What happened

Shares of cloud software provider Domo (NASDAQ:DOMO) soared on Friday after the company reported strong third-quarter results. The stock was up about 20% at 12:55 p.m. EST.

So what

Domo reported third-quarter revenue of $36.8 million, up 30% year over year and nearly $2 million above the average analyst estimate. Billings rose 29% year over year to $38.8 million, and subscription revenue surged 34% to $30.4 million.

A person looking at a screen.

Image source: Getty Images.

Non-GAAP earnings came in at a loss of $27.9 million, or $1.06 per share, up from a loss of $41.5 million in the prior-year period. Operating expenses declined by about 10% year over year.

CEO Josh James said: "Demand for our products and services continues to grow as enterprises around the globe embrace digital transformation and push our products deeper into their business processes. We have a very large multibillion-dollar market opportunity in front of us." 

Now what

Domo expects fourth-quarter revenue between $37.5 million and $37.9 million, along with a non-GAAP loss of $1.23 to $1.27 per share. Both are above average analyst estimates of $35.7 million and a loss of $1.39, respectively.

With revenue rising and costs being kept in check, investors had plenty of reasons to bid up the stock on Friday, despite the large and persistent losses.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.