10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

OR

¨ 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.

(Exact name of registrant as specified in its charter)

Delaware	04-3285398
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)
1601 Trapelo Road, Third Floor Waltham, Massachusetts	02451
(Address of principal executive offices)	(Zip Code)

(781) 472-8100

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of May 1, 2015, there were 32,158,044 shares of the registrant’s Common Stock, par value $.01 per share, outstanding.

CONSTANT CONTACT, INC.

INDEX

	PAGE NUMBER
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS		1
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)		1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)		2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)		3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)		4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)		5
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		19
ITEM 4. CONTROLS AND PROCEDURES		20
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS		20
ITEM 1A. RISK FACTORS		21
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		35
ITEM 6. EXHIBITS		35
SIGNATURES		36

Part I. Financial Information

Item 1. Financial Statements

Constant Contact, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	March 31, 2015		December 31, 2014
(In thousands, except share and per share data)
ASSETS
Current assets
Cash and cash equivalents	$	123,078	$	104,301
Marketable securities		56,019		58,321
Accounts receivable, net of allowance for doubtful accounts		195		265
Prepaid expenses and other current assets		11,785		10,723
Total current assets		191,077		173,610
Property and equipment, net		44,320		43,739
Restricted cash		1,300		1,300
Goodwill		95,505		95,505
Acquired intangible assets, net		1,676		2,160
Deferred taxes		4,658		4,658
Other assets		1,550		1,893
Total assets	$	340,086	$	322,865
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	8,377	$	4,703
Accrued expenses		14,435		12,230
Deferred revenue		40,148		37,838
Total current liabilities		62,960		54,771
Other long-term liabilities		3,681		3,783
Total liabilities		66,641		58,554
Commitments and contingencies (Note 7)
Stockholders’ equity
Preferred stock; $0.01 par value; 5,000,000 shares authorized; no shares issued or outstanding at March 31, 2015 and December 31, 2014		—		—
Common stock; $0.01 par value; 100,000,000 shares authorized; 32,152,030 and 31,908,622 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively		322		319
Additional paid-in capital		255,164		249,599
Accumulated other comprehensive income (loss)		6		(10	)
Retained earnings		17,953		14,403
Total stockholders’ equity		273,445		264,311
Total liabilities and stockholders’ equity	$	340,086	$	322,865

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Constant Contact, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended March 31,
(In thousands, except per share data)	2015			2014
Revenue	$	90,417		$	78,874
Cost of revenue		24,431			21,727
Gross profit		65,986			57,147
Operating expenses
Research and development		13,825			13,074
Sales and marketing		36,068			32,800
General and administrative		11,793			10,120
Total operating expenses		61,686			55,994
Income from operations		4,300			1,153
Interest income and other income (expense), net		(57	)		23
Income before income taxes		4,243			1,176
Income tax expense		(693	)		(328	)
Net income	$	3,550		$	848
Net income per share:
Basic	$	0.11		$	0.03
Diluted	$	0.11		$	0.03
Weighted average shares outstanding used in computing per share amounts:
Basic		32,091			31,289
Diluted		33,658			32,442

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Constant Contact, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended March 31,
(In thousands)	2015			2014
Net income	$	3,550		$	848
Other comprehensive income (loss):
Net unrealized gains (losses) on marketable securities, net of tax		25			(3	)
Translation adjustment		(9	)		1
Total other comprehensive income (loss)		16			(2	)
Comprehensive income	$	3,566		$	846

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Constant Contact, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
(In thousands)	2015			2014
Cash flows from operating activities
Net income	$	3,550		$	848
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,053			5,911
Amortization of premium on investments		84			55
Stock-based compensation expense		4,304			3,914
Provision for (recovery of) bad debts		(1	)		5
Income tax benefit from the exercise of stock options		(1,180	)		(226	)
Taxes paid related to net share settlement of restricted stock units		(373	)		(751	)
Changes in operating assets and liabilities:
Accounts receivable		71			39
Prepaid expenses and other current assets		115			(1,463	)
Other assets		343			(13	)
Accounts payable		1,977			(264	)
Accrued expenses		3,070			1,064
Deferred revenue		2,310			2,070
Other long-term liabilities		(102	)		(98	)
Net cash provided by operating activities		20,221			11,091
Cash flows from investing activities
Purchases of marketable securities		(16,014	)		(15,963	)
Proceeds from maturities of marketable securities		18,250			12,865
Acquisition of property and equipment, including costs capitalized for development of internal-use software		(5,250	)		(5,929	)
Net cash used in investing activities		(3,014	)		(9,027	)
Cash flows from financing activities
Proceeds from issuance of common stock pursuant to the exercise of stock options		9,396			2,290
Income tax benefit from the exercise of stock options		1,180			226
Repurchase of common stock		(9,000	)		—
Net cash provided by financing activities		1,576			2,516
Effects of exchange rates on cash and cash equivalents		(6	)		1
Net increase in cash and cash equivalents		18,777			4,581
Cash and cash equivalents, beginning of period		104,301			82,478
Cash and cash equivalents, end of period	$	123,078		$	87,059
Supplemental disclosure of noncash investing and financing activities:
Capitalization of stock-based compensation	$	68		$	50
Acquisition of property and equipment included in accounts payable	$	2,755		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(amounts in thousands, except share and per share amounts)

1. Nature of the Business

Constant Contact, Inc. (the “Company”) was incorporated as a Massachusetts corporation in 1995 and was reincorporated in the State of Delaware in 2000. The Company is a leading provider of online marketing tools that are designed for small organizations, including small businesses, associations and non-profits. The Company seeks to help customers succeed by creating and growing their customer and member relationships through easy-to-use products combined with education, support, KnowHow^® and coaching. In April 2014, the Company formally launched Constant Contact Toolkit™, an integrated online marketing platform that simplifies small business marketing by bringing together the tools needed to drive repeat customers and reach new ones. The Company also offers a suite of online marketing tools, including Email Marketing, EventSpot^®, Social Campaigns™, SaveLocal™, SinglePlatform and Survey, that enables customers to launch and monitor marketing campaigns across multiple channels, including email, social media, events, local deals, online listings and surveys. These products are marketed and sold directly by the Company and through a wide variety of partners primarily in the United States of America.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include those of the Company and its subsidiaries, after elimination of all intercompany accounts and transactions. The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

The condensed consolidated balance sheet at December 31, 2014 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K, File Number 001-33707, on file with the SEC.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position as of March 31, 2015 and consolidated results of operations and of cash flows for the three months ended March 31, 2015 and 2014, have been made. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2015.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates these estimates, judgments and assumptions, including those related to revenue recognition, stock-based compensation, goodwill and acquired intangible assets, capitalization of software and website development costs and income taxes. The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from these estimates.

Marketable Securities

The Company’s marketable securities are classified as available-for-sale and are carried at fair value with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Realized gains and losses and declines in value judged to be other than temporary are included as a component of interest and other income (expense) based on the specific identification method.

5

At March 31, 2015, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
United States Treasury Notes	$	11,796	$	6	$	—		$	11,802
Corporate and Agency Bonds		43,213		11		(7	)		43,217
Commercial Paper		1,000		—		—			1,000
Total	$	56,009	$	17	$	(7	)	$	56,019

At March 31, 2015, marketable securities consisted of investments that mature within one year with the exception of government treasuries and corporate and agency bonds with a fair value of $19,172, which have maturities within two years.

At December 31, 2014, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
United States Treasury Notes	$	20,000	$	6	$	—		$	20,006
Corporate and Agency Bonds		37,330		2		(16	)		37,316
Commercial Paper		999		—		—			999
Total	$	58,329	$	8	$	(16	)	$	58,321

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, is used to measure fair value:

• 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.

The following tables present the Company’s fair value hierarchy for its cash equivalents and marketable securities, which are measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014:

	Fair Value Measurements at March 31, 2015 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money Market Instruments	$	8,183	$	—	$	—	$	8,183
United States Treasury Notes		11,802		—		—		11,802
Corporate and Agency Bonds		—		43,217		—		43,217
Commercial Paper		—		1,000		—		1,000
Total	$	19,985	$	44,217	$	—	$	64,202

6

	Fair Value Measurements at December 31, 2014 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money Market Instruments	$	5,885	$	—	$	—	$	5,885
United States Treasury Notes		20,006		—		—		20,006
Corporate and Agency Bonds		—		37,316		—		37,316
Commercial Paper		—		999		—		999
Total	$	25,891	$	38,315	$	—	$	64,206

Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of unrestricted common shares outstanding for the period.

Diluted net income per share is computed by dividing net income by the sum of the weighted average number of unrestricted common shares outstanding during the period and the weighted average number of potential common shares from the assumed exercise of stock options and the vesting of shares of restricted stock units using the “treasury stock” method when the effect is not anti-dilutive.

The following is a summary of the shares used in computing diluted net income per share:

(in thousands)
	Three months ended March 31,
	2015		2014
Weighted average shares used in calculating basic net income per share		32,091		31,289
Stock options		1,397		1,029
Warrants		—		1
Restricted stock units		170		123
Shares used in computing diluted net income per share		33,658		32,442

The following common stock equivalents were excluded from the computation of diluted net income per share because they had an anti-dilutive impact as the proceeds under the treasury stock method were in excess of the average fair market value for the period:

(in thousands)
	Three months ended March 31,
	2015		2014
Options to purchase common stock		269		1,031
Restricted stock units		79		268
Total options exercisable into common stock and restricted stock units issuable in common stock		348		1,299

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued new guidance, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The new guidance is effective for the Company commencing January 1, 2017. Early application is not permitted. The guidance permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that this guidance will have on its consolidated financial statements.

In August 2014, the FASB issued new guidance, Presentation of Financial Statements — Going Concern. The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The guidance will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is evaluating the effect that this guidance will have on its consolidated financial statements.

7

In April 2015, the FASB issued new guidance, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The guidance clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software. The guidance will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company does not believe the guidance will have a material impact on its consolidated financial statements.

3. Goodwill and Acquired Intangible Assets

The carrying amount of goodwill was $95,505 at March 31, 2015 and December 31, 2014. Goodwill is not amortized, but instead is reviewed for impairment at least annually in the fourth quarter or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired.

Intangible assets consist of the following:

			March 31, 2015						December 31, 2014
	Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology		3 years	$	4,357	$	3,710	$	647	$	4,357	$	3,465	$	892
Customer relationships		3.75 years		3,315		2,841		474		3,315		2,666		649
Publisher relationships		5 years		710		402		308		710		367		343
Trade name		5 years		570		323		247		570		294		276
			$	8,952	$	7,276	$	1,676	$	8,952	$	6,792	$	2,160

The Company amortizes the intangible assets over the estimated useful lives noted above. Amortization of the developed technology and publisher relationships assets is on a straight-line basis as the pattern of consumption of the economic benefits of the intangible assets cannot be reliably determined. The Company also amortizes the trade name asset over its estimated useful life on a straight-line basis as the straight-line basis is not materially different than the pattern of consumption of economic benefit basis. Customer relationships are amortized over their useful life based on the pattern of consumption of economic benefit of the asset. Amortization commences once the asset has been placed in service. Amortization expense for intangible assets was $484 and $567 for the three months ended March 31, 2015 and 2014, respectively. Amortization relating to developed technology and publisher relationships is recorded within cost of revenue and amortization of customer relationships and trade name is recorded within sales and marketing expense. Future estimated amortization expense for intangible assets as of March 31, 2015 is as follows:

Remainder of 2015	$	1,099
2016		470
2017		107
Total	$	1,676

4. Stockholders’ Equity and Stock-Based Compensation

Stock Repurchase Program

In the second quarter of 2014, the Board of Directors authorized the repurchase of up to $30,000 of its common stock through July 31, 2015. Under the authorization, the Company can repurchase shares in the open market, which may include the use of 10b5-1 trading plans, or through privately negotiated transactions. The timing and amount of repurchases, if any, will depend upon several factors, including market and business conditions. Stock repurchases may be suspended or discontinued at any time. The Company intends to fund repurchases from its cash and cash equivalents.

During the three months ended March 31, 2015, the Company repurchased 228,671 shares of its common stock at an average price of $39.36 per share. These shares were retired and returned to authorized but unissued shares and accounted for as a reduction to stockholders’ equity in the Company’s condensed consolidated balance sheet.

8

Stock-Based Compensation Expense

The Company grants stock-based awards under its existing 2011 Stock Incentive Plan and its 2007 Employee Stock Purchase Plan. The Company also has outstanding stock-based awards under its 1999 Stock Option/Stock Issuance Plan and 2012 Inducement Award Plan but is no longer granting awards under these plans. As of March 31, 2015, 1,740,896 shares of common stock are available for issuance under the 2011 Stock Incentive Plan. As of March 31, 2015, 312,026 shares of common stock are available for issuance to participating employees under the 2007 Employee Stock Purchase Plan. The Company applies the fair value recognition provisions for all stock-based awards granted or modified in accordance with authoritative guidance. Under this guidance the Company records compensation costs over the requisite service period of the award based on the grant-date fair value. The straight-line method is applied to all grants with service conditions, while the graded vesting method is applied to all grants with both service and performance conditions.

The Company recognized stock-based compensation expense on all awards in cost of revenue and operating expense categories as follows:

	Three months ended March 31,
	2015		2014
Cost of revenue	$	499	$	442
Research and development		867		1,020
Sales and marketing		1,191		1,032
General and administrative		1,747		1,420
	$	4,304	$	3,914

Additionally, the Company capitalized $68 and $50 of stock-based compensation related to the development of internal-use software for the three months ended March 31, 2015 and 2014, respectively.

5. Income Taxes

For the three months ended March 31, 2015 and 2014, the Company recorded income tax expense of $693 and $328, respectively. Income tax is related to federal, state, and to a lesser extent, foreign tax obligations. The Company’s effective tax rate may vary from period to period based on changes in estimated taxable income or loss, changes to federal, state or foreign tax laws, deductibility of certain costs and expenses, and as a result of acquisitions.

The Company’s estimated effective tax rate for 2015 and 2014, which has been applied to the Company’s income before income taxes for the three months ended March 31, 2015 and 2014, varies from the statutory rate primarily due to non-deductible stock-based compensation expense, that increases the effective tax rate, partially offset by state research and development credits that decrease the effective tax rate. The federal research and development credit has not yet been enacted for 2015 and had not yet been enacted in the first quarter of 2014 and therefore was not included in the Company’s estimated effective tax rate for either 2015 or 2014. The income tax expense for the first quarters of 2015 and 2014 was further reduced by the impact of disqualifying dispositions of incentive stock options during the periods.

The Company had net deferred tax assets of $6,443 at December 31, 2014, which did not change at March 31, 2015.

The Company has not recorded any amounts for unrecognized tax benefits as of March 31, 2015 or December 31, 2014. As of March 31, 2015 and December 31, 2014, the Company had no accrued interest or tax penalties recorded.

6. Accrued Expenses

	March 31, 2015		December 31, 2014
Payroll and payroll-related	$	5,627	$	4,430
Licensed software and maintenance		1,197		1,197
Marketing programs		1,968		490
Other accrued expenses		5,643		6,113
	$	14,435	$	12,230

9

7. Commitments and Contingencies

Office Leases

The Company has a lease for its headquarters space in Waltham, Massachusetts (the “Lease”) that is effective through September 2022 with one ten-year extension option. The Lease includes space the Company is currently occupying as well as space that will be made available at various points in time during the term.

The Company leases office space for a sales and support office in Colorado under a lease agreement effective through April 2019 with three three-year extension options. The Company also leases small amounts of general office space in Florida, New York, California and the United Kingdom under lease agreements that expire at various dates through 2018.

Lease incentives, payment escalations and rent holidays specified in the lease agreements are accrued or deferred as appropriate such that rent expense per square foot is recognized on a straight-line basis over the terms of occupancy.

At March 31, 2015 and December 31, 2014, the Company had both prepaid rent and accrued rent balances related to its office leases. The prepaid rent balance was $52 as of March 31, 2015, of which $13 was included in prepaid expenses and other current assets and $39 was included in other assets. The accrued rent balance was $4,268 as of March 31, 2015, of which $705 was included in accrued expenses and $3,563 was included in other long-term liabilities. The prepaid rent balance was $51 at December 31, 2014, of which $3 was included in prepaid expenses and other current assets and $48 was included in other assets. The accrued rent balance was $4,232 at December 31, 2014, of which $577 was included in accrued expenses and $3,655 was included in other long-term liabilities.

