Shares of Red Hat fell more than 13 percent on Thursday after the company reported a deceleration of billings and announced that CFO Frank Calderoni would step down.
In an interview with Jim Cramer on Thursday, Red Hat's CEO Jim Whitehurst said Calderoni was an "extraordinary" executive, and was always more of a CEO-in-waiting.
"An opportunity came up and he will be a CEO, and when he came to Red Hat he said his aspiration was to be a CEO. I fully understood that, and obviously the timing is not perfect, but he has a great opportunity," Whitehurst said.
Whitehurst added that the departure was always expected at some point, it was just unfortunate that it was announced this quarter. Calderoni joined Red Hat in June 2015 after serving as the CEO of Cisco Systems. He is leaving Red Hat to become CEO of a company that was not named.
Red Hat is the world's No. 1 provider of Linux based open-sourced operating systems for businesses, along with middleware, virtualization and storage software that has become increasingly more popular in the cloud.
While Red Hat posted an earnings beat, its revenue came in below Wall Street's expectations, up 17.5 percent year-over-year and billings were up just 9 percent. This was a big change from 19 and 16 percent in the two previous quarters.
The CEO attributed the deceleration in billings to two deals that did not close due to the continuing resolution legislation and changing government. He says the deals are now on track to close.
"We really do think this was an air pocket related to two deals that just given the changing government had a bit of an impact on us," Whitehurst said.
Whitehurst added that the company typically does not guide on billings because they are volatile in nature. However, he felt confident that there would be a rebound in billings, and conveyed strength in the business and the future.
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