Shutterfly Inc. (NASDAQ:SFLY) shares are moving higher after beating revenue and earnings estimates by a wide margin. Investors also cheered the company’s decision of buying privately-held photography company Lifetouch for $825M. The potential acquisition signals Shutterfly’s cash generating potential to support investments in growth opportunities.

Shutterfly stock soared more than 20% after the earnings beat. The stock is up 26% in the last three months. SFLY stock has the 52-week trading range of $39.76-$66.47.

The company’s revenue increased 6% in the fourth quarter to $593 million, beating the consensus estimate by $37 million. While consumer net revenue was flat with the previous year quarter, its business solutions revenues increased 81% to $71.9 million.  

Strong organic growth, revenues from legacy websites, accelerating mobile growth, and expense control contributed in exceeding the high end of guidance for the fourth-quarter.

The CEO Christopher North said: “I’m proud of the effort from the Shutterfly team which has allowed us to bring our customers together on a single consumer platform, re-focusing on Shutterfly and Tiny Prints, our two strongest Consumer brands.”

On a revenue growth of 6%, the company generated operating earnings growth of 16%, driven by expense control and investments in high margins areas.

Shutterfly’s strategy to acquire Lifetouch, which is the leader in school photography, will allow it to add $450 million of Adjusted EBITDA by 2020.

“Lifetouch is a strong strategic fit, bringing significant synergies while adding scale and profitability”, Christopher North said.

The company expects to generate revenue in the range of $1.26B in FY2018, compared to $1.1 billion in 2017, exceeding the consensus revenue estimate of $1.21 billion. Shutterfly expects to generate earnings per share in the range of $2.38 per share, higher from analysts estimate for $1.50. Overall, Shutterfly has been working on the strategy of investing in organic and inorganic growth opportunities to set strong foot-holds for the long-term sustainable growth.  

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