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March 31, 2009

Red Hat reports strong Q4 sales

Subscription revenue grew 14% to $139.4m

By CBR Staff Writer

Open source software vendor Red Hat has reported a 27% decline in net income to $16m for the fourth quarter 2009 on revenue up 18% at $166.22m.

Operating income during the quarter grew 11% to $20.23m, while diluted EPS fell 20% to $0.08. The company generated operating cash flow of $60m. The company said subscription revenue grew 14% to $139.4m and training and services grew 37% to $27m.

For fiscal 2009, the company reported a 3% increase in net income to $79m compared to net income of $77m, on revenue up 25% at $652.57m.

Charlie Peters, executive vice president and CFO at Red Hat, said: Solid execution and focused expense management enabled us to exceed our guidance for non-GAAP operating margins and EPS for the fourth quarter. We ended the year with cash and cash equivalents and investments of $846m and essentially no debt. During the year, we redeemed $570m in convertible debt and repurchased 2.9 million shares of the company’s common stock, which reduced our diluted share count by more than 10%.

In the first quarter 2010, the company expects revenue between $171m and $173m. For fiscal 2010, it expects revenue between $720m and $735m.

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