What: Shares of cybersecurity company Proofpoint (NASDAQ:PFPT) jumped on Thursday after the company reported better-than-expected third-quarter results. The stock closed the day up about 12% from the previous close.

So what: Proofpoint reported quarterly revenue of $69.1 million, up 37% year-over-year and about $3 million higher than analysts expected. Billings also grew at a blistering pace, up 37% year-over-year to $85 million. CEO Gary Steele stated that "Our strong third quarter results reflect Proofpoint's ongoing high competitive win rates, traction with new products along with robust add-on and renewal activity."

The company reported a non-GAAP EPS loss of $0.06, an improvement over the $0.11 loss reported during the same period last year, and five cents better than the average analyst estimate. On a GAAP basis, the company lost $0.71 per share, compared to a loss of $0.46 per share during the same period last year. This discrepancy was driven in part by a near-doubling of the company's stock-based compensation expense.

Now what: In addition to reporting a strong quarter, Proofpoint raised its full-year guidance for both revenue and billings. Revenue is expected to be between $263 million and $264 million, with billings expected to be between $316.8 million and $318.8 million. A non-GAAP EPS loss between $0.35 and $0.36 rounds out the company's guidance.

Despite posting big losses, Proofpoint is free cash flow positive, thanks to both its heavy use of stock-based compensation and its subscription-based business model bringing in cash. With Proofpoint's stock price based mostly on its ability to grow revenue quickly, the company delivered exactly what investors were looking for.