Rosetta Stone Inc (RST) SEC Filing 10-K Annual report for the fiscal year ending Monday, December 31, 2018

Exhibit 99.1

Rosetta Stone Inc. Reports Fourth Quarter and Full Year 2018 Results

Q4 2018 Revenue stable vs. prior year for first quarter since 2014, led by Lexia revenue growth of 20%

ARLINGTON, VA — March 6, 2019

Fourth Quarter 2018 Highlights

“2018 was a transformative year for Rosetta Stone, marked by exceptional growth in our Literacy business, re-imaged products in our Language business and the completion of the transition of our company to subscription sales,” said John Hass, Chairman and Chief Executive Officer.  “The result is a more balanced, and better positioned Rosetta Stone, with a future clearly focused on leveraging our two biggest assets - our growing presence in U.S. K12 schools and our iconic brand.”

Mr. Hass continued, “The fourth quarter of 2018 was the inflection point we have been working towards. As we look ahead, we are excited to continue our transformation into a global leader in digital learning solutions that served over five million paid learners in 2018.  We expect our focus will result in a company with accelerating growth and expanding margins that will become more apparent as we move through 2019.”

Fourth Quarter 2018 Review

Revenue: Total revenue in the fourth quarter was $44.6 million, compared to $44.8 million in the fourth quarter 2017, as growth in the Company’s Literacy Segment was offset by a decline in the Company’s Consumer Language segment, largely the result of the transition from perpetual product sales to subscription-based sales. Revenue before Fit Brains, which was decommissioned mid-2018, grew slightly year-over-year in the fourth quarter for the first time since 2014.

Revenue at Lexia increased 20% year-over-year to $14.5 million. Lexia's sustained revenue growth reflects strong demand for its product portfolio, high retention rates, and increased effectiveness of the Company's direct sales force. Literacy bookings grew 13% over the prior year period reflecting a consistently high renewal rate of 100% in the current period. It also reflected a continuing trend of both new and renewal bookings moving to the third calendar quarter which is the beginning of the school operating year.

E&E Language segment revenue decreased 3% year-over-year to $14.6 million.  E&E language bookings decreased $1.6 million, or 9% year-over-year, with lower bookings from our reseller channel.

Consumer Language segment revenue declined 13% year-over-year to $15.5 million. The decline was driven by the SaaS transition across all channels in the segment. Subscribers grew 32% year-over-year to 487,000 at December 31, 2018. Subscriber growth was largely driven by the inclusion of lower priced, shorter initial duration subscriptions in the Company’s portfolio. Subscriptions with a duration of one year or less totaled 44% of the subscription unit mix at the end of the fourth quarter 2018, up from 34% at the end of the same quarter last year.  Consumer Language bookings before prior-year SOURCENEXT and Fit Brains, which has been decommissioned, totaled $17.2 million in Q4 2018, down from $18.6 million in Q4 2017.