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Red Hat In The Black

Hemos posted more than 13 years ago | from the good-work-all dept.

Red Hat Software 205

Cycon writes "Red Hat has just announced that they have finally achieved a positive cash flow! Today they announced that in the quarter ending May 31, 2001, they have seen $25.6 million in revenue, with an adjusted net income of $600,000. Congradulations to everyone at RHAT!"

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Winning the race (1)

Anonymous Coward | more than 13 years ago | (#137879)

This, of course, means that they are WAY ahead of every other internet startup. Not that I use Redhat, but I'd root for them at least until Slackware goes IPO (not bloody likely)

Re:Red Hat remains in red: Posts $27.6M net loss (1)

Anonymous Coward | more than 13 years ago | (#137880)

Copyright (C) 2001 The Canadian Press (CP), All rights reserved

Yup, and look at how well you followed that.

Bull (1)

Anonymous Coward | more than 13 years ago | (#137881)

Read the numbers--they had an operating loss of $3.8M and interest income of $4.4M, which is how they got a profit of $600K. Compared to the same quarter last year, their revenue was up about $4M, and their costs declined by about $2M. That's definitely movement in the right direction, as opposed to the bizarre numbers coming out of Caldera.

RH is still bleeding, just at a slightly lower rate than last year. When they post a true operating profit it will be time to celebrate.

Re:Says more about RedHat than Linux (1)

Anonymous Coward | more than 13 years ago | (#137882)

Sometimes linux is a POS, all right. 8-)

Re:Difference between "adjusted" and "reported"? (2)

Anonymous Coward | more than 13 years ago | (#137885)

The reported net loss includes one time expenses such as purchases of companies. Thus you can't say they're worse off.

congradulations? (2)

Anonymous Coward | more than 13 years ago | (#137886)

try congraTulations.....

Re:Red Hat remains in red: Posts $27.6M net loss (2)

Anonymous Coward | more than 13 years ago | (#137887)

How can you know so much about finance, yet so little about the damned english language?

Red Hat remains in red: Posts $27.6M net loss (4)

Anonymous Coward | more than 13 years ago | (#137888)

Red Hat remains in red: Linux software maker posts $27.6M quarterly net loss

RESEARCH TRIANGLE PARK, N.C., Jun 19, 2001 (The Canadian Press via COMTEX) -- Linux software packager Red Hat Inc. said Tuesday it broke even on an operating basis in the quarter ended May 31, meeting Wall Street estimates.

Red Hat reported adjusted net income of $600,000 US, or break even per share, in the first three months of its financial year. That compared with an adjusted net loss of $3.7 million, or two cents per share, a year earlier.

Before adjustments, the net loss was $27.6 million, or 16 cents a share, compared with a net loss of $17.4 million, or 11 cents a share, in the first quarter of the previous year.

Red Hat reported revenue of $25.6 million, down five per cent from the previous quarter but up 18 per cent from the year-earlier period.

Red Hat, which has yet to report a profit since it went public, markets a CD-ROM version of the open-source Linux operating system and provides customers with technical support.

The online source for news sports entertainment finance and business news in Canada

Copyright (C) 2001 The Canadian Press (CP), All rights reserved

Woohoo! (5)

Wakko Warner (324) | more than 13 years ago | (#137889)

Now maybe we'll get Direct Deposit again! I'm tired of trying to cash these "stock options" things in at the foodstamp redemption center...

--
Forget Napster. Why not really break the law?

If so the consultants should certify in other OSes (2)

emil (695) | more than 13 years ago | (#137893)

Assuming that they don't have any retention problems, they should keep a small core of people who are certified in Solaris, HP-UX, AIX, and/or Tru64 ostensibly for "integration issues."

I also hope that they have Oracle and DB2 people on staff now, especially since DB2 certification is free until September (and DB2 has put the first Linux score on the TPC site).

But then again, if they have lousy managers of the type that drove away Raster, then don't even bother with this.

Re:hopefully this will help the stock price (2)

ptomblin (1378) | more than 13 years ago | (#137896)

Hah! I sold my RedHat stock at $125. Unfortunately I used the profit to buy Corel stock, so that proved I was just lucky with RedHat.


--

Cygnus Solutions (5)

Per Abrahamsen (1397) | more than 13 years ago | (#137897)

I wonder how much come from the "old" Red Hat, and how much come from the always profitable Cygnus Solutions. Buying profitable companies is one way to become profitable.

Of the wins listed, about half would be typical Cygnus Solutions contracts (GNUPro), and half would be typical Red Hat contracts (Linux). A few could be either or neither, maybe made possible by the merger.

