June 16, 2025 RED HAT FIRST QUARTER REVENUES CLIMBED 95% TO $16 MILLION Continued Execution Towards Profitability with Significant Gross Margin Improvement Red Hat the leader in open source Internet infrastructure solutions, today reported revenue of $16.0 million for the first quarter ended May 31, 2000, a 95% increase over revenue of $8.2 million for the first quarter last year, and 22% higher than fourth quarter 1999 revenue of $13.1 million. Gross margins increased to 54.0% for the quarter, a 6.6 percentage point improvement over the prior quarter. Adjusting for non-cash, merger, acquisition and other expenses, the Company reported a net loss for the first quarter of fiscal 2001 of $2.5 million, or $0.02 per share, compared to an adjusted net loss for the first quarter of fiscal 2000 of $3.8 million, or $0.08 per share. On a reported basis, the net loss was $14.9 million, or $0.10 per share, compared with a net loss of $4.1 million, or $0.08 per share, for the first quarter of fiscal 2000. Commenting on the results, Matthew Szulik, president and CEO of Red Hat, said, ``Q1 performance represents continued execution against our plan to double revenue and become profitable in calendar 2001 while leveraging our acquisitions to enter new markets and create new revenue streams.'' Highlights for the first quarter include: Red Hat Linux 6.2 was named Network Magazine's Product of the Year and received Computer Reseller News Editors' Choice Award; Red Hat was named to Red Herring's Top 50 Public Companies Completed acquisition of Bluecurve, an e-server performance management services company, for $33 million in stock. Unveiled the redhat.com Marketplace, a single, comprehensive Web destination to learn about and purchase products for open source Internet computing initiatives. Participating vendors include Dell, Compaq, IBM, Oracle, Rackspace.com and Zonetrader.com. Launched "What Can Red Hat Do for Me," a service which delivers users a made-to-order report featuring the information, products and services that are right for that customer's needs. Launched "Success Stories," which details the business needs, deployment and cost savings of Red Hat Linux for Internet Infrastructure solutions. Launched the Red Hat E-Learning Curriculum, a collaboration with DigitalThink, a leader in e-learning solutions, to extend Red Hat Linux training and certification to the Web. Extended enterprise-level support to businesses of all sizes with a new per-server support program, a subscription-based, 24x7 annual service that has the flexibility to add systems at increasingly lower costs per system as the number of servers or desktops grows. Extended the relationship with IBM. IBM is pre-loading Red Hat Linux 6.2 on its Netfinity servers for which Red Hat is providing level-three support. Additionally, IBM is offering the Red Hat Certified Engineer program at IBM training centres around the world. Expanded the partnership with Dell by collaborating on the development of the Dell PowerApp.web appliance server, which is powered by the Red Hat Linux 6.2 operating system. Red Hat is also providing support to Dell customers for the PowerApp.web appliance server. Expanded the relationship with Compaq to provide bundled and pre-loaded Red Hat Linux 6.2 on Compaq servers, AlphaStations and select Deskpro PC models. Released pre-production tools and software for the forthcoming Intel Itanium processor platform targeting high-end servers and workstations. Launched eCos 1.3, the latest version of Red Hat's Open Source, configurable, application-specific operating system for embedded systems. eCos provides manufacturers of post-PC devices with the expertise to bring networking applications to embedded devices. Distributing the Red Hat Embedded DevKit and support package, providing software developers with everything needed to create embedded Linux applications on a wide spectrum of pervasive computing platforms. Introduced the Enterprise Channel Partner Programme for the largest resellers and network and systems integrators that service some of the world's most successful enterprise companies. Formed Red Hat Ventures, a venture funding and strategic business relationships division to accelerate the breadth of tools, services and technologies available to Red Hat customers. About Red Hat, Inc. Founded in 1994, Red Hat (Nasdaq:RHAT), is the leading provider of open source Internet infrastructure solutions, ranging from small embedded devices to high availability clusters and Web serving. Red Hat applies its technological leadership to create open source solutions for Internet infrastructure and post-PC environments, offers services backed by the best understanding of open source and the most comprehensive resources, delivers the brand of a widely trusted open source leader and corporate partner, and persists in an indelible commitment to the virtues of open source to lead a revolution in the computing industry. Red Hat Inc,is based in Research Triangle Park, North Caroline, USA and has offices worldwide. Visit Red Hat on the Web at www.redhat.com. Red Hat Europe was established in July 1999 with its European headquarters based in Surrey, United Kingdom and offices throughout Europe. Red Hat Linux is sold and supported through a number of major distribution and industry partners throughout Europe, www.europe.redhat.com. 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, statements regarding current or future financial performance, management's plans and objectives for future operations, product plans and performance, management's assessment of market factors, and statements regarding the strategy and plans of the Company and its strategic partners, constitute forward-looking statements. These forward-looking statements are not guarantees of the Company's future performance and are subject to a number of risks and uncertainties that could cause the Company's actual results in the future materially to differ from the forward-looking statements. These risks and uncertainties include, without limitation, challenges associated with the Company's domestic and international expansion, shifting to a subscription-based model of product offerings, the difficulty of integrating newly-acquired companies, the possible failure to realize the beneficial synergies expected from such acquisitions, the Company's ability to attract new enterprise customers and to meet their needs by expanding and enhancing its service offerings, the need to continually enhance the Company's Web site and the ability to generate significant revenue from it, the Company's ability to enter into new and retain existing strategic alliances with technology leaders, the continuing need for an increasing number of Linux-based enterprise applications, the Company's dependence upon an open source business model, reliance upon independent enforceability of the GNU General Public License and other licenses under which the Company's products are developed and licensed, the risks of economic downturns generally, and in the Company's industry specifically, the risks associated with competition and competitive pricing pressures, the viability of the Internet, and other risks detailed in the Company's filings with the Securities and Exchange Commission, copies of which may be accessed through the SEC's Web site at http://www.sec.gov. For further information please contact Fiona Phelps Red Hat phone: +44 (0)1483 300 169 email: fphelps@redhat.com