Concur Breezes Past Estimate

Zacks

Concur Technologies (CNQR) reported third-quarter fiscal 2012 earnings per share (non-GAAP pre-tax income) of 34 cents, comfortably surpassing the Zacks Consensus Estimate of 8 cents and the prior-year earnings from continuing operations of 29 cents.

On a GAAP basis, earnings per share increased a whopping 200% year over year to 12 cents from the year-ago earnings per share of 4 cents.

Revenue

Total revenue was $113.2 million, up 26.5% year over year and driven by exceptionally strong performance from the SMB market segment with a total of more than 1,000 new customers during the reported quarter.

Income and Expenses

Non-GAAP operating margin was 18.9% in the reported quarter compared with 19.8% in the prior-year quarter. Non-GAAP operating income was $21.4 million compared with $17.7 million reported a year ago.  Sales and marketing expense was $45.2 million, up 23.2% year over year from $36.7 million, while general and administration expense was $18.8 million compared with $11.6 million in the prior-year quarter.

Balance Sheet and Cash Flow

Cash and cash equivalents were $237.8 million at the end of the reported quarter compared with $380.2 million at the end of the previous-year quarter. The company reported total equity of $732 million compared with $700 million a year ago. Net cash from operating activities was $25.1 million in the third quarter of fiscal 2012 versus $16.3 million in the comparable prior-year quarter.

Outlook

The company’s total revenue is expected to increase 24% year over year in the fourth quarter of fiscal 2012. Non-GAAP pre-tax income per share is expected to be 38 cents for fourth quarter 2012.

For fiscal 2012, the company maintained its revenue growth guidance of 26%. Non-GAAP operating margin for the year is expected to be 19%, up from its prior expectation of 18.5%.

Concur expects non-GAAP pre-tax income per share to be $1.37 in fiscal 2012, up from the previous expectation of $1.31. Cash flow from operations, excluding one-time acquisition and other related cost, is expected to be $88 million in fiscal 2012. The company expects capital expenditures to be between $36 million and $38 million.

Recently, Concur’s integrated travel and expense management solution has been selected to power the U.S. General Services Administration (:GSA) program. The program is targeted to manage online bookings, travel authorizations and voucher processing.

Concur Technologies is a provider of business services that automate the processes involved in the management of corporate expense. Major competitors of Concur are Compuware Corporation (CPWR), Oracle Corp. (ORCL) and SAP AG (SAP).

We currently maintain our long-term Neutral recommendation on Concur Technologies that correlates with a Zacks #3 Rank (Hold rating) over the short term.

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