Revenue growth remains steady at 10.0% year-over-year, though operating margins are limited to 10.5% due to substantial sales and marketing expenditures.
| Sales/Revenue | 361.86M | 331.68M | 285.38M | 252.15M | 214.42M | 174.23M | 129.06M | 87.27M | 50.49M |
| Revenue Growth % | 13.59% | 16.22% | 13.18% | 17.6% | 23.07% | 35% | 47.89% | 72.82% | - |
| Cost of Goods Sold | 97.51M | 91.06M | 81.62M | 73.55M | 61.49M | 50.83M | 37.69M | 24.25M | 13.03M |
| COGS % of Revenue | - | 27.46% | 28.6% | 29.17% | 28.68% | 29.17% | 29.2% | 27.79% | 25.81% |
| Gross Profit | 264.36M | 240.62M | 203.77M | 178.61M | 152.93M | 123.41M | 91.37M | 63.02M | 37.46M |
| Gross Margin % | 73.05% | 72.54% | 71.4% | 70.83% | 71.32% | 70.83% | 70.8% | 72.21% | 74.19% |
| Gross Profit Growth % | - | 18.08% | 14.09% | 16.79% | 23.92% | 35.06% | 44.99% | 68.21% | - |
| Operating Expenses | 236.79M | 220.81M | 195.47M | 174.45M | 142.93M | 120.89M | 93.14M | 67.48M | 43.16M |
| OpEx % of Revenue | - | 66.57% | 68.49% | 69.18% | 66.66% | 69.39% | 72.17% | 77.33% | 85.48% |
| Selling, General & Admin | 45.99M | 41.92M | 38.53M | 31.13M | 24.24M | 18.03M | 13.75M | 9.51M | 5.45M |
| SG&A % of Revenue | - | 12.64% | 13.5% | 12.35% | 11.31% | 10.35% | 10.65% | 10.9% | 10.78% |
| Research & Development | 56.33M | 53.09M | 45.57M | 38.79M | 29.48M | 23.98M | 18.37M | 15.12M | 10.34M |
| R&D % of Revenue | - | 16.01% | 15.97% | 15.38% | 13.75% | 13.77% | 14.23% | 17.33% | 20.48% |
| Other Operating Expenses | 4M | 125.81M | 111.37M | 104.53M | 89.21M | 78.88M | 61.02M | 42.85M | 27.38M |
| Operating Income | 27.56M | 19.8M | 8.29M | 15.52M | 10M | 2.51M | -1.77M | -4.46M | -5.7M |
| Operating Margin % | 7.62% | 5.97% | 2.91% | 6.15% | 4.66% | 1.44% | -1.37% | -5.12% | -11.28% |
| Operating Income Growth % | - | 138.71% | -46.54% | 55.21% | 297.97% | 241.92% | 60.36% | 21.64% | - |
| EBITDA | 51.73M | 43.7M | 30.28M | 35.06M | 24.41M | 14.41M | 6.8M | 1.09M | -3.07M |
| EBITDA Margin % | 14.3% | 13.18% | 10.61% | 13.9% | 11.38% | 8.27% | 5.27% | 1.25% | -6.07% |
| EBITDA Growth % | 25.31% | 44.35% | -13.64% | 43.65% | 69.38% | 111.83% | 522.32% | 135.64% | - |
| D&A (Non-Cash Add-back) | 24.17M | 23.9M | 21.98M | 19.54M | 14.41M | 11.9M | 8.57M | 5.56M | 2.63M |
| EBIT | 17.21M | 0 | 0 | 0 | 0 | 0 | -1.77M | -4.46M | -5.7M |
| Net Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | -341K | -510K | -2.41M | 2.56M |
| Other Income/Expense | 78K | 316K | 175K | 231K | 262K | 341K | 510K | 2.41M | -2.56M |
| Pretax Income | 27.64M | 20.12M | 8.47M | 15.75M | 10.26M | 2.85M | -1.26M | -2.06M | -8.25M |
| Pretax Margin % | 7.64% | 6.07% | 2.97% | 6.25% | 4.78% | 1.64% | -0.98% | -2.36% | -16.35% |
| Income Tax | 7.62M | 5.8M | 1.26M | 2.99M | 262K | 0 | 0 | 0 | 0 |
| Effective Tax Rate % | 27.57% | 28.84% | 14.83% | 18.99% | 2.55% | 0% | 0% | 0% | 0% |
| Net Income | 20.02M | 14.31M | 7.21M | 12.76M | 23.68M | 2.91M | -1.26M | -2.06M | -8.25M |
| Net Margin % | 5.53% | 4.32% | 2.53% | 5.06% | 11.04% | 1.67% | -0.98% | -2.36% | -16.35% |
| Net Income Growth % | 65.41% | 98.43% | -43.45% | -46.13% | 712.59% | 331.27% | 38.72% | 75.09% | - |
| Net Income (Continuing) | 20.02M | 14.31M | 7.21M | 12.76M | 23.68M | 2.91M | -1.26M | -2.06M | -8.25M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 0.60 | 0.44 | 0.23 | 0.41 | 0.76 | 0.10 | -0.04 | -0.07 | -0.88 |
| EPS Growth % | 58.65% | 91.3% | -43.9% | -46.05% | 681.09% | 318.16% | 39.48% | 91.63% | - |
| EPS (Basic) | - | 0.45 | 0.23 | 0.42 | 0.78 | 0.10 | -0.04 | -0.07 | -0.88 |
| Diluted Shares Outstanding | 33.26M | 32.84M | 31.36M | 31M | 31.04M | 29.95M | 28.25M | 27.88M | 9.37M |
| Basic Shares Outstanding | 32.08M | 31.62M | 30.73M | 30.39M | 30.34M | 28.77M | 28.25M | 27.88M | 9.37M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - |
High customer acquisition costs
