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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, 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, 2009ORo

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.)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:
   o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated filer o

Accelerated filer þ

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

Smaller reporting company o   Rule 12b-2 o þ
      Documents Incorporated by Reference
  Form 10-K.




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##### 





CONSTANT
    CONTACT, INC.
  INDEX
   
 PageNumberPART IITEM 1.


BUSINESS


2ITEM 1A.


RISK FACTORS


15ITEM 1B.


UNRESOLVED STAFF COMMENTS


29ITEM 2.


PROPERTIES


29ITEM 3.


LEGAL PROCEEDINGS


30ITEM 4.


RESERVED


N/APART IIITEM 5.


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


30ITEM 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


43ITEM 8.


FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


44ITEM 9.


CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


66ITEM 9A.


CONTROLS AND PROCEDURES


66ITEM 9B.


OTHER INFORMATION


67PART 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


68SIGNATURES


69EX-10.34 2010 Executive Cash Incentive Bonus PlanEX-10.35 Form of Performance Stock Option AgreementEX-10.36 Letter Agreement between the Company and John J. Walsh, Jr.EX-21.1 Subsidiaries of the CompanyEX-23.1 Consent of PricewaterhouseCoopers LLPEX-31.1 Section 302 Certification of Chief Executive OfficerEX-31.2 Section 302 Certification of Chief Financial OfficerEX-32.1 Section 906 Certification of Chief Executive OfficerEX-32.2 Section 906 Certification of Chief Financial Officer




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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
        pay-per-click word-of-mouth
 2




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(781) 472-8100. www.constantcontact.com. Form 10-K. 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
        
    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,
    particularly during times of economic distress.    
    General Email Applications.  General email
    applications and services such as
    Microsoft®

    Outlook®,

    Google
    Gmail®,

    America
    Online®

    and
    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 generally beyond the scope of most small
    organizations.    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 customer
    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,
    channel partnerships, national radio advertising, targeted
    television advertising, referrals, print advertising, in-person
    seminars and public relations and other brand awareness
    programs. In 2009, our cost of email marketing customer
    acquisition, which we define as our total annual sales and
    marketing expense divided by the gross number of email marketing
    customers added during the year, was approximately $350 per
    email marketing customer. For 2009, our average monthly total
    revenue per email marketing customer, including all sources of
    revenue, was $35.55, 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 2009, at least 97.4% of customers in a given month have
    continued to subscribe to 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 customer
    support in order to encourage trials and ongoing usage of our
    products. 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., Canadian and United Kingdom 4




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based trial customers to help them launch an initial campaign
    and address any questions or concerns. 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.
    Integrated Multiple Product Offering.  In 2007,
    we launched our online survey product and, in 2009, we launched
    our event marketing product. These products are fully integrated
    with our email marketing product. As a result, all of our
    products share a common contact management system, in which all
    information resides in one place that streamlines the management
    of customer contact information across all products. When used
    in combination, our products provide our customers with a
    unified, efficient, and effective marketing solution that
    enhances their ability to build and strengthen customer
    relationships.  Growth
    Strategy
    
    Acquire New Customers.  We aggressively seek to
    continue to attract new customers by promoting the Constant
    Contact brand, educating prospects on the benefits of email
    marketing, event marketing and online surveys and encouraging
    small organizations to try our products.
    Increase Revenue Per Customer.  As of
    December 31, 2009, we had in excess of 347,500 email
    marketing customers. We seek to increase revenue from each email
    marketing customer through cross-selling our event marketing and
    survey products and through add-on services we offer, such as
    image hosting and email archiving, which enhance our products,
    Provide Additional Products.  We plan to
    continue to invest in research and development to maintain our
    leadership position in email marketing and to develop and
    provide our customers with complementary products that are easy
    to use, effective and affordable. We believe that we have a
    significant opportunity to sell our event marketing and survey
    products to our email marketing customers. As new customers
    adopt our event marketing and survey products, we will also have
    the opportunity to cross-sell our email marketing product.
    Pursue Complementary Acquisitions.  We follow
    industry developments and technology advancements and intend to
    evaluate and potentially acquire technologies or businesses to
    enhance our products, offer new products and access new
    customers or markets, or both.
    Expand Internationally.  We currently sell our
    products to customers in over 140 countries and territories,
    despite limited marketing efforts outside of the United States.
    We also offer certain customer support services in Spanish,
    including email marketing templates and webinars. We believe
    that opportunities exist to more aggressively market our
    products in English and Spanish-speaking countries.  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 5




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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 420 templates
    provide ideas about the kinds of emails customers can send,
    including newsletters, 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 and a retail template designed to promote mens
    apparel.
    Contact List Growth and 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®

    Outlook®,

    Microsoft®

    Outlook
    Express®,

    Intuit®

    QuickBooks®,

    ACT!®

    by Sage Software and
    Salesforce®.

