Red Hat reports mixed second quarter results

The company missed revenue estimates and its guidance fell below Wall Street targets.
Written by Natalie Gagliordi, Contributor

Red Hat reported mix second quarter financial results on Wednesday, as well as weak guidance compared to estimates. The open-source software company reported a net income of $87 million, or 46 cents per share. A year ago, the company's net income was $97 million, or 53 cents per share.

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Non-GAAP earnings came to 85 cents per share on revenue of $823 million, up 14 percent year over year. Wall Street was looking for earnings of 82 cents per share with $829 million in revenue. Shares of Red Hat were down over two percent in after hours trading.

Breaking revenue down, Red Hat said subscription revenue was of 20 percent year over year to $722 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 rose 31 percent to $196 million.

In terms of guidance, Red Hat expects revenue between $848 million to $856 million with earnings at 87 cents per share. Analysts expect revenue of at least $862 million with earnings of 92 cents a share.

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"Our second quarter results were consistent with our guidance and we drove 20% growth in total backlog to $3.3 billion," said Red Hat CFO Eric Shander. "We are re-affirming our full year growth in constant currency at 16%-17% year-over-year; however, we are adjusting our full year total revenue guidance in dollars by approximately $15 million, solely to account for the change in FX rates."

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