##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-33707
 CONSTANT CONTACT, INC.
  Delaware
    
    04-3285398(State or other jurisdiction of incorporation)
    
    (I.R.S. Employer
Identification No.)1601 Trapelo Road, Third FloorWaltham, Massachusetts
    
    02451(Address of principal executive offices)
    
    (Zip Code)
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



CONSTANT CONTACT, INC.
 INDEX
 PAGENUMBERPART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS
    
    
    3CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
    
    
    3CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
    
    
    4CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
    
    
    5NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    
    
    6ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    15ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    22ITEM 4. CONTROLS AND PROCEDURES
    
    
    22PART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    23ITEM 1A. RISK FACTORS
    
    
    23ITEM 6. EXHIBITS
    
    
    36SIGNATURES
    
    
    37EXHIBITS
    
    
    38EX-10.1EX-10.2EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



Part I. Financial Information
 
 Item 1.
    
    Financial Statements
 Constant Contact, Inc.
 
 Condensed Consolidated Balance Sheets


(Unaudited)
 June 30,
    
    
    December 31,(In thousands, except share and per share data)
    
    2010
    
    
    2009AssetsCurrent assetsCash and cash equivalents
    
    $
    33,279
    
    
    $
    59,822Marketable securities
    
    
    82,706
    
    
    
    53,280Accounts receivable, net
    
    
    59
    
    
    
    53Prepaid expenses and other current assets
    
    
    4,694
    
    
    
    3,420Total current assets
    
    
    120,738
    
    
    
    116,575Property and equipment, net
    
    
    26,842
    
    
    
    23,891Restricted cash
    
    
    750
    
    
    
    750Goodwill
    
    
    5,068
    
    
    
    Acquired intangible assets, net
    
    
    970
    
    
    
    Other assets
    
    
    272
    
    
    
    272Total assets
    
    $
    154,640
    
    
    $
    141,488Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    7,828
    
    
    $
    5,806Accrued expenses
    
    
    7,528
    
    
    
    7,211Deferred revenue
    
    
    23,624
    
    
    
    20,341Total current liabilities
    
    
    38,980
    
    
    
    33,358Long-term accrued rent
    
    
    2,758
    
    
    
    3,162Total liabilities
    
    
    41,738
    
    
    
    36,520Commitments and contingencies (Note 8)Stockholders equityPreferred stock, $0.01 par value; 5,000,000
shares authorized; no shares issued or
outstanding as of June 30, 2010 and December
31, 2009
    
    
    
    
    
    
    Common stock, $0.01 par value; 100,000,000
shares authorized; 28,960,225 and 28,403,673
shares issued and outstanding as of June 30,
2010 and December 31, 2009, respectively
    
    
    290
    
    
    
    284Additional paid-in capital
    
    
    160,344
    
    
    
    150,716Accumulated other comprehensive income
    
    
    26
    
    
    
    40Accumulated deficit
    
    
    (47,758
    )
    
    
    (46,072
    )Total stockholders equity
    
    
    112,902
    
    
    
    104,968Total liabilities and stockholders equity
    
    $
    154,640
    
    
    $
    141,488
  3




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Constant Contact, Inc.
 
 Condensed Consolidated Statements of Operations
 (Unaudited)
 Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,(In thousands, except per share data)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Revenue
    
    $
    42,455
    
    
    $
    30,955
    
    
    $
    81,936
    
    
    $
    59,073Cost of revenue
    
    
    12,686
    
    
    
    8,897
    
    
    
    24,402
    
    
    
    17,026Gross profit
    
    
    29,769
    
    
    
    22,058
    
    
    
    57,534
    
    
    
    42,047Operating expensesResearch and development
    
    
    5,943
    
    
    
    4,525
    
    
    
    11,564
    
    
    
    8,671Sales and marketing
    
    
    20,217
    
    
    
    14,281
    
    
    
    38,921
    
    
    
    28,112General and administrative
    
    
    4,604
    
    
    
    3,373
    
    
    
    8,903
    
    
    
    6,518Total operating expenses
    
    
    30,764
    
    
    
    22,179
    
    
    
    59,388
    
    
    
    43,301Loss from operations
    
    
    (995
    )
    
    
    (121
    )
    
    
    (1,854
    )
    
    
    (1,254
    )Interest income
    
    
    85
    
    
    
    160
    
    
    
    168
    
    
    
    286Net (loss) income
    
    $
    (910
    )
    
    $
    39
    
    
    $
    (1,686
    )
    
    $
    (968
    )Net (loss) income per share:Basic
    
    $
    (0.03
    )
    
    $
    0.00
    
    
    $
    (0.06
    )
    
    $
    (0.03
    )Diluted
    
    $
    (0.03
    )
    
    $
    0.00
    
    
    $
    (0.06
    )
    
    $
    (0.03
    )Weighted average shares outstanding used in computing per share amounts:Basic
    
    
    28,652
    
    
    
    28,207
    
    
    
    28,554
    
    
    
    28,175Diluted
    
    
    28,652
    
    
    
    29,421
    
    
    
    28,554
    
    
    
    28,175
  4




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Constant Contact, Inc.
 
