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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
       Form 10-K
      (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    001-33707
      CONSTANT CONTACT,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

04-3285398(State or other jurisdiction of
    
    incorporation or organization)

(I.R.S. Employer
    Identification No.)Reservoir Place, 1601 Trapelo Road, Suite 329

02451Waltham, Massachusetts

(Zip code)(Address of principal executive
    offices)   (781) 472-8100
    (Registrants telephone number, including area code)
    Securities registered pursuant to Section 12(b) of the
    Act:
 Title of Class

Name of Exchange on Which RegisteredCommon Stock, $.01 par value

NASDAQ Global Market   Securities registered pursuant to Section 12(g) of the
    Act:
 None.
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer þ
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      Form 10-K.




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##### 





CONSTANT
    CONTACT, INC.
  INDEX
   
 PageNumberPART IITEM 1.


BUSINESS


2ITEM 1A.


RISK FACTORS


14ITEM 1B.


UNRESOLVED STAFF COMMENTS


28ITEM 2.


PROPERTIES


28ITEM 3.


LEGAL PROCEEDINGS


29ITEM 4.


SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS


29PART IIITEM 5.


MARKET FOR REGISTRANTS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES


29ITEM 6.


SELECTED FINANCIAL DATA


31ITEM 7.


MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


32ITEM 7A.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


42ITEM 8.


FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


43ITEM 9.


CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


66ITEM 9A.


CONTROLS AND PROCEDURES


66ITEM 9B.


OTHER INFORMATION


66PART IIIITEM 10.


DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


67ITEM 11.


EXECUTIVE COMPENSATION


67ITEM 12.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


67ITEM 13.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
    AND DIRECTOR INDEPENDENCE


67ITEM 14.


PRINCIPAL ACCOUNTANT FEES AND SERVICES


67PART IVITEM 15.


EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES


67SIGNATURES


68Ex-10.19 2008 Executive Incentive PlanEx-10.20 Master-Service Agreement dated July 19, 2007Ex-21.1 Subsidiaries of the CompanyEx-23.1 Consent of PricewaterhouseCoopers LLPEx-23.2 Consent of Vitale, Caturano & Company, Ltd.Ex-31.1 Section 302 Certification of CEOEx-31.2 Section 302 Certification of CFOEx-32 Section 906 Certification of CEO & CFO




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Forward-Looking
    Statements
  Form 10-K Form 10-K Form 10-K
  Form 10-K




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PART I  ITEM 1.
    BUSINESS  Overview
         2




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(781) 472-8100. www.constantcontact.com. www.sec.gov
  Industry
    Background
  Benefits
    of Email Marketing
    
    Targeted.  Email marketing enables
    organizations to tailor messages to specific audiences and
    enables recipients to respond through links to websites.
    Timely.  The cycle from concept through design
    and execution for email marketing is much shorter than direct
    mail because there is no need to print and mail. Reducing cycle
    time allows organizations to rapidly respond to market
    conditions and opportunities.
    Efficient.  Email marketing combines low cost
    with measurable responses leading to an attractive return on
    investment.  Constant
    Contact Market Opportunity
    non-profits 4-digit
    
    Unfamiliar with Email Marketing.  Many small
    organizations are not familiar with the benefits of email
    marketing and do not understand how to effectively build a
    permission-based contact list, develop an effective email
    marketing campaign and measure its effectiveness.
    Lack of Technical Expertise.  Small
    organizations often do not have the technical expertise to
    implement email marketing software or to design and execute
    effective email marketing campaigns. 3




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
    Limited Budgets.  Small organizations typically
    have small marketing budgets. They generally cannot afford to
    hire in-house staff or engage an outside marketing agency to
    develop, execute and evaluate an email marketing campaign.    
    General Email Applications.  General email
    applications and services such as Microsoft
    Outlook®,
    America
    Online®
    or Microsoft
    Hotmail®
    are generally designed for one-to-one emails. They do not easily
    incorporate the formatting, graphics, and links necessary to
    produce professional-looking email marketing campaigns. They
    also limit the number of recipients per email and do not have
    the reporting capabilities to allow users to evaluate the
    effectiveness of their email marketing campaigns. Finally, they
    do not provide regulatory compliance tools to assist the sender
    in complying with anti-spam requirements.
    Enterprise Service Providers.  Enterprise
    service providers, such as Epsilon Data Management LLC (a
    subsidiary of Alliance Data Systems Corporation), ExactTarget,
    Inc., Responsys Inc. and Silverpop Systems Inc. focus on large
    organizations with sizeable marketing budgets. These providers
    offer sophisticated, Internet-based marketing services and tools
    with professional and customized execution and reporting at a
    price and scale that is far beyond the scope of most small
    organizations.    Our
    Solution
    
    Easy.  We enable customers to easily create
    great looking email marketing campaigns without prior expertise
    in marketing, graphic design or Hyper Text Markup Language, or
    HTML. Our product includes over 300 customizable templates
    intelligently organized to streamline creation of a
    professional-looking message. We also provide customers with
    tools that make it easy for them to import, build and manage
    contact lists and to monitor delivery and response. We further
    enhance our product with unlimited free customer support and
    daily webinars covering topics ranging from a general product
    tour to email marketing best practices.
    Fast.  Because our product is accessed through
    the web, customers only need access to a computer and the
    Internet to begin using it to create and send their first email
    campaign. A customer can typically create and send their first
    campaign in less than one hour. Once a customer has loaded their
    contact list, created and sent their first campaign, our product
    becomes even faster to use as this information is stored and can
    be easily accessed for future use.
    Affordable.  We offer our email marketing
    product on a subscription basis, eliminating the up-front
    license fee associated with traditional software. Instead, we
    encourage potential customers to try our product without charge
    for a 60-day
    period. After the free trial, customers can use our product for
    a subscription fee of as low as $15 per month with the amount of
    the fee increasing based on the number of unique contacts or
    email addresses in a customers contact list. We provide
    discounted pricing for both prepayments and non-profits. For the
    year ended December 31, 2007, the average monthly amount
    that we charged a customer for our email marketing solution
    alone was approximately $33. In addition, in 2007, our average
    monthly total revenue per email marketing customer, including
    all sources of revenue, was $33.63.
    Effective.  Our product provides our customers
    with an effective way to reach their customers, clients and
    members. According to data measured by ReturnPath, Inc.
    approximately 98% of our customers emails were delivered
    past any spam filters or controls to their target email inboxes
    in the United States 4




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during 2007. We have made significant investments in systems and
    processes to reduce the number of our customers emails
    that are blocked as possible spam. In addition, to help ensure
    that customers emails are delivered, we have developed
    relationships with leading Internet Service Providers, or ISPs.  
    Measurable.  Our email marketing campaign
    reports provide customers with information and data regarding
    each campaign. In addition to receiving aggregate data on email
    receipt, open rates and click- through rates per campaign, our
    customers can identify on an individual basis which contacts
    received and opened an email and which links in the email they
    clicked on. We also provide comparable metrics for our overall
    customer base. This feedback permits customers to alter the
    content or timing of their campaigns to capitalize on aspects of
    prior campaigns that were positively received by their
    constituents.  Business
    Strengths
    
