Shares in Pivotal Software Inc. rose in after-hours trading after the cloud company reported decent third-quarter results that beat analysts’ expectations.

The company, which makes software that lets enterprises build cloud computing applications more easily, posted a quarterly loss before certain costs such as stock compensation of 5 cents per share. Revenue came to $168.1 million for the quarter, which was up 30 percent from a year ago.

Wall Street was expecting a loss of 8 cents per share on revenue of $163.7 million. The company’s net loss for the quarter came to $34.8 million, or 45 cents per share.

Pivotal also had good news for investors with its subscription revenue, which shot up 53 percent from a year ago, to $100.8 million. Subscription revenue growth is always appreciated by investors because it’s seen as a steadier, more predictable and profitable income stream than traditional software licenses, the model Pivotal is trying to move away from.

Officials added that the company, majority-owned by Dell Technologies Inc., also grew its paying customer base to 368.

No doubt, Pivotal will be happy enough with its performance in the quarter, which seems to have calmed investors’ nerves following the drama of its previous earnings report. In its second-quarter earnings, which was its second report since going public, Pivotal’s stock crashed by 25 percent even though it comfortably beat analyst’s forecasts. There was no such nosedive today, however, as the stock rose almost 4 percent after-hours.

Pivotal Chief Executive Rob Mee (pictured) pointed to his company’s “strong revenue growth” in prepared remarks. “We also saw meaningful transactions with both new and existing customers as organizations across industries continue to choose Pivotal as their strategic partner for digital transformation,” the executive said.

Whether or not the company can keep adding customers remains to be seen, however, for the CloudFoundry platform on which its products are based is facing some stiff competition from rival platforms, notably those based on Kubernetes, said Holger Mueller, principal analyst and vice president at Constellation Research Inc.

“Pivotal keeps doing well and is growing its numbers,” Mueller said. “It roughly kept the loss constant, which is a good achievement. However it will have to keep working at straightening out its finances.”

Mueller also noted that the platform-as-a-service market is consolidating and Kubernetes confuses some executives, given that alternatives to CloudFoundry that were not on the map 12 months ago. “To remain in the sunshine spot, Pivotal will have to keep on innovating and taking customers live with next generation apps deployed on premises and in the public cloud,” he said. “The next 12 months will be key to see where Pivotal is heading.”

Pivotal is at least optimistic about its chances in the immediate future. It posted fourth quarter guidance that came in above expectations. It said it’s looking for an adjusted loss of 9 to 10 cents per share on revenue of $169 million to $171 million. Analysts are projecting revenue of $167.2 million.

Photo: Pivotal Software