As writers who publish our thoughts publicly, I think it's vitally important to hold ourselves accountable. In that spirit, this article is devoted to a stock I hyped early and often, only to see it continually tank: Rosetta Stone (NYSE: RST).

Competing against products offered by CBS' (NYSE: CBS) Pimsleur, Disney's (NYSE: DIS) Publishing Worldwide, and McGraw Hill (NYSE: MHP), Rosetta's Version 4 Totale has struggled to gain traction, especially in the U.S.

But with its most recent earnings announcement -- which beat analyst estimates by a whopping $0.23 -- there are new reasons to be hopeful ... as well as new reasons to view the company with a skeptical eye. Here's a quick rundown of how its three different segments performed.

U.S. consumers

  • The bleeding finally stopped for this segment, with revenue down only 5% year on year.
  • The rebranding of its products with new ads is in place as promised, and it will now benefit from the popularity of Apple's iPad, since the Rosetta Stone app is up and running.
  • U.S. consumers, which recently account for the "problem area" of Rosetta's sales, now make up a reduced 55% of total revenue.

International consumers

  • Offices will be in place and running in both China and Brazil by year's end.
  • Revenue was up an impressive 58% year on year, showing continued strength.
  • This segment now accounts for 20% of total revenue for the company.

Institutional customers

  • Growth has hit a roadblock here, as revenue was actually down by 1% year on year.
  • The company lost its exclusive contract with the U.S. Army. The Army will be replacing Rosetta Stone with an internally developed service.
  • Institutional buyers -- companies, governments, and schools -- now make up 20% of total revenue.

A mixed bag
Other than the impressive earnings beat, there were other positive signs for the company. For the first six months of the year, revenue from subscriptions -- which will be vital for the company moving forward -- accounted for 26.9% of total revenue. That's more than 10% higher than last year.

At the same time, the company has lost $9.3 million over the past year. And while revenue was up 10% overall compared to 2010's second quarter, accounts receivable were up 35% sequentially. Rosetta's being more lenient with customers' payment terms at the exact moment when it can't afford to.

Learning a new language is hard!
After digesting all this information, I guess I'm right back where I started. I'm not buying, but I'm not selling, either. I'm very interested to see what kind of traction Version 4 Totale has in K-12 districts, and those numbers should be available in the next earnings release. If you'd like to be in the loop and follow all of the latest on this company, I encourage you to add Rosetta Stone to your watchlist.