Guidance Software Inc. shares gained 10 percent Wednesday, a day after the company reporting better-than-expected fourth quarter results. The quarter was helped by higher sales of its digital investigation software.

After Tuesday’s market close, the Pasadena software developer reported a net loss of $1.6 million (-7 cents a share), compared with net income of $317,000 (1 cent) a year earlier. Revenue rose 12 percent to $25.2 million.

Guidance, whose software is used by law enforcement organizations, government agencies and companies, said that excluding share-based compensation, it earned 5 cents a share. Analysts surveyed by Thomson Reuters had expected adjusted earnings of 3 cents a share on $23.8 million revenue.

“In a down economy, with ever tightening budgets, we’re very pleased that more customers than ever are responding favorably to our EnCase eDiscovery enhancements and choosing Guidance as their solution for in-house eDiscovery,” said Chief Executive Victor Limongelli in a statement.

Guidance shares closed up 29 cents, or 10 percent, to $3.11 on the Nasdaq after earlier jumping as high as 25 percent.