Welcome!

Server Monitoring Authors: Yeshim Deniz, Liz McMillan, Pat Romanski, Carmen Gonzalez, Ken Schwaber

Related Topics: Server Monitoring, Java IoT, Linux Containers, Open Source Cloud, Containers Expo Blog, @CloudExpo

Server Monitoring: Article

Red Hat Numbers Up in Crummy Economy

Revenues were up 11.4% to $174.4 million in its first fiscal quarter

Red Hat's revenues were up 11.4% to $174.4 million in its first fiscal quarter ended May 31. Subscription revenue was $148.8 million, up 14% year-over-year. It earned $18.5 million, or 10 cents a share, up 7%. Its non-GAAP income for the quarter was $28.7 million, or 15 cents a share, a penny better than expected.

It attributes its results to being cheaper than proprietary kit, particularly in this economy.

Operating cash flow totaled $61.2 million, as compared to $63.4 million last year. Deferred revenue now comes to $567.3 million, up 15% year-over-year and it's got $884.5 million in the bank.

It bought back $47 million worth of stock during the quarter. In the last year it has reduced its shares outstanding by approximately 11%.

Red Hat figures the spending environment is unlikely to improve much in the next few quarters, although at least now budgets are "known," it says. At the height of the meltdown they were a complete mystery.

Red Hat's service revenues dropped, which it attributed to strained travel budgets for training. JBoss is still growing faster than the rest of the company but not at the 2x rate it was recording. The company also took a hit from currency conversions.

Its top 25 accounts all renewed at a reported 120% of their original value but companies are now more likely to pay only a year at a time rather than take out one of Red Hat's prized three-year contracts.

Since Red Hat's direct sales force is responsible for the larger accounts, the breakdown between direct and channel sales was 39% to 61%. Apparently it only saw conversions of free to paid in small deals.

Billings growth, impacted by the decline in average contract terms, weakened for the third quarter in a row to $177 million, up 3% year-over-year versus the more usual 25%-30%.

The operating margin was 23.4%.

The company said it thought it would see revenues of $178 million-$180 million this quarter and earnings of 14 cents-15 cents.

Red Hat's contribution to the cloud seems to be limited to providing part of the infrastructure.

It claims it will benefit from Oracle's acquisition of Sun, whose Unix installations it has been merrily picking off for years. It says customers are uncomfortable with so much software concentrated in one vendor, OpenSolaris isn't a factor in the enterprise and that it "wouldn't want to be the guy comp'd on Unbreakable Linux," the version of Red Hat Oracle sells.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


IoT & Smart Cities Stories
DXWorldEXPO LLC announced today that "IoT Now" was named media sponsor of CloudEXPO | DXWorldEXPO 2018 New York, which will take place on November 11-13, 2018 in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
Founded in 2000, Chetu Inc. is a global provider of customized software development solutions and IT staff augmentation services for software technology providers. By providing clients with unparalleled niche technology expertise and industry experience, Chetu has become the premiere long-term, back-end software development partner for start-ups, SMBs, and Fortune 500 companies. Chetu is headquartered in Plantation, Florida, with thirteen offices throughout the U.S. and abroad.
DXWorldEXPO LLC announced today that ICC-USA, a computer systems integrator and server manufacturing company focused on developing products and product appliances, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City. ICC is a computer systems integrator and server manufacturing company focused on developing products and product appliances to meet a wide range of ...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
SYS-CON Events announced today that DatacenterDynamics has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY. DatacenterDynamics is a brand of DCD Group, a global B2B media and publishing company that develops products to help senior professionals in the world's most ICT dependent organizations make risk-based infrastructure and capacity decisions.
Nicolas Fierro is CEO of MIMIR Blockchain Solutions. He is a programmer, technologist, and operations dev who has worked with Ethereum and blockchain since 2014. His knowledge in blockchain dates to when he performed dev ops services to the Ethereum Foundation as one the privileged few developers to work with the original core team in Switzerland.
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22nd international CloudEXPO | first international DXWorldEXPO and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time t...
Headquartered in Plainsboro, NJ, Synametrics Technologies has provided IT professionals and computer systems developers since 1997. Based on the success of their initial product offerings (WinSQL and DeltaCopy), the company continues to create and hone innovative products that help its customers get more from their computer applications, databases and infrastructure. To date, over one million users around the world have chosen Synametrics solutions to help power their accelerated business or per...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...