RALEIGH — Amid reports that IBM’s $34 billion merger with Red Hat could be in trouble, the Raleigh-based company released its fourth-quarter financial results — and the results are mixed.
Red Hat, one of the world’s leading providers of open source solutions, reported a total revenue of $879 million during its fourth quarter, up 14 percent year-over-year. However, analysts had estimated $883.9 million in revenue, leaving Red Hat with a $4.9 million shortfall.
On the bright side: the company also reported an earnings per share of $1.16 — $0.15 better than the analyst estimate of $1.01. Its full fiscal year total revenue is $3.4 billion. That’s a 15 percent jump year-over-year.
“Enterprise organizations are continuing to move to hybrid cloud environments, which is contributing to strong growth in Red Hat’s cloud enabling technologies,” Jim Whitehurst, Red Hat’s president and CEO Chief Executive Officer, said in a statement.
“Across the portfolio, our total number of customers with active subscriptions greater than $5 million increased 33 percent year-over-year in fiscal year 2019. Also key to that growth is the increasing number of Ansible and OpenShift customers, which now total more than 1300 and 1000, respectively, as of the end of fiscal year 2019.”
Eric Shander, Red Hat’s executive vice president and chief financial officer, added: “In FY19, we continued to strengthen our strategic relationships with enterprise organizations, which was evidenced by continued growth in sizeable commitments. We saw a 17 percent year-over-year increase in the number of deals over $1 million, despite the smaller base of large renewals in fiscal year 2019. These deals included broad adoption across Red Hat’s portfolio of technologies, with cross-selling up 22 percent from the previous year.
“Additionally, our total backlog was $4.1 billion, a 22 percent increase year-over-year. This is the third consecutive year where backlog increased at a rate of more than 20 percent year-over-year, which further reflects the forward momentum of our business.”
Other highlights include:
- Fourth quarter Application Development-related and other emerging technology subscription revenue of $225 million, up 30 percent year-over-year; full fiscal year Application Development-related and other emerging technology subscription revenue of $816 million, up 31 percent year-over-year.
- Fourth quarter training and services revenue of $105 million, up 18 percent year-over-year; full fiscal year total training and services revenue of $413 million, up 19 percent year-over-year.
- Year-end deferred revenue balance of $3.0 billion, up 15 percent year-over-year.
The results come as multiple news outlets reported earlier this month that IBM’s $34 million deal to merge with Red Hat could be in trouble and facing delays.
However, a spokesperson for IBM told WRAL TechWire at the time that the deal is still progressing. “As IBM has announced previously, we expect the deal to close in the second half of 2019,” said Douglas Shelton.
The deal was announced last October, with Red Hat shareholders approving the deal in January.