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What changed in HARTE HANKS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of HARTE HANKS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+167 added−171 removedSource: 10-K (2026-03-17) vs 10-K (2025-03-17)

Top changes in HARTE HANKS INC's 2025 10-K

167 paragraphs added · 171 removed · 138 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe are the successor to a newspaper business started by Houston Harte and Bernard Hanks in Texas in the early 1920s. We were incorporated in Delaware on October 1, 197 0. In 1972, Harte Hanks went public and was listed on the New York Stock Exchange (“NYSE”).
Biggest changeWith offices in North America, Asia-Pacific and Europe, we serve leading global brands enabling them to design, activate and optimize the full customer and product lifecycle. We are the successor to a newspaper business started by Houston Harte and Bernard Hanks in Texas in the early 1920s. We were incorporated in Delaware on October 1, 197 0.
The most significant aspect of these laws and regulations that may be applied to, or affect, our business or the businesses of our clients include the following: • The Federal Trade Commission’s positions regarding the processing of personal information and consumer protection as expressed through its Protecting Consumer Privacy in an Era of Rapid Change, Data Brokers, Big Data and Cross-Device Tracking reports (each of which seek to address consumer privacy, data protection, and technological advancements related to the collection or use of personal information for marketing purposes). 8 Table of Contents • Data protection laws in the United States (“U.S.”) (which are generally state specific) and in the European Union (“EU”), including the General Data Protection Regulation (“EU Regulation 679/2016”), each of which imposes a number of obligations with respect to the processing of personal data, and with respect to EU Regulation 679/2016 also imposes prohibitions related to the transfer of personal information from the EU to other countries, including the United States, that do not provide data subjects with an “adequate” level of privacy or security, and applies to all of our products in the EU. • The Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act (“GLB”), which, among other things, regulates the use for marketing purposes of non-public personal financial information of consumers held by financial institutions.
The most significant aspect of these laws and regulations that may be applied to, or affect, our business or the businesses of our clients include the following: • The Federal Trade Commission’s positions regarding the processing of personal information and consumer protection as expressed through its Protecting Consumer Privacy in an Era of Rapid Change, Data Brokers, Big Data and Cross-Device Tracking reports (each of which seek to address consumer privacy, data protection, and technological advancements related to the collection or use of personal information for marketing purposes). • Data protection laws in the United States (“U.S.”) (which are generally state specific) and in the European Union (“EU”), including the General Data Protection Regulation (“EU Regulation 679/2016”), each of which imposes a number of obligations with respect to the processing of personal data, and with respect to EU Regulation 679/2016 also imposes prohibitions related to the transfer of personal information from the EU to other countries, including the United States, that do not provide data subjects with an “adequate” level of privacy or security, and applies to all of our products in the EU. • The Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act (“GLB”), which, among other things, regulates the use for marketing purposes of non-public personal financial information of 8 Table of Contents consumers held by financial institutions.
Our comprehensive logistics solutions include: • Nationwide & Regional Shipping – We facilitate the shipping of millions of time-sensitive materials annually, leveraging our nationwide logistics network. • Certified Fleet & Expedited Shipping – With access to a fleet of over 15,000 trucks, we provide clients with scalable third-party logistics (3PL) services tailored to their needs. • Allink®360: Proprietary Logistics Technology – Our proprietary rate-shopping system, Allink®360, optimizes freight costs and delivery timelines, ensuring shipments arrive on time and within budget. • Flexible & Scalable Logistics Solutions – We offer customized logistics solutions designed to accommodate businesses of all sizes, from startups to Fortune 500 enterprises.
Our comprehensive logistics solutions include: • Nationwide & Regional Shipping – We facilitate the shipping of millions of time-sensitive materials annually, leveraging our nationwide logistics network. • Certified Fleet & Expedited Shipping – With access to a contracted fleet of over 15,000 trucks, we provide clients with scalable third-party logistics (3PL) services tailored to their needs. • Allink®360: Proprietary Logistics Technology – Our proprietary rate-shopping system, Allink 360, optimizes freight costs and delivery timelines, ensuring shipments arrive on time and within budget. • Flexible & Scalable Logistics Solutions – We offer customized logistics solutions designed to accommodate businesses of all sizes, from startups to Fortune 500 enterprises.
We leverage technology to help reduce customer effort while providing a human touch to increase customer satisfaction. • Customer Care Technology and AI Transformation – Our solution services teams configure various CRM solutions (e.g., Salesforce, Zendesk) and channel /AI technology including Amazon Connect to create meaningful customer interactions by connecting content between agent, AI-driven interfaces and web-based self-help tools and community forums. • Self-Service Technology - We providing and maintain self service solutions through Interactive Voice Response ("IVR"), Help Centers, online, and via apps and channel technology.
We leverage technology to help reduce customer effort while providing a human touch to increase customer satisfaction. • Customer Care Technology and AI Transformation – Our solution services teams configure various CRM solutions (e.g., Salesforce, Zendesk) and channel /AI technology including Amazon Connect to create meaningful customer interactions by connecting content between agent, AI-driven interfaces and web-based self-help tools and community forums. • Self-Service Technology - We provide and maintain self-service solutions through Interactive Voice Response ("IVR"), Help Centers, online, and via apps and channel technology.
None of the information on, or accessible through, these websites are part of this Form 10-K or is incorporated by reference herein. 3 Table of Contents OUR BUSINESS Harte Hanks is a leading customer and brand experience company operating in six service categories - data, marketing, sales, customer care, fulfillment and logistics.
None of the information on, or accessible through, these websites is part of this Form 10-K or is incorporated by reference herein. 3 Table of Contents OUR BUSINESS Harte Hanks is a leading customer and brand experience company operating in six service categories - data, marketing, sales, customer care, fulfillment and logistics.
Our expertise spans the range of strategies including targeting, Go-To-Market, commercial, product launch, customer experience, campaign, content, ABM and demand strategy. • Creative & Content - Full-service creative and content design, development and execution spanning traditional and digital channels, including creative concepts, messaging and content assets for print, broadcast, direct mail, website, app, display, social, mobile, search engine marketing, and voice. • Marketing Technology – Website and app development, e-commerce development and enablement, database building and management, platform architecture creation, and marketing automation to serve as the foundation for digital and multi-channel marketing execution. • Digital and Multi-channel Marketing Execution & Advertising - Orchestration and execution of programs and campaigns across multiple channels, territories and audiences, using data, strategies, content and Marketing technology or MarTech provided either by Harte Hanks or by our clients.
Our expertise spans the range of strategies including targeting, Go-To-Market, commercial, product launch, customer experience, campaign, content, ABM (Account Based Marketing) and demand strategy. • Creative & Content - Full-service creative and content design, development and execution spanning traditional and digital channels, including creative concepts, messaging and content assets for print, broadcast, direct mail, website, app, display, social, mobile, search engine marketing, and voice. • Marketing Technology – Website and app development, e-commerce development and enablement, database building and management, platform architecture creation, and marketing automation to serve as the foundation for digital and multi-channel marketing execution. • Digital and Multi-channel Marketing Execution & Advertising - Orchestration and execution of programs and campaigns across multiple channels, territories and audiences, using data, strategies, content and Marketing technology or MarTech provided either by Harte Hanks or by our clients.
Setup and management of digital advertising programs and campaigns across the latest advertising channels (e.g. Google, Meta, LinkedIn, TikTok) and platforms (DSPs, ABM advertising, industry networks). • Demand Generation and ABM (Account Based Marketing) - Providing intelligence-based B2B solutions that understand audiences and their behaviors, and then inspire and drive action to deliver results.
Setup and management of digital advertising programs and campaigns across the latest advertising channels (e.g., Google, Meta, LinkedIn, TikTok) and platforms (DSPs, ABM advertising, industry networks). • Demand Generation and ABM - Providing intelligence-based B2B solutions that understand audiences and their behaviors, and then inspire and drive action to deliver results.
These documents are provided as soon as practical after they are filed with the SEC and may also be found at the SEC. The SEC also maintains a website (http://www.sec.gov) that contains periodic reports, proxy and information statements and other information regarding irruers, including Harte Hanks, that file electronically with the SEC.
These documents are provided as soon as practical after they are filed with the SEC and may also be found at the SEC. The SEC also maintains a website (http://www.sec.gov) that contains periodic reports, proxy and information statements and other information regarding issuers, including Harte Hanks, that file electronically with the SEC.
This approach to “effortless customer experience” not only drives better service results but also lowers our clients’ operational costs. 5 Table of Contents Our global, omnichannel delivery model is focused on providing our clients three key services: • Customer Service Outsourcing - Our accomplished customer care associates interact and resolve consumer queries and complaints across hardware and software platforms, healthcare benefit plans, product recalls and/or a myriad of other customer service issues.
This approach to “effortless customer experience” not only drives better service results but is also designed to lower our clients’ operational costs. 5 Table of Contents Our global, omnichannel delivery model is focused on providing our clients three key services: • Customer Service Outsourcing - Our accomplished customer care associates interact and resolve consumer queries and complaints across hardware and software platforms, healthcare benefit plans, product recalls and/or a myriad of other customer service issues.
We then combine these insights with seamless program execution, fulfillment, service and delivery on a project or ongoing service basis to meet our client's goals. In essence we offer services along the customer & product lifecycle - from Data to Demand, to Deal, to Delivery, and everything in between.
We then combine these insights with seamless program execution, fulfillment, service and delivery on a project or ongoing service basis to meet our clients’ goals. In essence we offer services along the customer & product lifecycle - from Data to Demand, to Deal, to Delivery, and everything in between.
At the core of how we address this is a concentration on our client's key audiences - prospects, customers, patients, members, partners, employees and influencers - and how we help align our client's brands and products to these different audiences along journeys.
At the core of how we address this is a concentration on our clients’ key audiences - prospects, customers, patients, members, partners, employees and influencers - and how we help align our clients’ brands and products to these different audiences along journeys.
In and across these service categories, we address today's biggest growth and customer experience challenges for B2B and B2C businesses across the world in the new era of intelligence and Artificial Intelligence ("AI"), by being a modern journey enabler.
In and across these service categories, we address today's biggest growth and customer experience challenges for B2B and B2C businesses across the world in the new era of intelligence and artificial intelligence (“AI”), by being a modern journey enabler.