As of March 31, 2015, future minimum lease payments under non-cancelable office leases are as follows:

Remainder of 2015	$	7,176
2016		10,061
2017		10,005
2018		9,604
2019		8,492
Thereafter		22,462
		67,800
Less: Sublease income		628
	$	67,172

Total rent expense under office leases was $2,409 and $2,320 for the three months ended March 31, 2015 and 2014, respectively. Total rent expense for the three months ended March 31, 2015 is net of sublease income of $47.

Third-Party Hosting Agreements

The Company has agreements with two affiliated vendors to provide specialized space and equipment and related services from which the Company hosts its software applications. Payment escalations and rent holidays specified in these agreements are accrued or deferred as appropriate such that rent expense per square foot is recognized on a straight-line basis over the terms of occupancy. As of March 31, 2015 and December 31, 2014, the Company had both prepaid rent and accrued rent balances related to these agreements. As of March 31, 2015, the Company had prepaid rent of $429, of which $277 was included in prepaid expenses and other current assets and $152 was included in other assets. Of the accrued rent balance of $166, $47 was included in accrued expenses and $119 was included in other long-term liabilities. At December 31, 2014, the Company had prepaid rent of $501, of which $295 was included in prepaid expenses and other current assets and $206 was included in other assets. The accrued rent balance was $172 of which $38 was included in accrued expense and other current liabilities and $134 was included in other long-term liabilities.

The agreements include payment commitments that expire at various dates through 2017. As of March 31, 2015, future minimum payments under the agreements are as follows:

Remainder of 2015	$	2,958
2016		4,049
2017		775
Total	$	7,782

Total rent expense under hosting agreements was $1,105 and $1,063 for the three months ended March 31, 2015 and 2014, respectively.

10

Vendor Commitments

As of March 31, 2015, the Company had issued both cancellable and non-cancellable purchase orders to various vendors and entered into contractual commitments with various vendors totaling $27,901 related to marketing programs and other non-marketing goods and services to be delivered principally during 2015.

Letters of Credit and Restricted Cash

As of March 31, 2015 and December 31, 2014, the Company maintained a letter of credit totaling $1,300 for the benefit of the landlord of the Lease. The landlord can draw against the letter of credit in the event of default by the Company. The Company was required to maintain a cash balance of at least $1,300 as of March 31, 2015 and December 31, 2014 to secure the letter of credit. These amounts were classified as restricted cash in the balance sheet at March 31, 2015 and December 31, 2014.

Indemnification Obligations

The Company enters into standard indemnification agreements with the Company’s channel partners and certain other third parties in the ordinary course of business. Pursuant to these agreements, the Company indemnifies and agrees to reimburse the indemnified party for losses incurred by the indemnified party in connection with certain intellectual property infringement and other claims by any third party with respect to the Company’s business and technology. Based on historical information and information known as of March 31, 2015, the Company does not expect it will incur any significant liabilities under these indemnification agreements.

Legal Matters

In September 2012, RPost Holdings, Inc., RPost Communications Limited and RMail Limited (collectively, “RPost”) filed a complaint in the United States District Court for the Eastern District of Texas that named the Company as a defendant in a lawsuit. The complaint alleged that certain elements of the Company’s email marketing technology infringe five patents held by RPost. RPost seeks an award for damages in an unspecified amount and injunctive relief. In February 2013, RPost amended its complaint to name five of the Company’s marketing partners as defendants. Under the Company’s contractual agreements with these marketing partners, the Company is obligated to indemnify them for claims related to patent infringement. The Company filed a motion to sever and stay the claims against its partners and multiple motions to dismiss the claims against the Company. In January 2014, the case was stayed pending the resolution of certain state court and bankruptcy court actions involving RPost, to which the Company is not a party. The stay was extended by agreement of the parties in December 2014. This litigation is in its very early stages. As a result, neither the ultimate outcome of this litigation nor an estimate of a probable loss or any reasonably possible losses can be assessed at this time. Nevertheless, the Company believes that it has meritorious defenses to any claim of infringement and intends to defend itself vigorously.

In March 2013, CreateAds LLC (“CreateAds”) filed a complaint in the United States District Court for the District of Delaware that named the Company as a defendant in a lawsuit. The complaint, which was served on the Company on March 8, 2013, alleged that certain elements of the Company’s email marketing technology infringe a patent held by CreateAds. CreateAds seeks an award for damages in an unspecified amount and injunctive relief. In February 2014, the case was stayed pending a decision by the United States Supreme Court in the appeal of a patent case with issues very similar to the ones pending in the Company’s motion to dismiss. Following the Supreme Court’s decision in June 2014, the Company filed a motion for summary judgment seeking to invalidate the patent for lack of patent-eligible subject matter. By agreement of the parties, the case was dismissed with prejudice as to the claims raised by CreateAds in February 2015.

The Company is from time to time subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of its business. While the outcome of these other claims cannot be predicted with certainty, management does not believe that the outcome of any of these other legal matters will have a material adverse effect on the Company’s results of operations or financial condition.

8. 401(k) Savings Plan

The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code of 1986. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Company contributions to the plan may be made at the discretion of the Board of Directors. The Company elected to make matching contributions for the plan years ending December 31, 2015 and 2014 at a rate of 100% of each employee’s contribution up to a maximum matching contribution of 3% of the employee’s compensation and at a rate of 50% of each employee’s contribution in excess of 3% up to a maximum of 5% of the employee’s compensation.

Through March 31, 2015 and 2014, the Company made matching contributions of $1,068 and $863 for the plan years ended December 31, 2015 and 2014, respectively.

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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, 2014, included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on February 25, 2015. 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 that are not statements of historical fact. 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.

Overview

We are a leading provider of online marketing tools that are designed for small organizations, including small businesses, associations and non-profits. We seek to help our customers succeed by creating and growing their customer and member relationships through our easy-to-use products combined with education, support, KnowHow and coaching. Our tools include email marketing, social media marketing, event marketing, local deals, online listings and survey products. In April 2014, we formally launched Constant Contact Toolkit, an integrated online marketing platform that simplifies small business marketing by bringing together the tools needed to drive repeat customers and reach new ones. Toolkit combines new and existing elements of our product set to make it easy for small organizations to find and engage with current and new customers across multiple marketing channels, including email, social, mobile and web. Toolkit is available to new customers through three different packages: Email, Email Plus and Personal Marketer. We also plan to migrate existing customers to Toolkit over time. We believe Toolkit makes it easier for smaller organizations to find and engage with current and new customers, which, in turn, will allow us to achieve increased product usage, increased revenue per customer and higher retention rates. We market our products and acquire our customers through a variety of sources including online marketing, such as search engines and advertising with online networks and other websites, offline marketing through television and radio advertising, local seminars, relationships with our partners, outbound sales efforts, referrals from our growing customer base, general brand awareness and a link to our website in the footer of substantially all of the emails sent by our customers.

We have grown rapidly since launching our first on-demand product in 2000. As of March 31, 2015, we had approximately 645,000 unique paying customers and had revenue of $90.4 million. Unique customers are rounded to the nearest 5,000 and we define unique customers as customers of all of our products and services, inclusive of both subscription and transaction-based products. Transactional customers are included in the customer count for the period if they transacted within the prior 12-month period. A customer of multiple products and services is counted as one unique customer.

Our business strategy is to expand beyond email marketing to provide an integrated multi-product offering, Constant Contact Toolkit, to drive higher customer lifetime value by offering gains in average revenue per customer and retention. We believe increasing our customer’s lifetime value will be a key contributor to our continued success. To drive lifetime value, we intend to continue to focus on acquiring and supporting customers in a cost-effective manner, increasing average revenue per customer (through cross-selling, list size growth and Toolkit) and improving customer retention rates.

In July 2014, we announced a stock repurchase program. Under the repurchase program, we are authorized to repurchase up to $30 million of our common stock through July 31, 2015. Stock may be repurchased from time to time in the open market, which may include the use of 10b5-1 trading plans, or in privately negotiated transactions in accordance with applicable securities and stock exchange rules. During the three months ended March 31, 2015, we repurchased 228,671 shares of common stock at an average price of $39.36 per share.

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Key Financial and Operating Metrics

In connection with the ongoing operation of our business, our management and our Board of Directors regularly review key financial and operating metrics. Given our growth strategy, we pay particular attention to customer lifetime value, customer acquisition metrics, trialer growth, customer attrition, success in cross-selling and growing customer list sizes, number of unique paying customers and average revenue per customer. We also consider other financial and operating metrics such as revenue, quarterly revenue growth, gross margin, expenses, customer satisfaction rates, average speed of answer for customer support calls, email deliverability rates and capital expenditures, among others. Management considers these financial and operating metrics critical to understanding and improving our business, reviewing our historical performance, benchmarking our performance versus other companies and identifying current and future trends, and for planning purposes. In addition, we believe that certain financial measures, which are not measures of financial performance under accounting principles generally accepted in the United States of America, or GAAP, are useful to management and investors in evaluating our operating performance for the periods presented and provide a tool for evaluating our ongoing operations. These non-GAAP financial measures, however, should not be considered a substitute for GAAP financial measures, including but not limited to net income (loss) or cash flows from operating, investing and financing activities and may not be comparable to similarly titled measures reported by other companies.

We consider the following non-GAAP financial measures to be key indicators of our financial performance:

• “adjusted EBITDA,” which we define as GAAP net income (loss) before income taxes, interest income and other income (expense), depreciation and amortization, stock-based compensation and litigation contingency accruals;

• “adjusted EBITDA margin,” which we define as adjusted EBITDA divided by revenue;

• “non-GAAP net income,” which we define as GAAP net income (loss) before the non-cash portion of income taxes, stock-based compensation expense and litigation contingency accruals; and

• “free cash flow,” which we define as net cash flow from operating activities less acquisition of property and equipment.

Certain Trends and Uncertainties

The following represents a summary of certain trends and uncertainties, which could have a significant impact on our financial condition and results of operations. This summary is not intended to be a complete list of potential trends and uncertainties that could impact our business in the long or short term. This summary should be considered along with the factors set forth under Part II, Item 1A “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.

• Our long term strategy is substantially dependent on our ability to continue to generate interest in our existing products and to enhance, expand and integrate our product offerings to serve the online marketing needs of small businesses, associations and non-profits. If we fail, our financial results could be adversely impacted.

• In April 2014, we formally launched Constant Contact Toolkit, our bundled product offering that allows our customers to have access to multiple products for one monthly fee. Our efforts to offer product bundles may not result in significant revenue growth, may negatively impact trialer conversion rates, may be confusing to our customers, may result in higher customer attrition and may disrupt existing product offerings, which still account for a significant majority of our revenue, any of which may harm our financial performance and impede our long-term growth strategy.

• Over the last several months, we have experienced higher than normal credit card failure rates as we seek to charge our customer accounts. We believe that this is occurring because credit card issuers have issued a significant number of new credit cards as a result of the highly-publicized data breaches that have impacted national retailers and financial institutions and new policies that will eventually require card issuers to replace existing credit cards with chip-enabled credit cards. While we are taking various actions to address this issue, this trend has negatively impacted our business and may continue to do so in the future.

• The risk of a data security breach or service disruption caused by computer hackers and cyber criminals has increased as the frequency, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Our systems have been, and may in the future be, the target of various forms of cyber attacks. While we make significant efforts to maintain the security and integrity of our systems, our cybersecurity measures and the cybersecurity measures taken by our third-party hosting facilities may be unable to anticipate, detect or prevent all attempts to compromise our systems. Any security breach, whether successful or not, could harm our reputation, subject us to lawsuits and other potential liabilities and ultimately could result in the loss of customers and loss of revenue.

• We believe that given the size of our potential market and the relatively low barriers to entry, competition may increase. Increased competition could result from existing competitors, existing competitors that have been acquired by larger enterprises or new competitors that enter the market because of the potential opportunity. We intend to closely monitor competitive activity and respond accordingly. Increased competition could have an adverse effect on our financial condition and results of operations.

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Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. We believe that of our significant accounting policies, which are described in the notes to the condensed consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC, the following accounting policies involve the most judgment and complexity:

• Revenue recognition;

• Income taxes;

• Goodwill and acquired intangible assets;

• Software and website development costs; and

• Stock-based compensation.

Accordingly, we believe the policies set forth above are critical to fully understanding and evaluating our financial condition and results of operations. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected.

There have been no material changes in our critical accounting policies since December 31, 2014. For further information, please see the discussion of critical accounting policies included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Sources of Revenue

We derive our revenue principally from subscription fees from our customers. Our revenue is driven primarily by the number of paying customers and the subscription fees for our products and is not concentrated within any one customer or group of customers. We generally do not require our customers to commit to a contractual term; however, our customers are required to prepay for subscriptions on a monthly, semi-annual, or annual basis by providing a credit card or bank check. Fees are recorded initially as deferred revenue and then recognized as revenue on a daily basis over the prepaid subscription period. We also generate a small amount of revenue from ancillary services related to our products, which primarily consist of custom services and training, and a small amount of revenue from transactional fee-based products and services offerings.

Cost of Revenue and Operating Expenses

We allocate certain occupancy and general office related expenses, such as rent, utilities, office supplies and depreciation of general office assets to cost of revenue and operating expense categories based on headcount. As a result, an occupancy expense allocation is reflected as personnel costs in cost of revenue and each operating expense category.

Cost of Revenue. Cost of revenue consists primarily of wages and benefits for software operations and customer support personnel, credit card processing fees, depreciation and amortization, maintenance and hosting of our software applications underlying our product offerings and other direct costs of delivering our products. We allocate a portion of customer support costs relating to assisting trial customers to sales and marketing expense.

The expenses related to our hosted software applications are affected by the number of customers who subscribe to our products and the complexity and redundancy of our software applications and hosting infrastructure. We expect cost of revenue to increase in absolute dollars as we expect to increase our number of customers but to continue to decrease as a percentage of revenue as we gain efficiencies created by our expected revenue growth and cost savings.

Research and Development. Research and development expenses consist primarily of wages and benefits for product strategy and development personnel. We have focused our research and development efforts on improving ease-of-use, functionality and technological scalability of our existing products as well as on the development of new product offerings. We primarily expense research and development costs. However, direct development costs related to software enhancements that add functionality are capitalized and amortized over their useful life. Over the shorter term, we expect that research and development expenses will increase in absolute dollars but remain generally flat as a percentage of revenue. Over the longer term, we expect our research and development expenses to increase in absolute dollars but decrease as a percentage of revenue as we expect to grow our revenue at a faster rate.

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Sales and Marketing. Sales and marketing expenses consist primarily of advertising and promotional costs, wages and benefits for sales and marketing personnel, partner referral fees, the portion of customer support costs that relate to assisting trial customers and amortization of sales and marketing relating intangible assets. Advertising costs consist primarily of pay-per-click advertising with search engines, other online and offline advertising media, including television and radio advertisements, as well as the costs to create and produce these advertisements. Advertising costs are expensed as incurred. Promotional costs consist primarily of public relations, memberships and event costs. Additionally, sales and marketing expenses include costs related to our efforts to retain our customers and to cross-sell and increase usage of our products. In order to continue to grow our business and brand and category awareness, we expect that we will continue to commit substantial resources to our sales and marketing efforts. As a result, we expect that on an annual basis, sales and marketing expenses will increase in absolute dollars, but continue to decrease as a percentage of revenue as we expect to grow our revenue at a faster rate.

General and Administrative. General and administrative expenses consist primarily of wages and benefits for administrative, human resources, internal information technology support, finance, accounting and analytics personnel, professional fees, board compensation and expenses, certain taxes and other corporate expenses. We expect that general and administrative expenses will increase in absolute dollars as we continue to add personnel in connection with the anticipated growth of our business and incur costs related to operating as a public company but to remain relatively flat as a percentage of revenue.

Results of Operations

Three Months Ended March 31, 2015 compared to Three Months Ended March 31, 2014

Revenue

	Three Months Ended March 31,
	2015		2014		Change
	(Dollars in thousands)
Revenue	$	90,417	$	78,874		15	%

Revenue increased by $11.5 million from 2014 to 2015. The increase resulted primarily from an approximately 7% increase in the number of average monthly customers and an approximately 8% increase in average revenue per customer. The increase in average revenue per customer was primarily due to new packaging and pricing plans rolled out to a subset of our customers and to revenue from our SinglePlatform product. We expect our average revenue per customer to increase over time.

