##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 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, Suite 329
Waltham, Massachusetts
    
    02451(Address of principal executive offices)
    
    (Zip Code)
   þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



CONSTANT CONTACT, INC.
 INDEX
 PAGENUMBERPART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS
    
    
    1CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
    
    
    1CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
    
    
    2CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
    
    
    3NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    
    
    4ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
    
    
    12ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    20ITEM 4. CONTROLS AND PROCEDURES
    
    
    20PART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    21ITEM 1A. RISK FACTORS
    
    
    21ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    35ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    35ITEM 6. EXHIBITS
    
    
    36SIGNATURES
    
    
    37EXHIBITSEX-31.1 Section 302 Certification of the Chief Executive OfficerEX-31.2 Section 302 Certification of the Chief Financial OfficerEX-32.1 Section 906 Certification of the Chief Executive OfficerEX-32.2 Section 906 Certification of the Chief Financial Officer




---



##### 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)
    
    2009
    
    
    2008AssetsCurrent assetsCash and cash equivalents
    
    $
    39,191
    
    
    $
    73,243Short-term marketable securities
    
    
    67,678
    
    
    
    33,932Accounts receivable, net
    
    
    89
    
    
    
    40Prepaid expenses and other current assets
    
    
    3,375
    
    
    
    3,670Total current assets
    
    
    110,333
    
    
    
    110,885Property and equipment, net
    
    
    22,075
    
    
    
    15,799Restricted cash
    
    
    750
    
    
    
    308Other assets
    
    
    145
    
    
    
    150Total assets
    
    $
    133,303
    
    
    $
    127,142Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    3,575
    
    
    $
    4,786Accrued expenses
    
    
    6,518
    
    
    
    5,461Deferred revenue
    
    
    18,297
    
    
    
    15,052Total current liabilities
    
    
    28,390
    
    
    
    25,299Long-term accrued rent
    
    
    3,038
    
    
    
    1,853Total liabilities
    
    
    31,428
    
    
    
    27,152Commitments and contingencies (Note 7)Stockholders equityPreferred stock, $0.01 par value; 5,000,000
shares authorized; no shares issued or
outstanding as of June 30, 2009 and
December 31, 2008
    
    
    
    
    
    
    Common stock, $0.01 par value; 100,000,000
shares authorized; 28,295,322 and
28,170,812 shares issued and outstanding as
of June 30, 2009 and December 31, 2008,
respectively
    
    
    283
    
    
    
    282Additional paid-in capital
    
    
    147,291
    
    
    
    144,414Accumulated other comprehensive income
    
    
    81
    
    
    
    106Accumulated deficit
    
    
    (45,780
    )
    
    
    (44,812
    )Total stockholders equity
    
    
    101,875
    
    
    
    99,990Total liabilities and stockholders equity
    
    $
    133,303
    
    
    $
    127,142
  1




---



##### Table of Contents



Constant Contact, Inc.
 
 Condensed Consolidated Statements of Operations
 (Unaudited)
 Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,(In thousands, except per share data)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Revenue
    
    $
    30,955
    
    
    $
    20,771
    
    
    $
    59,073
    
    
    $
    38,938Cost of revenue
    
    
    8,897
    
    
    
    5,649
    
    
    
    17,026
    
    
    
    10,432Gross profit
    
    
    22,058
    
    
    
    15,122
    
    
    
    42,047
    
    
    
    28,506Operating expensesResearch and development
    
    
    4,525
    
    
    
    3,701
    
    
    
    8,671
    
    
    
    7,030Sales and marketing
    
    
    14,281
    
    
    
    10,220
    
    
    
    28,112
    
    
    
    18,888General and administrative
    
    
    3,373
    
    
    
    2,299
    
    
    
    6,518
    
    
    
    4,324Total operating expenses
    
    
    22,179
    
    
    
    16,220
    
    
    
    43,301
    
    
    
    30,242Loss from operations
    
    
    (121
    )
    
    
    (1,098
    )
    
    
    (1,254
    )
    
    
    (1,736
    )Interest income
    
    
    160
    
    
    
