Red Hat, Inc. (NYSE:RHT) Q4 2016 Earnings Conference Call - Preliminary Transcript
Mar 22, 2016 • 05:00 pm ET
basis, we estimate annual stock compensation expenses of approximately $180 million and annual amortization expense of approximately $29 million. GAAP fully-diluted EPS guidance includes non-cash interest expense, which is related to the convertible debt discount of approximately $19 million.
Operating cash flow is expected to grow in the range from $800 million to $820 million. This range includes a headwind of approximately $10 million for increased cash taxes as the company continues to drive greater profitability. For those of you who try to model billings metrics, we would expect the same business flow in our renewal subscription model as in the past. We expect both bookings and billings to repeat their historic pattern of being lowest in Q1 and growing going forward to the end of the highest level in Q4. For Q1 specifically, we offer the following outlook. We expect revenue to be in the range of $558 million to $566 million, which is up 18% in US dollars at the high end of the range. One should note that FY 2016 Q1 revenue had a one-time catch-up benefit from the CCSP program that will not repeat in Q1 of this year. We expect non-GAAP operating margin of approximately 22% and non-GAAP earnings per share of $0.50.
Consistent with prior practices, I will not forecast quarterly cash flow, but please note that it can be variable depending upon individual payments or receipts. Overall, we delivered a strong performance in Q4 and throughout FY 2016. We continue to believe there is significant opportunity for Red Hat, as IT organizations transition their application development and infrastructure to the hybrid cloud environment.
We are very well-positioned to deliver an attractive combination of revenue growth, profitability and cash flow for FY 2017. We remain optimistic about the company's long-term opportunity, as we are uniquely positioned to further drive the adoption of open source technologies and to enable customers to reap the benefits of hybrid cloud computing.
Operator, I would now like to turn the call back over to you for the first question.
Operator, before we do that, this is Jim Whitehurst again. It's brought to my attention that I misspoke on one number. The number of deals above -- in excess of $10 million that we closed was five deals, which is a record for any quarter, but it's five deals, not 15, and the number is correct on our website. Thank you all.