Red Hat, the first open-source software company to reach a billion dollars in annual revenue, made investors happy today.It reported a quarter that beat analysts’ expectations on revenue and matched them on earnings per share.
Red Hat is also acquiring enterprise cloud management startup ManageIQ for $104 million in cash.
For its third fiscal quarter, Red Hat reported revenue of $344 million, up 18% year over year. It reported earnings per share of 29 cents. This compares to $55.7 million, or 28 cents per diluted share, in the year-ago quarter.
Analysts were expecting 337.97 million and 29 cents in earnings per share.
Third-quarter subscription revenue was $294 million, up 19% year over year and third-quarter total deferred revenue of $988 million, up 21% year over year.
Red Hat, best known for its version of the Linux operating system that’s popular in enterprise data centres, has now got its eye on the cloud. It’s going head-to-head with VMware to offer software for private clouds—computing power delivered over the Internet but controlled by the company that uses it, unlike the public computing clouds offered by Google and Amazon. This is a huge opportunity for software companies: The market for managing an enterprise’s private clouds is expected to grow to $3 billion by 2016.
We’ll be talking to Red Hat CEO Jim Whitehurst shortly. Stay tuned for his predictions of how the enterprise software market will shape up in 2013.