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Red Hat Q1 Earnings Call Transcript
Author: 123jump.com Staff
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Last Update: 1:16 AM ET July 02 2009

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Red Hat first quarter rose 11% to $174 million with subscription revenue going up by 14%. Net income rose marginally to $18.5 million. Earnings per share were 15 cents as against 12 cents a year ago.


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Aaron Schwartz – Ladenburg Thalmann

Okay that’s helpful and one quick follow up. Jim, you talked a little bit about strategic partners and I was wondering if you could provide some color on sort of as you move more into the VDI opportunity what should we expect there? Are you going to pursue more strategic partnerships to attack that opportunity?

Jim Whitehurst

In general one of the things I think Red Hat does well which positions us well, this is across all of our areas, is we work well with others in the ecosystem, right? Our job or our key focus in open source is we commoditize computing at various layers in the stack and we work well with other partners who have other strategies around us. I think that’s no different in VDI than it is in most other areas of the stack.

Tom McCallum

Next question please.

Operator

Your next question comes from the line of Michael Turits of Raymond James. Your line is now open.

Michael Turits – Raymond James

Hi two questions, first of all your constant currency billings rate was up 8%. I calculated organic about 9% last quarter. Does it feel like that’s pretty much bottomed here?

Charlie Peters

In terms of the rate of change, I think your question is probably about economically, has the economy bottomed. I don’t have really any idea. I don’t want to try to make a call. In terms of billing it really has more to do with the type of deals that we do the agreement about when a customer is to be billed than really anything else.

Michael Turits – Raymond James

And then so my question here is on the subject of JBoss. You’ve made comments in the past that JBoss was growing somewhere around twice the rate of the RHEL business. Is that still a pretty good rule of thumb, those trends still in place?

Charlie Peters

I think in Q1 it did not grow at twice the rate but it still grew at a faster pace than the rest of the business and I think we offered some color, Jim offered some color in the big deals. We’re still seeing big deals. They’d be leading indicators we had a number of large consulting assignments in the quarter and continuing, which are helping customers move off more expensive proprietary middleware to JBoss. So consulting goes first, other choices follow.

Tom McCallum

Next question please.

Operator

Your next question comes from the line of Brent Williams of Benchmark Co. Your line is now open.
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