Cost of Revenue

	Three Months Ended March 31,
	2015			2014			Change
	(Dollars in thousands)
Cost of revenue	$	24,431		$	21,727			12	%
Percent of revenue		27	%		28	%

Cost of revenue increased by $2.7 million from 2014 to 2015. The increase in absolute dollars resulted primarily from an increase in personnel costs in our operations group of $751,000, which is responsible for managing our technology infrastructure and an increase in customer support personnel costs of $714,000 to support our customer growth. Cost of revenue also increased by $799,000 as a result of costs associated with customer loyalty and incentive programs. Merchant card fees increased by $293,000 due to the higher volume of billing transactions.

Research and Development

	Three Months Ended March 31,
	2015			2014			Change
	(Dollars in thousands)
Research and development	$	13,825		$	13,074			6	%
Percent of revenue		15	%		17	%

Research and development expenses increased by $751,000 from 2014 to 2015. The increase in absolute dollars was due primarily to additional personnel-related costs of $499,000 as a result of our continued hiring of research and development employees to further develop and enhance our products.

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Sales and Marketing

	Three Months Ended March 31,
	2015			2014			Change
	(Dollars in thousands)
Sales and marketing	$	36,068		$	32,800			10	%
Percent of revenue		40	%		42	%

Sales and marketing expenses increased by $3.3 million from 2014 to 2015. The increase in absolute dollars was largely due to personnel-related costs of $1.9 million and consulting costs of $198,000. Advertising and promotional expenditures also increased by $620,000 and partner referral fees increased by $203,000.

General and Administrative

	Three Months Ended March 31,
	2015			2014			Change
	(Dollars in thousands)
General and administrative	$	11,793		$	10,120			17	%
Percent of revenue		13	%		13	%

General and administrative expenses increased by $1.7 million from 2014 to 2015. The increase in absolute dollars was primarily due to additional personnel costs of $927,000 as a result of increasing the number of general and administrative employees to support our overall growth and additional consulting costs of $701,000.

Interest and other income (expense), net

	Three Months Ended March 31,
	2015			2014		Change
	(Dollars in thousands)
Interest and other income (expense), net	$	(57	)	$	23		(348	)%

Interest and other income (expense), net decreased by $80,000 from a net other income in 2014 to a net other expense in 2015 due primarily to an increase in foreign currency transaction expense, partially offset by a slight increase in interest income.

Income Taxes

	Three Months Ended March 31,
	2015			2014
	(Dollars in thousands)
Income tax expense	$	693		$	328
Percent of income before income taxes		16	%		28	%

Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss, changes to federal, state or foreign tax laws, deductibility of certain costs and expenses, and as a result of acquisitions.

Our estimated effective tax rate for 2015 and 2014, which has been applied to our income before income taxes for the three months ended March 31, 2015 and 2014, varies from the statutory rate primarily due to non-deductible stock-based compensation expense that increases the effective tax rate, partially offset by state research and development credits that decrease the effective tax rate. The federal research and development credit has not yet been enacted for 2015 and had not yet been enacted in the first quarter of 2014 for 2014 and therefore was not included in our estimated effective tax rate for either 2015 or 2014. The income tax expense for the first quarter of 2015 and 2014 was further reduced by the impact of disqualifying dispositions of incentive stock options during the periods.

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Liquidity and Capital Resources

During the first quarter of 2015 and 2014, we funded our operations with cash flows generated from operations. At March 31, 2015, our principal sources of liquidity were cash and cash equivalents and marketable securities of $179 million.

The following table summarizes our sources and uses of cash for each of the periods presented below:

	Three Months Ended March 31,
	2015			2014
	(in thousands)
Cash provided by operating activities	$	20,221		$	11,091
Cash used in investing activities	$	(3,014	)	$	(9,027	)
Cash provided by financing activities	$	1,576		$	2,516

Net cash provided by operating activities

During the three months ended March 31, 2015, operating activities provided $20.2 million of cash. The cash flow provided by operating activities primarily resulted from our net income of $3.6 million, our net non-cash charges of $9.3 million and cash provided by changes in our operating assets and liabilities of $7.8 million. These amounts were partially offset by cash used to pay taxes for net settlement of equity awards of $373,000. Our net non-cash charges in the first quarter of 2015 primarily consisted of $6.1 million of depreciation and amortization of our long-lived assets and $4.3 million of stock-based compensation. Cash provided from changes in our operating assets and liabilities during the three months ended March 31, 2015 consisted primarily of a $5.0 million increase in accounts payable and accrued expenses and a $2.3 million increase in deferred revenue.

During the three months ended March 31, 2014, operating activities provided $11.1 million of cash. The cash flow provided by operating activities primarily resulted from our net income of $848,000, our net non-cash charges of $9.7 million and cash provided by changes in our operating assets and liabilities of $1.3 million. These amounts were partially offset by cash used to pay taxes for net settlement of equity awards of $751,000. Our net non-cash charges in the first quarter of 2014 primarily consisted of $5.9 million of depreciation and amortization of our long-lived assets and $3.9 million of stock-based compensation. Cash provided from changes in our operating assets and liabilities during the three months ended March 31, 2014 consisted primarily of a $2.1 million increase in deferred revenue and an $800,000 net increase in accounts payable and accrued expenses, partially offset by a $1.5 million increase in prepaid expenses and other current assets.

Our cash provided by operating activities is generally affected by the amount of net income, growth in prepaid subscriptions, changes in working capital accounts and the timing of rent payments and add-backs of non-cash expense items such as depreciation and amortization of long-lived assets, stock-based compensation expense and the change in deferred tax assets. Changes in our working capital accounts are generally driven by the timing of payments to our vendors.

Net cash used in investing activities

Net cash used in investing activities was $3.0 million in the three months ended March 31, 2015 as compared to $9.0 million in the three months ended March 31, 2014. Net cash used in investing activities in 2015 consisted primarily of cash paid to purchase property and equipment of $5.3 million, partially offset by cash provided by the net settlements of marketable securities of $2.2 million. Net settlements of marketable securities generated cash as a result of the proceeds from the maturities of marketable securities being greater than the cash used to purchase marketable securities. Net cash used in investing activities in 2014 consisted primarily of cash paid to purchase property and equipment of $5.9 million and the net settlements of marketable securities of $3.1 million. Net settlements of marketable securities used cash as a result of the cash used to purchase marketable securities being greater than the proceeds from the maturities of marketable securities.

Acquisitions of property and equipment generally include the purchase of computer equipment for our operations and employees, equipment, furniture and leasehold improvements and the capitalization of certain software development costs. We have also made capital expenditures for equipment to increase capacity of our hosting infrastructure and to accommodate growth in our business. We continue to increase the amount of space we lease for our corporate headquarters and to acquire property and equipment to outfit the additional space.

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Net cash provided by financing activities

Net cash provided by financing activities was $1.6 million and $2.5 million for the three months ended March 31, 2015 and 2014, respectively. Net cash provided by financing activities consisted primarily of proceeds from stock issued pursuant to the exercise of stock options and from the income tax benefit related to the exercise of stock options. Additionally, in the first quarter of 2015, we used $9.0 million to repurchase our common stock under a stock repurchase program initiated in the second quarter of 2014.

As of December 31, 2014, we had federal and state net operating loss carry-forwards of $8.6 million and $377,000, respectively, which we intend to use to the extent available to offset payments of future federal and state income tax liabilities. If unused, our net operating loss carry-forwards expire at various dates through 2034 for federal and 2026 for state income tax purposes. As of December 31, 2014, we also had federal and state research and development credit carry-forwards of $9.4 million and $6.8 million, respectively, which we intend to use to the extent available to offset payments of future federal and state income tax liabilities. If unused, our research and development credit carry-forwards will expire at various dates through 2034 for federal and 2029 for state income tax purposes. In addition, we have $1.4 million of state investment tax credits, of which $600,000 can be carried forward indefinitely while the remainder, if unused, will expire at various dates through 2016.

Contractual Obligations

We lease our headquarters in Waltham, Massachusetts under an operating lease that is effective through September 2022 with one ten-year extension option. The lease includes the space we are occupying currently as well as additional space that will be made available to us through the term of the lease. We lease office space in Colorado for a sales and support office under an operating lease that expires in April 2019 with three three-year extension options. We also lease small amounts of general office space in Florida, New York, California and the United Kingdom under lease agreements that expire at various dates through 2018.

We have agreements with various vendors to provide specialized space and equipment and related services from which we host our software application. The agreements include payment commitments that expire at various dates through early 2017.

As of March 31, 2015, we had issued both cancellable and non-cancellable purchase orders and entered into contractual commitments with various vendors totaling $27.9 million relating to marketing programs and other non-marketing related goods and services.

The following table summarizes our contractual obligations at March 31, 2015, and the effect such obligations are expected to have on our liquidity and cash flow in future periods.

	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
	(In thousands)
Office lease obligations	$	67,800	$	9,671	$	19,989	$	17,720	$	20,420
Third-party hosting agreements		7,782		3,966		3,816		—		—
Vendor commitments		27,901		25,484		1,611		806		—
Total	$	103,483	$	39,121	$	25,416	$	18,526	$	20,420

Our future capital requirements may vary materially from those now planned and will depend on many factors, including, but not limited to, development of new products, market acceptance of our products, the levels of advertising and promotion required to launch additional products and improve our competitive position in the marketplace, the expansion of our sales, support and marketing organizations, the establishment of additional offices in the United States and worldwide and the building of infrastructure necessary to support our anticipated growth, the response of competitors to our products and our relationships with suppliers and clients. Since the introduction of our on-demand email marketing product in 2000, we have experienced increases in our expenditures consistent with the growth in our operations and personnel, and we anticipate that our expenditures will continue to increase on an absolute dollar basis in the future.

We believe that our current cash, cash equivalents and marketable securities and operating cash flows will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months. Thereafter, we may need to raise additional funds through public or private financings or borrowings to fund our operations, develop or enhance products, to fund expansion, to respond to competitive pressures or to acquire complementary products, businesses or technologies. If required, additional financing may not be available on terms that are favorable to us, or at all. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders will be reduced and these securities might have rights, preferences and privileges senior to those of our current stockholders or we may be subject to covenants that restrict how we conduct our business. No assurance can be given that additional financing will be available or that, if available, such financing can be obtained on terms favorable to our stockholders and us. During the last three years, inflation and changing prices have not had a material effect on our business. We are unable to predict whether inflation or changing prices will materially affect our business in the foreseeable future.

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Off-Balance Sheet Arrangements

We do not engage in any off-balance sheet financing activities. We do not have any interest in entities referred to as variable interest entities, which include special purpose entities and other structured finance entities.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, or the FASB, issued new guidance, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The new guidance is effective for us commencing January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that this guidance will have on our consolidated financial statements.

In August 2014, the FASB issued new guidance, Presentation of Financial Statements — Going Concern. The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The guidance will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We are evaluating the effect that this guidance will have on our consolidated financial statements.

In April 2015, the FASB issued new guidance, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The guidance clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software under. The guidance will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We do not believe the guidance will have a material impact on our consolidated financial statements

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Risk. Significantly all of our revenue and expenses are denominated in United States dollars. Accordingly, our results of operations and cash flows are not subject to material fluctuations due to changes in foreign currency exchange rates. Increased activity in international markets will expose us to changes in currency exchange rates. The economic impact of currency exchange rate movements is often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. These changes, if material, could cause us to adjust our financing and operating strategies.

Interest Rate Sensitivity. We had cash and cash equivalents and marketable securities of $179 million at March 31, 2015, which consisted of cash, government securities, corporate and agency bonds, commercial paper and money market instruments. Interest income is sensitive to changes in the general level of interest rates; however, due to the nature of these investments, we do not believe that we have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates.

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Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2015. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2015, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

(b) Changes in Internal Control over Financial Reporting.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended March 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In September 2012, RPost Holdings, Inc., RPost Communications Limited and RMail Limited, or collectively, RPost, filed a complaint in the United States District Court for the Eastern District of Texas that named us as a defendant in a lawsuit. The complaint alleged that certain elements of our email marketing technology infringe five patents held by RPost. RPost seeks an award for damages in an unspecified amount and injunctive relief. In February 2013, RPost amended its complaint to name five of our marketing partners as defendants. Under our contractual agreements with these marketing partners, we are obligated to indemnify them for claims related to patent infringement. We filed a motion to sever and stay the claims against our partners and multiple motions to dismiss the claims against us. In January 2014, the case was stayed pending the resolution of certain state court and bankruptcy actions involving RPost, to which we are not a party. The stay was extended by agreement of the parties in December 2014. This litigation is in its very early stages. As a result, neither the ultimate outcome of this litigation nor an estimate of a probable loss or any reasonably possible losses can be assessed at this time. Nevertheless, we believe we have meritorious defenses to any claim of infringement and intend to defend the lawsuit vigorously.

In March 2013, CreateAds LLC, or CreateAds, filed a complaint in the United States District Court for the District of Delaware that named us as a defendant in a lawsuit. The complaint alleged that certain elements of our email marketing technology infringe a patent held by CreateAds. CreateAds seeks an award for damages in an unspecified amount and injunctive relief. In February 2014, the case was stayed pending a decision by the United States Supreme Court in the appeal of a patent case with issues very similar to the ones pending in our motion to dismiss. Following the Supreme Court’s decision in June 2014, we filed a motion for summary judgment seeking to invalidate the patent for lack of patent-eligible subject matter. By agreement of the parties, the case was dismissed with prejudice as to the claims raised by CreateAds in February 2015.

From time to time we may become subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of our business. While the outcome of these other claims cannot be predicted with certainty, we do not believe that the outcome of any of these other legal matters will have a material adverse effect on our results of operations, financial condition or cash flows.

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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 vary 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, our business and results of operations will be affected adversely.

To succeed, we must continue to attract and retain customers and increase sales to new and existing customers. The rate at which new and existing customers purchase and renew subscriptions to our products depends on a number of factors, including those outside of our control. In future periods, our total customers and revenue could decline or grow more slowly than we expect.

We rely on a variety of methods to attract new customers, such as paying providers of online services, search engines, directories and other websites to provide content, advertising banners and other links that direct prospects to our website, television and radio advertising, the efforts of our partners and the inclusion of a link to our website in substantially all of our customers’ emails. In addition, we are committed to providing our customers with a high level of support. As a result, we believe many of our new customers are referred to us by existing customers. However, customers cancel their accounts for many reasons, including economic concerns, business failure, credit card failure, the timeliness and success of product enhancements and introductions by us and those of our competitors, the pricing offered by us and our competitors, the frequency and severity of any system outages and technological change or a perception that they do not use our products effectively, the service is not a good value and that they can manage their online marketing efforts without our products. In some cases, we terminate an account because the customer fails to comply with our standard terms and conditions.

Our future success also depends on retaining our current customers at acceptable retention levels. As our customer base continues to grow, even if our customer retention rates remain the same on a percentage basis, the absolute number of customers we lose each month will increase. We must continually add new customers to replace customers whose accounts are cancelled or terminated, which may involve significantly higher marketing expenditures than we currently anticipate and may result in new customers who pay us less on a monthly basis than terminating customers. If the cost of our marketing initiatives were to significantly increase or our efforts to satisfy our existing customers are not successful, we may not be able to attract new customers or retain existing customers on a cost-effective basis and, as a result, our business and results of operations would be affected adversely.

Beginning in April 2014, we formally launched Constant Contact Toolkit, our integrated online marketing platform. We have relatively little experience selling an integrated product and currently, we are generally not offering the product to all of our prospects. To the extent that offering this integrated platform leads to a decline in the number of customers or a decline in revenue, or negatively impacts our existing customers or our existing products, which still account for a significant majority of our revenue, or results in higher customer attrition, or causes our executives and employees to have to expend time and resources to support two different offerings, our business and results of operations may be affected adversely.

Our business is substantially dependent on the market for email marketing services for small organizations.

