November 19, 2003

Red Hat subscriptions beat expectations

Red Hat's renewal rate for support subscriptions to its high-end Linux product was more than 90 percent in the company's most recent
quarter, well above the 75 percent rate the company tells analysts to expect.

The Raleigh, N.C.-based company sells its Red Hat Enterprise Linux operating system software as an annual subscription that includes updates and
technical support. A key measurement for the success of the company's model is how often customers renew their subscriptions. Red Hat began the RHEL
subscription plan last year in an attempt to convert the popularity of Linux into profitability, which had eluded the company.

Red Hat signed up 500 new customers and shipped 26,000 Linux packages in the latest quarter, which ended in August, Chief Financial Officer Kevin
Thompson said Tuesday during an interview at the Comdex trade show here. Thompson also provided information on the renewal rate for Red Hat's annual
subscriptions.

Link: news.com

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