Red Hat Reports $934 Million Revenue in Q1 FY20, Up 15 Percent YOY

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    • Of total revenue, $815 million came from subscription revenue and $119 million came from training and services revenue.
    • The European Union regulators to decide on the proposed $34 billion acquisition of Red Hat by IBM today.

     

    Open source solutions provider Red Hat reported double digit revenue growth for the first quarter of its fiscal year 2020 that ended May 31, 2019.

    Total first quarter revenue was $934 million, a 15 percent increase year-over-year. While subscription revenue for the quarter was $815 million and services revenue was $119 million. Subscription revenue represents 87 percent of total revenue.

    “Our large deal momentum remained strong, as we doubled the number of deals over $5 million and saw 15 percent growth in the number of deals over $1 million from the year-ago quarter. Many of these deals contained emerging technologies, including an OpenStack deal for over $5 million and our largest ever storage and hyperconverged deal for over $15 million,” said Eric Shander, Red Hat Executive Vice President and Chief Financial Officer., in a press release.

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    Other highlights of the Red Hat’s Quarterly Results include: 

    Subscription revenue from infrastructure-related offerings was $580 million, an 11 percent increase year-over-year.

    Subscription revenue from application development-related and other emerging technology offerings was $235 million, a 24 percent increase year-over-year.

    Deferred revenue balance at the end of the quarter was $2.8 billion, a 14 percent increase year-over-year.

    GAAP operating income for Q1 was $132 million, an 18 percent increase year-over-year.

    GAAP operating margin was 14.1 percent and non-GAAP operating margin was 21.7 percent.

    GAAP operating cash flow was $460 million for the first quarter, a 33 percent increase year-over-year.

    $34 Billion IBM-Red Hat Deal

    Due to the pending transaction with International Business Machines (IBM) Corporation, Red Hat did not host a conference call to report its quarterly business results.

    The European Union regulators will decide on the proposed $34 billion acquisition of Red Hat by IBM today. IBM had filed for EU approval last month.

    The US Department of Justice has already approved the deal without demanding concessions.

    Once the deal is closed, Red Hat will join IBM’s Hybrid Cloud team as a distinct unit, and will maintain its current management team and headquarters, facilities, brands and practices.

    Red Hat shareholders would also receive $190 a share in cash if the deal is approved.

     

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