Red Hat milks corporate Linux sales for strong Q1

Subscriptions look solid

By Ashlee Vance in Chicago • Get more from this author

Posted in Financial News, 1st July 2005 05:16 GMT

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A bustling enterprise Linux business carried Red Hat to improved first quarter results. The software maker reported revenue of $60.8m in the period - a solid 46 per cent jump over $41.8m in the same quarter one year ago. Red Had enjoyed a slight increase in services and embedded OS revenue, while subscriptions to its corporate Linux product jumped significantly. The improved overall business helped Red Hat post net income of $12.4m - a rise over the $10.9m last year.

Red Hat's CFO Charlie Peters spared investors undue enthusiasm when describing the results.

"Our results for the first quarter represent a solid start to the fiscal year," he said. "We continue to experience strong customer demand."

Red Hat's flagship enterprise OS pulled in $48.7m during the quarter, which compares to $30m last year. Embedded revenue increased to $497,000 from $225,000. Services revenue for the enterprise OS hit $11.4m, which compares to $10.5m one year earlier.

Red Hat, however, saw a dramatic fall in embedded services revenue from $710,000 down to $157,000 in the first quarter.

Management warned that a stronger dollar could put pressure on future quarters. Red Hat expects second quarter sales to come in between $64m and $65m. ®