OpenTable Inc OPEN.O, which allows diners to reserve tables at restaurants online, forecast fourth-quarter revenue largely above expectations and said it would strengthen its mobile platform.
Shares of the company were up 4 percent in extended trading.
The company said it was working on mobile payment to let patrons pay for a meal via their mobile phones. It plans to launch the service in San Francisco this year.
"We will continue to be aggressive on mobile and getting people to have our app," a company executive said on a conference call with analysts.
About 41 percent of OpenTable's seated diners booked through mobile devices in North America in the third quarter, up from about 30 percent a year earlier.
OpenTable has been betting on mobile devices to drive revenue and expects most diners to use the platform.
Application downloads on smartphones, tablets, and other mobile computing devices will increase to 187 billion in 2017 from 87.8 billion in 2013, IDC forecast in June. (link.reuters.com/myg79t)
The company said it expects adjusted earnings of 49 cents to 53 cents per share on revenue of $50.7 million to $52.1 million for the fourth quarter.
Analysts on average were expecting adjusted earnings of 52 cents per share on revenue of $50.9 million, according to Thomson Reuters I/B/E/S.
Third-quarter reservation revenue rose 27 percent, while subscription revenue increased 11 percent.
If a reservation is made through OpenTable's website or app, the restaurant is charged $1 per diner. If a diner makes a reservation on the restaurant's website and is directed to the OpenTable system, the charge is 25 cents.
The number of seated diners rose 30 percent to 38.5 million in the quarter ended September 30.
OpenTable's installed restaurant base rose 17 percent, said the company, whose footprint include the United Kingdom, Germany, Japan and China.
Total revenue rose 18 percent OpenTable's net income rose to $7.6 million, or 32 cents per share, from $5.9 million, or 26 cents per share, a year earlier to $46.7 million.
Excluding items, the company earned 50 cents per share.
Analysts had expected for adjusted earnings of 42 cents per share, on revenue of $46 million.
OpenTable said in July that it bought the reservation system of rival Urbanspoon and would provide bookings for the site in future.
The deal comes as OpenTable faces increased competition from the likes of Yelp Inc (YELP.N), which bought another reservations company, SeatMe, despite having an ongoing partnership with OpenTable.
OpenTable shares closed at $71.10 on the Nasdaq on Tuesday.
(Reporting by Chandni Doulatramani in Bangalore; Editing by Joyjeet Das)