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Local Tech Wire
RALEIGH, N.C. – Red Hat Chief Executive Officer Jim Whitehurst had a bundle of good news to talk about when the world’s top Linux software developer and services provider disclosed its most recent quarterly earnings Wednesday.
Profits and revenues beat Wall Street expectations, and buyers responding Thursday, sending (NYSE: RHT) shares up 12 percent, or $3.07, to $27.95.
In fact, business is good enough that Whitehurst said Red Hat is growing, not shrinking, its workforce unlike most of its high-tech brethren,
“We have added people every quarter this year and our – most of our additions have been in sales and engineering and we are planning continued additions where and when needed,” Whitehurst said.
During a conference call with analysts, as reported by SeekingAlpha, Whitehurst talked about “solid execution” despite the “worst server shipment environment since the data has been tracked”:
“I am pleased to announce another quarter of solid execution resulting in strong growth and financial results. Many IT organizations continue to move ahead with purchases of high value solutions that reduce costs and improve performance, reliability, and scalability of their IT infrastructure. Red Hat is capitalizing on this demand as a result of our strong customer relationship and proven value proposition. These factors contributed to our better-than-expected total revenue in the second quarter and drove annual subscription revenue growth of 15% for both the quarter and the first half of FY10.
“What makes Red Hat’s growth all the more impressive is the fact that it comes during a period of time that one leading industry research firm has referred to as the worst server shipment environment since the data has been tracked. “
“Red Hat’s value proposition is further evidenced by our strength of our renewals. I am pleased to report that for the sixth consecutive quarter, all of our top 25 deals that were up for renewals not only renewed but did so at a total of over 120% of the prior year’s value.“
We are pleased by the loyalty and trust our top customers have placed in Red Hat … we are especially pleased to see a former financial services customer return to Red Hat with a sizable purchase during the second quarter.
“Over the past three-and-a-half years since we began tracking the metric of renewals on the top 25 deals each quarter, only three out of the 350 deals did not reduce. In that same time, two of the three have since returned to Red Hat, including one during the second quarter. …
“Before turning the call over to Charlie [Peters, Red Hat’s CFO], I would like to note that the past quarter marked a couple of important milestones for Red Hat. First we celebrated our 10-year anniversary as a public company. We started off as a small company distributing Linux software and have grown rapidly into a strategic IT vendor, providing open source solutions that support mission critical infrastructure of major enterprises around the globe.’
“Secondly, we are also pleased to be recently recognized by our inclusion as a component of the S&P 500, joining a key group of industry leading firms in the U.S. …”
For the complete transcript,