Appdev sales help fatten up Red Hat before it’s swallowed by IBM

Red Hat’s (probably) last set of full year financial results showed its application development business growing faster than its infrastructure business.

The open source champion is in the throes of being acquired by IBM, but released Q4 results yesterday that showed total revenues for the quarter ending February 28 up 13.8 per cent to $879m. Net income was $139.5m, compared to a $12.2m loss last year. Full year revenues were $3.4bn, up 15.1 per cent on the year, while net profits for the 12 months were $434m, up 65.7 per cent on the year.

Subscriptions accounted for $774.2m of that revenue figure in the fourth quarter, and $3bn for the full year. The balance falls under training and services.

“Enterprise organizations are continuing to move to hybrid cloud environments, which is contributing to strong growth in Red Hat’s cloud enabling technologies,” Jim Whitehurst, Red Hat’s CEO said in a statement. He said that increasing numbers of Ansible and OpenShift customers were contributing to that growth, with customer numbers standing at 1,300 for the former and 1,000 for the latter.

Infrastructure-related subscriptions accounted for $549m, an increase of 8 per cent year on year, or 10 per cent measured in constant currency. For the full year, they came in at $2.1bn, up 9 per cent on the year (10 per cent in constant currency).

Application development-related and “other emerging technology offerings” revenues were up 30 per cent to $225m for the quarter (34 per cent in constant currency, and up 31 per cent to  $816m (32 per cent in constant currency) for the full year.

Growth in hybrid cloud, application development and “other emerging technology” will presumably go down well with putative parent IBM, which is due to take over Red Hat sometime in the second half of this year.

That looming deal was the reason why Whitehurst didn’t give a forecast for Red Hat’s performance, and why the firm didn’t hold an earnings call to go into its financials in depth. However, the firm reported a total backlog for fiscal year 2019 was in excess of $4.1 billion, up 22 per cent year-over-year, which should give IBM something to wet its lips about in the meantime.