HARTE HANKS INC
For the period ended Sep 30, 2025. Filed Nov 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 12, 2025
HHS$3.96-1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001628280-25-039311
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001628280-25-051383
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 82 previous paragraphs and 87 current paragraphs.
50 unchanged; 31 reworded; 5 added; 1 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Operating expenses were $39.0 million in the three months ended September 30, 2025, a decrease of $6.7 million, or 14.7%, compared to $45.7 million in the three months ended September 30, 2024.
Current report
One Big Beautiful Bill Act
Current report
On July 4, 2025, the President of the United States signed H.R. 1, the “One Big Beautiful Bill Act (OBBBA),” into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% of bonus depreciation, and more favorable rules for determining the limitation on business interest expense.
Current report
The Act also includes certain changes to the US taxation of foreign activity, including changes to foreign tax credits, amongst other changes. These changes are generally effective for tax years beginning after December 31, 2025, and therefore do not impact the current quarter's tax provision. While these changes are not yet effective, the Company has begun assessing the potential impact on its future effective tax rate, deferred tax assets and liabilities, and global tax planning strategies. Based on preliminary modeling, the Company anticipates that the elimination of the Net Deemed Tangible Income Return (NDTIR) may slightly increase future U.S. tax liability on foreign earnings, partially offset by the increased foreign tax credit.
Current report
The Company will continue to monitor regulatory guidance and assess the impact of these changes in future reporting periods. No adjustments to current or deferred taxes have been recorded in the third quarter of 2025 related to the OBBBA.
Removed paragraphs (1)
Previous report
Operating expenses were $38.6 million in the three months ended June 30, 2025, a decrease of $5.1 million, or 11.6%, compared to $43.7 million in the three months ended June 30, 2024.
Reworded paragraphs (31)
Previous wording
The following MD&A section is intended to help the reader understand the results of operations and financial condition of Harte Hanks, Inc. including any material changes in the Company’s financial condition and results of operations since December 31, 2024, and as compared with the three and six months ended June 30, 2025. This section is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the accompanying notes included herein as well as our 2024 10-K. Our 2024 10-K contains a discussion of other matters not included herein, such as disclosures regarding critical accounting policies and estimates, and contractual obligations. See Note A, Overview and Significant Accounting Policies, in the Notes to Condensed Consolidated Financial Statements for further information.
Current wording
The following MD&A section is intended to help the reader understand the results of operations and financial condition of Harte Hanks, Inc. including any material changes in the Company’s financial condition and results of operations since December 31, 2024, and as compared with the three and nine months ended September 30, 2025. This section is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the accompanying notes included herein as well as our 2024 10-K. Our 2024 10-K contains a discussion of other matters not included herein, such as disclosures regarding critical accounting policies and estimates, and contractual obligations. See Note A, Overview and Significant Accounting Policies, in the Notes to Condensed Consolidated Financial Statements for further information.
Previous wording
For thethree and six months ended June 30, 2025, we recorded restructuring charges related to this business transformation effort of $0.1 million and$1.0 million, respectively. For the year ended December 31, 2024, we incurred total restructuring charges of $2.4 million.
Current wording
For thethree and nine months ended September 30, 2025, we recorded restructuring charges related to this business transformation effort of $0.5 million and$1.5 million, respectively. For the year ended December 31, 2024, we incurred total restructuring charges of $2.4 million.
Previous wording
Revenue decreased $6.4 million, or 14.2%, to $38.6 million in the three months ended June 30, 2025, compared to the three months ended June 30, 2024 due to a reduction in revenue in all three segments. Those decreases were the result of fluctuations in timing of high volume periods associated with ongoing programs, and the conclusion of relationships with some customers.
Current wording
Revenue decreased $8.1 million, or 17.0%, to $39.5 million in the three months ended September 30, 2025, compared to the three months ended September 30, 2024 due to a reduction in revenue in all three segments. Those decreases were the result of fluctuations in timing of high volume periods associated with ongoing programs, and the conclusion of relationships with some customers.
Previous wording
Labor expense decreased $3.2 million, or 14.3%, to $19.4 million due to direct labor reductions associated with lower revenue, and cost controls related to overhead labor.
Current wording
Labor expense decreased $3.8 million, or 15.7%, to $20.4 million due to lower labor expense associated with lower revenue, and cost controls related to overhead labor.
