Red Hat rakes in big bucks

Some companies, OK most companies, are in trouble, but Red Hat, the world's number one Linux company just keeps signing the customers and making the bucks.

In its first financial quarter for the 2010 fiscal year, which ended May 31st, 2009, Red Hat's total revenue was $174.4 million, an 11% increase from the year ago quarter. The company also reports that "subscription revenue for the quarter was $148.8 million, up 14% year-over-year."

GAAP (Generally Accepted Accounting Principles) operating income for the quarter was $25.1 million with a 14.4% operating margin. After the usual adjustments for stock compensation and amortization non-GAAP operating income for the first quarter was $40.7 million, up 19% year-over-year. Non-GAAP operating margin was 23.4%, up 160 basis points from the year ago quarter. None too shabby eh?

For stock-holders this translated into "net income for the quarter was $18.5 million, or $0.10 per diluted share, compared with $17.3 million, or $0.08 per diluted share, in the year ago quarter. Non-GAAP net income for the quarter was $28.7 million, or $0.15 per diluted share, after adjusting for stock compensation and amortization expenses, as compared to $26.0 million, or $0.12 per diluted share, in the year ago quarter."

"We are pleased to report better than expected revenue and EPS results in Q1," said Red Hat CEO Jim Whitehurst in a statement. "Red Hat's growth is driven in part by our ability to help enterprise customers save money in a challenging IT spending environment. Our open source solutions drive new capabilities, efficiencies and functionality into the mission critical infrastructure of our customers."

Red Hat CFO, Charlie Peters, added in the same statement that Red Hat remains "focused on managing discretionary costs and improving efficiencies, we also continue to invest in growth opportunities in middleware, virtualization and cloud computing. These efforts combined with solid top line growth contributed to non-GAAP operating income growth of 19% year-over-year and healthy cash flow. In the quarter, we repurchased $47 million of common stock while strengthening our balance sheet with a 5% sequential increase in cash and investments. On a year-over-year basis, we have reduced our diluted shares outstanding by approximately 11%."

Looking ahead, Red Hat looks to expand the popularity of its JBoss middleware stack by adding support for Spring Framework, Seam and Google Web Toolkit. Later this summer, Red Hat will also be releasing the next version of its flagship operating system, RHEL (Red Hat Enterprise Linux): RHEL 5.4. This version will include greatly improved support for the KVM (Kernel Virtual Machine) and is expected to be a very important release for Red Hat's virtualization customers.

In short, at a time when other companies are dying on the vine, Red Hat isn't just healthy, it's growing.

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