Financial Performance - Fourth quarter revenues were $39.9 million, down 15.4% from $47.1 million in Q4 2024[6] - Net income for Q4 2025 was $2.2 million, or $0.30 per share, compared to a net loss of $2.4 million, or $0.33 per share, in the prior year[8] - Full year revenues in 2025 were $159.6 million, down 13.9% from $185.2 million in 2024[9] - Operating income for 2025 was $0.4 million, an 81.6% decrease from $2.1 million in 2024[9] - Positive EBITDA of $1.0 million in Q4 2025 compared to negative EBITDA of $0.3 million in Q4 2024[7] - Adjusted EBITDA for the year ended December 31, 2025 was $6,898,000, down from $13,987,000 in 2024, representing a decrease of about 50.7%[23] - Revenue for the year ended December 31, 2025 was $159,570,000, a decline of approximately 13.8% from $185,242,000 in 2024[24] - The adjusted operating margin for Q4 2025 was 0.2%, down from 4.6% in Q4 2024[23] - Contribution margin for the year ended December 31, 2025 was $4,858,000, compared to $9,646,000 in 2024, indicating a decrease of about 49.7%[24] Segment Performance - Customer Care segment revenue was $13.7 million, accounting for 34% of total revenue, down 9% year-over-year[7] - Fulfillment & Logistics Services segment revenue was $17.3 million, representing 44% of total revenue, down 17% year-over-year[7] - Revenue Solutions segment revenue was $8.9 million, a decrease of 22% compared to the prior year quarter[7] Cash and Assets - The company ended 2025 with a cash balance of $5.6 million, down from $9.9 million at the end of 2024, with zero debt[10] - Total assets decreased from $101,782,000 in 2024 to $91,826,000 in 2025, a decline of approximately 9.3%[22] - Cash and cash equivalents decreased from $9,934,000 in 2024 to $5,587,000 in 2025, a decline of approximately 43.5%[22] - The company’s pension liabilities for qualified plans decreased from $5,445,000 in 2024 to $4,106,000 in 2025, a reduction of about 24.6%[22] Liabilities and Expenses - Total current liabilities decreased from $26,734,000 in 2024 to $24,249,000 in 2025, a reduction of approximately 9.2%[22] - The company reported restructuring expenses of $1,782,000 for the year ended December 31, 2025, compared to $2,402,000 in 2024[24] Future Outlook - The company aims to deepen customer relationships to drive profitable growth and long-term value for shareholders in 2026[3]

Revenue and Client Relationships - Harte Hanks generated 10.5% of total revenues from its largest client in 2025, with the largest 25 clients accounting for 68.3% of total revenue[37] - The company’s revenue streams tend to be higher in the fourth quarter due to increased activity in the retail and healthcare verticals[45] - Approximately 9.5% of the company's revenues were derived from operations outside the United States, primarily in Europe and Asia, indicating potential for international expansion[77] Financial Performance - Operating revenue for the year ended December 31, 2025, was $159.6 million, a decrease of $25.6 million or 13.9% compared to $185.2 million in 2024[132] - Revenue in the Revenue Solutions segment declined by $15.2 million or 30.2% to $35.1 million; Fulfillment & Logistics Services revenue decreased by $7.6 million or 9.3% to $74.4 million; Customer Care segment revenue fell by $2.9 million or 5.4% to $50.1 million[133] - Operating expenses for 2025 were $159.2 million, down $24.0 million or 13.1% from $183.1 million in 2024[134] - The net loss for 2025 was $811, a decrease of 97.3% compared to a net loss of $30,297 in 2024[132] - Diluted EPS from operations for 2025 was $(0.11), down 97.4% from $(4.15) in 2024[132] Cost Management and Restructuring - The company expects restructuring cost reductions from "Project Elevate" to be approximately $16.0 million during 2024 through 2025, with total restructuring charges of $1.8 million and $2.4 million incurred in 2025 and 2024, respectively[36] - The company is implementing "Project Elevate" to optimize its cost structure, but may not achieve all identified savings, which could adversely affect financial results[70] - Labor costs decreased by $12.9 million or 13.8% due to optimized operations and reduced salary and wages[134] Operational Strategy and