Operating income grew 29% to $27.5m, while diluted EPS grew 50% to $0.15. Operating cash flow was $62m compared to $54.3m in the same period last year. During the quarter the company repurchased $47m of common stock.

The company said subscription revenue increased 15% to $156.3m, while training and services revenue declined 5% to $27.4m.

During the quarter the company formed a SOA alliance with HP, and a cloud alliance with Verizon Business.

For the first half, net income increased 24% to $47.5m on revenue up 11% at $358m. Total cash, cash equivalents and investments at the end of the quarter was $912m.

Jim Whitehurst, president and chief executive at Red Hat, said: "IT organizations continue to move ahead with purchases of high value solutions, and this factor contributed to our better than expected total revenue in the second quarter, and drove annual subscription revenue growth of 15% for both the quarter and first half of fiscal year 2010. We continue to be optimistic about Red Hat's future and believe the company is well positioned when the economic and IT spending environment improves."

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