A few months ago, Gordon Eubanks agreed to take a board seat at Concur Technologies, Inc.
Last week, Concur announced its earnings, and the company is continuing to grow. Revenues increased 29% to $18.6 million in the second quarter. During this period, net income increased from $700,000, or $0.02 cents per share, to $1.7 million, or $0.05 cents per share.
Essentially, Concur has a Web-based system that allows companies to track expenses for travel and entertainment. Actually, it is not uncommon for companies to use paper-intensive activities or simplistic spreadsheets to manage the process. No doubt, this often leads to inefficiencies. In fact, with Sarbanes-Oxley, it is now critical that companies maintain better internal controls -- which means finding better ways to manage expense tracking.
Concur's approach is to use software as a service and charge for it on a subscription basis. In the second quarter, subscription revenues totaled $13.9 million. What makes this attractive is that the revenue is recurring, which gives the company much more visibility in terms of forecasting.
And Concur is having no problems getting deals. Some of the latest customers include Bridgestone Europe, CAE Inc., CarMax, Inc., and Puma International.
Concur has a strong business model and technology suite for the expense management industry. The big question is: What's the long-term potential for this market?
Well, despite a tough IT market, Concur is growing nicely. The good news is that Concur is putting many more resources in its direct sales, as well as distribution deals. For example, the company recently struck a channel alliance deal with IBM
Just as other types of outsourcing -- such as payroll through ADP
Fool contributor Tom Taulli does not own shares of companies mentioned in this article.