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What's happening?
Shares of Pegasystems (NASDAQ:PEGA) dropped more than 10% Wednesday after the software company's third-quarter results fell short of analysts' estimates.

Why it's happening
Adjusted quarterly sales rose 13% year over year, to $138.3 million, which translated to adjusted net income of $8.4 million, or $0.11 per diluted share. Analysts were expecting earnings of $0.15 per share on sales of $143.5 million.

Pegasystems founder and CEO Alan Trefler also insisted the company's results so far in 2014 are "very solid and reflect the increasing benefits Pega clients are achieving through the use of our technology." During the subsequent conference call, Trefler also reminded investors their revenue is typically "lumpy," and relies on closing a significant amount of business in Q4. What's more, he said, "Historically compared to guidance, we are further ahead than we've been in any of the recent years." 

While this quarter may not have lived up to Wall Street's expectations, that near-term underperformance should be of little consequence to patient, long-term investors.

Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Pegasystems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.