Red Hat's Q2 mixed relative to expectations
Red Hat's second quarter was solid, but the company's non-GAAP earnings fell short of expectations.
The company reported second quarter earnings of $35 million, or 18 cents a share, down from 20 cents a share a year ago. Non-GAAP earnings were 28 cents a share. Second quarter sales were $322.6 million, up 15 percent from a year ago.
Wall Street was looking for non-GAAP earnings of 29 cents a share on revenue of $322.15 million.
Overall, Red Hat CFO Charlie Peters said the second quarter marked "a significant ramp-up in investments in our nascent storage business, with the launch in late June of Red Hat Storage Server 2.0." Those investments in addition to two middleware acquisitions in the quarter cut earnings by a penny a share.
Despite the mixed earnings report, Red Hat is continuing to show traction on multiple fronts. The company ended the quarter with $1.36 billion in cash and equivalents.
By the numbers:
- Red Hat's second quarter subscription revenue was $278.8 million.
- Training and services sales were $43.79 million.
- Sales and marketing expenses in the second quarter were $123.6 million, up from $99.7 million a year ago.
- R&D spending in the second quarter was $63.4 million, up from $51.5 million a year ago.
