Apptio Inc. reported its first quarterly earnings results as a public company, and analysts cheered.

Total revenues of $40.6 million were up 26 percent from the third quarter of 2015, and quarterly losses narrowed to $4.5 million from $7.4 million. Gross margins strengthened to 67 percent from 61 percent in the third quarter of 2015.

Apptio’s net loss narrowed to 45 cents per share, better than the consensus estimate of a loss of 56 cents and down from a second-quarter loss of 61 cents. In after-hours trading, the stock rose about 3 percent. Apptio shares trade about 25 percent above the $16 offering price, but below its first-day close of $22.55.

Apptio sells a suite of financial analysis products it calls a “CIO’s business management system.” The products are meant to help top information technology executives make informed decisions about their technology investments. Apptio claims more than 40 percent of the Fortune 100 use its software as their IT business system of record.

“The global trends of digitization and cloud migration are a tailwind for our market,” said co-founder and Chief Executive Sunny Gupta. “Customers are migrating more of their infrastructure to the public cloud and they’re using Apptio to compare on-premise costs to the public cloud.”

The company is also benefiting from a profusion of new vendors that chief information officers must evaluate. “We are seeing the vendor landscape within enterprise IT exploding,” Gupta said. “Customer are doing more business with more vendors, and there are many subscription terms. This is a challenge we’re seeing across every single customer. We believe it’s a great opportunity to up-sell our cost transparency module to our installed base.”

Across the board, Apptio showed signs of growing financial strength. Subscription revenue grew from 79 percent to 84 percent of total sales. Net cash used in operating activities fell to $2.2 million for the first nine months, down from $8.8 million in the comparable period last year.  Free cash flow was minus $5.7 million, compared to negative $15.4 million in the nine months ended a year ago. The company has no outstanding bank debt.

On the quarterly earnings call, executives painted a rosy picture of the future, saying the company has only made a small dent in the potential market. “Our biggest competitor continues to be Excel,” Gupta said, “but we believe IT is so complex that you just can’t manage your spending on spreadsheets.”

The company is also only beginning to enter some vertical markets, such as the federal government. “We’ve seen that once we get the first few customers in a new market up and running, it drives broader adoption,” Gupta said. “Becoming a public company was great for name recognition.”

Apptio forecast fourth-quarter revenues to come in between $41.5  million and $42.5  million, with total 2016 revenues of between $157.7 and $158.7 million and a loss of $21.9 million to $22.9 million. Executives said subscription revenues will continue to grow while losses will shrink.