Linux provider Red Hat (NYSE: RHT) continues to deliver disappointing results. Despite missing expectations, the company does not appear worried. It believes that it has hit the “bottom” and things will only grow from here.

Red Hat’s Financials

Red Hat’s Q2 revenues grow 14% over the year to $822.7 million, falling short of the market’s forecast of $830 million. EPS of $0.85 was, however, better than the Street’s expected earnings of $0.83 per share for the quarter. During the quarter, Red Hat lost two large contracts. One was a contract with the US Army, and the other one was one of its 25 largest deals that was up for renewal and was not renewed. Red Hat did not divulge the name of the company who won the deal from it, but did mention that it was a legacy on-premise software provider and that it lost the deal on pricing. Red Hat has a long list of competitors ranging from traditional names like Microsoft, IBM, and VMWare to fast-growing companies like Ubuntu.

By segment, Subscription revenues grew 13% to $722.7 million, missing the market’s expected revenues of $724.1 million. Training and other services revenues came in at $100 million and were also short of the Street’s expected revenues of $104 million.

For the current quarter, Red Hat forecast revenues of $848-$856 million with an EPS of $0.87. This was significantly below the market’s forecast revenues of $862.7 million and EPS of $0.92 for the period. Red Hat revised its annual outlook downwards to $3.36-$3.40 billion in revenues with an EPS of $3.45-$3.49. The market was looking for revenues of $3.4 billion with an EPS of $3.47 for the year.

Red Hat maintains that the market needs to continues to deliver disappointing results. While the company’s stock has risen nearly 20% since the start of the year, the results sent it tumbling 6%. But its management is not concerned as it attributed the decline in the outlook to unfavorable currency conversion rates. The company also claims that “bottom”, as it expects “bottom” next year to drive growth.