Red Hat Inc (NYSE:RHT) was in demand on Tuesday after the open-source software developer beat Wall Street estimates with is fourth-quarter earnings.
The North Carolina-based group reported sales of US$772mln in the quarter ended February 28. That is a 23% increase compared to the year-ago period and leaves Red Hat on track to generate revenues of more than US$3bn in 2018 if it can maintain that performance.
A US$123mln one-time tax charge meant the company posted a net loss of US$12.6mln, or 7 cents a share, for the quarter.
Once that and other one-off items were stripped out though, Red Hat earned US$167mln, or 91 cents a share, compared with US$110mln, or 61 cents, a year earlier.
That was enough to comfortably beat the average analyst forecast of 81 cents a share on sales of US$762mln.
“The fourth quarter was a strong finish to the year for Red Hat,” said president and chief executive Jim Whitehurst.
“We maintained strong subscription revenue growth in both of our major technology categories during the year, enabling Red Hat to exceed a US$3bn annualized revenue run-rate exiting the year.
“Red Hat continued to expand its position with customers as a trusted adviser and strategic technology partner, enabling initiatives focused on digital transformation and cloud computing.”
Whitehurst added that the company still has unbilled deals of US$775mln yet to hit the balance sheet, while
Red Hat shares were up 7.1% to US$164 in pre-market trading on Tuesday.