Image source: Getty Images.
Continue Reading Below
Shares of Ellie Mae (NYSE: ELLI) are on the move, rising by about 11% as of 12:15 p.m. EDT as the company's third-quarter earnings and guidance for 2016 left investors optimistic about what's to come.
Ellie Mae delivered on the top and bottom lines, as revenue grew 46% year over year to $100.4 million. Net income grew to $13.8 million, and earnings per share more than doubled to $0.41.
The company is growing by attracting new customers and deriving more revenue from its existing customers. This quarter, it reported that revenue per active Encompass user increased 23% over the year-ago period to $640 per user.
Continue Reading Below
Management noted that increased loan volume per user as well as increased penetration (the number of its services it was able to sell to each user) helped drive its nominal and per-user revenue growth.
Ellie Mae is looking ahead to a healthy fourth quarter. The company raised its revenue guidance to a range of $351 million to $352 million for the full year, up from previous guidance of $339 million to $341 million. Guidance for net income and adjusted net income were increased to $33.2 million to $33.75 million and $71.1 million to $71.8 million, up from a range of$27.5 million to $28.5 million and $63.5 million to $66 million,respectively.
This quarter showed that Ellie Mae can win big when all of its main earnings drivers (loan volume, penetration, and the number of active users) trend in the right direction.Increased compliance spending that has dragged on bank profits has been a boon for Ellie Mae.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.
Jordan Wathen has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Ellie Mae. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.