Red Hat Inc. said its fourth-quarter profit rose 7 percent as the software distributor worked to expand the footprint of its open source products with costly internal investments.
New CEO James Whitehurst believes Red Hat is now ready to continue rapid growth through an economic downturn as the Raleigh-based company pitches its free software to organizations looking to cut their tech budgets.

“It’s my hypothesis for why we continue to see robust demand while others seem to be having issues,” Whitehurst said in an interview. “We’re known for value, and when you’re looking to cut budgets, we’re a logical name that comes to mind.”

Unlike Microsoft Corp., Red Hat makes money from its Linux operating system and other software by selling subscriptions for service.

Red Hat said Thursday it earned $22 million, or 10 cents per share, in its first quarter under new CEO James Whitehurst, compared to $20.5 million, also 10 cents per share, a year earlier.

Red Hat said its revenue rose 27 percent to $141.5 million in the quarter ending Feb. 29.