    Focus on Small Organizations.  We have
    maintained a consistent and exclusive focus on small
    organizations, which has enabled us to design a full customer
    experience tuned to their unique needs. Through the website
    experience, product usability, affordable price point and
    personal touch of our communications consultants and support
    representatives, we work to ensure that small organizations feel
    that we are committed to their success.
    Efficient Customer Acquisition Model.  We
    believe that we have developed an efficient customer acquisition
    model that generates an attractive return on our sales and
    marketing expenditures. We utilize a variety of marketing
    channels to acquire new customers including online advertising,
    partner relationships, radio advertising, online and in-person
    seminars and brand awareness. In 2007, our cost of email
    marketing customer acquisition, which we define as our total
    sales and marketing expense divided by the gross number of email
    marketing customers added during the year, was approximately
    $255 per email marketing customer. For 2007, our average monthly
    total revenue per email marketing customer, including all
    sources of revenue, was $33.63, implying payback on a revenue
    basis in less than one year.
    High Degree of Recurring Revenue.  We benefit
    from a high level of customer loyalty. From January 2005
    through December 2007, at least 97.4% of customers in a given
    month have continued to use our email marketing product in the
    following month. We believe this represents a high level of
    customer retention, particularly given the transient nature of
    many small organizations. These customers provide us with a
    significant base of recurring revenue and generate new customer
    referrals.
    Consistent Commitment to Customer Service.  We
    seek to provide our customers with a high level of support in
    order to encourage trials and ongoing usage of our product. We
    conduct online webinars and in-person events to educate
    potential customers about the benefits of email marketing. In
    addition, our communications consultants seek to contact all new
    U.S. and Canadian based trial customers to help them launch
    an initial campaign and address any questions or concerns. As a
    result, we believe we have a highly satisfied customer base.
    Software-as-a-Service Delivery.  We provide our
    product on an on-demand basis, meaning that our customers can
    access and use our product through a standard web browser. This
    enables our customers to rapidly begin using our product with
    few up-front costs and limited technical expertise. It also
    enables us to serve additional customers with little incremental
    expense and to deploy new applications and upgrades quickly and
    efficiently to our existing customers. 5




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Our
    Products and Services
  Email
    Marketing
    
    Campaign Creation Wizard.  This comprehensive,
    easy-to-use interface enables our customers to create and edit
    email campaigns. Through intuitive controls, customers can
    readily change colors, fonts, borders and backgrounds and insert
    images and logos to help ensure that their emails appear
    polished and professional. The wizard operates on a
    what-you-see-is-what-you-get basis whereby a
    customer can move paragraphs and blocks of content within the
    draft email quickly and view the message from the perspective of
    intended recipients.
    Professionally Developed Templates.  These
    pre-designed email message forms help customers quickly create
    attractive and professional campaigns. Over 300 templates
    provide ideas about the kinds of emails customers can send,
    including newsletters, event invitations, business letters,
    promotions and announcements, and demonstrate, through the use
    of color and format, the creativity and professionalism of a
    potential campaign. Our advanced editing functionality enables
    customers to easily modify the templates. We also provide
    templates designed to appeal to specific vertical markets. For
    example, we offer a restaurant template that includes a
    pre-formatted menu section.
    Contact List Management.  These tools help
    customers build and manage their email contact lists. Our
    contact list building tools include file and spreadsheet import
    functionality as well as software plug-ins to import contact
    lists maintained in Microsofts
    Outlook®
    and Outlook
    Express®
    and Intuits
    QuickBooks®.
    We also provide HTML programming code for a Join My
    Mailing List box that can be included on the
    customers web site and used to gather new contacts. Our
    list management tools enable a customer to target or segment
    contacts for all or specific campaigns and monitor email
    addresses to which previous campaigns could not be delivered. In
    addition to their constituents names and email addresses,
    several additional customizable fields are available for the
    purposes of personalizing email messages. Unsubscribe requests
    are automatically processed to help ensure ongoing compliance
    with government regulations and email marketing best practices.
    Email Tracking and Reporting.  These features
    enable our customers to review and analyze the overall
    effectiveness of a campaign by tracking and reporting aggregate
    information including how many emails were delivered, how many
    were opened, and which links were clicked on. These features
    also enable our customers to identify on an individual basis
    which contacts received an email, opened an email and clicked on
    particular links within the message.
    Email Delivery Management.  These tools are
    incorporated throughout our product and are designed to maintain
    our high deliverability rates. Some of these tools are readily
    apparent to our customers, such as in-depth delivery tracking.
    Others are delivered through back-office processes, such as a
    spam content check and address validation. To further improve
    the percentage of emails delivered, we work closely with ISPs on
    spam prevention issues. We also include processes and
    verifications that greatly increase compliance with anti-spam
    standards.
    Image Hosting.  We enable customers to store up
    to five images for free, view and edit these images and resize
    them as necessary for use in their email campaigns. Up to
    approximately 1,200 images (25 megabytes) can be stored for
    an additional $5.00 per month. By adding images to an email
    message, a customer can make the campaign more compelling and
    visually appealing.
    Email Archive.  We offer our customers the
    ability to create a hosted version of current and past email
    communications on our system and make them readily available to
    their constituents via a link on a customers website. The
    service, which is available for an additional $5.00 per month,
    extends the life of an email communication and provides our
    customers an ability to showcase to online visitors the extent
    and breadth of their communication efforts. 6




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
    Security and Privacy.  We protect our
    customers data at a higher level than we believe many of
    our customers do themselves. We do not use our customers
    confidential information, including their contact lists, except
    to provide our product, nor do we share, sell or rent this
    information. In addition, we require that our customers adopt a
    privacy policy to assist them in complying with government
    regulations and email marketing best practices.  Survey
    ® follow-up
  Customer
    Support
        Professional
    Services
    Pricing
  60-day
 7




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60-day
    Number of Unique Email Addresses

Monthly Fixed PricingUp to 500

$
15.00501-2,500

$
30.002,501-5,000

$
50.005,001-10,000

$
75.0010,001-25,000

$
150.00         Customers
     8




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Sales and
    Marketing
    Customer
    Acquisition Sources
  Online Advertising. pay-per-click
  Channel Partners.
  Offline Advertising. Entrepreneur
  Word-of-Mouth Referrals.
  Footer Click-Throughs.
  Sales
    Efforts
  Communications Consultants.
  Local Evangelism.
 9




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Distance Learning.
  Other
    Marketing Initiatives
  Press Relations and Thought Leadership. Email Marketing
    Hints & Tips
  Website Marketing.
   Vertical Marketing.
  Community.
    Technology
       10




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Research
    and Development
    Competition
    
    product functionality, performance and reliability;
    integrated solutions;
    customer support and education;
    deliverability rates;
    product scalability;
    ease of use; and
    cost.         11




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Government
    Regulation
        
    prohibiting false or misleading email header information;
    prohibiting the use of deceptive subject lines;
    ensuring that recipients may, for at least 30 days after an
    email is sent, opt out of receiving future commercial email
    messages from the sender, with the opt-out effective within
    10 days of the request;
    requiring that commercial email be identified as a solicitation
    or advertisement unless the recipient affirmatively permitted
    the message; and
    requiring that the sender include a valid postal address in the
    email message.    and/or
  (http://www.espcoalition.org), CAN-SPAM
   12




