Exhibit 99.1

Sonic Foundry Reports Third Quarter Fiscal 2013 Results

MADISON, Wis.--(BUSINESS WIRE)--July 25, 2013--Sonic Foundry, Inc. (NASDAQ: SOFO), the trusted market leader for video management and academic, enterprise and event webcasting, today announced financial results for its fiscal 2013 third quarter ended June 30, 2013.

GAAP results include:

• Revenues of $8.0 million, up 3 percent from the fiscal third quarter of 2012
• Product and other revenue of $4.2 million, up 1 percent from the fiscal third quarter of 2012
• Services revenue of $3.8 million, up 6 percent from $3.6 million in the third quarter of fiscal 2012
  • Support and maintenance revenue of $2.0 million, an increase of 9 percent over the third quarter of fiscal 2012
  • Event services and hosting revenue of $1.8 million, an increase of 3 percent over the third quarter of fiscal 2012
• Unearned revenue balance of $6.6 million, compared to $5.7 million at June 30, 2012
• GAAP net income of $40 thousand or $0.01 per basic share, compared to net income of $559 thousand or $0.14 per basic share in the fiscal third quarter of 2012
• Gross margin of $5.6 million or 70 percent compared to $5.6 million or 72 percent for the fiscal third quarter of 2012
• Cash balance of $3.1 million at June 30, 2013
• Equity investment in earnings from Mediasite KK of $11 thousand related to our current 26% ownership interest in our Japanese partner

Non-GAAP results include:

• Billings of $8.5 million, an increase of 2 percent over the third quarter of fiscal 2012
• Product and other billings of $4.4 million, up 4 percent from the third quarter of fiscal 2012
• Services billings of $4.1 million is consistent with the third quarter of fiscal 2012
  • Support and maintenance billings of $2.5 million, an increase of 3 percent over the third quarter of fiscal 2012
  • Event services and hosting billings of $1.6 million, a decrease of 6 percent over the third quarter of fiscal 2012
• Non-GAAP net income of $1.0 million or $0.26 per basic share compared to non-GAAP net income of $1.6 million or $0.41 per basic share in the third quarter of fiscal 2012

Non-GAAP net income primarily excludes all non-cash related expenses of stock compensation, depreciation, amortization, provision for income taxes and includes the cash impact of billings not recognized as revenue. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

At June 30, 2013, $6.6 million of revenue was deferred, of which the company expects to realize approximately $2.4 million in the quarter ending September 30, 2013. Revenue from service contracts is recognized over the life of the contract. Services revenue includes Mediasite customer support contracts as well as training, installation, rental, event and content hosting services.

Gross margin decreased from 72 percent in the third quarter of fiscal 2012 to 70 percent in the third quarter of fiscal 2013 due to a greater volume of discounted upgrade units for customers whose product had reached the end of hardware eligibility.

International product and service billings accounted for 27 percent of overall billings, compared to 24 percent in the third quarter of fiscal 2012. During the third quarter of this fiscal year, 80 percent of billings were to preexisting customers, compared to 85 percent in third quarter fiscal 2012, with 63 percent to education customers and 27 percent to corporate.

As previously reported in June 2013, the Company’s Board of Directors authorized a $1 million common stock repurchase program. No repurchases have been made pursuant to the program during the quarter.

“The ability to scale the creation, management and security of video assets is increasingly a requirement for higher education and corporations. In the third quarter we continued to build on our new product-line momentum by strategically expanding our sales team to pursue new markets, and add a concentrated focus to building our existing customer deployments. While still in the early stages, this emphasis on reaching a broader spectrum of organizations and deepening customer relationships has already created tremendous opportunity for Sonic Foundry in the corporate and higher education markets,” said Gary Weis, chief executive officer of Sonic Foundry. “Our large opportunities in the Middle East continue to develop as campuses under construction near completion. While we were optimistic at the beginning of the year that we would begin shipping solutions for these opportunities in the third quarter of fiscal 2013, we now believe that the majority of shipments will occur in the first half of our fiscal year 2014. We are confident that we will exceed the current year guidance of 13% growth in billings for our base business.”

Sonic Foundry will host a corporate webcast today for analysts and investors to discuss its fiscal 2013 third quarter results at 3:30 p.m. CT / 4:30 p.m. ET. It will use its patented rich media communications system, Mediasite, to webcast the presentation for both live and on-demand viewing. To access the presentation, register at www.sonicfoundry.com/earnings. An archive of the webcast will be available for 90 days.

EXPLANATION OF NON-GAAP MEASURES

To supplement our financial results presented on a GAAP basis, we use a measure of non-GAAP net income or loss in our financial presentation, which excludes certain non-cash costs and includes certain cash billings not recognized as revenue for GAAP purposes. Our non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the factors management uses in planning for and forecasting future periods. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. Our non-GAAP financial measures reflect adjustments based on the following items:

• Billings not recorded as revenue: We have included the cash effect of billings not recorded as revenue, which are deferred for GAAP purposes, in arriving at non-GAAP net income or loss. Our services are typically billed and collected in advance of providing the service which requires minimal cost to perform in the future. Billings are a better indicator of customer activity and cash flow than revenue is, in management’s opinion, and is therefore used by management as a key operational indicator.
• Depreciation and amortization of intangible and other assets expenses: We have excluded the effect of depreciation and amortization of assets from our non-GAAP net income or loss. Depreciation and amortization of asset costs is a non-cash expense that includes the periodic write-off of tooling, product design and other assets that contributed to revenues earned during the periods presented and will contribute to future period revenues as well.
• Non-cash provision for income taxes: We have excluded the impact of the provision for income taxes from our non-GAAP net income or loss. The provision for income taxes is associated with the difference in treatment of goodwill which is not expensed for GAAP purposes but is amortized over a fifteen year life for Federal income tax purposes. The result is a non-cash expense and liability that will never be paid.
• Stock-based compensation expenses: We maintain an employee qualified stock option plan under which we grant options to acquire common stock to eligible employees. We also maintain an employee stock purchase plan under which common stock may be issued to eligible employees at a reduced price. Stock-based compensation expenses are recorded for these plans in accordance with FASB Accounting Standards Codification subtopic 718, Compensation-Stock Compensation. Stock-based compensation expense is a non-cash expense. As a result, we have excluded the effect of stock-based compensation expenses from our non-GAAP net income or loss.

About Sonic Foundry®, Inc.

Sonic Foundry (NASDAQ: SOFO) is the trusted market leader for enterprise webcasting solutions, providing video content management and distribution for education, business and government. Powered by the patented Mediasite webcasting platform and webcast services of Mediasite Events, the company empowers people to advance how they share knowledge online, using video webcasts to bridge time and distance, enhance learning outcomes and improve performance.

Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for Sonic Foundry's products, its ability to succeed in capturing significant revenues from media services and/or systems, the effect of new competitors in its market, integration of acquired business and other risk factors identified from time to time in its filings with the Securities and Exchange Commission.

CONTACT:
Sonic Foundry, Inc.
For investor inquiries:
investor@sonicfoundry.com
or
For media relations:
Tammy Jackson, 608.770.9052
tammy@sonicfoundry.com