These solutions help companies understand which accounts, sectors and persons to target, and then generate marketing qualified leads (“MQLs”) and pipelines for their marketing and sales team, through combining data, strategy, content, MarTech and digital/multi-channel execution. • Managed Marketing Services - Also referred to as "Marketing as a Service".
These solutions help companies understand which accounts, sectors and persons to target, and then generate marketing qualified leads (“MQLs”) and pipelines for their marketing and sales team, through combining data, strategy, content, MarTech and digital/multi-channel execution. • Managed Marketing Services - Also referred to as “Marketing as a Service”.
Although we from time to time evaluate inventions for their possibility of being awarded a patent, we do not own any patents, and patents are not core to our intellectual property strategy (other than as may be incidental to commercially available technology or software we license).
Although we from time to time evaluate inventions for their possibility of being awarded a 9 Table of Contents patent, we do not own any patents, and patents are not core to our intellectual property strategy (other than as may be incidental to commercially available technology or software we license).
We support our clients by addressing their end customers’ urgent needs, navigating an increasingly-complex technology landscape, and integrating artificial intelligence technology and automation — while maintaining a fierce devotion to reducing customer effort, for the benefit of both the business and the buyer.
We support our clients by addressing their end customers’ urgent needs, navigating an increasingly-complex technology landscape, and integrating AI technology and automation — while maintaining a fierce devotion to reducing customer effort, for the benefit of both the business and the buyer.
We had 16 em ployees in our corporate sales and marketing function as of December 31, 2024. Competition Our competition comes from local, national, and international marketing, advertising, customer care, print fulfillment, smaller 3PL, logistics companies, and internal client resources, against whom we compete for individual projects, entire client relationships, and marketing expenditures.
We had 12 em ployees in our corporate sales and marketing function as of December 31, 2025. Competition Our competition comes from local, national, and international marketing, advertising, customer care, print fulfillment, smaller 3PL, logistics companies, and internal client resources, against whom we compete for individual projects, entire client relationships, and marketing expenditures.
Our clients span a wide range of industries including but not limited to retail, travel, streaming, healthcare, financial services, and technology, which insulates the Company from adverse conditions in any one sector. We generally enter into long-term contracts with our clients ranging in duration from one to three years.
Our clients span a wide range of industries including but not limited to retail, travel, streaming, healthcare, financial services, and technology, which reduced the concentration risk of the Company in any one sector. We generally enter into long-term contracts with our clients ranging in duration from one to three years.
Harte Hanks is proud of its diverse workforce and cross-cultural competency and, as of December 31, 2024, employed individuals from 6 different countries. As of December 31, 2024, 58% of Harte Hanks’ workforce was female. Harte Hanks is committed to recruiting and employing qualified candidates regardless of their gender or cultural background.
Harte Hanks is proud of its diverse workforce and cross-cultural competency and, as of December 31, 2025, employed individuals in 7 different countries. As of December 31, 2025, 58% of Harte Hanks’ workforce was female. Harte Hanks is committed to recruiting and employing qualified candidates regardless of their gender or cultural background.
HUMAN CAPITAL RESOURCES As of December 31, 2024, Harte Hanks employed 1,715 full-time employees and 288 part-time employees, of which approximately 1,141 a re based outside of the U.S., primarily in the Philippines. A portion of our workforce is provided to us through staffing companies. None of our workforce is represented by labor unions.
HUMAN CAPITAL RESOURCES As of December 31, 2025, Harte Hanks employed 1,719 full-time employees and 350 part-time employees, of which approximately 1,380 a re based outside of the U.S., primarily in the Philippines. A portion of our workforce is provided to us through staffing companies. None of our workforce is represented by labor unions.
We became a private company in a leveraged buyout in 1984, and in 1993 we again went public and listed our common stock on the NYSE. On July 13, 2020, we began trading on the OTCQX® Best Market (the “OTCQX”) .
In 1972, Harte Hanks went public and was listed on the New York Stock Exchange (“NYSE”). We became a private company in a leveraged buyout in 1984, and in 1993 we again went public and listed our common stock on the NYSE. On July 13, 2020, we began trading on the OTCQX® Best Market (the “OTCQX”) .
As a B2B services company we practice the marketing and sales methodology and tactics we offer to our clients, including ABM, demand generation, content marketing, inside sales and enterprise sales. We also leverage partnerships to extend our reach and broaden our solutions.
As a B2B services company we practice the marketing and sales methodology and tactics we offer to our clients, including ABM, demand generation, content marketing, inside sales and enterprise sales.
For marketing, we leverage a combination of corporate marketing resources, marketing services resources and a modern MarTech stack including CRM, content management, SEO/digital advertising tools to support targeting, account based marketing, demand creation and awareness.
We also leverage partnerships to extend our reach and broaden our solutions. 7 Table of Contents For marketing, we leverage a combination of corporate marketing resources, marketing services resources and a modern MarTech stack including CRM, content management, SEO/digital advertising tools to support targeting, account based marketing, demand creation and awareness.
Additionally, we have adopted a code of ethics that applies to our interim chief operating officer, chief financial officer and general counsel which is posted on our website. Our website also includes our corporate governance guidelines and the charters for each of our audit, compensation, and nominating and corporate governance committees.
Additionally, we have adopted a code of ethics that applies to our principal officers, including those serving in interim roles which is posted on our website. Our website also includes our corporate governance guidelines and the charters for each of our audit, compensation, and nominating and corporate governance committees.
The challenges we solve include: • Grappling with data, AI and technology in the cookie-less world; • Growing awareness, demand and sales for products; • Storing, fulfilling and delivering samples, kits, materials and products direct to the door of consumers, influencers or businesses; • Delivering better customer experience and support across multiple channels; and • Delivering effectively with tighter budgets and talent shortages Our clients need help enabling their journey to growth, to transformation, to customer centricity, to product success and to AI powered approaches and solutions to marketing, sales, fulfillment and customer care.
The challenges we solve include: • Grappling with data, AI and technology in a cookie-restricted digital environment; • Growing awareness, demand and sales for products; • Storing, fulfilling and delivering samples, kits, materials and products direct to the door of consumers, influencers or businesses; • Delivering better customer experience and support across multiple channels; and • Delivering effectively with tighter budgets and talent shortages.
Continued public interest in individual privacy rights and data security may result in the adoption of further voluntary industry guidelines that could impact our direct marketing activities and business practices. 9 Table of Contents INTELLECTUAL PROPERTY RIGHTS Our intellectual property assets include trademarks and service marks that identify our Company and our services, know-how, software, and other technology that we develop for our internal use and for license to clients and data and intellectual property licensed from third parties, such as commercial software and data providers.
INTELLECTUAL PROPERTY RIGHTS Our intellectual property assets include trademarks and service marks that identify our Company and our services, know-how, software, and other technology that we develop for our internal use and for license to clients and data and intellectual property licensed from third parties, such as commercial software and data providers.
In general, our contracts with our customers are terminable on short notice with little or no penalty payable on termination. 7 Table of Contents Sales and Marketing Harte Hanks operates a modern sales and marketing growth engine to generate awareness, create demand and convert this demand into new business, as well as support existing client growth and retention.
Sales and Marketing Harte Hanks operates a modern sales and marketing growth engine to generate awareness, create demand and convert this demand into new business, as well as support existing client growth and retention.
Our largest client in terms of revenue generated 9.4% of total revenues in 2024 . Our largest 25 clients in terms of revenue generated 72.1% of total revenue in 2024 .
Our largest client in terms of revenue generated 10.5% of total revenues in 2025 . Our largest 25 clients in terms of revenue generated 68.3% of total revenue in 2025 .
Most of our contracts do not require our customers to purchase a minimum amount of services from us.
Most of our contracts do not require our customers to purchase a minimum amount of services from us. In general, our contracts with our customers are terminable on short notice with little or no penalty payable on termination.
Reorganization cost reductions from Project Elevate during 2024 through 2026 are estimated to be $16.0 million. In connection with our cost-saving and restructuring initiatives, we incurred total restructuring charges of $2.4 million and $5.7 million in 2024 and 2023, respectively. Customers Our clients include large multinational enterprises, small and medium-sized businesses and government organizations.
In connection with our cost-saving and restructuring initiatives, we incurred total restructuring charges of $1.8 million and $2.4 million in 2025 and 2024, respectively. This program has resulted in ongoing cost optimization and rationalization initiatives across the organization. Customers Our clients include large multinational enterprises, small and medium-sized businesses and government organizations.
The program involves the optimization and rationalization of our business resources as well as the partial reinvestment of savings into the Company's sales and marketing team, technology, and strategy. A business transformation office was established at the beginning of 2024 to manage and measure these initiatives.
The program named "Project Elevate" involved the optimization and rationalization of our business resources as well as the partial reinvestment of savings into the Company's sales and marketing team, technology, and strategy. Reorganization cost reductions from Project Elevate during 2024 through 2025 are estimated to be $16.0 million.
ITEM 1. BUSINESS INTRODUCTION Harte Hanks, Inc., together with its subsidiaries (“Harte Hanks,” “Company,” “we,” “our,” or “us”) is a leading glob al cus tomer experience company. With offices in North America, Asia-Pacific and Europe, Harte Hanks works with some of the world’s most respected brands.
ITEM 1. BUSINESS INTRODUCTION Harte Hanks, Inc., together with its subsidiaries (“Harte Hanks,” “Company,” “we,” “our,” or “us”) is a glob al Business Experience Outsourcing company . We operate at the intersection of data, marketing , sales, customer care, fulfillment, and logistics integrating front office revenue growth and customer experience operations with back office execution to deliver measurable business outcomes.
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During the second half of 2023, we engaged a consulting firm to help review and analyze the structure and operations of the Company. This review included greater than 200 meetings with personnel at all levels of the firm and led to the initiation of our transformation program named "Project Elevate".
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Our clients need help enabling their journey to growth, to transformation, to customer centricity, to product success and to AI powered approaches and solutions to marketing, sales, fulfillment and customer care.
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Diversity, Equity and Inclusion : Harte Hanks recognizes the value of diversity, equity and inclusion within its organization and strives to ensure that its workplace reflects the diverse communities in which it operates in order to promote collaboration, innovation, creativity and belonging.
