Apptio reported a 31 percent increase in second-quarter revenue Wednesday, beating expectations for both revenue and profit as sales of its technology-management software continue to grow.
For the period ending June 30th, revenue was $59 million, split between subscription revenue of $49.2 million and services revenue of $9.8 million and outpacing analyst estimates of $55.67 million. Subscriptions for Apptio’s software, which help companies manage how much money and time they are spending on information technology, grew slightly faster than its overall revenue compared to the same period last year.
“We believe that every company is becoming a technology business,” said Sunny Gupta, co-founder and CEO of the Bellevue-based company, on a conference call following the release of its results. “Customers are struggling to get visibility across cloud vendors” as they try to manage the complicated array of technology that is required to run almost any business in 2018.
Gupta attributed the revenue gains to a “significant uptick” in subscriptions to its ITFM Foundation product introduced last year, as well as new federal customers thanks to the FedRAMP certification it earned in 2017.
On a GAAP basis, Apptio posted a narrow loss of $5.2 million. The company has been paring down those losses over the last year as revenue accelerates, and while its operating margin is still negative thanks to spending on sales and marketing, excluding special items Apptio eked out net income of $0.01 a share. Analysts were expecting it to lose $0.01 a share.
Investors liked what they saw, sending Apptio’s stock up three percent in after-hours trading. The company also raised its guidance for the third quarter to fall between $57.5 million and $58.8 million, ahead of analyst expectations for the third quarter of $56.6 million.