Says more about RedHat than Linux (2)

Jon Peterson (1443) | more than 13 years ago | (#137898)

Can't help thinking that RH is really benefitting from their system integration and consultancy skills. If they did the same stuff for Solaris and other nixes, they'd probably be making alot more money!

Still, things like this have to be good news for Linux:

"Contract signed with BP Oil for support renewal for POS rollout to 2,500 petrol stations across Europe. "

Assuming that the POS systems actually _are_ Linux....

Re:This is an adequate response to the M$ FUD (2)

johnnyb (4816) | more than 13 years ago | (#137902)

Of course, I am one who believes that making money should be difficult. i.e. - we should have to _work_ for a living. So the fact that money didn't just flow in a pipeline to free software companies actually encouraged me, because it showed that free software companies actually have to continually provide increasing value to their customers, instead of just forcing them to pay money.

It's obvious when money just flows out of someone's ears without hard work that something is amiss.

Slightly wrong... (5)

larien (5608) | more than 13 years ago | (#137904)

They reported a net profit, which is different from a positive cash flow. A company can have a positive cash flow (eg, just after a rights issue) but still be making a loss and it can have a negative cash flow (eg, large capital purchases which don't fully affect profit in the year of purchase) and still make a profit.

A full look at the finances would reveal if they do have a positive cash flow, but the two don't go hand-in-hand.
--

Cygnus (3)

Ed Avis (5917) | more than 13 years ago | (#137905)

Did you notice how many of the deals they trumpeted in the press release are actually from the Cygnus side of the business? I wonder whether the Linux half of things is profitable.

Re:Not to piss on this circle-jerk... (1)

Fyndo (11748) | more than 13 years ago | (#137909)

Huge, I'm sure. But then they're a much older and established company. The relevant comparison might be to MS at this stage in it's development....

Re:Time.... (3)

woggo (11781) | more than 13 years ago | (#137910)

Imagine someone at a computer security firm telling the boss that he/she wants to become a "Black Hat" user.
Well, the OpenBSD zealots would have you believe that the reaction wouldn't be any worse than if someone at a security firm told her boss that she wanted to be a "Red Hat" user. *rimshot*

(Disclaimer: I use and like Red Hat)

POS Terminals? (2)

weston (16146) | more than 13 years ago | (#137914)

I think I've had to work with a few of these.
Why is Red Hat trying to make something like
THIS? POS terminals are frustration, and nothing
but peices of .... of.... something.... wait
a sec, it'll come to me....

i

--

All things aside . . . (3)

Badgerman (19207) | more than 13 years ago | (#137916)

Forget the M$/Linux thing, forget the fact that 600K doesnt seem significant compared to other companies, forget the dot-com hype and fall.

A company using OS as its base has managed to make a profit in a few years and survive. That may not legitimate the business model, but it gives us some hope that it is legitimate or can be legitimate.

And that, all things aside, is pretty damn neat and inspiring. So congrats to the Red Hat people.

great news (2)

Misha (21355) | more than 13 years ago | (#137918)

Free round of install images on me!

it's a nice bonus for the AWESOME job they did on RH7.1


Re:...I thought open source was bad for business?? (1)

MrAl (21859) | more than 13 years ago | (#137919)

Consider this: How many open source companies are making money? How many closed source companies are making money? Perhaps open source isn't a bad business model, but it's appears to be a pretty sucky one if so few can make money off it.

Database Software / Service (1)

Patrick Lewis (30844) | more than 13 years ago | (#137924)

I saw this article [yahoo.com] outlining a database venture that Red Hat will be introducing. Does anyone have any details to this? I am curious if they will be developing something from scratch or using an existing product (the article tends to lean toward "from scratch", but it isn't really clear).

Re:Says more about RedHat than Linux (2)

jmauro (32523) | more than 13 years ago | (#137925)

It could always be eCos that they picked up from cygnus.

Buy? (2)

macdaddy (38372) | more than 13 years ago | (#137926)

So would people recommend buying RH stock now?

--

Yea but... (2)

brianvan (42539) | more than 13 years ago | (#137929)

when will LinuxOne show a profit? :)

Re:Difference between "adjusted" and "reported"? (3)

throx (42621) | more than 13 years ago | (#137936)

It can't be written off because it is, in fact, money that they don't have any more. As pointed out by other in this thread though, it does NOT include stock options which are a going to be a major hit to that income figure.

Realistically, Red Hat isn't in the black and still won't be for some time. Don't go spending your hard earned cash on RHAT just yet...