    709
    
    
    
    286
    
    
    
    1,685Net income (loss)
    
    $
    39
    
    
    $
    (389
    )
    
    $
    (968
    )
    
    $
    (51
    )Net income (loss) per share:Basic
    
    $
    0.00
    
    
    $
    (0.01
    )
    
    $
    (0.03
    )
    
    $
    (0.00
    )Diluted
    
    $
    0.00
    
    
    $
    (0.01
    )
    
    $
    (0.03
    )
    
    $
    (0.00
    )Weighted average shares outstanding used in computing per share amounts:Basic
    
    
    28,207
    
    
    
    27,856
    
    
    
    28,175
    
    
    
    27,701Diluted
    
    
    29,421
    
    
    
    27,856
    
    
    
    28,175
    
    
    
    27,701
  2




---



##### Table of Contents



Constant Contact, Inc.
 
 Condensed Consolidated Statements of Cash Flows
 (Unaudited)
 Six Months EndedJune 30,(In thousands)
    
    2009
    
    
    2008Cash flows from operating activitiesNet loss
    
    $
    (968
    )
    
    $
    (51
    )Adjustments to reconcile net loss to net cash provided by operating activitiesDepreciation and amortization
    
    
    3,761
    
    
    
    2,230Accretion of discount on investments
    
    
    (36
    )
    
    
    (17
    )Stock-based compensation expense
    
    
    2,312
    
    
    
    1,204(Recovery) provision for bad debts
    
    
    (4
    )
    
    
    4Changes in operating assets and liabilitiesAccounts receivable
    
    
    (45
    )
    
    
    23Prepaid expenses and other current assets
    
    
    295
    
    
    
    (220
    )Other assets
    
    
    5
    
    
    
    (26
    )Accounts payable
    
    
    (1,211
    )
    
    
    1,165Accrued expenses
    
    
    1,057
    
    
    
    1,831Deferred revenue
    
    
    3,245
    
    
    
    2,841Long-term accrued rent
    
    
    1,185
    
    
    
    101Net cash provided by operating activities
    
    
    9,596
    
    
    
    9,085Cash flows from investing activitiesPurchases of short-term marketable securities
    
    
    (33,735
    )
    
    
    Proceeds from maturities of short-term marketable securities
    
    
    
    
    
    
    4,200Increase in restricted cash
    
    
    (442
    )
    
    
    Acquisition of property and equipment, including costs capitalized for
development of internal use software
    
    
    (9,997
    )
    
    
    (8,133
    )Net cash used in investing activities
    
    
    (44,174
    )
    
    
    (3,933
    )Cash flows from financing activitiesProceeds from issuance of common stock pursuant to exercise of stock options
    
    
    243
    
    
    
    126Proceeds from issuance of common stock pursuant to employee stock purchase
plan
    
    
    283
    
    
    
    229Proceeds from issuance of common stock in connection with secondary public
offering, net of issuance costs of $743
    
    
    
    
    
    
    4,012Net cash provided by financing activities
    
    
    526
    
    
    
    4,367Net (decrease) increase in cash and cash equivalents
    
    
    (34,052
    )
    
    
    9,519Cash and cash equivalents, beginning of period
    
    
    73,243
    
    
    
    97,051Cash and cash equivalents, end of period
    
    $
    39,191
    
    
    $
    106,570
  3




---



##### Table of Contents



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
  4




---



##### Table of Contents



Revenue Recognition
 Revenue Recognition in Financial
Statements Application of AICPA Statement
of Position 97-2 to Arrangements that include the Right to Use Software Stored on Another Entitys
Hardware
 Accounting for Revenue Arrangements with Multiple
Deliverables,
 Software and Web Site Development Costs
 Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use Accounting for Web Site Development Costs
 Comprehensive Income (Loss)
   Three months endedJune 30,2009
    
    
    2008Net income (loss)
    
    $
    39
    
    
    $
    (389
    )Other comprehensive income:Unrealized gains on available-for-sale securities, net
    
    
    21
    
    
    
    Comprehensive income (loss)
    
