Harte Hanks Reports Decline in Revenue and Increased Losses in Q2 2026

Harte Hanks, Inc. reported a decline in financial performance for the second quarter of 2026, with revenues totaling $37.98 million, a decrease of 1.7% from $38.63 million in the same period of 2025. For the first half of 2026, the company generated $75.25 million in revenue, down 6.2% from $80.19 million year-over-year. The decrease in revenue was primarily attributed to declines in the Revenue Solutions and Fulfillment & Logistics Services segments, which were partially offset by growth in the Customer Care segment, which saw an 8.5% increase in revenue to $12.85 million for the quarter.

Operating expenses increased by 10% to $42.47 million in the second quarter, compared to $38.60 million in the prior year. Labor costs rose by 2.3% to $19.90 million, driven by higher health benefit costs, while advertising, selling, general, and administrative expenses surged by 58.6% to $8.79 million, largely due to increased professional service and legal expenses. The company reported an operating loss of $4.49 million for the quarter, compared to a slight operating income of $34,000 in the same quarter of 2025. The net loss for the quarter was $5.00 million, or $(0.67) per share, compared to a net loss of $335,000, or $(0.05) per share, in the prior year.

In terms of operational developments, Harte Hanks has been undergoing a restructuring initiative named "Project Elevate," aimed at optimizing business resources and reallocating savings into sales, marketing, and technology. The company incurred restructuring charges of $0.2 million in the second quarter of 2026, up from $0.1 million in the same period of 2025. The total restructuring charges incurred through June 30, 2026, amounted to $10.2 million, with an estimated $16 million in cost reductions expected from the initiative over the next few years.

As of June 30, 2026, Harte Hanks had total assets of $88.06 million, down from $91.83 million at the end of 2025. The company’s cash and cash equivalents decreased to $5.19 million from $5.59 million. The total liabilities increased to $72.71 million, compared to $71.30 million at the end of the previous year. The company also reported a significant reduction in stockholders' equity, which fell to $15.35 million from $20.53 million, primarily due to the net loss and treasury stock activities.

Looking ahead, Harte Hanks has entered into a merger agreement with Star Equity Holdings, which is expected to close in the fourth quarter of 2026. Under the terms of the agreement, shareholders will have the option to receive either cash or preferred stock in the transaction. The company remains focused on managing its liquidity and operational costs while navigating the challenges posed by market conditions and client spending behaviors.