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and/or
    
    new customers signing up for our services must agree that they
    will send email through our service only to persons who have
    given their permission;
    when an email contact list is uploaded, the customer must
    certify that it has permission to email each of the addressees;
    when an individual indicates that they want to be added to a
    mailing list, they may receive a confirmation email and may be
    required to confirm their intent to be added to the contact
    list, through a process called double opt-in;
    we electronically inspect all of our customers email
    contact lists to check for spam traps, dictionary attack
    patterns and lists that fail to meet our permission
    standards; and
    for customers with large email address lists, we conduct list
    review interviews to verify that the list is properly acquired
    and permission-based and that the proposed messages meet our
    content standards. Initial campaigns using such lists are
    conducted in stages, so that we can terminate the campaign early
    if the list generates an unusually high number of complaints.  Intellectual
    Property
      
    the technological skills of our research and development
    personnel;
    frequent enhancements to our products;
    continued expansion of our proprietary content; and
    high levels of customer service.   13




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®
  Employees
    Facilities
    ITEM 1A.
    RISK
    FACTORS  Our business is subject to numerous risks. We caution you
    that the following important factors, among others, could cause
    our actual results to differ materially from those expressed in
    forward-looking statements made by us or on our behalf in
    filings with the SEC, press releases, communications with
    investors and oral statements. Any or all of our forward-looking
    statements in this Annual Report on
    Form 10-K
    and in any other public statements we make may turn out to be
    wrong. They can be affected by inaccurate assumptions we might
    make or by known or unknown risks and uncertainties. Many
    factors mentioned in the discussion below will be important in
    determining future results. Consequently, no forward-looking
    statement can be guaranteed. Actual future results may vary
    materially from those anticipated in forward-looking statements.
    We undertake no obligation to update any forward-looking
    statements, whether as a result of new information, future
    events or otherwise. You are advised, however, to consult any
    further disclosure we make in our reports filed with
    the SEC.
  RISKS
    RELATED TO OUR BUSINESS AND INDUSTRY
  If we
    are unable to attract new customers and retain existing
    customers on a cost-effective basis, our business and results of
    operations will be affected adversely.
   14




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Our
    business is substantially dependent on the market for email
    marketing services for small organizations.
    U.S.
    federal legislation entitled Controlling the Assault of
    Non-Solicited Pornography and Marketing Act of 2003 imposes
    certain obligations on the senders of commercial emails, which
    could minimize the effectiveness of our email marketing product,
    and establishes financial penalties for non-compliance, which
    could increase the costs of our business.
    If
    economic or other factors negatively affect the small business
    sector, our customers may become unwilling or unable to maintain
    accounts with us, which could cause our revenue to decline and
    impair our ability to operate profitably.
   15




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Evolving
    regulations concerning data privacy may restrict our
    customers ability to solicit, collect, process and use
    data necessary to conduct email marketing campaigns or to send
    surveys and analyze the results or may increase their costs,
    which could harm our business.
    As
    Internet commerce develops, federal, state and foreign
    governments may draft and propose new laws to regulate Internet
    commerce, which may negatively affect our
    business.
    In the
    event we are unable to minimize our loss of existing customers
    or to grow our customer base by adding new customers, our
    operating results will be adversely affected.
    As we
    expand our customer base through our marketing efforts, our new
    customers may use our products differently than our existing
    customers and, accordingly, our business model may not be as
    efficient at attracting and retaining new
    customers.
   16




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The
    market in which we participate is competitive and, if we do not
    compete effectively, our operating results could be
    harmed.
        If the
    delivery of our customers emails is limited or blocked,
    the fees we may be able to charge for our email marketing
    product may not be accepted by the market and customers may
    cancel their accounts.
     17




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Competition
    for our employees is intense, and we may not be able to attract
    and retain the highly skilled employees whom we need to support
    our business.
      If we
    fail to promote and maintain our brand in a cost-effective
    manner, we may lose market share and our revenue may
    decrease.
    We
    depend on search engines to attract a significant percentage of
    our customers, and if those search engines change their listings
    or our relationship with them deteriorates or terminates, we may
    be unable to attract new customers, which would adversely affect
    our business and results of operations.
   18




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The
    success of our business depends on the continued growth and
    acceptance of email as a communications tool, and the related
    expansion and reliability of the Internet infrastructure. If
    consumers do not continue to use email, demand for our email
    marketing products may decline.
    Various
    private spam blacklists have in the past interfered with, and
    may in the future interfere with, the effectiveness of our
    products and our ability to conduct business.
      Any
    efforts we may make in the future to promote our services to
    market segments other than small organizations or to expand our
    product offerings beyond email marketing may not
    succeed.
   19




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Our
    customers use of our products to transmit negative
    messages or website links to harmful applications could damage
    our reputation, and we may face liability for unauthorized,
    inaccurate or fraudulent information distributed via our
    products.
        If we
    fail to enhance our existing products or develop new features,
    our products may become obsolete or less competitive and we
    could lose customers.
    Our
    relationships with our channel partners may be terminated or may
    not continue to be beneficial in generating new email marketing
    customers, which could adversely affect our ability to increase
    our customer base.
    Our
    growth could strain our personnel resources and infrastructure,
    and if we are unable to implement appropriate controls and
    procedures to manage our growth, we may not be able to
    successfully implement our business plan.
   20




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If we
    fail to retain our key personnel, we may not be able to achieve
    our anticipated level of growth and our business could
    suffer.
    Any
    significant disruption in service on our website or in our
    computer systems, or in our customer support services, could
    reduce the attractiveness of our products and result in a loss
    of customers.
  co-located
   21




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If the
    security of our customers confidential information stored
    in our systems is breached or otherwise subjected to
    unauthorized access, our reputation may be harmed, we may be
    exposed to liability and we may lose the ability to offer our
    customers a credit card payment option.
      We
    rely on third-party computer hardware and software that may be
    difficult to replace or that could cause errors or failures of
    our service.
    If we
    are unable to protect the confidentiality of our unpatented
    proprietary information, processes and know-how and our trade
    secrets, the value of our technology and products could be
    adversely affected.
   22




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Our
    use of open source software could impose limitations on our
    ability to commercialize our products.
      If a
    third party asserts that we are infringing its intellectual
    property, whether successful or not, it could subject us to
    costly and time-consuming litigation or require us to obtain
    expensive licenses, and our business may be adversely
    affected.
    
    divert managements attention;
    result in costly and time-consuming litigation;
    require us to enter into royalty or licensing agreements, which
    may not be available on acceptable terms, or at all;
    in the case of open source software-related claims, require us
    to release our software code under the terms of an open source
    license; or
    require us to redesign our software and services to avoid
    infringement.    Providing
    our products to customers outside the United States exposes us
    to risks inherent in international business.
    
    localization of our products, including translation into foreign
    languages and associated expenses;
    laws and business practices favoring local competitors; 23




