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What: Shares of Ellie Mae (NYSE:ELLI) are surging, rising by 17% as of 11 a.m. EST on Friday after the company reported better-than-expected earnings.

So what: Ellie Mae reported earnings of $4.8 million, or $0.16 per share in the fourth quarter. Adjusted for stock option compensation and amortization, the company earned $0.44 per share.

The company's CEO, Johnathan Corr, said it best, noting that the company's "fourth quarter year-over-year revenue growth of 39% was driven by the continued ramp of Encompass users and adoption of our services. Total seat bookings reached an all-time high of 16,200 during the quarter and included a record 8,700 new customer seats."

Ellie Mae's growth is coming from two sources: A growing number of customers, as well as an increase in revenue per customer. The company pointed out that it generated $475 per Encompass user in the fourth quarter, a 10% increase over the year-ago period. Active Encompass users increased 25% year over year.

Now what: Looking ahead, Ellie Mae projects that sales growth will extend into 2016. The company guided for revenue of $317 to $321 million, a 26% improvement over 2015 at the midpoint. It further expects to earn $22.2 to $24.2 million in net income for the full year, which, at the midpoint, would mirror its earnings for 2015.

On the conference call, the company indicated that it is forecasting an 11% decline in mortgage origination volume in 2016 compared to 2015. However, offsetting this decline is Ellie Mae's belief that it can continue to generate more revenue per loan, according to conference call commentary.

Given its history of blowing through analyst targets and its own guidance, 2016 could be even better than the company projects.

Jordan Wathen has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Ellie Mae. 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.