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

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.

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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

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27 comments
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  • Not as good as Apple

    Apple makes hundreds of billions of dollars a year on iTunes and Safari, both free products. Safari is even mostly open source.
    edtimes
    • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

      @edtimes Although, you must buy either Windows or MacOS to use these 'free' products.
      anothercanuck
      • Do Computers come free with every download of Linux?

        No Text
        Bruizer
      • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

        @Bruizer
        Does the price of tea in China dance on the head of a needle? What the heck are you talking about?
        jeverettk
    • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

      @edtimes yeah, but Apple has to pay so much over head their revenue is only in the millions.<br><br>Mac OS X is a copy of FreeBSD with no root access<br>iOS is a copy of the original Palm OS. (well, they are very similar)<br>And, safari is a copy of Webkit. So, is there any originality in Apple's software? NO!
      Maarek
      • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

        @Maarek<br><br>Wow, I have not seen such a bald-facedly wrong series of statements in a long time, and that it saying a LOT here at ZDNet.<br><br>1) Apple's revenue is in the billions. Recheck your facts. Their profit margin per unit AFTER costs is staggering.<br>2) MacOS is NOT FreeBSD, though it has many FBSD components, just as it is not MACH. More importantly, even if it were, considering the fact that Apple is, BY FAR, the single biggest contributor to the code base, WTF is your point, exactly?!?<br>Also hate to break it to you, but OSX most certainly DOES have root access. As a POSIX compliant, FULLY certified UNIX, it has to. It just is not turned on by default, which is how it should be. (Directory Utility>Enable Root User)<br>2) iOS IS OSX. Or are you claiming Apple stole UNIX from Palm, now?!?<br>3) Safari is based on KHTML, NOT webkit. Webkit came from Apple's KHTML work. And as with FreeBSD, as Apple is, by far, the single biggest contributor to the code repository, what, exactly, is your point?
        DeusXMachina
    • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

      @edtimes

      Hundreds of billions a year for Apple? Give me a break! They don't even have revenue of $100 billion a year for their entire product line (iPod, iPad, Mac, etc.)!
      zagrossadjadi
    • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

      @edtimes Get a clue "hundreds of billions"? I work for the largest Corporation in the world and even they don't make "hundreds of billions", they barely gross that amount.
      bigpicture
  • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

    WooHoo!

    Nice job Red Hat
    choyongpil
  • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

    Congrats to Red Hat
    daikon
  • M$ demise is within site

    starved by the FOSS revolution, in a couple of years M$ will go belly up!
    Linux Geek
    • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

      @Linux Geek

      thats wat they said last year and the year before that keep trying though...
      Viper589
    • You could be right...

      @Linux Geek
      MSFT 2010 revenue was about $66 Billion. A record year.

      Looks like they are really in trouble there, Champ...
      dazzlingd
    • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

      @Linux Geek with nearly 40 Billion in cash? Belly up? Not hardly. They just had a record 4th *Quarter* of over 16 Billion.
      To keep this in perspective. Symantec made over 6 billion last year. A good chunk of this was simply AntiVirus. And no other pure-play linux company is even close to RedHat.
      DevGuy_z
  • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

    The first billion is the hardest. Way to go, Redhat!
    anothercanuck
    • It is an impressive mile-stone.

      @anothercanuck

      For a company based almost purely on open-source (ie: different than free) software.
      Bruizer
      • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

        @Bruizer
        What part of Red Hat Enterprise Linux is not open-source?
        daikon
      • Red Hat does not sell a free product

        @Bruizer
        They sell support. To say that Red Hat made a billion dollars on a free product is ridiculous. It's stupid. And it simply isn't true.

        Like I suggested above (and you understood, no one else did), Apple doesn't make billions selling iTunes and Safari. They make billions selling the things that go around iTunes and Safari. Red Hat has made a billion selling services that aren't offered for free by anyone else. No one has made a billion selling Linux. Not Red Hat. Not Novell. Not Linus. No one.
        edtimes
      • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

        @edtimes
        <br>"To say that Red Hat made a billion dollars on a free product is ridiculous. It's stupid. And it simply isn't true."<br><br>Stupid, stupid strawman! Somebody get that thing a brain!
        jeverettk
      • RE: Red Hat: Nearing $1 billion in revenue; Not bad for free software

        @Bruizer I agree it is pretty amazing. And even though they sell Linux, they probably make most of their money on service contracts - not unlike IBM. So in that sense they aren't pure-play. I doubt there IS a profitable pure-play OSS company out there.
        DevGuy_z