Revenue during the quarter grew 27.73 percent to $58.02 million from $45.43 million in the previous year period. Gross margin for the quarter expanded 765 basis points over the previous year period to 49.83 percent. Operating margin for the quarter stood at negative 11.24 percent as compared to a negative 32.56 percent for the previous year period.

Operating loss for the quarter was $6.52 million, compared with an operating loss of $14.79 million in the previous year period.

However, the adjusted operating loss for the quarter stood at $2.03 million compared to operating loss of $11.36 million in prior year period.

"Benefitfocus continued its positive momentum and delivered strong third quarter results with total revenue growing 28% in the quarter," said Shawn Jenkins, chief executive officer of Benefitfocus. "Our employer revenue grew 55% driven by impressive demand for our platform, and once again, our software revenue retention rate was over 95%.”. Jenkins added, “We are also pleased that we achieved adjusted EBITDA profitability one quarter ahead of plan and continue to make excellent progress towards achieving our long-term goals. Throughout 2016 we have extended our leadership position within the dynamic cloud based benefits administration market as we remain focused on enabling our customers to engage employees, improve plan fit, reduce benefits expense and streamline administration."

For financial year 2016, Benefitfocus, Inc projects revenue to be in the range of $233 million to $234 million. The company expects net loss to be in the range of $42.20 million to $41.20 million and adjusted net loss to be in the range of $23.40 million to $22.40 million. It company forecasts diluted loss per share to be in the range of $0.79 to $0.76 on adjusted basis.

For the fourth-quarter 2016, Benefitfocus, Inc projects revenue to be in the range of $62.30 million to $63.30 million. The company expects net loss to be in the range of $9.20 million to $8.20 million and adjusted net loss to be in the range of $4.20 million to $3.20 million. On an adjusted basis, the company forecasts diluted loss per share to be in the range of $0.14 to $0.11.

Operating cash flow remains negative
Benefitfocus, Inc has spent $20.86 million cash to meet operating activities during the nine month period as against cash outgo of $25.69 million in the last year period.

Cash flow from investing activities was $24.86 million for the nine month period as against cash outgo of $48.29 million in the last year period.

The company has spent $1.27 million cash to carry out financing activities during the nine month period as against cash inflow of $65.90 million in the last year period.

Cash and cash equivalents stood at $50.80 million as on Sep. 30, 2016, up 18.16 percent or $7.81 million from $42.99 million on Sep. 30, 2015.

Working capital drops significantly
Benefitfocus, Inc has witnessed a decline in the working capital over the last year. It stood at $4.25 million as at Sep. 30, 2016, down 84.98 percent or $24.06 million from $28.31 million on Sep. 30, 2015. Current ratio was at 1.05 as on Sep. 30, 2016, down from 1.33 on Sep. 30, 2015.

Days sales outstanding went down to 42 days for the quarter compared with 45 days for the same period last year.

At the same time, days payable outstanding went down to 17 days for the quarter from 21 for the same period last year.