Previous wording
Production and Distribution expenses decreased $1.3 million, or 9.4%, primarily due to lower transportation cost associated with the lower logistics revenue.
Current wording
Production and Distribution expenses decreased $2.7 million, or 18.7%, primarily to$11.7 milliondue to lower transportation cost associated with the lower logistics revenue.
Previous wording
Advertising, Selling, General and Administrative expenses decreased $0.3 million, or 5.4%, primarily due to lower professional service expenses.
Current wording
Advertising, Selling, General and Administrative expenses decreased $0.1 million, or 2.1%, to$5.1 million primarily due to lower professional service expenses.
Previous wording
Other expenses, net, for the three months ended June 30, 2025 were$0.4 million compared to$38.2 million, in the prior year quarter. The$37.8 million decrease in other expenses, net, was mainly due to the expenses from the pension termination during the second quarter of 2024.
Current wording
Other expenses, net, for the three months ended September 30, 2025 were$0.2 million compared to$0.9 million, in the prior year quarter. The$0.7 million decrease in other expenses, net, was mainly due to the lower pension expense and changes in foreign currency gain and loss account, as compared to the prior year quarter.
Previous wording
The income tax benefit of $0.1 million in the second quarter of 2025 represents a decrease of income tax benefit of $8.9 million when compared to the second quarter of 2024. Our effective tax rate was 18.9% for the second quarter of 2025, a decrease of 5.5% from the effective tax rate of 24.4% for the second quarter of 2024, The effective income tax rates differ from the federal statutory rate of 21%, primarily due to the U.S. state income taxes and the impact of income earned in foreign jurisdictions.
Current wording
The income tax benefit of $2.6 million in the third quarter of 2025 represents an increase in income tax provision of $1.7 million when compared to the third quarter of 2024. Our effective tax rate was 816.6% for the third quarter of 2025, an increase of 730.7% when compared to the third quarter of 2024. The effective income tax rate differs from the federal statutory rate of 21%, primarily due to the U.S. state income taxes and income earned in foreign jurisdictions comparative to the level of income in total.
Previous wording
Revenue decreased $10.3 million, or 11.4%, to $80.2 million, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024 due to decreased revenue in the Marketing Services and Fulfillment & Logistics Services segments. The reduction in revenues in the six month period relates to the conclusion of programs, and the ordinary turnover of customers at a higher rate than initiation of new programs and revenues from new customers.
Current wording
Revenue decreased $18.4 million, or 13.3%, to $119.7 million, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 due to decreased revenue in all three segments. The reduction in revenue mainly relates to the conclusion of programs, and the ordinary turnover of customers at a higher rate than initiation of new programs and revenues from new customers.
Previous wording
Operating expenses were $80.2 million in the six months ended June 30, 2025, a decrease of $8.5 million, or 9.6%, compared to $88.7 million in the six months ended June 30, 2024. Cost controls to match revenues and Project Elevate led to the decline in operating expenses. Management expects further cost reductions in excess of new costs attributable to revenue growth.
Current wording
Operating expenses were $119.2 million in the nine months ended September 30, 2025, a decrease of $15.3 million, or 11.3%, compared to $134.5 million in the nine months ended September 30, 2024. Cost controls to match revenues and Project Elevate led to the decline in operating expenses. Management expects further cost reductions in excess of new costs attributable to revenue growth.
Previous wording
Labor expense decreased $6.9 million, or 15.0%, primarily due to lower direct labor costs as workforce was adjusted with the reduction in revenue.
Current wording
Labor expense decreased $10.7 million, or 15.2%, to $59.6 million primarily due to lower direct labor costs as workforce was adjusted with the reduction in revenue.
Previous wording
Production and Distribution expenses decreased $1.0 million, or 3.5%, primarily due to lower transportation costs associated with lower logistics services revenue as compared to the prior year.
Current wording
Production and Distribution expenses decreased $3.7 million, or 8.8%, to$38.2 million, primarily due to lower transportation costs associated with lower logistics services revenue as compared to the prior year period.
Previous wording
Advertising, Selling, General and Administrative expenses decreased $0.4 million, or 3.5%, primarily due to lower sales and marketing expenses.
Current wording
Advertising, Selling, General and Administrative expenses decreased $0.5 million, or 3.0%, to$16.5 million primarily due to lower sales and marketing expenses.
