03 May Sonic Foundry reports quarterly loss, higher Mediasite sales
Madison, Wis. – Rich media communications may be improving the way educational institutions and businesses communicate and collaborate, but Sonic Foundry, a provider of automated rich media communications technology, still lost nearly $1 million in the second quarter of fiscal year 2006.
The company, which still expects to reach the break-even point this year, reported a net loss of $947,000 or $0.03 per share for the quarter. Although $255,000 of the loss was attributed to the adoption of FAS (Fixed-Asset Accounting), the net loss for the second quarter is comparable to the net loss of $941,000 reported in the second quarter of FY 2005.
The loss occurred despite increasing sales of the company’s core Mediasite product. Sonic Foundry reported revenues of $2.95 million, an increase of 43 percent from $2.07 million reported for the second quarter of FY 2005. Mediasite product and service billings increased 69 percent, to $3.27 million.
In the most recent quarter, 51 percent of sales were made to higher education customers, 27 percent to corporate clients, and 20 percent to government agencies. The company extended its customer base to 541 customers, up 70 percent from the prior year, including 183 colleges and universities. Recent private-sector customer additions include Landstar Systems, Symantec, and Time, Inc.
Thanks in part to a broader emphasis on enterprise sales, which use a greater percentage of professional services, second quarter service revenue grew 268 percent to $652,000, up from $177,000 in the second quarter of fiscal 2005. The company’s service fees now represent 22 percent of total revenues, compared to nine percent for the same period last year.
Sonic Foundry has been attempting to build market share by expanding its sales and marketing reach, and the company believes it now is achieving greater sales efficiency and pipeline expansion. The company said increased billings and expense controls already are contributing to an improving cash flow situation, and that it still expects to reach the operating cash flow break-even point during fiscal 2006, and to have sufficient cash to reach break-even operations.