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Continued public interest in individual privacy rights and data security may result in the adoption of further voluntary industry guidelines that could impact our direct marketing activities and business practices.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe widespread increase in the cost of goods and services due to inflation, supply chain disruptions, and rising interest rates has negatively impacted, and may continue to affect the discretionary spending of our customers. This, in turn, may adversely impact our results of operations. We cannot predict the extent or duration of these negative effects on our business.
Biggest changeThis, in turn, may adversely impact our results of operations. We cannot predict the extent or duration of these negative effects on our business. We are subject to risks associated with operations outside the United States Harte Hanks conducts business outside of the United States.
If our facilities are damaged, or if we are unable to access and use our facilities, our business and results of operations will be adversely affected. Our operations rely on the ability of our employees to work at specially equipped facilities to perform services for our clients.
If our facilities are damaged, or if we are unable to access and use our facilities, our business and results of operations will be adversely affected. Many of our operations rely on the ability of our employees to work at specially equipped facilities to perform services for our clients.
Other relevant compliance considerations in support of these mandates include establishing solutions in support of broad privacy and data protection rights, including those designed to offer notice to individuals, capture prior consent, grant access to personal information, 15 Table of Contents offer choices regarding the decision to share one’s personal information and how such information can be used, as well as related controls to honor choices expressed related to if and how personal information can be processed or licensed for marketing purposes.
Other relevant compliance 14 Table of Contents considerations in support of these mandates include establishing solutions in support of broad privacy and data protection rights, including those designed to offer notice to individuals, capture prior consent, grant access to personal information, offer choices regarding the decision to share one’s personal information and how such information can be used, as well as related controls to honor choices expressed related to if and how personal information can be processed or licensed for marketing purposes.
Outsourcing these processes to facilities not owned by us is not a viable option. Should we lose access to a facility for any reason, including as a result of pandemics, terrorist incident or natural disaster, our service levels are likely to decline or be suspended and clients would go without service or secure replacement services from a competitor.
Outsourcing these processes to facilities not owned by us is not a viable option. Should we lose access to a facility for any reason, such as a result of pandemics, terrorist incident or natural disaster, our service levels are likely to decline or be suspended and clients would go without service or secure replacement services from a competitor.
Additionally, privacy and security concerns may limit consumers’ willingness to voluntarily provide data to our clients or marketing companies. Some of our services depend on voluntarily provided data. For instance, we believe that one of the most attractive offerings of our Marketing Services segment is the provision of data-analytics to our clients.
Additionally, privacy and security concerns may limit consumers’ willingness to voluntarily provide data to our clients or marketing companies. Some of our services depend on voluntarily provided data. For instance, we believe that one of the most attractive offerings of our Revenue Solutions segment is the provision of data-analytics to our clients.
Uncertainty around, and disruption from, new and emerging technologies, including the adoption and utilization of artificial intelligence, may result in risks and challenges that could impact our business. We utilize new and emerging technologies, including AI, in our solutions and services. As with many innovations, AI presents risks and challenges that could significantly disrupt our business model.
Uncertainty around, and disruption from, new and emerging technologies, including the adoption and utilization of AI, may result in risks and challenges that could impact our business. We utilize new and emerging technologies, including AI, in our solutions and services. As with many innovations, AI presents risks and challenges that could significantly disrupt our business model.
Such regulations may result in significant operational costs or constrain our ability to develop, deploy, or maintain these technologies. 16 Table of Contents Significant system disruptions, loss of data center capacity or interruption of telecommunication links could adversely affect our business and results of operations.
Such regulations may result in significant operational costs or constrain our ability to develop, deploy, or maintain these technologies. Significant system disruptions, loss of data center capacity or interruption of telecommunication links could adversely affect our business and results of operations.
Competitive pricing pressures tend to increase in difficult or uncertain economic environments, due to the reduced marketing expenditures of many of our clients and prospects, and in turn negatively impact the competitive business environment for marketing service providers such as our company.
Competitive pricing pressures tend to increase in difficult or uncertain economic environments, due to the reduced marketing expenditures of many of our clients and 11 Table of Contents prospects, and in turn negatively impact the competitive business environment for marketing service providers such as our company.
To the extent that we do not successf ully manage our costs our financial results may be adversely affected. Consumer perceptions regarding the privacy and security of their data may prevent or impair our ability to offer our products and services.
To the extent that we do not successf ully manage our costs our financial results may be adversely affected. 12 Table of Contents Consumer perceptions regarding the privacy and security of their data may prevent or impair our ability to offer our products and services.
We have grouped these risk factors into three categories: • Risks related to our business and how we operate; • Risks related to cybersecurity and technology; • Risks related to our capital structure and common stock. 10 Table of Contents Risks Related to our Business and How we Operate Most of our client engagements are cancellable on short notice.
We have grouped these risk factors into three categories: • Risks related to our business and how we operate; • Risks related to cybersecurity and technology; • Risks related to our capital structure and common stock. Risks Related to our Business and How we Operate Most of our client engagements are cancellable on short notice.
Litigation involving patents and other intellectual property rights has 17 Table of Contents become far more common and expensive in recent years, and we face the risk of additional litigation relating to our use or future use of intellectual property rights of third parties.
Litigation involving patents and other intellectual property rights has become far more common and expensive in recent years, and we face the risk of additional litigation relating to our use or future use of intellectual property rights of third parties.
Customers may also be slow to restore their marketing budgets to prior levels during an economic recovery and 12 Table of Contents may respond similarly to adverse economic conditions in the future. Our revenues are dependent on national, regional, and international economies and business conditions.
Customers may also be slow to restore their marketing budgets to prior levels during an economic recovery and may respond similarly to adverse economic conditions in the future. Our revenues are dependent on national, regional, and international economies and business conditions.
Risks related to our pension benefit plans may adversely impact our results of operations and cash flows. Pension benefits represent significant financial obligations. As of December 31, 2024, we had approximately $24.4 million of unfunded pension liabilities.
Risks related to our pension benefit plans may adversely impact our results of operations and cash flows. Pension benefits represent significant financial obligations. As of December 31, 2025, we had approximately $23.0 million of unfunded pension liabilities.
We are a target of cyber-attacks of varying degrees on a regular basis. Over time, the techniques used to conduct these cyber-attacks, as well as the sources and targets of these attacks, have become increasingly sophisticated and, in some cases, have been but, are often not recognized until such attacks are launched or have been in place for some time.
Over time, the techniques used to conduct these cyber-attacks, as well as the sources and targets of these attacks, have become increasingly sophisticated and, in some cases, have been but, are often not recognized until such attacks are launched or have been in place for some time.
Our common stock price may continue to be volatile due to several factors including the following (some of which are beyond our control): • variations in our operating results from period to period and variations between our actual operating results and the expectations of securities analysts, investors, and the financial community; • the development and sustainability of an active trading market for our common stock; • unanticipated developments with client engagements or client demand, such as variations in the size, budget, or progress of engagements, variability in the market demand for our services, client consolidations, and the unanticipated termination of several major client engagements; • announcements of developments affecting our businesses; • competition and the operating results of our competitors; • the overall strength of the economies of the markets we serve and general market volatility; and • other factors discussed elsewhere in this Item 1A, “Risk Factors.” Because of these and other factors, investors in our common stock may not be able to resell their shares at or above their original purchase price. 19 Table of Contents Our certificate of incorporation and bylaws contain anti-takeover protections that may discourage or prevent strategic transactions, including a takeover of our company, even if such a transaction would be beneficial to our stockholders.
Our common stock price may continue to be volatile due to several factors including the following (some of which are beyond our control): • variations in our operating results from period to period and variations between our actual operating results and the expectations of securities analysts, investors, and the financial community; • the development and sustainability of an active trading market for our common stock; • unanticipated developments with client engagements or client demand, such as variations in the size, budget, or progress of engagements, variability in the market demand for our services, client consolidations, and the unanticipated termination of several major client engagements; • announcements of developments affecting our businesses; • competition and the operating results of our competitors; • the overall strength of the economies of the markets we serve and general market volatility; and • other factors discussed elsewhere in this Item 1A, “Risk Factors.” Because of these and other factors, investors in our common stock may not be able to resell their shares at or above their original purchase price.
We could fail to adequately protect our intellectual property rights and may face claims for intellectual property infringement. Our ability to compete effectively depends in part on the protection of our technology, products, services, and brands through intellectual property right protections, including copyrights, database rights, trade secrets, trademarks, as well as through domain name registrations, and enforcement procedures.
Our ability to compete effectively depends in part on the protection of our technology, products, services, and brands through intellectual property right protections, including copyrights, database rights, trade secrets, trademarks, as well as through domain name registrations, and enforcement procedures.
If our new leaders fail in their new and additional roles and responsibilities (and more generally if we are unable to attract additional leaders with the necessary skills to manage our business) our business and its operating results may suffer.
Many of the members of our current leadership team have limited tenure in their current roles. If our new leaders fail in their new and additional roles and responsibilities (and more generally if we are unable to attract additional leaders with the necessary skills to manage our business) our business and its operating results may suffer.
In addition, the timing of particular jobs or types of jobs at particular times of year (such as mail programs supporting the holiday shopping season or contact center programs supporting a specific event) may cause significant fluctuations in the operating results of our operations in any given quarter.
In addition, the timing of particular jobs or types of jobs at particular times of year (such as mail programs supporting the holiday shopping season or contact center programs supporting a specific event) may cause significant fluctuations in the operating results of our operations in any given quarter. 10 Table of Contents A large portion of our revenue is generated from a limited number of clients.
If a substantial number of data providers or other key data sources were to withdraw or restrict their data, if we were to lose access to data due to government regulation or if the collection of data becomes uneconomical, our ability to provide products and services to our clients could be materially and adversely affected, which could result in decreased revenues, net income and earnings per share.
If a substantial number of data providers or other key data sources were to withdraw or restrict their data, if we were to lose access to data due to government regulation or if the collection of data becomes uneconomical, our ability to provide products and services to our clients could be materially and adversely affected, which could result in decreased revenues, net income and earnings per share. 17 Table of Contents Risks Related to our Capital Structure and Common Stock The covenants in the Credit Facility limit the Company ’ s operating and financial flexibility.
