Red Hat: Nearing $1 billion in revenue; Not bad for free software

Summary:Red Hat delivered a strong fourth quarter and is on track to be the first pure play open source company to hit $1 billion in annual revenue.

Red Hat delivered a strong fourth quarter and is on track to be the first pure play open source company to hit $1 billion in annual revenue.

The open source software provider reported fourth quarter net income of $33.5 million, or 17 cents a share. Non-GAAP earnings were 26 cents a share for the fourth quarter was $244.8 million, up 25 percent from a year ago. Red Hat's earnings were boosted by 2 cents a share due to a research and development tax credit. Wall Street was expecting earnings of 22 cents a share on sales of $236 million.

For the year ended Feb. 28, 2011, Red Hat reported net income of $107.3 million, or 55 cents a share, on revenue of $909.3 million, up 22 percent from a year ago.

That revenue tally makes Red Hat a lock to break through the $1 billion sales total in the year ahead. Jim Whitehurst, CEO of Red Hat, said the company's run rate is approaching $1 billion in revenue. Whitehurst added that Red Hat is gaining from data center upgrades, virtualization software and JBoss middleware.

By the numbers:

  • Red Hat delivered margins of 16 percent for fiscal 2011.
  • Fourth quarter subscription revenue was $209.3 million, up 24 percent from a year ago. Training and services revenue was $35.4 million.
  • Billings in the quarter topped 30 percent, Red Hat's fastest rate in 12 quarters.
  • Cash and investments were $1.2 billion as of Feb. 28.

Topics: Linux, Open Source, Software

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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