and flexibility have received positive recognition from industry experts.
In just a month since its launch, RHEL 6 has established itself as the industry's highest performing virtualization platform for data center servers. This according to the latest results from SPEC, the industry standard virtualization performance benchmark from the Standard Performance Evaluation Corporation. RHEL 6 was also recognized by eWEEK Labs, as one of the products that did the most improved enterprise technology in 2010. In fact, eWEEK named RHEL 6 a Top Product of the Year.