Subscription growth of 26 percent helped Apptio top Wall Street estimates for revenue and net earnings Monday, and it reached an important milestone on the path to profitability.
For the period ended March 31st, Apptio’s revenue was $54.1 million, up 23 percent from the same period last year. Analysts polled by Yahoo Finance were expecting the IT cost management company to record $51.65 million in revenue.
“Technology is no longer managed by central IT organizations,” said Apptio CEO Sunny Gupta on a conference call following the release of the results. Instead, departments like human resources or marketing are increasingly buying cloud services without going through IT, which has made them more flexible but makes it harder to keep track of costs across a decent-sized organization.
According to those pesky GAAP accounting rules, Apptio is still in the red, recording a net loss of $8.1 million, or $0.19 a share. But excluding special items and one-time charges, Apptio broke even for the quarter, a far better performance than the non-GAAP net loss of $0.06 a share analysts were expecting.
During the quarter Apptio acquired Digital Fuel, which has a fair amount of overlap with Apptio’s business, for $42.5 million. The integration is “going well,” Gupta said, implying that Apptio will be able to renew a good chunk of Digital Fuel’s customers.
Apptio also completed the FedRAMP certification during the quarter, which allows it to pitch more business to government customers.
The company also issued guidance for the upcoming quarter and year that was in line or ahead of analyst expectations. Investors liked what they saw, sending Apptio’s stock up 5 percent in after-hours trading.
(Editor’s note: This story was updated several times as more information became available.)