Red Hat Q1 earnings: Right in line

Red Hat Q1 earnings: Right in line

Summary: Results are in for the U.S. open source software company's fiscal first quarter 2014. A look at the numbers.


The U.S. open source software company Red Hat announced results for its fiscal first quarter 2014 this evening, reporting earnings per share of $0.32 on revenue of $363 million, right in line with Wall Street's expectations of $0.31 on $360 million.

The company's shares (RHT) were up 1 percent in after-hours trading.

Here's what you need to know for Q1:

  • That revenue figure was up 15 percent year over year
  • Subscription revenue was $316 million, up 16 percent year over year
  • Operating income (non-GAAP) was $87 million, up 7 percent year over year
  • Operating cash flow was $142 million, up 14 percent year over year
  • Operating margin (non-GAAP) was 23.9 percent.

The challenge that faces the company is simple to explain and difficult to solve: faced with competition from Microsoft, Amazon and VMware, can it make inroads in the growing public and private cloud markets?

Chief executive Jim Whitehurst says yes. "We continued to execute against our strategy of significantly expanding our addressable market in the new cloud-centric data center," he said in a statement.

In other words, it's a play for the long term. A look at the company's Q1 subscription revenue and R&D spending—focused on cloud management, its Linux OpenStack Platform and its OpenShift platform-as-a-service offering—reveals just that. Quarterly subscription revenue was $316 million, up 16 percent from Q1 last year, and R&D spending was $74 million, up from $60 million last year.


Topics: Open Source, Enterprise Software

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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  • Kudos Red Hat

    Great job Red Hat.
  • Can it make inroads?

    I'm not without bias here, I'm RHCE qualified but I do also use it at home - in my servers, my windows and other distros are virtualised from RHEL. To be honest the only machines I have that have full installs of non RHEL OS's are my apple laptops

    That said I do use Mac OS, Windows, Ubuntu based distros, several times a week and I have an AWS account, all be it a fairly basic one - so I have some experience of each. Obviously I've used MS support before... Particularly recently (it's very touchy about hardware configuration these days) regarding activation.

    From my point of view, Red Hat's support is superb. I'm consistently blown away by how helpful and knowledgable they are.