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What Else Will Red Hat Acquire?

Apr. 06, 2018 4:31 PM ETRed Hat, Inc. (RHT)3 Comments
Sramana Mitra profile picture
Sramana Mitra


  • Red Hat has clearly proven how open source can still deliver a successful business model.
  • ts recent acquisition of CoreOS is expected to help it compete better with rivals like Docker, which relies on its own container orchestration tool Swarm.
  • I would like to know what other similar acquisitions does Red Hat have in the offing?

Linux may not be the OS of choice for desktops, but it dominates the world when it comes to supercomputers, web servers, and Chromebooks. Additionally, Linux Kernel actually powers the Android OS that is used in Android-based mobile devices. According to market reports, as of 2017, Linux powered all of the top 500 supercomputers in the world.

Red Hat's Financials

Linux provider Red Hat (NYSE:RHT) is reaping benefits from this dominance in the market. Fourth quarter revenue grew 23% over the year to $772 million, against the market's forecast of $762 million. EPS of $0.91 also was significantly better than the Street's expected $0.81 for the quarter. Red Hat's deferred revenue balance rose by 25% to $2.6 billion.

By segment, Subscription revenues grew 22% to $683 million. Within the segment, infrastructure subscription revenues grew 17% to $510 million and revenue from tools for writing applications rose 39% to $173 million. Training and other services revenues grew 29% to $89 million.

Red Hat ended the year with revenues growing 21% to $2.9 billion driven by a 21% growth in subscription revenues which brought in $2.6 billion. EPS for the year grew by a cent to $1.40.

For the current quarter, the company forecast revenues of $800-$810 million, ahead of the consensus of $795 million. EPS expectation of $0.68 was below the Street's forecast of $0.73. Red Hat expects to end the current year with revenues growing to $3.425-$3.46 billion, above consensus of $3.37 billion. It expects to end the year with an EPS of $3.38-$3.41, higher than market estimates of $3.34.

Red Hat's Cloud Focus

Red Hat may be known widely for Linux, but it is shifting focus to other cloud-focused offerings including Ansible - the software to automate data center operations, OpenShift - the container application platform, and OpenStack - the open source alternative for virtualization. For the recent

This article was written by

Sramana Mitra profile picture
Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual accelerator that aims to help one million entrepreneurs globally to reach $1 million in revenue and beyond. She is a Silicon Valley entrepreneur and strategy consultant, she writes the blog Sramana Mitra On Strategy, and is author of the Entrepreneur Journeys book series and Vision India 2020. From 2008 to 2010, Mitra was a columnist for Forbes. As an entrepreneur CEO, she ran three companies: DAIS, Intarka, and Uuma. Sramana has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Full bio can be found at http://www.sramanamitra.com/bio/

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