The size of our competitors varies widely across vertical markets and service lines. Some of our competitors have significantly greater financial, technical, marketing, and other resources than we do in one or all of our market segments.
Some of our competitors have significantly greater financial, technical, marketing, and other resources than we do in one or all of our market segments.
The Credit Facility includes covenants currently restricting or potentially restricting the Company’s and its subsidiaries’ ability to create, incur, assume or become liable for indebtedness; make certain investments; pay dividends or repurchase the Company's stock; create, incur or assume liens, consummate mergers or acquisitions, liquidate, dissolve, suspend or cease operations, or modify accounting or tax reporting methods (other than as required by the generally accepted accounting principles in the United States of America). 18 Table of Contents Covenant and ratio requirements may limit the manner in which we can conduct our business, and we may be unable to engage in favorable business activities or finance future operations and capital needs.
The Credit Facility includes covenants currently restricting or potentially restricting the Company’s and its subsidiaries’ ability to create, incur, assume or become liable for indebtedness; make certain investments; pay dividends or repurchase the Company's stock; create, incur or assume liens, consummate mergers or acquisitions, liquidate, dissolve, suspend or cease operations, or modify accounting or tax reporting methods (other than as required by the generally accepted accounting principles in the United States of America).
The loss or prolonged absence of the services of these individuals could have a material adverse effect on our business, financial position, or operating results . 13 Table of Contents Interest rate increases could affect our results of operations, cash flows and financial position.
The loss or prolonged absence of the services of these individuals could have a material adverse effect on our business, financial position, or operating results . Interest rate increases could affect our results of operations, cash flows and financial position. Interest rate fluctuations in Europe and the United States may affect the amount of interest we earn on cash equivalents.
We are subject to risks associated with operations outside the United States Harte Hanks conducts business outside of the United States. During 2024, approximately 9.4% o f our revenues were derived from operations outside the United States, primarily in Europe and Asia. We may expand our international operations in the future as part of our growth strategy.
During 2025, approximately 9.5% o f our revenues were derived from operations outside the United States, primarily in Europe and Asia. We may expand our international operations in the future as part of our growth strategy.
We cannot guarantee that these third parties will effectively protect and handle sensitive personal information or other confidential information, or that we will have adequate recourse against these third parties in the event such third parties fail to adequately protect and handle such sensitive or confidential information.
We cannot guarantee that these third parties will effectively protect and handle sensitive personal information or other confidential information, or that we will have adequate recourse against these third parties in the event such third parties fail to adequately protect and handle such sensitive or confidential information. 16 Table of Contents We could fail to adequately protect our intellectual property rights and may face claims for intellectual property infringement.
Approximately 72.1% o f our revenue for 2024 was generated by our 25 largest clients.
Approximately 68.3% o f our revenue for 2025 was generated by our 25 largest clients.
Interest rate fluctuations in Europe and the United States may affect the amount of interest we earn on cash equivalents. Our Credit Facility bears interest based upon the Secured Overnight Financing Rate. Our results of operations, cash flows, and financial position could be materially or adversely affected by significant increases in interest rates.
Our Credit Facility bears interest based upon the Secured Overnight Financing Rate. Our results of operations, cash flows, and financial position could be materially or adversely affected by significant changes to interest rates.
A large portion of our revenue is generated from a limited number of clients. The loss of a client or significant work from one or more of our clients could adversely affect our business. Our largest client (measured in revenue) generated 9.4% of total revenues in 2024 and represented 11.9% of total accounts receivable as of December 31, 2024 .
The loss of a client or significant work from one or more of our clients has adversely affected our business and could in the future adversely affect our business. Our largest client (measured in revenue) generated 10.5% of total revenues in 2025 and represented 12.3% of total accounts receivable as of December 31, 2025 .
We are subject to and affected by numerous laws, regulations, and industry standards that regulate direct marketing activities, including those that address privacy, data protection, processing personal information, information security, and marketing communications.
Risks Related to Cybersecurity and Technology Privacy, information security and other regulatory requirements may prevent or impair our ability to offer our products and services. We are subject to and affected by numerous laws, regulations, and industry standards that regulate direct marketing activities, including those that address privacy, data protection, processing personal information, information security, and marketing communications.
Fluctuations in our revenue and operating results and other factors may impact the volatility of our stock price. The price at which our common stock has traded in recent years has fluctuated greatly and has declined significantly.
The price at which our common stock has traded in recent years has fluctuated greatly and has declined significantly.
If we do not employ new technologies, including AI, as quickly or efficiently as our competitors, or if our competitors develop more cost-effective or client-preferred technologies, it could have a material adverse effect on our ability to win and retain business from clients, which would adversely affect our business.
If we do not employ new technologies, including AI, as quickly or efficiently as our competitors, or if our competitors develop more cost-effective or client-preferred technologies, it could have a material adverse effect on our ability to win and retain business from clients, which would adversely affect our business. 15 Table of Contents The regulatory landscape surrounding AI and generative AI technologies is also evolving, and the ways in which these technologies will be regulated by governmental authorities, self-regulatory institutions, or other regulatory authorities remain uncertain.
The various risks that are inherent in doing business in the United States are also generally applicable to doing business anywhere else and may be exacerbated by the difficulty of doing business in numerous sovereign jurisdictions due to differences in culture, laws, and regulations. 14 Table of Contents If we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed.
The various risks that are inherent in doing business in the United States are also generally applicable to doing business anywhere else and may be exacerbated by the difficulty of doing business in numerous sovereign jurisdictions due to differences in culture, laws, and regulations.
A transformational office was established at the beginning of 2024 with the mandate to manage and measure these initiatives on a go forward basis. However, w e may not be able to recognize all identified potential savings and even if we are able to recognize the identified savings, such cost savings may be insufficient to achieve our cost management objectives.
However, w e may not be able to recognize all identified potential savings and even if we are able to recognize the identified savings, such cost savings may be insufficient to achieve our cost management objectives.
Risks Related to our Capital Structure and Common Stock The covenants in the Credit Facility may limit the Company ’ s operating and financial flexibility. The Credit Facility and the terms under which we borrow money under any future credit facilities or other agreements could have significant consequences for our business.
The Credit Facility and the terms under which we borrow money under any future credit facilities or other agreements could have significant consequences for our business.
Certain of our solutions may require lengthy and complex implementations that can be subject to changing client preferences and continuing changes in technology, which can increase costs or adversely affect our business. 11 Table of Contents Current and future competitors may have significantly greater financial and other resources than we do, and they may sell competing services at lower prices or at lower profit margins, resulting in pressures on our prices and margins.
Certain of our solutions may require lengthy and complex implementations that can be subject to changing client preferences and continuing changes in technology, which can increase costs or adversely affect our business.
Our business plan and expectations for the future require that we effectively manage our cost structure, including our operating expenses and capital expenditure across our operations.
Our business plan and expectations for the future require that we effectively manage our cost structure, including our operating expenses and capital expenditure across our operations. The program named "Project Elevate" involved the optimization and rationalization of our business resources as well as the partial reinvestment of savings into the Company’s sales and marketing team, technology, and strategy.
If we do not prevent security breaches and other interruptions to our infrastructure, we may be exposed to lawsuits, lose customers, suffer harm to our reputation, and incur additional costs. The services we offer involve the transmission of large amounts of sensitive and proprietary information over public communications networks, as well as the processing and storage of confidential customer information.
We have experienced cybersecurity incidents in the past, and if we do not prevent security breaches and other interruptions to our infrastructure, we may be exposed to lawsuits, lose customers, suffer harm to our reputation, and incur additional costs.
Additionally, as we rely on third-party providers for some of our offerings, we have already experienced margin compression due to higher service charges. While inflation appears to be stabilizing, we are actively taking steps to preserve our margins. However, these efforts may not be sufficient, and inflation could continue to adversely impact our profitability.
Additionally, as we rely on third-party providers for some of our offerings, we have already experienced margin compression due to higher service charges. 13 Table of Contents The widespread increase in the cost of goods and services due to inflation has negatively impacted, and may continue to affect the discretionary spending of our customers.
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For instance, in light of the current inflationary environment and increased cost of capital due to rising interest rates, our customers may reduce the amount of services we provide to them, for among other reasons, to preserve liquidity.
Added
Current and future competitors may have significantly greater financial and other resources than we do, and they may sell competing services at lower prices or at lower profit margins, resulting in pressures on our prices and margins. The size of our competitors varies widely across vertical markets and service lines.
Removed
In 2023, t he program named Project Elevate was created and changed processes in each of our business segments to transform the operational cost structure of the company and change the culture to be more agile, optimize the structure, and cost justify all activities of the organization.
Added
The services we offer involve the transmission of large amounts of sensitive and proprietary information over public communications networks, as well as the processing and storage of confidential customer information.
Removed
Over the past few years, we have replaced many of our leaders (including our Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer), some a number of times.
Added
We are a target of cybersecurity incidents of varying degrees on a regular basis.
Removed
Section 404 of the Sarbanes-Oxley Act of 2002 requires that we establish and maintain internal control over financial reporting and we are also required to establish disclosure controls and procedures under applicable SEC rules.
Added
Covenant and ratio requirements may limit the manner in which we can conduct our business, and we may be unable to engage in favorable business activities or finance future operations and capital needs.
Removed
An effective internal control environment is necessary to enable us to produce reliable financial reports and is an important component of our efforts to prevent and detect financial reporting errors and fraud. Management is required to provide an annual assessment on the effectiveness of our internal control over financial reporting.
Added
We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors. We are a “smaller reporting company” as defined in the Exchange Act.
Removed
Our testing may reveal significant deficiencies in our internal control over financial reporting that are deemed to be material weaknesses and render our internal control over financial reporting ineffective. In the past these assessments and similar reviews have led to the discovery of material weaknesses, all of which have been remediated.
Added
We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million.
Removed
However, no assurance can be given that we won't discover material weaknesses in the future. We have incurred and we expect to continue to incur substantial accounting and auditing expenses and spend significant management time in complying with the requirements of Section 404.
Added
We have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies and may continue to rely on such exemptions.
