Slow economy helps boost Red Hat revenue by 23%

Red Hat’s third quarter revenue jumped 23% from last year, helped by its cloud computing business.

The open-source business software firm said September-November net income was $38.2 million, or 19 cents a share, compared with $26 million, or 13 cents a share, a year ago.

Revenue rose 23% to $290 million. Subscription revenue, which accounts for 85% of total revenue, rose by more than a fifth.

“When the economy is weak, we do well, and when the economy is slowing, we also tend to do well,” said Charlie Peters, Red Hat’s CFO, in a conference call, according to The Register.

When the economy is weak, we do well, and when the economy is slowing, we also tend to do well

Red Hat’s shares have gained 45% since touching a year low in August as growing demand from corporate customers for open-source software such as Red Hat Enterprise Linux boosted subscription revenue.

“We will continue to expand our storage solutions in cloud computing and big data storage, and believe that Red Hat is well positioned to deliver disruptive solutions in the large and growing storage market,” said CEO Jim Whitehurst.

However, Red Hat forecast fourth-quarter revenue largely below analysts’ expectations, with the weak euro harming sales.