At a time when even Oracle's revenue is dropping, Red Hat has reported second quarter revenues of $183.6 million, or 12% ahead of a year ago.

Subscription revenue, a desirable, recurring source of revenues, was up 15% to $156.3 million of the total.

Net income for the quarter, ended Aug. 31, was $28.9 million, or $0.15 per share compared to $21.1 million or $.10 per share a year ago, according to generally accepted accounting principles. Red Hat's flagship product line Red Hat Enterprise Linux; JBoss application server middleware is a follow on product set.

"Red Hat's financial performance was strong across all of our key metrics. We delivered double digit growth in revenue and deferred revenue, expanded our non-GAAP operating margins and generated strong cash flow from operations," said Charles Peters, CFO.

Non-GAAP operating margins were 23.7%, up 170 basis points or 1.7% from a year earlier. GAAP operating margin was 15%.

"We continue to be optimistic about Red Hat's future and believe the company [will be] well positioned when the economic and IT spending environment improves," said Jim Whitehurst, president and CEO. He termed second quarter revenues "better than expected."

Oracle in its most recent quarter reported on Sept. 17 that revenues were down 5% but earnings per share were up 8%, with non-GAAP operating margins of 46%.

Red Hat reported operating cash flow for the quarter of $62 million compared to 54.3 million a year ago, up 14%. Total cash, cash equivalents and investments as of Aug. 31 were $911.8 million.

In July, after ten years as a public company, Red Hat was selected for listing in the Standard and Poor's 500 index.

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