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RALEIGH, N.C.—(BUSINESS WIRE)—March 31, 2005—Red Hat, Inc. (NASDAQ: RHAT), the world's leading provider of open source solutions to the enterprise, today announced financial results for the fourth quarter and fiscal year ended February 28, 2005.
Total revenue for the fourth quarter of fiscal 2005 was $57.5 million, a year-over-year increase of 56% and a sequential increase of 13%. For the full fiscal year 2005, total revenue was $196.5 million, an increase of 58% compared to fiscal year 2004.
Enterprise subscription revenue was $45.4 million in the fourth quarter of fiscal 2005, an increase of 92% on a year-over-year basis and 19% on a sequential basis. For the full fiscal year 2005, enterprise subscription revenue was $147.4 million, or a 120% year-over-year increase.
For the fourth quarter of fiscal 2005, the company reported net income of $11.8 million, or $0.06 per diluted share. Earnings per share for the fourth quarter of fiscal 2005 grew 200% on a year-over-year basis and were in-line with the prior quarter. For the full fiscal year, the company reported net income of $45.4 million, or $0.24 per diluted share, up from $0.07 per diluted share a year ago.
The company generated $30.6 million in cash flow from operations during the fourth quarter of fiscal 2005. This led to full fiscal year 2005 cash flow from operations of $122.2 million, representing an increase of 100% compared to fiscal year 2004.
After investing $54.8 million to repurchase stock during the quarter, cash and investments totaled $929 million as of February 28, 2005. [By separate press release, the company also announced today the expansion of its share repurchase program, which more than doubled the authorization of the prior share repurchase program.]
At the end of fiscal 2005, the company's total deferred revenue balance was $137.3 million, an increase of 86% on a year-over-year basis
"We are very pleased with the strong momentum of the Linux market place, and our business in particular," commented Charlie Peters, Executive Vice President and Chief Financial Officer of Red Hat. "Based on publicly available information, we believe our enterprise subscription revenue run rate is more than six times that of the number two Linux provider, and over the past year we have expanded our market leadership position across the globe. A number of leading industry analysts believe that Linux will continue to be the fastest growing operating system over the next 3-5 years and we remain confident in our ability to compete."
Charlie Peters also stated, "We were very pleased with the company's revenue and bookings performance during the quarter. Heading into fiscal 2006, we feel optimistic about our business opportunity based on the strength of the market and our competitive position, and the growing visibility of our recurring revenue model. Finally, our confidence in the future cash flow capabilities of the company is evidenced by the expansion of our share repurchase program, which was separately announced today."
See the earnings tables.
Red Hat, the world's leading open source and Linux provider, is headquartered in Raleigh, N.C. with offices spanning the globe. Red Hat is leading Linux and open source solutions into the mainstream by making high quality, low cost technology accessible. Red Hat provides operating system software along with middleware, applications and management solutions. Red Hat also offers support, training, and consulting services directly to its customers worldwide and through its channel partners. Red Hat's Open Source strategy offers customers a long-term plan for building infrastructures that are based on and leverage open source technologies with a focus on security and ease of management. Learn more: http://www.redhat.com. For investor inquiries, contact Gabriel Szulik at Red Hat, (919) 754-4439.
Any statements in this press release about future expectations, plans and prospects for the company, including statements containing the words "believes," "anticipates," "plans," "expects," "will," and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: the factors discussed in our most recent Quarterly Report on Form 10-Q filed with the SEC (a copy of which may be accessed through the SEC's website at http://www.sec.gov), reliance upon strategic relationships, management of growth, the possibility of undetected software errors, the risks of economic downturns generally, and in Red Hat's industry specifically, the risks associated with competition and competitive pricing pressures and the viability of the Internet. In addition, the forward-looking statements included in this press release represent the company's views as of the date of this press release and these views could change. However, while the company may elect to update these forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the company's views as of any date subsequent to the date of the press release.
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