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Constant Contact Set for Strong End to 2014
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Constant Contact Set for Strong End to 2014

New financials from marketing software provider Constant Contact point to impressive year-on-year growth in revenue for Q3 and beyond.

Overall takings for the company have been pinpointed at $83.5 million for Q3, signalling an increase of 15.9% compared to the $72 million earned during the same period last year. Adjusted EBITDA has risen 23.6% year on year to hit $18.1 million while cash flow from operations has lifted from $13.7 million to $18.4 million.

The growth can be explained partly by consistent lifts in new customers since Q3 2013. Based in Waltham, Massachusetts, the company recruited 45,000 gross new unique customers in the third quarter of last year before adding two sets of 50,000 in Q2 and Q3 of this year respectively.

Constant Contact specialises in delivering various online marketing solutions for small and medium-sized businesses, with these solutions used by approximately 625,000 customers.

Moving forward

As well as continuous growth in users, Constant Contact’s ability to hold onto the subscribers it enlists could also explain why the company is managing to rise its earnings year on year.

The group’s monthly retention rate of customers was frozen at an average of 97.8% for the third quarter of 2014.

Capital expenditure is at a relatively low $7.0 million, down from $9.2 million for 2013, in a period where the company’s gross margin rose slightly from 71.6% to 72.2%. The widespread increases have certainly made CEO Gail Goodman look forward to a bright few months ahead.

“We delivered another strong quarter, punctuated by accelerating revenue growth, expanding profitability and an increase in additions,” said Goodman, who has seen huge change since starting her tenure in 1999.

Back then, the company was solely focused on driving customer engagement through email. It now focuses on driving interactions through surveys, social media, online listings, email and more via an all-in-one solution for creating campaigns. 

Goodman added: “We are on track to deliver on our goal of sustained long-term revenue growth greater than 20% and expanding profitability margins greater than 20%.”

Looking ahead

Constant Contact’s future, as touched on by Goodman, is looking just as promising as the present, according to a business outlook for Q4 2014. 

This suggests revenue between $87.4 million - $87.8 million, which would be a quarter-on-quarter rise even in the worst case scenario. There will be the odd decrease from the heady heights of Q3, though, as adjusted EBITDA scales down to between $17.9 million - $18.4 million. 

Still, the efforts from previous quarters will ensure that Constant Contact manages an impressive set of figures for the full year 2014, which is expected to reap earnings of between $333.1 million - $331.4 million.

Richard Towey

Richard Towey

Richard serves as head of content at PerformanceIN. After many years spent covering developments from the automotive, sports, travel and finance sectors, he eventually turned his full attention to reporting on stories from the fast-evolving world of digital marketing. Richard now heads up the editorial team at PerformanceIN: the performance marketing industry's leading publication.  

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