Difference between "adjusted" and "reported"? (5)

throx (42621) | more than 13 years ago | (#137937)

With the SEC investigating the occurance of Tech companies not reporting employee stock options as part of the company's liabilities, how much faith can we put in this statement when you look at the full quote:

"Adjusted" net income of $600,000 (up from a loss of $3.7m last year).
"Reported" net loss of $27.6m (from a loss of $17.4m last year).

If I'm correct, doesn't this mean that at the end of the day they are actually worse off than they were last year and just putting PR spin on the figure?

Boring quibble (3)

Chalst (57653) | more than 13 years ago | (#137944)

The announcement is that Red Hat are showing a profit for the first time: they certainly will have shown positive cashflow already (ie. cash going into their money accounts minus cash going out) when they were floated.

Hmmm... (1)

mjh (57755) | more than 13 years ago | (#137945)

...wonder if the stock [yahoo.com] will rise. At the time of this post, it was down $.19.
--

Impending Name Change (1)

volpe (58112) | more than 13 years ago | (#137946)

Now that they are no longer "in the red", so to speak, I wonder if they will change their name to "BlackHat", and become a security consulting firm.

Re:Red Hat remains in red: Posts $27.6M net loss (5)

ProfDumb (67790) | more than 13 years ago | (#137950)


Red Hat remains in red: Posts $27.6M net loss



If you go look at the actual figures, you will see that most of that loss is "depreciated goodwill" -- when Red Hat acquires a company they put "goodwill" on their books as an asset and then depreciate it according to very arbitrary accounting rules. In reality, Red Hat did not buy depreciating physical assets, but rather the skills and reputations, which are not depreciating.

On the other hand, the loss also contains several million in stock options, which really are an expense to the company. The "cash flow" number in headline ignores stock options. Therefore, Red Hat really is losing money, but nothing like $27 million.

Re:Red Hat remains in red: Posts $27.6M net loss (2)

selectspec (74651) | more than 13 years ago | (#137953)

magic?

Re:Red Hat remains in red: Posts $27.6M net loss (5)

selectspec (74651) | more than 13 years ago | (#137954)

Red hat is in the black actually. They had a posative cash flow this year. In otherwords more cash came in than went out. The net loss is attributable to the ammortization of aquistions from prior years. Ammoritzations are not attributable to cash flows only to balance sheets and income statements. When one asks whether a company is in the red or the black, it is implicit that they are refering to cash flows and/or the operating budget (which like cash flows doesn't include ammortizations).

Re:...I thought open source was bad for business?? (1)

anothy (83176) | more than 13 years ago | (#137959)

...linux can be profitable, if not as a product than for customer support
uh, just to be clear, arn't you basically saying RH is making money off selling software that needs their support? gee, M$ has already proved that's a succesfull business strategy!

Time.... (5)

bish (84411) | more than 13 years ago | (#137960)

to change the Company Name?

And you were doing so well.

Re:Difference between "adjusted" and "reported"? (1)

LordNimon (85072) | more than 13 years ago | (#137961)

In many companies, unvested options can still be purchased by employees. The difference is that if the employee quits, the company has the right (and often does) to buy back the unvested options.
--
Lord Nimon

Not to piss on this circle-jerk... (2)

dave-fu (86011) | more than 13 years ago | (#137964)

...but as long as we're pooh-poohing M$ (how clever!) and rooting for GPL and Linux and whatever... what do Microsoft's financials look like this quarter? Not that facts should mean anything around here.

They did not earn a profit! (1)

duplicate-nickname (87112) | more than 13 years ago | (#137965)

According their GAAP earnings report (generally accepted accounting priciples) RedHat lost $27 million. Their Pro forma showed a profit of only $600k which does not include the $20 million RHAT took in depreciation (non-cash expenses). There are no accounting rules for the pro forma earnings, so most investers look at the gaap AND pro forma to determine if a company is profitable.

With RHAT only showing $600k in pro forma profits, I think its safe to say that they are NOT in the black.

ÕÕ

Re:Red Hat remains in red: Posts $27.6M net loss (1)

duplicate-nickname (87112) | more than 13 years ago | (#137966)

You are correct, there is no way RedHat is earning a profit, but they probably aren't losing $27 million either. One must consider both the GAAP and Pro Forma earnings....and with only $600k in pro forma earnings, it is safe to say RHAT is still in the red.

BTW, one would be a fool to make investing decisions solely on pro forma earnings reports!

ÕÕ

Faster than... (3)

swordgeek (112599) | more than 13 years ago | (#137971)

Not bad--they beat Amazon!

Re:Believe the hype (1)

VultureMN (116540) | more than 13 years ago | (#137972)

AAAUUUUIIIIGGGHHH!

No penguin entrails for me today.