Services - Harte Hanks operates in six service categories: data, marketing, sales, customer care, fulfillment, and logistics, addressing growth and customer experience challenges for B2B and B2C businesses[21] - The company leverages a proprietary DataView tool, providing a 360-degree customer view with over 1,500 attributes for accurate predictive marketing[27] - Harte Hanks' fulfillment and logistics services support enterprise-level supply chain management and eCommerce scalability, enhancing customer experience and optimizing cost efficiencies[29] - The company provides a flexible outsourcing marketing operations solution known as "Marketing as a Service," which integrates various marketing functions[27] Technology and Innovation - The proprietary logistics technology, Allink®360, optimizes freight costs and delivery timelines, ensuring on-time and within-budget shipments[39] - The company has developed proprietary software, including NexTOUCH and Allink 360, which are integral to its business operations[54] - The company is positioned to help clients navigate challenges in a cookie-restricted digital environment, enhancing awareness, demand, and sales for products[24] Human Capital and Compliance - The company’s human capital strategy emphasizes training and talent development, with a commitment to providing various learning opportunities[56] - The company is subject to numerous local, national, and international laws regulating direct marketing activities, including privacy and data security[47] - The company faces risks associated with compliance to evolving privacy and data protection regulations, which could increase operational costs and impact service offerings[84] Market Risks and Competition - The company faces intense competition in the B2B services industry, with significant risks related to client retention and market dynamics[62] - Competitors may have significantly greater financial resources, leading to pricing pressures that could negatively impact the company's margins and results of operations[65] - Reduced marketing budgets from clients due to economic conditions could lead to decreased demand for the company's products and services[69] Financial Liabilities and Risks - The company has approximately $23.0 million in unfunded pension liabilities as of December 31, 2025, which may impact future results of operations and cash flows[99] - Interest rate fluctuations could materially affect the company's cash flows and financial position, particularly regarding its Credit Facility[74] - Inflation has negatively impacted the company's financial condition, particularly through rising labor costs and service charges from third-party providers[75] Cybersecurity and Data Management - The company has experienced cybersecurity incidents in the past, and failure to prevent future breaches could lead to lawsuits, loss of customers, and reputational harm[90] - The company has implemented robust processes to manage cybersecurity risks, overseen by its Chief Security Officer and Risk Steering Committee[107] - The company relies heavily on data centers and telecommunications infrastructure, and any significant disruptions could materially affect its ability to provide services, resulting in loss of revenues and client confidence[89] Accounting and Financial Reporting - The financial statements were prepared in conformity with accounting principles generally accepted in the United States of America[214] - The company evaluated its internal control over financial reporting and concluded it was effective as of December 31, 2025[184] - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements[176] - The audit was conducted in accordance with PCAOB standards, ensuring the reliability of the financial statements[216]