    $
    60
    
    
    $
    (389
    )
 Six months endedJune 30,2009
    
    
    2008Net loss
    
    $
    (968
    )
    
    $
    (51
    )Other comprehensive loss:Unrealized losses on available-for-sale securities, net
    
    
    (25
    )
    
    
    (2
    )Comprehensive loss
    
    $
    (993
    )
    
    $
    (53
    )
 5




---



##### Table of Contents



Fair Value of Financial Instruments
 Fair Value
Measurements
 
    
    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
  Net Income (Loss) Per Share
    (in thousands)
 Three months endedJune 30,2009
    
    
    2008Weighted average shares used in calculating basic net income (loss) per share
    
    
    28,207
    
    
    
    27,856Stock options
    
    
    1,179
    
    
    
    Warrants
    
    
    1
    
    
    
    Restricted shares
    
    
    34
    
    
    
    Shares used in computing diluted net income (loss) per share
    
    
    29,421
    
    
    
    27,856
 6




---



##### Table of Contents



(in thousands)
 June 30,2009
    
    
    2008Options to purchase common stock
    
    
    3,403
    
    
    
    2,345Warrants to purchase common stock
    
    
    1
    
    
    
    1Restricted shares
    
    
    24
    
    
    
    72Total options, warrants and restricted shares exercisable into common stock
    
    
    3,428
    
    
    
    2,418
 Accounting for Stock-Based Compensation
 Share-Based Payment Accounting for Stock-Based Compensation
 Income Taxes
  Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 Accounting for Income Taxes
  Segment Data
  7




---



##### Table of Contents



Recent Accounting Pronouncements
 Effective Date of FASB Statement No.
157
  
 3. Stockholders Equity
 Warrants
  4. Stock-Based Awards
 Stock Incentive Plan
  Stock Purchase Plan
  Restricted Stock
  8




---



##### Table of Contents



Stock-Based Compensation Expense
  Three months endedJune 30,2009
    
    
    2008Cost of revenue
    
    $
    174
    
    
    $
    83Research and development
    
    
    283
    
    
    
    164Sales and marketing
    
    
    283
    
    
    
    159General and administrative
    
    
    499
    
    
    
    238Total
    
    $
    1,239
    
    
    $
    644
 Six months endedJune 30,2009
    
    
    2008Cost of revenue
    
    $
    321
    
    
    $
    154Research and development
    
    
    506
    
    
    
    311Sales and marketing
    
    
    517
    
    
    
    295General and administrative
    
    
    968
    
    
    
    444Total
    
    $
    2,312
    
    
    $
    1,204
  5. Income Taxes
    6. Accrued Expenses
 June 30,
    
    
    December 31,2009
    
    
    2008Payroll and payroll related
    
    $
    2,265
    
    
    $
    2,211Licensed software and maintenance
    
    
    1,161
    
    
    
    981Marketing programs
    
    
    1,533
    
    
    
    569Other accrued expenses
    
    
    1,559
    
    
    
    1,700$
    6,518
    
    
    $
    5,461
 9




---



##### Table of Contents



7. Commitments and Contingencies
 Operating Leases
      Remainder of 2009
    
    $
    1,6532010
    
    
    4,2012011
    
    
    4,8312012
    
    
    5,2092013 and thereafter
    
    
    18,351Total
    
    $
    34,245
 Hosting Services
  10




---



##### Table of Contents



Remainder of 2009
    
    $
    1,6102010
    
    
    3,2552011
    
    
    1,9002012
    
    
    1,6612013
    
    
    774Total
    
    $
    9,200
 Vendor Commitments
  Letters of Credit and Restricted Cash
  Indemnification Obligations
  8. 401(k) Savings Plan
  9. Subsequent Events
  11




---



##### Table of Contents



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, 2008 included in our
Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March 12,
2009. 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
  12




---



##### Table of Contents




    
    adjusted EBITDA defined as GAAP net income (loss) plus depreciation and amortization and stock-based
compensation and minus net interest income.
    
    adjusted EBITDA margin defined as adjusted EBITDA divided by revenue.
    