We derive, and expect to continue to derive, a substantial portion of our revenue from our email marketing product for small organizations, including small businesses, associations and non-profits. For the years ended December 31, 2014 and 2013, revenue from our email marketing product alone was approximately 80% and 84%, respectively, of our total revenue. In addition, email marketing is the most prominent offering within our Toolkit product. Widespread acceptance of email marketing among small organizations will continue to be critical to our future growth and success. There is no certainty regarding how the market for email marketing will continue to develop, or whether it will experience any significant contractions. Our ability to attract and retain customers will depend in part on our ability to make email marketing convenient, effective and affordable. If small organizations determine that email marketing does not sufficiently benefit them or utilize alternative or new electronic methods of communicating with their customers, existing customers may cancel their accounts and potential customers may decide not to adopt email marketing. If the market for email marketing services fails to continue to grow or grows more slowly than we currently anticipate, demand for our services may decline and our revenue would suffer.

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Our growth strategy requires us to expand our product offerings beyond email marketing and this expansion may not be successful.

We have traditionally focused our business on providing our email marketing product for small organizations, but over the last several years we have significantly expanded our product offerings. Our efforts to introduce new products beyond our email marketing product or to offer a bundled offering of two or more of our products, such as Toolkit, may not result in significant revenue growth, may not be complementary to our email marketing product, may not be timely, may divert management resources from our existing operations and require us to commit significant financial resources to an unproven business or product or may be confusing to our customers, any of which may harm our financial performance and impede our long-term growth strategy.

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.

Our system stores our customers’ proprietary email contacts lists, credit card information, personally identifiable information and other critical data. Any accidental or willful security breaches or other unauthorized access could expose us to liability for the loss of such information, adverse regulatory action by federal and state governments, time-consuming and expensive litigation and other possible liabilities as well as negative publicity, which could severely damage our reputation. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our software are exposed and exploited, and, as a result, a third party obtains unauthorized access to any of our customers’ data, our relationships with our customers will be severely damaged, and we could incur significant liability. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched against a target, we and our third-party hosting facilities may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, as we continue to grow our customer base and our brand becomes more widely known and recognized, we may become a more inviting target for third parties seeking to compromise our security systems. Any security breach, whether actual or perceived, would harm our reputation, and we could lose customers and fail to acquire new customers. Further, any mandatory disclosures regarding a security breach often lead to widespread negative publicity, which may cause our customers to lose confidence in the effectiveness of our data security measures.

We are subject to a variety of laws and regulations, including regulation by various federal government agencies, including the United States Federal Trade Commission and state and local agencies. The United States and various state and foreign governments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiable information of individuals, and the FTC and many state attorneys general are applying federal and state consumer protection laws to impose standards on the online collection, use and dissemination of data. Self-regulatory obligations, other industry standards, policies, and other legal obligations may apply to our collection, distribution, use, security or storage of personally identifiable information or other data relating to individuals. In addition, the federal government and many states, including Massachusetts, have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data. These obligations may be interpreted and applied in an inconsistent manner from one jurisdiction to another and may conflict with one another, other regulatory requirements or our internal practices. Any failure or perceived failure by us to comply with United States, European Union or other foreign privacy or security laws, policies, industry standards or legal obligations or any security incident that results in the unauthorized access to, or acquisition, release or transfer of, personally identifiable information or other customer data may result in governmental enforcement actions, litigation, fines and penalties or adverse publicity and could cause our customers to lose trust in us, which could have an adverse effect on our reputation and business. We expect that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws, regulations and standards may have on our business. Future laws, regulations, standards and other obligations could impair our ability to collect or use information that we utilize to provide targeted advertising to our customers, thereby impairing our ability to maintain and grow our total customers and increase revenue. Future restrictions on the collection, use, sharing or disclosure of our customers’ data or additional requirements for express or implied consent of customers for the use and disclosure of such information limit our ability to develop new products and features.

In addition, failure to maintain compliance with the data protection policy standards adopted by the major credit card issuers may limit our ability to offer our customers a credit card payment option. Any loss of our ability to offer our customers a credit card payment option would harm our reputation and make our products less attractive to many small organizations by negatively impacting our customer experience and significantly increasing our administrative costs related to customer payment processing.

Our existing general liability insurance may not cover any, or cover only a portion of any, potential claims related to security breaches to which we are exposed or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage would increase our operating expenses and reduce our net income.

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United States federal legislation and the laws of many foreign countries impose certain obligations on the senders of commercial emails, which could minimize the effectiveness of our products, particularly our email marketing product, and establish financial penalties for non-compliance, which could increase the costs of our business.

The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or CAN-SPAM Act, establishes certain requirements for commercial email messages and specifies penalties for the transmission of commercial email messages that are intended to deceive the recipient as to source or content. The CAN-SPAM Act, among other things, obligates the sender of commercial emails to provide recipients with the ability to opt out of receiving future emails from the sender. In addition, some states have passed laws regulating commercial email practices that are significantly more punitive and difficult to comply with than the CAN-SPAM Act, particularly Utah and Michigan, which have enacted do-not-email registries listing minors who do not wish to receive unsolicited commercial email that markets certain covered content, such as adult or other harmful products. Some portions of these state laws may not be preempted by the CAN-SPAM Act. The ability of our customers’ constituents to opt out of receiving commercial emails may minimize the effectiveness of our products. Moreover, non-compliance with the CAN-SPAM Act carries significant financial penalties. If we were found to be in violation of the CAN-SPAM Act, applicable state laws not preempted by the CAN-SPAM Act, or foreign laws regulating the distribution of commercial email such as the laws of Canada and the United Kingdom, whether as a result of violations by our customers or if we were deemed to be directly subject to and in violation of these requirements, we could be required to pay penalties, which would adversely affect our financial performance and significantly harm our business, and our reputation would suffer. We also may be required to change one or more aspects of the way we operate our business, which could impair our ability to attract and retain customers or could increase our operating costs.

The market in which we participate is highly competitive and, if we do not compete effectively, our operating results could be harmed.

The market for our products is highly competitive and rapidly changing, and the barriers to entry are relatively low. In addition, this market is highly fragmented with some vendors providing part of the solution or addressing specific solutions or segments of the market. Given our broad product offering, we compete with both point-solutions and broader solution providers. With the introduction of new technologies and the influx of new entrants to the market, we expect competition to persist and intensify in the future, which could harm our ability to increase sales, limit customer attrition and maintain our prices.

Our principal email marketing competitors include providers of email marketing products for small to medium size businesses such as AWeber Systems, Inc., iContact Corporation, a subsidiary of Cision, Inc., Protus, a subsidiary of j2 Global, Inc. (Campaigner ^®), The Rocket Science Group LLC (MailChimp ^®), VerticalResponse, Inc., a subsidiary of Deluxe Corporation, Cimpress N.V. (VistaPrint ^®) and GoDaddy Inc. These vendors typically charge a low monthly fee or a low fee per number of emails sent and, in some cases, they have a free offering. Competition could result in reduced sales, reduced margins or the failure of our email marketing product to achieve or maintain more widespread market acceptance, any of which could harm our business. In addition, there are a number of other vendors that are focused on providing email marketing products for larger organizations, including Alterian, a subsidiary of SDL, plc, CheetahMail, Inc., a subsidiary of Experian Group Limited, ExactTarget, Inc., a subsidiary of Salesforce.com, Inc., Responsys Inc. and Eloqua Limited, subsidiaries of Oracle Corporation, Silverpop, an IBM Company, and StrongMail Systems, Inc. While we do not compete in a significant way with vendors of email marketing products serving larger customers, we may compete with these providers in the future. Finally, our email marketing product experiences some competition from ISPs, web hosting companies, advertising and direct marketing agencies and other large established businesses, possessing large, existing customer bases, substantial financial resources and established distribution channels. If these companies decide to further invest in and develop, market or resell competitive email marketing products, acquire one of our larger competitors or form a strategic alliance with one of our competitors, our ability to compete effectively could be significantly compromised and our operating results could be harmed.

Our other products also face intense competition. EventSpot, our event marketing product, competes with offerings by Eventbrite, Inc., Evite, LLC, a wholly-owned, operating business of IAC/InterActiveCorp, Regonline, a division of Lanyon Solutions Inc., and Cvent, Inc. Our Social Campaigns product competes with offerings by Offerpop Corporation and Pagemodo, a subsidiary of Cimpress N.V. Our survey product competes with similar offerings by Surveymonkey.com Corporation and Widgix, LLC doing business as SurveyGizmo^®. Our SaveLocal product competes with offerings by Groupon, Inc., LivingSocial, Inc., Amazon Local ™ and Googleoffers ™. Our SinglePlatform product competes with offerings by Yext, Inc. and Locu Inc., a subsidiary of GoDaddy.com, LLC. In addition, our bundled product offerings, including Toolkit, could face competition from new competitors who are different from the companies we currently compete with on our individual products.

Our current and potential competitors may have significantly more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the development, promotion, sale and support of their products. Our current and potential competitors may have more extensive customer bases and broader customer relationships than we have. In addition, these companies may have longer operating histories and greater name recognition than we have and may be able to bundle email marketing, event marketing or survey products with other products that have already gained widespread market acceptance and offer them at no cost or low cost. These competitors may be better able to respond quickly to new technologies and to undertake more extensive marketing campaigns. In an attempt to gain market share, competitors may offer aggressive price discounts or alternative pricing models on the products they offer, such as so-called “freemium” pricing in which a basic offering is provided for free with advanced features provided for a fee. As a result, increased competition could result in lower sales, price reductions, reduced margins and the loss of market share. If we are unable to compete with these companies and their offerings, the demand for our products could substantially decline.

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Any significant disruption in service on our website or in our computer systems, or in our customer support services, could result in a loss of customers.

The satisfactory performance, reliability and availability of our technology and our underlying network infrastructure are critical to our operations, level of customer service, reputation and ability to attract new customers and retain existing customers. Despite the implementation of security measures, our infrastructure may be vulnerable to computer viruses, worms, other malicious software programs, illegal or abusive content or similar disruptive problems caused by our customers, employees, consultants or other Internet users who attempt to invade or disrupt public and private data networks. In the past, we have been subject to distributed denial of service, or DDOS, attacks by hackers intent on disrupting our products, and we may be subject to DDOS attacks or other abuse in the future.

In providing our services, we also rely on third-party hosting facilities, bandwidth providers, ISPs and mobile networks. Our production system hardware and the disaster recovery operations for our production system hardware are co-located in third-party hosting facilities. These facilities do not guarantee that our customers’ access to our products will be uninterrupted, error-free or secure. Our operations also depend on the ability of our third-party hosting facilities to protect their and our systems against damage or interruption from natural disasters, power or telecommunications failures, air quality, temperature, humidity and other environmental concerns, computer viruses or other attempts to harm our systems, criminal acts and similar events. In addition, our customer support services, which are located at our headquarters in Waltham, Massachusetts and at our sales and support office in Loveland, Colorado, would experience interruptions as a result of any disruption of electrical, phone or any other similar facility support services.

Our production disaster recovery system is located at one of our third-party hosting facilities. Our corporate disaster recovery system is located at our headquarters in Waltham, Massachusetts. These systems do not provide real-time backup and neither system may have sufficient capacity to recover all data and services in the event of an outage and we cannot guarantee that our backup systems, regular data backups, security protocols, network protection mechanisms and other procedures currently in place, or that may be in place in the future, will be adequate to prevent network and service interruption, system failure, damage to one or more of our systems or data loss. In the event of a disaster in which our production system hardware and the disaster recovery operations for our production system hardware are irreparably damaged or destroyed, we would experience interruptions in access to our products. Moreover, our headquarters and one of the third-party facilities that hosts our production system hardware are located within several miles of each other. As a result, any regional disaster could affect these locations equally.

Any interruptions or delays in access to our products or customer support, whether as a result of third-party error, our own error, natural disasters, security breaches or malicious actions, whether accidental or willful, could harm our relationships with customers and our reputation and lead to liability. These factors could damage our brand and reputation, divert our employees’ attention, reduce our revenue, subject us to liability and cause customers to cancel their accounts, any of which could adversely affect our business, financial condition and results of operations. Also, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur and our results of operations may be negatively impacted.

If we fail to enhance our existing products, develop new products or offer a bundle of our products that our customers and prospective customers find compelling, our products may become obsolete or less competitive and our financial performance could be impacted.

The markets in which we compete are characterized by constant change and innovation, and we expect them to continue to evolve rapidly. To the extent we are not able to continue to identify challenges faced by small businesses and organizations and provide products that respond in a timely and effective manner to their evolving needs, or if we are unable to enhance our existing products successfully, including our recent enhancements to our contact management functionality and our plans to update our editing environment, our business, operating results and financial condition will be adversely affected.

Creating and designing such enhancements and new products entails significant technical and business risks and requires substantial expenditures and lead-time, and there is no guarantee that such enhancements and new products will be completed in a timely fashion, nor is there any guarantee that any new product offerings will anticipate our customer’s needs or gain acceptance among our customers or in the broader market. In addition, such enhancements and new products may not be profitable for a number of years, if at all, and even if they are profitable, operating margins for new products may not be as high as the margins we have experienced historically. Our existing customers and prospective new customers may be dissatisfied with our enhancements to our existing products and may leave us or choose competing providers, or may not view any new product as complementary to our other product offerings and not purchase such additional products.

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We must continue to commit significant resources to develop our technology in order to maintain our competitive position, and these commitments will be made without knowing whether such investments will result in products the market will accept. Our new products or product enhancements could fail to attain meaningful market acceptance for many reasons, including:

• delays in releasing new products or product enhancements to the market;

• our failure to accurately predict market demand or customer preferences;

• defects, errors or failures in product design or performance;

• negative publicity about product performance or effectiveness;

• introduction of competing products (or the anticipation thereof) by others;

• poor business conditions for our customers or poor general macroeconomic conditions;

• the perceived value of our products or product enhancements relative to their cost; and

• changing regulatory requirements adversely affecting the products we offer.

Similarly, if we offer a bundle of our products, such as Toolkit, that our customers and prospective customers do not find compelling, our business will also be harmed. Creating, designing and marketing these packages (and converting our current customer base to these new packages) entails significant technical and business risks and requires substantial expenditures, lead-time and management attention, and there is no guarantee that such packages will anticipate our customers’ needs or gain acceptance among our customers or in the broader market.

If we cannot successfully enhance our existing services or develop new products or if we are not successful in implementing such enhancements and selling new products or new packages of our products to our customers, we could lose customers or have difficulty attracting new customers, which would adversely impact our financial performance.

Our relationships with our partners may not be as successful in generating new customers as we anticipate, which could adversely affect our ability to increase our customer base.

We maintain a network of different types of partners, some of whom refer customers to us through links on their websites and outbound promotion to their customers, resell our products and create integrations with our products. We have invested and will continue to invest in programs to enhance our partners’ effectiveness; however, these programs could require substantial investment while providing no assurance of return or incremental revenue. We also rely on some of our partners to create integrations with third-party applications and platforms used by our customers. If we fail to encourage our partners to create such integrations or if we do not adequately facilitate these integrations from a technology perspective, demand for our products could decrease, which would harm our business and operating results. If we are unable to maintain our contractual relationships with existing partners or establish new contractual relationships with potential partners, we may experience delays and increased costs in adding customers, which could have a material adverse effect on us. The number of customers we are able to add through these relationships is dependent on the marketing efforts of our partners over which we exercise very little control, and a significant decrease in the number of new customers generated through these relationships or failure of our investment in partner programs to be effective could adversely affect the size of our customer base and revenue.

Third parties have asserted, and may in the future assert, claims that we are infringing their intellectual property, which, whether successful or not, could subject us to costly and time-consuming litigation or require us to obtain expensive licenses, and our business may be adversely affected.

The software and Internet industries are characterized by the existence of a large number of patents, trademarks and copyrights and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. Third parties, including so-called non-practicing entities, which are entities that have no operating business but exist purely as collectors of patents, have asserted, and in the future may assert, patent and other intellectual property infringement claims against us in the form of lawsuits, letters or other forms of communication. These claims, whether or not successful, could:

• 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.

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As a result, any third-party intellectual property claims against us could increase our expenses and adversely affect our business. In addition, many of our agreements with our partners and others require us to indemnify them for third-party intellectual property infringement claims, which would increase the cost to us resulting from an adverse ruling on any such claim. Even if we have not infringed any third party’s intellectual property rights, we cannot be sure our legal defenses will be successful, and even if we are successful in defending against such claims, our legal defense could require significant financial resources and management time. Finally, if a third party successfully asserts a claim that our products infringe its proprietary rights, royalty or licensing agreements might not be available on terms we find acceptable or at all and we may be required to pay significant monetary damages to such third party.