Core Insights - Harte Hanks reported a positive EBITDA for FY 2025, indicating a focus on margin expansion and disciplined capital allocation to enhance shareholder value [2][4] Financial Performance - Total revenues for Q4 2025 were $39.9 million, a decrease of 15.4% from $47.1 million in Q4 2024 [2][8] - The company achieved a net income of $2.2 million, or $0.30 per share, compared to a net loss of $2.4 million, or $0.33 per share, in the prior-year quarter [3][8] - Full year revenues for 2025 were $159.6 million, down 13.9% from $185.2 million in 2024 [9] - The operating income for 2025 was $0.4 million, a significant decrease of 81.6% from $2.1 million in 2024 [9] Segment Performance - Customer Care segment generated $13.7 million in revenue, accounting for 34% of total revenue, with a decline of 9% year-over-year [5] - Fulfillment & Logistics Services segment reported $17.3 million in revenue, representing 44% of total revenue, down 17% compared to the prior year [6] - Revenue Solutions segment earned $8.9 million, or 22% of total revenue, with a decrease of 22% year-over-year [7] Cash Position and Debt - The company ended 2025 with a cash balance of $5.6 million, down from $9.9 million at the end of 2024, and had zero debt [5][10]

Revenue Performance - Revenue for the three months ended September 30, 2025, decreased by $8.1 million, or 17.0%, to $39.5 million compared to the same period in 2024, attributed to reductions across all three segments [110]. - For the nine months ended September 30, 2025, revenue decreased by $18.4 million, or 13.3%, to $119.7 million compared to the same period in 2024, due to decreased revenue in all segments [116]. - Marketing Services segment revenue decreased by $4.4 million, or 33.4%, to $8.826 million for the three months ended September 30, 2025, compared to $13.255 million in the prior year [127]. - Customer Care segment revenue decreased by $1.5 million, or 11.6%, to $11.553 million for the three months ended September 30, 2025, primarily due to timing fluctuations [130]. - Fulfillment & Logistics Services segment revenue decreased by $2.2 million, or 10.2%, to $19.141 million for the three months ended September 30, 2025, due to lower volume from existing customers [133]. Operating Income and Expenses - Operating income for the three months ended September 30, 2025, was $509,000, down 73.2% from $1.9 million in the same quarter of 2024 [109]. - Operating expenses for the three months ended September 30, 2025, were $39.0 million, a decrease of $6.7 million, or 14.7%, from $45.7 million in the prior year [111]. - Operating income for the Marketing Services segment decreased by $0.9 million, or 36.9%, to $1.535 million for the three months ended September 30, 2025 [128]. - Customer Care segment operating income decreased by $1.4 million, or 57.9%, to $1.037 million for the three months ended September 30, 2025 [131]. - Fulfillment & Logistics Services segment operating income increased by $0.6 million, or 57.4%, to $1.690 million for the three months ended September 30, 2025 [133]. - Operating expenses for the nine months ended September 30, 2025, were $119.2 million, a decrease of $15.3 million, or 11.3%, from $134.5 million in the prior year [117]. - Labor expenses for the nine months ended September 30, 2025, decreased by $10.7 million, or 15.2%, to $59.6 million due to adjustments in workforce aligned with revenue reductions [118]. Cash and Financing - Cash and cash equivalents were $6.5 million as of September 30, 2025, down from $9.9 million at December 31, 2024 [135]. - Net cash used in operating activities was $2.5 million for the nine months ended September 30, 2025, compared to $7.0 million for the same period in 2024 [137]. - The Company had the ability to borrow up to $24.0 million under its Credit Facility as of September 30, 2025 [146]. - The Credit Facility interest rate was 6.49% as of September 30, 2025, with a maturity date extended to June 30, 2028 [143]. Tax and Restructuring - The effective tax rate for the nine months ended September 30, 2025, was (329.8)%, a decrease of 352.6% compared to the same period in 2024, primarily due to income earned in foreign jurisdictions [122]. - Restructuring charges related to the business transformation for the three and nine months ended September 30, 2025, were $0.5 million and $1.5 million, respectively [107]. - The company expects reorganization savings from "Project Elevate" to be approximately $16.0 million from 2024 to 2026 [106]. - The company initiated "Project Elevate" to optimize operations and reinvest savings into sales, marketing, and technology [106].

