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Concur Reports Strong Revenue, Earnings and Cash Flow for Fiscal 2012
Nov 07, 2012 (03:11 PM EST)


Increasing customer demand in core business and new markets expected to drive continued strong revenue growth of 25% in fiscal 2013

REDMOND, Wash., Nov. 7, 2012 /PRNewswire/ -- Concur (Nasdaq: CNQR) today reported financial results for its fourth quarter and fiscal year ended September 30, 2012.

Concur reported total revenue for the fourth quarter of fiscal 2012 of $117.9 million, up 24% from the year-ago quarter and up 4% from the prior quarter. Fiscal 2012 fourth quarter non-GAAP pre-tax income was $23.1 million, or $0.40 per share. 

For the full 2012 fiscal year, revenue increased 26% from the prior fiscal year to $439.8 million, and non-GAAP pre-tax income increased 19% from the prior fiscal year to $78.7 million, or $1.39 per share.

"Driven by the investments we made over the past few years, we continue to meet or exceed our targets on key financial metrics such as revenue, non-GAAP operating margin, non-GAAP earnings and cash flow," said Steve Singh, Chairman and CEO of Concur. "Just as importantly, those investments are meaningfully expanding the addressable market we can serve and driving the innovation curve in our industry.  As a result, we expect revenue in fiscal 2013 to grow by 25% fueled by strong customer growth across all geographies, notably the SMB and global account market segments."

Singh continued, "Concur's vision of The Perfect Trip is built on creating a travel ecosystem that dynamically responds to the needs of business travelers, the companies that they work for and the suppliers that serve them.  Innovations such as Concur Open Booking and the Concur T&E Cloud are transforming our industry, and have been enthusiastically embraced by customers, suppliers and application developers.  We are enabling the success of partners and application providers through the Concur T&E Cloud and fostering innovation through investments in companies such as TaxiMagic, ClearTrip, Yapta, Room 77 and buuteeq."

Financial Highlights

  • Total revenue was $117.9 million for the fourth quarter of fiscal 2012, up 24% compared to the year-ago quarter, and up 4% sequentially.
  • Non-GAAP pre-tax income was $23.1 million, or $0.40 per share, for the fourth quarter of fiscal 2012, compared to $20.5 million, or $0.37 per share, for the year-ago quarter. Please refer to "About Concur's Non-GAAP Financial Measures" below for an explanation of our non-GAAP financial measures used in this press release.
  • Non-GAAP operating margin was 21% for the fourth quarter of fiscal 2012, compared to 24% for the year-ago quarter.
  • GAAP cash flow from operations of $37.0 million was ahead of our expectations for the fourth quarter of fiscal 2012.
  • GAAP net loss attributable to Concur was $8.2 million, or $0.15 net loss per share, for the fourth quarter of fiscal 2012, compared to $14.0 million, or $0.26 net loss per share, for the year-ago quarter.
  • Total revenue was $439.8 million for fiscal 2012, up 26% year-over-year.
  • Non-GAAP pretax income was $78.7 million, or $1.39 per share, for fiscal 2012, compared to $66.3 million, or $1.20 per share, for fiscal 2011.
  • Non-GAAP operating margin was 20% for fiscal 2012, compared to 21% for fiscal 2011.
  • GAAP cash flow from operations was $93.6 million for fiscal 2012, an increase of 22% compared to fiscal 2011.
  • GAAP net loss attributable to Concur was $7.0 million, or $0.13 net loss per share, for fiscal 2012, compared to $10.7 million, or $0.20 net loss per share, for fiscal 2011.

