=Red Hat (RHT) reported earnings on Wed 19 Sept 18 (a/h)

Red Hat beats by $0.03, reports revs in-line; guides NovQ EPS below consensus, revs below consensus; guides FY19 EPS in-line, revs in-line 

• Reports Q2 (Aug) earnings of $0.85 per share, excluding non-recurring items, $0.03 better than the S&P Capital IQ Consensus of $0.82 and above prior guidance of approx $0.81; revenues rose 13.7% year/year to $822.75 mln vs the $828.12 mln S&P Capital IQ Consensus and vs prior guidance of $822-830 mln.
  • Biilings were $789 mln.
  • Subscription revenue rose 13% to $723 mln. Breaking this down a bit, subscription revenue from Infrastructure-related offerings rose 8% YoY to $527 mln. Subscription revenue from Application Development-related and other emerging technology offerings rose 31% YoY to $196 mln.
  • Non-GAAP operating margin declined to 23.9% from 26.4% last year, but this was above prior guidance of approx 23%.
• Co issues downside guidance for Q3 (Nov), sees EPS of approx $0.87, excluding non-recurring items, vs. $0.92 S&P Capital IQ Consensus; sees Q3 revs of $848-856 mln vs. $862.1 mln S&P Capital IQ Consensus. Guides to NovQ non-GAAP operating margin of approx 24%.
• Co issues in-line guidance for FY19, sees EPS of $3.45-3.49, excluding non-recurring items, vs. $3.45 S&P Capital IQ Consensus and vs prior guidance of $3.44-3.48; sees FY19 revs of $3.360-3.395 bln  vs. $3.39 bln S&P Capital IQ Consensus and bs prior guidance of $3.375-3.410 bln. Reaffirms full year non-GAAP operating margin of approx 23.9%.