If the delivery of our customers’ emails is limited or blocked or our customers’ emails are directed to an alternate or “tabbed” section of the recipient’s inbox, customers may cancel their accounts.

Internet Service Providers, or ISPs, can block emails from reaching the intended recipients. While we continually improve our own technology and work closely with ISPs to maintain our deliverability rates, the implementation of new or more restrictive policies by ISPs may make it more difficult to deliver our customers’ emails. In addition, some ISPs have started to categorize as “promotional” emails that originate from email service providers and, as a result, direct them to an alternate or “tabbed” section of the recipient’s inbox. If ISPs materially limit or halt the delivery of our customers’ emails, or if we fail to deliver our customers’ emails in a manner compatible with ISPs’ email handling or authentication technologies or other policies, or if the open rates of our customers’ emails are negatively impacted by the actions of ISPs to categorize emails, then customers may question the effectiveness of our products and cancel their accounts. This, in turn, could harm our business and financial performance.

If we fail to promote and maintain our brands in a cost-effective manner, we may lose market share and our revenue may decrease.

We believe that developing and maintaining awareness of the Constant Contact brands in a cost-effective manner is critical to our goal of achieving widespread acceptance of our online marketing platform and attracting new customers. Furthermore, we believe that the importance of brand recognition will increase as competition in our industry increases. Successful promotion of our brands will depend largely on the effectiveness of our marketing efforts and the effectiveness and affordability of our products for our target customer demographic. Historically, our efforts to build our brands have involved significant expense, and it is likely that our future marketing efforts will require us to incur additional significant expenses. Such brand promotion activities may not yield increased revenue and, even if they do, any revenue increases may not offset the expenses we incur to promote our brands. If we fail to promote and maintain our brands successfully, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brands, we may lose our existing customers to our competitors or be unable to attract new customers, which would cause our revenue to 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.

Many of our customers located our website by clicking through on search results displayed by search engines such as Google^®, Yahoo!^® and Bing^®. Search engines typically provide two types of search results, algorithmic and purchased listings. Algorithmic listings cannot be purchased, and instead are determined and displayed solely by a set of formulas designed by the search engine. Purchased listings can be purchased by advertisers in order to attract users to their websites. We rely on both algorithmic and purchased listings to attract a significant percentage of the customers we serve to our website. Search engines revise their algorithms from time to time in an attempt to optimize their search result listings. If search engines on which we rely for algorithmic listings modify their algorithms, this could result in fewer potential customers clicking through to our website, requiring us to resort to other costly resources to attempt to replace this traffic, which, in turn, could reduce our revenue and negatively impact our operating results, harming our business. If one or more search engines on which we rely for purchased listings modifies or terminates its relationship with us, our expenses could rise, or our revenue could decline and our business may suffer. The cost of purchased search listing advertising fluctuates and may increase as demand for these channels grows, and any such increases could negatively affect our financial results.

Furthermore, competitors may in the future bid on our brand names and other search terms that we use to drive traffic to our websites. Such actions could increase our advertising costs and result in decreased traffic to our website.

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Mobile devices are increasingly being used to access the Internet, and our products may not be as effective when accessed through these devices, which could harm our business.

We offer our products across a variety of operating systems and through the Internet. Historically, we designed our products for use on a desktop or laptop computer; however, mobile devices, such as smartphones and tablets, are increasingly being used as the primary means for accessing the Internet. We are dependent on the interoperability of our products with third-party mobile devices and mobile operating systems, as well as web browsers that we do not control. Any changes in such devices, systems or web browsers that degrade the functionality of our products could adversely affect usage of our products. In addition, because a growing number of our customers access our products through mobile devices, we are dependent on the interoperability of our products with mobile devices and operating systems. Improving mobile functionality is an integral component of our product development plans. In the event that our customers, or the intended recipients of our customers’ marketing campaigns, have difficulty accessing and using our products on mobile devices, our customer growth, business and operating results could be adversely affected.

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, such as social media or text messaging, demand for our email marketing product may decline.

The future success of our business depends on the continued and widespread adoption of email as a primary means of communication. Security problems such as “viruses,” “worms” and other malicious programs or reliability issues arising from outages and damage to the Internet infrastructure could create the perception that email is not a safe and reliable means of communication, which would discourage businesses and consumers from using email. Use of email by businesses and consumers also depends on the ability of ISPs to prevent unsolicited bulk email, or “spam,” from overwhelming consumers’ inboxes. In recent years, ISPs have developed new technologies to filter unwanted messages before they reach users’ inboxes. In response, spammers have employed more sophisticated techniques to reach consumers’ inboxes. Although companies in the anti-spam industry have started to address the techniques used by spammers, if security problems become widespread or frequent or if ISPs cannot effectively control spam, the use of email as a means of communication may decline as consumers find alternative ways to communicate. In addition, if alternative communications tools, such as social media or text messaging, gain widespread acceptance, the need for email may lessen. Any decrease in the use of email would reduce demand for our email marketing product and harm our business.

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.

We depend on email to market to and communicate with our customers, and our customers rely on email to communicate with their customers and members. Various private entities attempt to regulate the use of email for commercial solicitation. These entities often advocate standards of conduct or practice that significantly exceed current legal requirements and classify certain email solicitations that comply with current legal requirements as spam. Some of these entities maintain “blacklists” of companies and individuals, and the websites, ISPs and Internet protocol addresses associated with those entities or individuals, that do not adhere to those standards of conduct or practices for commercial email solicitations that the blacklisting entity believes are appropriate. If a company’s Internet protocol addresses are listed by a blacklisting entity, emails sent from those addresses may be blocked if they are sent to any Internet domain or Internet address that subscribes to the blacklisting entity’s service or purchases its blacklist.

Some of our Internet protocol addresses currently are listed with one or more blacklisting entities and, in the future, our other Internet protocol addresses may also be listed with these and other blacklisting entities. There can be no guarantee that we will not continue to be blacklisted or that we will be able to successfully remove ourselves from those lists. Blacklisting of this type could interfere with our ability to market our products and services and communicate with our customers and could undermine the effectiveness of our customers’ marketing campaigns, all of which could have a material negative impact on our business and results of operations.

Our customers’ use of our products and website to transmit negative messages or website links to harmful applications in violation of our policies or otherwise could damage our reputation, and we may face liability for unauthorized, inaccurate or fraudulent information distributed via our products.

Our customers could use our products or website to transmit negative messages or website links to harmful applications, reproduce and distribute copyrighted material or the trademarks of others without permission, or report inaccurate or fraudulent data or information. Any such use of our products could damage our reputation and we could face claims for damages, copyright or trademark infringement, defamation, negligence or fraud. Moreover, our customers’ promotion of their products and services through our products may not comply with federal, state and foreign laws. We cannot predict whether our role in facilitating these activities would expose us to liability under these laws. Even if claims asserted against us do not result in liability, we may incur substantial costs in investigating and defending such claims. If we are found liable for our customers’ activities, we could be required to pay fines or penalties, redesign business methods or otherwise expend resources to remedy any damages caused by such actions and to avoid future liability.

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Our customers’ use of our SaveLocal product may negatively impact our reputation and could subject us to legal and regulatory risks, which could harm our business and results of operations.

Our brand and reputation may be harmed by our customers’ use of our SaveLocal product. Any shortcomings of one or more of our SaveLocal customers, particularly with respect to an issue affecting the quality of the deal offered or the products or services sold or such customer’s fraudulent or deceptive conduct, may be attributed to us, potentially damaging our reputation and brand value, reducing our ability to attract new customers or retain our current customers and subjecting us to potential liability, thereby negatively affecting our results of operations.

The application of certain United States and international laws and regulations to SaveLocal deals and to our role in facilitating our customers’ offer of SaveLocal deals is uncertain. These include laws and regulations such as the Credit Card Accountability Responsibility and Disclosure Act of 2009, or the CARD Act, the laws of most states, which contain provisions governing product terms and conditions of gift cards, gift certificates, stored value or pre-paid cards or coupons, and unclaimed and abandoned property laws. These laws may include provisions prohibiting or limiting the use of expiration dates on gift cards or the amount of fees charged in connection with gift cards or requiring specific disclosures on or in connection with gift cards and the imposition of certain fees.

If we are required to alter our business practices as a result of any laws or regulations, our revenue could decrease, our costs could increase and our business could otherwise be harmed. In addition, the costs and expenses associated with defending any actions related to such additional laws and regulations and any payments of related penalties, judgments or settlements could adversely impact our financial results.

In addition, if any laws or regulations require that the face value of SaveLocal coupons have a minimum expiration period beyond the period desired by our SaveLocal customers for their promotional programs, or no expiration period, this may affect the willingness of our customers to use our SaveLocal product in jurisdictions where these laws apply.

Our business may be negatively impacted by seasonal trends.

Sales of our products are impacted by seasonality. Small organizations are typically less active during the summer months. Thus, we generate fewer new customers during this time. As a result, we adjust our sales and marketing activities accordingly. If these seasonality trends change materially, our financial and operating results for any given quarter may be negatively impacted and may differ materially from results in prior quarterly periods.

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.

Competition for highly skilled engineering and marketing personnel is intense and we continue to face difficulty identifying and hiring qualified personnel in certain areas of our business and in certain locations. We may not be able to hire and retain such personnel at compensation levels consistent with our existing compensation and salary structure. In particular, candidates making employment decisions, particularly in high-technology industries, often consider the value of any equity they may receive in connection with their employment. As a result, any significant volatility in the market price of our common stock may adversely affect our ability to attract or retain highly skilled engineering and marketing personnel.

In addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements and the quality of our services and our ability to serve our customers could diminish, resulting in a material adverse effect on our business.

The success of our SinglePlatform offering is based, in part, on the quality of the content provided by our SinglePlatform customers, including our SingleAPI merchants, and our ability to maintain a strong network of publishers.

Our SinglePlatform customers, including our SingleAPI merchants, provide us with current information about their business and offerings that we, in turn, provide to our network of electronic publishers, including but not limited to Yelp^®, foursquare^®, YP.com and Urbanspoon^®. The success of the SinglePlatform and SingleAPI offerings depend, in part, on our ability to provide these publishers and their consumers with the information and access to the services or products they seek, which in turn depends on the quantity and quality of the content and services provided by these customers. For example, we may be unable to provide these publishers and their consumers with the information they seek if our customers do not contribute content or services that are helpful, reliable and up-to-date, or if they remove content they previously submitted. If our SinglePlatform products do not provide content that is helpful, reliable and up-to-date or access to services that end users are interested in using, our ability to maintain our current network of electronic publishers and sign up new publishers could be harmed. If we are unable to provide our electronic publishers and their consumers with the information or services they seek, or if they can find equivalent content or services on other platforms, they may stop or reduce their use of our product, which could negatively impact our ability to retain existing customers and obtain new customers and merchants and our business would be harmed.

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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.

Our success depends, in part, on our ability to attract and retain key personnel. Our success also depends on the continued contributions of our executive officers and other key technical and marketing personnel, each of whom would be difficult to replace. In particular, Gail F. Goodman, our Chairman, President and Chief Executive Officer, is critical to the management of our business and operations and the development of our strategic direction. The loss of the services of Ms. Goodman or other executive officers or key personnel and the process to replace any of our key personnel would involve significant time and expense, may take longer than anticipated and may significantly delay or prevent the achievement of our business objectives.

We may be subject to time-consuming and costly litigation.

From time to time, we may be subject to various claims and lawsuits by partners, customers, or other parties arising in the ordinary course of business, including lawsuits alleging patent infringement. We are currently a party to the actions that are described in Part II, Item 1 “Legal Proceedings”, included elsewhere in this Quarterly Report on Form 10-Q. These matters can be time-consuming, divert management’s attention and resources, and cause us to incur significant expenses. Furthermore, the results of any of these actions may have a material adverse effect on our results of operations, financial condition and cash flows.

Economic conditions may 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 products are designed specifically for smaller organizations. These organizations frequently have limited budgets and are often resource- and time-constrained and, as a result, may be more likely to be significantly affected by economic downturns than their larger, more established counterparts. As a result, smaller organizations may choose to spend the limited funds that they have on items other than our products. Moreover, if smaller organizations experience economic distress, they may be unwilling or unable to expend time and financial resources on marketing, which would negatively affect the overall demand for our products, increase customer attrition and could cause our revenue growth to decline. Uncertain and adverse economic conditions may also lead to a decline in the ability of our customers to use or access credit, including through credit cards, as well as increased refunds and chargebacks, any of which could adversely affect our business. Economic conditions may also adversely affect third parties with which we have entered into relationships and upon which we depend in order to grow our business. There can be no assurance, therefore, that current economic conditions or worsening economic conditions, or a recurring recession, will not have a significant adverse impact on our operating and financial results.

If we are unable to protect the confidentiality of our proprietary information, processes and know-how and trade secrets, the value of our technology and products could be adversely affected.

We rely heavily upon unpatented proprietary technology, processes and know-how and trade secrets. Although we try to protect this information in part by executing confidentiality agreements with our employees, consultants and third parties, such agreements may offer only limited protection and may be breached. Any unauthorized disclosure or dissemination of our proprietary technology, processes and know-how or our trade secrets, whether by breach of a confidentiality agreement or otherwise, may cause irreparable harm to our business, and we may not have adequate remedies for any such breach. In addition, our trade secrets may otherwise be independently developed by our competitors or other third parties. If we are unable to protect the confidentiality of our proprietary information, processes and know-how or our trade secrets are disclosed, the value of our technology and services could be adversely affected, which could negatively impact our business, financial condition and results of operations.

The process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We may choose not to seek patent protection for certain innovations and may choose not to pursue patent protection in certain jurisdictions, and under the laws of certain jurisdictions, patents or others intellectual property may be unavailable or limited in scope. Furthermore, it is possible that our patent applications may not issue as granted patents, that the scope of our issued patents will be insufficient or not have the coverage originally sought, that our issued patents will not provide us with any competitive advantages, and that our patents and other intellectual property rights may be challenged by others or invalidated through administrative processes or litigation. In addition, issuance of a patent does not assure that we have an absolute right to practice the patented invention, or that we have the right to exclude others from practicing the claimed invention. As a result, we may not be able to obtain adequate patent protection or to enforce our issued patents effectively.

Competitors and others may have adopted, and in the future may adopt, tag lines or service or product names similar to ours, which could impede our ability to build our brands’ identities and possibly lead to confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of the terms or designs of one or more of our trademarks.

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From time to time, legal action by us may be necessary to enforce our patents, trademarks and other intellectual property rights, to protect our trade secrets, to determine the validity and scope of the intellectual property rights of others or to defend against claims of infringement or invalidity. Such litigation could result in substantial costs and diversion of resources, distract management and technical personnel and negatively affect our business, operating results, financial condition and cash flows. If we are unable to protect our intellectual property rights, we may find ourselves at a competitive disadvantage to others. Any inability on our part to protect adequately our intellectual property may have a material adverse effect on our business, operating results and financial condition.

Our use of open source software could impose limitations on our ability to commercialize our products.

We incorporate open source software into our products. Although we monitor our use of open source software closely, the terms of many open source licenses to which we are subject have not been interpreted by United States or foreign courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our products. In such event, we could be required to seek licenses from third parties in order to continue offering our products, to re-engineer our products or to discontinue sales of our products, or to release our software code under the terms of an open source license, any of which could materially adversely affect our business. Given the nature of open source software, there is also a risk that third parties may assert copyright and other intellectual property infringement claims against us based on our use of certain open source software programs.

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 implement our business plan successfully.

We are currently experiencing a period of rapid growth in our headcount and operations, which has placed, and will continue to place, to the extent that we are able to sustain such growth, a significant strain on our management and our administrative, operational and financial reporting infrastructure. Our success will depend in part on the ability of our senior management to manage this expected growth effectively. To do so, we believe we will need to continue to hire, train and manage new employees as needed. If our new hires perform poorly, or if we are unsuccessful in hiring, training, managing and integrating these new employees, or if we are not successful in retaining our existing employees, our business may be harmed. To manage the expected growth of our operations and personnel, we will need to continue to improve our operational and financial controls and update our reporting procedures and systems. The expected addition of new employees and the capital investments that we anticipate will be necessary to manage our anticipated growth will increase our cost base, which will make it more difficult for us to offset any future revenue shortfalls by reducing expenses in the short term. If we fail to manage our anticipated growth successfully, we will be unable to execute our business plan successfully.

