Red Hat's Profit Beats Estimates

Red Hat, the world’s largest commercial distributor of the Linux operating system, reported revenue and profit that beat estimates, as the company benefited from higher demand for open-source software and its cloud-based products.

Shares of Red Hat, whose customers include Adobe Systems and Verizon Communications, rose 4.5 percent in after-market trading on Wednesday.

Red Hat announced a $500 million share buyback program that will replace an existing $300 million program.

The company gives away its open-source software for free but makes money by selling subscriptions for support and training services.

Red Hat has been benefiting from higher demand from enterprises for its software used in data-centers and cloud computing.

The Raleigh, North Carolina-based company competes with Citrix Systems, VMware and Oracle.

Red Hat’s net income rose to $47.7 million, or 26 cents per share, in the fourth quarter ended Feb. 28, from $45.1 million, or 24 cents per share, a year earlier.

Excluding items, Red Hat earned 43 cents per share.

Revenue jumped about 16 percent to $463.9 million.

Analysts on average had expected a profit of 41 cents per share on revenue of $456.5 million, according to Thomson Reuters I/B/E/S.

(Reporting by Anya George Tharakan in Bengaluru; Editing by Sriraj Kalluvila)

This article originally appeared on Recode.net.

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