RightNow Technologies, a scrappy CRM company that is starting to become a more serious competitor with CRM giants such as SAP, Oracle's Siebel, and Salesforce, just announced a solid quarter in which they continue to make customer and revenue gains.

The company reported GAAP earnings of $1.4 million, or 4 cents per share, for the quarter. The non-GAAP earnings, which analysts use in their estimates, were 9 cents per share, matching the street view. Revenue grew 20 percent from the year-ago period to $43.5 million. But company executives were careful to stress on the call that recurring revenue stream is growing at a 27% clip.

While the quarter wasn't exactly a blowout, it reflects the company's steady growth in the CRM market. RightNow Founder and CEO Greg Gianforte cited strong gains in recurring revenue and news customers, saying, "we believe our business today is stronger than at any time in our history."

This morning the stock initially traded down in the news but rebounded quickly this morning and is now trading flat, at about $15.51. The stock is somewhat thinly traded, with an average volume of only 280,000 shares, and it can be quite volatile. The 52-week range is $11.55-$20.

What's interesting about RighNow is that it is coming at large competitors such as SAP, Salesforce, and Oracle from a slightly different angle. SAP, and Oracle (through its acquisition of Siebel) came into the CRM market via contact centers and call-center management, while Salesforce entered with a focus on sales contact management. RightNow's strength is in managing customer service across electronic paltforms, including the Web, and it has edged into contact-center and sales management to fill out its feature set through tactical acquisitions.

RightNow executives say it's the only company leading in several segments of CRM -- including emerging areas such as social and Web monitoring -- using Gartner Group's "Magic Quadrant" analysis. RightNow calls its platform CX, for "Customer Experience." It targets mid-to-large organizations who are managing large numbers of customer relationships, often over the Web.

Analysts on the quarterly conference call were focused on the customer mix and margin expansion in 2010. In the Q&A session, RightNow executives were bombarded with questions about how margins could expand. Gianforte and CFO Jeff Davison said that because recurring revenue through customer renewals is growing at a strong clip and the growth in expenses is being held down below the revenue growth rate, margins will continue to expand this year.

RightNow's stock is currently priced at a forward P/E multiple of 24 based on next year's earnings estimates of 66 cents per share. Investors have priced in solid growth, but clearly the company has a lot of upside if it can gain significant market share in the CRM market and expand margins as executives have guided. The current entry point may be attractive given its 52-week range of $11.55-$20.