Cognos (NASDAQ:COGN), a business intelligence (BI) software developer, added fuel to the software rally last week. On news of its earnings results, the stock soared nearly 10% to $35.11. More importantly, it looks like the traction will continue.

In the third quarter, revenues increased from $212 million to $229.9 million. Net income was $23.8 million, or $0.26 per share, down from last year's $24.9 million, or $0.27 per share. But excluding non-cash items, profits were $30 million, or $0.33 per share.

Cognos is a leader in BI software applications, which helps major companies to better analyze data from their databases, enterprise resource planning applications, and other information technology assets. The company helps its customers answer important questions: How are we doing? Why are we on or off track? What should we do about it?

Cognos has more than 23,000 customers, including Home Depot (NYSE:HD), (NASDAQ:AMZN), and Dow Chemical (NYSE:DOW).

Management is certainly upbeat about its prospects. Second-quarter and full-year earnings guidance came in higher than expected, probably because the business is getting lots of momentum from the launch of its flagship product, Cognos 8. And with the company's recent moves to cut costs, there is good reason to believe management's optimism for improved earnings.

What's more, the company announced a plan to buy up to $200 million of its shares.

In other words, Cognos is both a top-line/bottom-line story. Given the investor money that is rushing into the software sector, it also seems likely to be a strong performer among the group.

For related Foolishness:

Home Depot is an Inside Value pick. Amazon is a Stock Advisor selection, and Dow Chemical is an Income Investor recommendation.

Fool contributor Tom Taulli does not owns shares of any companies mentioned in this article.