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Red Hat revenue jumps to US$847M in third quarter

Subscription revenue makes up US$741 million

Open source provider, Red Hat, saw revenue jump 13 per cent to US$847 million during the third quarter ending 30 November.

Subscription revenue for the quarter was US$741 million, up 13 per cent.

Meanwhile, subscription revenue from infrastructure-related offerings for the quarter was US$534 million, an increase of eight per cent year-over-year, and subscription revenue from application development-related and other emerging technology offerings for the quarter was US$207 million, an increase of 28 per cent.

The open source provider’s Certified Cloud and Service Providers (CCSP) program reached the US$300 million annualised run-rate milestone in the third quarter, with 25 per cent year-over-year growth of Red Hat Enterprise Linux on-demand in public clouds.

In addition, Red Hat CEO and president Jim Whitehurst said the company continued to experience strong customer growth in Red Hat OpenShift, its enterprise Kubernetes platform, and Red Hat Ansible Automation, both of which added more than 100 customers during the third quarter.

Furthermore, Red Hat CFO and executive vice president Eric Shander added that during the third quarter, the company closed 100 deals over US$1 million and delivered double digit total revenue growth of 13 per cent year-over-year.

“Moreover, our total backlog grew 22 per cent year-over-year to approximately US$3.5 billion,” Shander said. “Strong renewals of our largest deals also helped drive these results with all of our top 25 deals renewing at an upsell rate above 120 per cent.”

Operating income was down eight per cent to US$109 million, and net income also took a hit from US$102 million a year ago, down to US$94 million.

A special meeting has been set on 16 January for Red Hat stockholders to consider and vote on IBM's proposed acquisition of the company.

On 28 October, IBM and Red hat announced an agreement and plan of merger which would see IBM acquire Red Hat for US$190.00 per share in an all-cash transaction - valuing the deal at US$34 billion.

“The acquisition of Red Hat is a game-changer,” Ginni Rometty, CEO of IBM, said at the time. “It changes everything about the cloud market.

“IBM will become the world's no.1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses."