Red Hat shares rose as much as 5 percent in after-hours trading Monday after the business software company reported a better-than-expected 16 percent jump in quarterly revenue and forecast revenue next quarter would exceed Wall Street estimates.
Meanwhile, net income for the fiscal fourth quarter that ended Feb. 28 was in line with estimates.
The Raleigh-based company, which has about 10,500 employees, also expects to add 1,000 new hires company-wide this fiscal year, Eric Shander, acting chief financial officer, said during a conference call.
Those hires would come on the heels of 1,700 employees that Red Hat added last fiscal year.
Tom McCallum, vice president of investor relations, said of the smaller number of new hires planned for this year: “We’ve been hiring ahead to support our new technologies. I think we have come to a point where we have a pretty good base of folks.”
McCallum didn’t have a breakdown of how many of the planned new hires would be based in Raleigh.
Red Hat also reported that billings and backlog – two metrics that analysts follow closely because they are leading indicators of future revenue – showed robust growth.
Billings for the quarter totaled $986 million, up 29 percent and well ahead of analysts’ estimates of $869 million, Mizuho Securities analyst Abhey Lamba wrote in a research note. Backlog exceeded $2.7 billion for the entire fiscal year, up 28 percent and the biggest annual gain since the company started reporting backlog nine years ago.
Red Hat CEO Jim Whitehurst said the company landed more than 280 contracts worth over $1 million last fiscal year, up 30 percent from the prior year. In the fourth quarter, the company signed its first $100 million contract.
Revenue totaled $628.9 million, up from $543.5 million, marking the 60th consecutive quarter of revenue growth for the Raleigh-based company. Analysts polled by Bloomberg News had projected revenue of $618.8 million.
Adjusted net income totaled $110 million, or 61 cents per share, up from $97 million, or 52 cents a share, a year ago.
For all of fiscal 2017, revenue totaled $2.4 billion, up 18 percent. Adjusted net income was $414 million, or $2.27 per share, versus $355 million, or $1.91 per share, a year ago.
Red Hat released its quarterly results after the markets closed Monday. Earlier in the day, the company’s shares closed at $82.20, down 76 cents. Its shares have risen 18 percent this year.