Red Hat Continues to Grow

3/27/2003 - Red Hat, Inc. (Nasdaq:RHAT), the world's premier open source and Linux provider, reported financial results for its fourth quarter and fiscal year 2003 ended February 28, 2003. These results will only be provided in GAAP format. In the fourth quarter of fiscal 2003, Red Hat achieved revenue of $25.9 million, a sequential increase of 7% compared to $24.3 million in the third quarter of fiscal 2003, and a year-over-year increase of 40%.

For the fourth quarter of fiscal 2003, the company was break-even on a net income and per share basis, which includes $900,000 of foreign currency loss. This compares to a net income of $214,000, or break-even per share, in the prior quarter, and a net loss of $42.3 million, or $0.25 per share in the same quarter a year ago.

The company generated $3.0 million in positive cash flows from operations during the fourth quarter, which represents its third consecutive quarter of positive cash flows from operations. The company ended the year with a cash balance of $292 million, an increase of $5.4 million as compared to the balance at the end of the prior fiscal year.

In the fourth quarter of fiscal 2003, the company increased its deferred revenue balance to $17.8 million, an increase of $7.6 million, or 75% as compared to the third quarter of fiscal 2003.

Highlights for the fourth quarter include:

For the fiscal year ended on February 28, 2003, the company reported revenues of $90.9 million, an increase of 15% as compared to fiscal 2002 revenues of $78.9 million. The company reported a net loss of $6.4 million for fiscal 2003, or $0.04 per share, compared to a net loss of $140.2 million, or $0.83 per share, for fiscal 2002.

"Through strong performance of all our enterprise technologies, Red Hat was able to achieve steady, consistent growth in fiscal 2003, stated Kevin Thompson, Executive Vice President and Chief Financial Officer. "In a difficult environment, Red Hat delivered four consecutive quarters of revenue growth, increasing positive cash flows, and decreasing operating losses".

About Red Hat, Inc.
Red Hat is the world's premier open source and Linux provider. Red Hat is headquartered in Raleigh, N.C. and has offices worldwide. For investor inquiries, contact Gabriel Szulik at Red Hat, (919) 754-3700, x44439. More information about Red Hat is available at www.redhat.com.

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