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Red Hat In The Black for Q3
wheeeee! writes "Red Hat has posted a profit for the third quarter. Well, a meager $300 grand of actual net, but still a profit nonetheless. Their total revenue of $24.3 million was higher than expected. The cash flow appears to have been spurred by an increase in sales of RH's Advanced Server, of which 12000 were sold, compared to 8000 the previous quarter. RH says they're now following the Generally Accepted Accounting Principles, developed in the wake of recent accounting troubles at some companies."
300K may not seem like much, but at a time when many companies arn't making a dime, it's not bad at all, especially for a company with an "alternative" business plan.
Well it is great news that a company how's business is solely about linux_is_turning a profit, and especially since they have been not struggling, but watching what they do. It is also good to see that they are doing this with out memberships or asking for more donations. What also helps is that their Distro is what many American business use, and what certification are measured against (some not all). Now is this good? After the 8.0 release I didn't see so many people praising Red Hat as with the 7.3 release. I see Red Hat push for a standardization in the Linux community, but it is more of "their" standards, not what the community wants. This is a double edged sword, good for them and getting Linux more coverage, but possibly bad for the community with a muscle like Red Hat who as we can tell is starting to flex a bit. Please tell me what you think on this.
This SIG pulled due to lack of funding. (This damn war is costing too much!)
I'm always impressed when relatively 'public' offerings such as Red Hat can turn a profit, really showing how important the business sector is. They may want free software, but they're more interested in low-cost software with some guarantee of support and an upgrade path. What I also found interesting was that those sale on advanced Server aren't actually sales - they're actually a subscription charge. 800-900 dollars for a year, product launched in May, and 1200 buyers (subscriptors?) by the third quarter - so that comes to just over $10,000,000 *if* they all pay a year's charges in advance. Not bad, and a revenue stream which will keep going year-over-year. Not bad at all. And I thought it was mainly online games charging subscriptions...
Diplomacy is the art of saying "nice doggie" whilst looking for a rock
More important though, they will lower they prices:
"The average selling price of an Advanced Server subscription in the second and third quarters was $800 to $900 over a year, but it will decrease to $600 to $800 in the future, Red Hat said"
What I particularly like:
"overall gross margins were 66 percent"
Now there's a healthy company!
At last, someone gets to the 3. Profit!!! stage.
There's a better Reuters coverage of the subject here.
Redhat has 170 million shares outstanding.
A Market capitalization of 1 billion dollars.
$300k isn't going to cut it. (annually, quarterly, monthly or even weekly.)
Daily earnings of $300k would be decent.
1% profit on their sales is a little slim.
They've still got a way to go to justify their price
Can the same be said for FreeBSD?
There's a Mercedes gap too. I want one and can't afford one, but it's not government's job to do anything about it.
It's good to see a Linux and open source-based business model succeed.
It was a joke! When you give me that look it was a joke.
...will they change their name to Black Hat?
Red Hat Linux 7.3 Personal - $59.95
Red Hat Linux 8.0 Personal - $39.95 ($20 cheaper)
Red Hat Linux 7.3 Professional - $199.95
Red Hat Linux 8.0 Professional - $149.95 ($50 cheaper)
Redhat 8.0 is actually cheaper than 7.3. Its pretty interesting if they will end up making more money doing this.
Free Instant Site Inclusion
... i was able to get a negative score in Q3 was Q3DM17.
Anonymous Coward was in the wrong place.
"We r makin teh bling$$$ 300K y0!!!1"
So, the Linux "market leader" brings home a profit of 300K. How big a company is RH? My co only has a few thousand employees and we bring home a few billion every year.
Why should we get excited about this? It's more like bad news than good.
If Redhat is pushing (or wants to push) the linux community towards more standardisation, why don't they join the unitedlinux effort then ?
If suse, caldera, conectiva and openlinux can put aside their own goals for the sake of profitability errhm standardisation then Redhat should be willing to make this step as well.
looks like those prones have built a nice distro, makin some good money with their excellent software.
looks like their the last software co. to lock up the barb streisand collection.
boy, at least they have some girls working for them in the kernel dev. department. they have hot sexy little feet.
I guess in the light of recent financial changes it might be more appropriate if they company would rename itself Black Hat?
