Q1 non-GAAP revenue and non-GAAP EPS exceed guidance
Company reports Q1 non-GAAP revenue growth of 31%
Concur (CNQR) today reported financial results for its first quarter ended December 31, 2013.
Concur reported total GAAP revenue for the first quarter of fiscal 2014 of $163.1 million. Excluding revenue from businesses that the company intends to divest, non-GAAP revenue for the first quarter of 2014 was $160.3 million, up 31% from the year-ago quarter and up 4% from the prior quarter. GAAP net loss attributable to Concur for the first quarter of fiscal 2014 was $24.2 million, or $0.43 per share. Fiscal 2014 first quarter non-GAAP pretax income was $12.4 million, or $0.21 per share.
"We kicked off fiscal 2014 with a strong first quarter in which we exceeded expectations for revenue, earnings, cash flow from operations and free cash flow. New customer growth remains very robust as more than 1,000 new customers joined the Concur family. We saw continued traction around our open platform initiatives as customers, travelers, developers and partners embrace TripLink™ and the Concur T&E Cloud," said Steve Singh, Chairman and CEO of Concur. "Driven by a strong demand environment and strong business execution, we are continuing to invest in our vision of the Perfect Trip and to drive greater efficiency into the corporate travel supply chain. That commitment to industry transformation is driving greater value for our customers, for business travelers and our partners and is fueling our capacity to cross $1 billion in annual revenues in the years ahead."
Financial Highlights
Business Highlights
Concur is transforming the corporate travel industry by driving innovation for travelers, businesses and suppliers to fuel The Perfect Trip™. The Company's mission to make travel better for the entire travel ecosystem is supported by product development efforts, partner and platform initiatives, investments in the Perfect Trip Fund, and strategic acquisitions. Some of the highlights from the first quarter of fiscal 2014 included:
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.
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: potential difficulties in connection with recent business and asset acquisitions, including achievement of the anticipated benefits of these acquisitions or the broader integration of such businesses with Concur; adverse economic or market conditions, 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 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 and security of our computer networks and hosting infrastructure for our subscription service offerings; risks associated with the privacy and protection of information while in our possession; 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 or difficulties associated with expansion into new geographic markets; uncertain market acceptance of recently-introduced or future products and services; and risks associated with our financing and investment activities.
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.
Concur Technologies, Inc. |
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Consolidated Statements of Operations |
|||||
(In thousands, except per share amounts) |
|||||
(Unaudited) |
|||||
Three Months Ended |
|||||
2013 |
2012 |
||||
Revenues |
$ 163,078 |
$ 122,798 |
|||
Expenses: |
|||||
Cost of operations |
58,523 |
34,996 |
|||
Sales and marketing |
73,162 |
54,942 |
|||
Systems development and programming |
21,564 |
14,227 |
|||
General and administrative |
24,904 |
19,632 |
|||
Revaluation of contingent consideration |
(1,228) |
2,809 |
|||
Amortization of intangible assets |
5,230 |
4,464 |
|||
Total expenses |
182,155 |
131,070 |
|||
Operating loss |
(19,077) |
(8,272) |
|||
Other income (expense): |
|||||
Interest income |
859 |
554 |
|||
Interest expense |
(10,880) |
(4,968) |
|||
Loss from equity investments |
(1,130) |
(601) |
|||
Other, net |
(582) |
(88) |
|||
Total other expense |
(11,733) |
(5,103) |
|||
Loss before income tax |
(30,810) |
(13,375) |
|||
Income tax benefit |
(6,439) |
(1,057) |
|||
Consolidated net loss |
(24,371) |
(12,318) |
|||
Less: loss attributable to noncontrolling interest |
151 |
286 |
|||
Net loss attributable to Concur |
$ (24,220) |
$ (12,032) |
|||
Net loss per share attributable to Concur common stockholders: |
|||||
Basic |
$ (0.43) |
$ (0.22) |
|||
Diluted |
(0.43) |
(0.22) |
|||
Weighted average shares used in computing net loss per share: |
|||||
Basic |
56,056 |
55,082 |
|||
Diluted |
56,056 |
55,082 |
Concur Technologies, Inc. |
