Customers with active subscriptions greater than $5 million increased 33 percent y/y
Red Hat reported Q4 results this week that beat earnings per share (EPS) estimates but missed on revenue with a 14 percent Y/Y growth.
Due to its pending acquisition by IBM, the company won’t hold a call or provide guidance, but an earnings statement gave some insight into growth areas for the company, with app development tools surging.
Success on the latter front will be music to Red Hat executives’ ears: the company has been making a concerted play for growth in the sector, just last month unveiling a range of new integration tools across its sprawling portfolio suite.
Red Hat Earnings: Subscription Revenue Grows Solidly
Q4 subscription revenue was $774.2 million (up 16 percent Y/Y in constant currency) with infrastructure-related offerings at $549 million (up 10 percent.
Application Development-related offerings were the standout though in terms of growth, surging 35 percent to total $225 million in Q4, the company said.
See also: Kubernetes “Officially” Comes to Windows
Jim Whitehurst, President and Chief Executive Officer of Red Hat said: “Across the portfolio, our total number of customers with active subscriptions greater than $5 million increased 33 percent year-over-year in fiscal year 2019. Also key to that growth is the increasing number of Ansible and OpenShift customers, which now total more than 1,300 and 1,000, respectively, as of the end of fiscal year 2019.”
CFO Eric Shander added: “In FY19, we continued to strengthen our strategic relationships with enterprise organizations, which was evidenced by continued growth in sizeable commitments. We saw a 17 percent year-over-year increase in the number of deals over $1 million, despite the smaller base of large renewals in fiscal year 2019.”
“These deals included broad adoption across Red Hat’s portfolio of technologies, with cross-selling up 22 percent from the previous year.”
Overall subscription revenue for the full fiscal year was $2.9 billion, up 15 percent year-over-year. Full year GAAP net income was $434 million, compared with $262 million, or $1.42 diluted EPS, in the prior fiscal year. (The last fiscal year included a one-time tax charge of $123 million related to the Tax Cuts and Jobs Act).