[August 07, 2012]

Single Touch Systems Reports Third Quarter Fiscal Results

Single Touch Systems Inc. (OTC BB: SITO), a technology based mobile media solutions provider that enables retailers, advertisers and brands to easily connect with customers through its patented technologies, reported results for its fiscal third quarter ended June 30, 2012.

Q3 FY 2012 Operational Update

• (May 24, 2012) New Patent issued by the United States Patent and Trademark Office for its "Searching for Mobile Content" technology. The patent permits data transfer between existing and upgraded mobile devices, allowing a new phone to contact an old phone to transfer applications between the two devices;
• (June 14, 2012) Signed first Software-as-a-Service (SaaS) agreement with integrated advertising agency Hero Media Group, whereby Single Touch will enable Hero Media to leverage its Web-based interface for mobile campaign management;
• (June 29, 2012) Agreed to license its Abbreviated Dial Code patents to Mobile Direct Response (MDR), a digital marketing and advertising firm, and is formalizing the terms. An abbreviated dial code call is placed by dialing the #, ##, * or ** symbols on the handset with an alphanumeric code associated with the advertiser or brand, then pressing the send button;
• (July 26, 2012) A settlement conference has been scheduled for August 27, 2012 in its patent infringement lawsuit against Zoove Corporation.

For the fiscal third quarter ended June 30, 2012, revenue increased approximately 37% to $1.59 million, compared to revenue of $1.15 million for the same period in 2011. The increase in revenue, all of which was organic, was directly attributable to continuing adoption of Single Touch's mobile platform, new programs to support existing client relationships and additional programs for new client relationships.

For the third fiscal quarter ended June 30, 2012, total quarterly customer message volume increased 37.1% compared to the same period last year. These year-over-year increases demonstrate the continued growth of the Company's core messaging platform.

"In addition to the continued strength of our core messaging activity, we made significant strides within the advertising community, establishing our first agency relationships during the quarter. In the first instance, we struck an agreement to develop a white-label SaaS solution around our proprietary mobile messaging platform; and in the second, we agreed to license our proprietary Abbreviated Dial Code technology," said James Orsini, Chief Executive Officer of Single Touch. "In addition to further validating our technology, these relationships represent new opportunities for revenue generation; we expect to begin to realize initial revenue contribution from these relationships by the end of 2012."

Mr. Orsini concluded, "The other noteworthy achievement during the quarter was the progress we made on the legal front. Our efforts to defend, protect and monetize our intellectual property portfolio continue to gain positive momentum as our claims work their way through the legal system. Along with our legal representatives, we remain confident in the validity of our claims and our ability to monetize these important assets."

For the 9 months ended June 30, 2012, gross margins increased to 54% as compared to 52% for the same prior year period.

Loss from operations for the quarter ended June 30, 2012, excluding stock-based compensation and depreciation and amortization (adjusted EBITDA) decreased to ($356,336) compared to a loss of ($457,581) for the same quarter last year. The reduction in the loss from operations during the quarter reflects higher revenues coupled with a reduction in General & Administrative expenses, mostly attributable to decreased professional fees and consulting expenses.

Although Adjusted EBITDA is not a measure in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company uses Adjusted EBITDA to evaluate the performance of its underlying business and believes it is a useful tool for that purpose. Please refer to "Reconciliation of Non-GAAP Measures" below.

The net loss for the quarter ended June 30, 2012 was ($1.0) million compared to a loss of ($1.3) million for the same period last year. The decrease in net loss during the quarter was primarily attributable to higher wireless applications revenue, coupled with lower general and administrative expenses.

As of June 30, 2012, Single Touch had cash and cash equivalents of $0.6 million compared to $0.5 million at the beginning of the fiscal year. Cash used in operations during the nine-month period was $1.7 million. Additionally, the Company had CapEx of $0.5 million during the quarter.

-Tables to Follow-

About Single Touch Systems Inc.

Single Touch Systems Inc. (SITO) is a technology based mobile solutions provider serving businesses, advertisers and brands. Through patented technologies and a modular, adaptable platform, SITO's multi-channel messaging gateway enables marketers to reach consumers on all types of connected devices, with information that engages interest, drives transactions and strengthens relationships and loyalty.

For more information about Single Touch Systems Inc visit: www.singletouch.net.

Safe Harbor Statement

This news release contains forward-looking statements that involve risks and uncertainties and reflect Single Touch's judgment as of the date of this release. These statements include those regarding strategy, growth and future operations. Actual events or results may differ from Single Touch's expectations. The risks and uncertainties include reliance on brand owners and wireless carriers, the possible need for additional capital, as well as other risks identified in Single Touch's most recent Form 10-K filing with the SEC. Single Touch disclaims any intent or obligation to update these forward-looking statements beyond the date of this press release, except as may be required by law.

* Adjustments for each of these items represents the elimination of stock-based compensation included within the GAAP expense amount to arrive at the Adjusted EBITDA amount.

* Adjustments for each of these items represents the elimination of stock-based compensation included within the GAAP expense amount to arrive at the Adjusted EBITDA amount.

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