(Raleigh, N.C.) Red Hat (NYSE: RHT), the world’s leading provider of open source solutions, today announced financial results for its fiscal year 2010 third quarter ended November 30, 2009. Total revenue for the quarter was $194.3 million, an increase of 18% from the year ago quarter. Subscription revenue for the quarter was $164.4 million, up 21% year-over-year.

“Continued solid execution drove another quarter of strong results for Red Hat. Our double digit growth in the current economic environment was driven by our compelling value proposition and outstanding service. Our customer focus has clearly differentiated us from the competition. Red Hat was recently ranked as #1 among software vendors by IT executives for the fifth time in six years in the Ziff Davis CIO Insight Study, with the highest marks for reliability and value,” stated Jim Whitehurst, President and Chief Executive Officer of Red Hat. “We also continued to introduce new products, including the November release of RHEV that advances our position in server virtualization and cloud computing. RHEV provides customers the choice of a high-value, low cost, open management solution that was not previously available in the $2 billion virtualization market.”

GAAP operating income for the quarter was $19.8 million, including a previously announced charge of $8.8 million for a litigation settlement, compared to $21.0 million in the year ago quarter. After adjusting for stock compensation, amortization expenses and the charge for the litigation settlement as detailed in the tables below, non-GAAP operating income for the quarter was $46.1 million, up 20% year-over-year. GAAP operating margin was 10.2%. Non-GAAP operating margin was 23.7%, up 50 basis points from the year ago quarter.

GAAP net income for the quarter was $16.4 million, or $0.08 per diluted share, compared with $24.3 million, or $0.12 per diluted share, in the year ago quarter. The current quarter GAAP net income was reduced by $0.03 per diluted share due to the charge for the litigation settlement. Non-GAAP adjusted net income for the quarter was $33.5 million, or $0.17 per diluted share, after adjusting for stock compensation, amortization expenses and the charge for the litigation settlement as detailed in the tables below, as compared to $36.9 million, or $0.18 per diluted share, in the year ago quarter.

Operating cash flow totaled $54.1 million, compared to $59.1 million from the year ago quarter. Due to record billings, accounts receivable increased $24 million compared to last year even as days sales outstanding (DSO) improved to 54 days compared to 59 days last year. At November 30, the company’s total deferred revenue balance was $618.7 million, an increase of 23% on a year-over-year basis. Total cash, cash equivalents and investments as of November 30, 2009 were $959.1 million after repurchasing $52.3 million, or 1.9 million shares, of common stock.

“Strong bookings, particularly in North America, led to strong billings and greater than 20% growth in subscription revenue and deferred revenue, as well as further improvement of non-GAAP operating margins,” stated Charlie Peters, Executive Vice President and Chief Financial Officer of Red Hat. “This type of consistent performance, combined with our strong balance sheet, led to our third debt rating upgrade in 20 months by Standard and Poors rating agency.”

Additional information on Red Hat’s reported results, including a reconciliation of the non-GAAP adjusted results, are included in the financial tables below. A live webcast of Red Hat’s results will begin at 5:00 pm ET today and can be accessed by the general public at Red Hat’s investor relations website at http://investors.redhat.com. A replay of the webcast will be available shortly after the live event has ended.

Red Hat, the world’s leading provider of open source solutions and a component of the S&P 500, is headquartered in Raleigh, NC with over 65 offices spanning the globe. CIOs ranked Red Hat as one of the top vendors delivering value in Enterprise Software for six consecutive years in the CIO Insight Magazine Vendor Value survey. Red Hat provides high-quality, affordable technology with its operating system platform, Red Hat Enterprise Linux, together with virtualization, applications, management and Services Oriented Architecture (SOA) solutions, including Red Hat Enterprise Virtualization and JBoss Enterprise Middleware. Red Hat also offers support, training and consulting services to its customers worldwide. Learn more: http://www.redhat.com.