Expense Vendor Turns Annual Profit

Concur Technologies, a Redmond, Wash.-based corporate expense reporting provider, this week announced that its 2003 net income hit $1 million-marking the first profitable year for the company and for any pure expense vendor. Concur last year recorded a net loss of $12.3 million.

Concur attributed much of its strength to the penetration of its subscription offering, as well as leverage from its reseller channels, which Concur actively has been adding every quarter.

Concur announced the addition to its roster of reseller relationships with U.S. Bank--the largest issuer of Visa-branded corporate cards. Concur said it will focus on the midmarket through the relationship, while U.S. Bank will market AccessExpense, a co-branded version of Concur's subscription offering to clients.

Concur CEO Steve Singh said he is hopeful that the U.S. Bank partnership will match the success of its reseller agreement with Roseland, N.J.-based payroll giant ADP. During an investor conference in New York yesterday, Singh said that approximately 600 of its 1,400 customers have come from its reseller arrangement with ADP. Concur's stable of reseller partnerships also includes Microsoft Business Solutions and Cambridge, Mass.-based Sapient, among others.

Even prior to its acquisition of rival Captura more than one year ago, Concur's earnings consistently have trumped those of the previous quarter. Singh expects the growth to continue, saying the expense management market still is ripe for business. "We expect 20 percent year-over-year growth over the next five years," he said, citing a largely untapped market.

John Van Decker, vice president at IT research firm Meta Group, illustrated how untapped is the automated expense management market. During a presentation at the New York conference, he said that on a global basis only 3 percent of total companies use a Web-based expense solution, while about 20 percent of Global 2000 companies have automated. He added that a recovering economy and Sarbanes-Oxley legislation, which tightens corporate controls and governance, should continue corporate investment in automated expense management and other IT spending.

Although revenues from its licensed offerings fell short of last year's revenues, Singh asserted that Concur will continue to offer its licensed solution but will maintain a focus on hosted offerings.