What happened

A10 Networks (ATEN 1.39%) shareholders were celebrating on Friday. The software services specialist jumped 34% after management announced strong third-quarter results and issued a bullish outlook for the final quarter of 2021 and beyond.

An older woman checks her phone while working from home.

Image source: Getty Images.

So what

Sales rose 15% in the period that ended in late September, management revealed in a late Thursday press release. That spike surpassed the aggressive outlook that CEO Dhrupad Tivedi and his team issued in late July. A10 Networks is finding plenty of room to build on its portfolio, including by pushing deeper into cybersecurity services. "We achieved strong ... results," Tivedi said, "as our solutions are enabling us to capture market share."

A10 Networks also posted a solid profitability boost, with operating margin rising to 80% of sales, compared with 78% of sales a year ago.

Now what

Trivedi and his team see the good times rolling at least into early 2022. Sales will rise 10% in Q4, executives predicted, and profitability will continue to expand. These wins should come despite supply chain issues and rising costs.

Yet investors were even happier to hear what management had to say about the medium term. "We expect this positive momentum to sustain into 2022," executives said. To add weight to that prediction, the company issued a new capital allocation plan that calls for faster stock buyback spending and a brand-new dividend.

Paired with the good news on growth and profit margins, its no surprise that the capital return plan helped boost A10 Networks' stock higher on Friday.