    We also offer a Contact Capture Tool that enables customers to
    add and update contacts directly from a computer or point of
    sale device. Finally, we provide customers the ability to add a
    Join My Mailing List application on the
    customers website and
    Facebook®

    page, which can be 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
    Internet service providers, or ISPs, on spam prevention issues.
    We also include processes and verifications that greatly
    increase compliance with anti-spam standards. According to data
    measured by an independent third party, approximately 98% of our
    customers emails were delivered past any spam filters or
    controls to their target email inboxes in the United States
    during 2009.
    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. For
    customers who elect to purchase our premium image hosting
    option, we offer them access to our stock image gallery with
    thousands of images to choose from and allow them to store up to
    approximately 1,200 personal images (25 megabytes).
    The premium image hosting option costs 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 or on
    Facebook®

    or
    Twittertm.

    The service, which is available for an additional $5.00 per
    month, extends the life of up to 100 email communications and
    provides our customers an ability to showcase on their website
    and social media sites 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
    in the delivery of 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.  Event
    Marketing
  ®
  Survey
    easy-to-understand ® ® follow-up
  Customer
    Support
       7




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Ancillary
    Services
    Professional Services.
  Experts Program. two-day
  Pricing
  60-day 60-day
    Number of Unique Email Addresses

Monthly 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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business-to-business business-to-consumer business-to-business business-to-consumer
    Sales and
    Marketing
    Customer
    Acquisition Sources
  Online Advertising. pay-per-click tm
  Channel Partners.
  tm
 9




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Radio Advertising.
  Print Advertising. Entrepreneur
  Word-of-Mouth
    Referrals.
  Footer Click-Throughs.
  Sales
    Efforts
  Communications Consultants.
  Local Evangelism.
  Distance Learning.
  Other
    Marketing Initiatives
  Press Relations and Thought Leadership. Hints & Tips The Constant Contact Guide to Email
    Marketing
  Website Marketing. visitor-to-trial trial-to-paying
  Vertical Marketing.
  Community.
 10




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Small Business Organization Initiatives.
    Technology
    and Operations
    around-the-clock
      Research
    and Development
    ®
 11




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Competition
    
    product functionality, performance and reliability;
    integrated solutions;
    customer support and education;
    email deliverability rates;
    product scalability;
    ease of use; and
    cost.  ® tm
        tm
 12




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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
        and/or
 13




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
    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 use of the list generates an unusually high number of
    complaints.  Intellectual
    Property
      ®
  Employees
    Facilities
   14




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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.
    Current
    economic conditions may further negatively affect the small
    business sector, which may cause our customers to terminate
    existing accounts with us or cause potential customers to fail
    to purchase our products, resulting in a decrease in our revenue
    and impairing our ability to operate profitably.
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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.
    In the
    event we are unable to minimize the loss of our existing
    customers or to grow our customer base by adding new customers,
    our operating results will be adversely affected.
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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 severely harmed, we
    may be exposed to liability and we may lose the ability to offer
    our customers a credit card payment option.
      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.
   17




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As
    Internet commerce develops, federal, state and foreign
    governments may adopt new laws to regulate Internet commerce,
    which may negatively affect our business.
    As we
    attempt to 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.
    The
    market in which we participate is highly competitive and, if we
    do not compete effectively, our operating results could be
    harmed.
    ® tm
   18




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tm
    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.
  denial-of-service
   19




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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.
    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.
  tm
 20




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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 or alternative
    communications tools gain popularity, 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.
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Our
    customers use of our products and website 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.
      Our
    business may be negatively impacted by seasonal
    trends.
    If we
    fail to enhance our existing products or develop new products,
    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.
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Competition
    for employees in our industry is intense, and we may not be able
    to attract and retain the highly skilled employees whom we need
    to support our business.
      Our
    anticipated growth could strain our personnel resources and
    infrastructure, and if we are unable to implement appropriate
    controls and procedures to manage our anticipated growth, we may
    not be able to successfully implement our business
    plan.
      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.
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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 and that requires us to closely monitor our usage to
    ensure that we remain in compliance with any applicable
    licensing requirements.
    If we
    are unable to protect the confidentiality of our unpatented
    proprietary information, processes and know-how and trade
    secrets, the value of our technology and products could be
    adversely affected.
    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; 24




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
    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;
    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.
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We are
    incurring significant 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 compliance
    initiatives.
    Our
    ability to use net operating loss carryforwards in the United
    States may be limited.
    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;
    general economic conditions;
    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 as a
    result of our actions or those of third parties;
    the timing of additional investments in our hardware and
    software systems;
    the seasonal trends in our business; 26




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
    regulatory compliance costs;
    costs associated with future acquisitions of technologies and
    businesses; and
    extraordinary expenses such as litigation or other
    dispute-related settlement payments.  quarter-to-quarter
  We may
    need additional capital in the future, which may not be
    available to us on favorable terms, or at all, and may dilute
    the ownership of our existing stockholders.
    
