Red Hat Continues to Cash In
On Wednesday, Red Hat announced outstanding results from its latest fiscal quarter.
The total revenue for its fiscal third quarter, which ended Nov. 30, 2005, was $73.1 million, an increase of 44 percent from the year ago quarter and 11 percent from the prior quarter.
RHEL (Red Hat Enterprise Linux) subscription revenue provided the bulk of the income. The total subscription revenue was $60.2 million. This is up 54 percent year-over-year and 11 percent from the prior quarter.
Red Hat Inc. also reported operating income of $18.7 million. This is a 147 percent increase from the year ago quarter and a 57 percent increase from the prior quarter.
The net income for the quarter was even better. The company reported a net income of $23.2 million, up 114 percent year-over-year and 39 percent from the last quarter.
For stock holders, the earnings per diluted share were 12 cents for the quarter, an increase from 9 cents in the prior quarter and 6 cents in the year-ago quarter.
This was well ahead of expectations.
Financial analysts polled by Thomson Financial had expected Red Hat to earn 9 cents per share for the quarter with $71.1 million in revenue.
In fairness, this was also ahead of Red Hats own predictions for the quarter, which had been on the same line.
The dividend increase was both the result of improved subscription sales and a gross margin improvement to 84 percent.
Or, to put in other terms, Red Hat realized remarkable annualized revenue of $270,000 per employee.
"Our third-quarter results reflect return on investments in people and infrastructure made in prior periods," said Charlie Peters, Red Hat CFO, in a statement.
"Solid growth across key metrics indicates not only strength in the demand for our solutions but also continuing improvements in the day-to-day operations of our business, Peters said.
"We believe that our third-quarter revenue growth places Red Hat among the fastest growing mid-cap technology companies in the world," said Dion Cornett, Red Hats VP of investor relations, in a statement.
In advance of the earnings announcement, Red Hat stock had gone up 4.6 percent to $26.56. This set a new high for the year. In after-market trading, Red Hat was continuing its upward climb.
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