Red Hat Expect to Break $1 Billion
Red Hat has reported an excellent first quarter, with revenues up 27 per cent on the back of strong repeat business, increased channel sales and good worldwide growth.
Revenue growth was the highest in three years and the company reported billings grew 28 per cent in its first financial quarter of 2012, the highest level in four years. Chief executive Jim Whitehurst has already stated that he wants 2012 to be the year Red Hat breaks $1bn in revenues.
"Execution was strong in the first quarter and resulted in better-than-expected results for all of our key financial metrics," said Charlie Peters, chief financial officer of Red Hat.
"Fiscal year 2012 is off to a great start, with broad demand from enterprise customers who are driving a fundamental shift in the delivery of IT services."
Renewal of business was very strong, he said, with all 25 of Red Hat's top accounts renewing at 130 per cent of their original contracts. Within the top 30 clients, the company signed one $5m customer and a record-breaking 14 that were worth $1m or more.
Channel business made up 63 per cent of the company's volume, up four per cent on the year. Peters attributed this to strong channel partners and steady government business. Red Hat's middleware also showed good growth and was included in 40 per cent of this quarter's contracts.
Geographically, over half of Red Hat's business comes from the Americas, but Asia showed good growth and now accounts for a fifth of the company's business. Europe accounted for 24 per cent of Red Hat's results for the quarter, but Peters said it was showing growth in surprising areas.
"The European business is growing, but the surprise was the growth in the services side of this market, with a very strong training business developing. The US continued to be good, both in commercial and government terms," Peters said.
"Asia had a good quarter, it's the first time its share has been as high as 20 per cent for a while, and Japan was right on target despite difficult circumstances."
Red Hat made much of the shift to cloud services during the call, and has called a press conference tomorrow to announce a new initiative in the area.
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