Red Hat CFO reaches for eject cord after Street-beating performance
Linux firm ups annual guidance yet again
Red Hat chief financial officer Charlie Peters announced on Wednesday that he's stepping down from the company, even as it reported another quarter of strong earnings that beat even its own guidance.
The Linux kingpin reported $455.9m in total revenues for the third quarter of its fiscal 2015, which outperformed Wall Street's average estimate handily.
Revenues were up 15 per cent from the same period a year ago, and during a conference call with financial analysts on Thursday, Peters said Red Hat saw double-digit growth across all of its major geographic regions during the quarter.
"Our strong Q3 results marked the eleventh straight quarter of mid-to-high teens revenue growth as we continued to reinforce and expand our strategic relationship with our customers," CEO Jim Whitehurst said in a canned statement.
As in past quarters, most of those dollars came from software subscriptions. Total subscription revenues for the period were $394.7m, which was up 15.2 per cent from a year ago.
But if the training and services division wasn't as lucrative for Red Hat as subscriptions, it too is growing at a steady clip, with revenues up 13.8 per cent to $61.2m in the third quarter.
Red Hat's sales were so good this past quarter, in fact, that it has increased its revenue guidance for the year to just under $1.8bn – the third time it has upped its guidance in three successive quarters.
"We believe our leadership position in the open source industry and broad portfolio of Open Hybrid Cloud technologies creates a strong position for Red Hat to capture market share in the cloud-enabled data center," Whitehurst said.
The strongest piece of that portfolio remains Linux itself, however. Peters said that the "app dev and emerging technologies" part of the business – which includes middleware, OpenStack, OpenShift, CloudForms, and storage – made up just 14 per cent of total revenue in the quarter.
And despite Red Hat's strong revenue for Q3, its net income for the quarter was $48m, which was down 7.9 per cent, year-on-year. Still, that resulted in earnings of $0.42 per diluted share, which also beat the analysts' estimates.
Investors were ecstatic and sent Red Hat's share price shooting up by nearly 11 per cent in after-hours trading.
So it was on a high note that Peters said that he will leave the company within the next 12 months to spend more time with his family, which he said now includes six grandchildren.
Peters, who joined Red Hat in 2004, said that he would remain with the company for as long as it needs him as it begins the process of finding someone to replace him.
Whitehurst added, "We'll plan to name a successor when we think the time's right and the process has run its course." ®
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