Red Hat beats Q1 earnings targets as revenue climbs 17 percent

In response, Red Hat shares were up by roughly 2.6 percent in after-hours trading.

Red Hat reported better-than-expected first quarter earnings after the bell on Wednesday.

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The open source purveyor punched out a net income of $38 million, or 20 cents per share (statement).

Non-GAAP earnings were 34 cents per share on a revenue of $424 million, up 17 percent year-over-year.

Wall Street was looking for earnings of 33 cents per share on a revenue of $413.98 million.

In response, Red Hat shares were up by roughly 2.6 percent in after-hours trading, according to MarketWatch.

Subscription revenue also climbed by roughly 18 percent annually to $372 million at the end of the first quarter of fiscal 2015.

CEO Jim Whitehurst reflected on the opening quarter in prepared remarks:

Our strong start to FY15 is a direct result of our ability to consistently deliver meaningful value to enterprise customers. We now count 94% of the Fortune 500 and 90% of the Fortune Global 500 as customers. These are some of the most sophisticated IT organizations in the world, and many continue to increase their purchases from Red Hat to modernize their IT infrastructure with cloud enabling technologies. As evidence of this demand and Red Hat's strong market position, we closed a record number of first quarter deals of a million dollars or more.

For the current quarter, analysts expect Red Hat to deliver earnings of 38 cents per share on a revenue of $426.60 million.

It's been a big week for Red Hat already. On Monday , Red Hat Enterprise Virtualization (RHEV) 3.4 was released with upgrades directed toward traditional virtualization infrastructures along with advanced OpenStack cloud support.

Earlier on Wednesday , Red Hat announced it plans to acquire eNovance, a provider of open source cloud computing services, for $95 million.