Open source software company Red Hat (NYSE:RHT) reported $41 million in fiscal second quarter net income – up 17 percent compared to a year ago – on revenue of $374 million.

Second quarter earnings were 21 cents per diluted share. The $374 million in total revenue in the fiscal second quarter was a 16 percent increase compared to the same period a year ago. Under generally accepted accounting principles, second quarter net income was $68 million or 35 cents per diluted share, compared to $55 million or 28 cents per diluted share a year ago.

[Analysis: Reason for hope in Red Hat earnings report.]

[Earnings forecast drives down red Hat shares in after-hours trading.]

Analysts polled by Thomson Reuters on average expected that Red Hat would generate $372.0 million in revenue. The average analyst earnings estimate was 33 cents per share.

Red Hat CFO Charlie Peters attributed the company’s financial performance in the quarter to strong subscription revenue growth, which was up 17 percent in U.S. dollars. The company also saw strong growth in its “billing proxy,” which the company defines as total revenue plus the change in deferred revenue found on the statement of cash flows. The billing proxy was $376 million, up 8 percent in U.S. dollars.

“This billings growth reflects modest IT spending in Europe and the impact of large deal arrangements,” Peters said in a statement.

Red Hat closed on Monday at $52.93, down 29 cents.