Wenn ist das Nunstueck git und Slotermeyer? Ja! Beiherhund das Oder die Flipperwaldt gersput.
The GAAP (Generally Accepted Accounting Principles) were not developed recently, and achieving compliance with the GAAP could not be considered any kind of special accomplishment for a new company, any more than would adherence to the laws of arithmetic.
What you mean not telling lies like enron & others.
in my life God comes first.... but Linux is pretty high after that
Francis Smit
Of course you are right about the overvaluation - the current market cap is in no ways appropiate.
But I disagree about the low profit margin - to judge about this, you need to know, which amount of revenues comes from products and which from services.
Products in the software industry tend to have fixed (development) costs, while production costs are marginal. That means, if you sell more, your profit may rocket as costs stay at the same level.
Services tend to have mostly variable costs (workforce), so higher revenues from services produce higher costs, too. So the profit margin may not rise if revenues from services grow.
$300k profit isn't tremendous but, considering that the third largest bankruptcy in US history has just been announced, it's not bad. Not bad at all.
Best Slashdot Co
I feel cygwin is
one of the best products in the RH stable.
the purchase of cygnus was a great move.
-greg
You know how many times I heard these "Redhat is getting too big" comments since the 90's? Linux is free, GPL, and can't be "owned" by any vendor including Microsoft or Redhat. I'll tell you what I think on this...*?#!$@*!! up about it,and stop bringing it up!
If you wanna get rich, you know that payback is a bitch
Oh boy!, $300,000... throw a parade. err, yay.
That's going to go real far against the $63,846,000 in losses that they've raked in in the last 4 financial quarters...
Correctly if I'm wrong but the GAAP were developed weren't developed in the wake of recent accounting troubles, but the bulk of them were developed during the 60's and 70's. I can certainly remember being taught them 10 years ago when I did my degree.
This site seems to agree.
Unless these are some new US ones. Anyway it is nice to see a tech company doing well.
Those clowns at RH have been cooking their books for years. Ex-PWC jerkoffs (nothing against PWC, mind you) and Greylock sugar-coaters. It's all a house of cards inside.
Red Hat said about 70 percent of its revenue comes from direct sales of products to its customers, but over time, it expects 65 percent to 70 percent of sales to come through indirect sales channels such as its partnerships with IBM, Oracle, Dell and Hewlett-Packard.
Hmm. So either way, 65 to 70% of the revenue is coming from shipping products; I find that interesting in light of the fact that RedHat appears to me to be uniquely positioned to be the biggest player in the support arena; this must surely be the cash cow par excellence?
How about an Ask Slashdot session with a RedHat exec?
Blearf. Blearf, I say.
McDonald's posts its first quarterly loss ever.
Quarterly earnings are at best a snapshot and are hugely overemphasized. This latest is really just breaking even and change. Still, Redhat is not bleeding cash like many other companies in similar markets. I think their long term prospects are respectable.
They're trading at around $6.55 this morning. The prospects for a quick killing at that price are poor, but haven't we all learned our lesson?
Helium balloons want to be free.
But the Generally Accepted Accounting Principles (also known as GAAP) have been around for a LONG time. Not just since the recent accounting problems showed their face as the poster implies.
This company has combined great a great technical staff with the ability to market and profit from products that differentiate them. I have not had any experience with the Advanced Server product, but as a RH8.0 user, I can say that the product is showing great improvements.
The linux market will not support a "Microsoft of linux" if that is your fear, the market for distros is very liquid, in fact, almost infinitely liquid. RedHat will only survive by providing true value above and beyond the hundred or so other distros that happen to be marketed at any given time, most of which are solid products in their own right.
One is a Red Hat in the black, and the other is a black hat in the red.
Ba-doom-ching!
The anti-Red Hat rants on this site are utterly baseless and sophomoric. If Red Hat were to exit the market, a significant force for the advancement of linux would vanish. Thank you for your post.
Is this real profit or like when they "broke even" a while back and it was a lot of funny accounting?
That said, RH is potentially addressing a gigantic market. Even if 20% of Solaris and Win2k installs migrate to RedHat, thats in incredible jump in the number of installed cusomters with credible purchasing power.
I would confidently place RH in the same league as some biotechs in terms of market potential.
