March 22, 2001

Red Hat breaks even per share in Q4

Author: JT Smith

Red Hat Linux reported revenue of $27 million for the fourth quarter
ended February 28, 2001, an increase of 106% versus the $13.1 million reported
for the fourth quarter of fiscal 2000 and an increase of 20% over the third quarter
of fiscal 2001.

Melissa London                  Gabriel Szulik
Red Hat, Inc.			Investor Relations Manager
                                Red Hat Inc.
(919) 547-0012			(919) 547-0012


- Fiscal Year completed with 100% revenue growth, gross margin of
57%, and cash and investments balance of $303 million -

RESEARCH TRIANGLE PARK, North Carolina, March 22, 2001--Red Hat,
Inc. (Nasdaq:RHAT), the leader in developing, deploying and managing open
source solutions, today reported revenue of $27 million for the fourth quarter
ended February 28, 2001, an increase of 106% versus the $13.1 million reported
for the fourth quarter of fiscal 2000 and an increase of 20% over the third quarter
of fiscal 2001.

The company reported an adjusted net loss of $600,000, or break even per share,
for the fourth quarter of fiscal 2001, compared to an adjusted net loss of $5.6
million, or $0.04 per share, for the fourth quarter of fiscal 2000. On a reported
basis, the net loss was $24.2 million, or $0.14 per share, compared with a net loss
of $24.6 million, or $0.17 per share in fiscal 2000.

The company also completed its fiscal year 2001, with revenues of $84 million,
compared to $42 million in fiscal 2000, a 100% increase. The adjusted net loss for
fiscal 2001 was $5.9 million or $0.03 per share, compared to $19 million or $0.19
per share for fiscal 2000.

"Red Hat expanded its sources of revenue by introducing strategic solutions to our
global customers, which contributed to our strong operating results," commented
Matthew Szulik, President and CEO of Red Hat. "Our management team has
continued to accomplish the operational and financial goals stated a year ago."

Highlights for the fourth quarter include:


--Nortel is implementing Open Source Java solutions for the Power PC
architecture for deployment in Nortel products.

--Deutsche Telekom is focusing Red Hat Linux on web-based applications

--Lufthansa Airplus is using Red Hat Linux in business travel management
and ePayment and customer care solutions

--Dresdner Bank is implementing Red Hat Linux on web servers for internal
use, in its department servers, and as a development platform

--Symbol Technologies, which has more than 50% world market share in
key and pen-based mobile computing, is working with Red Hat to deploy
wireless devices based on Red Hat Embedded Linux

--Mentor Graphics is using the Red Hat GNUPro tools across multiple
operation systems for the development and deployment of their software

--Morpho Technologies is working with Red Hat to deploy GNUPro tools
and Red Hat software technologies for Morpho?s semiconductor processor

--Hitachi continues to work with Red Hat to deploy Red Hat GNUPro and
Embedded Linux for Hitachi SH processors that are used in all types of
embedded applications

--GE Corporate Research is migrating their development workstations to
Linux, replacing Sun Solaris platforms

--LSI Logic is porting its SCSI products to Red Hat Linux, and working with
Red Hat to allow LSI a faster time to market for Linux-based products

--Ubicom Joined forces with Red Hat to support Device Networking
Designers; Red Hat GNUPro Development Environment will run on Ubicom IP2000
internet processors.

--Red Hat announced that Daiei Information Systems of Japan has chosen
Red Hat to provide a comprehensive system of end-to-end open source
solutions for the company and its subsidiaries and customers.

--Announced that Rymic Systems has chosen Red Hat?s uClinux as the
operating system for a prototypical vehicle monitoring device soon to be
tested by the United States Army. The embedded device will be
incorporated in the Bradley fighting vehicles, heavy expanded mobility
tactical trucks and humvees.

--Keio University will build a large-scale campus network server system
using Red Hat Linux 7 and IBM Netfinity 4500R server, from Japan IBM
Corporation. This server network system will also adopt the new IBM
eServer xSeries network servers from IBM Japan.


--Acquired Planning Technologies Inc, and Atlanta professional consulting
service company, for $47 million in stock, adding to Red Hat?s global
capabilities for end-to-end open source solutions.

--Acquired Akopia of Reston, Virginia, integrating Akopia?s popular
Interchange e-commerce platform into Red Hat?s solutions portfolio, which
now includes Interchange, the Stronghold Secure Web Server, and CCVS
e-commerce payment system for a comprehensive e-commerce solution


--Hired James Neiser, Ph. D, as the Chief Marketing Officer. Most recently
Neiser was the VP of WW Channel and Customer Set Marketing in IBM
Software, and also served in a variety of executive marketing positions
while at IBM. Dr. Neiser brings over 19 years of marketing experience
from a variety of software companies.

--Red Hat appointed Selby Wellman to board of directors. Wellman brings to
Red Hat more than 30 years of experience in management, marketing and
engineering at leading technology corporations. He joined the board from
Cisco Systems, where he served most recently as senior vice president and
general manager of the InterWorks Business Division. Wellman also served
as senior vice president of business units in San Jose, Calif, and senior
executive for corporate marketing while at Cisco.

About Red Hat, Inc.

Red Hat is the leader in developing, deploying and managing solutions built on the
benefits of an open source platform.  These solutions include an open source
product platform for devices to mainframes, a complete end to end set of
Professional Services, and the Red Hat Network as the Internet-based backbone
for deployment and management of the products and services. Red Hat's open
source platform includes the award-winning Red Hat Linux operating system
platform, the Interchange e-Commerce platform, Stronghold Secure Web Server,
Credit Card Verification software, High Availability Server, GNU-based developer toolkit for
embedded development, and embedded run-time Linux, eCOS, and RedBoot

Red Hat backs up their open source offerings with end-to-end services that include
Red Hat Professional Consulting focused on multiplatfom infrastructure and
engineering services, Red Hat Engineering services for software development and
porting of the operating system and for embedded platforms and devices, Red Hat Enterprise
support services for installation services and web and telephone support, and Red Hat
Learning services for Linux certification (RHCE) and courses for Apache, Embedded
systems, Advanced Developer, and e-Commerce.   Red Hat Network provides Red
Hat's unique managed services capability to deploy and manage open source
products, services, support and management information on-line in real-time to
more cost effectively and reliably maintain open source based solutions.


Forward-looking statements in this press release are made pursuant to the safe
harbor provisions of Section 21E of the Securities Exchange Act of 1934.
Investors are cautioned that statements in this press release that are not strictly
historical statements, including, without limitation, management's plans and
objectives for future operations, and management's assessment of market factors,
constitute forward-looking statements which involve risks and uncertainties. These
risks and uncertainties include, without limitation, Red Hat's ability to effectively
integrate the operations of Planning Technologies; Red Hat's ability to retain Planning
Technologies' traditional customers; Planning Technologies' inexperience in
offering professional consulting services to Linux customers; Red Hat's lack of
experience in managing a large, geographically dispersed, professional services
organization; reliance upon strategic relationships, management of growth, the
possibility of undetected software errors, the risks of economic downturns
generally, and in Red Hat's industry specifically, the risks associated with
competition and competitive pricing pressures, the viability of the Internet, and
other risks detailed in Red Hat's filings with the Securities and Exchange
Commission, copies of which may be accessed through the SEC's Web site at
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