Executive Summary

Q3 2025 revenue declined 17.0% YoY to $39.5M but improved sequentially vs Q2 ($38.6M); GAAP net loss widened to $(2.3)M (−$0.31) on higher tax expense, while EBITDA was $1.7M and Adjusted EBITDA was $2.4M .
Cost control offset part of the top-line pressure: operating expenses fell 14.7% YoY; adjusted operating margin improved sequentially to 3.0% (Q2: 1.0%) though below Q3’24 (6.5%) .
Management highlighted a new Samsung Electronics America partnership in Customer Care and expects Q4 to show sequential improvement as late-stage pipeline conversions ramp; full-year 2025 positive EBITDA reiterated .
No S&P Global consensus was available for revenue/EPS/EBITDA, so beats/misses vs Street cannot be assessed this quarter (see Estimates Context).

What Went Well and What Went Wrong

What Went Well
- New blue-chip client win: “opening of our new Greenville, South Carolina facility with Samsung Electronics America marks a significant step forward in replenishing our pipeline” (President David Fisher) .
- Sequential improvement in Fulfillment & Logistics: revenue +5.6% QoQ to $19.1M and segment EBITDA rose to $2.3M, aided by operational efficiencies and disciplined pricing .
- Liquidity remains solid: $6.5M cash, zero debt, and $24M revolver availability; credit facility extended to June 30, 2028 with a $10M accordion feature .
What Went Wrong
- Revenue pressure persisted: total revenue down 17.0% YoY on timing and program transitions across legacy contracts; Marketing Services revenue down 33.4% YoY on industry-wide budget discipline .
- Profitability weaker YoY: EBITDA ($1.7M) and Adjusted EBITDA ($2.4M) declined vs Q3’24 ($2.9M/$4.1M); adjusted operating margin 3.0% vs 6.5% a year ago .
- Unusually high tax expense weighed on bottom line: income tax expense of $2.6M turned modest pre-tax income into a $(2.3)M net loss (−$0.31) .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$47.63	$41.56	$38.63	$39.52
Operating Income ($USD Millions)	$1.90	$(0.04)	$0.03	$0.51
Adjusted Operating Margin %	6.5%	1.8%	1.0%	3.0%
EBITDA ($USD Millions)	$2.94	$1.02	$1.10	$1.73
Adjusted EBITDA ($USD Millions)	$4.14	$1.81	$1.47	$2.42
Net (Loss) Income ($USD Millions)	$0.14	$(0.39)	$(0.34)	$(2.29)
Diluted EPS ($)	$0.02	$(0.05)	$(0.05)	$(0.31)

Segment performance

Segment Metric	Q3 2024	Q2 2025	Q3 2025
Marketing Services Revenue ($M)	$13.26	$8.66	$8.83
Marketing Services EBITDA ($M)	$2.80	$1.36	$1.76
Customer Care Revenue ($M)	$13.07	$11.85	$11.55
Customer Care EBITDA ($M)	$2.51	$1.61	$1.10
Fulfillment & Logistics Revenue ($M)	$21.31	$18.12	$19.14
Fulfillment & Logistics EBITDA ($M)	$1.34	$1.43	$2.35

KPIs and cost drivers

KPI	Q1 2025	Q2 2025	Q3 2025
Cash & Equivalents ($M)	$8.98	$4.76	$6.51
Debt Outstanding	$0	$0	$0
Credit Facility Availability ($M)	$24.0	$24.0	$24.0
Working Capital ($M)	N/A	N/A	$15.7
Restructuring Expense ($M)	$0.84	$0.15	$0.54
Stock-based Compensation ($M)	$(0.05)	$0.22	$0.15
Income Tax (Expense)/Benefit ($M)	$(0.22)	$(0.08)	$(2.61)
Weighted Avg Diluted Shares (M)	7.36	7.38	7.42
Total Operating Expenses ($M)	$41.60	$38.60	$39.01

Notes:

Operating expenses fell 14.7% YoY in Q3 (to $39.0M) via ongoing cost improvements, partly offsetting revenue declines .
Segment mix in Q3: Fulfillment & Logistics 49%, Customer Care 29%, Marketing Services 22% of revenue .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EBITDA (Quarterly)	2025	“Positive EBITDA in each quarter in 2025”	Q4 expected to show sequential improvement as pipeline converts; positive EBITDA again targeted	Maintained (qualitative)
EBITDA (Consolidated)	FY 2025	Not provided	“Continues to expect positive EBITDA for full-year 2025”	New qualitative frame
Customer Care Revenue Trajectory	Q4 2025	Not provided	Expect steady Q4; sequential improvement through 2026, subject to seasonality	New qualitative commentary

No numeric ranges were provided for revenue, margins, OpEx, OI&E, tax rate, or dividends.

