Subscriptions lift Red Hat revenue

Strong showing in corporate subscriptions boosts revenue by 56 percent in the fourth quarter for the Linux seller.

Martin LaMonica Former Staff writer, CNET News
Martin LaMonica is a senior writer covering green tech and cutting-edge technologies. He joined CNET in 2002 to cover enterprise IT and Web development and was previously executive editor of IT publication InfoWorld.
Martin LaMonica
2 min read
Red Hat's revenue increased by more than half in the fourth quarter, lifted by a rise in subscriptions to its Linux operating system.

Fevenue for the three months ended Feb. 28 was $57.5 million, up 56 percent compared with the same period last year, exceeding analysts' expectations, the Linux seller reported Thursday. Revenue also grew for the full fiscal 2005 year, increasing 58 percent to $196.5 million.

Red Hat's profit for the fourth quarter was 6 cents per share, or $11.8 million, in line with analysts' forecasts. For the year, profit was 24 cents per share, or $45.4 million.

Red Hat credited the growth to an uptick in contracts for its Linux operating system and related services among corporate customers. The company said it racked up a total of 175,000 new and renewed subscriptions in the fourth quarter. Its revenue from enterprise subscriptions was $45.4 million in the period, a 19 percent increase compared with the previous quarter.

"The bottom line is that momentum in the Linux marketplace and our business remains strong," company CEO Matthew Szulick said.

Company executives said that the financial performance of Red Hat's Netscape line of Web server and security products, which it acquired from Time Warner last year, was better than expected. Revenue from markets outside the United States was also strong, particularly in Europe, executives said.

The company voiced an optimistic note for the coming fiscal year and issued its first full-year forecast. It anticipates revenue will grow about 40 percent and come in between $270 million and $280 million.

The Raleigh, N.C., company's stock closed at $10.91 on Thursday, but in after-hours trading dropped 6 cents to $10.85.