##### 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 September 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. EmployerIdentification No.)1601 Trapelo Road, Suite 329Waltham, 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
    
    
    13ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    21ITEM 4. CONTROLS AND PROCEDURES
    
    
    21PART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    21ITEM 1A. RISK FACTORS
    
    
    21ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    34ITEM 6. EXHIBITS
    
    
    36SIGNATURES
    
    
    37EXHIBITS
    
    
    38EX-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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Part I. Financial Information
 
 Item 1. Financial Statements
 
 Constant Contact, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
 September 30,
    
    
    December 31,(In thousands, except share and per share data)
    
    2009
    
    
    2008AssetsCurrent assetsCash and cash equivalents
    
    $
    53,347
    
    
    $
    73,243Short-term marketable securities
    
    
    57,089
    
    
    
    33,932Accounts receivable, net
    
    
    83
    
    
    
    40Prepaid expenses and other current assets
    
    
    3,302
    
    
    
    3,670Total current assets
    
    
    113,821
    
    
    
    110,885Property and equipment, net
    
    
    23,026
    
    
    
    15,799Restricted cash
    
    
    750
    
    
    
    308Other assets
    
    
    251
    
    
    
    150Total assets
    
    $
    137,848
    
    
    $
    127,142Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    3,065
    
    
    $
    4,786Accrued expenses
    
    
    7,379
    
    
    
    5,461Deferred revenue
    
    
    19,393
    
    
    
    15,052Total current liabilities
    
    
    29,837
    
    
    
    25,299Long-term accrued rent
    
    
    3,161
    
    
    
    1,853Total liabilities
    
    
    32,998
    
    
    
    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 September 30, 2009 and
December 31, 2008
    
    
    
    
    
    
    Common stock, $0.01 par value; 100,000,000
shares authorized; 28,351,640 and 28,170,812
shares issued and outstanding as of September
30, 2009 and December 31, 2008, respectively
    
    
    284
    
    
    
    282Additional paid-in capital
    
    
    148,803
    
    
    
    144,414Accumulated other comprehensive income
    
    
    73
    
    
    
    106Accumulated deficit
    
    
    (44,310
    )
    
    
    (44,812
    )Total stockholders equity
    
    
    104,850
    
    
    
    99,990Total liabilities and stockholders equity
    
    $
    137,848
    
    
    $
    127,142
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Constant Contact, Inc.
 
 Condensed Consolidated Statements of Operations
(Unaudited)
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,(In thousands, except per share data)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Revenue
    
    $
    33,533
    
    
    $
    22,859
    
    
    $
    92,606
    
    
    $
    61,797Cost of revenue
    
    
    9,927
    
    
    
    6,554
    
    
    
    26,953
    
    
    
    16,986Gross profit
    
    
    23,606
    
    
    
    16,305
    
    
    
    65,653
    
    
    
    44,811Operating expensesResearch and development
    
    
    4,663
    
    
    
    3,935
    
    
    
    13,334
    
    
    
    10,965Sales and marketing
    
    
    14,169
    
    
    
    10,819
    
    
    
    42,281
    
    
    
    29,707General and administrative
    
    
    3,432
    
    
    
    2,564
    
    
    
    9,950
    
    
    
    6,888Total operating expenses
    
    
    22,264
    
    
    
    17,318
    
    
    
    65,565
    
    
    
    47,560Income (loss) from operations
    
    
    1,342
    
    
    
    (1,013
    )
    
    
    88
    
    
    
    (2,749
    )Interest income
    
    
    123
    
    
    
    614
    
    
    
    409
    
    
    
    2,299Other income
    
    
    5
    
    
    
    
    
    
    
    5
    
    
    
    Net income (loss)
    
    $
    1,470
    
    
    $
    (399
    )
    
    $
    502
    
    
    $
    (450
    )Net income (loss) per share:Basic
    
    $
    0.05
    
    
    $
    (0.01
    )
    
    $
    0.02
    
    
    $
    (0.02
    )Diluted
    
    $
    0.05
    
    
    $
    (0.01
    )
    
    $
    0.02
    
    
    $
    (0.02
    )Weighted average shares outstanding used in computing per share amounts:Basic
    
    
    28,304
    
    
    
    28,036
    
    
    
    28,219
    
    
    
    27,814Diluted
    
    
    29,569
    
    
    
    28,036
    
    
    
    29,447
    
    
    
    27,814
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Constant Contact, Inc.
 
