HHS · Harte Hanks, Inc.

Revenue for the quarter ended March 31, 2026, totaled $37.3 million, a 10.3% decrease from $41.6 million in the prior-year period. This decline reflects broad-based softness across all three reportable segments—Revenue Solutions, Customer Care, and Fulfillment & Logistics—as noted in management’s discussion of sustained client budget discipline and macroeconomic uncertainty. The filing does not identify near-term recovery catalysts, and no segment-level growth or stabilization is indicated.

Operating income declined to a loss of $768 thousand, compared to a loss of $40 thousand in Q1 FY2025—a 1,820% deterioration. This widening loss stems not from discrete charges but from structural cost dynamics: transportation rates have increased over the last few years due to demand and supply fluctuations within the transportation industry, and management explicitly states that future changes in these expenses will continue to impact total production costs, total operating expenses, and margins. With revenue down and transportation costs elevated, the Company’s ability to absorb fixed costs eroded, resulting in negative operating leverage across the consolidated business.

Net income declined 60.2% to a loss of $628 thousand, and diluted earnings per share were -$0.08, down 60.0% from -$0.05 in the prior year. This aligns directly with the higher net loss magnitude and reflects no material non-operating adjustments or tax-related anomalies in the reported results.

Liquidity remains supported by cash on hand, cash provided by (or used in) operating activities, and borrowings available under the Credit Facility. Management affirms its belief that it will be able to meet liquidity requirements and fund fixed obligations—including finance and operating leases and unfunded pension plan benefit payments—in the short term and beyond. No specific cash balance or undrawn credit capacity figures are disclosed in the authoritative financial packet, and therefore none are included here.