    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.    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.   27




---



##### Table of Contents



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;
    changes in general economic, industry and market conditions;
    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 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; and
    investors general perception of us.    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.
    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.
   28




---



##### Table of Contents




    authorize the issuance of blank check preferred
    stock that could be issued by our board of directors to impede
    or delay 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         29




---



##### Table of Contents



Commitments and Contingencies Form 10-K.
  ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    RESERVED PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Certain
    Information Regarding the Trading of Our Common Stock
    High

Low2008:First Quarter

$
25.24


$
14.13Second Quarter

$
20.19


$
14.09Third Quarter

$
21.24


$
16.25Fourth Quarter

$
17.95


$
10.312009:First Quarter

$
17.25


$
12.37Second Quarter

$
20.95


$
13.67Third Quarter

$
23.09


$
18.03Fourth Quarter

$
20.54


$
14.702010:First Quarter (through March 8, 2010)

$
20.45


$
16.36   Holders
    of Our Common Stock
    Dividends;
    Equity Repurchases
    Recent
    Sales of Unregistered Securities; Use of Proceeds from
    Registered Securities
    Securities
    Authorized for Issuance Under Equity Compensation
    Plans
   30




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K. Form 10-K. Form 10-K.
   Year Ended December 31,2009


2008


2007


2006


2005(In thousands, except per share and customer data)Statements of Operations Data:Revenue

$
129,061


$
87,268


$
50,495


$
27,552


$
14,658Cost of revenue(1)


37,692



24,251



13,031



7,801



3,747Gross profit


91,369



63,017



37,464



19,751



10,911Operating expenses:(1)Research and development


18,367



15,123



10,341



6,172



3,355Sales and marketing


61,023



42,851



27,376



18,592



7,460General and administrative


13,749



9,508



5,445



2,623



1,326Total operating expenses


93,139



67,482



43,162



27,387



12,141Loss from operations


(1,770
)


(4,465
)


(5,698
)


(7,636
)


(1,230
)Interest and other income (expense), net


510



2,409



(2,556
)


(203
)


(24
)Net loss


(1,260
)


(2,056
)


(8,254
)


(7,839
)


(1,254
)Accretion of redeemable convertible preferred stock










(816
)


(3,788
)


(5,743
)Net loss attributable to common stockholders

$
(1,260
)

$
(2,056
)

$
(9,070
)

$
(11,627
)

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

$
(0.04
)

$
(0.07
)

$
(0.97
)

$
(3.38
)

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


28,253



27,879



9,366



3,438



2,813Other Operating Data:End of period number of email marketing customers(2)


347,548



253,421



164,669



89,323



47,730     (1)
    
    Amounts include stock-based compensation expense, as follows:  Year Ended December 31,2009


2008


2007


2006


2005(In thousands)Cost of revenue

$
706


$
354


$
81


$
25


$
Research and development


1,150



737



170



27



Sales and marketing


1,134



648



133



19



General and administrative


2,094



1,117



261



12



17$
5,084


$
2,856


$
645


$
83


$
17   (2)
    
    We define our end of period number of email marketing customers
    as email marketing customers that we billed directly during the
    last month of the period.  31




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##### Table of Contents



As of December 31,2009

2008

2007

2006

2005(In thousands)Balance Sheet Data:Cash, cash equivalents and short-term marketable securities

$
113,102


$
107,175


$
101,535


$
12,790


$
2,784Total assets


141,488



127,142



111,845



18,481



5,545Deferred revenue


20,341



15,052



10,354



5,476



2,827Redeemable convertible preferred stock warrant














628



Notes payable and capital lease obligation














702



1,326Redeemable convertible preferred stock














35,322



16,657Total stockholders equity (deficit)


104,968



99,990



94,354



(28,629
)


(17,237
)   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.
  Business
    Overview
   32




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##### Table of Contents



Key
    Financial and Operating Metrics
      
    adjusted EBITDA, which we define as GAAP net income
    (loss) plus depreciation and amortization and stock-based
    compensation and minus net interest income;
    adjusted EBITDA margin, which we define as adjusted
    EBITDA divided by revenue; and
    free cash flow, which we define as net cash flow
    from operating activities less acquisition of property and
    equipment.    Certain
    Trends and Uncertainties
  Risk
    Factors Form 10-K
  
    We continue to closely monitor current adverse economic
    conditions, particularly as they impact small businesses,
    associations and non-profits. We are unable to predict the
    likely duration and severity of the current adverse economic
    conditions in the U.S. and other countries, but the longer
    the duration the greater risks we face in operating our business.
    We believe that given the size of our potential market and the
    relatively low barriers to entry, competition will continue to
    increase. Increased competition could result from existing
    competitors or new competitors that enter the market because of
    the potential opportunity. We will continue to closely monitor
    competitive activity and respond accordingly. Increased
    competition could have an adverse effect on our financial
    condition and results of operations. 33




