Forget about the wiggles and waggles of gold, oil and Treasury bonds, and you see something interesting - companies in the tech sector are making money again. Whether this upturn in IT spending is a release of demand that was pent-up during the worst of the recession, or whether companies see buying software and hardware as an alternative to wetware (that is, additional employees), software companies like Red Hat (NYSE:RHT) are definitely seeing some improvement in business.
The Quarter That Was
This open-source software and services company posted 20% revenue growth in its fiscal second quarter. Within those figures, subscription revenue rose 19%, while deferred revenue rose 12% to $650 million. The company not only saw new subscriptions rise 21%, but managed a 100% renewal rate for its top accounts in the quarter, and saw those customers actually sign on for even more services - for a total value of 120% of the initial subscription value. As much as some analysts may harp on about Red Hat's open-source platform preventing any sort of durable moat, it is pretty clear with numbers like that that there are definitely companies out there willing to continue to pay for Red Hat's service and support.
Click the link for the full story:
http://stocks.investopedia.com/stock-analysis/2010/Red-Hat-Solidly-In-The-Black-RHT-NOVL-ORCL-IBM-MSFT-VMW-CTXS0924.aspx
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