CONCUR TECHNOLOGIES, INC. 
By BELLEVUE, Wash., Jan. 29, 2014 /PRNewswire/ -- Concur (Nasdaq: 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(TM) 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
-- Total GAAP revenue was $163.1 million in the first quarter of fiscal
2014, including $2.8 million in revenue from businesses the company
intends to divest. Excluding the $2.8 million, non-GAAP revenue was
$160.3 million for the first quarter of fiscal 2014, an increase of
approximately 31% compared to the year-ago quarter and up 4%
sequentially.
-- GAAP pretax loss was $30.8 million for the first quarter of fiscal 2014,
compared to a GAAP pretax loss of $13.4 million for the year-ago
quarter. GAAP net loss attributable to Concur was $24.2 million, or
$0.43 per share, for the first quarter of fiscal 2014, compared to GAAP
net loss attributable to Concur of $12.0 million, or $0.22 per share,
for the year-ago quarter.
-- Non-GAAP pretax income was $12.4 million, or $0.21 per share, for the
first quarter of fiscal 2014, compared to $17.2 million, or $0.30 per
share, for the year-ago quarter. Please refer to "About Concur's
Non-GAAP Financial Measures" below for an explanation of our non-GAAP
financial measures used in this press release.
-- Non-GAAP operating margin was 9.6% for the first quarter of fiscal 2014,
compared to 15.4% for the year-ago quarter.
-- GAAP cash flows from operations were $12.1 million for the first quarter
of fiscal 2014.
Business Highlights
Concur is transforming the corporate travel industry by driving innovation for travelers, businesses and suppliers to fuel The Perfect Trip(TM). 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:
-- Rapidly expanding customer base: Concur continued to extend its
leadership position in travel and expense management with the addition
of more than one thousand new customers in the first quarter. The
Company experienced strong demand across all its markets, including its
core enterprise customer segment, the SMB market, and emerging
international markets as businesses of all sizes look to capitalize on
the benefits of an integrated travel and expense management solution.
-- Platform success: With more than 200 partners, travel suppliers and
developers connected to Concur's customers through the Concur T&E Cloud
and the Concur App Center, both enterprises and travelers are benefiting
from access to additional products and services that extend the value of
their Concur solution. Concur is leveraging innovation from solution
providers around the world to expand the Company's ecosystem and drive
material savings for its customers who are adopting solutions at a rapid
pace. For example, a large enterprise recently identified more than
$500,000 in savings using Concur and our App Center partner Universal
VAT to reclaim value-added taxes. Several hundred clients of all sizes
in the Pharmaceutical and Medical Device industries have leveraged
Concur App Center partner solutions to comply with physician payment
regulations in the US. An enhancement to the integration between Concur
and Cegedim will now enable clients globally to have instant access to
Cegedim's global physician database OneKey directly from within Concur
to further comply with global transparency requirements.
-- Continued strong progress on Government deployments: The Company made
additional progress working with U.S. government agencies to deploy
Concur's travel and expense management services under the U.S. General
Services Administration (GSA) E-Gov Travel Services 2 (ETS2) for
managing online bookings, travel authorizations and voucher processing.
Ten agencies are now live with implementations also underway at many
additional agencies. Agencies are also realizing the benefit of working
with more than ten Travel Management Companies (TMC) who are active in
Concur's embedded TMC program.
-- TripLink momentum: Customers continue to embrace an open ecosystem to
deliver a full view of their travel and expenses by adopting TripLink.
This momentum is driving supplier adoption and facilitating an easier
travel experience for business travelers. Significantly, the industry is
also recognizing the value of partnering with Concur as many TMCs,
including Christopherson Business Travel, Gant Travel Management,
Ovation Corporate Travel, and others are leveraging Concur's cloud
services platform to provide a holistic view of travel and spend and to
deliver the best customer experience.
-- ExpenseIt® gaining traction: Companies are realizing increased
productivity, visibility and efficiency by adopting ExpenseIt. More than
400 corporate customers are using ExpenseIt, driving increased user
adoption and delivering a simpler solution for capturing receipts and
filing expenses.