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Consolidated Balance Sheets |
|||||||
(In thousands, except per share amounts) |
|||||||
(Unaudited) |
|||||||
December 31, |
September 30, |
||||||
2013 |
2013 |
||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ 406,176 |
$ 301,696 |
|||||
Short-term investments |
442,695 |
531,065 |
|||||
Accounts receivable, net of allowance of $5,642 and $3,567 |
110,803 |
106,587 |
|||||
Deferred tax assets |
44,218 |
43,987 |
|||||
Deferred costs and other assets |
54,609 |
55,341 |
|||||
Total current assets |
1,058,501 |
1,038,676 |
|||||
Non-current assets: |
|||||||
Property and equipment, net |
84,804 |
82,414 |
|||||
Investments |
101,585 |
101,756 |
|||||
Deferred costs and other assets |
48,695 |
51,082 |
|||||
Intangible assets, net |
118,429 |
123,297 |
|||||
Deferred tax assets |
3,417 |
3,255 |
|||||
Goodwill |
325,343 |
324,454 |
|||||
Total assets |
$ 1,740,774 |
$ 1,724,934 |
|||||
Liabilities and equity |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ 14,333 |
$ 15,036 |
|||||
Customer funding liabilities |
54,605 |
37,039 |
|||||
Accrued compensation |
23,662 |
30,142 |
|||||
Acquisition-related liabilities |
2,155 |
2,231 |
|||||
Acquisition-related contingent consideration |
1,987 |
3,182 |
|||||
Other accrued expenses and liabilities |
26,520 |
34,537 |
|||||
Deferred revenues |
95,622 |
88,550 |
|||||
Convertible senior notes, net |
268,846 |
265,426 |
|||||
Total current liabilities |
487,730 |
476,143 |
|||||
Non-current liabilities: |
|||||||
Convertible senior notes, net |
386,853 |
381,807 |
|||||
Deferred rent and other long-term liabilities |
10,610 |
10,373 |
|||||
Deferred revenues |
10,942 |
15,499 |
|||||
Tax liabilities |
16,112 |
22,832 |
|||||
Total liabilities |
912,247 |
906,654 |
|||||
Equity: |
|||||||
Concur stockholders' equity: |
|||||||
Common stock, $0.001 par value per share |
56 |
56 |
|||||
Authorized shares: 195,000 |
|||||||
Shares issued and outstanding: 56,073 and 56,044 |
|||||||
Additional paid-in capital |
993,127 |
961,497 |
|||||
Accumulated deficit |
(165,898) |
(141,679) |
|||||
Accumulated other comprehensive loss |
(638) |
(1,815) |
|||||
Total Concur stockholders' equity |
826,647 |
818,059 |
|||||
Noncontrolling interest |
1,880 |
221 |
|||||
Total equity |
828,527 |
818,280 |
|||||
Total liabilities and equity |
$ 1,740,774 |
$ 1,724,934 |
Concur Technologies, Inc |
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Consolidated Statements of Cash Flows |
||||||
(In thousands) |
||||||
(Unaudited) |
||||||
Three Months Ended |
||||||
Operating activities: |
2013 |
2012 |
||||
Consolidated net loss |
$ (24,371) |
$ (12,318) |
||||
Adjustments to reconcile consolidated net loss to net cash provided by operating activities: |
||||||
Amortization of intangible assets |
5,230 |
4,464 |
||||
Depreciation and amortization of property and equipment |
9,163 |
6,621 |
||||
Accretion of discount and issuance costs on notes |
8,467 |
3,172 |
||||
Share-based compensation |
30,489 |
17,729 |
||||
Revaluation of contingent consideration |
(1,228) |
2,809 |
||||
Deferred income taxes |
(7,035) |
(1,631) |
||||
Excess tax benefits from share-based compensation |
(146) |
(146) |
||||
Loss from equity investments |
1,130 |
601 |
||||
Changes in operating assets and liabilities, net of effects from acquisitions: |
||||||
Accounts receivable, net |
(3,953) |
2,261 |
||||
Deferred costs and other assets |
3,334 |
1,414 |
||||
Accounts payable |
547 |
(1,237) |
||||
Accrued liabilities |
(12,044) |
(19,385) |
||||
Deferred revenues |
2,516 |
695 |
||||
Net cash provided by operating activities |
12,099 |
5,049 |
||||
Investing activities: |
||||||
Purchases of investments |
(248,385) |
(127,508) |
||||
Maturities of investments |
336,523 |
76,344 |
||||
Increase in customer funding liabilities |
17,467 |
2,989 |
||||
Investment in and loans to unconsolidated affiliates |
(3,524) |
(17,326) |
||||
Capital expenditures |
(12,306) |
(10,534) |
||||
Net cash provided by (used in) investing activities |
89,775 |
(76,035) |
||||
Financing activities: |
||||||
Investments in consolidated joint venture by noncontrolling interest |
1,809 |
- |
||||
Payments on repurchase of common stock |
(441) |
(201) |
||||
Net proceeds from share-based equity award activity |
272 |
563 |
||||
Proceeds from employee stock purchase plan activity |
805 |
656 |
||||
Minimum tax withholding on restricted stock awards |
(26) |
(96) |
||||
Excess tax benefits from share-based compensation |
