Zacks_Analysts' Blog : Concur Beats Estimate - Analyst Blog

Concur Technologies Inc. (CNQR) reported second-quarter fiscal 2011 earnings per share from continuing operations of 6 cents, below the Zacks Consensus Estimate of 9 cents and prior-year earnings per share of 13 cents. However, the company’s earnings and revenue performance for the quarter was above its expectations led by strong demand for its services.

Revenue

Total revenue increased by 16% year over year to $84.6 billion. On a sequential basis, total revenue increased by 5%. The company benefited in the quarter from its acquisition of Triplt, which provided Concur with new revenue streams ahead of the traditional subscription revenue model. Launch of Concur Japan and Concur India during the quarter also benefited the company.

 Income and Expenses

Sales and marketing expense in the quarter was $37.8 million compared with $22.7 million in the prior-year period. General and administrative expense was $14.1 million compared with $9.6 million. The company incurred an operating loss of $2.3 million in the quarter compared with operating income of $11.0 million.

Balance Sheet & Cash Flow

Cash and cash equivalent was $385.1 million at the end of the quarter compared with $329.1 million at the end of the prior-year quarter. Stockholders’ equity came in at $696.5 million.

Net cash flow from operating activities was $16.0 million in the quarter compared with $18.2 million in the prior-year period.

Outlook

The company expects its third-quarter fiscal 2011 revenue to increase by 18% year over year. Revenue growth for fiscal 2011 is expected to be same as growth rate seen in fiscal 2010.

Concur expects non-GAAP pre-tax income per share to be $0.29 in the third quarter of fiscal 2011. 

Fiscal 2011 non-GAAP operating margin is expected to be 21.5% or more and cash flows from operations is expected to be between $84 million and $87 million, excluding one-time acquisition and other related costs, and capital expenditures in the range of $25 million and $27 million.

The company continues to invest in expanding its distribution capacity to drive strong customer growth and boost its business performance. The recently made Triplt acquisition and new launched products supports the company’s future growth prospects.

Concur Technologies is a provider of business services that automate the processes involved in the management of corporate expense. Concur focuses on reducing costly and inefficient expense processes in businesses of all sizes, by streamlining the reimbursement processes, reducing operating costs, improving internal controls, and enabling customers to apply greater insight into their spending patterns through analytics. Major competitors of Concur are Compuware Corporation (CPWR), Oracle Corp. (ORCL) and SAP AG (SAP).

We currently maintain our Neutral rating on Concur Technologies, with a Zacks #4 Rank (Sell recommendation) over the next one-to-three months.