Global Expense Accounts Fuel Concur's Growth
Loathing can be a profitable motivator. Just ask Steve Singh, CEO and board chairman of Redmond-based Concur Technologies (Nasdaq: CNQR), about filing expense reports. In his prior travel-heavy post, he put off submitting any for the first nine months of the job. Catching up on all the paperwork, sorting receipts and completing forms took nearly a full work week of his time. Of the necessary irritation, Singh says, “I’m not a fan.”
Mike Hilton, the company’s cofounder and current executive vice president of worldwide marketing, agrees. “It’s painful,” he winces. “Everybody hates it.”
Yet for the past 18 years, Singh, his brother Rajeev, and Hilton have grown a company whose single-minded focus is the expense report. Concur provides on-demand software services through the internet that simplify creating, submitting and processing them. But it’s not from any fondness. The company’s mission is really more like a vendetta. It wants to make the despised expense report disappear—or at least become a virtually effortless task that no one dreads.
Lots of companies have signed onto the mission. More than 15,000 firms in 100 countries pay subscription fees to Concur for access to its cloud-based travel booking and expense reporting services. In the fiscal year ended September 13, 2011, total revenues were $349.5 million, up 19 percent from the year before.
Despite the rapid growth, Singh and investors say the market remains largely untapped. Most companies still rely on handwritten forms with stapled receipts to reimburse employees for their expenses. Concur provides its subscribers access to standardized online expense reporting that can be easily integrated into a company’s accounting system to create a streamlined, ultimately paperless experience. It lowers processing costs, offers opportunities for expense control and speeds reimbursements to employees.
“Concur has always been a very well-run company with big growth prospects,” says John Kraft, an analyst at Portland’s financial services holding company D.A. Davidson, which maintains a positive rating for the company. “They’re a nice breath of fresh air in that they’re focused on the future.”
Steve Singh is investing heavily to make sure Concur emerges as the global leader in its market segment, maintaining a dizzying pace of acquisitions, partnerships and expansions into new global markets. Those investments contributed to an $11 million net loss last year. Still, analysts are so confident of the management team that the company’s stock is valued at nearly 50 times earnings, giving the business a market capitalization of more than
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