Coronavirus Update: Our team is here to help our clients and readers navigate these difficult times. Visit our Resources page now »

Skip to Main Content

About Rosetta Stone Ltd.

Rosetta Stone holds itself out as the key to common language -- at least to understanding another language. The provides language-learning software via digital download, online subscriptions, and CD-ROM. It's Rosetta Stone Language Library combines images, text, and audio, without the traditional translation or grammar explanations, to mimic the way children learn their native languages. With consumer and institutional customers in more than 150 countries Rosetta Stone offers software for about 30 languages. Its products are available through direct sales channels and at selected retailers such as, Barnes & Noble, and Staples.


Rosetta Stone operates through three segments, North America Consumer, Rest of World Consumer, and Global Enterprise & Education. The consumer segments derive revenues from individuals and retail partners. The North America Consumer segment is its largest, accounting for about 59% of sales. Rest of the World Consumers account for 9% of sales. The Institutional segment, which consists of sales to educational institutions, government agencies, and corporations worldwide, accounts for about a third of revenues.

Geographic Reach

While US residents have never been know for their willingness to learn foreign languages, they generate 81% of Rosetta Stone's revenue. The company makes about 80% of sales in the US. It has international sales offices in Brazil and the UK. One of the benefits of its language-learning approach is that products don't require translation into the user's native language, potentially increasing the efficiency of global expansion.

Sales and Marketing

With the activities of retail kiosks -- located mostly in malls -- not translating to adequate sales, Rosetta Stone closed the kiosks in the US and Europe in 2014. Most of the company's sales come through direct channels such as call centers and websites. It also targets the home school market with promotional campaigns at trade shows, seminars, and direct mailings. A direct sales force works on accounts with k-12 schools, universities, federal government, not-for-profit organizations, and companies. Rosetta Stone spiked its ad budget in 2014 with an additional $16 million to reach about $80 million in advertising.

Financial Performance

For the second straight year revenue declined at Rosetta Stone in 2014 as the company posted its biggest loss. Revenue notched down 1% to $262 million from $264.6 million in 2013. Rosetta Stone's loss widened to $73 million in 2014, from $16 million in 2013. Consumer sales fell in the US and in other markets. A 41% increase in sales to companies and schools shored up overall revenue.

The company's net loss was attributed to an impairment charge on goodwill in its consumer segments totaling about $20 million. Sales and marketing expenses were $27 million higher in 2014 from 2013.

Cash flow from operations dropped to $6.7 million in 2014 from $8.1 million in 2013.


Although it still holds a leading position in its industry, Rosetta Stone has seen its US consumer bookings decline since 2009 due to the troubled global economy, increased competition, and an evolving media and product delivery environment. To address its challenges, the company is looking not only at experimenting with pricing and marketing, but also delivering more of its offerings online, in both desktop and mobile applications.

Rosetta Stone is challenged by changing consumer tastes. Sales of its CD-ROM products dropped 13% 2014 as consumer prefer to listen to language lessons on mobile devices. Subscriptions for such services rose 16% in 2014, but couldn't outweigh the CD drop. The company has opened technology offices in Austin and San Francisco to help it develop new models for delivery.

The company is trying new tacks to boost sales. In promoting itself an outlet for learning a foreign language (such as traveling to another country), Rosetta Stone has new relationship with travel authority Rick Steves. Steves produces original content about travel destinations for the Rosetta Stone website and its social media channels. Meanwhile, the company sponsors Steves' weekly National Public Radio program and his podcast.

Rosetta Stone changed its operations in Korea and Japan to a partner model from wholly owned offices, closing its office in Japan and streamlining activities in Korea.

As sales and income has lagged, Rosetta Stone in mid-2015 began to look at options for the company including a sale.

Mergers and Acquisitions

In another direction, Rosetta Stone is positioning its product as a brain fitness booster. In 2014 it acquired Vivity Labs, which develops brain fitness games. Its flagship product is Fit Brains. Vivity brings a set of applications for use on mobile, the Web, and social media. The purchase price was about $12 million.

The completed another acquisition in 2014 that extends its cloud-based products. The purchase of Tell Me More brings online language learning subscriptions and learning services to Rosetta Stone. Tell Me More's suite of Software as a Service language apps have been aimed at corporate and educational customers.

Rosetta Stone Ltd.

135 W Market St
Harrisonburg, VA 22801-3710
Phone: 1 (540) 432-6166

Firm Stats

Employer Type: Privately Owned
Head of Global Communications: Michelle Alvarez
Vice President Marketing: Andy Mead
Vice President of Information Technology: Mark Moseley
Employees (This Location): 400
Employees (All Locations): 1,140

Major Office Locations

Harrisonburg, VA

Other Locations

Boston, MA
Harrisonburg, VA
Mount Crawford, VA