Red Hat (NASDAQ:RHAT), a leading provider of the Linux-based operating system, continues to see increasing acceptance of the open source technology. While the Microsoft (NASDAQ:MSFT) faithful may be yawning at the latest results from its competitor, they nonetheless would have to grudgingly admit that the first quarter showed impressive growth.

Red Hat's revenues grew by 45.5% to $60.8 million, compared with last year's $41.8 million. The bulk of its growth came from subscription sales: $49.2 million versus $30.6 million a year ago. Revenues from its services increased marginally by 3.1%.

Costs associated with subscription sales were $5.2 million, while costs for its services were $6.8 million. Combined, the company managed healthy gross margins of 80.3%, comparable to its profitability from a year ago. Operating expenses as a percentage of sales also remained even at 67.8%.

Solid earnings of $0.07 per share -- which beat analyst consensus estimates by 40% -- resulted from the company's robust revenue growth and stable profit margins. It managed to improve earnings and increase cash flow alike.

Owner earnings, defined by Tom Gardner of Motley Fool Hidden Gems as net income + depreciation + amortization +/- onetime items - capital expenditures, came in at $12.6 million, or 61.5% higher than last year's $7.8 million. With an owner-earnings run rate at $50.4 million (the quarterly figure multiplied by 4), Red Hat is currently valued at approximately 49 times its owner earnings.

This kind of valuation will likely scare away many investors. Certainly the company will need to continue rapidly growing owner earnings to support its current price tag. But as long as it shows no signs of slowing down, Red Hat warrants a closer look.

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Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.