Global expansion and strong Enterprise Linux subscription sales lifted Red Hat's revenue and net income to double-digit growth for its fiscal 2008 second quarter.

The company reported profit of $18.2 million, or $0.09 per share, an increase of 64 percent year over year for the quarter that ended Aug. 31. Last year for the same quarter, Red Hat reported profit of $11.04 million. Revenue for the most recent second quarter was $127.3 million, an increase of 28 percent over the same quarter last year when the company reported revenue of $99.67 million. Non-GAAP (generally accepted accounting principles) adjusted net income for the quarter was $36.9 million, or $0.17 per share, a figure in line with consensus estimates from analysts at Thomson First Call.

Subscriptions revenue continued to outshine revenue from training and services, though both segments saw increases for the quarter. Revenue from subscriptions comprised $109.17 million, or 86 percent of revenue, while revenue from training and services was $18.1 million, or 14 percent.

Red Hat attributed its strong growth to overseas expansion, particularly in Japan, where a Nikkei Market Access survey ranked Red Hat Japan the number-one technology vendor that customers intend to conduct business with in the future. The company also saw increases in operating margin and operating cash flow, business performance improvements that are important to Red Hat's global expansion, said Charlie Peters, executive vice president and CFO, in a statement.

Non-GAAP operating margin was 20.7 percent for the quarter, an increase from 17.8 percent year over year. Non-GAAP operating cash flow was $63.7 million for the quarter, an increase of 43 percent year over year and 22 percent, sequentially.

Red Hat continues to be the leading commercial provider of Linux server software, but the company also expanded its portfolio of open-source products for enterprise customers in the second quarter. Notable product releases during the quarter were JBoss Enterprise Application Platform 4.2, software infrastructure to help enterprises migrate legacy applications to an open-source platform, and a beta of Red Hat Developer Studio, a development runtime and set of open-source tools built on the popular Eclipse development framework.

Red Hat also made gains in increasing support among third-party applications for Red Hat Enterprise Linux and passed the 3,000 mark for the number of applications certified to run on its enterprise OS.

On a conference call Tuesday, Red Hat Chairman, CEO and President Matthew Szulik announced some changes to Red Hat's business structure as the company prepares to expand from a Linux company into a full-service enterprise software and services provider.

Beginning Tuesday, the company is split into three lines of business: infrastructure, middleware, and online services. Each of those divisions will have a general manager who will be compensated on the profitability of his or her business, he said. General managers also will be responsible for product marketing, and Red Hat's Michael Chen, who is returning to the U.S. from China after a three-year stint building Red Hat's business there, is now vice president of corporate marketing, Szulik said.