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
    compliance with multiple, conflicting and changing governmental
    laws and regulations, including tax, email marketing, privacy
    and data protection laws and regulations;
    foreign currency fluctuations;
    different pricing environments;
    difficulties in staffing and maintaining foreign
    operations; and
    regional economic and political conditions.  We
    have incurred net losses in the past and expect to incur net
    losses in the future.
    We are
    incurring significant increased costs as a result of operating
    as a public company, and our management has been, and will
    continue to be, required to devote substantial time to new
    compliance initiatives.
    Sarbanes-Oxley
  Our
    ability to use net operating loss carryforwards in the United
    States may be limited.
   24




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Our
    quarterly results may fluctuate and if we fail to meet the
    expectations of analysts or investors, our stock price could
    decline substantially.
    
    our ability to retain existing customers, attract new customers
    and satisfy our customers requirements;
    changes in our pricing policies;
    our ability to expand our business;
    the effectiveness of our personnel;
    new product and service introductions;
    technical difficulties or interruptions in our services;
    general economic conditions;
    the timing of additional investments in our hardware and
    software systems;
    regulatory compliance costs;
    costs associated with future acquisitions of technologies and
    businesses; and
    extraordinary expenses such as litigation or other
    dispute-related settlement payments.    We may
    need additional capital in the future, which may not be
    available to us on favorable terms, or at all, and may dilute
    your ownership of our common stock.
    
    fund our operations;
    respond to competitive pressures;
    take advantage of strategic opportunities, including more rapid
    expansion of our business or the acquisition of complementary
    products, technologies or businesses; and
    develop new products or enhancements to existing products.   25




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We may
    engage in future acquisitions that could disrupt our business,
    dilute stockholder value and harm our business, operating
    results or financial condition.
    
    an inability to locate a suitable acquisition candidate or
    technology or acquire a desirable candidate or technology on
    favorable terms;
    difficulties in integrating personnel and operations from the
    acquired business or acquired technology with our existing
    technology and products and in retaining and motivating key
    personnel from the business;
    disruptions in our ongoing operations and the diversion of our
    managements attention from their day-to-day
    responsibilities associated with operating our business;
    increases in our expenses that adversely impact our business,
    operating results and financial condition;
    potential write-offs of acquired assets and increased
    amortization expense related to identifiable assets
    acquired; and
    potentially dilutive issuances of equity securities or the
    incurrence of debt.    RISKS
    RELATED TO THE OWNERSHIP OF OUR COMMON STOCK
  The
    market price of our common stock has been and may continue to be
    volatile.
    
    fluctuations in our quarterly financial results or the quarterly
    financial results of companies perceived to be similar to us;
    changes in estimates of our financial results or recommendations
    by securities analysts;
    failure of any of our products to achieve or maintain market
    acceptance;
    changes in market valuations of similar companies;
    success of competitive products;
    changes in our capital structure, such as future issuances of
    securities or the incurrence of additional debt;
    announcements by us or our competitors of significant products,
    contracts, acquisitions or strategic alliances;
    regulatory developments in the United States, foreign countries
    or both;
    litigation involving our company, our general industry or both;
    additions or departures of key personnel;
    investors general perception of us; and
    changes in general economic, industry and market conditions. 26




---



##### Table of Contents



If
    securities or industry analysts do not continue to publish
    research or publish inaccurate or unfavorable research about our
    business, our stock price and trading volume could
    decline.
    Future
    sales of shares by certain of our stockholders could cause our
    stock price to decline.
  lock-up 180-day lock-up lock-up lock-up lock-up
  180-day lock-up lock-up 16-day lock-up 180-day lock-up 18-day
    Insiders
    have substantial control over us and will be able to influence
    corporate matters.
  Form 10-K,
  Anti-takeover
    provisions in our charter documents and Delaware law could
    discourage, delay or prevent a change of control of our company
    and may affect the trading price of our common
    stock.
   27




---



##### Table of Contents




    authorize the issuance of blank check preferred
    stock that could be issued by our board of directors to thwart a
    takeover attempt;
    establish a classified board of directors, as a result of which
    the successors to the directors whose terms have expired will be
    elected to serve from the time of election and qualification
    until the third annual meeting following their election;
    require that directors only be removed from office for cause and
    only upon a supermajority stockholder vote;
    provide that vacancies on our board of directors, including
    newly created directorships, may be filled only by a majority
    vote of directors then in office;
    limit who may call special meetings of stockholders;
    prohibit stockholder action by written consent, requiring all
    actions to be taken at a meeting of the stockholders; and
    require supermajority stockholder voting to effect certain
    amendments to our restated certificate of incorporation and
    second amended and restated bylaws.  We do
    not currently intend to pay dividends on our common stock and,
    consequently, the ability to achieve a return on an investment
    in our common stock will depend on appreciation in the price of
    our common stock.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES       28




---



##### Table of Contents



ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    High


Low2007:Fourth Quarter (from October 3, 2007)

$
30.76


$
15.452008:First Quarter (through March 7, 2008)

$
25.24


$
15.00       Recent
    Sales of Unregistered Securities
       29




---



##### Table of Contents



Form S-1 No. 333-144381),
   30




---



##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K.
  Year Ended December 31,2007


2006


2005


2004


2003Statements of Operations Data:Revenue

$
50,495


$
27,552


$
14,658


$
8,071


$
4,465Cost of revenue(1)


13,031



7,801



3,747



2,211



1,899Gross profit


37,464



19,751



10,911



5,860



2,566Operating expenses:(1)Research and development


10,341



6,172



3,355



2,140



1,653Sales and marketing


27,376



18,592



7,460



3,385



2,549General and administrative


5,445



2,623



1,326



856



640Total operating expenses


43,162



27,387



12,141



6,381



4,842Loss from operations


(5,698
)


(7,636
)


(1,230
)


(521
)


(2,276
)Interest and other income (expense), net


(2,556
)


(203
)


(24
)


(34
)


(39
)Net loss


(8,254
)


(7,839
)


(1,254
)


(555
)


(2,315
)Accretion of redeemable convertible preferred stock


(816
)


(3,788
)


(5,743
)


(3,701
)


(2,471
)Net loss attributable to common stockholders

$
(9,070
)

$
(11,627
)

$
(6,997
)

$
(4,256
)

$
(4,786
)Net loss attributable to common stockholders per share:Basic and diluted

$
(0.97
)

$
(3.38
)

$
(2.49
)

$
(4.37
)

$
(5.75
)Weighted average shares outstanding used in computing per share
    amounts:Basic and diluted


9,366



3,438



2,813



974



832Other Operating Data:End of period number of customers(2)


164,669



89,323



47,730



25,229



14,431     (1)
    
    Amounts include stock-based compensation expense, as follows:  Year Ended December 31,2007


2006


2005


2004


2003Cost of revenue

$
81


$
25


$



$



$
Research and development


170



27











Sales and marketing


133



19







6



6General and administrative


261



12



17



17



17$
645


$
83


$
17


$
23


$
23    (2)
    
    We define our end of period number of customers as email
    marketing customers that we billed directly during the last
    month of the period.  31




---



##### Table of Contents



As of December 31,2007


2006


2005


2004


2003Balance Sheet Data:Cash, cash equivalents and short-term marketable securities

