Original URL: http://www.theregister.co.uk/2008/03/27/red_hat_q4_2008_earnings/

Red Hat cheerleading purges Q4 profits

Momentum isn't cheap

By Austin Modine

Posted in Financial News, 27th March 2008 21:59 GMT

Red Hat's profit rose 7 per cent during its fiscal fourth quarter, with a healthy bump in revenue offset by the open source software distributor's increased sales, marketing, and R&D expenses.

In Red Hat's first quarter under new CEO James Whitehurst, the company earned $22m, compared to $20.3m in the same period last year.

Revenue for the quarter was $141.5m, an increase of 27 per cent year-over-year. Subscription revenue for Q4 was $121.9m, up 27 per cent over the previous year.

"During the fourth quarter, I spent a significant amount of time meeting with customers, partners, employees and thought leaders from the open source community," said Whitehurst in a statement. "The momentum of open source solutions is strong and growing, and we believe there is a significant opportunity to expand our presence with existing customers and many companies and industries that have only just begun to adopt open source solutions in a meaningful way."

Red Hat bought a lot of that precious momentum, raising sales and marketing expenses to $52.1m during the quarter, compared with $39.7m year-over year. Research and development during Q4 was $26.3m, up from $20m.

For the full year, total revenue increased 31 per cent to $523m compared with fiscal 2007. Subscription revenue rose 32 per cent from the previous year to $449.8m.

Red Hat's fiscal year GAAP income was $76.7m, compared with $59.9m in the prior year. ®