---



##### Table of Contents




    We believe that as we continue to grow revenue at expected
    rates, our cost of revenue and operating expenses, including
    sales and marketing, research and development and general and
    administrative expenses, will increase in absolute dollar
    amounts. For a description of the general trends we anticipate
    in various expense categories, see Cost of Revenue and
    Operating Expenses below.
    As of December 31, 2009, we had cash and cash equivalents
    and short-term marketable securities of $113 million.
    During 2009, we experienced a substantial decline in our
    investment income as a result of the reduction in interest rates
    generally.  Sources
    of Revenue
      Cost of
    Revenue and Operating Expenses
    Cost of Revenue.
    Research and Development.
  Sales and Marketing. pay-per-click
 34




---



##### Table of Contents



General and Administrative.
  Critical
    Accounting Policies
  Form 10-K
  Revenue Recognition.
    Income Taxes.
  Software and Website Development
    Costs.
 35




---



##### Table of Contents



Redeemable Convertible Preferred Stock
    Warrant.
  Stock-Based Compensation.
    Year Ended December 31,2009

2008

2007Weighted average risk-free interest rate


2.64
%


2.24
%


4.23
%Expected term (in years)


6.1



6.1



6.1Weighted average expected volatility


53.8
%


54.37
%


62.1
%Expected dividends


0
%


0
%


0
%    36




---



##### Table of Contents



Results
    of Operations
    Year Ended December 31,2009


2008


2007Revenue


100
%


100
%


100
%Cost of revenue


29



28



26Gross profit


71



72



74Operating expenses:Research and development


14



17



20Sales and marketing


47



49



54General and administrative


11



11



11Total operating expenses


72



77



85Loss from operations


(1
)


(5
)


(11
)Interest and other income (expense), net






3



(5
)Net loss


(1
)%


(2
)%


(16
)%   Comparison
    of Years Ended December 31, 2009 and 2008
  Revenue.
  Cost of Revenue.
  Research and Development Expenses.
  Sales and Marketing Expenses.
 37




---



##### Table of Contents



General and Administrative Expenses.
  Interest and Other Income (Expense),
    Net.
  Comparison
    of Years Ended December 31, 2008 and 2007
  Revenue.
  Cost of Revenue.
  Research and Development Expenses.
  Sales and Marketing Expenses.
 38




---



##### Table of Contents



General and Administrative Expenses.
  Interest and Other Income (Expense),
    Net.
  Liquidity
    and Capital Resources
         39




---



##### Table of Contents




    during 2009, deferred revenue increased $5.2 million from
    $15.1 million to $20.3 million;
    during 2008, deferred revenue increased $4.7 million from
    $10.4 million to $15.1 million; and
    during 2007, deferred revenue increased $4.9 million from
    $5.5 million to $10.4 million.      
    during 2009, accrued expenses increased $1.7 million from
    $5.5 million to $7.2 million primarily due to
    increased marketing costs;
    during 2008, accrued expenses increased $2.6 million from
    $2.9 million to $5.5 million primarily due to
    increased employee related costs as a result of personnel
    additions and approximately $250,000 related to the acquisition
    of property and equipment included in accrued expenses at
    December 31, 2008; and
    during 2007, accrued expenses increased $522,000 from
    $2.4 million to $2.9 million.    
    during 2009, accounts payable increased $1.0 million from
    $4.8 million to $5.8 million;
    during 2008, accounts payable increased $928,000 from
    $3.9 million to $4.8 million; and
    during 2007, accounts payable increased $1.3 million from
    $2.6 million to $3.9 million.      
    depreciation and amortization expense of $8.6 million,
    $5.6 million and $2.6 million for the years ended
    December 31, 2009, 2008 and 2007, respectively;
    stock-based compensation expense of $5.1 million,
    $2.9 million and $645,000 for the years ended
    December 31, 2009, 2008 and 2007, respectively; and
    change in fair value of a preferred stock warrant of
    $3.9 million for the year ended December 31, 2007.       40




---



##### Table of Contents



41




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    New
    Accounting Guidance
    Contractual
    Obligations
          MoreLess than








thanTotal


1 Year


1-3 Years


3-5 Years


5 Years(In thousands)Operating lease obligations

$
32,592


$
4,203


$
10,040


$
10,811


$
7,538Hosting commitments


7,590



3,255



3,561



774



Vendor commitments


15,657



15,657











Total

$
55,839


$
23,115


$
13,601


$
11,585


$
7,538  42




---



##### Table of Contents



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Foreign Currency Exchange Risk.
  Interest Rate Sensitivity.
 43




---



##### Table of Contents



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


45Consolidated 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  44




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm     Internal Control - Integrated Framework
          45




---



##### Table of Contents



Constant
    Contact, Inc.Consolidated Balance Sheets
  December 31,2009


2008(In thousands, except share and per share data)ASSETSCurrent assetsCash and cash equivalents