Recent Business Highlights

  • Concur is revolutionizing the corporate travel industry by continuing to drive innovation for travelers, businesses and suppliers to fuel The Perfect Trip™. Recent highlights delivered against this vision – supported by The Concur® T&E Cloud, Concur® Open Booking and Concur® Big Data – include:
    • Concur unveiled Trip Maximizer for Concurforce, the Concur travel and expense management offering designed for Salesforce that now enhances the entire process of planning, booking and conducting business travel for employees who need to visit with prospects and clients in the field.
    • Concur announced cloud-to-cloud integration with NetSuite where completed and approved T&E expense reports feed directly into the NetSuite Employee Center, making comprehensive and accurate T&E spend data available through NetSuite's Accounts Payable and General Ledger services.
    • Concur co-led a $10 million funding round for buuteeq, the leading cloud digital marketing system for hotels, which helps hotels of all sizes, anywhere in the world reach their customers, and drives ongoing benefits for Concur corporate clients who want to deliver the broadest array of corporate-approved choices to their business travelers.
  • Concur extended its leadership position in the travel and expense management market, adding a record number of new clients across its global customer base. 
    • The Company saw particular strength adding new customers and expanding deployments within its core enterprise customer segment. 
    • Concur continues to experience rapid growth in the SMB market as these businesses look to capitalize on the benefits of an integrated solution. 
    • The success of emerging markets such as Japan helped fuel the expansion of Concur's global customer base and created new opportunities for future revenue growth.
  • Concur is now actively selling its services to U.S. government agencies as the sole provider to power the U.S. General Services Administration (GSA) program for managing online bookings, travel authorizations and voucher processing for U.S. government agencies. Concur's sole provider award was recently upheld by the U.S. General Accounting Office, which allowed Concur to begin selling its services into the 93 GSA-covered agencies despite a post-award bid protest filed by another provider.
  • Concur continues to see momentum in helping higher education clients drive down the costs of travel and expense management – recently showcasing industry-leading innovation, a new partnership with Huron Consulting Group and higher education client successes at the 2012 Society for Collegiate Travel and Expense Management (SCTEM) Conference.
  • Concur announced strong adoption and continued success of its Advisor Program – which provides accounting professionals with the tools, training and support to help them add Concur solutions service to their practice. To date, the program has enabled more than 3,000 accounting professionals and SMB consultants to bring greater value to their small business customers by introducing them to Concur expense reporting solutions that help save time, minimize hassles, control spending, optimize cash flow management and prevent fraud.

Business Outlook

The following statements are based on our current expectations and we do not undertake any duty to update them. These statements are forward-looking and inherently uncertain. Actual results may differ materially as a result of the factors identified below, the factors identified in our public filings made with the Securities and Exchange Commission, or other factors. Please also refer to "About Concur's Non-GAAP Financial Measures" below for an explanation of our non-GAAP financial measures and a reconciliation of those measures to GAAP equivalents.

  • Concur expects revenue for the first quarter of fiscal 2013 to grow approximately 21% year-over-year from the first quarter of fiscal 2012. For the first quarter of fiscal 2013, Concur expects non-GAAP pre-tax income per share to be $0.30.  Non-GAAP pre-tax income excludes the effects of non-cash related items such as stock-based compensation expenses, amortization of intangible assets, and the accretion of the discount on our senior convertible notes.  It also excludes the non-cash accounting implications and cash fees and expenses of acquisitions and other related strategic activity in which the Company may deploy capital. 
  • Concur expects fiscal 2013 revenue to grow approximately 25% year-over-year from fiscal 2012.
  • Concur expects fiscal 2013 non-GAAP pre-tax income per share to be at least $1.40.
  • Concur expects fiscal 2013 non-GAAP operating margin to be approximately 16% to 19%.
  • Concur expects cash flows from operations in fiscal 2013 to be at least $80 million, excluding the TripIt contingent consideration reconciliation, acquisition and other related costs. The Company expects capital expenditures in fiscal 2013 to be slightly greater than its typical range of 6% to 8% of revenue.

All company or product names are trademarks and/or registered trademarks of their respective owners.

This press release contains forward-looking statements that are inherently uncertain. These forward-looking statements, such as the statements made by Mr. Singh, are based on Concur's current expectations and involve many risks and uncertainties that could cause actual results to differ materially from current expectations. Factors that could cause or contribute to actual results differing from current expectations include, but are not limited to: potential difficulties in connection with recent business and asset acquisitions, including achievement of the anticipated benefits of these acquisitions or the broader integration of such businesses with Concur; adverse economic or market conditions, which may cause customers and prospects to delay or reduce purchases of our products and services, cause customers to reduce business travel and correspondingly reduce the use of our products and services, reduce the ability of customers, channel partners, vendors and suppliers to fulfill their obligations to us, increase volatility of our stock price and foreign exchange rates, and otherwise adversely affect our operations and financial performance; potential delays in market adoption and penetration of our subscription service offerings; potential difficulties associated with our deployment and support of our products and services; our ability to manage expected growth of our subscription service offerings; the scalability and security of our computer networks and hosting infrastructure for our subscription service offerings; risks associated with the privacy and protection of information while in our possession; potential increases in the rate of attrition of customers of our subscription service offerings; the level of investment in information technology by our customers; the level of business travel that may reduce the use of our products and services or inhibit new sales of our products and services; potential difficulties associated with strategic relationships and with development of new products and services; risks or difficulties associated with expansion into new geographic markets; uncertain market acceptance of recently-introduced or future products and services; and risks associated with our financing and investment activities.

