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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.

Timothy Green has no position in any stocks mentioned. The Motley Fool recommends MicroStrategy. 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.