 Condensed Consolidated Statements of Cash Flows
 (Unaudited)
 Six Months EndedJune 30,(In thousands)
    
    2010
    
    
    2009Cash flows from operating activitiesNet loss
    
    $
    (1,686
    )
    
    $
    (968
    )Adjustments to reconcile net loss to net cash provided by operating activitiesDepreciation and amortization
    
    
    5,464
    
    
    
    3,761Amortization (accretion) of premium (discount) on investments
    
    
    11
    
    
    
    (36
    )Stock-based compensation expense
    
    
    3,716
    
    
    
    2,312Recovery of bad debts
    
    
    (4
    )
    
    
    (4
    )Changes in operating assets and liabilities, net of effects from acquisitionAccounts receivable
    
    
    (2
    )
    
    
    (45
    )Prepaid expenses and other current assets
    
    
    (1,262
    )
    
    
    295Other assets
    
    
    
    
    
    
    5Accounts payable
    
    
    2,022
    
    
    
    (1,211
    )Accrued expenses
    
    
    95
    
    
    
    1,057Deferred revenue
    
    
    3,283
    
    
    
    3,245Long-term accrued rent
    
    
    (404
    )
    
    
    1,185Net cash provided by operating activities
    
    
    11,233
    
    
    
    9,596Cash flows from investing activitiesPurchases of marketable securities
    
    
    (63,746
    )
    
    
    (33,735
    )Proceeds from maturities of marketable securities
    
    
    34,295
    
    
    
    Increase in restricted cash
    
    
    
    
    
    
    (442
    )Payment for
acquisition of Nutshell Mail, Inc., net of cash acquired
    
    
    (2,225
    )
    
    
    Acquisition of property and equipment, including costs capitalized for
development of internal use software
    
    
    (8,350
    )
    
    
    (9,997
    )Net cash used in investing activities
    
    
    (40,026
    )
    
    
    (44,174
    )Cash flows from financing activitiesProceeds from issuance of common stock pursuant to exercise of stock options
    
    
    1,860
    
    
    
    243Proceeds from issuance of common stock pursuant to employee stock purchase plan
    
    
    390
    
    
    
    283Net cash provided by financing activities
    
    
    2,250
    
    
    
    526Net decrease in cash and cash equivalents
    
    
    (26,543
    )
    
    
    (34,052
    )Cash and cash equivalents, beginning of period
    
    
    59,822
    
    
    
    73,243Cash and cash equivalents, end of period
    
    $
    33,279
    
    
    $
    39,191Supplemental disclosure of non-cash financing activities:Issuance of
common stock in connection with the acquisition of Nutshell Mail, Inc.
    
    $
    3,603
    
    
    $
    
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Constant Contact, Inc.
 
 Notes to Condensed Consolidated Financial Statements
 1. Nature of the Business
  2. Summary of Significant Accounting Policies
 Basis of Presentation
    Use of Estimates
  6




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Revenue Recognition
  Goodwill and Acquired Intangible Assets
   Software and Web Site Development Costs
  Comprehensive Loss
   Three months endedJune 30,2010
    
    
    2009Net (loss) income
    
    $
    (910
    )
    
    $
    39Other comprehensive (loss) income:Unrealized gains on available-for-sale securities, net
    
    
    29
    
    
    
    21Comprehensive (loss) income
    
    $
    (881
    )
    
    $
    60
 Six months endedJune 30,2010
    
    
    2009Net loss
    
    $
    (1,686
    )
    
    $
    (968
    )Other comprehensive loss:Unrealized losses on available-for-sale securities, net
    
    
    (14
    )
    
    
    (25
    )Comprehensive loss
    
    $
    (1,700
    )
    
    $
    (993
    )
 7




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##### Table of Contents



Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. Treasury Bills
    
    $
    39,951
    
    
    
    20
    
    
    $
    
    
    
    $
    39,971U.S. Treasury Note
    
    
    5,024
    
    
    
    7
    
    
    
    
    
    
    
    5,031Corporate and Agency Bonds
    
    
    34,705
    
    
    
    5
    
    
    
    (6
    )
    
    
    34,704Certificates of Deposit
    
    
    3,000
    
    
    
    
    
    
    
    
    
    
    
    3,000Total
    
    $
    82,680
    
    
    $
    32
    
    
    $
    (6
    )
    
    $
    82,706
   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
 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.
    
