Constant Contact (NASDAQ:CTCT) will announce its earnings for the first quarter of 2012 on April 26. We currently have a $27 Trefis price estimate for Constant Contact, which stands nearly 5% below its market price. Its primary business is content marketing which comprises email marketing, event marketing and online survey tools. It has also ventured into social media marketing lately with offerings like Social Campaigns. It has also been focusing on the mobile marketing and daily deals space, and continues to improve its email marketing offering with new features. The company now offers a complete set of online marketing tools, including email, event, social media and mobile marketing, and competes with the likes of Groupon (NASDAQ:GRPN), Living Social, Eventbrite, iContact, Surveymonkey as well as Salesforce.com (NASDAQ:CRM).
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In this earnings release, here’s what we’ll primarily be looking at:
Customer growth expected to continue
Constant Contact’s customer base grew to 500,000 customers by the end of 2011, and is expected to continue to grow in the coming years, as more small businesses sign up for its complete array of online marketing offerings. We expect it to reach nearly 800K customers by the end of the forecast period.
You can check the impact of any change in its user base on its Trefis value estimate using this chart:
Average Revenue Per User expected to increase
Constant Contact has managed to generate increasing amounts of revenue per user in the past, by offering additional services and up-selling them to its existing user base. It now offers a complete set of online marketing tools, including email, event, social media and mobile marketing, as well as daily deals, and is expected to roll out even more. We expect it to continue to generate increasing amounts of revenue per user.
You can check out the impact of any changes in its ARPU growth on its Trefis price estimate using this chart:
Social and Mobile Marketing to drive revenue growth
Constant Contact has been focusing on social media marketing and mobile marketing. It recently launched Social Campaigns, which enables customers to market their products on Facebook and Twitter, and acquired CardStar, a mobile loyalty based marketing startup. It also launched its own daily deals offering, as well as new mobile marketing tools. As social network and mobile usage explodes in the coming years, we expect these two businesses to drive customer growth as well as ARPU growth for Constant Contact.
Constant Contact’s various content marketing offerings generate almost all of its revenue, and account for more than 80% of its $27 Trefis price estimate.
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