Re:What does B8 00 4C CD 21 mean? (1)

VultureMN (116540) | more than 13 years ago | (#137973)

B8 00 4C = load AX register with 004C (hex)
CD 21 = Int 21h = DOS service vector
The DOS service is specified in AH, which in this case is 4C, which is return with error code. (Program Termination). The return status is AL, which in this case is 00. So the return status the program that is terminating is 0, it probably means success.

The upshot is, successful death! DIE DIE DIE! OK.

How can you have a reported net LOSS and a Profit? (1)

lordmage (124376) | more than 13 years ago | (#137978)

"The company reported an adjusted net income of $600,000, or break even per share, for the first quarter of fiscal 2002, compared to an adjusted net loss of $3.7 million, or $0.02 per share, for the first quarter of fiscal 2001. On a reported basis, the net loss was $27.6 million, or $0.16 per share, compared with a net loss of $17.4 million, or $0.11 per share in the first quarter of fiscal 2001"

Will someone explain how you can lost money and still be profitable. I dont get it? What is "Reported basis" any Accountant?

congrats to redhat and linux (2)

small_dick (127697) | more than 13 years ago | (#137981)

this is really good news.

i only wish so many programmers weren't losing their jobs right now ... the 'dot crash' has certainly taken its toll.

redhat 7.1 is the best release i've seen ... 2.4 kernel, xfree 4.0, etc.


Treatment, not tyranny. End the drug war and free our American POWs.

Re:Congratulations all around (1)

Mr.Phil (128836) | more than 13 years ago | (#137983)

RHAT is the stock ticker symbol for Red Hat... so that isn't spelled wrong.

However, pretty much everything else on the front page is. :)

Re:Good on 'em! (1)

Mr.Phil (128836) | more than 13 years ago | (#137984)

autorpm kinda fits that bill

Re:Offtopic (1)

SLi (132609) | more than 13 years ago | (#137985)

mov ax,4c00 you mean, I'm sure?
Or if that's 32 bit code, it's mov eax,21cd4c00.
Or then my skills at disassembling in head have rusted :)

Congrats to Red Hat (1)

FiNnZ (133419) | more than 13 years ago | (#137986)

I dont care about stock downgrades and upgrades, but I do care that Red Hat can sustain itself and continue to give me an alternative to the Microsoft OS, especially with the coming of XP (boooooo). Microsoft, be afraid, be very afraid. Just because they give it away doesn't mean that they can't put you on the shelf.

Good on 'em! (1)

RedOregon (161027) | more than 13 years ago | (#137994)

Great for RedHat. Now either make .RPMs track dependencies or point me at a site that shows how to integrate apt-get into RH and we'll check out 7.1.....

____

And here's a comforting thought... (1)

taliver (174409) | more than 13 years ago | (#137996)

Red Hat is providing support for Lucent deployment of applications using GNUPro tool suite on many embedded platforms used extensively throughout Lucent's Wide Area Network Switching Products.

That they would mention Lucent as the second bullet in their list of achievements... scary.



This is an adequate response to the M$ FUD (1)

uriyan (176677) | more than 13 years ago | (#137997)

M$ FUD generally makes a bad reading, since it persumes the listener to be a total idiot. However it did use to have one valid point: the economic factor.

Open-source projects earn money with much difficulty and in indirect ways. This was an issue which has concerned me much, because money is necessary for existence in any reasonable society.

The recent news about RedHat making profit uplifted that concern from my heart. RedHat is built around free software. It is apparent that if RedHat can make profit, others can too.

To sum up, eat your wallet, M$!

Excellent (1)

pizen (178182) | more than 13 years ago | (#137998)

Time to buy stock. Time for a turn-around in the US economy (especially Tech stocks). Or is this just another sign of the apocalypse?
---

RedHat, GPL, and Gates (2)

Alien54 (180860) | more than 13 years ago | (#137999)

This event (Redhat in the Black) contrasts well with the recent statement of Gates, as noted in the previous Slash story:

The GPL, he continued, "breaks that cycle--that is, it makes it impossible for a commercial company to use any of that work or build on any of that work."

This, taken to the logical end, would make the success of Redhat impossible. All this means is that there is a subtle bug in his logic.

which is somehow appropriate.

It is my view that the MS proprietary accomplishes the exact thing that Gates accuses the GPL of. It makes it impossible for a commercial company to use any of that work or build on any of that work, except with the permission of Microsoft.

Redhat obviously does not have this as an issue, as they are continuing to grow nicely.

Congratulations, Redhat!

