) reported third-quarter fiscal 2014 non-GAAP pre-tax loss of 4
cents a share (including share based compensation expense) that
fared better than the Zacks Consensus Estimate of a loss of 7
cents. However, the reported figure plummeted from 13 cents earned
in the prior-year quarter.
Excluding share based compensation expense, the company reported
earnings of 25 cents compared with 39 cents in the year-ago
On a GAAP basis, the company delivered a breakeven compared with
an earnings of 5 cents in the prior-year period.
The company reported non-GAAP revenues of $177 million, up 28%
year over year and 6% sequentially. Revenues surpassed the Zacks
Consensus Estimate of $175 million. Including one-time revenues of
$1.4 million from divested businesses, GAAP revenues came in at
The company has been benefiting from robust growth in its core
business, driven by the increased demand for integrated travel and
expense management solutions. The Perfect Trip initiative that was
started a couple of years back has been going strong as reflected
by the increase in its distribution capacity and the ongoing
integration of the travel space. This initiative is driven by the
presence of an open platform - Travel & Expense (T&E) that
makes the travel ecosystem more efficient and competitive. The
increasing acceptance of this initiative by Concur's customers,
partners, developers, and suppliers across the globe reflects the
immense potential of this novel concept.
However, the company's financials have been negatively impacted
by the increasing expenses in the quarter. Concur's sales and
marketing expenses increased 27.0% year over year to $71.2 million
while general and administration expenses rose 23.8% year over year
to $25.9 million. This led to a 28.5% decline in non-GAAP operating
income to $17.5 million and a decrease of 770 basis points in
operating margin to 9.9%.
Other Financial Details
Concur ended the quarter with cash and cash equivalents of
$475.0 million and shareholders' equity of $768.7 million.
Net cash from operating activities decreased to $25.5 million
from $28.0 million in the prior-year quarter.
Along with the earnings release, management provided guidance
for the fourth quarter and full-year fiscal 2014.
Concur expects non-GAAP revenues for the fourth-quarter fiscal
2014 to grow about 21% year over year and expects non-GAAP pre-tax
income per share to be about 32 cents a share.
Management revised its guidance for fiscal 2014 for non-GAAP
revenue, which is now expected to increase by approximately 27%
year over year compared with 26% projected earlier. The company
reiterated its outlook for non-GAAP pre-tax income per share at 93
cents a share. The non-GAAP operating margin is expected to be
about 10% compared with the earlier provided range of 10%-12%.
Cash flow from operations is predicted to be not less than $85
million, up from $72 million projected earlier, while capital
expenditures are expected to be about 8% of fiscal 2014
Concur currently holds a Zacks Rank #3 (Hold). Some other
better-ranked stocks in the industry include Open Text Corporation
), Pegasystems Inc. (
) and Trend Micro Inc. (
). All three stocks sport a Zacks Rank #1 (Strong Buy).
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