$
59,822


$
73,243Short-term marketable securities


53,280



33,932Accounts receivable, net of allowance for doubtful accounts


53



40Prepaid expenses and other current assets


3,420



3,670Total current assets


116,575



110,885Property and equipment, net


23,891



15,799Restricted cash


750



308Other assets


272



150Total assets

$
141,488


$
127,142LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
5,806


$
4,786Accrued expenses


7,211



5,461Deferred revenue


20,341



15,052Total current liabilities


33,358



25,299Long-term accrued rent


3,162



1,853Total liabilities


36,520



27,152Commitments and contingencies (Note 10)Stockholders equityPreferred stock; $0.01 par value; 5,000,000 shares
    authorized; no shares issued or outstanding at December 31,
    2009 and 2008






Common stock; $0.01 par value; 100,000,000 shares
    authorized at December 31, 2009 and 2008; 28,403,673 and
    28,170,812 shares issued and outstanding at
    December 31, 2009 and 2008, respectively


284



282Additional paid-in capital


150,716



144,414Accumulated other comprehensive income


40



106Accumulated deficit


(46,072
)


(44,812
)Total stockholders equity


104,968



99,990Total liabilities and stockholders equity

$
141,488


$
127,142    46




---



##### Table of Contents



Constant
    Contact, Inc.
  Consolidated
    Statements of Operations
  Years Ended December 31,2009


2008


2007(In thousands, except per share data)Revenue

$
129,061


$
87,268


$
50,495Cost of revenue


37,692



24,251



13,031Gross profit


91,369



63,017



37,464Operating expensesResearch and development


18,367



15,123



10,341Sales and marketing


61,023



42,851



27,376General and administrative


13,749



9,508



5,445Total operating expenses


93,139



67,482



43,162Loss from operations


(1,770
)


(4,465
)


(5,698
)Interest income


504



2,409



1,543Interest expense










(188
)Other income and expense, net


6







(3,911
)Net loss


(1,260
)


(2,056
)


(8,254
)Accretion of redeemable convertible preferred stock










(816
)Net loss attributable to common stockholders

$
(1,260
)

$
(2,056
)

$
(9,070
)Net loss attributable to common stockholders per share: basic
    and diluted

$
(0.04
)

$
(0.07
)

$
(0.97
)Weighted average shares outstanding used in computing per share
    amounts: basic and diluted


28,253



27,879



9,366    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


Comprehensive


Accumulated


Equity


ComprehensiveShares


Amount


Shares


Amount


Shares


Amount


Shares


Amount



Shares


Amount


Capital


Income


Deficit


(Deficit)


Loss(In thousands, except share data)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
)


94,354Issuance of common stock in connection with stock option
    exercises



































201,300



2



234











236Issuance of common stock in connection with employee stock
    purchase plan



































38,033



1



496











497Issuance of common stock in connection with secondary public
    offering, net of issuance costs of $756



































314,465



3



3,996











3,999Stock-based compensation expense











































2,856











2,856Unrealized gain on
    available-for-sale
    securities















































104







104


$
104Net loss



















































(2,056
)


(2,056
)


(2,056
)Total comprehensive loss


























































$
(1,952
)Balance at December 31, 2008



































28,170,812



282



144,414



106



(44,812
)


99,990Issuance of common stock in connection with stock option
    exercises



































187,283



2



466











468Issuance of common stock in connection with employee stock
    purchase plan



































45,578







674











674Stock-based compensation expense











































5,162











5,162Unrealized loss on
    available-for-sale
    securities















































(60
)






(60
)

$
(60
)Reclassification adjustment for realized gains on
    available-for-sale
    securities included in net loss















































(6
)






(6
)


(6
)Net loss



















































(1,260
)


(1,260
)


(1,260
)Total comprehensive loss


























































$
(1,326
)Balance at December 31, 2009





$







$







$







$





28,403,673


$
284


$
150,716


$
40


$
(46,072
)

$
104,968    48




---



##### Table of Contents






Constant
    Contact, Inc.
  Consolidated
    Statements of Cash Flows
  Years Ended December 31,2009


2008


2007(In thousands)Cash flows from operating activitiesNet loss

$
(1,260
)

$
(2,056
)

$
(8,254
)Adjustments to reconcile net loss to net cash provided by
    operating activitiesDepreciation and amortization


8,572



5,558



2,631Amortization (accretion) of premium (discount) on investments


72



(46
)


(151
)Stock-based compensation expense


5,084



2,856



645Changes in fair value of redeemable convertible preferred stock
    warrant










3,918(Recovery of) provision for bad debts


(8
)


6



8Gain on sales of marketable securities


(6
)






Gain on sale of equipment










(6
)Changes in operating assets and liabilitiesAccounts receivable


(5
)


16



(29
)Prepaid expenses and other current assets


250



(1,969
)


(1,290
)Other assets


(122
)


103



(237
)Accounts payable


1,020



928



1,282Accrued expenses


1,750



2,283



522Deferred revenue


5,289



4,698



4,878Long-term accrued rent


1,309



1,502



351Net cash provided by operating activities


21,945



13,879



4,268Cash flows from investing activitiesPurchases of short-term marketable securities


(65,739
)


(33,798
)


(9,327
)Proceeds from maturities of short-term marketable securities


33,750



4,500



9,000Proceeds from sales of short-term marketable securities


12,509







Net increase in restricted cash


(442
)






