Red Hat finished its fiscal 2010 on Feb. 28 with revenues of $748.2 million, an increase of 15% over the year before, it reported Wednesday.

The supplier of Red Hat Enterprise Linux and JBoss middleware concluded the year with a strong fourth quarter, with revenues up 195.9 million, an increase of 18% over the same quarter a year ago.

Subscription revenue for the quarter was $169.2 million, up 21%. Red Hat has been reaping the benefit of implementing a subscription model throughout the recession. With subscriptions, as opposed to upfront license payments, revenue is often deferred and received over a two or three-year period.

For example, Red Hat's current deferred subscription revenue is larger than its total subscription revenue for 2010. Subscriptions represented $638.7 million of the fiscal year's total; deferred subscription revenue amounts to $646 million, an increase of 19% over the year before. No matter how steep a downturn, a company entering a fiscal year on a subscription business plan often has a healthy share of its revenue already pending.

The annual earnings per share was $.45, versus $.39 per share last year, an increase of 15%. Net income was $87.3 million, versus $78.7 million the year before, according to generally accepted accounting principles.

Cash flow totaled $255.2 million for the year, after payment of a previously announced litigation settlement of $8.8 million. Cash and investments as of Feb. 28 totaled $970.2 million after repurchasing 3.1 million shares worth $90.1 million of Red Hat common stock in the fourth quarter. For the year, it repurchased a total of 10 million shares at a cost of $236.4 million. Red Hat now has 193.5 million shares outstanding, or 8.4% fewer than the year before.

"Our fourth quarter capped off a year of solid performance, moving us closer to our milestone revenue goal of a billion dollars," said CEO Jim Whitehurst in the earnings announcement. "We believe we are well positioned at the confluence of several major technology trends in the data center, including cloud computing, virtualization and middleware," he added.

Chief Financial Officer Charlie Peters said the results reflected "consistent execution in the most difficult economic conditions of our lifetime." Red Hat added 350 employees through the year, mainly in engineering and sales, invested in sales training and new systems and equipment during the year, he said.