Sonic Foundry tops $1 million in revenue

source: Sonic Foundry

MADISON—Sonic Foundry Inc., a Madison-based media solutions company, announced Tuesday that in third-quarter 2004 they have for the first time exceeded $1 million in sales. This reflects the dramatic upturn the company has taken in growth strategies, having increased its revenue by 250% from last year, and is a good indicator that the company is expected to be profitable next year.
Third-quarter revenues more than tripled to $1.2 million, compared $343,000 for the same period last year. Losses were reported at $1.6 million for the quarter, up slightly from last quarter’s $1.2 million, and are a sharp contrast to the 2003 third quarter’s $4.5 million. Gross margins improved to 62 percent from last quarter’s 54 percent and even further from the 2003 third quarter’s 43 percent.
At one time the company had 450 employees and had $50 million in accumulated losses. In July 2003, the company sold its line of audio and video-editing products to Sony Pictures for $19 million.
Sonic has been exploring new directions and is putting a major effort into its main product, Mediasite Live. It has tripled its sales force to fifteen employees since December and at least twenty-five other employees have been added between the Madison headquarters and Pittsburgh research and development operation.
“Within a year we have turned the corner in transforming Sonic Foundry into a fast-paced media technology company that is pioneering a brand new market,” Sonic Foundry CEO Rimas Buinevicius said. “The key image is that it’s a sales process which continues to grow by putting more bodies on the floor.”
Sonic has been building on a base of reliable customers, and has succeeded in recently adding several high-profile clients. The Mediasite technology is primarily useable for distance education, and over fifty colleges—including Northeastern University and the University of Maryland—have added the technology over the past year. High-profile names in the industry have also found a market for the communications system, and it has been adopted so far by Proctor and Gamble, Lockheed Martin,and the Mayo Clinic.
A partnership with Pittsburgh-based BXVideo is also beginning to generate success, as Mediasite can be used to store and record presentations for delivery overseas.
“We spend a lot of time working with customers to get past the technological barriers which come up,” Buinevicius said. “Their comments and purchasing behavior are our best indication of the strides we are making toward realizing our vision.”