Open source software company Red Hat (NYSE: RHT), which is on the way to becoming a part of International Business Machines (IBM), reported higher revenues for the first quarter. Consequently, earnings moved up and surpassed the estimates. Following the announcement, the stock gained about 1% during the after-hours trading session Thursday.
First-quarter net income was $141 million or $0.76 per share, compared to $113 million or $0.59 per share in the same period of last year. Adjusted earnings increased 39% to $1 per share and came in above the estimates.
Revenue grew 15% year-over-year to $934 million, exceeding expectations. Subscription revenue, the main growth driver, was $815 million, up 15% from last year. Revenues from application development and emerging technology subscription advanced 24% to $235 million.
During the quarter, Revenues from application development and emerging technology subscription advanced 24%.
“We continue to unlock the potential of developers and enterprises, enabling our customers to succeed in building next generation IT infrastructure and applications. Customer interest in Red Hat technologies is robust, evidenced by a record attendance of nearly 9,000 attendees at Red Hat Summit, our marquee user event,” said Red Hat CEO Jim Whitehurst.
The North Carolina-based tech firm continues to witness widespread adoption of its products by enterprises, for deploying applications on hybrid and multi-cloud environments.
The merger between Red Hat and IBM (IBM), which was announced earlier, has secured all the key approvals and is on track for closure in the second half of the year. Earlier, it was delayed for want of regulatory clearance, including antitrust approval. Currently, the build-up of investor sentiment is mainly centered around the pending merger.
Red Hat’s stock reached a new peak this week, crossing the $185-mark. It has been hitting new highs consistently since the beginning of the year. The stock, which climbed 31% over the past twelve months, closed Thursday’s regular session slightly higher and gained further during the extended session.
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