146 |
146 |
||||
Net cash provided by financing activities |
2,565 |
1,068 |
||||
Effect of foreign currency exchange rate changes on cash and cash equivalents |
41 |
(104) |
||||
Net increase (decrease) in cash and cash equivalents |
104,480 |
(70,022) |
||||
Cash and cash equivalents at beginning of period |
301,696 |
302,274 |
||||
Cash and cash equivalents at end of period |
$ 406,176 |
$ 232,252 |
Concur Technologies, Inc. |
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Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures |
|||||||
(In thousands, except per share and margin data) |
|||||||
(Unaudited) |
|||||||
Three Months Ended December 31, |
|||||||
2013 |
2012 |
||||||
Non-GAAP revenues: |
|||||||
Revenues |
$ 163,078 |
$ 122,798 |
|||||
Business operations to be divested |
(2,782) |
- |
|||||
Non-GAAP revenues |
$ 160,296 |
$ 122,798 |
|||||
Operating income (loss): |
|||||||
Operating loss |
$ (19,077) |
$ (8,272) |
|||||
Loss from operations as a % of total revenue (operating margin) |
-11.7% |
-6.7% |
|||||
Add back: |
|||||||
Share-based compensation |
30,489 |
17,729 |
|||||
Amortization of intangibles |
5,230 |
4,464 |
|||||
Acquisition and other related costs |
636 |
299 |
|||||
Revaluation of contingent consideration |
(1,228) |
2,809 |
|||||
Contingent consideration (included in compensation expense) |
- |
1,555 |
|||||
Noncontrolling interest joint venture |
151 |
286 |
|||||
Business operations to be divested |
(776) |
- |
|||||
Non-GAAP operating income |
$ 15,425 |
$ 18,870 |
|||||
Non-GAAP operating income as a % of total revenue (non-GAAP operating margin) |
9.6% |
15.4% |
|||||
Net income (loss) attributable to Concur: |
|||||||
Net loss attributable to Concur |
$ (24,220) |
$ (12,032) |
|||||
Add back: |
|||||||
Share-based compensation |
30,489 |
17,729 |
|||||
Amortization of intangibles |
5,230 |
4,464 |
|||||
Acquisition and other related costs |
636 |
299 |
|||||
Revaluation of contingent consideration |
(1,228) |
2,809 |
|||||
Contingent consideration (included in compensation expense) |
- |
1,555 |
|||||
Loss from equity investments |
1,130 |
601 |
|||||
Accretion of notes discount |
7,627 |
2,846 |
|||||
Income tax benefit |
(6,439) |
(1,057) |
|||||
Business operations to be divested |
(776) |
- |
|||||
Non-GAAP pretax income attributable to Concur |
$ 12,449 |
$ 17,214 |
|||||
Diluted net income (loss) per share attributable to Concur: |
|||||||
Diluted net loss per share attributable to Concur |
$ (0.43) |
$ (0.22) |
|||||
Add back: |
|||||||
Share-based compensation |
0.52 |
0.31 |
|||||
Amortization of intangibles |
0.09 |
0.08 |
|||||
Acquisition and other related costs |
0.01 |
0.01 |
|||||
Revaluation of contingent consideration |
(0.02) |
0.05 |
|||||
Contingent consideration (included in compensation expense) |
- |
0.03 |
|||||
Loss from equity investments |
0.02 |
0.01 |
|||||
Accretion of notes discount |
0.13 |
0.05 |
|||||
Income tax benefit |
(0.10) |
(0.02) |
|||||
Business operations to be divested |
(0.01) |
- |
|||||
Non-GAAP pretax diluted income per share attributable to Concur |
$ 0.21 |
$ 0.30 |
|||||
Shares used in calculation of GAAP and non-GAAP income (loss) per share attributable to Concur: |
|||||||
GAAP basic shares |
56,056 |
55,082 |
|||||
GAAP diluted shares |
56,056 |
55,082 |
|||||
Adjustment for warrants associated with convertible senior notes |
1,511 |
- |
|||||
Adjustment for share-based equity awards |
1,919 |
2,359 |
|||||
Non-GAAP diluted shares |
59,486 |
57,441 |
Concur Technologies, Inc. |
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Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense |
|||||
(In thousands, except per share and margin data) |
|||||
(Unaudited) |
|||||
Three Months Ended December 31, |
|||||
2013 |
2012 |
||||
Non-GAAP operating expense: |
|||||
Cost of operations |
$ 50,345 |
$ 32,329 |
|||
Sales and marketing |
58,343 |
45,005 |
|||
Systems development and programming |
17,511 |
12,090 |
|||
General and administrative |
18,496 |
14,478 |
|||
Total |
$ 144,695 |
$ 103,902 |
|||
Non-GAAP operating margin * |
9.6% |
15.4% |
|||
Non-GAAP pretax diluted income per share attributable to Concur * |
$ 0.21 |
$ 0.30 |
|||
Three Months Ended December 31, |
|||||
2013 |
2012 |
||||
Cost of operations |
$ 58,523 |
$ 34,996 |
|||
Less: |
|||||
Share-based compensation |
6,064 |
2,569 |
|||
Acquisition and other related costs |
- |
1 |
|||
Noncontrolling interest joint venture |
108 |
97 |
|||
Business operations to be divested |
2,006 |
- |
|||
