Image source: TubeMogul.

What: Shares of TubeMogul (NASDAQ:TUBE) fell as much as 22% on Tuesday morning, recovering to a milder 18% drop by 10:30 a.m. ET. The brand advertising software specialist reported second-quarter results Monday night, and fell short of Wall Street's estimates.

So what: In the second quarter, TubeMogul's sales rose 22% year over year to $55.4 million. On the bottom line, the breakeven performance in the year-ago period turned into $0.11 of net losses per share. The company's customers spent a total of $139.3 million on advertising campaigns managed by TubeMogul tools, a metric that management tracks under the name of "total spend." That's up 33% from the year-ago quarter.

Analysts had been looking for a loss of $0.07 per share on revenue near $58.1 million.

Looking ahead, TubeMogul's management expects to report third-quarter revenue of approximately $54 million, yielding an adjusted EBITDA loss of roughly $4 million.

Now what: TubeMogul CEO Brett Wilson conceded that total spend came in below expectations this time, but also noted that he was expecting this kind of market shift eventually.

"The transition in ad spending from desktop to mobile is accelerating, and while this impacted our results, this is precisely the trend we anticipated," Wilson said. "We are well positioned over the long term as brands require multiscreen solutions."

Mobile spend skyrocketed 146% higher year over year, and TV ad spending nearly doubled just from the first quarter. In other words, clients are adjusting their marketing budgets in unpredictable ways, and it will take a while to nail down accurate predictions in this environment.

Wilson is focused on next year's reshuffled market.

"We feel strongly that the investments we have made in [programmatic TV], mobile and social, along with the mix shift to these areas, positions us well to see strong topline growth in 2017," he said. "This growth will flow through to the bottom line and should result in significantly improved operating leverage in 2017."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.