Concur Reports Strong Revenue and Earnings Growth in First Quarter of Fiscal 2010

Company continues to invest against long-term global growth objectives; enters into new strategic alliances with leaders in corporate travel supply chain.

REDMOND, Wash., Feb. 3, 2010 -- Concur (Nasdaq: CNQR), the world's leading provider of on-demand Employee Spend Management services, today reported financial results for its first fiscal quarter ended December 31, 2009.

Concur reported total revenue for the first quarter of fiscal 2010 of $67.7 million. Total revenue for the quarter was up 16% from the year-ago quarter and up 4% from the prior quarter. Fiscal 2010 first quarter net income was $6.5 million, or $0.12 per share, exceeding company expectations. This compares to net income of $5.8 million, or $0.11 per share, in the year-ago quarter.

"I am very pleased with our performance as we executed exceptionally well across the business in the first quarter of fiscal 2010," said Steve Singh, chairman and CEO of Concur. "We see a variety of opportunities to continue to grow our business substantively over the next five years. These vehicles include growing our customer base in the markets we currently serve, geographic expansion, addressing the emerging business sector, and of course continuing to deliver new innovative services that drive greater efficiency into the corporate travel supply chain. We are committed to investing aggressively against each of these long-term growth opportunities.”

Singh continued, “Against those opportunities, we are expanding our distribution capacity and enhancing our content strategy via global partnerships. The long-term global alliance with Amadeus expands our market reach and affords our clients greater choice and flexibility for managing corporate travel and expenses on a global basis. And our successful American Express relationship is extended with a global agreement with American Express Business Travel that offers clients one comprehensive corporate travel and expense management program. These partnerships further validate Concur’s industry-leading vision and are a testament to Concur’s commitment to be a global leader in travel and expense management.”

Financial Highlights

-- Total revenue was $67.7 million for the first quarter of fiscal 2010, up 16% compared to the year-ago quarter, and up 4% sequentially. Revenues as reported herein include both Subscription revenue and Consulting and Other revenue as reported separately in prior periods.

-- Net income was $6.5 million, or $0.12 per share, for the first quarter of fiscal 2010, compared to $5.8 million, or $0.11 per share, for the year-ago quarter.

-- Non-GAAP pretax income was $15.7 million, or $0.30 per share, for the first quarter of fiscal 2010, compared to $13.1 million, or $0.25 per share, for the year-ago quarter. Non-GAAP net income was $9.9 million, or $0.19 per share, for the first quarter of fiscal 2010, compared to $8.4 million, or $0.16 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 23% for the first quarter of fiscal 2010, up from 21% for the year-ago quarter.

-- Cash flows from operations were $14.1 million for the first quarter of fiscal 2010, up 276% from the year-ago quarter.

Recent Business Highlights

-- Concur entered into a long-term global strategic alliance with Amadeus, a leading global technology and distribution partner to the travel industry, to bring key technologies together for a combined travel and expense management solution and to extend both companies’ core offerings.

-- Concur and American Express Business Travel, a leading provider of global travel management services and expertise, announced a global agreement that offers clients one comprehensive corporate travel and expense management program. This extends Concur’s successful relationship with American Express through the agreement previously announced with American Express’s Global Commercial Card business.

-- Concur signed global distribution and content agreements with Carlson Wagonlit Travel and Travelport, two industry-leading providers in the travel industry.

-- Concur released Concur® Mobile for iPhone on the Apple App Store. Also available for BlackBerry and Windows Mobile devices, this powerful extension of Concur® Travel & Expense lets mobile workers change flights; book taxis, hotels or dining; capture expenses; and approve expense reports – all from their hand-held device – within policy while on the road.

-- Concur ushered in a new era of on-demand services with the launch and immediate availability of Concur® Advantage services – a unique selection of value-added services and support – from project management through help desk support and everything in between – to help clients maximize the value of Concur solutions.

-- Concur announced a significant milestone as the company’s client count reached the 10,000 plateau – a customer base that represents over $35 billion in employee spend – during its recently completed fiscal 2009.

-- Concur hosted clients and partners at Concur Fusion – the company’s premier client event of the year – February 1-4, 2010 in Boca Raton, Florida.

-- Concur announced that Concur Travel & Expense featuring Concur Mobile was selected as the winner of the prestigious ‘Best Expense Management Service Provider’ award at London’s Business Travel Awards 2010. This award is one of the most valued and respected accolades within the business travel industry, reflecting the sentiments of some of the industry’s most important and influential people.

-- Concur chairman and CEO Steve Singh was named to Business Travel Magazine’s 25 Most Influential Executives in the business travel Industry for 2009, and also appointed to serve as the new Chair for 2010 Board of Trustees of the NBTA Foundation, NBTA's education and research foundation.

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 net income per share for the second quarter of fiscal 2010 to be $0.10, assuming an estimated effective tax rate of 36.5%, non-GAAP pre-tax income per share to be $0.27, and non-GAAP net income per share to be $0.17, assuming an estimated effective tax rate of 36.5%.

-- Concur expects net income per share for fiscal 2010 to be $0.52, assuming an estimated effective tax rate of 36.5%, non-GAAP pre-tax income per share to be $1.27, and non-GAAP earnings per share to be $0.80, assuming an estimated effective tax rate of 36.5%.

-- Concur expects the fiscal 2010 non-GAAP operating margin to be 23% or more for the year as a whole.

-- Concur expects cash flows from operations in fiscal 2010 to be between $71 million and $74 million, and capital expenditures of approximately $16 million.

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: adverse economic or market conditions, such as the current economic downturn, 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 difficulties associated with our realization of the benefits related to our acquisition of Etap-On-Line; potential difficulties associated with our realization of the benefits related to our business relationship with American Express; 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 of the hosting infrastructure for our subscription service offerings; 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 associated with expansion into new geographic markets; the lengthy sales cycle for our products and services; and uncertain market acceptance of recently-introduced or future products and services.

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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