Financial Performance - Revenue for Q3 2025 was $39.5 million, down from $47.6 million in Q3 2024, reflecting timing and program transitions [4] - Net loss for Q3 2025 was $2.3 million ($0.31 per diluted share), compared to net income of $0.1 million ($0.02 per diluted share) in Q3 2024 [4] - Operating income for Q3 2025 was $509,000, down from $1.90 million in Q3 2024, reflecting a decline of 73% [19] - The company reported a comprehensive loss of $2.49 million for Q3 2025, compared to a comprehensive income of $236,000 in Q3 2024 [19] Operating Expenses - Operating expenses decreased by 14.7% year-over-year to $39.0 million, compared to $45.7 million in Q3 2024 [4] - Adjusted operating margin for Q3 2025 was 3.0%, down from 6.5% in Q3 2024 [21] - The company incurred restructuring expenses of $538,000 in Q3 2025, compared to $836,000 in Q3 2024 [21] EBITDA - Adjusted EBITDA for Q3 2025 was $2.4 million, down from $4.1 million in Q3 2024 [4] - Adjusted EBITDA for Q3 2025 was $2.42 million, a decrease of 42% from $4.14 million in Q3 2024 [21] - The company expects positive EBITDA for full-year 2025, supported by ongoing cost reductions and operational efficiencies [6] Cash and Assets - The company ended Q3 2025 with $6.5 million in cash and cash equivalents and no outstanding debt [8] - Cash and cash equivalents decreased to $6.51 million as of September 30, 2025, from $9.93 million at the end of 2024 [20] - Total assets decreased to $92.71 million as of September 30, 2025, down from $101.78 million at the end of 2024 [20] - Total liabilities decreased to $72.83 million as of September 30, 2025, compared to $80.09 million at the end of 2024 [20] Revenue by Segment - Customer Care segment revenues were $11.6 million, an 11.6% decline from $13.1 million in Q3 2024 [12] - Marketing Services segment revenues were $8.8 million, reflecting a 33.4% decline from $13.3 million in Q3 2024 [12] - Fulfillment & Logistics Services segment revenues were $19.1 million, a 10.2% decrease from $21.3 million in Q3 2024 [12] Future Outlook - The partnership with Samsung Electronics America is expected to contribute to sequential improvement in Q4 and beyond [3]

Core Insights - Harte Hanks reported a net loss of $2.3 million for Q3 2025, compared to a net income of $0.1 million in Q3 2024, reflecting challenges in revenue generation and program transitions [4][6][13] - The company is optimistic about future growth, particularly in its Customer Care segment, bolstered by a new partnership with Samsung Electronics America [3][7][8] Financial Performance - Revenue for Q3 2025 was $39.5 million, down from $47.6 million in Q3 2024, attributed to timing and transitions in legacy customer contracts [4][6] - Operating expenses decreased by 14.7% year-over-year to $39.0 million, down from $45.7 million in Q3 2024, due to strategic cost improvements [4][6] - EBITDA for Q3 2025 was approximately $1.7 million, with Adjusted EBITDA at $2.4 million, compared to $2.9 million and $4.1 million in Q3 2024, respectively [4][6][13] Segment Performance - Customer Care segment revenues were $11.6 million, an 11.6% decline from $13.1 million in Q3 2024, with segment EBITDA at approximately $1.1 million [13] - Marketing Services segment revenues were $8.8 million, reflecting a 33.4% decline from $13.3 million in Q3 2024, with segment EBITDA at approximately $1.8 million [13] - Fulfillment & Logistics Services segment revenues were $19.1 million, a 10.2% decrease from $21.3 million in Q3 2024, but segment EBITDA improved to $2.3 million from $1.3 million in the prior year [13] Outlook and Strategy - The company expects positive EBITDA for the full year 2025, driven by ongoing cost reductions and operational efficiencies [6][8] - Management is focused on replenishing the business development pipeline with new client opportunities and expansions, anticipating improvements in Q4 2025 [6][8] - The partnership with Samsung is seen as a significant milestone, indicating a shift towards higher-value, technology-enabled service delivery [3][7] Balance Sheet and Liquidity - As of September 30, 2025, Harte Hanks had $6.5 million in cash and cash equivalents, with no outstanding debt and up to $24 million available under its credit facility [8][21] - The company amended its credit facility to extend maturity to June 30, 2028, enhancing its financial flexibility [4][8]

