Source: Ellie Mae.

Throughout the past year, financial institutions struggled to sustain their former levels of profitability, as a rise in interest rates caused mortgage refinancing volumes to plunge. Ordinarily, that might have meant difficulty for Ellie Mae (NYSE:ELLI), which specializes in software that helps mortgage originators manage their businesses more efficiently.

Yet as we've seen for quite a while, Ellie Mae stock has soared, even as volumes remained weak during most of 2014. Coming into Thursday afternoon's fourth-quarter report, Ellie Mae investors weren't certain about the company's growth prospects; but Ellie Mae's results left no doubt that the company's mortgage-handling platform has found favor in its core audience.

Let's take a closer look at just how well Ellie Mae performed last quarter, and what's coming in 2015.

Originating success at Ellie Mae
Ellie Mae posted record results in the fourth quarter, with a 53% climb in revenue, to $46.6 million, easily outpacing the 37% growth that most investors were looking to see. Net income soared more than 150%, and on an adjusted basis, earnings doubled to $0.38 per share, defying the slight decline in the consensus estimates among stock analysts. For the year, Ellie Mae's growth wasn't quite as impressive, but was still good, with revenue rising by more than a quarter, and adjusted net income climbing at an 18% pace.

Looking more closely at some of Ellie Mae's key metrics, the company clearly benefited from an upturn in the popularity of its service. The number of clients using Ellie Mae's Encompass system jumped 18%, to 109,000, and 85,000 of those users took advantage of the software-as-a-service version of the platform, up 33% from the year-ago quarter. Users under contract also rose by a third, and revenue from the SaaS version of Encompass climbed by nearly half, and now represents three-fifths of total revenue for the quarter.

Ellie Mae's Encompass consumer direct product. Source: Ellie Mae.

In addition, Ellie Mae's customer base has gotten more active, and therefore more profitable. Revenue per active user rose by 32%, to $433, and on-demand revenue jumped by nearly three-fifths to compose the lion's share of Ellie Mae's total sales. As new CEO Jonathan Corr pointed out, "We benefited from an uptick in the volume of loan applications during the quarter."

Yet Ellie Mae has also proven that even a slowdown in mortgage activity was positive for the company. "Against the backdrop of mortgage industry volumes that declined 38% in 2014," Corr said, "our performance was driven by demand for our all-in-one solution that meets lenders' ever-increasing needs for loan quality, regulatory compliance, and operating efficiency."

CEO Jonathan Corr. Source: Ellie Mae.

What will 2015 bring for Ellie Mae?
Ellie Mae remains optimistic about the coming year. The company's guidance for the first quarter includes revenue expectations of between $46 million and $47 million, producing adjusted earnings of $0.19 to $0.21 per share, both of which are better than those who are following the stock currently expect. For the full 2015 year, sales of $203 million to $206 million would equate to adjusted earnings of $0.86 to $0.91 per share, also topping estimates on both scores.

Yet a lot of Ellie Mae's success will depend on mortgage origination volume, and that's a tough issue for market participants to figure out. For its part, Ellie Mae relies on figures from the Mortgage Bankers Association and Fannie Mae and Freddie Mac, which believe that 2015 mortgage origination volume will climb 3% from last year's levels. Yet with some expecting the Federal Reserve to start raising interest rates in the middle of the year, the potential for soaring interest rates and a potential standstill in mortgage origination activity is a real threat.

Still, investors responded positively to Ellie Mae's quarterly results, sending the stock up nearly 10% in the first half-hour of after-hours trading following the announcement. Given how much success the company has had with its software, even during challenging conditions, anything short of a worst-case scenario for the mortgage market could bring even more growth to Ellie Mae's business this year and beyond.