Non-GAAP cost of operations |
$ 50,345 |
$ 32,329 |
|||
Sales and marketing |
$ 73,162 |
$ 54,942 |
|||
Less: |
|||||
Share-based compensation |
14,680 |
8,440 |
|||
Contingent consideration (included in compensation expense) |
- |
1,406 |
|||
Acquisition and other related costs |
- |
3 |
|||
Noncontrolling interest joint venture |
139 |
88 |
|||
Business operations to be divested |
- |
- |
|||
Non-GAAP sales and marketing |
$ 58,343 |
$ 45,005 |
|||
Systems development and programming |
$ 21,564 |
$ 14,227 |
|||
Less: |
|||||
Share-based compensation |
4,012 |
1,964 |
|||
Contingent consideration (included in compensation expense) |
- |
149 |
|||
Acquisition and other related costs |
- |
1 |
|||
Noncontrolling interest joint venture |
41 |
23 |
|||
Business operations to be divested |
- |
- |
|||
Non-GAAP systems development and programming |
$ 17,511 |
$ 12,090 |
|||
General and administrative |
$ 24,904 |
$ 19,632 |
|||
Less: |
|||||
Share-based compensation |
5,733 |
4,756 |
|||
Acquisition and other related costs |
636 |
294 |
|||
Noncontrolling interest joint venture |
39 |
104 |
|||
Business operations to be divested |
- |
- |
|||
Non-GAAP general and administrative |
$ 18,496 |
$ 14,478 |
|||
* Please refer to the reconciliation of GAAP to non-GAAP financial measures in previous table. |
CONCUR TECHNOLOGIES, INC.
About Concur's Non-GAAP Financial Measures
This release contains non-GAAP financial measures. The tables above reconcile the non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with accounting principles generally accepted in the United States ("GAAP").
Non-GAAP financial measures should not be considered as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Concur's non-GAAP financial measures do not reflect a comprehensive system of accounting and they differ from GAAP measures with similar names and from non-GAAP financial measures with the same or similar names that are used by other companies. We strongly urge investors and potential investors in our securities to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures that are included in this release and our consolidated financial statements, including the notes thereto, and the other financial information contained in our periodic filings with the Securities and Exchange Commission and not to rely on any single financial measure to evaluate our business.
Concur's management believes that its non-GAAP financial measures provide useful information to investors because it allows investors to view the business through the eyes of management. Further, Concur believes that its non-GAAP financial measures provide meaningful supplemental information regarding Concur's operating results because they exclude amounts that Concur excludes as part of its monitoring of operating results and assessing the performance of the business. In addition, Concur believes that its non-GAAP financial measures facilitate the comparison of results for current periods and the business outlook for future periods with results of past periods because the measures provide a special focus on the underlying operating performance of the business relative to expectations.
Concur presents the following non-GAAP financial measures in this release: non-GAAP revenues, non-GAAP operating income, non-GAAP operating margin, non-GAAP operating expense, non-GAAP pretax income, non-GAAP cost of operations, non-GAAP sales and marketing expenses, non-GAAP systems development and programming expenses, non-GAAP general and administrative expenses, non-GAAP diluted shares, and non-GAAP diluted pretax income per share. Concur excludes the following items as noted from these non-GAAP financial measures:
Further, in the calculation of non-GAAP pretax income per share:
Except as noted below, Concur believes that all of the following considerations apply equally to each of the non-GAAP financial measures that we present:
About Concur
Concur® is a leading provider of integrated travel and expense management solutions. Concur's easy-to-use Web-based and mobile solutions help companies, federal agencies and their employees control costs and save time. Concur's open platform enables the entire travel and expense ecosystem of customers, suppliers, and developers to access and extend Concur's T&E cloud. Concur's systems adapt to individual employee preferences and scale to meet the needs of companies from small to large. Learn more at http://www.concur.com or the Concur blog.
Make-A-Wish is a registered trademark of the Make-A-Wish Foundation of America.