Subscription revenue grew 15% on year-ago
Red Hat has posted better than expected results for the second quarter of fiscal 2010. The open source software vendor reported total revenue of $183.6m, up 12%, compared to $164.3m in the same period last year.
Subscription revenue for the quarter accounted for around 85% of the total revenue, which grew 15% to $156.3m, compared to $135.7m in the same period last year.
For the quarter ended August 31, 2009, the company posted an operating income of $27.5m, up 29% compared to $21.4m in the same period a year ago. The operating margin was 15%.
Jim Whitehurst, president and chief executive officer of Red Hat, said: IT organisations continue to move ahead with purchases of high value solutions, and Red Hat is capitalising on this demand as a result of our strong customer relationships and proven value proposition. These factors contributed to our better than expected total revenue in the second quarter, and drove annual subscription revenue growth of 15% for both the quarter and first half of fiscal year 2010.
The company posted a net income of $28.9m, or $0.15 per diluted share, compared to $21.1m, or $0.10 per diluted share, in the same quarter last year. Its adjusted earnings were $39.4m, or $0.20 per diluted share, after adjusting for stock compensation and amortisation expenses, compared to $30.1m, or $0.14 per diluted share, in the same period a year ago. The company also reported a discrete tax benefit of $7.3m.
Operating cash flow totalled $62m, up 14% from $54.3m in the second quarter last year. As of August 31, 2009, the company’s total deferred revenue balance was $580.9m with total cash, cash equivalents and investments of $911.8m.
Mr Whitehurst added: “We continue to be optimistic about Red Hat’s future and believe the company is well positioned when the economic and IT spending environment improves.