Concur Below Estimate

Concur Technologies (CNQR - Analyst Report) reported first-quarter fiscal 2012 loss per share from continuing operations of 2 cents, below the Zacks Consensus Estimate of earnings per share of 9 cents. Prior-year earnings from continuing operation was 8 cents.

The company reported non-GAAP earnings per share of 32 cents for the quarter compared with 30 cents in prior-year period.

Revenue

Total revenue was $100.4 million, an increase of 25% year over year. Revenue in the quarter was driven by investments made by the company in the last couple of years in the core business. The company witnessed robust demand in its market.

Income and Expenses

Non-GAAP operating margin was 20% in the reported quarter compared with 22% in the prior-year quarter. Operating income was $4.7 million compared with $9 million. Sales and marketing expense was $40.3 million compared with $27.7 million and general and administration expense was $15.1 million compared with $12.5 million in prior-year quarter.

Balance Sheet and Cash Flow

Cash and cash equivalents were $247.9 million at the end of the quarter with total equity of $710.0 million. Net cash from operating activities was $6.4 million for the first quarter of fiscal 2012.

New Update

During the quarter, the company launched its mobile travel and expense management app on salesforce.com's AppExchange Mobile, making it among the first enterprise apps to leverage AppExchange Mobile. Concur was also the first to deliver mobile app capabilities that enable users to book and complete in-policy air reservations directly from any Android, BlackBerry, iPhone or iPad device.

Concur continued to expand its global presence. In order to support its expanding operations in the Central European market, the company opened new facility in Frankfurt, Germany. The company also has a new service center in Manila, Philippines and doubled its space in San Francisco.

Outlook

The company’s total revenue is expected to increase by 25% year over year in the second quarter of fiscal 2012. For fiscal 2012, total revenue growth is expected to be 25.5% year over year from fiscal 2011.

Concur expects non-GAAP pre-tax income per share to be $1.27 in fiscal 2012 and 28 cents for the quarter. Non-GAAP operating margin for the year is expected to be 18%. Cash flow from operations, excluding one-time acquisition and other related cost, is expected to be in the range of $81 million to $85 million in fiscal 2012.

The company continues to invest in expanding its distribution capacity to drive customer growth while boosting its business performance. The recently made Triplt acquisition and newly launched products support the company’s future growth prospects.

However, Concur is dependent on the sales of a smaller number of solutions. A decline in demand for any of those solutions could substantially affect its results of operations. An important component of its business success depends on its ability to maintain and develop relationships with travel suppliers. Adverse changes in the existing relationships, or an inability to enter into new arrangements with these parties on favorable terms, could reduce the amount, quality and breadth of attractively-priced travel products and services. Further, though the macroeconomic environment improved, the rate of improvement in mature market was very nominal. However, developing economies continued to slide.

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 awhile enabling customers to apply greater insight into their spending patterns through analytics. Major competitors of Concur are Compuware Corporation (CPWR), Oracle Corp. (ORCL - Analyst Report) and SAP AG (SAP - Analyst Report).

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