The total revenue for the quarter, which was reported on June 28, was $84.0 million, an increase of 38 percent from the year ago quarter and 7 percent from the prior quarter.
Subscription revenue from RHEL (Red Hat Enterprise Linux) was $71.5 million, up 45 percent year-over-year and 7 percent sequentially.
The company reported operating income of $12.6 million for the quarter, including $7.6 million of non-cash stock compensation expense related to the implementation of FAS123R (Financial Accounting Series).
FAS123R is a new set of accounting regulations that requires the expensing of non-cash stock option grants and other equity awards.
GAAP (Generally Accepted Accounting Principles) net income for the quarter was $13.8 million, or 7 cents per share.
Without the FAS123R expenses, the net income would have been 14 cents per share. Analysts had expected the stock to deliver 9 cents a share.
At quarter end, the companys total deferred revenue balance was $254.7 million, an increase of 61 percent on a year-over-year basis and 14 percent sequentially.
The quarterly gross margin improved to 84 percent from 79 percent in the year-ago period. The Raleigh, N.C. company also had a total of $1.1 billion in cash and investments as of the end of May.