    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
  8




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Net Income (loss) Per Share
    (in thousands)
 Three monthsEnded June 30,2009Weighted average shares used in calculating basic
net income per share
    
    
    28,207Stock options
    
    
    1,179Warrants
    
    
    1Restricted shares
    
    
    34Shares used in computing diluted net income per share
    
    
    29,421
  (in thousands)
 Three months endedJune 30,2010
    
    
    2009Options to purchase common stock
    
    
    4,375
    
    
    
    1,916Warrants to purchase common stock
    
    
    1
    
    
    
    Restricted shares
    
    
    51
    
    
    
    Total options, warrants and restricted
shares exercisable into common stock
    
    
    4,427
    
    
    
    1,916
  (in thousands)
 Six months endedJune 30,2010
    
    
    2009Options to purchase common stock
    
    
    4,316
    
    
    
    3,249Warrants to purchase common stock
    
    
    1
    
    
    
    1Restricted shares
    
    
    26
    
    
    
    39Total options, warrants and restricted shares
exercisable into common stock
    
    
    4,343
    
    
    
    3,289
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Accounting for Stock-Based Compensation
  Income Taxes
   Segment Data
  New Accounting Guidance
  3. Acquisition of NutshellMail
   Current assets, including cash of $144
    
    $
    156Purchased technology
    
    
    970Goodwill
    
    
    5,068Total assets acquired
    
    
    6,194Fair value of liabilities assumed
    
    
    222Net assets acquired
    
    $
    5,972
 10




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4. Goodwill and Acquired Intangible Assets
   5. Stock-Based Awards
 Stock Incentive Plan
  Stock Purchase Plan
  Stock-Based Compensation Expense
  Three months endedJune 30,2010
    
    
    2009Cost of revenue
    
    $
    286
    
    
    $
    174Research and development
    
    
    572
    
    
    
    283Sales and marketing
    
    
    478
    
    
    
    283General and administrative
    
    
    645
    
    
    
    499Total
    
    $
    1,981
    
    
    $
    1,239
 Six months endedJune 30,2010
    
    
    2009Cost of revenue
    
    $
    523
    
    
    $
    321Research and development
    
    
    973
    
    
    
    506Sales and marketing
    
    
    874
    
    
    
    517General and administrative
    
    
    1,346
    
    
    
    968Total
    
    $
    3,716
    
    
    $
    2,312
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##### Table of Contents



6. Income Taxes
   7. Accrued Expenses
 June 30,
    
    
    December 31,2010
    
    
    2009Payroll and payroll related
    
    $
    3,224
    
    
    $
    1,984Licensed software and maintenance
    
    
    1,150
    
    
    
    1,106Marketing programs
    
    
    833
    
    
    
    2,014Other accrued expenses
    
    
    2,321
    
    
    
    2,107$
    7,528
    
    
    $
    7,211
 8. Commitments and Contingencies
 Operating Leases
   12




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Remainder of 2010
    
    $
    2,2652011
    
    
    4,8312012
    
    
    5,2092013
    
    
    5,3522014 and thereafter
    
    
    12,999Total
    
    $
    30,656
 Hosting Services
  Remainder of 2010
    
    $
    1,6272011
    
    
    1,9002012
    
    
    1,6612013
    
    
    774Total
    
    $
    5,962
 Vendor Commitments
  Letters of Credit and Restricted Cash
  Indemnification Obligations
  13




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9. 401(k) Savings Plan
   14




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis of our financial condition and results of operations should
be read in conjunction with the unaudited condensed consolidated financial statements and the
related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited
consolidated financial statements and notes thereto and managements discussion and analysis of
financial condition and results of operations for the year ended December 31, 2009 included in our
Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March 10,
2010. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These
statements are often identified by the use of words such as may, will, expect, believe,
anticipate, intend, could, estimate, or continue, and similar expressions or variations.
Such forward-looking statements are subject to risks, uncertainties and other factors that could
cause actual results and the timing of certain events to differ materially from future results
expressed or implied by such forward-looking statements. Factors that could cause or contribute to
such differences include, but are not limited to, those discussed in the section titled Risk
Factors, set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and elsewhere in this
report. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as
of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and
developments will cause our views to change. However, while we may elect to update these
forward-looking statements at some point in the future, we have no current intention of doing so
except to the extent required by applicable law. You should, therefore, not rely on these
forward-looking statements as representing our views as of any date subsequent to the date of this
Quarterly Report on Form 10-Q.
 Business Overview
     Key Financial and Operating Metrics
  15




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
    
    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
 
    
    We continue to closely monitor current adverse economic
conditions, particularly as they impact small businesses,
associations and non-profits.
We believe that small businesses, in particular, continue to be greatly impacted by the slow economy.
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.
    
