Image source: Rubicon Project.

What: Shares of Rubicon Project (NASDAQ:MGNI) tumbled on Wednesday following the company's second-quarter report. While Rubicon beat analyst estimates for both revenue and earnings, a deep cut in guidance sent the stock lower. At 12:30 p.m. EDT, the stock was down about 33%.

So what: Rubicon reported second-quarter non-GAAP revenue of $65.1 million, up 34% year over year and about $1 million higher than analysts were expecting. Non-GAAP EPS came in at $0.17, up from $0.06 during the prior-year period and $0.07 better than the average analyst estimate.

Those strong results were completely overshadowed by its guidance. As CEO Frank Addante explained the challenges facing the company, "The digital advertising market is undergoing changes that have fueled headwinds that we expect will continue through the remainder of the year -- particularly as it relates to desktop advertising in the U.S."

Rubicon now expects to produce full-year GAAP revenue between $275 million and $305 million, down from a previous range of $315 million to $355 million. Despite the drop in revenue guidance, it reiterated its non-GAAP EPS guidance of between $0.75 to $0.85.

Now what: The company's new revenue guidance represents growth compared to 2015, when GAAP revenue came in at $248 million. But its growth rate this year will be far slower than in the past, no doubt raising concerns about its long-term prospects. Rubicon carved out a new 52-week low on Wednesday, with investors losing all confidence in the stock.

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