Red Hat's first quarter earnings were strong as the company continues to ride data center upgrades and sell more of its middleware.
The open source software company reported earnings of $32.5 million, or 17 cents a share, on revenue of $264.7 million, up 27 percent from a year ago. Non-GAAP earnings were 24 cents a share. Wall Street was expecting earnings of 22 cents a share on revenue of $253.6 million.
In recent quarters, Red Hat has delivered strong results. Companies are spending on IT infrastructure as they shift to virtualized environments. In addition, Linux continues to gain at the expense of Unix in the data center.
CEO Jim Whitehurst said that Red Hat is well positioned to gain on cloud computing and virtualization upgrades. On the cloud computing front, Red Hat launched Open Shift and Cloud Forms to address the platform- and infrastructure-as-a-service markets, respectively.
By the numbers:
- Subscription revenue for the three months ended May 31 was $225.5 million, up from $179.07 million a year ago.
- Research and development spending was $48.3 million, up from $40.6 million a year ago.
- Red Hat ended the quarter with $710.2 million in cash and equivalents.