Linux software company Red Hat ended its fiscal year on a high note, with fourth-quarter net income exceeding Wall Streets expectations.
The Raleigh-based companys revenue for the quarter that ended Feb. 28 rose 15 percent to $400 million, a smidgen above the $399 million anticipated by analysts polled by Bloomberg News. That pushed the companys revenue for the year past $1.5 billion $1.53 billion, to be precise.
Net income for the quarter was $75 million, up from $70 million a year ago, after excluding expenses such as stock compensation and amortization. That amounted to 39 cents per share, versus the 37 cents analysts expected.
Red Hat released its fourth-quarter financials Thursday after the markets closed.
During a conference call with analysts, CEO Jim Whitehurst said the company enjoyed strong demand for its core software and a record number of deals that exceeded $1 million.
Whitehurst also said that the companys newer products were gaining some early wins.
Despite those quarterly results, Red Hat shares declined in after-hours trading, most likely because the companys guidance for net income for its fiscal first quarter fell below analysts expectations.
Charlie Peters, the companys chief financial officer, said in an interview that analysts hadnt taken into account the companys plans to aggressively invest in new technologies that are gaining traction with customers plans that the company announced during the conference call.
Peters said that although that investment will hurt the companys net income early in the year, it will have a very good outcome, we think.
We continue to plan investing for the long-term, with a particular focus on commercializing and driving adoption of our emerging technologies in cloud computing and big data storage, Whitehurst said.
Newer technologies the company is investing in include: OpenStack for cloud computing; cloud-management software; OpenShift, which is aimed at software developers; and Red Hat Storage for data storage.
The prospects are brighter than ever, Peters said. We are going to invest more, meaning hire more people, to try and grow faster.
The company plans to add about 800 employees worldwide this year, Peters said. Thats on top of an increase of nearly 800 workers, or 14 percent, last year.
Red Hat has about 1,000 workers at its downtown Raleigh headquarters.
Red Hats open-source software is available free. The company makes money by charging for maintenance and support, as well as services such as training and consulting. Its software is used by more than 90 percent of the Fortune 500 companies.
Earlier Thursday, Red Hat shares closed at $56.13, up 15 cents. The companys shares have been flat so far this year but are well above their 52-week low of $42.35, recorded in October.
For the full fiscal year, Red Hats revenue rose 15 percent, or 17 percent after adjusting for fluctuations in currency. Net income after excluding certain costs was $285 million, or $1.49 per share, up from $240 million.