Constant Contact Continues to Add Customers, Increase Cash Flow But Loses $1 Million

Constant Contact, the email-marketing firm, reported revenues of $28.1 million for the three months ended March 31, 2009, up roughly $10 million, or 55 percent, from the same period in 2008.

Gail Goodman, CEO of Constant Contact

The company reported a net accounting loss of $1 million for the quarter versus net income of roughly $338,000 for the same 2008 period. The loss may have been a strategic move as the company spends to gain market share. Adjusted earnings before taxes, depreciation, and amortization (EBITDA), which is a rough approximation of operating cash flow, was $1.7 million for the quarter, compared to $804,000 for the same quarter in 2008.

The company reported 280,900 email marketing customers as of March 31, and “over 20,000” ListenUp! survey customers. This equates to 300,900 accounts between the two products and, at average monthly revenue for the quarter of $9.4 million, roughly $31 per account per month. The 280,900 email marketing customers for March 31 compares to roughly 186.000 customers for the same time in 2008, an increase of some 51 percent.

Constant Contact is a pioneering email marketing company. It was founded in 1998 and is located in Waltham, Massachusetts, a suburb of Boston. The company’s common shares are publicly traded (NASDAQ: CTCT), having completed its initial public offering in 2007. It joins a handful of public companies that offer products exclusively via the Internet to mainly small and midsize firms. Other such notable companies with publicly traded shares are Google (NSDQ: GOOG), Yahoo! (NSDQ: YHOO), NetSuite (NYSE: N), Rackspace Hosting (NYSE: RAX) and eBay (NSDQ: EBAY), among others.

Roughly 28 million common shares of Constant Contact are publicly traded. With a stock price at May 27, 2009 of $16.71 per share, this equates to a market capitalization of approximately $472 million. Google, by comparison, has market capitalization of roughly $128 billion. NetSuite’s market capitalization is roughly $712 million. Gail Goodman, Constant Contact’s longtime CEO, is among the company’s largest shareholders. She owns 873,057 shares, according to recent SEC filings, which values her stake in the company at roughly $14.6 million.

Constant Contact’s share price has fluctuated over the past twelve months, from a high of $21.24 on Sept. 18, 2008 to a low of $10.31 on October 28, 2008.