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Red Hat: 56th Consecutive Quarter of Revenue Growth

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Nov. 20 2020, Updated 4:26 p.m. ET

56th consecutive quarter of revenue growth

Red Hat (RHT), a leading Linux software and open-source provider, was the latest in the technology space to announce its fiscal 4Q16 earnings. Created in 1991, Linux is an OS (operating system) that is free to use for everyone.

The company posted revenues and non-GAAP (generally accepted accounting principles) EPS (earnings per share) of $543.5 million and $0.52, respectively, which beat analysts’ estimates by $8.9 million and $0.02, respectively. For fiscal 2016, Red Hat reported revenues and EPS of $2.1 billion and $1.90, respectively. Fiscal 4Q16 marked the 56th straight quarter of revenue growth for Red Hat. Moreover, fiscal 2016 was the first fiscal year in which the company earned more than $2 billion in total revenues.

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Strong dollar fails to dampen Red Hat’s revenue growth

On a YoY (year-over-year) basis, Red Hat’s fiscal 4Q16 and 2016 revenues grew by 17% and 15%, respectively. On a constant currency basis, Red Hat’s fiscal 4Q16 and 2016 revenues grew 21%.

Red Hat, like its technology peers, suffered from the strengthening US dollar (UUP). Oracle (ORCL), Symantec (SYMC), Microsoft (MSFT), and IBM (IBM) are other tech players that derive a majority of their revenues from outside the United States. As a result, their top lines are impacted when the US dollar appreciates. Later in this series, we’ll discuss what drove Red Hat’s subscriptions in detail.

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