 Condensed Consolidated Statements of Cash Flows
(Unaudited)
 Nine Months EndedSeptember 30,(In thousands)
    
    2009
    
    
    2008Cash flows from operating activitiesNet income (loss)
    
    $
    502
    
    
    $
    (450
    )Adjustments to reconcile net income (loss) to net cash provided by operating activitiesDepreciation and amortization
    
    
    6,045
    
    
    
    3,859Amortization (Accretion) of premium (discount) on investments
    
    
    16
    
    
    
    (18
    )Stock-based compensation expense
    
    
    3,613
    
    
    
    1,961Recovery of bad debts
    
    
    (7
    )
    
    
    (1
    )Gain on sales of marketable securities
    
    
    (5
    )
    
    
    Changes in operating assets and liabilitiesAccounts receivable
    
    
    (36
    )
    
    
    (10
    )Prepaid expenses and other current assets
    
    
    368
    
    
    
    (1,200
    )Other assets
    
    
    (101
    )
    
    
    34Accounts payable
    
    
    (1,721
    )
    
    
    451Accrued expenses
    
    
    1,918
    
    
    
    2,376Deferred revenue
    
    
    4,341
    
    
    
    3,747Long-term accrued rent
    
    
    1,308
    
    
    
    34Net cash provided by operating activities
    
    
    16,241
    
    
    
    10,783Cash flows from investing activitiesPurchases of short-term marketable securities
    
    
    (54,600
    )
    
    
    Proceeds from maturities of short-term marketable securities
    
    
    19,400
    
    
    
    4,500Proceeds from sales of short-term marketable securities
    
    
    11,999
    
    
    
    Increase in restricted cash
    
    
    (442
    )
    
    
    Acquisition of property and equipment, including costs capitalized for development of
internal use software
    
    
    (13,210
    )
    
    
    (11,028
    )Net cash used in investing activities
    
    
    (36,853
    )
    
    
    (6,528
    )Cash flows from financing activitiesProceeds from issuance of common stock pursuant to exercise of stock options
    
    
    433
    
    
    
    211Proceeds 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 $746
    
    
    
    
    
    
    4,009Net cash provided by financing activities
    
    
    716
    
    
    
    4,449Net (decrease) increase in cash and cash equivalents
    
    
    (19,896
    )
    
    
    8,704Cash and cash equivalents, beginning of period
    
    
    73,243
    
    
    
    97,051Cash and cash equivalents, end of period
    
    $
    53,347
    
    
    $
    105,755
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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
  Revenue Recognition
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Software and Web Site Development Costs
  Comprehensive Income (Loss)
   Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income (loss)
    
    $
    1,470
    
    
    $
    (399
    )
    
    $
    502
    
    
    $
    (450
    )Other comprehensive loss:Unrealized losses on available-for-sale securities, net
    
    
    (3
    )
    
    
    
    
    
    
    (28
    )
    
    
    (2
    )Reclassification adjustment for realized gains on
available-for-sale securities included in net income
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )
    
    
    Comprehensive income (loss)
    
    $
    1,462
    
    
    $
    (399
    )
    
    $
    469
    
    
    $
    (452
    )
 Fair Value of Financial Instruments
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
    
    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 ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Weighted average shares used in calculating basic net
income (loss) per share
    
    
    28,304
    
    
    
    28,036
    
    
    
    28,219
    
    
    
    27,814Stock options
    
    
    1,243
    
    
    
    
    
    
    
    1,194
    
    
    
    Warrant
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    Restricted shares
    
    
    21
    
    
    
    
    
    
    
    33
    
    
    
    Shares used in computing diluted net income (loss) per share
    
    
    29,569
    
    
    
    28,036
    
    
    
    29,447
    
    
    
    27,814
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(in thousands)
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Options to purchase common stock
    
    
    942
    
    
    
    2,374
    
    
    
    1,485
    
    
    
    2,293Warrant to purchase common stock
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Restricted shares
    
    
    
    
    
    
    70
    
    
    
    
    
    
    
    81Total options, warrants and restricted
shares exercisable into common stock
    
    
    942
    
    
    
    2,445
    
    
    
    1,485
    
    
    
    2,375
 Accounting for Stock-Based Compensation
  Income Taxes
    Segment Data
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Recently Adopted Accounting Guidance
   New Accounting Guidance
  3. Stockholders Equity
 Warrants
  4. Stock-Based Awards
 Stock Incentive Plan
  Stock Purchase Plan
  Restricted Stock
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Stock-Based Compensation Expense
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Cost of revenue
    
    $
    178
    
    
    $
    92
    
    
    $
    499
    
    
    $
    246Research and development
    
    
    299
    
    
    
