By market open, shares had dropped 28.3% to $8.76.
Over its second quarter, the company expects revenue between $20.2 million and $20.8 million, representing 2% to 5% growth over the year-ago quarter. Analysts surveyed by Yahoo! Finance had expected revenue of $22.46 million.
For its full year ending January, Rally Software anticipates revenue of $87 million to $90 million, a 17% to 21% year-over-year increase. Analysts had anticipated $116.63 million.
The software developer also missed analysts' estimates in its recently-ended first quarter. The company generated $19.4 million in sales, under consensus of $19.6 million.