Red Hat revenues up – losses way up
Two-for-one stock split coming too
Leading Linux distributor Red Hat today announced a massively widening loss alongside rather narrower growth in revenue for its third quarter of fiscal 2000, its second quarter since it became a publicly owned company.
For the three months ending 30 November, Red Hat recorded revenues of $5.4, up 23 per cent on the $4.4 million sales it posted last quarter, and 64 per cent on the $3.3m it recorded for the same period last year. Back then, Red Hat lost $100,000. This time, its loss reached $3.6m - a whopping 3600 per cent increase.
Naturally, company president Matthew Szulik focused on the revenue gains: "This quarter revenue growth was due to a number of factors: an increase in global demand for Red Hat Linux; an increase in the need for services from corporate accounts; an increase in the contribution of Red Hat's global offices; and an increase in the demand for the content and customers of redhat.com."
Indeed, Red Hat's cut of the advertising it runs on its sites brought in $440,6678 during the quarter, up from zero during Q3 1999. Service revenue shot up 450 per cent over the 12 months. Sales of Red Hat software increased just 14 per cent. Clearly Red Hat's focus on services is paying off, even though it's costing the company plenty to build up that side of the business - during the quarter it opened its Asia-Pacific office and opened five Red Hat training centres (two in California, three in Europe).
The company also announced today a two-for-one stock split, due to take place on 27 December and which will increase the number of outstanding shares to around 137.6 million. ®