Rosetta Stone Inc. Reports First Quarter 2018 Results

Rosetta Stone Inc (NYSE:RST), a world leader in technology based learning solutions announced financial results for the first quarter ended March 31, 2018. The total revenue of the company was $42.8 million which is 10 percent down from $47.7 million in the year-ago period.

As quoted in the press release:

The first quarter net loss totaled $6.4 million, or $(0.29) per diluted share. In the year-ago period, the Company had net income of $0.5 million, or $0.02 per diluted share, which included a pre-tax restructuring charge of $0.8 million.

First Quarter 2018 Overview

• Revenue at Lexia, the Company’s Literacy segment, grew 22% year-over-year to a record high $12.4 million.
• The Consumer language segment completed its transition to a subscription model with 6% of new unit sales in the quarter coming from CDs and digital downloads. As expected, revenue in the Consumer Language segment fell in the quarter as a result of the transition to a full subscription model in which revenue is recognized ratably over the subscription period. In the first quarter of 2017, 58% of Consumer Language new unit sales were from CDs and download products for which revenues were primarily recognized at the time of sale.
• Total operating expenses slightly increased 1% year-over-year, to $39.0 million in the first quarter 2018. In the year-ago period, total operating expenses of $38.6 million included a pre-tax restructuring charge of $0.8 million.
• The Company had zero debt outstanding and ended the quarter with cash and cash equivalents of $39.2 million at March 31, 2018.

“Results this quarter were favorable to guidance, representing a solid beginning to the year,” said John Hass, Chairman, President and Chief Executive Officer. “The quarter was a critical milestone for Rosetta Stone, as we ended the sale of CD-language products and moved to a full subscription model in our Consumer Language segment. This completes the transition of all of our businesses to subscription sales and positions us for more sustainable and consistent growth in the future.”

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