What: Shares of MicroStrategy (NASDAQ:MSTR) slumped on Tuesday following the company's mixed third-quarter earnings report. At 3:30 Tuesday afternoon, the stock was down about 15%.

So what: MicroStategy reported quarterly revenue of $129.5 million, down 14% year-over-year and about $8 million shy of the average analyst estimate. Revenue from product licenses and subscription services slumped 15% year-over-year to $34.1 million, while product support revenue declined by 5% to $71.4 million. Other services revenue declined 33% to $24.1 million. According to the company, currency headwinds had a negative impact on revenues.

While revenue came up short of expectations, the company reported higher-than-expected earnings. EPS came in at $2.06, up from a net loss of $0.07 during the third quarter of 2014 and $0.10 better than analysts were expecting. The earnings beat was the result of a 40% year-over-year decrease in operating expenses, driven by a restructuring effort last year. The company had 1,939 employees at the end of the third quarter, down from 3,125 one year ago.

Now what: MicroStrategy has had trouble growing revenue for a few years now, and while cost cuts are boosting profits in the short term, they're not a long-term solution. The company faces a tremendous amount of competition in the enterprise analytics market, including both tech giants and smaller competitors. The drastic headcount reduction, which includes cutting R&D staff by more than half and reducing sales and marketing staff by nearly 40% over the past year, is also likely weighing on sales.

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