(42
)Proceeds from sale of equipment










12Acquisition of property and equipment, including costs
    capitalized for development of internal use software


(16,586
)


(13,121
)


(5,666
)Net cash used in investing activities


(36,508
)


(42,419
)


(6,023
)Cash flows from financing activitiesProceeds from notes payable










2,788Repayments of notes payable










(3,490
)Proceeds from issuance of common stock pursuant to exercise of
    stock options and warrants


468



236



227Proceeds from issuance of preferred stock pursuant to exercise
    of a warrant










59Proceeds from issuance of common stock pursuant to employee
    stock purchase plan


674



497



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










90,436Proceeds from issuance of common stock in connection with
    secondary public offering, net of issuance costs of $756






3,999



Net cash provided by financing activities


1,142



4,732



90,020Net (decrease) increase in cash and cash equivalents


(13,421
)


(23,808
)


88,265Cash and cash equivalents, beginning of year


73,243



97,051



8,786Cash and cash equivalents, end of year

$
59,822


$
73,243


$
97,051Supplemental disclosure of cash flow informationCash paid for interest

$



$



$
194Supplemental disclosure of noncash investing and financing
    activities:Acquisition of property and equipment included in accrued
    expenses

$



$
250


$
Capitalization of stock-based compensation


78







Conversion of redeemable convertible preferred stock to common
    stock










40,743    49




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##### 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
    Fair
    Value of Financial Instruments
    
    Level 1  Quoted prices in active markets for
    identical assets or liabilities.
    Level 2  Inputs other than Level 1 that are
    observable, either directly or indirectly, such as quoted prices
    for similar assets or liabilities; quoted prices in markets that
    are not active; or other inputs that are observable or can be
    corroborated by observable market data for substantially the
    full term of the assets or liabilities. 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)
   
    Level 3  Unobservable inputs that are supported
    by little or no market activity and that are significant to the
    fair value of the assets or liabilities    Fair
    Value Option for Financial Assets and Financial
    Liabilities
    Cash
    and Cash Equivalents
    Marketable
    Securities
  available-for-sale
    Gross


Gross


EstimatedAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


ValueU.S. Treasury Bills

$
31,928



22


$
(3
)

$
31, 947Corporate and Agency Bonds


17,712



21







17,733Certificates of Deposit


3,600











3,600Total

$
53,240


$
43


$
(3
)

$
53,280     Accounts
    Receivable
   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)
    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
    Revenue
    Recognition
       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)
    Deferred
    Revenue
    Software
    and WebSite Development Costs
    Redeemable
    Convertible Preferred Stock Warrant
    Comprehensive
    Loss
  available-for-sale
  Segment
    Data
    Net
    Loss Attributable to Common Stockholders Per Share
   53




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except share and per share amounts)
      Year Ended December 31,2009


2008


2007Options to purchase common stock


3,394,377



2,366,010



1,773,259Warrants to purchase common or redeemable convertible preferred
    stock


520



520



199,583Restricted shares


27,321



75,206



122,802Redeemable convertible preferred stock










13,200,608Total options, warrants, restricted shares and redeemable
    convertible preferred stock exercisable or convertible into
    common stock


3,422,218



2,441,736



15,296,252   Advertising
    Expense
    Accounting
    for Stock-Based Compensation
    Income
    Taxes
     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)
  Recently
    Adopted Accounting Guidance
      New
    Accounting Guidance
    3.
    Property
    and Equipment    December 31,2009


2008Computer equipment

$
21,129


$
15,172Software


13,266



6,886Furniture and fixtures


3,751



2,022Leasehold improvements


5,982



3,384Total property and equipment


44,128



27,464Less: Accumulated depreciation and amortization


20,237



11,665Property and equipment, net

$
23,891


$
15,799      55




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except share and per share amounts)
   4.
    Notes
    Payable      5.
    Redeemable
    Convertible Preferred Stock and Stockholders Equity
    (Deficit)  Public
    Offerings
      Common
    Stock
      Redeemable
    Convertible Preferred Stock
     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)
    Warrants
      6.
    Stock-Based
    Awards        Stock
    Options
   57




---



##### Table of Contents



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

Year Ended

Year EndedDecember 31,

December 31,

December 31,2009

2008

2007Weighted average risk-free interest rate


2.64
%


2.24
%


4.23
%Expected term (in years)


6.1



6.1



6.1Weighted average expected volatility


53.8
%


54.37
%


62.1
%Expected dividends


0
%


0
%


0
%  58




---



##### Table of Contents



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


RemainingAverage


Contractual


AggregateNumber of


Exercise


Term


IntrinsicOptions


Price


(In Years)


ValueBalance 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



6.32Granted


1,109,900



15.44Exercised


(201,300
)


1.17Forfeited


(88,051
)


10.00Balance at December 31, 2008


3,021,171


$
9.91Granted


1,369,350



16.87Exercised


(187,283
)


17.96Forfeited


(55,926
)


