What: Shares of NxStage Medical (NASDAQ:NXTM), a developer of medical devices used to treat diseases of the kidney, were up more than 10% today after the company reported its third-quarter earnings.

So what: NxStage Medical reported revenue of $86.5 million during the quarter, which was up 15% over the year-ago period and came in much higher than the $82.1 million that Wall Street expected. This revenue beat managed to filter down to its bottom line as well, as net loss for the quarter was only $1.7 million, or $0.03 per share, which also compared favorably to the $0.08 loss that investors predicted.

The company also issued upbeat guidance as it now expects fourth-quarter revenue to land between $86 million and $87 million with net loss coming in around $2 to $3 million. Those numbers also also better than the $85.9 million that the pros were looking for.

The combination of a third-quarter beat and an increase in fourth-quarter guidance caused the company to raise its full-year revenue estimate to fall between $332 million to $333 million, which is a nice bump from its previous guidance of $324 to $328 million. The company also lowered its net loss guidance for the year to be between $15 and $16 million, which is down from its previous guidance of $18 to $20 million.

With all financial metrics looking good, it's no surprise to see that investors are bidding up its shares today.

Now what: In the release, Jeffrey H. Burbank, NxStage's founder and CEO stated:

We remain confident in our 15% annual home revenue growth target for 2015. We are also increasingly confident that 2016 will be another strong year for NxStage, consistent with our target of a sustainable 15% Home revenue growth rate.

The company reiterated its expectation that it would begin launching its next-generation hemodialysis system late next year, and is currently targeting a long-term revenue growth rate of 15% to 20%. If it hits those projects, it could produce revenue of around $700 million by 2020.

Given that the market for dialysis is huge and the incidence of chronic kidney disease continues to grow, it certainly appears that there is plenty of room left for this company to expand its presence in the dialysis market. If it can do so successfully, it could offer its investors plenty of upside in the coming years.

Brian Feroldi has no position in any stocks mentioned. The Motley Fool owns shares of and recommends NxStage Medical. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.