Shares of Red Hat (NYSE:RHT) took a beating when the company's second-quarter report hit the newswires. But CEO Jim Whitehurst isn't worried.

Red Hat beat analyst estimates both on earnings and revenues by growing sales 16% year over year and adjusted earnings by 25%. Analysts and investors ignored all this good news to focus on the billings proxy, a forward-looking measure of upcoming revenues. On that measure -- on which Red Hat doesn't offer any guidance -- the 8% higher number fell short of Wall Street's 12% projections. Red Hat has seen this market reaction before, but the business growth hasn't slowed down like the panic sellers expected.

In a phone call with Fool analyst Anders Bylund, Whitehurst explained two big reasons investors shouldn't focus on the billings proxy. Spoiler alert: Big deals with long-term contracts are changing Red Hat's accounting, and the company is stealing market share from Microsoft (NASDAQ:MSFT) and others in several key markets. Oh, and Red Hat shares are starting to look cheap.