Red Hat Inc RHT
Q4 2013 Earnings Call Transcript

Transcript Call Date 03/27/2013

Operator: Good afternoon. My name is Ginger, and I will be your conference operator today. At this time, I would like to welcome everyone to the Red Hat Q4 2013 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Thank you. Mr. Tom McCallum, Vice President of Investor Relations, you may begin the conference.

Tom McCallum - VP, IR: Thank you, Ginger. Hello everyone, and welcome to Red Hat's earnings call for the fourth quarter and the fiscal year 2013. 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 closed today, and may be downloaded from on the Investor Relations page. Also, on this page, you'll be able to find a historic reconciliation schedule of GAAP to non-GAAP financial metrics, as well as a schedule of 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's provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated in these forward-looking statements as a result of various important factors, including those disclosed in the Company's most recent quarterly report on Form 10-Q filed with the SEC, as well as the safe harbor statement in today's press release.

In addition, any forward-looking statement represents our estimates or views only as of today, March 27, 2013 and these estimates or views 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 as of any date subsequent to today.

With that I'd like to turn the call over to Jim.

Jim Whitehurst - President and CEO: Thank you, Tom. Let me add my welcome to all of you joining us on today's call. We capped a successful year for Red Hat with strong sales performance in the fourth quarter. For FY '13 we drove record annual revenue up 17% year-over-year. Record billings proxy up 14% year-over-year and record total backlog, which was up more than 19% year-over-year.

Within that total backlog, the unbilled backlog that is the value of customer contracts to be billed in the future and not reflected in our financial statements increased significantly. The unbilled backlog grew from – to over $280 million, or up 40% as customers increased their commitments to Red Hat technologies in the data center.

The drivers of our growth include large deal traction and vertical expansion, UNIX to Linux migrations. Linux growing faster than Windows, free-to-pay conversions, strong renewals and cross-selling in our top accounts, growth of our middleware solutions, which continue to grow at a faster pace in our core, expansion of our total addressable market, expansion of our wallet share and existing customers and continued addition of new customers, and leadership as a strategic vendor in the re-architecture of the data center for the cloud.

Read our Earnings Call Transcript disclaimer.
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