Red Hat profits up in Q1
Open source solutions proving popular in difficult economic circumstances says Red Hat
Red Hat appears to be proving the attraction of open source solutions in tight economic times, posting a 7% rise in profits for its first fiscal quarter.
The open source solutions provider posted net income of $18.5 million, up from $17.3 million from the same quarter last year. Red Hat also saw total revenues up 11%, to reach $174.4 million.
Jim Whitehurst, president and CEO of Red Hat said: “We are pleased to report better than expected revenue and EPS results in Q1. Red Hat’s growth is driven in part by our ability to help enterprise customers save money in a challenging IT spending environment. Our open source solutions drive new capabilities, efficiencies and functionality into the mission critical infrastructure of our customers.”
Subscription revenue for the quarter was up by 14% to $148.8 million, while services and support revenue was flat at $25.6 million against $25.9 million in the same quarter last year.
Charlie Peters, executive vice president and CFO of Red Hat commented: “While we remain focused on managing discretionary costs and improving efficiencies, we also continue to invest in growth opportunities in middleware, virtualization and cloud computing. These efforts combined with solid top line growth contributed to non-GAAP operating income growth of l9% year-over-year and healthy cash flow. In the quarter, we repurchased $47 million of common stock while strengthening our balance sheet with a 5% sequential increase in cash and investments. On a year-over-year basis, we have reduced our diluted shares outstanding by approximately 11%.”