Concur Reports Results for Second Quarter of Fiscal 2013

REDMOND, Wash., May 1, 2013 — Concur (Nasdaq: CNQR) today reported financial results for its second quarter ended March 31, 2013.

Concur reported total revenue for the second quarter of fiscal 2013 of $127.4 million, up 17.5% from the year-ago quarter and up 3.7% from the prior quarter. GAAP net loss attributable to Concur for the fiscal 2013 second quarter was $7.6 million, or $0.14 net loss per share.Fiscal 2013 second quarter non-GAAP pretax income was $13.6 million, or $0.24 per share. 

 “As we discussed in April, we experienced one of the best bookings performances in Concur's history, with new bookings growing more than 100% over the second quarter last year.The strong bookings have resulted in longer implementation cycles, which impacts short-term revenue growth,” said Steve Singh, Chairman and CEO of Concur. “The bookings strength is primarily a result of the better-than-expected momentum in our federal government ETS2 contract and continued strength in our commercial business.We expect revenue growth to accelerate in the second half of fiscal 2013 with greater visibility for fiscal 2014, based on our underlying bookings momentum and the continued success of our core initiatives.”

Singh continued, "We just completed the largest and most successful Fusion conference in our history, where more than 2,000 customers and partners made it clear that they are looking to Concur to drive the innovation agenda for our industry.  Our open platform and connections to the vast travel ecosystem present a unique opportunity to transform a $1 trillion industry.We will provide the leadership to help realize the promise of The Perfect Trip by taking the knowledge, relationships and lessons learned over the past 20 years, and leveraging them to evolve our company and industry into the future.”

Financial Highlights

  • Total revenue was $127.4 million for the second quarter of fiscal 2013, up 17.5% compared to the year-ago quarter, and up 3.7% sequentially.
  • GAAP pre-tax loss was $8.5 million, compared to a GAAP pre-tax income of $1.3 million in the year-ago quarter.GAAP net loss attributable to Concur was $7.6 million, or $0.14 net loss per share, for the second quarter of fiscal 2013, compared to $4.8 million, or $0.09 net loss per share, for the year-ago quarter.
  • Non-GAAP pretax income was $13.6 million, or $0.24 per share, for the second quarter of fiscal 2013, compared to $18.5 million, or $0.33 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 12.4% for the second quarter of fiscal 2013, compared to 18.5% for the year-ago quarter.
  • GAAP cash flows from operations were $18.7 million for the second quarter of fiscal 2013.

Recent Business Highlights

  • Concur is revolutionizing the corporate travel industry by driving innovation for travelers, businesses and suppliers to fuel The Perfect Trip™.  At Fusion 2013, Concur’s annual customer conference, the Company released several new solutions that deliver against this vision – supported by The Concur® T&E Cloud, Concur® Open Booking and Concur® Big Data – including:
    • Concur Open Booking, which enables transactions booked through travel supplier web sites to automatically appear in Concur, delivering complete visibility, streamlined expense reporting and enhanced duty of care data back to corporate clients, regardless of where travel was booked.New partners on the Open Booking platform include:
      • Egencia®, the business travel division of the Expedia, Inc. group.Through Concur Open Booking, trips booked and managed by Egencia are automatically added to Concur Expense where the details pre-populate the expense report. Itinerary details, e-receipts and credit card charges are all matched to deliver increased insight and control to organizations, while making completing expense reports easier and more efficient for employees.
         
      • IHG (InterContinental Hotels Group), one of the world's leading global hotel companies. With the integration of Concur Open Booking, travelers whose profiles are linked with their IHG loyalty program account will be able to book directly on IHG's seven brand websites — which include InterContinental® Hotels & Resorts, Hotel Indigo®, Crowne Plaza® Hotels & Resorts, the Holiday Inn® brand family and two extended stay brands — and still get their company's negotiated rates. They'll also enjoy a personalized web experience that includes e-receipts directly from the hotel that automatically pre-populate their expense report.  
    • Concur App Center, which helps businesses and their travelers discover applications that deliver significant value to the enterprise as well as to their business travelers. Through the Concur App Center, web and mobile software developers can list applications (apps) that are integrated using Concur’s open platform.The App Center was launched with more than 30 relevant partners delivering apps for companies and their employees.
       
  • Concur continued to extend its leadership position in travel and expense management, adding a significant number of new clients globally. The Company continued to see strong demand from its core enterprise customer market and to experience rapid growth in the SMB market and emerging international markets as these businesses look to capitalize on the benefits of an integrated travel and expense management solution. 
     
  • A growing number of federal agencies have signed up for the company’s E-Gov Travel Service 2 (ETS2) solution to help them realize the cost savings, compliance benefits, and reporting capabilities that result from using an integrated travel and voucher management service to better manage the total cost of a trip. GSA’s core mission is to deliver cost savings to federal agencies and ETS2 is an essential tool for federal agencies for efficient, cost-effective travel management strategies and delivery of real savings to the taxpayer.
     
  • Concur hosted its annual customer conference – Fusion 2013 – over four days in April at The Venetian® | The Palazzo® in Las Vegas.Fusion brings together Concur clients, partners and staff to connect, collaborate and learn. Over the course of the four-day event, Concur unveiled exciting new innovations to inspire the future of business travel and enable each member of the corporate travel ecosystem to participate and reach that future on their own timetable.For the first time at Fusion, Concur debuted a Partner Expo showcase where more than 65 T&E companies gave the more than 2,000 attendees a first-hand look at what Concur partners have to offer.
     
  • Concur acquired conTgo to add comprehensive location-based services with advanced mobile communications and messaging capabilities to Concur’s offerings, extending the value of the Concur T&E Cloud for partners, suppliers and clients alike. The conTgo team developed an award-winning solution for companies to track, locate and communicate with employees regardless of their location. Working together with the Concur ecosystem of application developers, customers, and suppliers, Concur plans to deliver a variety of new location-based applications that benefit companies and their travelers alike.

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 third quarter of fiscal 2013 to grow approximately 23% year-over-year from the third quarter of fiscal 2012. For the third quarter of fiscal 2013, Concur expects non-GAAP pretax income per share to be $0.37.Non-GAAP pretax 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 23% year-over-year from fiscal 2012.
     
  • Concur expects fiscal 2013 non-GAAP pretax 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 settlement, excess tax benefits from share based compensation, and acquisition and other related costs. The Company expects capital expenditures to be slightly greater than typical range of 6% to 8% of fiscal 2013 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 delays in market adoption and penetration of our subscription service offerings; potential difficulties associated with our deployment and support of our products and services, such as longer implementation cycles at large customer deployments; 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; 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; risks associated with our financing and investment activities; and 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.

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.

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