Removed
While an effective internal control environment is necessary to enable us to produce reliable financial reports and is an important component of our efforts to prevent and detect financial reporting errors and fraud, disclosure controls and internal control over financial reporting are generally not capable of preventing or detecting all financial reporting errors and all fraud.
Added
Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Reports on Form 10-K. 18 Table of Contents Fluctuations in our revenue and operating results and other factors may impact the volatility of our stock price.
Removed
A control system, no matter how well-designed and operated, is designed to reduce rather than eliminate the risk of material misstatements in our consolidated financial statements. There are inherent limitations on the effectiveness of internal controls, including collusion, management override and failure in human judgment.
Added
Our certificate of incorporation and bylaws contain anti-takeover protections that may discourage or prevent strategic transactions, including a takeover of our company, even if such a transaction would be beneficial to our stockholders.
Removed
A control system can provide only reasonable, not absolute, assurance of achieving the desired control objectives and the design of a control system must reflect the fact that resource constraints exist.
Removed
If we are not able to comply with the requirements of Section 404, 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 (i) we could fail to meet our financial reporting obligations; (ii) our reputation may be adversely affected and our business and operating results could be harmed; (iii) the market price of our stock could decline; and (iv) we could be subject to litigation and/or investigations or sanctions by the SEC, or other regulatory authorities.
Removed
There were no changes in our internal controls over financial reporting during our most recent fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Risks Related to Cybersecurity and Technology Privacy, information security and other regulatory requirements may prevent or impair our ability to offer our products and services.
Removed
The regulatory landscape surrounding AI and generative AI technologies is also evolving, and the ways in which these technologies will be regulated by governmental authorities, self-regulatory institutions, or other regulatory authorities remain uncertain.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese cybersecurity drills are performed both in-house and by third-party service providers. We use automated tools that monitor, detect, and prevent cybersecurity risks and have a security operations center that operates 24 hours a day to alert us to any potential cybersecurity threats.
Biggest changeWe use automated tools that monitor, detect, and prevent cybersecurity risks and have a security operations center that operates 24 hours a day to alert us to any potential cybersecurity threats and have enabled automated threat response as a countermeasure to increasingly short windows between new vulnerabilities and attack.
Our Board of Directors, our internal Risk Steering Committee, in conjunction with our Chief Security Officer ("CSO"), have direct oversight of our management of cybersecurity risks. Our CSO and the Risk Steering Committee ("RSC") oversees our enterprise risk management process.
Our Board of Directors, our internal Risk Steering Committee, in conjunction with our Chief Security Officer ("CSO"), have direct oversight of our management of cybersecurity risks. Our CSO and the Risk Steering Committee ("RSC") oversee our enterprise risk management process.
The Board of Directors receives the full results of the annual enterprise risk assessment, including an evaluation of cybersecurity risks presented, a detailed description of the actions we have taken to mitigate these risks, and an analysis of cybersecurity threats and incidents across the industry.
The Board of Directors receives the full results of the annual enterprise risk assessment, including an evaluation of cybersecurity risks presented, a detailed description of the actions we have taken to mitigate these risks, and an analysis of cybersecurity threats and incidents 19 Table of Contents across the industry.
Our CSO has 3 decades of information technology and cybersecurity experience with the last 7 years leading the cybersecurity activities at Harte Hanks, as well as participating in numerous cyber readiness exercises with U.S. Government agencies, and has specialized training in cybersecurity risk management, cloud security and holds a CISSP certification offered by ISC2.
Our CSO has 3 decades of information technology and cybersecurity experience with the last 8 years leading the cybersecurity activities at Harte Hanks, as well as participating in numerous cyber readiness exercises with U.S. Government agencies, and has specialized training in cybersecurity risk management, cloud security and holds a CISSP certification offered by ISC2 and CRISC certification from ISACA.
As noted above, our RSC also has effected comprehensive incident response plans that outline the appropriate communication flow and response for certain categories of potential cybersecurity incidents. The RSC escalates events, including the Interim Chief Operating Officer and Board of Directors, as relevant, according to pre-defined criteria.
As noted above, our RSC also has effected comprehensive incident response plans that outline the appropriate communication flow and response for certain categories of potential cybersecurity incidents. The RSC escalates events, including the President and Board of Directors, as relevant, according to pre-defined criteria.
Our CSO, reporting to our Interim Chief Operations Officer, and in conjunction with our IT Department, has principal responsibility for assessing and managing cybersecurity risks and threats, implementing the systems necessary to address such risks and threats and preparing updates for the Board of Directors.
Our CSO, reporting to our President, and in conjunction with our IT Department, has principal responsibility for assessing and managing cybersecurity risks and threats, implementing the systems necessary to address such risks and threats and preparing updates for the Board of Directors.
We expect that the sophistication of cyber-threats will continue to evolve as threat actors increase their use of AI and machine-learning technologies. We have implemented robust processes to assess, identify, and manage cybersecurity risks, including potentially material risks, related to our internal information systems and our products.
We expect that the sophistication of cyber-threats will continue to evolve as threat actors increasingly use AI and automation to conduct cyberattacks at scale. We have implemented robust processes to assess, identify, and manage cybersecurity risks, including potentially material risks, related to our internal information systems and our products.
The RSC, along with our CSO, develops and implements cybersecurity risk mitigation strategies and activities throughout the year, including the management of comprehensive incident response plans, oversees the cybersecurity risks posed by third-party vendors, and receives regular updates on cybersecurity-related matters. 20 Table of Contents We have adopted the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework to continually evaluate and enhance our cybersecurity procedures.
The RSC, along with our CSO, develops and implements cybersecurity risk mitigation strategies and activities throughout the year, including the management of comprehensive incident response plans, oversees the cybersecurity risks posed by third-party vendors, and receives regular updates on cybersecurity-related matters.
This committee is comprised of our Chief Security Officer, our Interim Chief Operations Officer, our General Counsel / Privacy Officer, our Head of Human Resources, each Director of Operations of each of our business units, and our Chief Financial Officer, as well as other key leaders.
This committee is comprised of our Chief Security Officer, our President, our Head of Human Resources, each Director of Operations of each of our business units, and our Chief Financial Officer, as well as other key leaders. The RSC (in conjunction with the CSO), oversees activities related to monitoring, prevention, detection, mitigation and remediation of cybersecurity risks.
Removed
The RSC (in conjunction with the CSO), oversees activities related to monitoring, prevention, detection, mitigation and remediation of cybersecurity risks.
Added
We have adopted the National Institute of Standards and Technology (“NIST”) Cybersecurity and AI Risk Management Frameworks to continually evaluate and enhance our cybersecurity procedures.
Added
These cybersecurity drills are performed both in-house and by third-party service providers.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePetersburg, Florida Iasi, Romania Kansas City, Kansas Plano, Texas Manila, Philippines Lenexa, Kansas Uxbridge, United Kingdom Hasselt, Belgium As of December 31, 2024, our operational facilities were for the following use and square footage by segment: Description of Use United States International Total Office space 14,458 37,458 51,916 Fulfillment facilities 736,845 18,901 755,746 Total 751,303 56,359 807,662 Segment Leased Sq Ft Customer Care 44,220 Fulfillment & Logistics 755,746 Marketing Services 1,445 801,411 Corporate office 6,251 Total 807,662 We believe our facilities to be adequate for our business and operations as currently administered.
Biggest changePetersburg, Florida Uxbridge, United Kingdom Valencia, Spain 20 Table of Contents As of December 31, 2025, our operational facilities were for the following use and square footage by segment: Description of Use United States International Total Office space 28,850 38,963 67,813 Fulfillment facilities 623,948 4,402 628,350 Total 652,798 43,365 696,163 Segment Leased Sq Ft Customer Care 49,615 Fulfillment & Logistics 628,350 Revenue Solutions 11,947 689,912 Corporate office 6,251 Total 696,163 We believe our facilities to be suitable and adequate for our business and operations as currently administered.
ITEM 2. PROPERTIES Our headquarters is located in Chelmsford, MA. We lease office and fulfillment facilities around the world, primarily in the United States, Europe and Asia. As of December 31, 2024, we operated the following types of facilities in the following locations: Domestic Offices International Offices Operational Warehouses Chelmsford, Massachusetts Hasselt, Belgium East Bridgewater, Massachusetts St.
ITEM 2. PROPERTIES Our headquarters is located in Chelmsford, MA. We lease office and fulfillment facilities around the world, primarily in the United States, Europe and Asia.
Added
As of December 31, 2025, we operated the following types of facilities in the following locations: Domestic Offices International Offices Operational Warehouses Chelmsford, Massachusetts Hasselt, Belgium East Bridgewater, Massachusetts Greenville, South Carolina Iasi, Romania Hasselt, Belgium Plano, Texas Manila, Philippines Kansas City, Kansas St.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS In the ordinary course of its business, the Company is involved in various legal proceedings involving a variety of matters. The Company does not believe there are any pending legal proceedings that will have a material impact on the Company’s financial position or results of operations. ITEM 4.
Biggest changeITEM 3. LEGAL PROCEEDINGS In the ordinary course of its business, the Company is involved in various legal proceedings involving a variety of matters. The Company does not believe there are any pending legal proceedings that will have a material impact on the Company’s financial position or results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Removed
MINE SAFETY DISCLOSURES Not applicable. 21 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnder this program, our Board has authorized us to spend up to $6.5 million to repurchase shares of our outstanding common stock. After giving effect to these repurchases, we have remaining authority of $4.1 million to repurchase shares remaining under the program. ITEM 6. SELECTED FINANCIAL DATA Not applicable.
Biggest changeNo repurchases 21 Table of Contents were made during the quarter ended December 31, 2025. After giving effect to the repurchases made under the plan through December 31, 2025, the Company has remaining authority of $4.1 million to repurchase shares under the program, which has no expiration date. ITEM 6. RESERVED Not applicable.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Our common stock is listed for trading on the NASDAQ under the symbol "HHS". As of January 31, 2025, there were approximately 668 c ommon stockholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Our common stock is listed for trading on the NASDAQ under the symbol "HHS". As of January 31, 2026, there were approximatel y 593 c ommon stockholders of record.
