Harte Hanks, Inc.

Third-quarter 2024 revenue was $47.6 million, up 1.1% from $47.1 million in Q3 2023. Customer Care revenue rose to $13.1 million from $11.8 million, and Sales Services increased to $4.2 million from $2.2 million. Marketing Services fell to $9.1 million from $10.6 million, and Fulfillment and logistics declined to $21.3 million from $22.5 million. Operating income was $1.9 million versus $2.9 million a year ago; adjusted operating income was $3.1 million versus $3.2 million, with adjusted operating margin of 6.5% versus 6.9%. EBITDA was $2.9 million versus $3.9 million; adjusted EBITDA was $4.1 million versus $4.2 million. Guidance: management expects Q4 revenue to decline low to mid-single digits. They also reiterated Project Elevate’s target of $6 million of in-year EBITDA improvement, with additional restructuring expenses expected through Q4 2025.

Kirk Davis framed the quarter as part of a broader transformation aimed at sustainable growth and stronger free cash flow. He said the company is restructuring customer, sales, marketing, and data functions through the new Customer Excellence and Growth division, with data and AI intended to differentiate Harte Hanks’ offerings. He also highlighted recent client wins across fulfillment, sales services, and customer care as evidence that the strategy is starting to gain traction, while warning that revenue will not improve in a straight line.

David Garrison said Project Elevate produced $836,000 of restructuring charges in Q3 and that the company is on plan for $6 million of in-year EBITDA improvement. He broke out the expected savings as $3 million from personnel optimization, $2 million from streamlining contracts and back office operations, and $1 million from warehouse improvements, while noting some gains were offset by a larger sales team and non-capitalized technology investments. He also said cash and cash equivalents were $5.9 million at September 30 and $9.8 million at October 31, the $25 million line of credit is undrawn and extended to June 2025, and the company has no debt.

There was no analyst Q&A, as no questions came in during the call. Management therefore did not have to address additional concerns beyond prepared remarks. The main forward-looking point repeated was that Q4 revenue is expected to be down low to mid-single digits and that Project Elevate will continue to incur costs through Q4 2025.