Though Rally Software (RALY) beat FQ1 estimates and posted nearly in-line revenue, it expects FQ2 revenue of $20.2M-$20.8M (just 2%-5% Y/Y growth) and FY15 (ends Jan. '15) revenue of $87M-$90M (17%-21% growth), below consensus estimates of $22.5M and $92.3M.
EPS guidance is a little better: Rally expects FQ2 EPS of -$0.39 to -$0.42 and FY15 EPS of -$1.31 to -$1.36 vs. consensus estimates of -$0.42 and -$1.57.
The provider of cloud-based software development tools says it "struggled slightly in selling new seats to new customers," as large growth in quote-carrying headcount caused "some execution delay."
Canaccord's recent remarks about the growing pains often faced by enterprise software companies (in reference to Splunk) appear relevant.
GAAP opex +27% Y/Y to $22.6M. Paid seats +6% Q/Q and +23% Y/Y to ~226K.