Issuer Purchases of Equity Securities The following table contains information about our purchases of equity securities during the fourth quarter of 2024: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of a publicly announced plan Maximum dollar amount that may yet be purchased under the program (1) (in thousands) October 1 - 31, 2024 — $ — — $ 4,131 November 1 - 30, 2024 — $ — — $ 4,131 December 1 - 31, 2024 — $ — — $ 4,131 Total — $ — — (1) During the fourth quarter of 2024, we did not purchase any shares of our common stock through our stock repurchase program that was publicly announced on May 2, 2023.
Issuer Purchases of Equity Securities The following table contains information about our purchases of equity securities during the fourth quarter of 2025: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of a publicly announced plan Maximum dollar amount that may yet be purchased under the program (1) (in thousands) October 1 - 31, 2025 — $ — — $ 4,131 November 1 - 30, 2025 — $ — — $ 4,131 December 1 - 31, 2025 — $ — — $ 4,131 Total — $ — — (1) On May 2, 2023, the Board of Directors of the Company approved a share repurchase program to maximize shareholder value with authorization to repurchase $6.5 million of the Company’s Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Operating results from operations were as follows: Year Ended December 31, In thousands, except per share amounts 2024 % Change 2023 Operating revenue $ 185,242 -3.3% $ 191,492 Operating expenses 183,149 -2.6% 188,133 Operating income $ 2,093 -37.7% $ 3,359 Operating margin 1.1% -35.6% 1.8% Other expenses, net 40,027 658.4% 5,278 Income tax benefit (7,637) 2088.3% (349) Net loss $ (30,297) 1829.7% $ (1,570) Diluted EPS from operations $ (4.15) 1834.2% $ (0.21) 23 Table of Contents Year Ended December 31, 2024 vs.
Biggest changeWhile inflation has not had a material impact on our business, it is possible a material increase in inflation could have an impact on our clients, and in turn, on our business. 22 Table of Contents Results of Operations Operating results from operations were as follows: Year Ended December 31, In thousands, except per share amounts 2025 % Change 2024 Operating revenue $ 159,570 -13.9% $ 185,242 Operating expenses 159,184 -13.1% 183,149 Operating income $ 386 -81.6% $ 2,093 Operating margin 0.2% -78.6% 1.1% Other expenses, net 1,394 -96.5% 40,027 Income tax benefit (197) -97.4% (7,637) Net loss $ (811) -97.3% $ (30,297) Diluted EPS from operations $ (0.11) -97.4% $ (4.15) Year Ended December 31, 2025 vs.
The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgement. Resolution of legal matters in a manner inconsistent with management's expectations could have a material impact on the Company's financial condition and operating results.
The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management's expectations could have a material impact on the Company's financial condition and operating results.
The Company will repatriate foreign cash holdings when and if it is financially efficient to do so. Long Term Debt On December 21, 2021, the Company entered into a three-year, $25.0 million asset-based revolving credit facility (the “Credit Facility”) with Texas Capital Bank ("TCB").
The Company will repatriate foreign cash holdings when and if it is financially efficient to do so. 25 Table of Contents Long Term Debt On December 21, 2021, the Company entered into a three-year, $25.0 million asset-based revolving credit facility (the “Credit Facility”) with Texas Capital Bank ("TCB").
Management believes that the following are critical accounting estimates: 27 Table of Contents Revenue Recognition We recognize revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to be entitled to receive in exchange for those products or services based on the relevant contract.
Management believes that the following are critical accounting estimates: Revenue Recognition We recognize revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to be entitled to receive in exchange for those products or services based on the relevant contract.
Depreciation expense increased $0.1 million , or 3.5%, when compared to the year ended December 31, 2023. The largest components of our operating expenses are labor, transportation expenses and outsourced costs. Each of these costs is, at least in part, variable and tends to fluctuate in line with revenues and the demand for our services.
Depreciation expense increased $0.1 million , or 2.0%, when compared to the year ended December 31, 2024. The largest components of our operating expenses are labor, transportation expenses and outsourced costs. Each of these costs is, at least in part, variable and tends to fluctuate in line with revenues and the demand for our services.
Investing Activities Net cash used in investing activities was $3.7 million for the year ended December 31, 2024, compared to cash used in investing activities of $2.3 million for the year ended December 31, 2023.
Investing Activities Net cash used in investing activities was $2.8 million for the year ended December 31, 2025, compared to cash used in investing activities of $3.7 million for the year ended December 31, 2024.
The Credit Facility is secured by substantially all the assets of the Company and the Guarantors pursuant to a Pledge and Security Agreement, dated as of December 21, 2021, between the Company, TCB and the Guarantors (the “Security Agreement”).
The Credit Facility is secured by substantially all the assets of the Company and the Guarantors pursuant to a Pledge and Security Agreement, dated as of December 21, 2021, among the Company, TCB and the Guarantors party thereto (the “Security Agreement”).
The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative 28 Table of Contents goodwill impairment test. We booked an impairment charge of $1.6 million for goodwill in the year ended December 31, 2024, leaving a balance of $0.3 million.
The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative goodwill impairment test. We booked an impairment charge of $1.6 million for goodwill in the year ended December 31, 2024 , leaving a balance of $0.3 million. There was no goodwill impairment in the year ended December 31, 2025.
If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company performs a quantitative goodwill impairment test.
If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary.
The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.
The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 28 Table of Contents 2027.
The Credit Facility contains certain covenants restricting the Company's and its subsidiaries' ability to create, incur, assume or become liable for indebtedness; make certain investments; pay dividends or repurchase the Company's stock; create, incur or assume liens, consummate mergers or acquisitions, liquidate, dissolve, suspend or cease operations, or modify accounting or tax reporting methods (other than as required by U.S.
The Credit Facility contains certain covenants restricting the Company's and its subsidiaries' ability to create, incur, assume or become liable for indebtedness; make certain investments; pay dividends or repurchase the Company's stock; create, incur or assume liens, consummate mergers or acquisitions, liquidate, dissolve, suspend or cease operations, or modify accounting or tax reporting methods (other than as required by accounting principles generally accepted in the United States of America (“GAAP”)).
GAAP). As of December 31, 2024 and 2023, the Company had no borrowings outstanding under the Credit Facility. At each of December 31, 2024, and 2023, the Company had letters of credit in the amount of $1.0 million and $0.8 million outstanding, respectively. No amounts were drawn against these letters of credit as of December 31, 2024, and 2023.
As of December 31, 2025 and 2024, we had no borrowings outstanding under the Credit Facility. At each of December 31, 2025 and 2024, we had letters of credit outstanding in the amount of $0.7 million and $1.0 million, respectively. No amounts were drawn against these letters of credit at December 31, 2025 and 2024.
On December 31, 2023, the Company extended the maturity date for the Credit Facility by a period of six (6) months, to June 30, 2025. The extension extended the Credit Facility under substantially similar terms and conditions as originally executed.
On December 29, 2023, the Company extended the maturity date for the Credit Facility by a period of six months to June 30, 2025. The extension was executed with substantially similar terms and conditions as the original Credit Facility.
Critical Accounting Estimates Our Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures.
Critical Accounting Estimates Our Consolidated Financial Statements are prepared in accordance with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures.
The Credit Facility provides for loans up to the lesser of (a) $25.0 million, and (b) the amount available under a “borrowing base” calculated primarily by reference to the Company's cash and cash equivalents and accounts receivables.
The Credit Facility provides for loans up to the lesser of (a) $25.0 million or (b) the amount available under a “borrowing base” calculated primarily by reference to the Company's cash and cash equivalents and accounts receivables. The Credit Facility allows the Company to use up to $3.0 million of its borrowing capacity to issue letters of credit.
Financing Activities Net cash used in financing activities was $0.4 million for the year ended December 31, 2024, compared to $3.2 million net cash used in financing activities for the year ended December 31, 2023.
Financing Activities Net cash provided by financing activities was $0.5 million for the year ended December 31, 2025, compared to $0.4 million net cash used in financing activities for the year ended December 31, 2024.
The increase in tax benefit of $7.3 million was primarily related to the $37.5 million pension termination charge booked in the year ended December 31, 2024. 24 Table of Contents Segment Results The following is a discussion and analysis of the results of our reporting segments for the years ended December 31, 2024 and 2023.
The decrease in tax benefit of $7.4 million was primarily related to the one time pension termination charge booked in the year ended December 31, 2024. Segment Results The following is a discussion and analysis of the results of our reporting segments for the years ended December 31, 2025 and 2024.
Operating Expenses Operating expenses of $183.1 million for the year ended December 31, 2024 decreased $5.0 million, or 2.6%, when compared to $188.1 million for the year ended December 31, 2023.
Operating Expenses Operating expenses of $159.2 million for the year ended December 31, 2025 decreased $24.0 million, or 13.1%, when compared to $183.1 million for the year ended December 31, 2024.
Share Repurchase On May 2, 2023, the Board of Directors of Harte Hanks approved a share repurchase program to maximize shareholder value with authorization to repurchase $6.5 million of the Company’s Common Stock.
Share Repurchase On May 2, 2023, the Board of Directors of Harte Hanks approved a share repurchase program to maximize shareholder value with authorization to repurchase $6.5 million of the Company’s Common Stock. During 2023, 391,785 shares of common stock were repurchased for a total combined purchase price of $2.4 million.
Outlook We consider such factors as total cash and cash equivalents and restricted cash, current assets, current liabilities, total debt, revenues, operating income, cash flows from operations, investing activities, and financing activities when assessing our liquidity.
In 2025 and 2024, no shares of common stock were repurchased. 26 Table of Contents Outlook We consider such factors as total cash and cash equivalents and restricted cash, current assets, current liabilities, total debt, revenues, operating income, cash flows from operations, investing activities, and financing activities when assessing our liquidity.
Transportation rates have decreased over the last year due to changes in demand and supply within the transportation industry. Future changes in transportation expenses will continue to impact our total production costs and total operating expenses and in turn our margins. Postage costs of mailings are borne by our clients and are not directly reflected in our revenues or expenses.
Transportation rates have decreased over the last year due to changes in demand and supply within the transportation industry. Future changes in transportation expenses will continue to impact our total production costs and total operating 23 Table of Contents expenses and in turn our margins.
There are three principal financial measures reported to our Interim COO (the chief operating decision maker) for use in assessing segment performance and allocating resources . Those measures are revenues, operating income and operating income plus depreciation and amortization (“EBITDA”).
