Press release

Red Hat Previews Key First Quarter Results in Advance of Earnings Call on Thursday; Company Previews Earnings and Subscription Volumes

Red Hat, Inc. (NASDAQ: RHAT), the world's leading provider of open source solutions to the enterprise, today previewed earnings and subscription volumes for the first quarter of fiscal year 2005, in advance of its scheduled earnings call this Thursday at 5PM ET.
For the first quarter of fiscal year 2005, Red Hat reported sales of a total of 98,000 subscriptions of Red Hat Enterprise Linux, comprised of 75,000 subscriptions for enterprise IT markets and 23,000 subscriptions for HPC and hosting markets. This reflects a sequential increase of 14,000 subscriptions or 23% in the number of Red Hat Enterprise Linux subscriptions sold into enterprise IT markets and a sequential overall increase of 13% in the total number of subscriptions sold, in each case, as compared to the fourth quarter of fiscal year 2004. Average subscription rates for subscriptions sold into enterprise IT markets in the first quarter were $430 per subscription per year.
The Company also expects to report net income of over $10.0 million, or $0.05 per share for the first quarter, a sequential increase of over 100% compared to $5.0 million in reported net income in the previous quarter. Full GAAP operating income for the first quarter will be in the range of $4.7 million. Excluding stock-based compensation of approximately $1.6 million, operating income for the first quarter will be in the range of $6.3 million, or approximately 15% of revenues.
The company also confirmed once again that the earnings conference call will take place on Thursday, June 17th, at 5pm ET, to discuss these items and the full results for the first quarter in greater detail. The dial-in information is as follows:
Domestic: 800-216-6592
International: 706-634-0636
Domestic: 800-642-1687
International: 706-645-9291
Passcode: 7961560

About Red Hat

Red Hat is the world’s leading provider of open source software solutions, using a community-powered approach to reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies. Red Hat also offers award-winning support, training, and consulting services. As the connective hub in a global network of enterprises, partners, and open source communities, Red Hat helps create relevant, innovative technologies that liberate resources for growth and prepare customers for the future of IT. Learn more at

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Certain statements contained in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: risks related to delays or reductions in information technology spending; the effects of industry consolidation; the ability of the Company to compete effectively; the integration of acquisitions and the ability to market successfully acquired technologies and products; uncertainty and adverse results in litigation and related settlements; the inability to adequately protect Company intellectual property and the potential for infringement or breach of license claims of or relating to third party intellectual property; the ability to deliver and stimulate demand for new products and technological innovations on a timely basis; risks related to data and information security vulnerabilities; ineffective management of, and control over, the Company’s growth and international operations; fluctuations in exchange rates; and changes in and a dependence on key personnel, as well as other factors contained in our most recent Quarterly Report on Form 10-Q (copies of which may be accessed through the Securities and Exchange Commission’s website at, including those found therein under the captions "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations". In addition to these factors, actual future performance, outcomes, and results may differ materially because of more general factors including (without limitation) general industry and market conditions and growth rates, economic and political conditions, governmental and public policy changes and the impact of natural disasters such as earthquakes and floods. 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 this press release.