Red Hat, a provider of open source offerings, has announced that its total revenue for the quarter grew to $264.7m, an increase of 27% from the year ago quarter.

Reporting the financial results for its fiscal year 2012 first quarter ended 31 May 2011, the company said that its subscription revenue for the quarter was $225.5m, up 26% year-over-year.

GAAP operating income for the first quarter was $45.4m, a 17.1% operating margin, while non-GAAP operating income for the first quarter stood at $66.5m, up 28% year-over-year.

Non-GAAP operating margin was 25.1%, up 30 basis points from the year ago quarter.

Red Hat CEO Jim Whitehurst said the company has begun fiscal year 2012 with a strong first quarter including year-over-year billings growth of 28% that contributed to revenue and profitability.

Whitehurst said, "We believe there is a fundamental shift in IT spending, in which cloud computing and virtualisation have become key strategic priorities. We believe that Red Hat is well positioned to capitalise on this growing demand as enterprise customers look to Red Hat when upgrading and modernising their IT infrastructure."

According to a Bloomberg report, Whitehurst told reporters that Red Hat will reach the $1bn target this year as the shift to cloud computing and updating of old Unix systems to Linux will lead to faster growth.

He said, "We will accelerate the growth rate of the business…The market is coming to us because all the new development is happening on Linux or, more broadly, on an open-source platform. Clouds in general run an open source."

Whitehurst, 43, said that Red Hat will "blow by" the $1 billion in sales this year. The $1bn target was first set by Whitehurst in 2008.

In its latest financial results, the company recorded $32.5m, or $0.17 per diluted share, as net income for the quarter, compared with $24.1m, or $0.12 per diluted share, in the year ago quarter.

After adjusting for stock compensation and amortisation expenses, non-GAAP net income for the quarter was $47.0m, or $0.24 per diluted share, as compared to $35.6m, or $0.18 per diluted share, in the year ago quarter.

Operating cash flow was $90.2m for the first quarter, as compared to $60.6m in the year ago quarter. At quarter end, the company’s total deferred revenue balance was $786.0m, an increase of 26% on a year-over-year basis.

Total cash, cash equivalents and investments as of 31 May 2011 was $1.27bn, said the company.

Red Hat chief financial officer Charlie Peters said, "Strong sales execution, focused spending and good collections drove 49% growth in operating cash flow year-over-year,"

"Red Hat grew first quarter non-GAAP operating income by 28% year-over-year even as we ramped up marketing spending for the Red Hat Summit and product launches, and continued investments in R&D to enable further broadening of our product portfolio."

"We introduced innovative new cloud technologies such as OpenShift, our PaaS offering, and CloudForms, our IaaS offering. In addition, we enhanced our core products, including the release of Red Hat Enterprise Linux 6.1 and strengthened our partnerships with the launch of Open Virtualisation Alliance," Peters added.