Check out the Vinny the Vampire [eplugz.com] comic strip

Re:How can you have a reported net LOSS and a Prof (1)

bwalling (195998) | more than 13 years ago | (#138002)

Because when the accouting people get together with the public relations people, they start making shit up. However, there is a standard, accepted practice for coming up with bullshit figures, so they really haven't done anything 'wrong'.

If you ask me, it's all a load of crap. They work the numbers like hell until they like them. I've seen the actual numbers, and I've seen what my employer reports - interesting, to say the least.

Hold the Press..... (2)

bitva (206067) | more than 13 years ago | (#138006)

....I though anyone using the GPL couldn't make money as it's not practical for business.
At least that's what my friend from Redmond said.

Good Job Red Hat! (1)

VivianC (206472) | more than 13 years ago | (#138007)

You guys have now showed that a free operating system can turn a profit.

Next you need to show that it can SUSTAIN a profit.

Keep up the good work and keep making those nay-sayers eat their words!


Viv
-----------

Impossible (5)

91degrees (207121) | more than 13 years ago | (#138008)

Red Hat can't make a profit. That would make them a commercial company. Bill Gates himself said that it isn't possible for commercial companies to use GPL code. I think those Red Hat GPL hippies really ought to start reading Slashdot before making such ludicrous claims about profitability.

hopefully this will help the stock price (1)

wmulvihillDxR (212915) | more than 13 years ago | (#138009)

I've seen their stocks steadily decline from $6 to about $4.61 today. Congrats again to the RedHat peeps.

Congratulations all around (2)

ackthpt (218170) | more than 13 years ago | (#138012)

With the bleak rumors about VA running amok it's good to see that there is a market and money to be made. When the tech recession subsides Red Hat will be a major contender. I hope other ditribs are up and about to keep them honest.

Congradulations to everyone at RHAT!"

Congratulations on your new Spell Checker, spelling on here seems to be reaching rediculous proportions.

--
All your .sig are belong to us!

Re:Wow.. (1)

Darth RadaR (221648) | more than 13 years ago | (#138013)

Time to go put Redhat boxes in front of Windows boxes at CompUSA. :)

Good to see someone else doing that. I try to do my part by going to the book stores and putting Linux manuals & magazines in front of the MS magazines. :)

Re:What does B8 00 4C CD 21 mean? (1)

jaredcat (223478) | more than 13 years ago | (#138014)

From Symantec's Heuristics White Pages [google.com] :

Machine language bytes for example 1: B8 00 4C CD 21

Machine language bytes for example 2: B4 3C BB 00 00 88 D8 80 C4 10 8E C3 9C 26 FF 1E 84 00

Figure 3.

Two examples of machine language bytes that instruct the computer to terminate a program. Even though the two sequences of bytes tell the computer to do the same task, they look entirely different.

RedHat Profit (1)

Afreet1 (224290) | more than 13 years ago | (#138015)

Does anyone know where the most recent financial statements are available for RedHat? I just went to the SEC and RedHat's investor relations and all I found was this link [ccbn.com] to the 10-k issued in April.

According to those statements Redhat is still running a major loss and reducing their cash balance. However none of those numbers match RedHat's press release so I have to believe that the SEC doesn't have an updated report on file yet. The major issue I have is that I want to see the impact of the Operating cash flow alone. If the core business is not profitable then they have just been making money by investing in marketable securities.

Offtopic (1)

Daath (225404) | more than 13 years ago | (#138018)

Fear: When you see B8 00 4C CD 21 and know what it means mov ax,4c int 21 ?

Re:Time.... (1)

Kierthos (225954) | more than 13 years ago | (#138019)

Ahh, but if the name change does happen, we'll need an application called "Mirrorshades".

Kierthos

Re:"Selling" a "free" OS is a good business. (1)

Kierthos (225954) | more than 13 years ago | (#138020)

And if you make it impossible to fix by yourself, you have Windows.

Kierthos

Does anyone realize how awesome this is?!? (1)

wrinkledshirt (228541) | more than 13 years ago | (#138021)

Consider the following:

  • Their core product is software that you can download yourself at no cost. You don't even have to pay a cent to help them keep their servers running.
  • All controversies aside, they've made important contributions both in terms of gcc and the rpm. Both of these bits of software are also available at no cost to its users.
  • They've built a core product that other companies unabashedly rip off to make their own products, most notably Mandrake. These other companies can get their hands on this source for free.
  • They've focused their efforts on software that is still in its infancy (less than a decade old) and doesn't have as its main selling points the sorts of things that Joe Average (or even Joe Above Average) worries about on their home desktops (MS Office compatibility, games, fast Internet browsing). It's getting better, but it's still software for geeks.

