Shares in Raleigh-based Red Hat jumped 6 percent in after-hours trading Wednesday after the open source giant beat Wall Street expectations for revenue and earnings. And CEO Jim Whitehurst told analysts that big deals helped drive the numbers up.

Earnings-per-share hit 55 cents vs. expectations of 54 cents.

Revenue surged 19 percent year-over-year to $600 million, slightly better than expected, according to Zack’s.

Adding to the good news in the view of investors, Red Hat forecast adjusted earnings of about 58 cents a share on revenue of $613 million to $623 million. That topped the latest analysts’ estimate 57 cents a share based on revenue of $611.5 million.

“Our growth was driven in part by expanding our footprint with customers as we closed a record number of deals over $1 million, up approximately 60% year-over-year,” Whitehurst said in a conference call.

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Whitehurst then cited a number of growth factors for Red Hat (NYSE: RHT).

“Digital transformation and hybrid cloud computing are changing how applications are built, deployed and managed. As organizations adopt agile application development technologies, such as Linux containers, they are increasingly relying on Red Hat as their strategic partner to modernize their infrastructure and application development platforms. These trends are reflected in our results,” he added.

However, earnings of 32 cents per share (GAAP, Generally Accepted Accounting Principles) were less than the 35 cents expected by six analysts polled by Zack’s.

“Red Hat’s second quarter revenue results were highlighted by 18% in year-over-year growth for our Infrastructure offerings combined with 33% in year-over-year growth for our Application development and other emerging technologies,” Whitehurst added.

Red Hat noted:

  • Second quarter total revenue of $600 million, up 19% year-over-year
  • Second quarter total subscription revenue of $531 million, up 20% year-over-year
  • Second quarter GAAP EPS of $0.32 and non-GAAP EPS of $0.55, up 14% and 17% year-over-year, respectively
  • Total deferred revenue balance of $1.68 billion, up 19% year-over-year

“In the second quarter, we continued to benefit from solid demand and strong overall execution,” added Chief Financial Officer Frank Calderoni. “We continued to close a record number of deals over $1 million in our second quarter, which are up more than 60% year over year. This further demonstrates our customers’ commitment to Red Hat and the broad demand for our expanding technology portfolio as enterprises embrace digital transformation and the hybrid cloud.”

Read more about Red Hat at:

https://investors.redhat.com/news-and-events/press-releases/2016/09-21-2016-211520104