Concur Technologies CEO Discusses F4Q10 Results - Earnings Call Transcript
Concur Technologies
(
)
F4Q10
Earnings Call
November 10, 2010 5:00 p.m. ET
Executives
John Torrey - EVP of Corporate Development
Steve Singh - Chairman and Chief Executive Officer
Frank Pelzer - Chief Financial Officer
Analysts
Stephanie Withers - Goldman Sachs
Brad Reback - Oppenheimer
Brent Thill - UBS
Laura Lederman - William Blair
Michael - FBR Capital Markets
Thomas Ernst - Deutsche Bank
Ross MacMillan - Jefferies & Company
Steve Ashley - Robert W. Baird
Sid Parakh - McAdams Wright Ragen
Ajay Kasargod - Morgan Keegan
Brad Whitt - Gleacher & Company
Brendan Barnicle - Pacific Crest Securities
Presentation
Operator
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Good afternoon. At this time, I would like to welcome everyone to Concur Technologies Q4 Fiscal 2010 earnings conference call. [Operator Instructions] I would now like to turn the conference over to our host, John Torrey, executive vice president of corporate development. Please go ahead sir.
John Torrey
Thank you, operator. Good afternoon, and welcome everyone, to the Concur earnings conference call for our fourth quarter of fiscal 2010. My name is John Torrey, executive vice president of corporate development for Concur.
This call includes presentation slides that will accompany our prepared remarks. To access these slides, please visit our website at www.concur.com. Other information of interest to investors, including our SEC filings, press releases, and recent investor presentations, can be found on the Investor Relations page of our website.
We are now on slide 1. Our speakers for the call today are Steve Singh, our chairman and chief executive officer; and Frank Pelzer, our chief financial officer. After their prepared statements today, Steve and Frank will host a brief question-and-answer session.
Please now advance to slide 2. Before we get started, we want to remind you that during the course of this conference call, we will discuss our business outlook and make other forward-looking statements regarding our current expectations of future events and the future financial performance of the company.
These forward-looking statements are based on information available to us as of today's date and are subject to risk and uncertainty. We encourage you to review the details on the slide 2 and our filings with the Securities and Exchange Commission, which are available at www.sec.gov for additional information on risk factors that could cause actual results to differ materially from our current expectations and the forward-looking statements expressed or implied during this conference call. We assume no duty or obligation to update these forward-looking statements, even though our situation may change in the future.
Please now advance to slide 3. At this time, I'd like to turn the call over to Steve Singh. Steve?
Steve
Singh
Thank you John. Good afternoon everyone. Q4 was another very strong quarter, exceeding our expectations for revenue, earnings, free cash flow, and new customer growth. Looking ahead to fiscal 2011, we expect our annual revenue growth rate to improve over 2010, driving significant growth in revenue and earnings. And, we expect to significantly expand our investments across five key growth areas that are expected to drive further revenue and earnings growth in the medium and long-term.
In our call today, I'm going to focus the majority of my prepared remarks on key growth opportunities and how we expect to deploy capital. Please turn to the next slide.
Before I do that though, let me give you a quick summary on Q4 results. We saw exceptional operating performance across the business. Revenue grew 20% year-over-year and reached an all-time high at $77.5 million. This growth was driven in part by faster than expected deployments of new customers and in part by stronger than expected transactional volume. Strong revenue growth led to non-GAAP EPS for the quarter of $0.30 per share, which was ahead of our expectations. And, driven by stronger earnings and strong cash collections, free cash flow in the quarter was $17.2 million, well ahead of our expectations. Please turn to the next slide.
As I noted in prior earnings calls, we see a number of growth opportunities for the business. First and foremost, we're focused on significantly expanding our customer base in the markets we currently serve. Second, we'll materially expand our global presence. Third, we believe the SMB market can be a material portion of our revenue base. Fourth, we see a significant opportunity to deliver compelling value to the business traveler while they're on their trip. And finally, we're creating a high-value ecosystem through the Concur Connect platform that connects our customers, our partners and suppliers, together in a manner that drives compelling value for all members of the ecosystem.
We view our successful execution in these five growth areas as both opportunities for growth and the continued establishment of a competitive platform, which will be extremely difficult for our competitors from any vantage point to replicate or approach. I'd like to give you a little more color around each of these opportunities and speak to our expectations in each area. Please turn to the next slide.
In support of our first growth initiative, which is to grow our customer base in the markets we currently serve, we'll continue to increase our investments in distribution, market development, and innovation to continue to expand our customer base and the range of services that we can deliver to those customers. In the most recent quarter, new customer growth was the strongest in our history, aided in part by our partnership with American Express.
In fact, in fiscal 2010 we exceeded our target for new business coming from the American Express partnership. Additionally, in Q4 American Express exercised a 1.28 million share warrant that was part of the 2008 investment agreement, and while that exercise added another $50 million to our balance sheet, far more importantly it's a reflection of the continued and substantive success of the partnership between our companies.
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