Red Hat reports surge in first quarter revenue, up 18% year-over-year
Red Hat, the US multinational software company which focuses on open-source software products, reported a surge in revenue in its fiscal first quarter, up 18 percent year-over-year to $568 million – beating analysts’ expectations of revenue of $562.7 million.
The Releigh-based company said in a statement that subscription revenue from its infrastructure-related offerings for the quarter rose 14 percent year-over-year to $403 million.
Operating income for the quarter rose 6% to $75 million, while net income for the quarter was $61 million, or $0.33 per diluted share, compared with $48 million, or $0.26 per diluted share, in the year-ago quarter.
“We are seeing very good momentum in our business and solid execution,” Chief Financial Officer Frank Calderoni said during a conference call with analysts. He also noted that “although some companies have pointed to geographic weakness, we continue to see strong growth across all of our major geographies.
“Digital transformation and cloud computing are changing the way companies compete in virtually every industry today. Organizations that rapidly embrace agile IT technology are succeeding as industry innovation accelerates around them. Our open source-based technologies are helping customers capture the business benefits associated with this rapid rate of change,” stated Jim Whitehurst, President and Chief Executive Officer of Red Hat.
“Strong adoption of our technologies has been reflected in our total revenue growth including 18% year-over-year growth in Q1 that was driven in part by 39% growth of our Application Development-related and emerging technologies.”
“The first quarter was a strong start to FY17,” stated Frank Calderoni, Executive Vice President, Operations and Chief Financial Officer of Red Hat. “The momentum of our business and solid execution by our sales team was evidenced by the record number of deals over $1 million closed in Q1, up 50% compared to the year-ago period.”
Guidance – Q2
Red Hat said it forecasts revenue to be somewhere between $587 million and $593 million in the second quarter, while GAAP operating margin is expected to be approximately 13.4% and non-GAAP operating margin is expected to be approximately 22.8%.
Guidance – Full Year
For the full year Red Hat expects revenue to be between $2.380 billion and $2.420 billion. GAAP operating margin is expected to be approximately 14.3% and non-GAAP operating margin is expected to be approximately 23.0%.