As indicated by historical financial data, Constant Contact has maintained a steady revenue growth trajectory, achieving a 10.0% year-over-year increase by 2015Q3, which suggests the company is successfully capturing market share despite the presence of larger, more diversified competitors in the SMB marketing automation space.
The consistent top-line growth appears to be driven by the company's ability to retain its core user base while expanding its service offerings. Investors should monitor whether this growth remains durable as vertical-specific platforms continue to integrate native marketing tools that could potentially erode the company's addressable market.
Based on reported income statements, Constant Contact has sustained a robust gross margin profile, hovering around 72.5% as of 2015Q3, which reflects the inherent scalability of its subscription-based software model and effective management of cloud hosting and message delivery infrastructure costs over the observed period.
This margin stability suggests that the company possesses a degree of pricing power within its niche, likely supported by high switching costs for non-technical SMB users. However, the lack of significant margin expansion implies that the cost of maintaining high deliverability and support remains a persistent, non-negligible operational burden.
According to quarterly filings, the company's operating margin has fluctuated significantly, reaching 10.5% in 2015Q3, which highlights a persistent challenge in scaling operating income faster than the substantial sales and marketing expenditures required to acquire and retain small business customers in a saturated market environment.
The tight spread between gross and operating margins suggests that the company is currently prioritizing aggressive customer acquisition over immediate bottom-line profitability. This strategy warrants further investigation into whether the lifetime value of these acquired customers will eventually justify the high upfront marketing spend currently depressing operating margins.
As reported in financial statements, the company consistently utilized stock-based compensation, with figures reaching $4.4 million in 2015Q3, which suggests that reported net income may be partially inflated by non-cash expenses that dilute shareholder value and mask the true underlying cash-generating capability of the core business.
Investors should carefully evaluate the impact of these recurring non-cash charges on the quality of earnings, as they represent a significant portion of the net income reported in several quarters. The reliance on equity-based incentives may indicate a management focus on talent retention that comes at a direct cost to the bottom-line performance.
Based on an analysis of the income statement, the company's narrow operating margin of 5.97% leaves little room for error, suggesting that any increase in customer churn or a rise in acquisition costs could rapidly deteriorate profitability in the face of intensifying competition from integrated platforms.
Short-term observers might argue that the company's reliance on a single-product focus makes it vulnerable to broader ecosystem players who can bundle marketing tools at lower costs. The current financial structure appears fragile, and any failure to maintain high retention rates could lead to a significant contraction in operating performance.
Quick answers to the most common questions about buying CTCT stock.
For fiscal year 2014, Constant Contact, Inc. (CTCT) reported total revenue of $331.7M. This represents a 556.9% increase compared to $50.5M in 2007.
Constant Contact, Inc. (CTCT) is profitable, generating $14.3M in net income for the fiscal year ending 2014 with a net profit margin of 4.3%.
Constant Contact, Inc. (CTCT) reported an operating income of $19.8M, resulting in an operating profit margin of 6.0%. This margin reflects the operational efficiency of the business before interest and taxes.
Constant Contact, Inc. (CTCT) generated $240.6M in gross profit for the year, representing a gross profit margin of 72.5%. This demonstrates the company's core pricing power and production efficiency.