Providing our products to customers outside the United States exposes us to risks inherent in international business.

Customers in more than 180 countries and territories currently use our products. We have two regional development directors in Canada and a marketing office in the United Kingdom. We may continue to expand our international operations in the future. Accordingly, we are subject to risks and challenges that we would otherwise not face if we conducted our business only in the United States. The risks and challenges associated with providing our products to customers outside the United States include:

• 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 those relating to tax, email, privacy and data protection;

• foreign currency fluctuations;

• different pricing environments;

• difficulties in staffing and maintaining foreign operations; and

• regional economic and political conditions.

If we fail to meet these risks and challenges, we will be unable to execute our business plan and may be subject to fines and regulatory actions. Furthermore, expansion of our international operations may not be commercially successful.

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Failure to maintain effective internal control over financial reporting and disclosure controls and procedures would have a material adverse effect on our business.

The Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In order to comply with Section 404 of the Sarbanes-Oxley Act’s requirements relating to internal control over financial reporting, we incur substantial accounting expense and expend significant management time on compliance-related issues. We expect to continue to incur such expenses and expend such time in the future. If in the future we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock would likely decline and we could be subject to sanctions or investigations by the NASDAQ Stock Market, the SEC or other regulatory authorities, which would require additional financial and management resources.

Our quarterly results may fluctuate and if we fail to meet the expectations of analysts or investors, our stock price could decline substantially.

Our quarterly operating results may fluctuate, and if we fail to meet or exceed the expectations of securities analysts or investors, the trading price of our common stock could decline. Some of the important factors that could cause our revenue and operating results to fluctuate from quarter to quarter include:

• our ability to attract new customers, retain existing customers and satisfy our customers’ requirements;

• general economic conditions;

• average revenue per customer;

• our cost to acquire new customers;

• changes in our pricing or product bundling;

• our ability to expand our business;

• our ability to execute successfully on our strategy;

• new product and service introductions, including Toolkit;

• technical difficulties or interruptions in our services as a result of our actions or those of third parties;

• the timing of additional investments in our hardware and software systems;

• the seasonal trends in our business;

• changes in the growth rate of small businesses and organizations;

• any negative publicity or other actions that harm our brand;

• the timing of our marketing expenditures;

• competition in the market for our products;

• shortcomings in, or misinterpretations of, our metrics and data that cause us to fail to anticipate or identify market trends;

• terminations of, disputes with, or material changes to our relationships with third-party partners;

• loss of key employees;

• regulatory compliance costs;

• costs associated with future acquisitions of technologies and businesses and our ability to successfully integrate these acquisitions; and

• extraordinary expenses such as litigation or other dispute-related settlement payments.

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Any one of the factors above, or the cumulative effect of some of the factors referred to above, may result in significant fluctuations in our quarterly or annual operating results, including our key financial and operating metrics. This variability and unpredictability could result in our failing to meet our revenue or operating results expectations or those of securities analysts or investors for any period. In addition, a significant percentage of our operating expenses are fixed in nature and based on forecasted revenue. Accordingly, in the event of revenue shortfalls, we may be unable to mitigate the negative impact on operating results in the short term. If we fail to meet or exceed such expectations for these or any other reasons, our business and stock price could be materially and adversely affected and we could face costly lawsuits, including securities class action suits.

Some of these factors are not within our control, and the occurrence of one or more of them may cause our operating results to vary widely. As such, we believe that quarter-to-quarter comparisons of our revenue and operating results may not be meaningful and should not be relied upon as an indication of future performance.

We may engage in future acquisitions that could disrupt our business, dilute stockholder value and harm our business, operating results or financial condition.

We have completed several acquisitions in the past, including our most recent acquisition of SinglePlatform Corp. in June 2012. We have, from time to time, evaluated other acquisition opportunities and may pursue acquisition opportunities in the future. Acquisitions involve numerous risks, including:

• 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.

In addition, any acquisitions we complete may not ultimately strengthen our competitive position or achieve our goals, or such an acquisition may be viewed negatively by our customers, stockholders or the financial markets.

We may need additional capital in the future, which may not be available to us on favorable terms, or at all, and may dilute the ownership of our existing stockholders.

We have historically relied on cash from operations to fund our operations, capital expenditures and growth. We may require additional capital from equity or debt financing in the future to:

• 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 not be able to secure timely additional financing on favorable terms, or at all. The terms of any additional financing may place limits on our financial and operating flexibility. If we raise additional funds through issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution, and any new securities we issue could have rights, preferences and privileges senior to those of our common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us, if and when we require it, our ability to grow or support our business and to respond to business challenges could be significantly limited.

Our business is exposed to risks associated with credit card and other online payment chargebacks and fraud.

A majority of our revenue is processed through credit cards and other online payments. If our refunds or chargebacks increase, our processors could require us to increase reserves or terminate their contracts with us, which would have an adverse effect on our financial condition.

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Our failure to limit fraudulent transactions conducted on our websites, such as through the use of stolen credit card numbers, could also subject us to liability. Under credit card association rules, penalties may be imposed at the discretion of the association for inadequate fraud protection. Any such potential penalties would be imposed on our credit card processor by the association. Under our contracts with our payment processors, we are required to reimburse our processors for such penalties. However, we face the risk that we may fail to maintain an adequate level of fraud protection and that one or more credit card associations or other processors may, at any time, assess penalties against us or terminate our ability to accept credit card payments or other forms of online payments from customers, which would have a material adverse effect on our relationship with our customers, business, financial condition and operating results.

RISKS RELATED TO THE OWNERSHIP OF OUR COMMON STOCK

The market price of our common stock has been and may continue to be volatile.

The trading price of our common stock has been and may continue to be highly volatile and could be subject to wide fluctuations in response to various factors. Some of the factors that may cause the market price of our common stock to fluctuate include:

• fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

• quarterly unique customer additions and the cost of acquiring those customers and customer retention rates;

• 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;

• our ability to successfully integrate acquisitions;

• changes in our capital structure, such as future issuances of securities or the incurrence of 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;

• investors’ general perception of us; and

• the total number of shares of our common stock that have been sold short.

In addition, if the market for technology stocks or the stock market in general experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to litigation that, even if unsuccessful, could be costly to defend and a distraction to management.

There can be no assurance that our stock repurchase program will enhance long-term stockholder value and stock repurchases could increase the volatility of the price of our common stock and will diminish our cash and cash equivalents.

In July 2014, we announced that our Board of Directors approved a stock repurchase program for up to $30 million of our common stock through July 31, 2015. Under the repurchase program, we are authorized to repurchase shares in the open market, which may include the use of 10b5-1 trading plans, or through privately negotiated transactions. The timing and amount of repurchases will depend upon several factors, including market and business conditions. The repurchase program may be suspended or discontinued at any time without prior notice. Repurchases pursuant to our stock repurchase program could affect our stock price and increase its volatility. The existence of a stock repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock. Additionally, our stock repurchase program will diminish our cash and cash equivalents, which may reduce our flexibility with respect to future activities, including acquisitions. There can be no assurance that any stock repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased shares of stock. Although our stock repurchase program is intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the program’s effectiveness.

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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.

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. We do not control these analysts. If one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to 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.

We are a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change of control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our restated certificate of incorporation and second amended and restated bylaws may discourage, delay or prevent a change in our management or control over us that stockholders may consider favorable. Among other things, our restated certificate of incorporation and second amended and restated bylaws:

• authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to impede or delay 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.

We do not expect to pay cash dividends on our common stock. Any future dividend payments are within the absolute discretion of our board of directors and will depend on, among other things, our results of operations, working capital requirements, capital expenditure requirements, financial condition, contractual restrictions, business opportunities, anticipated cash needs, provisions of applicable law and other factors that our board of directors may deem relevant. We may not generate sufficient cash from operations in the future to pay dividends on our common stock.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following is a summary of our repurchases of our common stock during the three month period ended March 31, 2015:

Period	Total Number of Shares Purchased		Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
January 1 to January 31, 2015		19,801	$	37.50		19,801	$	12,897,078
February 1 to February 28, 2015		39,945		41.41		39,945		11,242,862
March 1 to March 31, 2015		168,925		39.09		168,925		4,639,835
Total		228,671	$	39.36		228,671	$	4,639,835

(1) Includes commissions, markups and expenses.

(2) In July 2014, our board of directors approved the repurchase of up to $30 million of our common stock through July 31, 2015. Repurchased shares are retired and resume the status of authorized but unissued shares of common stock.

Item 6. Exhibits

The exhibits listed in the Exhibit Index immediately preceding the exhibits are filed (other than exhibit 32.1 and exhibit 32.2) as part of this Quarterly Report on Form 10-Q and such Exhibit Index is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CONSTANT CONTACT, INC.
Date: May 6, 2015	By:	/s/ Gail F. Goodman
		Gail F. Goodman
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: May 6, 2015	By:	/s/ Harpreet S. Grewal
		Harpreet S. Grewal
		Executive Vice President and
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

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EXHIBIT INDEX

Listed and indexed below are all Exhibits filed as part of this report.

Exhibit No.	Description
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.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

* 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 it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gail F. Goodman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Constant Contact, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2015	/s/ Gail F. Goodman
	Gail F. Goodman
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Harpreet S. Grewal, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Constant Contact, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2015	/s/ Harpreet S. Grewal
	Harpreet S. Grewal
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2015 of Constant Contact, Inc. (the “Company”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gail F. Goodman, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated May 6, 2015	/s/ Gail F. Goodman
	Gail F. Goodman
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2015 of Constant Contact, Inc. (the “Company”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Harpreet S. Grewal, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 6, 2015	/s/ Harpreet S. Grewal
	Harpreet S. Grewal
	Executive Vice President and Chief Financial Officer and Treasurer

XML

Commitments and Contingencies - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Operating Leased Assets [Line Items]
Expiration of lease agreement	Various dates through 2017
Prepaid expenses and other current assets	$ 11,785		$ 10,723
Other assets	1,550		1,893
Amount of contractual commitments with various vendors for 2015	27,901
Letter of credit for the benefit of the landlord	1,300		1,300
Cash balance to secure the letter of credit	1,300		1,300
Office Leases [Member]
Operating Leased Assets [Line Items]
Prepaid rent	52		51
Prepaid expenses and other current assets	13		3
Other assets	39		48
Accrued rent balance	4,268		4,232
Rent expense	2,409	2,320
Income on sublease	47
Office Leases [Member] | Accrued Expenses [Member]
Operating Leased Assets [Line Items]
Accrued rent balance included in accrued expenses	705		577
Office Leases [Member] | Other Long-Term Liabilities [Member]
Operating Leased Assets [Line Items]
Accrued rent balance included in other long-term liabilities	3,563		3,655
Third-Party Hosting Agreements [Member]
Operating Leased Assets [Line Items]
Prepaid rent	429		501
Prepaid expenses and other current assets	277		295
Other assets	152		206
Accrued rent balance	166		172
Rent expense	1,105	1,063
Number of vendors provide for related services	2
Third-Party Hosting Agreements [Member] | Accrued Expenses [Member]
Operating Leased Assets [Line Items]
Accrued rent balance included in accrued expenses	47		38
Third-Party Hosting Agreements [Member] | Other Long-Term Liabilities [Member]
Operating Leased Assets [Line Items]
Accrued rent balance included in other long-term liabilities	$ 119		$ 134
Headquarters Space [Member]
Operating Leased Assets [Line Items]
Lease expiration date	Sep. 22, 2022
Time period for extension option	10 years
Number of extension option	1
Sales and Support Office [Member]
Operating Leased Assets [Line Items]
Time period for extension option	3 years
Number of extension option	3
Expiration of lease agreement	April 2019
General Office [Member]
Operating Leased Assets [Line Items]
Expiration of lease agreement	Various dates through 2018

XML

Summary of Significant Accounting Policies - Common Stock Equivalents Excluded from Computation of Diluted Net Income Per Share (Detail) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total options exercisable into common stock and restricted stock units issuable in common stock	348	1,299
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total options exercisable into common stock and restricted stock units issuable in common stock	269	1,031
Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total options exercisable into common stock and restricted stock units issuable in common stock	79	268

XML

Goodwill and Acquired Intangible Assets

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Acquired Intangible Assets

3. Goodwill and Acquired Intangible Assets

The carrying amount of goodwill was $95,505 at March 31, 2015 and December 31, 2014. Goodwill is not amortized, but instead is reviewed for impairment at least annually in the fourth quarter or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired.

Intangible assets consist of the following:

			March 31, 2015						December 31, 2014
	Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology		3 years	$	4,357	$	3,710	$	647	$	4,357	$	3,465	$	892
Customer relationships		3.75 years		3,315		2,841		474		3,315		2,666		649
Publisher relationships		5 years		710		402		308		710		367		343
Trade name		5 years		570		323		247		570		294		276
			$	8,952	$	7,276	$	1,676	$	8,952	$	6,792	$	2,160

The Company amortizes the intangible assets over the estimated useful lives noted above. Amortization of the developed technology and publisher relationships assets is on a straight-line basis as the pattern of consumption of the economic benefits of the intangible assets cannot be reliably determined. The Company also amortizes the trade name asset over its estimated useful life on a straight-line basis as the straight-line basis is not materially different than the pattern of consumption of economic benefit basis. Customer relationships are amortized over their useful life based on the pattern of consumption of economic benefit of the asset. Amortization commences once the asset has been placed in service. Amortization expense for intangible assets was $484 and $567 for the three months ended March 31, 2015 and 2014, respectively. Amortization relating to developed technology and publisher relationships is recorded within cost of revenue and amortization of customer relationships and trade name is recorded within sales and marketing expense. Future estimated amortization expense for intangible assets as of March 31, 2015 is as follows:

Remainder of 2015	$	1,099
2016		470
2017		107
Total	$	1,676

XML

Stockholders' Equity and Stock-Based Compensation - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock repurchase program number of shares authorized to be repurchased	228,671
Stock repurchase program average purchase price per share	$ 39.36
Capitalized stock-based compensation expense	$ 68	$ 50
2011 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock available for issuance	1,740,896
2007 Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock available for issuance	312,026
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock repurchase program authorized amount of shares repurchased			$ 30,000

XML

Goodwill and Acquired Intangible Assets - Future Estimated Amortization Expense for Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2015	$ 1,099
2016	470
2017	107
Net Carrying Amount	$ 1,676	$ 2,160

XML

Stockholders' Equity and Stock-Based Compensation - Recognized Stock-Based Compensation Expense (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 4,304	$ 3,914
Cost of Revenue [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	499	442
Research and Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	867	1,020
Sales and Marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	1,191	1,032
General and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,747	$ 1,420

XML

Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Income tax expense	$ 693,000	$ 328,000
Net deferred tax assets	6,443,000		6,443,000
Unrecognized tax benefits	0		0
Unrecognized tax benefits, accrued interest or tax penalties	$ 0		$ 0

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include those of the Company and its subsidiaries, after elimination of all intercompany accounts and transactions. The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

The condensed consolidated balance sheet at December 31, 2014 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K, File Number 001-33707, on file with the SEC.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position as of March 31, 2015 and consolidated results of operations and of cash flows for the three months ended March 31, 2015 and 2014, have been made. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2015.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates these estimates, judgments and assumptions, including those related to revenue recognition, stock-based compensation, goodwill and acquired intangible assets, capitalization of software and website development costs and income taxes. The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from these estimates.

Marketable Securities

The Company’s marketable securities are classified as available-for-sale and are carried at fair value with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Realized gains and losses and declines in value judged to be other than temporary are included as a component of interest and other income (expense) based on the specific identification method.

At March 31, 2015, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
United States Treasury Notes	$	11,796	$	6	$	—		$	11,802
Corporate and Agency Bonds		43,213		11		(7	)		43,217
Commercial Paper		1,000		—		—			1,000
Total	$	56,009	$	17	$	(7	)	$	56,019

At March 31, 2015, marketable securities consisted of investments that mature within one year with the exception of government treasuries and corporate and agency bonds with a fair value of $19,172, which have maturities within two years.

