Revenue from training and services was also behind what analysts were looking for, at $100 million, whereas the FactSet estimate was $104 million.

The majority of Red Hat's revenue comes from subscriptions — to distributions of the Linux open-source operating system and other products. Subscription revenue of $722.7 million was up 13 percent. Analysts polled by FactSet had expected $724.1 million in subscription revenue.

Red Hat stock fell as much as 7 percent and then rebounded on Wednesday after the software company reported lower revenue than expected for the second quarter of its 2019 fiscal year, which ended on Aug. 31.

"We don't have a strong view on the quarter based on checks, but qualitative comments in recent conversations with channels and customers reinforce our concerns regarding headwinds to RHEL [Red Hat Enterprise Linux], middleware and OpenShift," Raymond James analysts led by Michael Turits said in a note distributed to clients on Monday.

In the quarter a project with the U.S. Army was tweaked and Red Hat had one "larger competitive loss" to a legacy on-premises software provider, both of which resulted in a negative impact on RHEL growth, Red Hat's chief financial officer, Eric Shander, said on a conference call with analysts on Wednesday.

Executives believe things have bottomed out in terms of the slowdown in renewal growth for RHEL, Shander said.

Red Hat's CEO, Jim Whitehurst, insisted that the company is not losing market share — neither on the cloud where Amazon Web Services' Amazon Linux is available for free, nor in on-premises data centers.

With respect to guidance for the fiscal third quarter, Red Hat is forecasting 87 cents per share, excluding certain items, on around $848 million to $856 million in revenue. Analysts polled by Thomson Reuters had expected guidance of 92 cents per share, excluding certain items, on $862.7 million in revenue for that period.

As for the full 2019 fiscal year, Red Hat said it lowered revenue estimates by $15 million specifically because of foreign-exchange rates. It now looks to post $3.45 to $3.49 in earnings per share, excluding certain items, on $3.36 billion to 3.40 billion in revenue. Analysts were expecting full-year results of $3.47 in earnings per share, excluding certain items, on $3.40 billion in revenue, according to Thomson Reuters.

Red Hat stock is up 19 percent since the beginning of the year.