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 the prepared statements today, we will host a brief question-and-answer session. [Operator Instructions]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 this Slide 2 and our filings with the Securities and Exchange Commission, which are available at 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? S. Steven Singh Thank you, John, and good afternoon, everyone. Over the past decade, we've built Concur into one of the world's largest enterprise card application companies. And looking ahead to the next decade, we'll build upon that success and scale by leveraging our investment in content aggregation and delivery, big data and mobile computing. To evolve Concur into not just the leading applications company, but also a platform for content and commerce in the $1 trillion corporate travel market. This is a natural evolution of cloud computing, as megatrends such as cloud, social, mobile, local and big data come together. Central to our success over the next decade are the investments we've made in distribution and our investments in innovation. Specifically, the perfect trip, the Concur T&E Cloud, which is enabled by the Concur Connect platform and our global travel content strategy and the integration of our big data strategy across each of these. But before I expand upon these themes, let me tell you about Q2.
Please turn to Slide #4. A few minutes ago, we reported significantly better-than-expected results for Q2 of fiscal 2012. Meeting our expectations across the board and raising our revenue, operating margin, earnings and free cash flow expectations for the fiscal year as a whole. Q2 was an exceptional quarter across all key metrics. We grew revenue 28% year-over-year, which was nicely ahead of our expectation of 25% year-over-year growth, and revenue outperformance was driven by a number of factors. Deployments were ahead of schedule, travel transaction volume was significantly ahead of our expectations and we're starting to see early revenue returns on our investments in new markets such as the SMB market and the unmanaged travel market. And as you can see from the chart on the bottom of Slide 4, driven by strong bookings in prior periods. We've seen year-over-year revenue growth rate move up consistently over the past several quarters from 16% in the March 2011 quarter to 19%, to 23%, to 25% and to 28% in the most recent quarter. We're pleased to see the consistent and meaningful expansion of our revenue growth rate on top of what's already the second highest revenue scale in the SaaS industry. And reflecting the profit discipline that we have long enforced on our business, non-GAAP EPS was $0.33 per share and non-GAAP operating margin was 18.5%, both ahead of our targets, as revenue outperformance dropped to the bottom line.Please turn to Slide #5. At the start of the fiscal year, we highlighted our plans to significantly ramp investments across the business, with the focus on doubling our distribution capacity by the end of fiscal 2013, to accelerate both our core business and our growth initiatives and on continuing to drive the innovation curve in our industry as we expand our product and content footprint on a global basis, target the unmanaged travel market, invest in the Concur T&E Cloud and deliver on the government T&E Cloud. We're tracking well against each of these investment objectives and we expect to see the increase in benefits of these investments in fiscal 2013, '14 and '15, as we pursue the significant market opportunity that we see in front of us. To support our growth and innovation objectives, we've now crossed the 2,000 employee mark, and we're looking to bring another 500 individuals on to the Concur team over the remainder of the fiscal year. But even as we increase the size of our team significantly, the strength of our revenue outperformance is driving better-than-expected earnings and operating margin. And at this point, we expect earnings for the full fiscal year to be significantly ahead of our original expectations. And additionally, we are raising our operating margin expectations for the full fiscal year. Read the rest of this transcript for free on seekingalpha.com