Though Rosetta Stone (NYSE: RST) has yet to announce when earnings will be released, it will happen soon. I have written in favor of Rosetta twice, and founding Fool David Gardner has also made it one of his hot stocks to watch.

I still believe in the product and its stock, but I want to share some thoughts on what we should -- and shouldn't -- expect to see from fourth-quarter earnings.

Reasons to be excited
The most recent quarter represented the first full one where Rosetta's Version 4 Totale was available on the market. The big difference between Version 4 and past iterations is that it has a subscription component to it, which can provide a steady stream of revenue. Below are some areas where we should expect to see continued growth.

International buyers: What's the No. 1 language that Rosetta customers want to learn? The correct answer: English. Because many of us are located stateside, we overlook the enormous potential for Rosetta as a teacher of English abroad. Rosetta has barely scratched the surface: International revenue only accounts for 17% of total revenue. But it has been increasing by leaps and bounds, averaging a blistering 176% increase per quarter over the past year! Look for this trend to continue.

Consumers: During the third quarter of 2010, individual consumers accounted for 70% of total revenue. During the third quarter, revenue from consumers dipped, which was blamed largely on advertising problems. Keep an eye on out to see if growth resumes during the fourth quarter. If other areas are going well, it should.

Institutional buyers (not including schools): Several corporations use Rosetta to help their employees connect with non-English speaking customers. Institutional revenue has averaged 25% growth -- year over year -- over the past four quarters. Numbers may come in slightly below this benchmark this time around -- more on that below.

A big reason to be cautious
As a teacher myself for the past five years, I believe that schools represent the largest bloc of potential customers for Rosetta. If you're investing in the education sector, the last 12 months haven't been pretty. For-profit colleges like Strayer (Nasdaq: STRA) and Apollo Group (Nasdaq: APOL) are now feeling a pinch in the economic downturn -- from both declining enrollment and potential cuts in government aid.

Rosetta is actually poised to profit from the situation. You'll never hear me argue that kids would be better off with a computer teaching them than a talented adult. But facts are facts: With schools in a budget crunch across the country, and foreign language teachers hard to come by, Rosetta offers an enticing option.

Recently, the Ridgewood School District in Newark was forced to eliminate three foreign-language teaching positions -- saving the district $200,000. The cost for Rosetta's software, which all of the students can use, was just one-fourth the price. I've been using the Latin American Spanish version for the past five months. Though it may not be able to cultivate the cultural awareness a classroom teacher can, I've been impressed with the final product -- both as a customer and educator.

So why am I calling for caution? Version 4 was released in September, well after schools had set their budgets. The timing couldn't have been worse from an investor's standpoint. Most districts won't be settling their 2011-2012 budgets until mid-2011. This means that we won't be able to gauge Version 4's traction in this important market until the third-quarter results are announced in November.

This will test investor's patience, but in the end, I still believe it will be worth the wait.

Fool contributor Brian Stoffel owns shares of Rosetta Stone. Rosetta Stone is a Motley Fool Stock Advisor pick. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.