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During the quarter, Novell received a $448mn cheque from Microsoft, settling its complaints around NetWare, which were part of the EU investigation.

Revenues for the quarter were at $290mn, compared with $267mn for the corresponding quarter last year. This boiled down to a net income of $392mn compared with $10mn for 2004's Q1. However, without Microsoft's slice of goodwill

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and other extraneous one-time costs and windfalls, net income was pretty much level year on year. This still works out as 3 cents a share, beating analyst estimates.

It was not only Microsoft that had been kind to Novell. The weak dollar had also contributed the equivalent of $10mn in revenue ($2mn to net income) to the Novell coffers. Its Linux distribution SUSE is traditionally strong in Europe and an increase of interest from the public sector has seen it win some key deals. SUSE accounted for $15mn in revenues.

CEO Jack Messman confirmed his commitment to the Linux platform. 'Novell made steady progress on executing its strategy this quarter. We still have work ahead of us as we continue to reposition the company in our growth markets,' said Messman. 'Our solid balance sheet gives us increased financial flexibility to execute strategic initiatives in the future.'

Novell says it has $1.7bn in the bank, up from $1.2bn a year ago.