And they're still in the black. Their business practices violate almost every notion that we've come to accept as granted in order for a software house to make a profit, and they've wandered into an industry dominated by several different longstanding companies, and THEY'RE STILL MAKING A PROFIT!

This is so cool.

Try Conectiva Linux (1)

C0vardeAn0nim0 (232451) | more than 13 years ago | (#138022)

Alfredo "windowmaker" Kojima is now working on Conectiva, Brasils leading open source company. Recently he adapted apt-get to work with RPM, and it seems that this is integrated in Conectiva Linux 6.0. Click here [slashdot.org] for more details.

--

"comunists" making money ? (3)

C0vardeAn0nim0 (232451) | more than 13 years ago | (#138023)

IIRC M$ said that the free sotware movement was a "comunist" thing, and that it was a threat to the american way of life and for capitalism.

Well, if free software is communism or no, I don't know, but a company making profit with something IS capitalism in it's most pure form and is nice to see Red Hat proving that a capitalism company can make money with free stuff.

Time to eat some of your words Microsoft...

--

Believe the hype (1)

necrognome (236545) | more than 13 years ago | (#138025)

Somewhere a fat penguin is laughing, chasing vultures away. Good job Red Hat.

Wow.. (1)

codefreez (241042) | more than 13 years ago | (#138027)

I actually got this headline on my phone first rather than slashdot.

It's good to see Redhat's doing ok...too bad the MS FUD people will have people convinced linux is for sinners or something.

Time to go put Redhat boxes in front of Windows boxes at CompUSA. :)

Re:Not to piss on this circle-jerk... (5)

ocbwilg (259828) | more than 13 years ago | (#138033)

...but as long as we're pooh-poohing M$ (how clever!) and rooting for GPL and Linux and whatever... what do Microsoft's financials look like this quarter? Not that facts should mean anything around here.

Don't be ridiculous. You're actually suggesting that that we compare numbers from a smallish, niche-market company that has been in business for 5 years with those of a vicious, multinational, multi-billion dollar, anticompetitive monopolist that has been in business for 20 years? I've never heard such lunacy.

If you think that this is about money then you are very sadly mistaken. It is about ideology. It is about the fact that you don't have to be an extortionist or a monopolist or a tyrant in order to be a successful company. It is a testament to the power of open source that such a small (dare I say nearly insignificant) company can actually survive to operational profitability while competing against a company the size of Microsoft.

Do you remember what has happened to the rest of Microsoft's competitors over the past 20 years? They've been either acquired by The Beast, run out of business by The Beast, or beaten so badly into submission by The Beast that they've had to seek government protection. The only real exceptions to this are companies who were already multinational multibillion dollar companies before they began competing with Microsoft. RedHat (and open source in general) hasn't had any of those things happen to them. This is a great day for open source. Free speech for everyone!

Re:Red Hat remains in red: Posts $27.6M net loss (5)

TGK (262438) | more than 13 years ago | (#138035)

Goodwill dosn't quite work like that but ok. Say company X buys company Y for $5.0x10^9. Now, if we sit down and count all of company Y's assets and they come up to be, say, $3.6x10^9 the remainder is something called "goodwill." These are intangable assets. Things like, perhaps, market share, location, reputation. In short, things that no company can go out and buy, and thus do not have a dollar value of their own. Now the thing is, goodwill, must, under GAAP (Generaly Accecpted Accounting Principles) be ammortized off over a period not to exceed 40 years. Because it's always nice to have assets sticking around most companies use 40 years as their ammortization period.

So yes, ammortization of old expenses, especialy those having to do with the depreciation of goodwill is going to play a huge roll in this.

When we say a company is "in the red" or "in the black" the meaning differs depending on the period we are talking about. If we're refering to a year in general, the statement usualy refers to the income statement and or the statement of cash flows. The key portion of this is to ballance Revenue against COGS (cost of good sold). For Red Hat, COGS will include R&D work and will thus be very high. Revenue from goods sold will of course be close to zero due to the nature of open source. This leaves Red Hat makign it's money from Tech support and subscription servies as was so aptly pointed out above. Here's the other key, R&D expenses can be ammortized as well by a sufficiently creative accountant. Afterall, if this R&D is going to benefit the company over the next 10 years, then the expensce of that research can be spread out over those 10 years.

What this amounts to is this. We rather need a good solid stock holders report from RHAT to pour over until we can get some answers. Never trust what a company claims to the media, trust what it is required by law to report to the IRS. (And not even that in some cases)

This has been another useless post from....

Re:Difference between "adjusted" and "reported"? (1)

Greenisus (262784) | more than 13 years ago | (#138036)

I don't really know much about Wall Street, but I read Microserfs [amazon.com] . Don't the options have to sit for a while to vest? Since it's uncashed money, wouldn't they still be in the positive?

