U.S. video compression software manufacturer, DivX, Inc., reported a drop of 50 percent in its profit after factoring in higher expenses than anticipated and forecast that its earnings for Q1 will be below that anticipated.

This sent DivX’s stock down about 25 percent. DivX reported that its revenue increased 47 percent to $24.5 million and reported net income of $3.7 million, compared to $7.4 million for the same period one year ago.

San Diego, California-based DivX said that its operating expenses were $25.8 million, nearly double that anticipated, due to increased expenses in general and administrative overhead and sales costs.