Red Hat Inc. reported a 55 percent increase in third-quarter revenue on the strength of an 80 percent increase in software subscription revenue. The company also said net income for the quarter jumped 155 percent.

In an announcement Wednesday, the Raleigh, N.C.-based Linux vendor said it booked US$50.9 million in revenue for its fiscal third quarter, which ended Nov. 30, up from $32.8 million a year earlier. Software subscription revenue alone was $39.2 million, up 80 percent from $21.7 million a year earlier, according to the company.

Net income for the quarter was $10.8 million, up from $4.2 million a year earlier. Earnings per basic and diluted share were 6 cents, up from $0.02 a year earlier.

"We are pleased with our progress and continued growth," Red Hat Executive Vice President and Chief Financial Officer Charlie Peters said in a statement. "We believe that our results reflect continued improvements and validation of our subscription model."

In July, the company changed the way it books subscription revenue, based on a recommendation from its auditors. For the previous five years, Red Hat had booked subscription revenue on a monthly basis, as if the subscription began on the first day of the month in which the subscription was sold. For example, Red Hat would recognize one-twelfth of the revenue of a 12-month subscription in the calendar month during which the subscription began, and the remaining subscription revenue over the next 11 months. The company"s auditors suggested booking revenue on a daily basis instead.

Red Hat said its subscriptions for Red Hat Enterprise Linux reached 132,000 units in its third quarter, including 119,000 subscriptions to enterprise IT servers and 13,000 subscriptions to the high-performance computing/hosting marketplace and desktops.