Zacks_Analysts' Blog : Concur Outpaces Estimate - Analyst Blog

Concur Technologies (CNQR) reported third-quarter fiscal 2011 earnings per share from continuing operations of 17 cents, above the Zacks Consensus Estimate of 10 cents.  Prior-year earnings from continuing operation was 7 cents.

Revenue

Total revenue was $89.5 million, an increase of 19% year over year. A substantial portion of revenue was generated by the company from new customers, driven by an improved demand and expanded distribution network. The company expects to see further increase in demand across all customer segments and geographies.

Income and Expenses

Non-GAAP operating margin was 19.8% in the reported quarter compared with 23.9% in the prior-year quarter. Operating income was $1.8 million compared with $10.5 million. Sales and marketing expense was $36.4 million compared with $24.9 million and general and administration expense was $11.6 million compared with $10.0 million in prior-year quarter.

Balance Sheet and Cash Flow

Cash and cash equivalents was $380.2 million at the end of the quarter with total equity of $706.9 million. Cash flow from operations was $16.3 million for the third quarter of fiscal 2011.

New Update

In early July 2011, Concur completed the acquisition of a leading UK expense claim management provider, GlobalExpense. The third-quarter results did not include financial impact from this acquisition. The company also launched a number of new services and products during the quarter, including Triplt Pro integration and the Concur Advisor Program.

Outlook

The company’s total revenue grew by 22% year over year in the fourth quarter of fiscal 2011. For fiscal 2011, total revenue growth is expected to be approximately 19% year over year from fiscal 2010.  GlobalExpense is expected to contribute $0.5 million in revenue for the fourth quarter of fiscal 2011 and $5.0 million for fiscal year 2012.

Concur expects non-GAAP pre-tax income per share to be $0.37 in the fourth quarter of fiscal 2011, including approximately $0.03 of dilution from acquisition-related activities.

The company continues to invest in expanding its distribution capacity to drive customer growth and boost its business performance. The recently made Triplt acquisition and new launched products support 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 #2 Rank (Buy recommendation) over the next one-to-three months.