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Red Hat is getting to look more and more like a prime example of the old axiom "slow and steady wins the race."

Right before Christmas, the company delivered its third-quarter results for the period ending November 30, admitting that things had gone a bit slower than it and some on Wall Street had thought. It missed its unit bogie. Red Hat CEO Matthew Szulik said the units would turn up later in the fiscal year and later added that they had been factored into Q4 guidance.

Still, despite the miss, revenues were up 55% year-over-year and 10% sequentially to $50.9 million. Subscription revenues were up 80% year-over-year and 12% sequentially to $39.2 million. Service revenues were flat at $11.7 million. Deferred revenues weighed in at $121.4 million, up 170% year-over-year and 22% sequentially.

After-tax earnings worked out to $10.8 million, or six cents a share, up 155% year-over-year but off 8% from Red Hat's second fiscal quarter when it realized a $600,000 tax benefit.

Enterprise subscriptions, both new and renewals, totaled 132,000 units in the quarter, including 13,000 subscriptions covering HPC/hosting environments and desktops.

Wall Street consensus figured Red Hat would clear 133,000 unit and $51.5 million in revenues.

By comparison, Novell, whose quarter closed at the end of October, a month earlier, said it sold 21,000 SuSE units not including three multi-year, potentially enterprise-wide contracts that might encompass 25,000 servers over time.

Prudential says that unlike Red Hat, which is doing business with accounts such as Amazon, UBS and Fidelity, it has been able to find few Novell accounts with live production environments and that Novell's biggest Linux customer was a start-up hosting company in Texas.

Szulik dismissed both Novell and Sun with its Solaris x86 as significant Red Hat rivals.

Red Hat attributed 20% of its deferred revenues to multi-year contracts. It said they usually run three years, but in a few cases five or seven years. Red Hat declined to discuss discounts.

Szulik said the company has "large-scale strategic commitments" and a few enterprise-wide deals. He said 100% of Red Hat's Wall Street customers had renewed. Red Hat has ceased to make ASPs available. It claims it's become a meaningless number, subject to too many variables. It wants the market to focus on dollar values, its operating income and operating margin. Prudential figures its ASP, which has been declining, was $400 during the quarter. Red Hat's operating income was $7.6 million, 15% of total revenue. Its subscription gross margin was 91%; its overall gross margin was 80%. It generated $29.7 million in cash flow from operations during the quarter. The company added 73 people during the quarter, over 50 of them in sales and service. It now employs 839 people. Red Hat ended November with $979 million in the bank although it spent $45.2 million buying back its shares, depressed since the summer.