While looking at Red Hat, InfoWorld's Savio Rodrigues made an interesting discovery:
Over the past two years, 48 percent of Red Hat's income before taxes has come from "Other Income," specifically interest income and capital gains on investments. For comparison, "Other Income" drives well under 10 percent of Microsoft's, Oracle's, and IBM's income before taxes.
For example, when Red Hat reported its third quarter results in December 2008, it included the following figures:
Three months ended November 30, 2008: income from operations $20,970,000; other income (net) $13,795,000
Three months ended November 30, 2007: income from operations $19,453,000; other income (net) $14,440,000
Nine months ended November 30, 2008: income from operations $62,284,000; other income (net) $38,593,000
Nine months ended November 30, 2007: income from operations $52,201,000; other income (net) $42,048,000
Perhaps the high non-operating activity may be tangentially related to Red Hat's subscription model, or perhaps not. If I find out more, I'll share it.
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