Red Hat signs off last set of numbers before it is likely gobbled by IBM
Only the Chinese now to OK $34.5bn slurp
With the EU tipped to approve IBM's $34bn slurp of Red Hat next week, the open-source software house started Q1 of fiscal '20 with double-digit hikes in sales and profit, though its top line fell short of analyst estimates.
The US regulatory authorities have already given Red Hat the thumbs-up to be consumed by something Big and Blue, but the EU is scheduled to make a decision on 27 June, the last day of Red Hat's EMEA Partner knees-up.
In what could be its last set of results before it is assimilated into IBM's Hybrid Cloud unit, Red Hat said revenue for the quarter ended 31 May was up 15 per cent year-on-year to $934m, 0.3 per cent below consensus.
Broken down, subscription was up 15 per cent to $815m and services were up 17 per cent to $119m. Subscription for infrastructure-related sales was $580m, up 11 per cent, and Application Development stuff was $235m, up 24 per cent. Deferred revenues rose 17 per cent to $2.8bn.
"Our large deal momentum remained strong," Eric Shander, exec veep and CFO, said in a statement. "We doubled the number of deals over $5m and saw 15 per cent growth in the number of deals over $1m."
The record also included Red Hat's largest storage and hyperconverged sale – for more than $15m – and got sign-off for a $5m piece of OpenStack business.
Red Hat execs managed to once more dodge the customary conference call with analysts last night because of the pending nature of the IBM deal.
"Customer interest in Red Hat technologies is robust, evidenced by our record attendance of nearly 9,000 attendees at Red Hat Summit," said CEO Jim Whitehurst, again in a prepared remark.
With US and EU approval out of the way, Red Hat and IBM will then be awaiting the green light from China.
Profit for the quarter was up to $141.1m, up from $133.2m a year ago, and included a tax benefit of $13.2m that was largely related to an intra-entity transfer of assets. ®