Red Hat (RHT 86.15, +3.95) has climbed 4.8% in pre-market after reporting in-line fourth quarter earnings and guiding ahead of market expectations.
The software company that specializes in providing open-source enterprise management products reported earnings of $0.61 per share, which matched expectations. Revenue jumped 15.7% year-over-year to $628.80 million, which exceeded estimates.
The company noted that its revenue has now grown in 60 consecutive quarters while billings surged 45.0% quarter-over-quarter to $986 million.
Subscription revenue increased 17.0% year-over-year to $560 million. This made up 89.0% of total revenue, which was consistent with results for the full year.
Subscription revenue from infrastructure-related offerings increased 11.0% to $435 million while subscription revenue from application development-related and other emerging technologies offerings grew 40.0% to $125 million.
Red Hat's management pointed out that the company has seen an increase in large commitments from customers. Deals larger than $1 million were up 30.0% year-over-year while deals larger than $20 million reached a record. In addition, the company secured its first-ever customer commitment of about $100 million.
Total backlog increased 28.0% year-over-year to $2.70 billion. At the end of the year, deferred revenue balance was up 20.0% to $2.10 billion
Red Hat issues mixed forward guidance, expecting first quarter earnings between $0.52 and $0.53 per share, which is below market expectations. However, revenue is expected to be between $643 million and $650 million, which is ahead of current estimates. For the full year, the company expects to generate above-consensus earnings between $2.60 and $2.64 per share on revenue between $2.72 billion and $2.76 billion, which is ahead of market expectations.