Mobile advertising giant Millennial Media posted financial results for the third quarter of 2012 this week. Millennial has been investing in sales initiatives and R&D to maintain its momentum and it seems that this approach is working.

Millennial reported that revenue increased 88 percent year over year to $47.4 million, a much bigger gain than the 76 percent YoY growth rate it reported last quarter. Gross margin went up to 40.9 percent in Q3, reaching the company’s target range of 40 to 42 percent.

Expenses in the quarter ending September 30 totaled at $21 million, almost twice as much as it spent in the same period last year. This widened Milennial’s loss, which turned a profit before going public, to $1.8 million in comparison to the $200,000 it wrote off in the third quarter of 2011. This amounts to a loss of two cents per share, compared to the three cents per share analyst consensus reported by Bloomberg.

“Our strong results for the period along with our increased full-year outlook speak to the traction we established as the go to provider of mobile monetization solution,” co-founder and president Paul Palmieri said during the earnings call.  “There has been a lot of discussion in the media lately about a mobile monetization problem from our perspective and that’s reflected in these financial results. There is no mobile monetization problem just the growing opportunity for Millennial Media to capitalize on.”

There has been a lot going on for Millennial in the financial scene. Last month sources reported that Yahoo! may be interested in acquiring the company to solidify its consumer strategy. The web portal operator has two billion in the bank, and it is rumored to be eyeing several other mobile and social media companies as well.