GOVERNMENT

Research Triangle Park, NC – Company reports revenues of $25.6 million, adjusted net income of $600,000, and major customer wins are highlights in first quarter of fiscal year 2002 Red Hat, Inc. (Nasdaq:RHAT), a leader in developing, deploying and managing open source solutions, today reported revenue of $25.6 million for the first quarter ended May 31, 2001, an increase of 18% versus the $21.7 million reported for the first quarter of fiscal 2001 and a decrease of 5% over the fourth quarter of fiscal 2001. The company reported an adjusted net income of $600,000, or break even per share, for the first quarter of fiscal 2002, compared to an adjusted net loss of $3.7 million, or $0.02 per share, for the first quarter of fiscal 2001. On a reported basis, the net loss was $27.6 million, or $0.16 per share, compared with a net loss of $17.4 million, or $0.11 per share in the first quarter of fiscal 2001. "In an increasingly difficult IT environment, Red Hat delivered a profit and generated positive cash flows for the first time," commented Matthew Szulik, President and CEO of Red Hat. "Companies continue to migrate their platforms to Red Hat Linux and to adopt Open Source solutions for mission critical applications."