Core Insights - Harte Hanks has opened a new Customer Care center in Greenville, South Carolina, in collaboration with Samsung Electronics America [1] - This initiative is expected to create over 150 new jobs in the Greenville community [1] Company Overview - Harte Hanks is a leading global customer experience company with over 100 years of experience in connecting companies with their customers [1] - Samsung Electronics America is recognized for its advancements in mobile technologies, consumer electronics, home appliances, enterprise solutions, and innovative network systems [1] Economic Impact - The establishment of the Customer Care center will contribute positively to the local economy by providing employment opportunities [1]

Revenue Performance - Revenue for the three months ended June 30, 2025, decreased by $6.4 million, or 14.2%, to $38.6 million compared to the same period in 2024[108] - Revenue for the six months ended June 30, 2025, decreased by $10.3 million, or 11.4%, to $80.2 million compared to the same period in 2024[114] - The Marketing Services segment revenue decreased by $3.5 million, or 28.7%, for the three months ended June 30, 2025, due to customer turnover and reduced client spending[122] - Customer Care segment revenue for the three months ended June 30, 2025, decreased by $0.5 million, or 4.4%, compared to the same period in 2024, primarily due to timing fluctuations with specific programs[125] - Fulfillment & Logistics Services segment revenue decreased by $2.4 million, or 11.6%, for the three months ended June 30, 2025, primarily due to lower volume from existing customers[128] Operating Expenses - Operating expenses for the three months ended June 30, 2025, were $38.6 million, a decrease of $5.1 million, or 11.6%, from $43.7 million in the prior year[109] - Operating expenses for the six months ended June 30, 2025, were $80.2 million, a decrease of $8.5 million, or 9.6%, from $88.7 million in the prior year[115] - Labor expenses decreased by $6.9 million, or 15.0%, in the six months ended June 30, 2025, primarily due to adjustments in workforce in response to lower revenue[116] Net Loss and Income - The net loss for the three months ended June 30, 2025, was $335,000, compared to a net loss of $27.8 million in the same period of 2024[107] - Operating income for the Customer Care segment was $1.6 million for the three months ended June 30, 2025, down from $2.3 million in the same period in 2024, reflecting a decrease of $0.7 million due to higher technology costs[125] - Operating income for the Fulfillment & Logistics Services segment decreased by $0.4 million, or 30.9%, for the three months ended June 30, 2025, primarily due to lower revenue[128] Cash Flow and Liquidity - Cash and cash equivalents were $4.8 million as of June 30, 2025, down from $9.9 million at December 31, 2024[130] - Net cash used in operating activities for the six months ended June 30, 2025, was $5.7 million, an increase of $1.6 million compared to $4.1 million for the same period in 2024[132] - Net cash used in investing activities decreased to $0.3 million for the six months ended June 30, 2025, from $1.2 million in the same period in 2024[133] - The Company had the ability to borrow $24.0 million under its Credit Facility as of June 30, 2025, with no outstanding borrowings at that date[141] - The Credit Facility interest rate was 6.67% as of June 30, 2025, with a maturity extended to June 30, 2028[138] Restructuring and Savings - Project Elevate is expected to generate approximately $16.0 million in reorganization savings from 2024 to 2026[104] - Restructuring charges related to the business transformation effort were $0.1 million for the three months ended June 30, 2025, and $1.0 million for the six months ended June 30, 2025[105] Dividends - The Company did not pay any dividends in the three months ended June 30, 2025, and 2024[142] Tax Rate - The effective tax rate for the six months ended June 30, 2025, was 28.7%, an increase of 4.2% from the same period in 2024[119]

Financial Performance - Total revenues for Q2 2025 were $38.6 million, down 14.2% compared to $45.0 million in Q2 2024[5] - Operating income was $34.0 thousand compared to $1.4 million in the prior year quarter[5] - Net loss was $0.3 million, or $0.05 per basic and diluted share, compared to a net loss of $27.8 million, or $3.84 per share, in the prior year quarter[5] - EBITDA for Q2 2025 was $1.1 million compared to $2.4 million in the same period in the prior year[5] - Adjusted EBITDA for the three months ended June 30, 2025, was $1,468,000, down from $3,561,000 in the same period of 2024, indicating a decrease of approximately 58.7%[17] - Contribution margin for the total operations was $1,099,000 for Q2 2025, down from $2,395,000 in Q2 2024, a decrease of about 54.2%[18] - Adjusted operating margin for the three months ended June 30, 2025, was 1.0%, down from 5.6% in the same period of 