There are three principal financial measures reported to our President (the chief operating decision maker) for use in assessing segment performance and allocating resources . Those measures are revenues, operating income and operating income plus depreciation and amortization (“EBITDA”). EBITDA is considered a non-GAAP financial measure. A reconciliation of EBITDA to operating income is included below.
As of December 31, 2024, we had the ability to borrow approximately $24.0 million under our Credit Facility. Our principal sources of liquidity are cash on hand, cash provided by operating activities, and borrowings available under our Credit Facility. Our cash is primarily used for general corporate purposes, working capital requirements, and capital expenditure.
Our principal sources of liquidity are cash on hand, cash provided by operating activities, and borrowings available under our Credit Facility. Our cash is primarily used for general corporate purposes, working capital requirements, and capital expenditure.
During the goodwill impairment review, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company.
During the goodwill impairment review, the Company may assess qualitative 27 Table of Contents factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill.
Year Ended December 31, 2023 Consolidated Results Revenues Revenues of $185.2 million for the year ended December 31, 2024 a decrease of $6.3 million, or 3.3%, when compared to $191.5 million for the year ended December 31, 2023.
Year Ended December 31, 2024 Consolidated Results Revenues Revenues of $159.6 million for the year ended December 31, 2025 decreased $25.6 million, or 13.9%, when compared to $185.2 million for the year ended December 31, 2024.
The outstanding amounts advanced under the Credit Facility are due and payable in full on June 30, 2025. The Company may repay and borrow all or any portion of the loans advanced under the Credit Facility at any time, without premium or penalty.
The Company may repay and reborrow all or any portion of the loans advanced under the Credit Facility at any time, without premium or penalty.
This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU. No other new accounting pronouncements recently adopted or issued had or are expected to have a material impact on the consolidated financial statements.
This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU.
We also encounter fluctuations based on the geographic regions customers select for staff support. We are leveraging our Amazon Connect cloud-based platform to test and pilot new AI tools, and are exploring how we can augment growth by providing more technical support as clients migrate to more capable contact center platforms.
Existing customers who shift current programs to our lower cost off-shore markets can reduce revenues as the per agent cost is lower. We are leveraging our Amazon Connect cloud-based platform to test and pilot new AI tools, and are exploring how we can augment growth by providing more technical support as clients migrate to more capable contact center platforms.
Fulfillment & Logistics: Year Ended December 31, In thousands 2024 % Change 2023 Operating revenues $ 81,992 -3.5% $ 84,962 EBITDA 5,761 -34.9% 8,856 Operating Income 4,505 -41.6% 7,714 Operating Income % of Revenue 5.5 % -39.5% 9.1 % Fulfillment & Logistics segment revenue declined $3.0 million, or 3.5%, primarily due to the lower revenue from existing customers not being offset by growth in new programs and customers.
Operating income for the year ended December 31, 2025 decreased by $3.9 million to $6.0 million, or 39.7%, primarily due to higher technology costs, tighter margins in a competitive marketplace and reduced revenue. 24 Table of Contents Fulfillment & Logistics: Year Ended December 31, In thousands 2025 % Change 2024 Operating revenues $ 74,375 -9.3% $ 81,992 EBITDA 6,551 13.7% 5,761 Depreciation and amortization expense 2,214 76.3% 1,256 Operating income 4,337 -3.7% 4,505 Operating income % of revenue 5.8% 6.1% 5.5% Fulfillment & Logistics segment revenue declined $7.6 million, or 9.3%, primarily due to lost customers and the lower revenue from existing customers not being offset by growth in new programs and customers.
Significant judgment is required in determining our provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws. We record a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method.
Income Taxes We are subject to income taxes in the United States and numerous other jurisdictions. Significant judgment is required in determining our provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.
The restructuring expenses included $0.8 million of consulting expenses, $1.1 million of severance charges, and $0.5 million of facility related and other expenses. Impairment charges of $1.6 million and $1.5 million for goodwill and intangible assets decreased operating income in 2024. These noncash charges related to the previous acquisition of the InsideOut in December of 2022.
The restructuring expenses included $0.2 million of consulting expenses, $1.3 million of severance charges, and $0.3 million of facility related and other expenses. 2024 operating expenses also included impairment charges of $1.6 million and $1.5 million for goodwill and intangible assets. There were no impairment charges incurred for goodwill and intangible assets in 2025.
Operating Activities Net cash used in operating activities was $3.0 million for the year ended December 31, 2024, when compared to cash provided by operating activities of $10.5 million for the year ended December 31, 2023.
Operating Activities Net cash used in operating activities was $1.7 million for the year ended December 31, 2025, when compared to cash used in operating activities of $3.0 million for the year ended December 31, 2024. The $1.3 million year-over-year decrease in cash used in operating activities was primarily due to changes in assets and liabilities.
Marketing Services: Year Ended December 31, In thousands 2024 % Change 2023 Operating revenues $ 50,332 -4.9% $ 52,910 EBITDA 5,182 -21.9% 6,637 Operating Income 3,723 -32.8% 5,544 Operating Income % of Revenue 7.4 % -29.4% 10.5 % Marketing Services segment revenue declined $2.6 million, or 4.9%, due to customer turnover and additional client spending reductions.
Revenue Solutions: Year Ended December 31, In thousands 2025 % Change 2024 Operating revenues $ 35,128 -30.2% $ 50,332 EBITDA 5,584 7.8% 5,182 Depreciation and amortization expense 797 -45.4% 1,459 Operating income 4,787 28.6% 3,723 Operating income % of revenue 13.6% 84.2% 7.4% Revenue Solutions segment revenue declined $15.2 million, or 30.2%, due to customer turnover and additional client spending reductions.
This segment is our most economically sensitive segment with regard to changes in our clients' marketing strategies. Operating income for the year ended December 31, 2024 decreased $1.8 million reducing operating income by 32.8% when compared to the prior year.
This segment is our most economically sensitive segment with regard to changes in our clients' marketing strategies. Ope rating income for the year ended December 31, 2025 increased $1.1 million improving operating income by 28.6% mainly due to the 2024 impairment of goodwill and intangible assets.
Overview The following MD&A section is intended to help the reader understand the results of operations and the financial condition of Harte Hanks.
Overview The following MD&A section is intended to help the reader understand the results of operations and the financial condition of Harte Hanks. This section is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes included herein.
Management is closely monitoring inflation and wage pressure in the market, and the potential impact on our business. While inflation has not had a material impact on our business, it is possible a material increase in inflation could have an impact on our clients, and in turn, on our business.
Management is closely monitoring inflation and wage pressure in the market, and the potential impact on our business.
Income Tax Benefit Our 2024 income tax benefit was $7.6 million for the year ended December 31, 2024, when compared to tax benefit of $0.3 million for the year ended December 31, 2023.
This $38.6 million decrease in other expenses was mainly due to $37.5 million of pension termination charges booked in the year ended December 31, 2024. Income Tax Benefit Our 2025 income tax benefit was $0.2 million for the year ended December 31, 2025, when compared to tax benefit of $7.6 million for the year ended December 31, 2024.
Revenue in Fulfillment & Logistics Services declined $3.0 million, or 3.5%, to $82.0 million; our Marketing Services segment revenue declined $2.6 million, or 4.9%, to $50.3 million; revenue in our Customer Care segment declined $0.7 million, or 1.3%, to $52.9 million.
Revenue in the Revenue Solutions segment declined $15.2 million, or 30.2%, to $35.1 million; our Fulfillment & Logistics Services declined $7.6 million, or 9.3%, to $74.4 million; revenue in our Customer Care segment declined $2.9 million, or 5.4%, to $50.1 million. Please see segment results below for additional information on the changes in revenue year over year.
Advertising, Selling, and General and Administrative expenses increased $2.1 million or 10.2%, when compared to the year ended December 31, 2023 primarily due to the expansion of the sales and marketing activities. Restructuring expenses decreased $3.3 million to $2.4 million for the year ended December 31, 2024.
Advertising, Selling, and General and Administrative expenses decreased $0.6 million or 2.5%, when compared to the year ended December 31, 2024 primarily due to the lower sales expenses from lower revenue as well as lower professional expenses, which was partially offset by increased technology expenses. Restructuring expenses decreased $0.6 million to $1.8 million for the year ended December 31, 2025.
This benefit was partially offset by the expansion of the sales and marketing team and higher labor production activities in the Fulfillment and Logistics segment. Pr oduction and Distribution expenses decreased $2.9 million, or 4.9%, when compared to the year ended December 31, 2023, primarily driven by lower transportation costs in our logistics business.
Pr oduction and Distribution expenses decreased $6.7 million, or 11.9%, when compared to the year ended December 31, 2024, primarily driven by lower transportation costs in proportion with our lower revenues in our logistics business.
These letters of credit exist to support insurance programs relating to workers’ compensation, and general liability as well as lease obligations. We had no other off-balance sheet financing arrangements as of December 31, 2024, and 2023. As of December 31, 2024, we had the ability to borrow approximately $24.0 million under the Credit Facility.
These letters of credit exist to support insurance programs relating to workers’ compensation, medical insurance, and reducing the cash security deposit on leased property. We had no other off-balance sheet financing activities at December 31, 2025 and 2024.
Customer Care: Year Ended December 31, In thousands 2024 % Change 2023 Operating revenues $ 52,918 -1.3% $ 53,620 EBITDA 10,128 6.7% 9,488 Operating Income 9,921 10.4% 8,988 Operating Income % of Revenue 18.7 % 11.8% 16.8 % Customer Care segment revenue declined $0.7 million, or 1.3% when compare to the prior year, which was impacted by one-time project-based engagements, temporary surges or declines in call volumes among retained customers due to specific programs and events.
Customer Care: Year Ended December 31, In thousands 2025 % Change 2024 Operating revenues $ 50,067 -5.4% $ 52,918 EBITDA 6,245 -38.3% 10,128 Depreciation and amortization expense 266 28.5% 207 Operating income 5,979 -39.7% 9,921 Operating income % of revenue 11.9% -36.3% 18.7 % Customer Care segment revenue declined $2.9 million, or 5.4% when compared to the prior year, which was impacted by fluctuations based on the geographic regions customers select for staff support.