-- TripIt® helps make wishes come true: Over the holiday season, TripIt
helped frequent travelers donate more than 1.2 million airline miles to
Make-A-Wish®. More than 70% of wishes granted by Make-A-Wish involve
travel. These donations help Make-A-Wish send even more children and
their families on the trips of their dreams.
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.
-- Concur expects non-GAAP revenue for the second quarter of fiscal 2014 to
grow approximately 30% year-over-year from the second quarter of fiscal
2013. For the second quarter of fiscal 2014, Concur expects non-GAAP
pretax income per share to be $0.14. Non-GAAP revenue and pretax income
exclude the effects of businesses the company intends to divest and
non-cash related items such as stock-based compensation expenses,
amortization of intangible assets, and the accretion of the discount on
our convertible senior notes. It also excludes the non-cash accounting
implications and cash fees and expenses of acquisitions and other
related strategic activity in which the Company may deploy capital.
-- Concur expects fiscal 2014 non-GAAP revenue to grow approximately 26%
year-over-year from fiscal 2013.
-- Concur expects fiscal 2014 non-GAAP pretax income per share to be at
least $0.93.
-- Concur expects fiscal 2014 non-GAAP operating margin to be in the range
of 10% to 14%.
-- Concur expects cash flows from operations in fiscal 2014 to be at least
$72 million, excluding excess tax benefits from share based
compensation, acquisition and other related costs, and noncontrolling
interest. The Company expects capital expenditures to be 8% to 9% of
fiscal 2014 revenue.
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.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
December 31,
------------
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.
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
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
December 31,
------------
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.
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.
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:
-- Share-based compensation. Concur's non-GAAP financial measures exclude
share-based compensation, which consists of expenses for restricted
stock units ("RSU"). Concur excludes these expenses from its non-GAAP
financial measures primarily because they are non-cash expenses that are
not considered part of ongoing operating results when assessing the
performance of our business. Excluding these amounts improves
comparability of the performance of the business across periods.
-- Amortization of intangible assets. In accordance with GAAP, operating
expenses include amortization of acquired intangible assets such as
customer relationships and technology. Concur excludes these items from
its non-GAAP financial measures because they are typically static
expenses that Concur does not consider part of ongoing operating results
when assessing the performance of our business, and Concur believes that
doing so facilitates comparisons to its historical operating results and
to the results of other companies in our industry, which have their own
unique acquisition histories.
-- Acquisition and other related costs. Concur excludes the effects of
acquisition and other related costs from its non-GAAP financial
measures. Acquisition and other related costs include transaction fees,
due diligence costs, travel expenses, and other one-time direct costs
associated with strategic activity in which we may deploy capital. Such
expenses are incurred in connection with our acquisitions and other
strategic investments, which generally would not have otherwise been
incurred in the periods presented as a part of our continuing
operations. Concur also believes it is useful for investors to
understand the effects of these items on our operations.
-- Revaluation of contingent consideration. The authoritative guidance on
business combinations requires contingent consideration to be recorded
at fair value on the acquisition date. The authoritative guidance also
requires that changes in the fair value of the contingent consideration
subsequent to the acquisition date be recorded in the consolidated
statements of operations. Concur excludes from its non-GAAP financial
measures the gains or losses from the fair value re-measurement of the
contingent consideration in order to facilitate the comparison of
post-acquisition operating results. Concur believes that it is useful
for investors to understand the effects of these items on our
operations.
-- Contingent consideration (included in compensation expense). Concur's
non-GAAP financial measures exclude contingent consideration included in
compensation expense which relates to the cash payment to certain TripIt
employees whose right to receive such payment is forfeited if they
terminate their employment prior to the required service period. The
contingent cash payment that these employees are entitled to receive is
part of the consideration that all TripIt shareholders received from
Concur in exchange for their TripIt shares. As the contingent payment
is subject to continued employment, GAAP requires that it be accounted
for as compensation expense and such expense is subject to revaluation
similar to the above mentioned "revaluation of contingent
consideration." Concur excludes this item from its non-GAAP financial
measures primarily because it is a component of the deal consideration
and it is not considered part of ongoing operating results when
assessing the performance of our business. The exclusion of these
expenses facilitates the comparison of post-acquisition operating
results.
