Image source: Bottomline Technologies.

What: Shares of cloud-based digital banking and business payment solutions provider Bottomline Technologies (NASDAQ:EPAY) surged on Friday following the company's fiscal fourth-quarter report. A double-digit rise in subscription revenue fueled a revenue and earnings beat, sending the stock up 12% by 11:30 a.m. EDT.

So what: Bottomline reported fourth-quarter revenue of $88.1 million, up 3% year over year, or up 5% on a constant currency basis. Analysts were expecting roughly $87 million of revenue. Subscription and transaction revenue, derived mostly from the company's cloud platforms, rose 14% year over year to $50.9 million. According to CEO Rob Eberle, bookings rose much faster than revenue:

"We have innovative products to make the complex process of business payments efficient and secure, and the market is responding as evidenced by our Subscription and Transaction Bookings results which are up year over year 93% for the fourth quarter and 79% for the year."

Non-GAAP EPS came in at $0.37, up from $0.35 during the prior-year period and $0.07 higher than the average analyst estimate. On a GAAP basis, the company posted a loss of $0.16 per share, an improvement over a loss of $0.57 per share during the fourth quarter of 2015. A difference in tax rates was the only reason for the improvement, with GAAP operating income slumping by 45% year over year due to higher costs.

Now what: Double-digit growth of the company's cloud-based products was enough to drive revenue growth during the quarter, and as the mix shifts further toward the cloud, growth has the potential to accelerate. Bottomline announced a $60 million share repurchase program along with its report, citing its strong results, predictable business model, and an attractive stock price as good reasons to invest in its own stock. Investors agreed on Friday, driving the stock higher.

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