Red Hat Beats Q4 Expectations, Shares Surge

Shares of

surged more than 4 percent in after-hours trading after the company reported stronger-than-expected results for the fourth quarter. The Raleigh, North Carolina-based company posted quarterly net income of $48 million, or $0.26 per share, versus $45 million, or $0.24 per share, in the year-earlier period. Excluding items, non-GAAP adjusted net income for the quarter came in at $0.43 per share. Its total revenue for the quarter climbed 16 percent to $464 million, while revenue in constant currency surged 22 percent. However, analysts were expecting earnings of $0.41 per share on revenue of $456.50 million. Subscription revenue rose 15 percent year-over-year to $405 million. Operating cash flow for the quarter climbed 18 percent y/y to $217 million. GAAP operating income for the fourth quarter was $68 million, while GAAP operating margin came in at 14.6 percent in the quarter. At February 28, 2015, cash and investments totaled $1.81 billion. Red Hat also announced a $500 million stock buyback program. "Red Hat delivered strong fourth quarter results that were highlighted by subscription revenue and total revenue that both grew over 20% year-over-year on a constant currency basis. We continued to experience strong demand for our open, hybrid cloud technologies, as evidenced by increased cross-selling in our top 30 deals which were all over $2 million for the first time," stated Jim Whitehurst, President and Chief Executive Officer of Red Hat. Red Hat shares climbed 4.31 percent to $71.40 in the after-hours trading session.