13.74Balance at December 31, 2009


4,147,312


$
12.49



8.14


$
20,420Vested and expected to vest at December 31, 2009


3,982,376


$
12.39



8.06


$
20,017Exercisable at December 31, 2009


1,635,886


$
7.66



6.76


$
15,546             Years EndedDecember 31,2009


2008


2007Cost of revenue

$
706


$
354


$
81Research and development


1,150



737



170Sales and marketing


1,134



648



133General and administrative


2,094



1,117



261$
5,084


$
2,856


$
645  59




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except share and per share amounts)
    Stock
    Purchase Plan
    Restricted
    Stock
    7.
    Income
    Taxes    Years EndedDecember 31,2009


2008


2007Statutory rate


34
%


34
%


34
%Increase in valuation allowance


(41
)


(27
)


(44
)State taxes, net of federal benefit


(11
)


19



6Impact of permanent differences


(6
)


(2
)


Stock options


(64
)


(20
)Expiration of state net operating losses






(3
)


(5
)Tax credits


94



17



8Impact of change in effective state tax rates






(18
)


Other


(6
)






10
%


0
%


0
%  60




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except share and per share amounts)
    December 31,2009


2008Deferred tax assetsCurrent:Accrued expenses

$
640


$
304Total current


640



304Noncurrent:Net operating loss carryforwards


11,146



12,583Depreciation and capitalized research and development


776



724Research and development credit carryforwards


4,143



2,392Stock options


1,827



895Other


26



10Total noncurrent


17,918



16,604Total gross deferred tax assets


18,558



16,908Deferred tax asset valuation allowance


(17,062
)


(16,559
)Deferred tax assets


1,496



349Deferred tax liabilities-non-currentDepreciation and capitalized research and development


(1,496
)


(349
)Total deferred tax liabilities  non-current


(1,496
)


(349
)Net deferred tax assets

$



$
        61




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except share and per share amounts)
        8.
    Accrued
    Expenses  December 31,2009


2008Payroll and payroll related

$
1,984


$
2,211Licensed software and maintenance


1,106



981Marketing programs


2,014



569Other accrued expenses


2,107



1,700$
7,211


$
5,461   9.
    401(k)
    Savings Plan      10.
    Commitments
    and Contingencies  Operating
    Leases
   62




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except share and per share amounts)
              2010

$
4,2012011


4,8312012


5,2092013


5,3522014 and thereafter


12,999Total

$
32,592  63




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except share and per share amounts)
  Hosting
    Services
    2010


3,2552011


1,9002012


1,6612013


774Total

$
7,590   Vendor
    Commitments
    Letters
    of Credit and Restricted Cash
    Indemnification
    Obligations
    11.
    Related
    Party Transactions   64




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except share and per share amounts)
   12.
    Quarterly
    Information (Unaudited)  Three Months EndedDec. 31,

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

March 31,2009

2009

2009

2009

2008

2008

2008

2008Statements of Operations Data:Revenue

$
36,455


$
33,533


$
30,955


$
28,118


$
25,471


$
22,859


$
20,771


$
18,167Gross profit


25,716



23,606



22,058



19,989



18,206



16,305



15,122



13,384(Loss)/income from operations


(1,858
)


1,342



(121
)


(1,133
)


(1,716
)


(1,013
)


(1,098
)


(638
)Net (loss)/income


(1,762
)


1,470



39



(1,007
)


(1,606
)


(399
)


(389
)


338Basic and diluted net (loss)/income per share

$
(0.06
)

$
0.05


$
0.00


$
(0.04
)

$
(0.06
)

$
(0.01
)

$
(0.01
)

$
0.01  65




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f)
  
    Pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of our assets;
    Provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that our receipts and expenditures are being made only in
    accordance with authorizations of our management and
    directors; and
    Provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of our
    assets that could have a material effect on our financial
    statements.    Internal
    Control  Integrated Framework
 66




---



##### Table of Contents



Form 10-K.
  Changes
    in Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
  ITEM 9B.
    OTHER
    INFORMATION   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   67




---



##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Financial Statements
  Form 10-K.
  Exhibits
  Form 10-K
  Financial Statement Schedules
   68




---



##### Table of Contents



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

Title

Date/s/  Gail
    F. GoodmanGail
    F. Goodman

Chairman, President and Chief Executive Officer (Principal
    Executive Officer)

March 10, 2010/s/  Thomas
    AndersonThomas
    Anderson

Director

March 4, 2010/s/  Robert
    P. BadavasRobert
    P. Badavas

Director

March 10, 2010/s/  John
    CampbellJohn
    Campbell

Director

March 4, 2010/s/  Michael
    T. FitzgeraldMichael
    T. Fitzgerald

Director

March 10, 2010/s/  William
    S. KaiserWilliam
    S. Kaiser

Director

March 4, 2010/s/  Daniel
    T. H. NyeDaniel
    T. H. Nye

Director

March 10, 2010/s/  Steven
    R. WassermanSteven
    R. Wasserman

Vice President and Chief Financial Officer (Principal Financial
    and Accounting Officer)