SEEEEE? I told you so (1)

FrostyWheaton (263146) | more than 13 years ago | (#138037)

I told you that OSS and service driven computer companies could and would make it. well here'steh proof, you see that? $600,000 of profit! Ha! and all you nonbelievers wer trying to tell me for the last (5?) years that it wouldn't work, well HA!!

Now they just have to make back all the money they lost up to this point.

Homer, that's not God, it's just a waffle Bart stuck to the ceiling
I know I shouldn't eat thee

positive cash flow? (1)

wroot (264810) | more than 13 years ago | (#138038)

A more fair thing to say would be that they BROKE EVEN (finally)

Wroot

Re:Difference between "adjusted" and "reported"? (1)

GuyFromAccounting (266997) | more than 13 years ago | (#138039)

Just because a cost is a one time expense doesn't mean it is irrelevant.

Re:Difference between "adjusted" and "reported"? (2)

GuyFromAccounting (266997) | more than 13 years ago | (#138040)

You are right but, the problem is not that options aren't part of the liabilites, its that the cost of these options are excluded in the calculation of net income. In fact follwing the table link you see that These results "Exclude amortization of goodwill and intangibles, stock based compensation, and merger and acquisition costs"

What does B8 00 4C CD 21 mean? (1)

pgpckt (312866) | more than 13 years ago | (#138042)

I give up. I am not that geeky. Want to tell us non-enlightened what B8 00 4C CD 21 means?

Re:Offtopic (1)

MikeyLikesIt! (313421) | more than 13 years ago | (#138043)

Which is, of course, the "Terminate With Return Code" interrupt under DOS V2 and all descendants.

"Selling" a "free" OS is a good business. (1)

Galactic-Geek2000 (322789) | more than 13 years ago | (#138044)

If you can "sell" an OS that is supposed to be "free", you are going to make money. Make the OS hard enough to use and you will make money on "consulting" too. Great business model.
Galactic Geek

Re:Time.... (2)

s20451 (410424) | more than 13 years ago | (#138047)

change the Company Name?

... to "Black Hat"? Imagine someone at a computer security firm telling the boss that he/she wants to become a "Black Hat" user.

Not too bad for cancer.... (2)

GreyPoopon (411036) | more than 13 years ago | (#138048)

There are lots of posts out there questioning whether it's really a profit or really positive cash flow, or whether they took a different slant on the numbers to make it look good. Just remember that non-tech businesses all do the same crap. Regardless of what the angle, they have shown that there are valid business models based largely on GPLed software. They have thrown a big "eat your words" into the face of M$. This comes at a critical time where evidence like this can be used to defuse some of the M$ propaganda. Way to go Red Hat!

GreyPoopon
--

Re:...I thought open source was bad for business?? (1)

TikkaMassala (411282) | more than 13 years ago | (#138049)

So they're just scraping by with under $1m profit, whereas Windows is raking in billions? That's hardly turning a profit when compared to Bill's boys.

Re:...I thought open source was bad for business?? (1)

Tech187 (416303) | more than 13 years ago | (#138056)

There are thousands of software vendors making a profit right now. Many aren't publicly traded companies. Few are dispensing an Open Source product.

Re:Red Hat remains in red: Posts $27.6M net loss (1)

Tech187 (416303) | more than 13 years ago | (#138057)

Needless to say that announcements like this serve to smoke out the ignorant. Doubtless there are clueful people out there waiting for the jubilant fools to sink their cash into RHAT, based on these hype figures.

"So ya think Red Hat is over the hurdle? Here, buy some more shares from me."

...I thought open source was bad for business??? (1)

powerlinekid (442532) | more than 13 years ago | (#138060)

Congratulations to Red Hat... they've done alot for the community. But more importantly... this shows that... linux can be profitable, if not as a product than for customer support, service for that product. Haha... and Micro$oft says GPL and Open Source are bad business models. This just proves them wrong (again).

Re:...I thought open source was bad for business?? (1)

powerlinekid (442532) | more than 13 years ago | (#138061)

The point is not in how rich Red Hat gets, but in that Microsoft blasts the GPL and Open Source as "bad business models" and "non-profitable" which Red Hat has now proven isn't true. Granted, they barely standing on the line and could fall either way, but still impressive netherless.