$
101,535


$
12,790


$
2,784


$
2,115


$
2,114Total assets


111,845



18,481



5,545



3,222



3,236Deferred revenue


10,354



5,476



2,827



1,270



615Redeemable convertible preferred stock warrant






628











Notes payable and capital lease obligation






702



1,326



844



612Redeemable convertible preferred stock






35,322



16,657



10,914



7,213Total stockholders equity (deficit)


94,354



(28,629
)


(17,237
)


(10,287
)


(6,129
)   ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  You should read the following discussion and analysis of our
    financial condition and results of operations together with our
    consolidated financial statements and the related notes and
    other financial information included elsewhere in this Annual
    Report on Form 10-K. Some of the information contained in this
    discussion and analysis or set forth elsewhere in this Annual
    Report on Form 10-K including information with respect to our
    plans and strategy for our business and related financing,
    includes forward-looking statements that involve risks and
    uncertainties. You should review the Risk Factors
    section of this Annual Report on Form 10-K for a discussion of
    important factors that could cause actual results to differ
    materially from the results described in or implied by the
    forward-looking statements contained in the following discussion
    and analysis.
  Overview
       32




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##### Table of Contents



Sources
    of Revenue
      Cost of
    Revenue and Operating Expenses
    Cost of Revenue.
    Research and Development.
 33




---



##### Table of Contents



Sales and Marketing. pay-per-click
  General and Administrative.
  Critical
    Accounting Policies
    Revenue Recognition. Revenue Recognition in Financial
    Statements No. 00-03, Application of AICPA Statement of Position
    97-2 to
    Arrangements that Include the Right to Use Software Stored on
    Another Entitys Hardware
  No. 00-21, Accounting for Revenue Arrangements with Multiple
    Deliverables
  Income Taxes.
 34




---



##### Table of Contents



Software and Website Development Costs. No. 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use Accounting for Web Site Development costs
  Redeemable Convertible Preferred Stock
    Warrant. Accounting for Certain Financial
    Instruments with Characteristics of Both Liabilities and
    Equity
  Stock-Based Compensation. Share-Based Payment Accounting for Stock-Based
    Compensation Accounting for Stock Issued to Employees
   35




---



##### Table of Contents



Share-Based Payment
  Results
    of Operations
    Year EndedDecember 31,2007


2006


2005Revenue


100
%


100
%


100
%Cost of revenue


26



28



26Gross profit


74



72



74Operating expenses:Research and development


20



22



23Sales and marketing


54



67



51General and administrative


11



10



9Total operating expenses


85



99



83Loss from operations


(11
)


(27
)


(9
)Interest and other income (expense), net


(5
)


(1
)


(0
)Net loss


(16
)%


(28
)%


(9
)%   Comparison
    of Years Ended December 31, 2007 and 2006
  Revenue.
 36




---



##### Table of Contents



Cost of Revenue.
  Research and Development Expenses.
  Sales and Marketing Expenses.
  General and Administrative Expenses.
  Interest and Other Income (Expense),
    Net.
 37




---



##### Table of Contents



Comparison
    of Years Ended December 31, 2006 and 2005
  Revenue.
  Cost of Revenue.
  Research and Development Expenses.
  Sales and Marketing Expenses.
  General and Administrative Expenses.
  Interest and Other Income (Expense),
    Net.
  Liquidity
    and Capital Resources
     38




---



##### Table of Contents



stock-based stock-based
        
    during 2007, deferred revenue increased $4.9 million from
    $5.5 million to $10.4 million;
    during 2006, deferred revenue increased $2.7 million from
    $2.8 million to $5.5 million; and
    during 2005, deferred revenue increased $1.5 million from
    $1.3 million to $2.8 million.      
    during 2007, accrued expenses increased $900,000 from
    $2.4 million to $3.3 million primarily due to
    increased employee related costs as a result of personnel
    additions;
    during 2006, accrued expenses increased $1.9 million from
    $494,000 to $2.4 million primarily due to increased
    marketing efforts during the year, increased employee related
    costs as a result of personnel additions and increased costs
    directly attributable to revenue growth partially offset by the
    receipt of invoices and timing of payments; and
    during 2005, accrued expenses increased $188,000 from $306,000
    to $494,000.    
    during 2007, accounts payable increased $1.3 from
    $2.6 million to $3.9 million;
    during 2006, accounts payable increased $1.1 million from
    $1.5 million to $2.6 million; and
    during 2005, accounts payable increased $1.3 million from
    $176,000 to $1.5 million.      
    change in fair value of warrant of $3.9 million and
    $588,000 for the years ended December 31, 2007 and 2006,
    respectively;
    depreciation and amortization expense of $2.6 million,
    $1.5 million and $591,000 for the years ended
    December 31, 2007, 2006 and 2005, respectively; and 39




---



##### Table of Contents




    stock-based compensation expense of $645,000, $83,000 and
    $17,000 for the years ended December 31, 2007, 2006 and
    2005, respectively.      stock-based
           40




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    New
    Accounting Pronouncements
  Business Combinations
  The Fair Value Option for Financial
    Assets and Financial Liabilities Including an amendment of FASB
    Statement No. 115
  Fair Value Measurements No. 157-2, Effective Date of FASB Statement No. 157
 41




---



##### Table of Contents



Contractual
    Obligations
    Less than








More thanTotal


1 Year


1-3 Years


3-5 Years


5 Years(In thousands)Operating lease obligations

$
6,024


$
2,041


$
3,983







Contractual commitments


9,302



1,756



3,490


$
3,282


$
774Total

$
15,326


$
3,797


$
7,473


$
3,282


$
774   ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Foreign Currency Exchange Risk.
  Interest Rate Sensitivity.
 42




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Constant
    Contact, Inc.
  Index to
    Consolidated Financial Statements
  Page(s)Reports of Independent Registered Public
    Accounting Firms


44Consolidated Balance Sheets


46Consolidated Statements of Operations


47Consolidated Statements of Changes in Redeemable
    Convertible Preferred Stock and Stockholders Equity
    (Deficit) and Comprehensive Loss


48Consolidated Statements of Cash Flows


49Notes to Consolidated Financial Statements


50   43




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm           /s/  PricewaterhouseCoopers
    LLP
    44




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
           
         45




---



##### Table of Contents



Constant
    Contact, Inc.
  Consolidated
    Balance Sheets
  December 31,2007


2006(In thousands, except share and per share data)ASSETSCurrent assetsCash and cash equivalents

$
97,051


$
8,786Short-term marketable securities


4,484



4,004Accounts receivable, net of allowance for doubtful accounts of
    $11 and $3 as of December 31, 2007 and 2006, respectively


62



41Prepaid expenses and other current assets


1,701



411Total current assets


103,298



13,242Property and equipment, net


7,986



4,957Restricted cash


308



266Other assets


253



16Total assets

$
111,845


$
18,481LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND 
    STOCKHOLDERS EQUITY (DEFICIT)Current liabilitiesAccounts payable

$
3,858


$
2,576Accrued expenses


3,279



2,406Deferred revenue


10,354



5,476Redeemable convertible preferred stock warrant






628Current portion of notes payable






449Total current liabilities


17,491



11,535Notes payable, net of current portion






253Total liabilities


17,491



11,788Commitments and contingencies (Note 10)Redeemable convertible preferred stockSeries A redeemable convertible preferred stock,
    $0.01 par value; 0 shares authorized and outstanding
    at December 31, 2007; 1,026,680 shares authorized and
    outstanding at December 31, 2006