Earnings Call Themes & Trends

Call transcript for Q3 2025 was not available in the document set; themes reflect management’s Q3 press release and prior-quarter 8-Ks.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Pipeline/New Logos	Q1: multiple new client wins; revamped sales org to improve conversions . Q2: “healthy pipeline” across segments .	Samsung partnership launched in Greenville, SC; late-stage opportunities expected to drive Q4 sequential improvement .	Improving
Cost Discipline/Transformation	Q2: executing Project Elevate; positive EBITDA despite headwinds . Q1: realigned sales; ongoing cost actions .	OpEx down 14.7% YoY; adjusted operating margin improved sequentially to 3.0% .	Ongoing execution
Marketing Budget Environment	Q1: reduced project work; contract expirations in inside sales . Q2: cautious client spending .	Marketing Services rev −33.4% YoY though segment remains profitable .	Persistent headwind
Fulfillment & Logistics Execution	Q1: slight YoY growth; mix benefited EBITDA . Q2: softer revs on small-project repositioning and delays .	QoQ revenue +5.6%; EBITDA strengthened to $2.3M on efficiencies and pricing .	Stabilizing
Liquidity/Balance Sheet	Q1: $9.0M cash; zero debt . Q2: $4.8M cash; zero debt; $24M capacity .	$6.5M cash; zero debt; credit facility extended to 2028 with $10M accordion .	Stable/extended runway

Management Commentary

“We’re encouraged by the momentum of our Customer Care segment, where the opening of our new Greenville, South Carolina facility with Samsung Electronics America marks a significant step forward in replenishing our pipeline with blue-chip, scalable programs.” — David Fisher, President .
“Our extended credit facility and cost discipline efforts provide flexibility to navigate program turnover from a position of strength. We expect Q4 to reflect the benefit of new business and client expansions now progressing through implementation.” — David Garrison, CFO .

Q&A Highlights

The Q3 2025 earnings call transcript was not available in the document corpus; Q&A details and any verbal guidance clarifications cannot be assessed this quarter.

Estimates Context

S&P Global consensus estimates for Q3 2025 EPS, revenue, and EBITDA were unavailable at the time of query; as a result, beats/misses vs Street cannot be determined this quarter. Values retrieved from S&P Global.*
Actuals: Revenue $39.52M; EBITDA $1.73M; Diluted EPS −$0.31 as reported by the company .

Key Takeaways for Investors

Sequential momentum building into Q4: revenue ticked up vs Q2 and adjusted operating margin improved to 3.0% as pipeline conversions begin to show; management explicitly expects further sequential improvement in Q4 .
New Samsung partnership is a tangible catalyst in Customer Care; watch ramp pace and margin mix as the Greenville facility scales .
Fulfillment & Logistics stabilized with QoQ growth and better EBITDA; continued efficiency and pricing discipline can support margins even if volumes are uneven .
Marketing Services remains the main drag (−33% YoY), reflecting broader marketing budget caution; any re-acceleration here would be a positive surprise in 2026 as account realignments mature .
Balance sheet flexibility is intact (cash, zero debt, extended revolver to 2028 with accordion); this reduces execution risk through program transitions and supports selective growth investments .
No Street consensus this quarter limits near-term “beat/miss” trading catalysts; near-term stock reaction likely tied to evidence of Q4 sequential growth and updates on pipeline conversion cadence .
Monitor tax line volatility after an unusually high tax expense in Q3 pressed GAAP results despite modest operating income; clarity on drivers could matter for modeling .

Additional notes

8-K 2.02 earnings press release: full document read (financial statements and segment details) .
Prior quarters trend analysis based on Q1 and Q2 2025 8-Ks .
No separate Q3 2025 call transcript or additional press releases were available in the document set (Q3 period window).

*Values retrieved from S&P Global.

HARTE HANKS INC (HHS)·Q3 2025 Earnings Summary