Re:...I thought open source was bad for business?? (1)

powerlinekid (442532) | more than 13 years ago | (#138062)

Well, Yes and No. Its not that the software is crap like Micro$oft and needs patches etc (although all major software projects have bugs). Its more along the lines of training, Sorry I didn't choose my words wisely enough. So yes the software needs support, but for the most part its due to people whos servers go down, or any problems that come from running a server (as opposed to Microsoft which yes supports servers, but seems like they mostly deal with support of desktop and workstation)

Re:...I thought open source was bad for business?? (1)

powerlinekid (442532) | more than 13 years ago | (#138063)

Yes out of how many thousands that went under. You can compare raw numbers all you want, but they really don't mean anything. I think thousands is a generous figure, but thats out of tens of thousands that try. That is my point... 3 profiting open source companies out 30 is just as impressive as "thousands" of profitting commercial companies out of tens of thousands.

Re:...I thought open source was bad for business?? (2)

powerlinekid (442532) | more than 13 years ago | (#138064)

Well technically noone is really making money right now... besides what, maybe IBM, Microsoft and Oracle. Sun is hurting, and lets not forget the dot-coms. The thing about the open source companies is that they are new, where in the US I think its 1/10 success rate for new companies. And we're not talking mom and pop corner stores, we're talking about trying to create million dollar corporations. So yeah they destined to fail. However, I promise you that the failure rate of Open Source companies (your Redhats, VAs, Mandrakes, etc) is probably not all that far off from the failure rates of Commercial Companies. Its easy to look at microsoft the king of commercial software and then look at Red Hat the king of open source (sorry to anyone that dislikes redhat, but redhat is the most successful so far) and laugh and doom Open Source to failure. But I have a suspicion that now that Red Hat has gotten its foot in the door, that it should continue to turn a profit. Ultimately thats what corporations need to do, make money. And that is why companies such as IBM, Microsoft, etc are still around... because they some how managed to be that 1 company that was able to make some money.

Good and Bad (1)

newt_sd (443682) | more than 13 years ago | (#138068)

Thats great that a business model actually is working and working with open source double great but is this the future of open source free unless you want custom support or some other feature

Re:Not to piss on this circle-jerk... (1)

haruharaharu (443975) | more than 13 years ago | (#138069)

When microsoft was the age of Redhat, weren't they a pissant little corp that wrote compilers? Hmm, Compare their respective oferings in the OS department - Dos 1.0 vs. RedHat 7.1

Is this possible? Can it be true? (1)

McD!ck (444861) | more than 13 years ago | (#138070)

Now that we see that Linux is a feasable option, perhaps all the computer superstore chains will finally start shipping machines to the public with LINUX installed default *GASP*. As the old poll fortold, Cowboy Neal did well this time, but he still has a lot of work to do! Must be tough when the future of linux rests in your cabable hands. ;)

Perhaps a new poll should be "Which linux Distro is going to make a profit next?"

RedHat in the Black (1)

trmpet1 (449917) | more than 13 years ago | (#138072)

We Love You Red Hat....Alot like the little engine that could....now maybe the little engine that runs Gates and Micro$oft over? No?

To celebrate (1)

Violet Null (452694) | more than 13 years ago | (#138073)

I hear that Red Hat is going to be giving away their software pretty soon. I don't believe it, myself, because, hey, once you start giving away your software, how are you ever going to make money?

How much until... (1)

SilentChris (452960) | more than 13 years ago | (#138077)

...they break even totally (make up all the losses?) Never mind. If it was Amazon it'd take forever. :)

My floor is cold... (3)

ColGraff (454761) | more than 13 years ago | (#138080)

Has hell frozen over? Or are they just supercooling their red hat boxen down there?

things just keep gettin' better... (1)

KapHn8d (458823) | more than 13 years ago | (#138081)

Good job and well deserved! RedHat's success and new publicity and backing from companies like IBM and Compaq are what is bringing a change that's been too long coming. Sit back and grab some popcorn... open source is about to re-release Deliverance on DVD... starring none other than Micro$oft's very own, Bill the Pig.

Re:Difference between "adjusted" and "reported"? (5)

A Commentor (459578) | more than 13 years ago | (#138082)

Purchases of companies have to be 'accounted for'. Since I don't know what RH paid for Cygnus, and I don't want to look it up, lets assume $30 Million. Also let's assume that the accounting 'books' for Cygnus says that their net worth is $2 Million.

So now they just paid $30 Million (could be in stock or cash), yet they can only add $2 in net worth to their books. In order to balance the books they must right off the $28 Million difference.

They can do it all at once, or spread it out over many quarters(i.e. get a tax benefit from it). They call this good will write-off. Even though RHat believes the company is worth $30 Million to buy, the difference between this purchase price and the accuired company's net worth have to be written off.

It doesn't impact the cash flow, which is critical. For cash flow they were generated postive $1.5 M, i.e. they now have $1.5 M more in the bank...

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