    free cash flow defined 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 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, 2009, we had cash and cash equivalents and
short-term marketable securities of $107 million. Over the
last twelve months, we have experienced a substantial
decline in our investment income as a result of the
reduction in interest rates generally. We currently
anticipate that our investment income in 2009 will be
substantially less than our investment income in 2008.
 Sources of Revenue
  13




---



##### Table of Contents



Cost of Revenue and Operating Expenses
  Cost of Revenue.
  Research and Development.
 Sales and Marketing.
 General and Administrative.
 Critical Accounting Policies
  14




---



##### Table of Contents




    
    Revenue recognition;
 
    
    Income taxes;
 
    
    Software and website development costs; and
 
    
    Stock-based compensation.
   Results of Operations
 Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
 Revenue
 Cost of
Revenue
 Research and Development Expenses
 15




---



##### Table of Contents



Sales and Marketing Expenses.
 General and Administrative Expenses.
 Interest Income.
 Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008
 Revenue
 Cost of
Revenue
 Research and Development Expenses
 16




---



##### Table of Contents



Sales and Marketing Expenses.
 General and Administrative Expenses.
 Interest Income.
 Liquidity and Capital Resources
  Cash Provided By Operating Activities
  17




---



##### Table of Contents



Cash Used In Investing Activities
  Cash Provided By Financing Activities
  Contractual Obligations
     18




---



##### Table of Contents



Payments Due InLess Than
    
    
    
    
    
    
    
    
    
    
    More ThanTotal
    
    
    1 Year
    
    
    1 - 3 Years
    
    
    3 - 5 Years
    
    
    5 Years(In thousands)Operating lease obligations
    
    $
    34,245
    
    
    $
    3,590
    
    
    $
    9,664
    
    
    $
    10,706
    
    
    $
    10,285Hosting commitments
    
    
    9,200
    
    
    
    2,401
    
    
    
    5,195
    
    
    
    1,604
    
    
    
    Vendor commitments
    
    
    4,927
    
    
    
    4,927
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    48,372
    
    
    $
    10,918
    
    
    $
    14,859
    
    
    $
    12,310
    
    
    $
    10,285
     Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
 Effective Date of FASB Statement No. 157 Fair Value
Measurements (SFAS 157)
 19




---



##### Table of Contents




 
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
 Foreign Currency Exchange Risk.
 Interest Rate Sensitivity.
 
 Item 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
 Changes in Internal Control over Financial Reporting.
 20




---



##### Table of Contents



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.
  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.
  21




---



##### Table of Contents



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.
  22




---



##### Table of Contents



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.
  As Internet commerce develops, federal, state and foreign governments may adopt new laws to
regulate Internet commerce, which may negatively affect our business.
  23




---



##### Table of Contents



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
  24




---



##### Table of Contents



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.
   25




---



##### Table of Contents



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.
  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.
  26




---



##### Table of Contents



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.
  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.
   27




---



##### Table of Contents



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.
  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.
   28




---



##### Table of Contents



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.
  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 our 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.
  29




---



##### Table of Contents



If a third party asserts that we are infringing its intellectual property, whether successful
or not, it could subject us to costly and time-consuming litigation or require us to obtain
expensive licenses, and our business may be adversely affected.
  
    
    divert managements attention;
    
    result in costly and time-consuming litigation;
    
    require us to enter into royalty or licensing agreements, which may
not be available on acceptable terms, or at all;
    
    in the case of open source software-related claims, require us to
release our software code under the terms of an open source license;
or
    
    require us to redesign our software and services to avoid infringement.
  Providing our products to customers outside the United States exposes us to risks inherent in
international business.
  
    
    localization of our products, including translation into foreign languages and associated expenses;
    
    laws and business practices favoring local competitors;
    
    compliance with multiple, conflicting and changing governmental laws and regulations, including
tax, email marketing, privacy and data protection laws and regulations;
    
    foreign currency fluctuations;
 30




---



##### Table of Contents




    
    different pricing environments;
    
    difficulties in staffing and maintaining foreign operations; and
    
    regional economic and political conditions.
 We have incurred net losses in the past and expect to incur net losses in the future.
  We are incurring significant 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.
  31




