Karlovic, the second seed, was stunned by Argentina's Maximo Gonzalez 3-6, 6-3, 6-4; while Ljubicic pulled out of his scheduled match against another compatriot, Roko Karanusic, because of a back ailment.
"I had treatment for three hours last night and then started treatment again this morning," Ljubicic told reporters. "We did everything possible and explored all possible solutions but unfortunately to recover in one day was too much."
Elsewhere, Russian Igor Andreev, the No. 4 seed, topped Spain's Daniel Gimeno-Traver 6-2, 7-6 (7-3); and Argentina's Guillermo Canas outlasted Serbian Boris Pashanski 6-7 (3-7), 6-3, 7-5.
In Friday's quarterfinals, top-seeded Fernando Verdasco of Spain plays German Mischa Zverev; third-seeded Carlos Moya of Spain meets seventh-seeded Fabio Fognini of Italy; Pashanski meets Karanusic; and Andreev plays Canas.