Previous wording
Other expenses, net, for thesix months ended June 30, 2025 were$1.0 million compared to$38.8 million, in the prior year period. The other expenses, net for thesix months ended June 30, 2024 included$37.8 million in charges resulting from the pension termination expenses.
Current wording
Other expenses, net, for thenine months ended September 30, 2025 were$1.2 million compared to$39.7 million, in the prior year period. The other expenses, net for thenine months ended September 30, 2024 included$37.5 million in charges resulting from the pension termination expenses.
Previous wording
The income tax benefit of$0.3 million in thesix months ended June 30, 2025 represents a decrease in income tax benefit of$8.8 million when compared to the same period of 2024. Our effective tax rate was 28.7% for thesix months ended June 30, 2025, an increase of 4.2% from theeffective tax rate of 24.5% for the same period of 2024. The effective tax rate differs from the federal statutory rate of 21.0%, primarily due to the U.S. state income taxes and income earned in foreign jurisdictions.
Current wording
The income tax provision of$2.3 million in thenine months ended September 30, 2025 represents an increase in income tax expense of$10.5 million when compared to the same period of 2024. Our effective tax rate was(329.8)% for thenine months ended September 30, 2025, a decrease of 352.6% when compared tothe same period of 2024. The effective tax rate differs from the federal statutory rate of 21.0%, primarily due to the income earned in foreign jurisdictionsc ompared to the domestic earnings. This imbalance created the higher tax provision when compared to the level of income in total.
Previous wording
The following is a discussion and analysis of the results of our reportable segments for the three and six months ended June 30, 2025 and 2024. There are three principal financial measures reported to our President (the chief operating decision maker) for use in assessing segment performance and allocating resources. Those measures are revenue and operating income and operating income plus depreciation and amortization (“EBITDA”). For additional information, see Note O, Segment Reporting, in the Notes to Condensed Consolidated Financial Statements.
Current wording
The following is a discussion and analysis of the results of our reportable segments for the three and nine months ended September 30, 2025 and 2024. There are three principal financial measures reported to our President (the chief operating decision maker) for use in assessing segment performance and allocating resources. Those measures are revenue and operating income and operating income plus depreciation and amortization (“EBITDA”). For additional information, see Note O, Segment Reporting, in the Notes to Condensed Consolidated Financial Statements.
Previous wording
Marketing Services segment revenue decreased $3.5 million, or 28.7%, due to customer turnover and the decline of client spending in excess of new business. Operating income for thethree months ended June 30, 2025 decreased $0.3 million, or 21.1%from the prior year quarter. Labor and other costs were reduced as programs and projects ended with customers resulting in lower revenue .
Current wording
Marketing Services segment revenue decreased $4.4 million, or 33.4%, due to customer turnover and the decline of client spending in excess of new business. Operating income for thethree months ended September 30, 2025 decreased
Previous wording
Marketing Services segment revenue decreased $8.3 million, or 32.2%, due to customer turnover and the additional client spending reductions. This segment is our most economically sensitive segment with regard to changes in our clients' marketing strategy. Operating income for thesix months ended June 30, 2025 decreased $1.2 million , or 37.0% from the prior year quarter primarily due to the reduced revenue which was partially offset by the lower labor cost associated with lower revenue.
Current wording
Marketing Services segment revenue decreased $12.7 million, or 32.6%, due to customer turnover and additional client spending reductions. This segment is our most economically sensitive segment with regard to changes in our clients' marketing strategy. Operating income for thenine months ended September 30, 2025 decreased $2.1 million , or 36.9% from the prior year period primarily due to the reduced revenue.
Previous wording
Customer Care segment revenue decreased $0.5 million, or 4.4%, primarily due tothe timing of fluctuations with specific programs. Operating income was $1.6 million for the three months ended June 30, 2025, compared to operating income of $2.3 million for the three months ended June 30, 2024. The $0.7 million decrease in operating income was due to higher technology costs being slightly offset by lower labor costs.
Current wording
Customer Care segment revenue decreased $1.5 million, or 11.6%, primarily due tothe timing of fluctuations with specific programs. Operating income was $1.0 million for the three months ended September 30, 2025, compared to operating income of $2.5 million for the three months ended September 30, 2024. The $1.4 million decrease in operating income was primarily due to lower labor costs from lower revenue.
