Red Hat losses down as Advanced Server OS gains ground

Four months after releasing its enterprise-ready Red Hat Advanced Server Linux operating system, Red Hat Inc. is showing signs of a healthier bottom line.

In an announcement late Tuesday, the leading Linux vendor in the U.S. reported revenue of US$21.2 million for its fiscal second quarter ended Aug. 31. That was up 9 percent from the $19.5 million the company posted in the previous quarter.

At the same time, losses dropped in the second quarter to $1.7 million from $4.6 million in the prior quarter.

On a pro forma basis, the Raleigh, N.C.-based Linux software and services company reported a net loss of $471,000 for the quarter, or break-even per share, compared to an adjusted net loss of $829,000, or break-even per share, in the prior quarter.

The company said the new Red Hat Advanced Server operating system is key to its improved performance. The operating system was unveiled early this year and began shipping in May, offering more robust and scalable Linux capabilities to business IT departments.

"Strong operating performance, including revenue growth and positive cash flows, delivers evidence that Linux in the enterprise is for real, and Red Hat is positioned to lead the market," Chief Financial Officer Kevin Thompson said in a statement.

In March, the company restructured after posting a net loss of $41.9 million. The business scaled back its embedded systems operations and closed its network consulting unit.

Notably, the company also announced that from now on, it will report its financial results based only on generally accepted accounting principles, rather than pro forma figures.

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