More SaaS: Concur, Taleo, RightNow

Concur, the expense management software maker, released its earnings for the second quarter of 2008. Subscription revenue growth was the main driving force behind their robust earnings. The company posted net income of $4.5 million or $0.09 a share, compared with $1.8 million or $0.04 a share in the corresponding quarter last year. Total revenue is also up 65% from the same quarter last year and stands at $54.9 million. Non-GAAP operating margin was 21% for the third quarter of fiscal 2008, up 3% from the same quarter last year.

Concur repurchased 367,100 shares of its common stock at $35.07 per share.

A day before its earnings were released, Concur announced its alliance with American Express, who purchased a 13% stake in the company for $251 million in cash. The two companies have formed a marketing partnership under which Concur will promote only the American Express corporate card to its clients. American Express will promote Concur’s expense management software to its clients. The announcement of this partnership caused the stock to jump 18.6% to $42.76. The stock rose further the next day on the strong earnings news, and is now trading at $46.28. I wrote about Concur’s SME opportunity a year back, and this partnership injects huge momentum to that.

Concur expects total revenue to be $56 million for the fourth quarter of fiscal 2008 and the total annual revenue to be $214 million. EPS for the fourth quarter is expected to be $0.08 and EPS for fiscal 2008 to be $0.32. My interview with Concur’s CEO Steve Singh is here.

Taleo, a leader in talent management, announced strong Q2 results as well last Thursday. They posted record revenues of $38.80 million, an increase of 25% from the same period last year. Application revenue was $30.9 million, an increase of 21% from the previous year. GAAP net income was $1.1 million or $0.04 per fully diluted share. Non-GAAP net income was $4.2 million or $0.15 per fully diluted share.

The company added a record 225 new customers, taking their base to over 1,900 customers with over 1.5 million users in total. Some of the new customers in the US included AT&T, Enterprise Product Partners, The Nielsen Company and US Foodservice.

International business saw strong growth with non-US revenues increasing 83%. This made up 13% of total revenues. Some of the new international customers were Cargotec, Veolia and Air France, among others.

In the last quarter, Taleo signed an agreement to acquire Vurv, thereby strengthening their position as leaders in talent management.

Taleo’s chairman and CEO Michael Gregoire said, “Our results highlight both the growing demand for talent management solutions in large and small companies regardless of the economic environment.” My interview with him is available here.

The stock price at the close on July 31, 2008 was $18.74, and it rose to $21.24 the next day after their excellent results were announced. The stock closed at $22.17 last night.

RightNow, another SaaS company declared a strong quarter with earnings and revenue above guidance. Total revenue in the second quarter of 2008 was $35.2 million. This represented 33% growth; revenue was $26.5 million in the second quarter of 2007.

The company reported a net loss of $3.1 million or $0.09 per share, a decrease from $5.7 million or $0.17 per share in Q2 2007. The last quarter saw new customers like Activision, Beretta USA, Enterprise Rent-A-Car, Hertz and Virgin Mobile.

Revenue for the last six months ended June 30, 2008, was $68.1 million, compared with $52.2 million for the corresponding period last year. Non-GAAP net loss for the last six months was $3.4 million or $0.10 per share, compared to Non-GAAP net loss of $8.5 million or $0.26 per share for the same period last year. In an interview with CEO Greg Gianforte, we recently discussed how his company went from bootstrapping to over $100 million in revenue.

For 2008, net loss per share is projected to be $0.30 to $0.26. Revenue is expected to be in the range of $141 to $143 million. These strong results pushed RightNow’s stock up to $16.88.

I continue to believe that SaaS companies will do well during the recession. In demonstrating such strong results, they are making a case for investors to better understand why.

This segment is a part in the series : More SaaS