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September 22, 2015

Subscription revenue supports solid Red Hat Q2

Subscription revenue rises with infrastructure software the main earner.

By James Nunns

Red Hat has posted its Q2 financials for 2016, with total and subscription revenue on the rise.

The company posted quarterly total revenue of $504 million, up 13% year-over-year, and quarterly subscription revenue of $442 million, also up 13% year-over-year.

The open source vendor revealed an annualised run-rate of $100 million for its certified cloud and service provider program, a run-rate of $2bn overall revenues.

Its subscription revenue totally $442 million breaks down into $363m for infrastructure software and $79m for apps development tools and other emerging technologies.

Jim Whitehurst, President and CEO, Red Hat, said: "Strong execution in Q2 contributed to total revenue results that exceeded 21% year-over-year growth on a constant currency basis. We were pleased with the progress of our technologies that address cloud deployments across multiple footprints.

"Specifically in this quarter, we achieved a public cloud milestone in our Certified Cloud and Service Provider program of an annualized run-rate of $100 million.

"We are also thrilled to be the first open source company to achieve an annualized run-rate of $2 billion in revenue this quarter. In addition, we believe Red Hat is well-positioned for the second half of the fiscal year as we continue to benefit from delivering innovation to our customers."

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GAAP operating income for the quarter was up 19% year-over-year to reach $76 million while operating cash flow was $120 million for the Q2, an increase of 12% on a year-over-year basis.

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