14,049Series B redeemable convertible preferred stock,
    $0.01 par value; 0 shares authorized and outstanding
    at December 31, 2007; 9,761,666 shares authorized and
    9,641,666 shares outstanding at December 31, 2006






6,376Series C redeemable convertible preferred stock,
    $0.01 par value; 0 shares authorized and outstanding
    at December 31, 2007; 2,521,432 shares authorized and
    outstanding at December 31, 2006






14,897Total redeemable convertible preferred stock






35,322Stockholders equity (deficit)Preferred stock; $0.01 par value; 5,000,000 and
    0 shares authorized at December 31, 2007 and 2006,
    respectively; no shares issued or outstanding






Common stock; $0.01 par value; 100,000,000 and
    20,000,000 shares authorized at December 31, 2007 and
    2006, respectively; 27,617,014 and 3,788,944 shares issued
    and outstanding as of December 31, 2007 and 2006,
    respectively


276



38Additional paid-in capital


136,832



5,835Accumulated other comprehensive income


2



Accumulated deficit


(42,756
)


(34,502
)Total stockholders equity (deficit)


94,354



(28,629
)Total liabilities, redeemable convertible preferred stock and
    stockholders equity (deficit)

$
111,845


$
18,481    46




---



##### Table of Contents



Constant
    Contact, Inc.
  Consolidated
    Statements of Operations
  Years Ended December 31,2007


2006


2005(In thousands, except per share data)Revenue

$
50,495


$
27,552


$
14,658Cost of revenue


13,031



7,801



3,747Gross profit


37,464



19,751



10,911Operating expensesResearch and development


10,341



6,172



3,355Sales and marketing


27,376



18,592



7,460General and administrative


5,445



2,623



1,326Total operating expenses


43,162



27,387



12,141Loss from operations


(5,698
)


(7,636
)


(1,230
)Interest income


1,543



479



47Interest expense


(188
)


(94
)


(71
)Other expense, net


(3,911
)


(588
)


Net loss


(8,254
)


(7,839
)


(1,254
)Accretion of redeemable convertible preferred stock


(816
)


(3,788
)


(5,743
)Net loss attributable to common stockholders

$
(9,070
)

$
(11,627
)

$
(6,997
)Net loss attributable to common stockholders per share: basic
    and diluted

$
(0.97
)

$
(3.38
)

$
(2.49
)Weighted average shares outstanding used in computing per share
    amounts: basic and diluted


9,366



3,438



2,813    47




---



##### Table of Contents






Constant
    Contact, Inc.
  Consolidated
    Statements of Changes in Redeemable Convertible Preferred Stock
    and Stockholders Equity (Deficit) and Comprehensive
    Loss
  Series A


Series B


Series CRedeemable


Redeemable


Redeemable


Total Redeemable















Accumulated





TotalConvertible


Convertible


Convertible


Convertible









Additional





Other





StockholdersPreferred Stock


Preferred Stock


Preferred Stock


Preferred Stock



Common Stock


Paid-in


Deferred


Comprehensive


Accumulated


Equity


ComprehensiveShares


Amount


Shares


Amount


Shares


Amount


Shares


Amount



Shares


Amount


Capital


Compensation


Income


Deficit


(Deficit)


Loss(In thousands, except share data)Balance at December 31, 2004


1,026,680


$
6,304



9,641,666


$
4,610






$




10,668,346


$
10,914




2,799,649


$
28


$
15,111


$
(17
)

$



$
(25,409
)

$
(10,287
)Issuance of common stock in connection with stock option
    exercises



































473,170



5



13















18Issuance of restricted stock



































192,010



2



10















12Amortization of deferred compensation expense















































17











17Accretion of Series A and B redeemable convertible
    preferred stock to redemption value






4,531







1,212















5,743












(5,743
)














(5,743
)Net loss























































(1,254
)


(1,254
)

$
(1,254
)Total comprehensive loss






























































$
(1,254
)Balance at December 31, 2005


1,026,680



10,835



9,641,666



5,822











10,668,346



16,657




3,464,829



35



9,391











(26,663
)


(17,237
)Issuance of common stock in connection with stock option
    exercises



































192,076



2



8















10Issuance of common stock in connection with warrant exercises



































132,039



1



181















182Stock-based compensation expense











































83















83Reclassification of redeemable convertible preferred stock
    warrant to liability











































(40
)














(40
)Issuance of Series C redeemable convertible preferred
    stock, net of issuance costs of $123


















2,521,432



14,877



2,521,432



14,877Accretion of Series A, B and C redeemable convertible
    preferred stock to redemption value






3,214







554







20







3,788












(3,788
)














(3,788
)Net loss























































(7,839
)


(7,839
)

$
(7,839
)Total comprehensive loss






























































$
(7,839
)Balance at December 31, 2006


1,026,680



14,049



9,641,666



6,376



2,521,432



14,897



13,189,778



35,322




3,788,944



38



5,835











(34,502
)


(28,629
)Issuance of common stock in connection with stock option
    exercises



































199,824



2



69















71Issuance of common stock in connection with warrant exercises



































125,704



1



155















156Issuance of common stock in connection with initial public
    offering, net of issuance costs of $1,804



































6,199,845



62



90,374















90,436Stock-based compensation expense











































645















645Accretion of Series A, B and C redeemable convertible
    preferred stock to redemption value






718







74







24







816












(816
)














(816
)Issuance of redeemable convertible preferred stock in connection
    with warrant exercise










120,000



4,605











120,000



4,605




























Conversion of redeemable convertible preferred stock to common
    stock upon close of initial public offering


(1,026,680
)


(14,767
)


(9,761,666
)


(11,055
)


(2,521,432
)


(14,921
)


(13,309,778
)


(40,743
)



17,302,697



173



40,570















40,743Unrealized gain on available-for-sale securities



















































2







2


$
2Net loss























































(8,254
)


(8,254
)


(8,254
)Total comprehensive loss






























































$
(8,252
)Balance at December 31, 2007





$







$







$







$





27,617,014


$
276


$
136,832


$



$
2


$
(42,756
)

$
94,354    48




---



##### Table of Contents





Constant
    Contact, Inc.
  Consolidated
    Statements of Cash Flows
  Years Ended December 31,2007


2006


2005(In thousands)Cash flows from operating activitiesNet loss

$
(8,254
)

$
(7,839
)

$
(1,254
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activitiesDepreciation and amortization


2,631



1,536



591Accretion of discount on investments


(151
)


(10
)


Stock-based compensation expense


645



83



17Changes in fair value of redeemable convertible preferred stock
    warrant


3,918



588



Provision for bad debts


8



5



21Gain on sale of equipment


(6
)






Changes in operating assets and liabilitiesAccounts receivable


(29
)


1



(31
)Prepaid expenses and other current assets


(1,290
)


(255
)


(26
)Other assets


(237
)


(16
)


Accounts payable


1,282



1,098



1,304Accrued expenses


873



1,412



187Deferred revenue


4,878



2,649



1,557Net cash provided by (used in) operating activities


4,268



(748
)


2,366Cash flows from investing activitiesPurchases of short-term marketable securities