Goodwill is not amortized. Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment.
The provision for income taxes includes the effects of any reserves that we believe are appropriate, as well as the related net interest and penalties. Goodwill and other Intangibles Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment.
For the year ended December 31, 2024, operating income was $4.5 million, a decrease of $3.2 million or 41.6%.
For the year ended December 31, 2025, operating income was $4.3 million, a decrease of $0.2 million or 3.7%. The decrease in operating income was primarily the result of lower revenue. Operating income as a percent of revenue improved with the continued focus on operational optimization.
The $2.8 million decrease in cash used in financing activities was primarily related to the $2.4 million used to repurchase our common stock in the year ended December 31, 2023 . Foreign Holdings of Cash Consolidated foreign holdings of cash as of December 31, 2024, and 2023 were $1.5 million and $5.4 million, respectively.
Foreign Holdings of Cash Consolidated foreign holdings of cash as of December 31, 2025, and 2024 were $2.2 million and $1.5 million, respectively.
This section is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes included herein. 22 Table of Contents Harte Hanks, Inc. is a leading global customer experience company operating in three business segments: Marketing Services, Customer Care, and Fulfillment & Logistics Services.
Harte Hanks, Inc. is a leading global customer experience company operating in three business segments: Revenue Solutions formerly referred to as Marking Services, Customer Care, and Fulfillment & Logistics Services.
The Credit Facility allows the Company to use up to $3.0 million of its borrowing capacity to issue letters of credit. 26 Table of Contents The loans under the Credit Facility accrue interest at a varying rate equal to the Secured Overnight Financing Rate (SOFR) plus a margin of 2.25% per annum.
The loans under the Credit Facility accrue interest at a varying rate equal to the Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.25% per annum. The outstanding amounts advanced under the Credit Facility are due and payable in full on June 30, 2028.
The amendments in ASU 2023-09 are effective for the fiscal year ending after December 15, 2025. The Company is currently evaluating the impact that this update will have on its disclosures in the consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40).
The Company adopted ASU 2023-09 for the year ended December 31, 2025 on a prospective basis. See Note I. Income Taxes for additional information. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40).
The remaining balance of intangible assets as of December 31, 2024 was $0.6 million. Legal and Other Contingencies The Company is subject to various legal proceeding and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain.
Management engages a third‑party actuary to calculate the projected benefit obligation and pension expense based on standard actuarial assumptions, including the discount rate, mortality assumptions, and expected return on plan assets. Legal and Other Contingencies The Company is subject to various legal proceeding and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain.
Other Expenses, net The total other expenses, net were $40.0 million for the year ended December 31, 2024, when compared to other expense, net of $5.3 million for the year ended December 31, 2023. This $34.7 million increase in other expenses included $37.5 million in pension termination charges offset by a year over year decrease in other expenses.
Postage costs of mailings are borne by our clients and are not directly reflected in our revenues or expenses. Other Expenses, net The total other expenses, net were $1.4 million for the year ended December 31, 2025, when compared to other expense, net of $40.0 million for the year ended December 31, 2024.
The decrease in operating income was primarily the result of lower revenue. 25 Table of Contents Liquidity and Capital Resources Sources and Uses of Cash Our cash and cash equivalent balances were $9.9 million and $18.4 million as of December 31, 2024, and 2023, respectively.
Liquidity and Capital Resources Sources and Uses of Cash Our cash and cash equivalent balances were $5.6 million and $9.9 million as of December 31, 2025, and 2024, respectively. As of December 31, 2025 and 2024, we had the ability to borrow approximately $24.3 million and $24.0 million under our Credit Facility, respectively.
Dividends We did not pay any dividends in either 2024 or 2023. Any future dividend declaration can be made only upon, and subject to, approval of our Board of Directors, based on its business judgment.
Any future dividend declaration can be made only upon, and subject to, approval of our Board of Directors, and will depend on our results of operations, financial condition, cash requirements, future business prospects, contractual and indenture restrictions and other factors deemed relevant by our Board of Directors.
Certain client programs provide for adjustments to billings based upon whether we achieve certain performance criteria. In these circumstances, revenue is recognized when the foregoing conditions are met. We record revenue net of any taxes collected from customers and subsequently remitted to governmental authorities.
Revenue recognition requires management to apply judgment in identifying performance obligations and determining the timing and amount of revenue recognized under customer contracts. Certain client programs provide for adjustments to billings based upon whether we achieve certain performance criteria which requires us to estimate variable consideration.
Labor costs decreased by $4.2 million, or 4.3%, when compared to the year ended December 31, 2023, primarily due to the reduction in workforce in our Customer Care and Marketing Service segments as a result of Project Elevate.
Labor costs decreased by $12.9 million, or 13.8%, when compared to the year ended December 31, 2024, primarily due to the reduction in salary and wages as operations were optimized to account for lower revenue. Termination of senior management staff also resulted in lower stock based compensation.
Recent Accounting Pronouncements In November 2023, FASB issued ASU 2023-07, which enhances the disclosures required for reportable segments in annual and interim consolidated financial statements. ASU 2023-07 is effective for the Company for annual reporting periods beginning with the fiscal year ending December 15, 2024 and for interim reporting periods beginning in fiscal year 2025.
ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact that this ASU will have on our consolidated financial statements.
Removed
Recent Developments Project Elevate Our management team continuously reviews and adjusts our cost structure and operating footprint to optimize our operations, and invest in improved technology. During the second half of 2023, we engaged a consulting firm to help review and analyze the structure and operations of the Company.
Added
The $0.9 million decrease was mainly driven by $0.9 million lower property, plant and equipment purchase in the year ended December 31, 2025, as compared to the year ended December 31, 2024.
Removed
This review included greater than 200 meetings with personnel at all levels of the firm and led to the initiation of our transformation program named "Project Elevate". The program involves the optimization and rationalization of our business resources as well as the partial reinvestment of savings into the Company's sales and marketing team, technology, and strategy.
Added
The $0.9 million increase in cash provided by financing activities was primarily related to the $1.1 million of cash we received for the recovery of short-swing profit from one shareholder in the year ended December 31, 2025, which was partially offset by $0.3 million of tax liability associated with this short-swing profit.
Removed
A business transformation office was established at the beginning of 2024 to manage and measure these initiatives. Reorganization savings from Project Elevate executed from 2024 to 2026 are estimated to be $16 million.
Added
On June 24, 2025, the Company entered into a second amendment to the Credit Facility (the “Second Amendment”) with TCB which extended the maturity date for the Credit Facility by a period of three years to June 30, 2028.
Removed
The segment results were impacted by the noncash items, $1.6 million of goodwill impairment and $1.5 million of intangible asset impairment, in the fourth quarter associated with the write-down of the InsideOut acquisition.
Added
The Second Amendment also includes an accordion feature that allows the Company to seek up to a $10.0 million increase in commitments under the credit line, subject to TCB approval.
Removed
Operating Income for the year ended December 31, 2024 increased by $0.9 million to $9.9 million, a 10.4% improvement in profits when compared to the prior year, despite a slight decrease in revenues. The improved operational efficiency is the result of diligent work to control costs while managing service delivery to meet customer expectations.
Added
After the letters of credit on December 31, 2025 and 2024, we had the ability to borrow up to $24.3 million and $24.0 million, respectively, under the Credit Facility. Dividends We did not pay any dividends in either 2025 or 2024.
Removed
The $13.5 million year-over-year decrease in cash from operating activities was primarily due to the $6.7 million payment to terminate the Qualified Pension Plan I during the year ended December 31, 2024, as well as the $3.6 million net decrease in other assets and liabilities.
Added
We record a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method.
Removed
The $1.4 million increase was mainly due to the $0.5 million of cash used and returned from escrow from acquisition activities and $0.9 million more cash used in technology improvement projects and routine equipment replacement in the year ended December 31, 2024, when compared to the year ended December 31, 2023.
Added
The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company.
Removed
During 2023, 391,785 shares of common stock were repurchased for a total combined purchase price of $2.4 million and in 2024, no shares of common stock were repurchased.
Added
Otherwise, the Company performs a quantitative goodwill impairment test in which the fair value of the reporting unit is compared to its carrying amount. Fair value is determined through various valuation techniques and assumptions such as cash flow models, discount rates, market multiples and control premiums..
Removed
Any payments received in advance of the performance of services or delivery of the product are recorded as deferred revenue until such time as the services are performed or the product is delivered.
Added
The net carrying balance of intangible assets as of December 31, 2025 and December 31, 2024 was $0.4 million and $0.6 million, respectively. There was no impairment of our intangible assets during the year ended December 31, 2025. Pension Accounting The Company sponsors defined benefit pension plans, the obligations and related expense of which are determined using actuarial valuations.
Removed
Costs incurred for search engine marketing solutions payable to the engine host and postage costs of mailings are billed to our clients and are not directly reflected in our revenue. Revenue from agency and digital services, direct mail, logistics, fulfillment and contact center is recognized as the work is performed.
Added
Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09").
Removed
Fees for these services are determined by the terms set forth in each contract. These fees are typically a set fixed price or rate by transaction occurrence, service provided, time spent, or product delivered. For arrangements requiring the design and build out of a database, revenue is not recognized until client acceptance occurs.
Added
ASU 2023-09 amends ASC 740, Income Taxes to expand income tax disclosures and requires that the Company disclose (i) the income tax rate reconciliation using both percentages and reporting currency amounts; (ii) specific categories within the income tax rate reconciliation; (iii) additional information for reconciling items that meet a quantitative threshold; (iv) the composition of state and local income taxes by jurisdiction; and (v) the amount of income taxes paid disaggregated by jurisdiction.
Removed
Up-front fees billed during the setup phase for these arrangements are deferred and direct build costs are capitalized. Pricing for these types of arrangements is typically based on a fixed price determined in the contract. Revenue from other database marketing solutions is recognized ratably over the contractual service period.
Added
In July 2025, the FASB issued ASU 2025-05, which amends ASC 326-20 to provide a practical expedient (for all entities) relating to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606.
Removed
Pricing for these services is typically based on a fixed price per month or per contract. Income Taxes We are subject to income taxes in the United States and numerous other jurisdictions.

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