March 10, 2010  69




---



##### 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(1)#

1999 Stock Option/Stock Issuance Plan, as amended.10
.2(1)#

Form of Non-Qualified Stock Option Agreement with Executive
    Officers under the 1999 Stock Option/Stock Issuance Plan.10
.3(1)#

Form of Non-Qualified Stock Option Agreement under the 1999
    Stock Option/Stock Issuance Plan.10
.4(1) #

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(1)#

Letter Agreement, dated April 14, 1999, between the Company
    and Gail F. Goodman.10
.10(1)#

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

Form of Director and Officer Indemnification Agreement.10
.12(1)

Amended and Restated Investors Rights Agreement, dated as
    of August 9, 2001, among the Company and the investors
    listed therein.10
.13(1)

Amended and Restated Preferred Investors Rights Agreement,
    dated as of May 12, 2006, among the Company and the parties
    listed therein.10
.14(1)

Lease Agreement, dated as of July 9, 2002, as amended,
    between the Company and Boston Properties Limited Partnership.10
.15(2)

Fourth Amendment to Lease, dated as of November 26, 2007,
    between the Company and Boston Properties Limited Partnership.10
.16(1)

Form of Indemnification Agreement between the Company and
    certain entities that sold stock in the Companys initial
    public offering.10
.17(3)

Master Services Agreement dated July 19, 2007 by and
    between the Company and Sentinel Properties-Bedford, LLC, as
    amended.10
.18(4)

Fifth Amendment to Lease, dated as of April 14, 2008,
    between the Company and Boston Properties Limited Partnership.10
.19(5)

Lease, dated as of May 30, 2008, between the Company and
    Centerra Office Tech I, LLC.10
.20(5)

Lease, dated as of May 30, 2008, between the Company and
    McWhinney 409CC, LLC.10
.21(6)#

Amendment No. 1 to 2007 Employee Stock Purchase Plan.10
.22(7)

First Amendment to Lease, dated as of October 8, 2008,
    between the Company and McWhinney 409CC, LLC.10
.23(8)#

Letter Agreement dated December 9, 2008 between the Company
    and Gail F. Goodman.10
.24(8)#

Letter Agreement dated December 9, 2008 between the Company
    and Steven R. Wasserman.10
.25(1)

Loan and Security Agreement, dated February 27, 2003, as
    amended, between the Company and Silicon Valley Bank.10
.26(9)#

2009 Executive Cash Incentive Bonus Plan.10
.27(10)#

Letter Agreement, dated March 7, 2007, between the Company
    and Robert P. Nault.10
.28(8)#

Letter Agreement, dated December 9, 2008, between the
    Company and Robert P. Nault.10
.29(8)#

Letter Agreement, dated December 9, 2008, between the
    Company and Ellen Brezniak.10
.30(9)#

Letter Agreement, dated December 9, 2008, between the
    Company and Nancie Freitas, amending a Letter Agreement, dated
    November 17, 2005 between the Company and Nancie Freitas.10
.31(11)

Lease, dated May 29, 2009, between the Company and Boston
    Properties Limited Partnership.10
.32(12)#

Transition Agreement, dated December 1, 2009, between the
    Company and Steven R. Wasserman.10
.33(13)

Amendment No. 2 to 2007 Employee Stock Purchase Plan. 70




---



##### Table of Contents



ExhibitNumber

Description10
.34*#

2010 Executive Cash Incentive Bonus Plan10
.35*#

Form of Performance Stock Option Agreement, under the 2007 Stock
    Incentive Plan.10
.36*#

Letter Agreement, dated September 3, 2008, between the
    Company and John J. Walsh, Jr., as amended.21
.1*

Subsidiaries of the Company.23
.1*

Consent of PricewaterhouseCoopers LLP.31
.1*

Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2*

Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1*

Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.32
.2*

Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    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 (Registration Number
    333-144381)
    filed with the Securities and Exchange Commission.(2)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    November 28, 2007.(3)
    
    Incorporated by reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2007 filed with the
    Securities and Exchange Commission on March 14, 2008.(4)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 18, 2008.(5)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    June 4, 2008.(6)
    
    Incorporated by reference to the Companys Quarterly Report
    on
    Form 10-Q
    for the quarter ended June 30, 2008 filed with the
    Securities and Exchange Commission on August 13, 2008.(7)
    
    Incorporated by reference to the Companys Quarterly Report
    on
    Form 10-Q
    for the quarter ended September 30, 2008 filed with the
    Securities and Exchange Commission on November 7, 2008.(8)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    December 10, 2008.(9)
    
    Incorporated by reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2008 filed with the
    Securities and Exchange Commission on March 12, 2009.(10)
    
    Incorporated by reference to the Companys Registration
    Statement on
    Form S-1,
    as amended (Registration Number
    333-149918)
    filed with the Securities and Exchange Commission.(11)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    June 4, 2009.(12)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    December 1, 2009.(13)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    December 2, 2009. 71