(9,327
)


(3,994
)


Proceeds from maturities of short-term marketable securities


9,000







Net increase in restricted cash


(42
)






(112
)Proceeds from sale of equipment


12Purchases of property and equipment


(5,666
)


(3,701
)


(2,097
)Net cash used in investing activities


(6,023
)


(7,695
)


(2,209
)Cash flows from financing activitiesProceeds from notes payable


2,788







1,007Repayments of notes payable


(3,490
)


(614
)


(506
)Repayments of capital lease obligations






(10
)


(19
)Proceeds from issuance of Series C redeemable convertible
    preferred stock, net of issuance costs of $123






14,877



Proceeds from issuance of common stock pursuant to exercise of
    stock options and warrants


227



192



18Proceeds from issuance of preferred stock pursuant to exercise
    of a warrant


59







Proceeds from sale of restricted stock










12Proceeds from issuance of common stock in connection with
    initial public offering, net of issuance costs of $1,804


90,436







Net cash provided by financing activities


90,020



14,445



512Net increase in cash and cash equivalents


88,265



6,002



669Cash and cash equivalents, beginning of year


8,786



2,784



2,115Cash and cash equivalents, end of year

$
97,051


$
8,786


$
2,784Supplemental disclosure of cash flow informationCash paid for interest

$
194


$
97


$
65Noncash investing and financing activities:Purchases of property and equipment included in accrued expenses






500



Conversion of redeemable convertible preferred stock to common
    stock


40,743







    49




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes
    to Consolidated Financial Statements
 (in thousands, except share and per share amounts)
  1.
    Nature of
    the Business    2.
    Summary
    of Significant Accounting Policies  Basis
    of Presentation
    Use of
    Estimates
    Cash
    and Cash Equivalents
    Marketable
    Securities
  Accounting for Certain Investments in Debt and Equity
    Securities
   50




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    Accounts
    Receivable
    Concentration
    of Credit Risk and Significant Customers
      Property
    and Equipment
      Computer equipment

3 yearsSoftware

3 yearsFurniture and fixtures

5 yearsLeasehold improvements

Shorter of life of lease or
    estimated useful life   Long-Lived
    Assets
  Accounting for the
    Impairment or Disposal of Long-Lived Assets
  Revenue
    Recognition
   51




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
  Revenue Recognition in Financial
    Statements No. 00-03, Application of AICPA Statement of Position
    97-2 to
    Arrangements that include the Right to Use Software Stored on
    Another Entitys Hardware
  No. 00-21, Accounting for Revenue Arrangements with Multiple
    Deliverables,
  Deferred
    Revenue
    Software
    and WebSite Development Costs
  No. 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use 00-02, Accounting for Web Site Development Costs
  Redeemable
    Convertible Preferred Stock Warrant (including Change in
    Accounting Principle)
  150-5, Issuers Accounting under FASB Statement No. 150
    for Freestanding Warrants and Other Similar Instruments on
    Shares that are Redeemable (FSP 150-5). FSP 150-5 Accounting for
    Certain Financial Instruments with Characteristics of both
    Liabilities and Equity FSP 150-5
  Comprehensive
    Loss
   52




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    Fair
    Value of Financial Instruments
    Segment
    Data
    Net
    Loss Attributable to Common Stockholders Per Share
      December 31,2007


2006


2005Options to purchase common stock


2,200,622



1,702,007



1,217,766Warrants to purchase common or redeemable convertible preferred
    stock


520



282,223



414,262Restricted shares


96,006



144,008



192,010Redeemable convertible preferred stock






17,146,675



13,868,824Total options, warrants, restricted shares and redeemable
    convertible preferred stock exercisable or convertible into
    common stock


2,297,148



19,274,913



15,692,862   Advertising
    Expense
    Accounting
    for Stock-Based Compensation (including Change in Accounting
    Principle)
  Share-Based Payment , Accounting for Stock-Based
    Compensation , Accounting for Stock Issued to
    Employees ,
 53




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    Income
    Taxes (including Change in Accounting Principle)
    Accounting for Uncertainty in Income Taxes, an Interpretation
    of FASB Statement No. 109 Accounting for Income
    Taxes
  Recent
    Accounting Pronouncements
  Business Combinations
  The Fair Value Option for Financial
    Assets and Financial Liabilities Including an amendment of FASB
    Statement No. 115
  Fair Value
    Measurements Effective
 54




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
  Date of FASB Statement No. 157,
  3.
    Property
    and Equipment    December 31,2007


2006Computer equipment

$
8,100


$
5,137Software


3,821



2,754Furniture and fixtures


1,308



1,015Leasehold improvements


929



160Total property and equipment


14,158



9,066Less: Accumulated depreciation and amortization


6,172



4,109Property and equipment, net

$
7,986


$
4,957       4.
    Notes
    Payable     55




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
  5.
    Redeemable
    Convertible Preferred Stock and Stockholders Equity
    (Deficit)  Initial
    Public Offering
    Redeemable
    Convertible Preferred Stock
        Voting
    Dividends
    Liquidation
    Preference
  winding-up
 56




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
          Conversion
      Redemption
   57




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    Warrants
    FSP 150-5.
  Common
    Stock
      6.
    Stock-Based
    Awards     58




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
        Stock
    Options
         59




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    Share
    Based Payment
  Year Ended


Year EndedDecember 31,


December 31,2007


2006Weighted average risk-free interest rate


4.23
%


4.82
%Expected term (in years)


6.1



6.1Weighted average expected volatility


62.1
%


64.9
%Expected dividends


0
%


0
%     WeightedAverageWeighted


RemainingAverage


Contractual


AggregateNumber of


Exercise


Term


IntrinsicOptions


Price


(In Years)


ValueOutstandingBalance at December 31, 2004


1,036,305


$
0.99Granted


737,091



0.06Exercised


(473,170
)


0.04Forfeited


(82,460
)


1.03Balance at December 31, 2005


1,217,766



0.79Granted


749,277



2.35Exercised


(192,076
)


0.05Forfeited


(72,960
)


0.47Balance at December 31, 2006


1,702,007



1.57Granted


860,296



13.36Exercised


(199,824
)


0.35Forfeited


(161,857
)


1.15Balance at December 31, 2007


2,200,622



6.32



8.33


$
33,405Exercisable at December 31, 2007


573,178


$
2.00



6.90


$
11,177    60




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
          Years EndedDecember 31,2007


2006Cost of revenue

$
81


$
25Research and development


170



27Sales and marketing


133



19General and administrative


261



12$
645


$
83     Stock
    Purchase Plan
    Restricted
    Stock
   61




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
  7.
    Income
    Taxes    Years Ended December 31,2007


2006


2005Statutory rate


(34
%)


(34
%)


(34
%)Increase in valuation allowance


44



40



55State taxes, net of federal benefit


(6
)


(6
)


(6
)Impact of permanent differences






1



Expiration of state net operation losses


5



5



Tax credits


(8
)


(7
)


(14
)Other


(1
)


1



(1
)0
%


0
%


0
%     December 31,2007


2006Deferred tax assetsNet operating loss carryforwards

$
14,002


$
10,778Capitalized research and development


22



41Research and development credit carryforwards


1,952



1,584Accrued expenses


307



176Redeemable convertible preferred stock warrant


288



237Total deferred tax assets


16,571



12,816Deferred tax asset valuation allowance


(16,299
)


