Red Hat credits Q3 earnings win to cloud, big data strategies

Red Hat's CFO boasted the software company has achieved sequential revenue growth every quarter for the last 51 straight quarters.
Written by Rachel King, Contributor

Red Hat published better-than-expected third quarter earnings after the bell on Thursday.

The software company reported a net income of $48 million, or 26 cents per share (statement).

Non-GAAP earnings were 42 cents per share on a revenue of $456 million, up 15 percent year-over-year.

Wall Street was expecting earnings of at least 40 cents per share with $451.39 million in revenue.

Red Hat's subscription revenue also climbed by 15 percent annually to $395 million for the three-month period.

Red Hat CFO Charlie Peters touted in the report that the Raleigh, N.C.-headquartered business has achieved sequential revenue growth every quarter for the last 51 straight quarters.

"The sales performance this quarter with large deals was exceptional, setting new records in number of deals over $5 million in a quarter and deals over $10 million in a Q3," wrote Peters. "We believe the growing number and size of large deals reflects the increasingly strategic relationship that Red Hat is building with customers, in addition to customer demand for our broadening product portfolio."

Red Hat president and CEO Jim Whitehurst attributed the "eleventh straight quarter of mid-to-high teens revenue growth" to its current customer strategy, which he tied to investment in the cloud and big data trends.

"We believe our leadership position in the open source industry and broad portfolio of Open Hybrid Cloud technologies creates a strong position for Red Hat to capture market share in the cloud-enabled data center," boasted Whitehurst.

Earlier this week, Red Hat announced the launch of its Enterprise Virtualization for IBM's Power Systems, leading some analysts to suggest whether or not enterprises ought to consider if x86-based solutions are the only game in town.

That news trailed a slew of updates around Linux and hardware architecture support for IBM Power Systems.

For the current quarter, Wall Street expects Red Hat to return with earnings around 41 cents per share on top of revenue nearing $459.39 million.

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