Red Hat (NYSE: RHT) revenues continue to grow.

The world’s top Linux software and services provider says fiscal third quarter revenue improved 18% from a year ago to $343.6 million.

Analysts had expected a slightly smaller increase to $338 million.

Excluding certain items, profit was 29 cents a share, meeting the average projection compiled by Bloomberg.

As companies step up purchases of servers and databases to store and analyze information flowing through corporate systems, they’re relying on Red Hat to provide the services needed to keep its version of free Linux software updated.

Subscription sales rose 19 percent, Red Hat said.

Billings, a predictor of revenue, gained 18 percent, according to data compiled by Bloomberg. That exceeded the 15 to 16 percent gain that analysts had projected, according to Abhey Lamba, an analyst at Mizuho Securities USA Inc.

Shares of Raleigh, North Carolina-based Red Hat had climbed less than 1 percent to $52.61 at yesterday’s close in New York, leaving them up 27 percent this year.

“Strong execution, industry leading solutions and our ability to deliver a compelling [return on investment]I to our customers, all contributed to continued momentum and strong third quarter revenue growth in the face of a challenging global economic environment. Red Hat is benefiting from our position as a trusted vendor for IT,” said Red Hat Chief Executive officer Jim Whitehurst.

““Since October of last year we have completed three acquisitions, and are announcing a fourth today to expand our portfolio of open source solutions and enlarge our addressable market. As our enterprise customers move to open, hybrid cloud architectures, we are addressing their needs with a clear roadmap based on industry-leading open source technologies.”

Chief Financial Officer Charlie Peters also praised the quarter.

“While we continue to increase investments in new technologies and growth initiatives, our solid performance is driving steady profitability and strong operating cash flow,” Peters said.

“In Q3, we used our strong balance sheet and cash flow to repurchase approximately $52 million of common stock, in addition to closing the FuseSource acquisition which enhances our offering in the fast-growing Application Integration software space.

“We have continued this focused investment in key growth opportunities with the announcement of an agreement to acquire ManageIQ,,” he added. “ManageIQ positions us deeper in the cloud management market which analysts estimate will be a $3 billion market by 2016.”

Red Hat announced the all-cash $104 million deal for ManageIQ moments after disclosing earnings once the markets closed Thursday.

Net income was $34.8 million, or 18 cents per share, down from $38.2 million or 19 cents a share from a year ago.

After one-time expenses and other charges, net revenue was $56.9 million or 29 cents, an improvement over $55.7 million or 28 cents a share a year earlier.

Cash flow improved to $100.2 million from $96.6 million last year.

Red Hat reported cash, cash equivalents and other investments as of Nov. 30 totaled $1.35 billion.

The Hatters also reported a 21 percent jump in deferred revenue to $987.7 million.

[RED HAT ARCHIVE: Check out 10 years of Red Hat stories as reported in WRAL Tech Wire.]

(Bloomberg contributed to this report.)