---



##### Table of Contents



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 and economic conditions in the small business sector specifically;
    
    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;
    
    the seasonality of our business;
    
    the timing of additional investments in our hardware and software systems;
    
    regulatory compliance costs;
    
    costs associated with future acquisitions of technologies and businesses; and
    
    extraordinary expenses such as litigation or other dispute-related settlement payments.
  We may need additional capital in the future, which may not be available to us on favorable
terms, or at all, and may dilute your ownership of our common stock.
  
    
    fund our operations;
    
    respond to competitive pressures;
    
    take advantage of strategic opportunities, including more
rapid expansion of our business or the acquisition of
complementary products, technologies or businesses; and
    
    develop new products or enhancements to existing products.
  32




---



##### Table of Contents



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
acquired business;
    
    disruptions in our ongoing operations and the diversion of our managements attention from their
day-to-day responsibilities associated with operating our business;
    
    increases in our expenses that adversely impact our business, operating results and financial condition;
    
    potential write-offs of acquired assets and increased amortization expense related to identifiable
assets acquired; and
    
    potentially dilutive issuances of equity securities or the incurrence of debt.
  RISKS RELATED TO THE OWNERSHIP OF OUR COMMON STOCK
 The market price of our common stock has been and may continue to be volatile.
  
    
    fluctuations in our quarterly financial and operating 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 additional debt;
    
    announcements by us or our competitors of significant products, contracts, acquisitions or strategic
alliances;
 33




---



##### Table of Contents




    
    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 thwart a
takeover attempt;
    
    establish a classified board of directors, as a result of
which the successors to the directors whose terms have
expired will be elected to serve from the time of election
and qualification until the third annual meeting following
their election;
    
    require that directors only be removed from office for
cause and only upon a supermajority stockholder vote;
    
    provide that vacancies on our board of directors, including
newly created directorships, may be filled only by a
majority vote of directors then in office;
    
    limit who may call special meetings of stockholders;
    
    prohibit stockholder action by written consent, requiring
all actions to be taken at a meeting of the stockholders;
and
    
    require supermajority stockholder voting to effect certain
amendments to our restated certificate of incorporation and
second amended and restated bylaws.
 34




---



##### Table of Contents



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
   
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
  1.
    
    The election of two class II directors for a term of three years; and2.
    
    The ratification of the selection of PricewaterhouseCoopers LLP as
our independent registered public accounting firm for the year
ending December 31, 2009.
  BrokerVotes
    
    Votes
    
    
    
    
    
    Non-Votes For
    
    Withheld
    
    Against
    
    Abstentions
    
    VotesElection of two class II directors:- John Campbell
    
    
    25,235,853
    
    
    
    483,207
    
    
    
    
    
    
    
    
    
    
    
    - Daniel T.H. Nye
    
    
    25,626,886
    
    
    
    92,174
    
    
    
    
    
    
    
    
    
    
    
    Ratification
of the selection of
PricewaterhouseCoopers LLP
    
    
    25,679,365
    
    
    
    
    
    
    
    39,294
    
    
    
    401
    
    
    
    
 35




---



##### Table of Contents



Item 6.
    
    Exhibits
  36




---



##### Table of Contents



SIGNATURES
  CONSTANT CONTACT, INC.Date: August 7, 2009
    By:
    /s/ Gail F. GoodmanGail F. GoodmanPresident and Chief Executive Officer
(Principal Executive Officer)Date: August 7, 2009
    By:
    /s/ Steven R. WassermanSteven R. WassermanVice President and Chief Financial Officer
(Principal Financial Officer) 37




---



##### Table of Contents



EXHIBIT INDEX
  Exhibit No.
    
    Description10.1(1)
    
    Lease, dated May 29, 2009, between the Company and Boston Properties Limited Partnership.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.(1)
    
    Incorporated by reference to the Companys Current Report on Form 8-K filed with the
Securities and Exchange Commission on June 4, 2009. 38