Please refer to the Company's public filings made with the Securities and Exchange Commission at www.sec.gov for additional and more detailed information on risk factors that could cause actual results to differ materially from current expectations. Concur assumes no obligation to update the forward-looking information contained in this press release.















Concur Technologies, Inc.



Consolidated Statements of Operations



(In thousands, except per share amounts)



(Unaudited)




















Three Months Ended

September 30,


Twelve Months Ended

September 30,













2012


2011


2012


2011
















Revenue


$ 117,881


$ 95,155


$ 439,826


$ 349,488
















Expenses:












Cost of operations


32,408


26,934


123,696


98,267




Sales and marketing


48,074


38,909


175,514


141,384




Systems development and programming


12,334


9,205


43,794


34,787




General and administrative


18,847


13,291


69,358


51,467




Revaluation of contingent consideration


(416)


2,624


(7,274)


4,034




Amortization of intangible assets


4,463


3,269


18,239


10,131
















Total expenses


115,710


94,232


423,327


340,070
















Operating income


2,171


923


16,499


9,418
















Other income (expense):












Interest income


845


429


2,373


2,177




Interest expense


(4,913)


(4,708)


(19,334)


(18,527)




Loss from equity investments


(601)


(673)


(2,649)


(890)




Other, net


(214)


(496)


(1,237)


(809)



Total other expense


(4,883)


(5,448)


(20,847)


(18,049)
















Loss before income tax


(2,712)


(4,525)


(4,348)


(8,631)
















Income tax expense


5,717


9,555


3,227


2,233
















Consolidated net loss


(8,429)


(14,080)


(7,575)


(10,864)
















Less: Loss attributable to noncontrolling interest


223


49


569


121
















Net loss attributable to Concur


$ (8,206)


$ (14,031)


$ (7,006)


$ (10,743)
















Net loss per share attributable to Concur common stockholders:












Basic


$ (0.15)


$ (0.26)


$ (0.13)


$ (0.20)




Diluted


$ (0.15)


$ (0.26)


$ (0.13)


$ (0.20)
















Weighted average shares used in computing net loss per share:












Basic


54,982


54,015


54,595


53,464




Diluted


54,982


54,015


54,595


53,464


























 









Concur Technologies, Inc.


Consolidated Balance Sheets


(In thousands, except per share amounts)



(Unaudited)














September 30, 


September 30, 






2012


2011



Assets







Current assets:








Cash and cash equivalents


$        302,274


$        370,157




Short-term investments


201,062


185,392




Restricted cash


-


852




Accounts receivable, net of allowance of $1,507 and $1,307

86,591


66,963




Deferred tax assets


12,929


9,831




Deferred costs and other assets


47,312


32,865



Total current assets


650,168


666,060



Non-current assets:








Property and equipment, net


57,391


45,975




Investments


65,621


51,426




Deferred costs and other assets


42,650


35,049




Intangible assets, net 


105,895


55,179




Deferred tax assets


17,657


22,970




Goodwill


281,892


279,192



Total assets


$     1,221,274


$     1,155,851











Liabilities and equity







Current liabilities:








Accounts payable


$          12,674


$           8,906




Customer funding liabilities


29,239


38,563




Accrued compensation


31,261


25,706




Acquisition-related liabilities


4,488


3,968




Acquisition-related contingent consideration


22,692


-




Other accrued expenses and liabilities


32,035


23,546




Deferred revenues


69,838


55,888




Senior convertible notes, net


251,607


-



Total current liabilities


453,834


156,577



Non-current liabilities:








Senior convertible notes, net


-


239,461




Deferred rent and other long-term liabilities


634


744




Deferred revenues


17,578


16,381




Acquisition-related contingent consideration


-


33,490




Tax liabilities


8,155


9,367



Total liabilities


480,201


456,020











Equity:







Concur stockholders' equity:








