Harte Hanks Reports $41.6 Million Revenue and $392,000 Net Loss in Q1 2025

Harte Hanks, Inc. reported a revenue of $41.6 million for the first quarter of 2025, reflecting an 8.6% decrease from $45.4 million in the same period of 2024. The decline was primarily driven by a significant drop in the Marketing Services segment, which saw revenues fall by 35.3% to $8.8 million. In contrast, the Customer Care segment experienced a 4.5% increase in revenue to $13.0 million, while the Fulfillment & Logistics Services segment reported a modest growth of 1.8%, reaching $19.8 million. The company's operating expenses also decreased by 7.7% to $41.6 million, largely due to a reduction in labor costs, which fell by 15.7% as a result of workforce reductions in the Marketing Services segment.

The company recorded a net loss of $392,000 for the first quarter of 2025, compared to a loss of $171,000 in the prior year. This increase in net loss was attributed to the significant revenue decline in the Marketing Services segment, which negatively impacted overall profitability. The loss per share for the quarter was $(0.05), compared to $(0.02) in the same quarter of 2024. The effective tax rate for the quarter was 35.4%, up from 29.3% in the previous year, primarily due to state income taxes and income earned in foreign jurisdictions.

In terms of strategic developments, Harte Hanks has initiated "Project Elevate," a transformation program aimed at optimizing business resources and reinvesting savings into sales, marketing, and technology. The company incurred restructuring charges of $0.8 million in the first quarter of 2025 as part of this initiative. Additionally, the company has merged its Sales Services business into the Marketing Services segment to enhance its strategic alignment and operational efficiency.

Operationally, Harte Hanks reported a decrease in customer counts and engagement metrics, particularly in the Marketing Services segment, which faced challenges in retaining clients and meeting demand. The company continues to monitor market conditions, including inflation and wage pressures, which could impact future performance. As of March 31, 2025, Harte Hanks had cash and cash equivalents of $9.0 million and the ability to borrow an additional $24.0 million under its credit facility, indicating a stable liquidity position.

Looking ahead, Harte Hanks remains focused on executing its multichannel strategy while adjusting its cost structure to align with market conditions. The company anticipates that the ongoing transformation efforts will yield significant savings and improve operational performance in the coming years. However, management acknowledges the uncertainties in the global economy and their potential impact on client budgets and overall business performance.