Red Hat (RHT)
Q2 2013 Earnings Call
September 24, 2012 5:00 pm ET
Executives
Tom McCallum
James M. Whitehurst - Chief Executive Officer, President and Director
Charles E. Peters - Chief Financial Officer and Executive Vice President
Analysts
Adam H. Holt - Morgan Stanley, Research Division
Kash G. Rangan - BofA Merrill Lynch, Research Division
Joel P. Fishbein - Lazard Capital Markets LLC, Research Division
Mark R. Murphy - Piper Jaffray Companies, Research Division
Michael Turits - Raymond James & Associates, Inc., Research Division
Jason Maynard - Wells Fargo Securities, LLC, Research Division
Bhavan Suri - William Blair & Company L.L.C., Research Division
Matthew Hedberg - RBC Capital Markets, LLC, Research Division
Brent Thill - UBS Investment Bank, Research Division
James Derrick Wood - Susquehanna Financial Group, LLLP, Research Division
Heather Bellini - Goldman Sachs Group Inc., Research Division
Steven M. Ashley - Robert W. Baird & Co. Incorporated, Research Division
Stewart Materne - Evercore Partners Inc., Research Division
Walter H. Pritchard - Citigroup Inc, Research Division
Edward Maguire - Credit Agricole Securities (USA) Inc., Research Division
John S. DiFucci - JP Morgan Chase & Co, Research Division
Rob D. Owens - Pacific Crest Securities, Inc., Research Division
Ross MacMillan - Jefferies & Company, Inc., Research Division
Presentation
Operator
Good afternoon, my name is Ali, and I will be your conference operator today. At this time, I would like to welcome everyone to the Red Hat Q2 2013 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to your host, Tom McCallum, Vice President of Investor Relations. Mr. McCallum, you may begin your conference.
Tom McCallum
Thank you, Ali. Hello, everyone, and welcome to Red Hat's earnings call for the second quarter of fiscal 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 redhat.com on the Investor Relations page. Also on this page, you will find a historic reconciliation schedule of GAAP to non-GAAP financial metrics, as well as the schedule on currency rates.
Various remarks that 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, as well as the Safe Harbor statement in today's press release.
In addition, any forward-looking statements represent our estimates or views only as of today, September 24, 2012, 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 at any date subsequent to today.
With that, I'd like to turn the call over to Jim.
James M. Whitehurst
Thanks, Tom, and welcome to everyone joining us on today's call. We continue to deliver steady growth in our key measures, with 22% constant currency growth in subscription revenue and over 30% operating cash flow growth for the fourth straight quarter. For both this quarter, as well as for the first half of the year, our global organization has executed well, and I'm pleased with our progress towards our long-term growth initiatives. We remain focused on serving the needs of our customers and in investing in technologies that enterprises require in the new era of computing. This strategic focus has led to a broad-based demand while elevating Red Hat as a strategic vendor and enabling us to gain market share by delivering innovation, combined with a compelling value proposition. It has also led to a significant expansion in our value proposition and addressable market opportunity.
The rate of software innovation in the data center has been phenomenal over the last few years. Clearly, open source technologies are the DNA of the software-defined data center based on projects such as KVM, Linux and OpenStack. Red Hat is able to both benefit from and help drive this rapid pace of innovation as a result of our community-driven development process, which we view is a significant competitive advantage. I'm proud to announce that we've been recognized on the Forbes World's Most Innovative Company list, ranking #4. We're also proud that our customers, who have built mission-critical systems on Red Hat technologies, are also on that Forbes list of innovative companies.
Our open source technologies are key to creating innovation, scale and flexibility in our customers' data centers and their businesses. CIOs are only beginning to wrap their arms around how they can best modernize their data centers for competitive advantage, and we're seeing early investments in proof of concepts in the next-generation IT architectures. We barely scratched the surface of this tremendous opportunity, and Red Hat's proven value proposition and trusted vendor status position us very well.
Many of you were able to attend our highly successful Red Hat Summit, where we experienced nearly a 40% surge in attendance. For those in attendance heard from key partners and users and saw community-powered innovation in action. Attendees have the chance to learn firsthand about innovations at our core RHEL and JBoss solutions.
We also introduced exciting new technologies that will address trends in cloud computing, storage and virtualization. For those who are unable to attend, let me provide a few important highlights. And for those who did make it, I'll discuss some updates.
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