Common stock, $0.001 par value per share


55


54




Authorized shares: 195,000








Shares issued and outstanding: 55,058 and 54,065








Additional paid-in capital


861,301


811,888




Accumulated deficit


(117,285)


(110,279)




Accumulated other comprehensive loss


(3,579)


(3,008)



Total Concur stockholders' equity


740,492


698,655



Noncontrolling interest


581


1,176



Total equity


741,073


699,831



Total liabilities and equity


$     1,221,274


$     1,155,851


























Concur Technologies, Inc


Consolidated Statements of Cash Flows


(In thousands)


(Unaudited)












Three Months Ended

September 30,


Twelve Months Ended

September 30,





Operating activities:

2012


2011


2012


2011


Consolidated net loss

$   (8,429)


$ (14,080)


$   (7,575)


$ (10,864)


Adjustments to reconcile consolidated net loss to net cash provided by operating activities:









Amortization of intangible assets

4,463


3,269


18,239


10,131


Depreciation and amortization of property and equipment

6,199


4,644


23,219


19,499


Accretion of discount and issuance costs on notes

3,116


2,907


12,146


11,333


Provision for (recovery of) doubtful accounts

(155)


(496)


200


(1,067)


Share-based compensation

18,119


11,120


57,193


35,974


Revaluation of contingent consideration

(416)


2,624


(7,274)


4,034


Deferred income taxes

3,389


8,611


(179)


1,253


Excess tax benefits from share-based compensation

(484)


(33)


(848)


(234)


Loss from equity investments

601


673


2,649


890


Changes in operating assets and liabilities, net of effects from acquisitions:









Accounts receivable

(1,472)


(838)


(20,136)


(11,343)


Deferred costs and other assets

(7,323)


(7,982)


(13,428)


(14,819)


Accounts payable

1,696


3,694


1,665


2,986


Accrued liabilities

13,670


14,919


12,345


17,567


Deferred revenues

4,030


4,668


15,369


11,623


Net cash provided by operating activities

37,004


33,700


93,585


76,963











Investing activities:









Purchases of investments

(100,747)


(90,196)


(542,871)


(425,449)


Maturities of investments

143,142


81,767


527,380


541,388


Decrease in customer funding liabilities, net of changes in restricted cash

(62)


(23,948)


(8,523)


(26,776)


Investment in and loans to unconsolidated affiliates

(4,842)


(3,000)


(23,708)


(46,271)


Capital expenditures

(8,130)


(6,996)


(30,725)


(27,932)


Payments for acquisitions, net of cash acquired

-


837


(68,266)


(42,424)


Payment of contingent consideration related to Etap acquisition

-


-


(5,275)


-


Net cash provided by (used in) investing activities

29,361


(41,536)


(151,988)


(27,464)











Financing activities:









Investments in consolidated joint venture by noncontrolling interest

-


-


-


1,152


Payments on repurchase of common stock

-


(1,601)


(1,451)


(1,601)


Net proceeds from share-based equity award activity

753


349


2,817


1,980


Proceeds from employee stock purchase plan activity

587


481


2,304


1,855


Minimum tax withholding on restricted stock awards

(4,482)


(842)


(14,200)


(11,936)


Excess tax benefits from share-based compensation

484


33


848


234


Repayments on capital leases

-


-


-


(199)


Net cash used in financing activities

(2,658)


(1,580)


(9,682)


(8,515)


Effect of foreign currency exchange rate changes on cash and cash equivalents

751


(622)


202


75


Net increase (decrease) in cash and cash equivalents

64,458


(10,038)


(67,883)


41,059


Cash and cash equivalents at beginning of period

237,816


380,195


370,157


329,098


Cash and cash equivalents at end of period

$ 302,274


$ 370,157


$ 302,274


$ 370,157






























Concur Technologies, Inc.


Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures


(In thousands, except per share and margin data)


(Unaudited)














Three Months Ended

September 30,


Twelve Months Ended

September 30,








2012


2011


2012


2011












Operating income:










Operating income


$ 2,171


$ 923


$ 16,499


$ 9,418


Income from operations as a % of total revenue (operating margin)


1.8%


1.0%


3.8%


2.7%


Add back:










Share-based compensation


18,119


11,120


57,193


35,974


Amortization of intangibles


4,463


3,269


18,239


10,131


Acquisition and other related costs


311


484


1,193


4,165


Revaluation of contingent consideration


(416)


2,624


(7,274)


4,034


Contingent consideration (included in compensation expense)


(284)


4,238


(396)


9,540


Noncontrolling interest joint venture


223


49


569


121


Non-GAAP operating income


$ 24,587


$ 22,707


$ 86,023


$ 73,383


Non-GAAP operating income as a % of total revenue (non-GAAP operating margin)


20.9%


23.9%


19.6%


21.0%












Net income (loss) attributable to Concur:










Net loss attributable to Concur


$ (8,206)


$ (14,031)


$ (7,006)


$ (10,743)


Add back:










Share-based compensation


18,119


11,120


57,193


35,974


Amortization of intangibles


4,463


3,269


18,239


10,131


Acquisition and other related costs


311


484


1,193


4,165


Revaluation of contingent consideration


(416)


2,624


(7,274)


4,034


Contingent consideration (included in compensation expense)


(284)


4,238


(396)


9,540


Loss from equity investments


601


673


2,649


890


Accretion of note discount


2,794


2,599


10,880


10,121


Income tax expense


5,717


9,555


3,227


2,233


Non-GAAP pretax income attributable to Concur


$ 23,099


$ 20,531


$ 78,705


$ 66,345












Diluted net income (loss) per share attributable to Concur:










Diluted net loss per share attributable to Concur


$ (0.15)


$ (0.26)


$ (0.13)


$ (0.20)


Add back:










Share-based compensation


0.32


0.20


1.01


0.65


Amortization of intangibles


0.08


0.06


0.32


0.19


Acquisition and other related costs


0.01


0.01


0.02


0.08


Revaluation of contingent consideration


(0.01)


0.05


(0.12)


0.07


Contingent consideration (included in compensation expense)


(0.01)


0.08


(0.01)


0.17


Loss from equity investments


0.01


0.01


0.05


0.02


Accretion of note discount


0.05


0.05


0.19


0.18


Income tax expense


0.10


0.17


0.06


0.04


Non-GAAP pretax diluted income per share attributable to Concur


$ 0.40


$ 0.37


$ 1.39


$ 1.20












Shares used in calculation of GAAP and non-GAAP income (loss) per share attributable to Concur:










GAAP basic shares


54,982


54,015


54,595


53,464












GAAP diluted shares


54,982


54,015


54,595


53,464


Adjustment for unvested share-based awards


2,315


1,691


2,063


2,018


Non-GAAP diluted shares


57,297


55,706


56,658


55,482





















 










Concur Technologies, Inc.


Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense


(In thousands, except per share and margin data)


(Unaudited)












Three Months Ended

September 30,


Twelve Months Ended

September 30,






2012


2011


2012


2011


Non-GAAP operating expense:









Cost of operations

$ 29,705


$ 25,432


$ 116,076


$ 94,777


Sales and marketing

39,722


29,373


147,862


113,470


Systems development and programming

10,232


7,318


37,658


28,116


General and administrative

13,613


10,324


52,173


39,741


Total

$ 93,272


$ 72,447


$ 353,769


$ 276,104











Non-GAAP operating margin *

20.9%


23.9%


19.6%


21.0%











Non-GAAP pretax diluted income per share attributable to Concur *

$ 0.40


$ 0.37


$ 1.39


$ 1.20












Three Months Ended

September 30,


Twelve Months Ended

September 30,






2012


2011


2012


2011


Cost of operations

$ 32,408


$ 26,934


$ 123,696


$ 98,267


Less:









Share-based compensation

2,650


1,484


7,489


3,440


Acquisition and other related costs

-


-


6


-


Noncontrolling interest joint venture

53


18


125


50


Non-GAAP cost of operations

$ 29,705


$ 25,432


$ 116,076


$ 94,777











Sales and marketing

$ 48,074


$ 38,909


$ 175,514


$ 141,384


Less:









Share-based compensation

8,496


5,691


27,744


19,273


Contingent consideration (included in compensation expense)

(257)


3,831


(358)


8,624


Acquisition and other related costs

11


-


36


-


Noncontrolling interest joint venture

102


14


230


17


Non-GAAP sales and marketing

$ 39,722


$ 29,373


$ 147,862


$ 113,470











System development and programming

$ 12,334


$ 9,205


$ 43,794


$ 34,787


Less:









Share-based compensation

2,113