Red Hat has reported a profit on an adjusted basis for the first
time in its history, citing customer moves to the Linux operating
system as a reason for success in its first fiscal quarter.
One of the leading Linux distributors, Red Hat reported adjusted
net income of $600,000 (£430,777) for the quarter ending 31 May, or
break even on a per share basis - in line with the expectations of
analysts polled by Thomson Financial/First Call. This compared to
an adjusted loss of $3.7m or $0.02 per share for the same quarter
last year.
Revenue for the quarter was $25.6m, an 18% improvement from a year
ago, officials said.
"In an increasingly difficult IT environment, Red Hat delivered a
profit and generated positive cash flows for the first time,"
president and chief executive officer Matthew Szulik said in a
statement.
The figures exclude the amortisation of goodwill and intangibles,
stock-based compensation and costs related to mergers and
acquisitions. On a reported basis, Red Hat's net loss was $27.6m,
or $0.16 per share, compared with a reported net loss a year ago of
$17.4m, or $0.11 per share, the company said.
Red Hat officials cited a number of customers migrating their
systems to Linux as reasons for the positive results. Red Hat
signed deals with Adobe Systems, Lucent Technologies, NEC, and
Nortel Networks for various software applications and services
during the quarter.
The company also said that it had increased revenue from software
subscriptions and embedded development services year-over-year. In
addition, Red Hat more than doubled its open source services
revenue from $2m a year ago to more than $4.3m this quarter.
Revenue from network consulting services dropped slightly, however,
to $5.2m.
While Linux remains a stranger to most desktop computers, the
software continued to gain traction during the start of 2001,
according to figures released last week by International Data
Corporation (IDC). Revenue from the sale of Linux servers grew 49%
in the first quarter, to $443m, IDC said.