    190
    
    
    
    805
    
    
    
    501Sales and marketing
    
    
    287
    
    
    
    163
    
    
    
    804
    
    
    
    458General and administrative
    
    
    537
    
    
    
    312
    
    
    
    1,505
    
    
    
    756Total
    
    $
    1,301
    
    
    $
    757
    
    
    $
    3,613
    
    
    $
    1,961
  5. Income Taxes
    6. Accrued Expenses
 September 30,
    
    
    December 31,2009
    
    
    2008Payroll and payroll related
    
    $
    2,454
    
    
    $
    2,211Licensed software and maintenance
    
    
    1,066
    
    
    
    981Marketing programs
    
    
    2,137
    
    
    
    569Other accrued expenses
    
    
    1,722
    
    
    
    1,700$
    7,379
    
    
    $
    5,461
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7. Commitments and Contingencies
 Operating Leases
      Remainder of 2009
    
    $
    8702010
    
    
    4,2012011
    
    
    4,8312012
    
    
    5,2092013 and thereafter
    
    
    18,351Total
    
    $
    33,462
 Hosting Services
  Remainder of 2009
    
    $
    8032010
    
    
    3,2552011
    
    
    1,9002012
    
    
    1,6612013
    
    
    774Total
    
    $
    8,393
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Vendor Commitments
  Letters of Credit and Restricted Cash
  Indemnification Obligations
  8. 401(k) Savings Plan
  9. Subsequent Events
  
 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
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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
   
    
    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
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
    
    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 September 30, 2009, we had cash and cash equivalents and short-term marketable
securities of $110 million. Year over year we have 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.
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Sales and Marketing.
 General and Administrative.
 Critical Accounting Policies
  
    
    Revenue recognition;
    
    Income taxes;
    
    Software and website development costs; and
    
    Stock-based compensation.
   Results of Operations
 Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008
 Revenue
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Cost of Revenue
 Research and Development Expenses
 Sales and Marketing Expenses.
 General and Administrative Expenses.
 Interest Income.
 Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008
 Revenue
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Cost of Revenue
 Research and Development Expenses
 Sales and Marketing Expenses.
 General and Administrative Expenses.
 Interest Income.
 Liquidity and Capital Resources
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Cash Provided By Operating Activities
  Cash Used In Investing Activities
  Cash Provided By Financing Activities
  Contractual Obligations
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Payments Due InLess Than
    
    
    
    
    
    
    
    
    
    
    More ThanTotal
    
    
    1 Year
    
    
    1 - 3 Years
    
    
    3 - 5 Years
    
    
    5 Years(In thousands)Operating lease obligations
    
    $
    33,462
    
    
    $
    3,873
    
    
    $
    10,353
    
    
    $
    10,778
    
    
    $
    8,458Hosting commitments
    
    
    8,393
    
    
    
    3,245
    
    
    
    3,959
    
    
    
    1,189
    
    
    
    Vendor commitments
    
    
    16,014
    
    
    
    16,014
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    57,869
    
    
    $
    23,132
    
    
    $
    14,312
    
    
    $
    11,967
    
    
    $
    8,458
     Off-Balance Sheet Arrangements
  New Accounting Guidance
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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.
 
 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
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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.
  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 minimize the loss of our 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.
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Evolving regulations concerning data privacy may restrict our customers ability to solicit,
collect, process and use data necessary to conduct email marketing campaigns or to send surveys and
analyze the results or may increase their costs, which could harm our business.
  As Internet commerce develops, federal, state and foreign governments may 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
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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.
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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.
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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.
   Our business may be negatively impacted by seasonal trends.
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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.
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If we fail to retain our key personnel, we may not be able to achieve our anticipated level of
growth and our business could suffer.
  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.
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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;
    
    different pricing environments;
    
    difficulties in staffing and maintaining foreign operations; and
    
    regional economic and political conditions.
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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.
  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;
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
    
    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.
  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;
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
    
    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;
    
    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.
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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.
 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
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Item 6.
    
    Exhibits
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SIGNATURES
  CONSTANT CONTACT, INC.Date: November 6, 2009
    By:
    /s/ Gail F. GoodmanGail F. GoodmanPresident and Chief Executive Officer
(Principal Executive Officer)Date: November 6, 2009
    By:
    /s/ Steven R. WassermanSteven R. WassermanVice President and Chief Financial Officer
(Principal Financial Officer) 37




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EXHIBIT INDEX
  Exhibit No.
    
    Description31.1*
    
    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.
 
 *
    
    Filed herewith.#
    
    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. 38