2024[17] Segment Performance - Customer Care segment generated $11.8 million in revenue, accounting for 31% of total revenue, with a decline of 4.4% year-over-year[5] - Fulfillment & Logistics Services segment revenue was $18.1 million, representing 47% of total revenue, down 11.6% compared to the prior year[5] - Marketing Services segment revenue was $8.7 million, down 28.7% year-over-year, with EBITDA totaling $1.4 million[5] - Revenue for the Fulfillment & Marketing Services segment decreased from $12,152,000 in Q2 2024 to $8,662,000 in Q2 2025, a decline of about 28.5%[18] Cash and Assets - Harte Hanks ended Q2 2025 with $4.8 million in cash and cash equivalents and $24.0 million of capacity on its credit line[4] - The cash balance increased to $9.9 million by July 31, 2025, reflecting a $0.9 million increase since March 31, 2025[4] - Cash and cash equivalents decreased from $9,934,000 in December 2024 to $4,757,000 in June 2025, a decline of approximately 52.1%[16] - Total assets decreased from $101,782,000 in December 2024 to $95,015,000 in June 2025, a decline of approximately 6.8%[16] - Total current liabilities decreased from $35,137,000 in December 2024 to $31,219,000 in June 2025, a reduction of approximately 11.2%[16] - Total stockholders' equity increased from $21,689,000 in December 2024 to $22,240,000 in June 2025, an increase of approximately 2.5%[16] Restructuring and Charges - The company recorded $0.1 million in restructuring charges in Q2 2025 related to the execution of Project Elevate[5] - Net loss for the three months ended June 30, 2025, was $335,000, compared to a net loss of $27,834,000 for the same period in 2024, representing a significant improvement[17] - Operating income for the three months ended June 30, 2025, was $34,000, compared to $1,373,000 in the same period of 2024, reflecting a significant decrease[17]

Revenue Performance - Revenue for the three months ended March 31, 2025, was $41.6 million, a decrease of $3.9 million, or 8.6%, compared to $45.4 million in the same period of 2024[102]. - Marketing Services segment revenue decreased by $4.8 million, or 35.3%, to $8.8 million, primarily due to customer loss and reduced demand[103]. - Customer Care segment revenue increased by $0.6 million, or 4.5%, to $13.0 million, driven by increased volume from new customers[112]. - Fulfillment & Logistics Services segment revenue increased by $0.4 million, or 1.8%, to $19.8 million, attributed to higher volume from existing customers[113]. Operating Expenses - Operating expenses for the three months ended March 31, 2025, were $41.6 million, a decrease of $3.5 million, or 7.7%, compared to $45.1 million in the same period of 2024[104]. - Labor expenses decreased by $3.7 million, or 15.7%, primarily due to workforce reductions in the Marketing Services segment[104]. - Restructuring charges for the three months ended March 31, 2025, were $0.8 million, comparable to $0.9 million in the prior year quarter[106]. Cash Flow and Financing - Net cash used in operating activities for the three months ended March 31, 2025, was $0.8 million, a significant decrease from $5.7 million in the same period of 2024[116]. - As of March 31, 2025, the company had cash and cash equivalents of $9.0 million and the ability to borrow an additional $24.0 million under its Credit Facility[114]. - The Company entered into a three-year, $25.0 million asset-based revolving credit facility, extended to June 30, 2025[120]. - The Credit Facility allows for loans up to $25.0 million or the amount available under a borrowing base, with $3.0 million available for letters of credit[121]. - The interest rate on the Credit Facility is variable, currently at 6.67% as of March 31, 2025[122]. - As of March 31, 2025, the Company had no borrowings under the Credit Facility but had letters of credit outstanding totaling $1.0 million[125]. - The Company has the ability to borrow $24.0 million under the Credit Facility as of March 31, 2025[126]. Shareholder Returns and Concerns - No dividends were paid during the three months ended March 31, 2025 and 2024[127]. - A share repurchase program was approved for $6.5 million, but no stock was repurchased during the three months ended March 31, 2025 and 2024[128]. - The Company believes there are no conditions that raise substantial doubt about its ability to continue as a going concern for the next twelve months[129]. - The Company has not engaged in any off-balance sheet financing activities as of March 31, 2025[125]. - The Credit Facility contains covenants that restrict the Company's ability to incur additional debt and engage in certain corporate actions[124].