Previous wording
Customer Care segment revenue increased $21 thousand, or 0.1%, which can be impacted by one-time project-based engagements, temporary surges or declines in call volumes among retained customers due to specific programs and events. We also encounter fluctuations based on the geographic regions customers select for staff support. We are leveraging our Amazon Connect cloud-based platform to test and pilot new AI tools, and are exploring how we can augment growth by providing more technical support as clients migrate to more capable contact center platforms. Operating Income was $3.6 million for the six months ended June 30, 2025, compared to operating income of $4.7 million for the six months ended June 30, 2024. The decrease of $1.1 million in operating income was due to higher technology costs being slightly offset by lower labor costs.
Current wording
Customer Care segment revenue decreased $1.5 million, or 3.9%, which can be impacted by one-time project-based engagements, temporary surges or declines in call volumes among retained customers due to specific programs and events. We also encounter fluctuations based on the geographic regions customers select for staff support. We are leveraging our Amazon Connect cloud-based platform to test and pilot new AI tools, and are exploring how we can augment growth by providing more technical support as clients migrate to more capable contact center platforms. Operating Income was $4.6 million for the nine months ended September 30, 2025, compared to operating income of $7.1 million for the nine months ended September 30, 2024. The decrease of $2.5 million in operating income was due to higher technology costs being slightly offset by lower labor costs.
Previous wording
Fulfillment & Logistics Services segment revenue decreased $2.4 million, or 11.6%, primarily due to the lower volume from the existing customers not being offset by growth in new programs and customers. Operating income decreased by $0.4 million primarily due to lower revenue.
Current wording
Fulfillment & Logistics Services segment revenue decreased $2.2 million, or 10.2%, primarily due to the lower volume from the existing customers not being offset by growth in new programs and customers. Operating income increased by $0.6 million primarily due to the conclusion of a production technology investment and a shift to higher contribution margin revenue mix.
Previous wording
Fulfillment & Logistics Services segment revenue decreased by $2.0 million, or 5.1%, due to lost customers and the lower volume from existing customers. Operating income decreased by $0.5 million, or 20.7% due to the lower revenue.
Current wording
Fulfillment & Logistics Services segment revenue decreased by $4.2 million, or 6.8%, due to lost customers and the lower volume from existing customers. Operating income increased slightly by $0.1 million, or 1.8% due to the conclusion of a production technology investment and a shift to higher contribution margin revenue mix.
Previous wording
Our cash and cash equivalent balances were $4.8 million and $9.9 million at June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025, we had the ability to borrow $24.0 million under our Credit Facility in addition to the existing letters of credit.
Current wording
Our cash and cash equivalent balances were $6.5 million and $9.9 million at September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025, we had the ability to borrow up to $24.0 million under our Credit Facility in addition to the existing letters of credit.
Previous wording
Our principal sources of liquidity are cash on hand, cash provided by operating activities, and borrowings available under our Credit Facility. Our cash is primarily used for general corporate purposes, working capital requirements, and capital expenditures. At this time, we believe that we will be able to continue to meet our liquidity requirements and fund our fixed obligations such as finance and operating leases and unfunded pension plan benefit payments and other needs for our operations in the short term and beyond. Although the Company believes that it will be able to meet its cash needs for the short and medium term, if unforeseen circumstances arise the Company may need to seek alternative sources of liquidity.
Current wording
Our principal sources of liquidity are cash on hand, cash provided by operating activities, and borrowings available under our Credit Facility. Our cash is primarily used for general corporate purposes, working capital requirements, and capital expenditure. At this time, we believe that we will be able to continue to meet our liquidity requirements and fund our fixed obligations such as finance and operating leases and unfunded pension plan benefit payments and other needs for our operations in the short term and beyond. Although the Company believes that it will be able to meet its cash needs for the short and medium term, if unforeseen circumstances arise the Company may need to seek alternative sources of liquidity.
Previous wording
Net cash used in the operating activities for thesix months ended June 30, 2025 was $5.7 million, compared to net cash used in operating activities of $4.1 million for thesix months ended June 30, 2024. The $1.6 million year-over-year increase in cash used in the operating activities was primarily due to $4.9 million changes in other assets and current liabilities.
Current wording
Net cash used in the operating activities for thenine months ended September 30, 2025 was $2.5 million, compared to net cash used in operating activities of $7.0 million for thenine months ended September 30, 2024. The $4.6 million year-over-year increase in cash used in the operating activities was primarily due to $3.5 million changes in other assets and current liabilities.
