New Relic Inc.‘s stock was taken to the cleaners again today after it posted second-quarter earnings that fell some way short of Wall Street’s expectations.

The company reported a loss before certain costs such as stock compensation of 7 cents per share on revenue of $166.1 million. Wall Street had been reckoning a profit of 2 cents per share on revenue of $163.4 million.

New Relic sells application and DevOps monitoring tools that help developers detect problems with their software applications. It’s basically a monitoring service for apps that runs in real time, helping DevOps teams gain a full understanding of any issues that could affect the performance of their apps.

The company announced earlier this year that it was repackaging the various tools it sells into just three categories to encourage broader adoption. At the same time, it introduced a simpler pricing model that it said would translate to lower costs for its users. New Relic told investors shortly afterwards that it was expecting to see a “near-term revenue hit” due to these changes to its business model, and its stock suffered as a result.

But that near-term hit is looking like it could drag on for longer than some investors had hoped. For the third quarter, New Relic said it’s expecting a loss ranging from 13 to 17 cents per share on revenue of $163 million to $165 million. Wall Street had forecast a third-quarter loss of just 2 cents per share, and they were hoping for more revenue this time too, at $167.3 million.

Some of New Relic’s investors have clearly had enough, as the company’s stock fell more than 11% after-hours.

New Relic founder and Chief Executive Lew Cirne (pictured) tried his best to put a positive spin on things, noting that early response to its new pricing model has been “encouraging” and that a new generation of individual developers are adopting its revamped free offering.

“While customer experimentation with the new product and pricing model slowed sales cycles in the quarter, on average, customers that are renewing on the new pricing model are growing their commitment to New Relic by double digits,” Cirne said.

Constellation Research Inc. analyst Holger Mueller told SiliconANGLE that pricing scheme transitions are always tricky to handle, but he said that in the long run the new model should benefit the company and prove to be more successful.

“New Relic’s quest to break even has taken a pause,” Mueller said. “Now it comes down to the company’s management to deliver on expectations and manage costs better for the coming quarter.”

Photo: SiliconANGLE