At December 31, 2014, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
United States Treasury Notes	$	20,000	$	6	$	—		$	20,006
Corporate and Agency Bonds		37,330		2		(16	)		37,316
Commercial Paper		999		—		—			999
Total	$	58,329	$	8	$	(16	)	$	58,321

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, is used to measure fair value:

• 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.

The following tables present the Company’s fair value hierarchy for its cash equivalents and marketable securities, which are measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014:

	Fair Value Measurements at March 31, 2015 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money Market Instruments	$	8,183	$	—	$	—	$	8,183
United States Treasury Notes		11,802		—		—		11,802
Corporate and Agency Bonds		—		43,217		—		43,217
Commercial Paper		—		1,000		—		1,000
Total	$	19,985	$	44,217	$	—	$	64,202

	Fair Value Measurements at December 31, 2014 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money Market Instruments	$	5,885	$	—	$	—	$	5,885
United States Treasury Notes		20,006		—		—		20,006
Corporate and Agency Bonds		—		37,316		—		37,316
Commercial Paper		—		999		—		999
Total	$	25,891	$	38,315	$	—	$	64,206

Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of unrestricted common shares outstanding for the period.

Diluted net income per share is computed by dividing net income by the sum of the weighted average number of unrestricted common shares outstanding during the period and the weighted average number of potential common shares from the assumed exercise of stock options and the vesting of shares of restricted stock units using the “treasury stock” method when the effect is not anti-dilutive.

The following is a summary of the shares used in computing diluted net income per share:

(in thousands)
	Three months ended March 31,
	2015		2014
Weighted average shares used in calculating basic net income per share		32,091		31,289
Stock options		1,397		1,029
Warrants		—		1
Restricted stock units		170		123
Shares used in computing diluted net income per share		33,658		32,442

The following common stock equivalents were excluded from the computation of diluted net income per share because they had an anti-dilutive impact as the proceeds under the treasury stock method were in excess of the average fair market value for the period:

(in thousands)
	Three months ended March 31,
	2015		2014
Options to purchase common stock		269		1,031
Restricted stock units		79		268
Total options exercisable into common stock and restricted stock units issuable in common stock		348		1,299

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued new guidance, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The new guidance is effective for the Company commencing January 1, 2017. Early application is not permitted. The guidance permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that this guidance will have on its consolidated financial statements.

In August 2014, the FASB issued new guidance, Presentation of Financial Statements — Going Concern. The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The guidance will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is evaluating the effect that this guidance will have on its consolidated financial statements.

In April 2015, the FASB issued new guidance, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The guidance clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software. The guidance will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company does not believe the guidance will have a material impact on its consolidated financial statements.

XML

Accrued Expenses - Components of Accrued Expenses (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Payables and Accruals [Abstract]
Payroll and payroll-related	$ 5,627	$ 4,430
Licensed software and maintenance	1,197	1,197
Marketing programs	1,968	490
Other accrued expenses	5,643	6,113
Accrued expenses, total	$ 14,435	$ 12,230

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Current assets
Cash and cash equivalents	$ 123,078	$ 104,301
Marketable securities	56,019	58,321
Accounts receivable, net of allowance for doubtful accounts	195	265
Prepaid expenses and other current assets	11,785	10,723
Total current assets	191,077	173,610
Property and equipment, net	44,320	43,739
Restricted cash	1,300	1,300
Goodwill	95,505	95,505
Acquired intangible assets, net	1,676	2,160
Deferred taxes	4,658	4,658
Other assets	1,550	1,893
Total assets	340,086	322,865
Current liabilities
Accounts payable	8,377	4,703
Accrued expenses	14,435	12,230
Deferred revenue	40,148	37,838
Total current liabilities	62,960	54,771
Other long-term liabilities	3,681	3,783
Total liabilities	66,641	58,554
Commitments and contingencies (Note 7)
Stockholders' equity
Preferred stock; $0.01 par value; 5,000,000 shares authorized; no shares issued or outstanding at March 31, 2015 and December 31, 2014
Common stock; $0.01 par value; 100,000,000 shares authorized; 32,152,030 and 31,908,622 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively	322	319
Additional paid-in capital	255,164	249,599
Accumulated other comprehensive income (loss)	6	(10)
Retained earnings	17,953	14,403
Total stockholders' equity	273,445	264,311
Total liabilities and stockholders' equity	$ 340,086	$ 322,865

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities
Net income	$ 3,550	$ 848
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,053	5,911
Amortization of premium on investments	84	55
Stock-based compensation expense	4,304	3,914
Provision for (recovery of) bad debts	(1)	5
Income tax benefit from the exercise of stock options	(1,180)	(226)
Taxes paid related to net share settlement of restricted stock units	(373)	(751)
Changes in operating assets and liabilities:
Accounts receivable	71	39
Prepaid expenses and other current assets	115	(1,463)
Other assets	343	(13)
Accounts payable	1,977	(264)
Accrued expenses	3,070	1,064
Deferred revenue	2,310	2,070
Other long-term liabilities	(102)	(98)
Net cash provided by operating activities	20,221	11,091
Cash flows from investing activities
Purchases of marketable securities	(16,014)	(15,963)
Proceeds from maturities of marketable securities	18,250	12,865
Acquisition of property and equipment, including costs capitalized for development of internal use software	(5,250)	(5,929)
Net cash used in investing activities	(3,014)	(9,027)
Cash flows from financing activities
Proceeds from issuance of common stock pursuant to the exercise of stock options	9,396	2,290
Income tax benefit from the exercise of stock options	1,180	226
Repurchase of common stock	(9,000)
Net cash provided by financing activities	1,576	2,516
Effects of exchange rates on cash and cash equivalents	(6)	1
Net increase in cash and cash equivalents	18,777	4,581
Cash and cash equivalents, beginning of period	104,301	82,478
Cash and cash equivalents, end of period	123,078	87,059
Supplemental disclosure of noncash investing and financing activities:
Capitalization of stock-based compensation	68	50
Acquisition of property and equipment included in accounts payable	$ 2,755

XML

401(k) Savings Plan - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Defined Contribution Plan Disclosure [Line Items]
Contribution by employer to 401 (k) Savings Plan	$ 1,068	$ 863
Employee's Contributions up to 3% [Member]
Defined Contribution Plan Disclosure [Line Items]
Employer matching contribution, percent	100.00%	100.00%
Employee's Contributions Between 3% and 5% [Member]
Defined Contribution Plan Disclosure [Line Items]
Employer matching contribution, percent	50.00%	50.00%
100% of Matching Contribution [Member]
Defined Contribution Plan Disclosure [Line Items]
Percentage of the employee's compensation	3.00%	3.00%
50% of Matching Contribution [Member]
Defined Contribution Plan Disclosure [Line Items]
Percentage of the employee's compensation	5.00%	5.00%
50% of Matching Contribution [Member] | Minimum [Member]
Defined Contribution Plan Disclosure [Line Items]
Percentage of the employee's compensation	3.00%	3.00%

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Maturity period for marketable securities classified as available-for-sale	1 year
Corporate and Agency Bonds [Member]
Summary Of Significant Accounting Policies [Line Items]
Fair value of agency bonds and treasury notes classified as available-for-sale securities	19,172
Corporate and Agency Bonds [Member] | Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Maturity period for marketable securities classified as available-for-sale	2 years

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Summary of Significant Accounting Policies - Summary of Shares used in Computing Diluted Net Income Per Share (Detail) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Weighted average shares used in calculating basic net income per share	32,091	31,289
Shares used in computing diluted net income per share	33,658	32,442
Stock Options [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Restricted stock units	1,397	1,029
Restricted Stock Units [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Restricted stock units	170	123
Warrants [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Warrants		1

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Nature of the Business

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Nature of the Business

1. Nature of the Business

Constant Contact, Inc. (the “Company”) was incorporated as a Massachusetts corporation in 1995 and was reincorporated in the State of Delaware in 2000. The Company is a leading provider of online marketing tools that are designed for small organizations, including small businesses, associations and non-profits. The Company seeks to help customers succeed by creating and growing their customer and member relationships through easy-to-use products combined with education, support, KnowHow^® and coaching. In April 2014, the Company formally launched Constant Contact Toolkit™, an integrated online marketing platform that simplifies small business marketing by bringing together the tools needed to drive repeat customers and reach new ones. The Company also offers a suite of online marketing tools, including Email Marketing, EventSpot^®, Social Campaigns™, SaveLocal™, SinglePlatform and Survey, that enables customers to launch and monitor marketing campaigns across multiple channels, including email, social media, events, local deals, online listings and surveys. These products are marketed and sold directly by the Company and through a wide variety of partners primarily in the United States of America.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	32,152,030	31,908,622
Common stock, shares outstanding	32,152,030	31,908,622

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Goodwill and Acquired Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible assets consist of the following:

			March 31, 2015						December 31, 2014
	Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology		3 years	$	4,357	$	3,710	$	647	$	4,357	$	3,465	$	892
Customer relationships		3.75 years		3,315		2,841		474		3,315		2,666		649
Publisher relationships		5 years		710		402		308		710		367		343
Trade name		5 years		570		323		247		570		294		276
			$	8,952	$	7,276	$	1,676	$	8,952	$	6,792	$	2,160

Future Estimated Amortization Expense for Intangible Assets

Future estimated amortization expense for intangible assets as of March 31, 2015 is as follows:

Remainder of 2015	$	1,099
2016		470
2017		107
Total	$	1,676

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 01, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	CTCT
Entity Registrant Name	Constant Contact, Inc.
Entity Central Index Key	0001405277
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		32,158,044

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Stockholders' Equity and Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Recognized Stock-Based Compensation Expense

The Company recognized stock-based compensation expense on all awards in cost of revenue and operating expense categories as follows:

	Three months ended March 31,
	2015		2014
Cost of revenue	$	499	$	442
Research and development		867		1,020
Sales and marketing		1,191		1,032
General and administrative		1,747		1,420
	$	4,304	$	3,914

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Revenue	$ 90,417	$ 78,874
Cost of revenue	24,431	21,727
Gross profit	65,986	57,147
Operating expenses
Research and development	13,825	13,074
Sales and marketing	36,068	32,800
General and administrative	11,793	10,120
Total operating expenses	61,686	55,994
Income from operations	4,300	1,153
Interest income and other income (expense), net	(57)	23
Income before income taxes	4,243	1,176
Income tax expense	(693)	(328)
Net income	$ 3,550	$ 848
Net income per share:
Basic	$ 0.11	$ 0.03
Diluted	$ 0.11	$ 0.03
Weighted average shares outstanding used in computing per share amounts:
Basic	32,091	31,289
Diluted	33,658	32,442

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Accrued Expenses

3 Months Ended

Mar. 31, 2015

Payables and Accruals [Abstract]

Accrued Expenses

6. Accrued Expenses

	March 31, 2015		December 31, 2014
Payroll and payroll-related	$	5,627	$	4,430
Licensed software and maintenance		1,197		1,197
Marketing programs		1,968		490
Other accrued expenses		5,643		6,113
	$	14,435	$	12,230

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Income Taxes

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

5. Income Taxes

For the three months ended March 31, 2015 and 2014, the Company recorded income tax expense of $693 and $328, respectively. Income tax is related to federal, state, and to a lesser extent, foreign tax obligations. The Company’s effective tax rate may vary from period to period based on changes in estimated taxable income or loss, changes to federal, state or foreign tax laws, deductibility of certain costs and expenses, and as a result of acquisitions.

The Company’s estimated effective tax rate for 2015 and 2014, which has been applied to the Company’s income before income taxes for the three months ended March 31, 2015 and 2014, varies from the statutory rate primarily due to non-deductible stock-based compensation expense, that increases the effective tax rate, partially offset by state research and development credits that decrease the effective tax rate. The federal research and development credit has not yet been enacted for 2015 and had not yet been enacted in the first quarter of 2014 and therefore was not included in the Company’s estimated effective tax rate for either 2015 or 2014. The income tax expense for the first quarters of 2015 and 2014 was further reduced by the impact of disqualifying dispositions of incentive stock options during the periods.

The Company had net deferred tax assets of $6,443 at December 31, 2014, which did not change at March 31, 2015.

The Company has not recorded any amounts for unrecognized tax benefits as of March 31, 2015 or December 31, 2014. As of March 31, 2015 and December 31, 2014, the Company had no accrued interest or tax penalties recorded.

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Summary of Significant Accounting Policies - Fair Value Hierarchy for Cash Equivalents and Marketable Securities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Financial Assets:
Available for sale securities fair value disclosure	$ 56,019	$ 58,321
United States Treasury Notes [Member]
Financial Assets:
Available for sale securities fair value disclosure	11,802	20,006
Commercial Paper [Member]
Financial Assets:
Available for sale securities fair value disclosure	1,000	999
Recurring [Member]
Financial Assets:
Total	64,202	64,206
Recurring [Member] | Money Market Instruments [Member]
Financial Assets:
Cash and cash equivalents fair value disclosure	8,183	5,885
Recurring [Member] | United States Treasury Notes [Member]
Financial Assets:
Available for sale securities fair value disclosure	11,802	20,006
Recurring [Member] | Corporate and Agency Bonds [Member]
Financial Assets:
Available for sale securities fair value disclosure	43,217	37,316
Recurring [Member] | Commercial Paper [Member]
Financial Assets:
Available for sale securities fair value disclosure	1,000	999
Level 2 [Member] | Recurring [Member]
Financial Assets:
Total	44,217	38,315
Level 2 [Member] | Recurring [Member] | Corporate and Agency Bonds [Member]
Financial Assets:
Available for sale securities fair value disclosure	43,217	37,316
Level 2 [Member] | Recurring [Member] | Commercial Paper [Member]
Financial Assets:
Available for sale securities fair value disclosure	1,000	999
Level 1 [Member] | Recurring [Member]
Financial Assets:
Total	19,985	25,891
Level 1 [Member] | Recurring [Member] | Money Market Instruments [Member]
Financial Assets:
Cash and cash equivalents fair value disclosure	8,183	5,885
Level 1 [Member] | Recurring [Member] | United States Treasury Notes [Member]
Financial Assets:
Available for sale securities fair value disclosure	$ 11,802	$ 20,006

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Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2015

Payables and Accruals [Abstract]

Components of Accrued Expenses

	March 31, 2015		December 31, 2014
Payroll and payroll-related	$	5,627	$	4,430
Licensed software and maintenance		1,197		1,197
Marketing programs		1,968		490
Other accrued expenses		5,643		6,113
	$	14,435	$	12,230

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements include those of the Company and its subsidiaries, after elimination of all intercompany accounts and transactions. The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

The condensed consolidated balance sheet at December 31, 2014 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K, File Number 001-33707, on file with the SEC.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position as of March 31, 2015 and consolidated results of operations and of cash flows for the three months ended March 31, 2015 and 2014, have been made. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2015.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates these estimates, judgments and assumptions, including those related to revenue recognition, stock-based compensation, goodwill and acquired intangible assets, capitalization of software and website development costs and income taxes. The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from these estimates.

Marketable Securities

Marketable Securities

The Company’s marketable securities are classified as available-for-sale and are carried at fair value with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Realized gains and losses and declines in value judged to be other than temporary are included as a component of interest and other income (expense) based on the specific identification method.

At March 31, 2015, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
United States Treasury Notes	$	11,796	$	6	$	—		$	11,802
Corporate and Agency Bonds		43,213		11		(7	)		43,217
Commercial Paper		1,000		—		—			1,000
Total	$	56,009	$	17	$	(7	)	$	56,019

At March 31, 2015, marketable securities consisted of investments that mature within one year with the exception of government treasuries and corporate and agency bonds with a fair value of $19,172, which have maturities within two years.

At December 31, 2014, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
United States Treasury Notes	$	20,000	$	6	$	—		$	20,006
Corporate and Agency Bonds		37,330		2		(16	)		37,316
Commercial Paper		999		—		—			999
Total	$	58,329	$	8	$	(16	)	$	58,321

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, is used to measure fair value:

• 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.

The following tables present the Company’s fair value hierarchy for its cash equivalents and marketable securities, which are measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014:

	Fair Value Measurements at March 31, 2015 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money Market Instruments	$	8,183	$	—	$	—	$	8,183
United States Treasury Notes		11,802		—		—		11,802
Corporate and Agency Bonds		—		43,217		—		43,217
Commercial Paper		—		1,000		—		1,000
Total	$	19,985	$	44,217	$	—	$	64,202

	Fair Value Measurements at December 31, 2014 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money Market Instruments	$	5,885	$	—	$	—	$	5,885
United States Treasury Notes		20,006		—		—		20,006
Corporate and Agency Bonds		—		37,316		—		37,316
Commercial Paper		—		999		—		999
Total	$	25,891	$	38,315	$	—	$	64,206

Net Income Per Share

Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of unrestricted common shares outstanding for the period.

