Red Hat has two firsts in its cap - the first Linux company, and now, the first open source company to hit $2 billion in revenues.
If it's impossible in the past to make money on Linux, and an open-source software business at that, today, this feat is entirely possible.
Four years ago, Red Hat earned the enviable distinction of becoming the first Linux company to earn $1 billion. And unlike many modern companies, RHT did it the old-fashioned way. Instead of taking advantage of investor's gullibility, the company honestly earned it.
Last Tuesday, Red Hat shares have gained by 0.3 percent to $75.95 in after-hours trading. This was after the open-source company posted better-than-expected results in its 2016 fourth quarter Tuesday's closing bell.
It has posted adjusted earnings of 52 cents per diluted share, exceeding the 47 percent per share projections of financial analysts. Income of the Raleigh, NC-based company increased by 17 percent to $544 million year-over-year and exceeded the projections of Wall Street of $537.2 million.
According to Jim Whitehurst, President and CEO of Red Hat, the feat was made possible due to "Enterprises increasingly adopting hybrid cloud infrastructures and open source technologies." This approach spurred the company's robust performance.
"Customers are demanding technologies that modernize the development, deployment and life-cycle management of applications across hybrid cloud environments," Whitehurst continued.
"Many are relying on Red Hat to provide both the infrastructure and the application development platforms to run their enterprise applications consistently and reliably across physical, virtual, private cloud and public cloud environments," he added.
For the 2016 fiscal year, RHT's total income was $2.05 billion, an increase of 15 percent in U.S. dollars from year to year. This is equivalent to 21 percent if the value is measured in constant currency.
Looking forward, Red Hat anticipates an earning ranging from $2.380 billion and $2.420 billion. If its wishes come true, it could easily be the first open source company to make $3 billion.
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