(12,688
)Net deferred tax assets


272



128Deferred tax liabilitiesDepreciation


(272
)


(128
)Total deferred tax liabilities


(272
)


(128
)Net deferred tax assets

$



$
      62




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
      Adoption
    of FIN 48
  Accounting for Uncertainty in Income Taxes, an
    Interpretation of FASB Statement No. 109 Accounting for Income Taxes
        8.
    Accrued
    Expenses  December 31,2007


2006Payroll and payroll related

$
1,114


$
694Licensed software and maintenance


638



562Marketing programs


344



509Other accrued expenses


1,183



641$
3,279


$
2,406  63




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
  9.
    401(k)
    Savings Plan    10.
    Commitments
    and Contingencies  Capital
    Leases
    Operating
    Leases
      2008

$
2,0412009


2,2642010


1,719$
6,024   Hosting
    Services
     64




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
  Letters
    of Credit
    Indemnification
    Obligations
    11.
    Related
    Party      12.
    Quarterly
    Information (Unaudited)  Three Months EndedDec. 31,


Sept. 30,


June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,2007


2007


2007


2007


2006


2006


2006


2006Statements of Operations Data:Revenue

$
15,867


$
13,517


$
11,398


$
9,713


$
8,484


$
7,239


$
6,400


$
5,429Gross Profit


12,096



10,094



8,292



6,982



6,075



5,201



4,589



3,886Loss from operations


(54
)


(781
)


(2,473
)


(2,390
)


(3,548
)


(1,626
)


(1,655
)


(807
)Net loss


(1,069
)


(1,691
)


(2,813
)


(2,681
)


(3,550
)


(1,521
)


(1,811
)


(957
)Net loss attributable to common stockholders


(1,096
)


(1,962
)


(3,078
)


(2,934
)


(3,809
)


(1,780
)


(2,945
)


(3,093
)Basic and diluted net loss attributable to common stockholders
    per share:

$
(0.04
)

$
(0.51
)

$
(0.81
)

$
(0.79
)

$
(1.06
)

$
(0.51
)

$
(0.88
)

$
(0.94
)  65




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE  Form S-1.
    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures and Changes in Internal Control Over
    Financial Reporting
  Rules 13a-15(e) 15d-15(e)
  15d-15(f)
  Managements
    Report on Internal Control Over Financial Reporting
  Form 10-K
  ITEM 9B.
    OTHER
    INFORMATION   66




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##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    www.constantcontact.com
  ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Financial Statements
  Form 10-K.
  Exhibits
    Financial Statement Schedules
   67




---



##### Table of Contents



SIGNATURES      By:
    /s/  Gail
    F. Goodman   President and Chief Executive Officer
      Signature

Title

Date/s/  Gail
    F. GoodmanGail
    F. Goodman

President and Chief Executive Officer

March 14, 2008/s/  Thomas
    AndersonThomas
    Anderson

Director

March 8, 2008/s/  Robert
    P. BadavasRobert
    P. Badavas

Director

March 9, 2008/s/  John
    CampbellJohn
    Campbell

Director

March 9, 2008/s/  Michael
    T. FitzgeraldMichael
    T. Fitzgerald

Director

March 9, 2008/s/  Patrick
    GallagherPatrick
    Gallagher

Director

March 9, 2008/s/  William
    S. KaiserWilliam
    S. Kaiser

Director

March 7, 2008/s/  Steven
    R. WassermanSteven
    R. Wasserman

Vice President and Chief Financial Officer

March 14, 2008  68




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description3
.1(1)

Restated Certificate of Incorporation of the Company.3
.2(1)

Second Amended and Restated Bylaws of the Company.4
.1(1)

Specimen Certificate evidencing shares of common stock.10
.1 (2)#

1999 Stock Option/Stock Issuance Plan, as amended.10
.2 (2)#

Form of Non-Qualified Stock Option Agreement with Executive
    Officers under the 1999 Stock Option/Stock Issuance Plan.10
.3 (2)#

Form of Non-Qualified Stock Option Agreement under the 1999
    Stock Option/Stock Issuance Plan.10
.4 (2) #

Restricted Stock Agreement, dated December 12, 2005,
    between the Company and Steven R. Wasserman.10
.5 (1)#

2007 Stock Incentive Plan.10
.6 (1)#

Forms of Incentive Stock Option Agreement under the 2007 Stock
    Incentive Plan.10
.7 (1)#

Forms of Non-Qualified Stock Option Agreement under the 2007
    Stock Incentive Plan.10
.8 (1)#

2007 Employee Stock Purchase Plan.10
.9 (2)#

Letter Agreement, dated April 14, 1999, between the Company
    and Gail F. Goodman.10
.10 (2)#

Letter Agreement, dated December 1, 2005, between the
    Company and Steven R. Wasserman.10
.11 (2)#

2007 Executive Team Bonus Plan.10
.12 (1)#

Form of Director and Executive Officer Indemnification Agreement.10
.13(2)

Amended and Restated Investors Rights Agreement, dated as
    of August 9, 2001, among the Company and the investors
    listed therein.10
.14(2)

Amended and Restated Preferred Investors Rights Agreement,
    dated as of May 12, 2006, among the Company and the parties
    listed therein.10
.15(2)

Lease Agreement, dated as of July 9, 2002, as amended,
    between the Company and Boston Properties Limited Partnership.10
.16(3)

Fourth Amendment to Lease, dated as of November 26, 2007,
    between the Company and Boston Properties Limited Partnership.10
.17(1)

Loan and Security Agreement, dated February 27, 2003, as
    amended, between the Company and Silicon Valley Bank.10
.18(4)

Form of Indemnification Agreement between the Company and
    certain entities that sold stock in the Companys initial
    public offering.10
.19*#

2008 Executive Incentive Plan.10
.20*

Master-Services Agreement dated July 19, 2007 by and
    between the Company and Sentinel
    Properties-Bedford,
    LLC, as amended.21
.1*

Subsidiaries of the Company.23
.1*

Consent of PricewaterhouseCoopers LLP.23
.2*

Consent of Vitale, Caturano & Company, Ltd.31
.1*

Certification by Chief Executive Officer..31
.2*

Certification by Chief Financial Officer.32*


Certification Pursuant to 18 U.S.C. Section 1350, as
    adopted Pursuant to Section 906 of the
    Sarbanes-Oxley
    Act of 2002, by Chief Executive Officer and Chief Financial
    Officer.     *
    
    Filed herewith.#
    
    Management contract or compensatory plan required to be filed as
    an exhibit pursuant to Item 15(b) of this Annual Report on
    Form 10-K.(1)
    
    Incorporated by reference to the Companys Registration
    Statement on
    Form S-1,
    as amended, filed with the Commission on September 4, 2007.(2)
    
    Incorporated by reference to the Companys Registration
    Statement on
    Form S-1,
    filed with the Commission on July 6, 2007.(3)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Commission on November 28, 2007.(4)
    
    Incorporated by reference to the Companys Registration
    Statement on
    Form S-1,
    as amended, filed with the Commission on September 12, 2007.