    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 June 30, 2010, we had cash and cash equivalents and
short-term marketable securities of $116 million. Due to
the low interest rates generally we expect only a nominal
amount of investment income in 2010.
 Sources of Revenue
   16




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Cost of Revenue and Operating Expenses
  Cost of Revenue.
 Research and Development.
 Sales and Marketing.
 General and Administrative.
 Critical Accounting Policies
  
    
    Revenue recognition;
    
    Income taxes;
    
    Goodwill and acquired intangible assets (see description below);
 17




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##### Table of Contents




    
    Software and website development costs; and
    
    Stock-based compensation.
  Goodwill and Acquired Intangible Assets
    Results of Operations
 Three Months Ended June 30, 2010 compared to Three Months Ended June 30, 2009
 Revenue
 Cost of Revenue
 Research and Development Expenses
 18




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##### Table of Contents



Sales and Marketing Expenses.
 General and Administrative Expenses.
 Interest Income.
 Six Months Ended June 30, 2010 compared to Six Months Ended June 30, 2009
 Revenue
 Cost of Revenue
 Research and Development Expenses
 19




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Sales and Marketing Expenses.
 General and Administrative Expenses.
 Interest Income.
 Liquidity and Capital Resources
  Cash Provided By Operating Activities
  20




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Cash Used In Investing Activities
  Cash Provided By Financing Activities
  Contractual Obligations
     Payments Due InLess Than
    
    
    
    
    
    
    
    
    
    
    More ThanTotal
    
    
    1 Year
    
    
    1 - 3 Years
    
    
    3 - 5 Years
    
    
    5 Years(In thousands)Operating lease obligations
    
    $
    30,656
    
    
    $
    4,669
    
    
    $
    10,300
    
    
    $
    10,912
    
    
    $
    4,775Hosting commitments
    
    
    5,962
    
    
    
    2,717
    
    
    
    2,858
    
    
    
    387
    
    
    
    Vendor commitments
    
    
    9,195
    
    
    
    9,195
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    45,813
    
    
    $
    16,581
    
    
    $
    13,158
    
    
    $
    11,299
    
    
    $
    4,775
  21




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Off-Balance Sheet Arrangements
  New Accounting Guidance
  
 Item 3.
    Quantitative and Qualitative Disclosures About Market Risk
 Foreign Currency Exchange Risk.
 Interest Rate Sensitivity.
 
 Item 4.

    Controls and Procedures
   22




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PART II. OTHER INFORMATION
 
 Item 1.

    Legal Proceedings
  
 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 Quarterly Report on Form 10-Q 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 differ 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.
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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.
  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.
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In the event we are unable to retain existing customers or to grow our customer base by adding new
customers, our operating results will be adversely affected.
  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 use our products or may increase their costs, which
could harm our business.
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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.
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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.
   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.
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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
 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.
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Our efforts to expand our
product offerings beyond email marketing may not succeed.
  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.
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Our relationships with our channel partners may be terminated or may not continue to be beneficial
in generating new customers, which could adversely affect our ability to increase
our customer base.
  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;
    
    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.
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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 may incur net losses in the future.
  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.
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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;
    
    regulatory compliance costs;
    
    costs associated with future acquisitions of technologies and businesses; and
    
    extraordinary expenses such as litigation or other dispute-related settlement payments.
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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.
  RISKS RELATED TO THE OWNERSHIP OF OUR COMMON STOCK
 The market price of our common stock has been and may continue to be volatile.
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
    
    fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
    
    quarterly net new email marketing customer additions;
    
    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.
  
    
    authorize the issuance of blank check preferred stock that could be issued by our board of directors to impede or
delay a takeover attempt;
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
    
    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 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Acquisition of Nutshell Mail
 
 Item 6. Exhibits
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SIGNATURES
  CONSTANT CONTACT, INC.Date: August 4, 2010
    By:
    /s/ Gail F. GoodmanGail F. GoodmanPresident and Chief
Executive Officer
(Principal Executive Officer)Date: August 4, 2010
    By:
    /s/ Harpreet S. GrewalHarpreet S. GrewalExecutive Vice
President and Chief
Financial Officer

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EXHIBIT INDEX
  Exhibit No.
    
    Description10.1*
    
    First Amendment to Lease dated as
of May 3, 2010 by  and between BP Reservoir Place LLC
(as successor-in-interest to Boston Properties Limited Partnership)
and the Company.10.2*
    
    Registration Rights Agreement dated as of May
21, 2010 by and among the Company and the stockholders of Nutshell Mail, Inc.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 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.32.2 *#
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, by Chief Financial Officer.
 
 #
    
    This certification shall not be deemed filed for purposes of Section 18 of the Securities
Exchange Act of 1934, or otherwise subject to the liability of that Section, nor shall they be
deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934.*
    
    Filed herewith. 38