I don't think the generally-accepted accounting principles are a recent development. Just because *you* only heard about it recently doesn't make it recent.
Companies advertising their adherence to the GAA might be recent. I would have hoped RedHat had always been adhering to the GAA, but I do remember their IPO and the fact that their stock price peaked at an outrageous value before dropping back to ~$10.
I also remember some major underwriting house (First Boston Credit Suisse or some such?) admitting to high-tech IPO hanky-panky some months ago.
Maybe recently embraced by those who weren't following them, but not recently developed.
Of course, anyone who can get people to invest in them when they've never posted a profit and never will, like the dot-bombs and Sprint PCS, is a pure genius.
http://us.biz.yahoo.com/t/r/rhat.html
not a good sign...
and so is microsoft
see here
Can one download the RH Advance Server for free?
How?
I'm glad to see them in the black, and I hope they're around for a long time (if only to piss off the nut jobs in the OSS community who think all profitable companies are evil), but I'm convinced RH is very close to the glass ceiling of growth and profitability, at least with their current product mix.
RH says they're now following the Generally Accepted Accounting Principles, developed in the wake of recent accounting troubles at some companies.
GAAP?
I learned about GAAP in grade 11 accounting. That was over seven years ago.
Nice to see major corporations are finally catching up to public school classes.
Someday, you're going to die. Get over it.
Are you moderators on crack, if there were ever an offtopic post, it's a blank one.
Please mod down parent post, as it is content free.
IBM quits giving money to them? Or any other large company that hands cash to them because they want the tax writeoff? I'd bet there wouldn't be a profit, but rather a huge deficit. Good God, everyone knows you can't give something away and expect to make a profit. Be honest, how many boxes of RH REALLY have been sold? Not enough to cover Alan Cox's salary (I'm quite sure it is massive). Why? Because the software is given away and also sold for $5 a disc. Can't make profit like that. Now Microsoft knows how to make money, RH should look at their model to see how a successful company is run. Be honest, you know it's true.
"RH says they're now following the Generally Accepted Accounting Principles, developed in the wake of recent accounting troubles at some companies."
When I last checked GAAP-based accounting has been around since the 1930s although they were not known by that name. In the USA, FASB is reponsible for establishing US GAAP. If Red Hat previously chose not to follow these standards and cook their books instead, we should hardly applaud them for finally doing what they should have done all along... especially now that deceptive accounting practices are no longer in fashion in the corporate world.
From the American Institute of Certified Public Accountants:
Between 1938 and 1959, the AICPA's Committee on Accounting Procedure (CAP) issued fifty-one authoritative pronouncements known as Accounting Research Bulletins that formed the basis of what became known as generally accepted accounting principles, or GAAP. In 1959, the CAP was replaced by another part-time body, the Accounting Principles Board (APB), which during the next fourteen years issued thirty-one new standards.
From the Financial Accounting Standards Board:
Since 1973, the Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports.
"Generally Accepted Accounting Principles, developed in the wake of recent accounting troubles at some companies"
Gee, so are those different than the GAAP rules that I learned in college? or different than the rules, going by the same name, that have existed in the US for many years. (International accounting has different rules, as well as each country)
that you can make money with Linux and with open source.
I'm at work and on a Redhat 7.3 box and I got Redhat 8.0 workstations directly behind me and all my servers run Redhat. I have 10 remote locations connected by Redhat gateways running FreeSwan. Everything is very stable ( I can tell how long I've worked here by the uptime on the file servers ) Thanks Redhat your success is well earned and for real.
I came to the datacenter drunk with a fake ID, don't you want to be just like me?
Holy Crap!
Bill Gates sold (by my rough count) 114,000,000 shares. That is some serious conversion of stocks to cash! Depending on share price that is worth a minimum of $4.5 billion and a maximum of $8 billion.
Soon as I saw the story on the front page I knew what awaited inside. Hundreds of posts from zitty geeks trying to be punker-than-thou by coming up with ever-more-obscure namedropping to make up for their lack of real style (or to pretend that they are actually old enough to have been involved). Drop the pretension kiddos. We all know that your Blink 182 CD is older than your copy of Bollocks.
