The $924,000 in net income amounted to 5 cents a share. Excluding charges for stock-based compensation, profit came to 11 cents a share, down from 19 cents in the same period last year.
Analysts surveyed by Thomson Financial anticipated 12 cents a share.
Revenue edged down 3 percent, to $29.2 million, barely missing analyst expectations of $30.9 million.
Interactive Intelligence's explanation of the downturn was a familiar refrain from the second quarter: Existing customers slowed buying in order to ride out the weak economy.
Also like the prior quarter, new customers flocked to the company in order to cut their costs. Unfortunately for Interactive, there weren't enough new customers to compensate for the pull backs by existing customers.
Indeed, it was the second quarter in a row in which Interactive profit took a shellacking. Second-quarter net income fell to $845,000 from $2.4 million a year earlier.
Interactive also disclosed yesterday it had repurchased 353,000 shares of its stock in the third quarter at a cost of $3.4 million. In late July, directors approved buying as much as $10 million of the stock over a 12-month period in order to signal confidence in the long-term future of the company.
The stock fell 8 cents this morning, to $6.39 a share, the lowest since early 2006.