Red Hat reports mixed Q4 ahead of IBM merger

The company reported fourth quarter revenue of $879 million, just shy of analyst estimates for $883.9 million in revenue.
Written by Natalie Gagliordi, Contributor

Red Hat delivered mixed fourth quarter financial results on Monday. The open-source software company -- which is being acquired by IBM in a $34 billion deal -- reported a net income of $139 million, or 75 per share. Red Hat said non-GAAP earnings for Q4 were $1.16 per share on revenue of $879 million, up 14 percent year over year.

Wall Street was looking for earnings of $1.01 per share with $883.9 million in revenue.

Broken out, Red Hat said subscription revenue was $549 million. The bulk of subscription revenue came from infrastructure-related products, while application-development related technologies accounted for the rest. Red Hat said application-development revenue was up 30 percent above last year. The company's Q4 training and services revenue came to $105 million, up 18 percent from a year ago.

Red Hat CEO Jim Whitehurst noted in prepared remarks that Red Hat's total number of customers with active subscriptions above $5 million increased 33 percent year-over-year. Key to that growth was an uptick in Ansible and OpenShift customers, which he said now total more than 1,300 and 1,000, respectively, as of the end of fiscal 2019.

Red Hat didn't provide an outlook ahead due to the pending IBM transaction.

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