I love how a whole new level of conformity has been created by the average bozo's efforts at individuality. It might almost work if your personal definition of individuality didn't depend so heavily on how you present yourself to others. I mean, what's the sense of being into bullshit like [insert pseudo-non-mainstream hobby here] if you can't talk about it to make yourself superior to your peers?
Kinda sounds like the Linux crowd, huh? "I'm so ALTERNATIVE by patching my kernel every day while you brainwashed Windows sheep meander in unenlightened tedium." Funny to think that if you had back all the time you spent tweaking and patching (for no good reason other than to say you have the latest version), you wouldn't know what to do with the workstation on your desk.
*sigh*
excuse the rant. caffiene has yet to be digested.
To all those naysayers about RH and Bluecurve: This is still Linux under the hood - dig in, and customize to your hearts content! Isn't that why you are using linux in the first place?
Quarter on quarter growth of 50%, for 2 quarters after a new product.
I don't think that will continue for a year or so, you're suggesting 500% in the next year (1.5^4)
Linux use is growing, but that isn't all Redhat, and that isn't all Advance server either.
I think there will be growth, lots in subscriptions and valuable service, but I don't see Redhat growing profit by 100x in the next few years.
I do think that they are doing better, and will probaly be somewhat successful, just not what hteir market cap suggests.
Then you find yourself in good company, you ass-ramming turd burglar!
...to the dude's story? Red Hat is making its money selling to big buisiness. Same way Oracle does. Same way a lot of companies do. The desktop market the not only one out there.
Ignorance kills, complacency kills, hatred kills, but usually not the ones guilty of them.
Of course, the reward for the sales this year was having the entire staff laid off so management can take the IP and form a new company, so who am I to judge.
The company predicted net income of $1.3 million to $2.5 million for the current quarter, which runs through February. Revenue should be between $26.5 million and $27.5 million. Cash generated from operations should increase to between $2 million and $3 million.
So... where does the other 25 million come from?
autopr0n is like, down and stuff.
No matter how slim a profit may be, there are tons of large, reputable companies out there that are
losing money. Breaking even is good, a profit is merely icing on the cake, and hopfully a sign
of things to come.
On a related note, RedHat's stock is down today. As a shareholder, I'm interested to know why it would
drop on good news. Any ideas?
Begun, this browser war has.
Alas, Red Hat still attempts to sell copies of GPLed, rather than commercial, software, and so will never be able to gain a true market edge over competitors. Not a horse to bet on if you're a betting man, IMHO.
None of these companies have the best track record for contributing to the community -- unlike Redhat. No, I'm not a Redhat fan, but they're much better than the those slimeballs.
This is important.... if we can't download it then it is against the GPL.
Out of curiosity, what's so bad about not making billions of dollars off of people? Non profit organizations do this all the time.
So people won't become rich from buying Redhat's stock, that doesn't mean the company can't create good GPL software, create some new jobs, and make a few extra dollars at the end..
Why do I keep typing pythong?
Out of curiosity, what's so bad about not making billions of dollars off of people? Non profit organizations do this all the time.
So people won't become rich from buying Redhat's stock, that doesn't mean the company can't create good GPL software, create some new jobs, and make a few extra dollars at the end..
Yes, all that is true, but, in practice, to the extent that Redhat becomes the de facto standard for professional use, they have a certain amount of control. If 3rd party binaries have more chance of working (ever tried installing random rpms with Suse?), Linux staff have RH-flavoured skills and the bookstores sell RH-flavoured guides, you are close to 'no-one ever got fired for running Redhat'. Sure, you can fork, or install Debian, or something, but most commercial users want some sort of road map.
Personally, I'm rooting for Redhat all the way. A bit less variety in the Linux world would make for a less exciting but more productive life.
Virtually serving coffee
And to think that this dog of a company was once valued at around $25 billion. At least now that it's earning a profit (for this quarter anyway), it will have a non-infinite P/E ratio.
Anyone remember a certain airline ticket company in the dot com era which had a higher market cap than the top 3 airlines combined?
Which reminds me... I think it's a good time to put in a phone call to that VC I've been meaning to get back to.
Unspinning the marketing web, what they really mean to say is that they are no longer using Generally Unacceptable Accounting Procedures.
I really don't see how McDonald's can make money. Their food is horrible!
Personally, if there is a Burger King within 100 miles of a McDonald's, I'll be eating flame broiled that night . .
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