-- Noncontrolling interest joint venture. Noncontrolling interest joint
venture includes income or loss from operations attributable to our
joint venture partner and is excluded from the calculation of non-GAAP
operating income because it is unrelated to our ownership in the
venture.
-- Loss from equity investments. For investments under the equity method,
Concur records its proportionate share of investee income or loss,
including adjustments to recognize certain differences between carrying
value and Concur's equity in net assets of the investee at the date of
investment, impairments, and other adjustments required by the equity
method. Concur's non-GAAP financial measures exclude the equity method
adjustments from GAAP income because they are unrelated to our ongoing
operations and are significantly impacted by factors outside our direct
control.
-- Accretion of note discount. In accordance with GAAP, interest expense on
the convertible senior notes includes the accretion of the note
discount, which is a non-cash expense that Concur does not consider part
of ongoing operating results when assessing the performance of our
business.
-- Income tax expense (benefit). Concur excludes this expense (benefit)
from certain non-GAAP financial measures primarily because it is largely
a non-cash expense (benefit) that Concur does not consider a meaningful
component of our operating results when assessing the performance of our
business. The exclusion of this expense (benefit) facilitates the
comparison of our business outlooks for future periods with the results
from prior periods.
-- Business operations to be divested. Business operations to be divested
include the revenues and operating expenses from the recently acquired
call center and BPO businesses, both of which were acquired during the
year ended September 30, 2013 and which Concur intends to divest. As
Concur does not expect these business operations to contribute to
Concur's ongoing operating results in the future, Concur believes it is
useful for investors to understand the effects of these items on our
current operating results.
Further, in the calculation of non-GAAP pretax income per share:
-- Non-GAAP pretax income is calculated by excluding the impacts of the
non-GAAP adjustments described above.
-- Non-GAAP diluted shares are calculated by including the anti-dilutive
impact of options to purchase shares of our own stock, which reduces the
potential economic dilution upon conversion of our convertible senior
notes. Under GAAP, the anti-dilutive impact of such call options
("Convertible Senior Notes Hedge") is not reflected in diluted shares.
Concur includes the anti-dilutive impact of the Convertible Senior Notes
Hedge, if any, in non-GAAP diluted shares because it is useful for
investors to understand their economic effects.
-- The dilutive effect of all unvested share-based awards, if any, are
included 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:
-- Concur's management uses non-GAAP operating income (including the
derived non-GAAP operating margin), non-GAAP operating expense, non-GAAP
pretax income and non-GAAP diluted pretax income per share in internal
reports used by management in monitoring and making decisions regarding
Concur's business. For example, these measures are used in monthly
financial reports prepared for management, and in quarterly reports to
Concur's Board of Directors. Concur also uses non-GAAP pretax diluted
income per share as a measure to determine executive cash incentive
compensation.
-- Because share-based compensation, amortization of intangible assets,
accretion of discount on convertible senior notes and income tax expense
(benefit) are largely non-cash in nature, Concur believes that non-GAAP
operating income, non-GAAP operating expense, non-GAAP diluted shares,
non-GAAP pretax income and non-GAAP diluted pretax income per share
provide a more focused view of the operations of its business. In
particular, share-based compensation amounts are difficult to forecast
because the magnitude of the charges depends upon the volume and timing
of RSU grants. Excluding these amounts improves comparability of the
performance of the business across periods.
-- The principal limitation of Concur's non-GAAP financial measures is that
they exclude significant expenses that are required by GAAP to be
recorded. In addition, non-GAAP financial measures are subject to
inherent limitations because they reflect the exercise of judgments by
management about which charges are excluded from the non-GAAP financial
measures.
-- To mitigate this limitation, Concur presents its non-GAAP financial
measures in connection with its GAAP results, and recommends that
investors do not give undue weight to its non-GAAP financial measures.
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.
SOURCE Concur
