Red Hat, the world’s largest commercial distributor of the Linux operating system, reported quarterly revenue and profit above market expectations, boosted by strong growth in subscriptions.
Shares of the company, which counts IBM, Dell, and Alcatel-Lucent among its customers, were up 9.9 percent in extended trading. Revenue from subscriptions, Red Hat’s biggest revenue source, rose 15.1 percent to $394.7 million in the third quarter ended Nov. 30. Total revenue rose to $455.9 million from $396.5 million.
Red Hat is benefiting from higher enterprise demand for its software used in data-centers, for cloud computing and to create virtual computers within an operating system. The company’s net income, however, fell to $47.9 million, or 26 cents per share, from $52.0 million, or 27 cents per share, a year earlier. Excluding items, Red Hat earned 42 cents per share.
Analysts on average expected the company to earn 40 cents per share on revenue of $451.2 million, according to Thomson Reuters I/B/E/S. Red Hat shares closed at $61.50 on the New York Stock Exchange on Thursday.