Open-source powerhouse Red Hat Inc. delivered another encouraging set of numbers in its second quarter of fiscal 2017 earnings call, edging past market estimates.

The Linux vendor reported income before certain costs such as stock compensation of 55 cents a share, with total revenues of $599.8 million, a 19 percent increase year-over-year. Wall Street analysts were looking at earnings of 54 cents a share on $593 million in revenues.

Investors appeared to be pleased. After rising 1.26 percent during Wednesday’s trading, Red Hat’s shares rose nearly 4 percent in Thursday morning trading.

Breaking things down, the company reported subscription revenues of $531.2 million for the quarter, up 20 percent from one year ago, accounting for 89 percent of its total revenues. Red Hat’s subscription revenues from infrastructure-related products totaled $427 million for the quarter, up 18 percent year-over-year. Application development-related revenues and those from other emerging technologies hit $104 million, a 33 percent increase from one year ago.

That last segment is important, because it’s where Red Hat executives see the company’s biggest opportunities for growth in the future. The company is pinning its hopes on being able to sell a broader range of software for managing application servers and data storage in the future. To that end, it has invested substantially in new areas like OpenStack infrastructure-as-a-service, OpenShift platform-as-a-service and Ansible automation.

“Digital transformation and hybrid cloud computing are changing how applications are built, deployed, and managed,” said Red Hat Chief Executive Jim Whitehurst in a statement. “As organizations adopt agile application development technologies such as Linux containers, they are able to rely on Red Hat as their strategic partner to modernize their infrastructure and application development platforms.”

More interesting than the numbers was the number of deals Red Hat sealed over the last quarter. The company closed on a record number of deals valued at over $1 million in Q2, bringing them up more than 60 percent year-over-year.

“This further demonstrates our customers’ commitment to Red Hat and the broad demand for our expanding technology portfolio as enterprises embrace digital transformation and the hybrid cloud,” Executive Vice President Frank Calderoni said in a statement.

In its guidance, Red Hat said it was hoping to achieve non-GAAP earnings of 58 cents per share on revenues of $613 million to $632 million in the third quarter. As for the full year, the company expects non-GAAP earnings to land somewhere between $2.23 and $2.25 per share on revenues of $2.415 billion to $2.435 billion.

Deutsche Bank analyst Karl Keirstead, noting in a report to clients that the billings growth rate has now accelerated for the past two quarters, sounded a positive note on the forecasts. “The decision to lift the low end of the FY18 revenues guide by $35 million despite only a $7 million 2QF17 beat signals that RHT must be expecting solid 2H results,” he said.

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