Diluted net income per share is computed by dividing net income by the sum of the weighted average number of unrestricted common shares outstanding during the period and the weighted average number of potential common shares from the assumed exercise of stock options and the vesting of shares of restricted stock units using the “treasury stock” method when the effect is not anti-dilutive.

The following is a summary of the shares used in computing diluted net income per share:

	Three months ended March 31,
(in thousands)	2015		2014
Weighted average shares used in calculating basic net income per share		32,091		31,289
Stock options		1,397		1,029
Warrants		—		1
Restricted stock units		170		123
Shares used in computing diluted net income per share		33,658		32,442

The following common stock equivalents were excluded from the computation of diluted net income per share because they had an anti-dilutive impact as the proceeds under the treasury stock method were in excess of the average fair market value for the period:

	Three months ended March 31,
(in thousands)	2015		2014
Options to purchase common stock		269		1,031
Restricted stock units		79		268
Total options exercisable into common stock and restricted stock units issuable in common stock		348		1,299

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued new guidance, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The new guidance is effective for the Company commencing January 1, 2017. Early application is not permitted. The guidance permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that this guidance will have on its consolidated financial statements.

In August 2014, the FASB issued new guidance, Presentation of Financial Statements — Going Concern. The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The guidance will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is evaluating the effect that this guidance will have on its consolidated financial statements.

In April 2015, the FASB issued new guidance, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The guidance clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software. The guidance will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company does not believe the guidance will have a material impact on its consolidated financial statements.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

7. Commitments and Contingencies

Office Leases

The Company has a lease for its headquarters space in Waltham, Massachusetts (the “Lease”) that is effective through September 2022 with one ten-year extension option. The Lease includes space the Company is currently occupying as well as space that will be made available at various points in time during the term.

The Company leases office space for a sales and support office in Colorado under a lease agreement effective through April 2019 with three three-year extension options. The Company also leases small amounts of general office space in Florida, New York, California and the United Kingdom under lease agreements that expire at various dates through 2018.

Lease incentives, payment escalations and rent holidays specified in the lease agreements are accrued or deferred as appropriate such that rent expense per square foot is recognized on a straight-line basis over the terms of occupancy.

At March 31, 2015 and December 31, 2014, the Company had both prepaid rent and accrued rent balances related to its office leases. The prepaid rent balance was $52 as of March 31, 2015, of which $13 was included in prepaid expenses and other current assets and $39 was included in other assets. The accrued rent balance was $4,268 as of March 31, 2015, of which $705 was included in accrued expenses and $3,563 was included in other long-term liabilities. The prepaid rent balance was $51 at December 31, 2014, of which $3 was included in prepaid expenses and other current assets and $48 was included in other assets. The accrued rent balance was $4,232 at December 31, 2014, of which $577 was included in accrued expenses and $3,655 was included in other long-term liabilities.

As of March 31, 2015, future minimum lease payments under non-cancelable office leases are as follows:

Remainder of 2015	$	7,176
2016		10,061
2017		10,005
2018		9,604
2019		8,492
Thereafter		22,462
		67,800
Less: Sublease income		628
	$	67,172

Total rent expense under office leases was $2,409 and $2,320 for the three months ended March 31, 2015 and 2014, respectively. Total rent expense for the three months ended March 31, 2015 is net of sublease income of $47.

Third-Party Hosting Agreements

The Company has agreements with two affiliated vendors to provide specialized space and equipment and related services from which the Company hosts its software applications. Payment escalations and rent holidays specified in these agreements are accrued or deferred as appropriate such that rent expense per square foot is recognized on a straight-line basis over the terms of occupancy. As of March 31, 2015 and December 31, 2014, the Company had both prepaid rent and accrued rent balances related to these agreements. As of March 31, 2015, the Company had prepaid rent of $429, of which $277 was included in prepaid expenses and other current assets and $152 was included in other assets. Of the accrued rent balance of $166, $47 was included in accrued expenses and $119 was included in other long-term liabilities. At December 31, 2014, the Company had prepaid rent of $501, of which $295 was included in prepaid expenses and other current assets and $206 was included in other assets. The accrued rent balance was $172 of which $38 was included in accrued expense and other current liabilities and $134 was included in other long-term liabilities.

The agreements include payment commitments that expire at various dates through 2017. As of March 31, 2015, future minimum payments under the agreements are as follows:

Remainder of 2015	$	2,958
2016		4,049
2017		775
Total	$	7,782

Total rent expense under hosting agreements was $1,105 and $1,063 for the three months ended March 31, 2015 and 2014, respectively.

Vendor Commitments

As of March 31, 2015, the Company had issued both cancellable and non-cancellable purchase orders to various vendors and entered into contractual commitments with various vendors totaling $27,901 related to marketing programs and other non-marketing goods and services to be delivered principally during 2015.

Letters of Credit and Restricted Cash

As of March 31, 2015 and December 31, 2014, the Company maintained a letter of credit totaling $1,300 for the benefit of the landlord of the Lease. The landlord can draw against the letter of credit in the event of default by the Company. The Company was required to maintain a cash balance of at least $1,300 as of March 31, 2015 and December 31, 2014 to secure the letter of credit. These amounts were classified as restricted cash in the balance sheet at March 31, 2015 and December 31, 2014.

Indemnification Obligations

The Company enters into standard indemnification agreements with the Company’s channel partners and certain other third parties in the ordinary course of business. Pursuant to these agreements, the Company indemnifies and agrees to reimburse the indemnified party for losses incurred by the indemnified party in connection with certain intellectual property infringement and other claims by any third party with respect to the Company’s business and technology. Based on historical information and information known as of March 31, 2015, the Company does not expect it will incur any significant liabilities under these indemnification agreements.

Legal Matters

In September 2012, RPost Holdings, Inc., RPost Communications Limited and RMail Limited (collectively, “RPost”) filed a complaint in the United States District Court for the Eastern District of Texas that named the Company as a defendant in a lawsuit. The complaint alleged that certain elements of the Company’s email marketing technology infringe five patents held by RPost. RPost seeks an award for damages in an unspecified amount and injunctive relief. In February 2013, RPost amended its complaint to name five of the Company’s marketing partners as defendants. Under the Company’s contractual agreements with these marketing partners, the Company is obligated to indemnify them for claims related to patent infringement. The Company filed a motion to sever and stay the claims against its partners and multiple motions to dismiss the claims against the Company. In January 2014, the case was stayed pending the resolution of certain state court and bankruptcy court actions involving RPost, to which the Company is not a party. The stay was extended by agreement of the parties in December 2014. This litigation is in its very early stages. As a result, neither the ultimate outcome of this litigation nor an estimate of a probable loss or any reasonably possible losses can be assessed at this time. Nevertheless, the Company believes that it has meritorious defenses to any claim of infringement and intends to defend itself vigorously.

In March 2013, CreateAds LLC (“CreateAds”) filed a complaint in the United States District Court for the District of Delaware that named the Company as a defendant in a lawsuit. The complaint, which was served on the Company on March 8, 2013, alleged that certain elements of the Company’s email marketing technology infringe a patent held by CreateAds. CreateAds seeks an award for damages in an unspecified amount and injunctive relief. In February 2014, the case was stayed pending a decision by the United States Supreme Court in the appeal of a patent case with issues very similar to the ones pending in the Company’s motion to dismiss. Following the Supreme Court’s decision in June 2014, the Company filed a motion for summary judgment seeking to invalidate the patent for lack of patent-eligible subject matter. By agreement of the parties, the case was dismissed with prejudice as to the claims raised by CreateAds in February 2015.

The Company is from time to time subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of its business. While the outcome of these other claims cannot be predicted with certainty, management does not believe that the outcome of any of these other legal matters will have a material adverse effect on the Company’s results of operations or financial condition.

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401(k) Savings Plan

3 Months Ended

Mar. 31, 2015

Compensation and Retirement Disclosure [Abstract]

401(k) Savings Plan

8. 401(k) Savings Plan

The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code of 1986. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Company contributions to the plan may be made at the discretion of the Board of Directors. The Company elected to make matching contributions for the plan years ending December 31, 2015 and 2014 at a rate of 100% of each employee’s contribution up to a maximum matching contribution of 3% of the employee’s compensation and at a rate of 50% of each employee’s contribution in excess of 3% up to a maximum of 5% of the employee’s compensation.

Through March 31, 2015 and 2014, the Company made matching contributions of $1,068 and $863 for the plan years ended December 31, 2015 and 2014, respectively.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Summary of Marketable Securities by Security Type

At March 31, 2015, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
United States Treasury Notes	$	11,796	$	6	$	—		$	11,802
Corporate and Agency Bonds		43,213		11		(7	)		43,217
Commercial Paper		1,000		—		—			1,000
Total	$	56,009	$	17	$	(7	)	$	56,019

At March 31, 2015, marketable securities consisted of investments that mature within one year with the exception of government treasuries and corporate and agency bonds with a fair value of $19,172, which have maturities within two years.

At December 31, 2014, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
United States Treasury Notes	$	20,000	$	6	$	—		$	20,006
Corporate and Agency Bonds		37,330		2		(16	)		37,316
Commercial Paper		999		—		—			999
Total	$	58,329	$	8	$	(16	)	$	58,321

Fair Value Hierarchy for Cash Equivalents and Marketable Securities Measured at Fair Value on Recurring Basis

The following tables present the Company’s fair value hierarchy for its cash equivalents and marketable securities, which are measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014:

	Fair Value Measurements at March 31, 2015 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money Market Instruments	$	8,183	$	—	$	—	$	8,183
United States Treasury Notes		11,802		—		—		11,802
Corporate and Agency Bonds		—		43,217		—		43,217
Commercial Paper		—		1,000		—		1,000
Total	$	19,985	$	44,217	$	—	$	64,202

	Fair Value Measurements at December 31, 2014 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money Market Instruments	$	5,885	$	—	$	—	$	5,885
United States Treasury Notes		20,006		—		—		20,006
Corporate and Agency Bonds		—		37,316		—		37,316
Commercial Paper		—		999		—		999
Total	$	25,891	$	38,315	$	—	$	64,206

Summary of Shares Used in Computing Diluted Net Income Per Share

The following is a summary of the shares used in computing diluted net income per share:

(in thousands)
	Three months ended March 31,
	2015		2014
Weighted average shares used in calculating basic net income per share		32,091		31,289
Stock options		1,397		1,029
Warrants		—		1
Restricted stock units		170		123
Shares used in computing diluted net income per share		33,658		32,442

Common Stock Equivalents Excluded from Computation of Diluted Net Income Per Share

The following common stock equivalents were excluded from the computation of diluted net income per share because they had an anti-dilutive impact as the proceeds under the treasury stock method were in excess of the average fair market value for the period:

(in thousands)
	Three months ended March 31,
	2015		2014
Options to purchase common stock		269		1,031
Restricted stock units		79		268
Total options exercisable into common stock and restricted stock units issuable in common stock		348		1,299

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Commitments and Contingencies - Future Minimum Lease Payments under Leases and Agreements (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Office Leases [Member]
Operating Leased Assets [Line Items]
Remainder of 2015	$ 7,176
2016	10,061
2017	10,005
2018	9,604
2019	8,492
Thereafter	22,462
Total	67,800
Less: Sublease income	628
Net operating lease obligation	67,172
Third-Party Hosting Agreements [Member]
Operating Leased Assets [Line Items]
Remainder of 2015	2,958
2016	4,049
2017	775
Total	$ 7,782

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Summary of Significant Accounting Policies - Summary of Marketable Securities by Security Type (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 56,009	$ 58,329
Gross Unrealized Gains	17	8
Gross Unrealized Losses	(7)	(16)
Estimated Fair Value	56,019	58,321
Corporate and Agency Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	43,213	37,330
Gross Unrealized Gains	11	2
Gross Unrealized Losses	(7)	(16)
Estimated Fair Value	43,217	37,316
United States Treasury Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	11,796	20,000
Gross Unrealized Gains	6	6
Estimated Fair Value	11,802	20,006
Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,000	999
Estimated Fair Value	$ 1,000	$ 999

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Goodwill and Acquired Intangible Assets - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Carrying amount of goodwill	$ 95,505		$ 95,505
Amortization expense for intangible assets	$ 484	$ 567

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 3,550	$ 848
Other comprehensive income (loss):
Net unrealized gains (losses) on marketable securities, net of tax	25	(3)
Translation adjustment	(9)	1
Total other comprehensive income (loss)	16	(2)
Comprehensive income	$ 3,566	$ 846

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Stockholders' Equity and Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stockholders' Equity and Stock-Based Compensation

4. Stockholders’ Equity and Stock-Based Compensation

Stock Repurchase Program

In the second quarter of 2014, the Board of Directors authorized the repurchase of up to $30,000 of its common stock through July 31, 2015. Under the authorization, the Company can repurchase shares in the open market, which may include the use of 10b5-1 trading plans, or through privately negotiated transactions. The timing and amount of repurchases, if any, will depend upon several factors, including market and business conditions. Stock repurchases may be suspended or discontinued at any time. The Company intends to fund repurchases from its cash and cash equivalents.

During the three months ended March 31, 2015, the Company repurchased 228,671 shares of its common stock at an average price of $39.36 per share. These shares were retired and returned to authorized but unissued shares and accounted for as a reduction to stockholders’ equity in the Company’s condensed consolidated balance sheet.

Stock-Based Compensation Expense

The Company grants stock-based awards under its existing 2011 Stock Incentive Plan and its 2007 Employee Stock Purchase Plan. The Company also has outstanding stock-based awards under its 1999 Stock Option/Stock Issuance Plan and 2012 Inducement Award Plan but is no longer granting awards under these plans. As of March 31, 2015, 1,740,896 shares of common stock are available for issuance under the 2011 Stock Incentive Plan. As of March 31, 2015, 312,026 shares of common stock are available for issuance to participating employees under the 2007 Employee Stock Purchase Plan. The Company applies the fair value recognition provisions for all stock-based awards granted or modified in accordance with authoritative guidance. Under this guidance the Company records compensation costs over the requisite service period of the award based on the grant-date fair value. The straight-line method is applied to all grants with service conditions, while the graded vesting method is applied to all grants with both service and performance conditions.

The Company recognized stock-based compensation expense on all awards in cost of revenue and operating expense categories as follows:

	Three months ended March 31,
	2015		2014
Cost of revenue	$	499	$	442
Research and development		867		1,020
Sales and marketing		1,191		1,032
General and administrative		1,747		1,420
	$	4,304	$	3,914

Additionally, the Company capitalized $68 and $50 of stock-based compensation related to the development of internal-use software for the three months ended March 31, 2015 and 2014, respectively.

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Goodwill and Acquired Intangible Assets - Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 8,952	$ 8,952
Accumulated Amortization	7,276	6,792
Net Carrying Amount	1,676	2,160
Developed Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years
Gross Carrying Amount	4,357	4,357
Accumulated Amortization	3,710	3,465
Net Carrying Amount	647	892
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years 9 months
Gross Carrying Amount	3,315	3,315
Accumulated Amortization	2,841	2,666
Net Carrying Amount	474	649
Publisher Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years
Gross Carrying Amount	710	710
Accumulated Amortization	402	367
Net Carrying Amount	308	343
Trade Name [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years
Gross Carrying Amount	570	570
Accumulated Amortization	323	294
Net Carrying Amount	$ 247	$ 276

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2015

Office Leases [Member]

Future Minimum Lease Payments under Leases and Agreements

As of March 31, 2015, future minimum lease payments under non-cancelable office leases are as follows:

Remainder of 2015	$	7,176
2016		10,061
2017		10,005
2018		9,604
2019		8,492
Thereafter		22,462
		67,800
Less: Sublease income		628
	$	67,172

Third-Party Hosting Agreements [Member]

Future Minimum Lease Payments under Leases and Agreements

As of March 31, 2015, future minimum payments under the agreements are as follows:

Remainder of 2015	$	2,958
2016		4,049
2017		775
Total	$	7,782