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What: Shares of Ultimate Software Group (NAS: ULTI) have jumped by 16% after the software maker reported third-quarter earnings last night.
So what: Revenue for the quarter jumped 19% to $67.8 million, which resulted in non-GAAP net income of $4.9 million, or $0.18 per share. Recurring revenue from the company's important Software-as-a-Service (SaaS) offering grew by 24% and comprised 81% of the quarter's sales.
Now what: Ultimate's annualized retention rate with existing recurring revenue customers is north of 96%, and the company expects recurring revenue to rise by 25% in 2011 and 2012. A couple of analysts who have buy ratings on the stock are out today with bullish comments. Needham & Company and Canaccord Genuity, who both have $60 price targets, like the company's bookings growth.
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