Previous wording
Net cash used in investing activities was $0.3 million for the six months ended June 30, 2025, as compared to the $1.2 million used in investing activities during the same period in 2024. The $0.9 million decrease in cash used in investing activities was primarily driven by lower property, plant and equipment purchase in the six months ended June 30, 2025.
Current wording
Net cash used in investing activities was $1.3 million for the nine months ended September 30, 2025, as compared to the $3.1 million used in investing activities during the same period in 2024. The $1.8 million decrease in cash used in investing activities was primarily driven by lower property, plant and equipment purchase in the nine months ended September 30, 2025.
Previous wording
Net cash provided by financing activities was $0.7 million for the six months ended June 30, 2025, as compared to $0.2 million of net cash used in financing activities during the six months ended June 30, 2024. The $0.9 million increase in cash provided by financing activities was primarily related to the $1.1 million of cash we received for the recovery of short-swing profit from one shareholder in the six months ended June 30, 2025 .
Current wording
Net cash provided by financing activities was $0.6 million for the nine months ended September 30, 2025, as compared to $0.3 million of net cash used in financing activities during the nine months ended September 30, 2024. The $0.9 million increase in cash provided by financing activities was primarily related to the $1.1 million of cash we received for the recovery of short-swing profit from one shareholder in the nine months ended September 30, 2025. This required$0.3 million tax liability offset for to this short-swing profit.
Previous wording
Consolidated foreign holdings of cash as of June 30, 2025 and December 31, 2024 were $1.4 million and $1.5 million, respectively.
Current wording
Consolidated foreign holdings of cash as of September 30, 2025 and December 31, 2024 were $2.2 million and $1.5 million, respectively.
Previous wording
The loans under the Credit Facility accrue interest at a variable rate equal to the Secured Overnight Financing Rate (SOFR) plus a margin of 2.25% per annum. The latest rate was 6.67% as of June 30, 2025. The outstanding amounts advanced under the Credit Facility are due and payable in full on June 30, 2025.
Current wording
The loans under the Credit Facility accrue interest at a variable rate equal to the Secured Overnight Financing Rate (SOFR) plus a margin of 2.25% per annum. The latest rate was 6.49% as of September 30, 2025. The outstanding amounts advanced under the Credit Facility are due and payable in full on June 30, 2028.
Previous wording
As of June 30, 2025 and December 31, 2024, we had no borrowings outstanding under the Credit Facility. At each of June 30, 2025 and December 31, 2024, we had letters of credit outstanding in the amount of $1.0 million and $1.0 million, respectively. No amounts were drawn against these letters of credit at June 30, 2025 and December 31, 2024. These letters of credit exist to support insurance programs relating to workers’ compensation, medical insurance, and reducing cash security deposits on leased property. We had no other off-balance sheet financing activities at June 30, 2025 and December 31, 2024. After the letters of credit on June 30, 2025, we had the ability to borrow $24.0 million under the Credit Facility.
Current wording
As of September 30, 2025 and December 31, 2024, we had no borrowings outstanding under the Credit Facility. At each of September 30, 2025 and December 31, 2024, we had letters of credit outstanding in the amount of $1.0 million and $1.0 million, respectively. No amounts were drawn against these letters of credit at September 30, 2025 and December 31, 2024. These letters of credit exist to support insurance programs relating to workers’ compensation, medical insurance, and reducing cash security deposits on leased property. We had no other off-balance sheet financing activities at September 30, 2025 and December 31, 2024. After the letters of credit on September 30, 2025, we had the ability to borrow up to $24.0 million under the Credit Facility.
Previous wording
On May 2, 2023, the Board of Directors of Harte Hanks approved a share repurchase program to maximize shareholder value with authorization to repurchase $6.5 million of the Company’s Common Stock. We didn't repur chase any stocks during thethree and six months ended June 30, 2025 and 2024.
Current wording
On May 2, 2023, the Board of Directors of Harte Hanks approved a share repurchase program to maximize shareholder value with authorization to repurchase $6.5 million of the Company’s Common Stock. As of September 30, 2025, the share repurchase program authorization availability was $4.1 million. The Company repur chased zero shares of common stock during thethree and nine months ended September 30, 2025 and 2024.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
$0.9 million, or 36.9%from the prior year quarter. Labor and other costs were reduced as programs and projects ended with customers resulting in lower revenue .