ACN



June 29, 2007

Research Associate: Shradha Poddar

Editor: Sweta Killa, M. Fin.

Sr. Ed.: Ian Madsen, CFA; imadsen@; 1-800-767-3771, x9417

111 N. Canal Street, Suite 1101 ● Chicago, IL 60606

|Concur Technologies, Inc. |(CNQR - NYSE) |$22.85 |

Note: All new or revised material since the last report is highlighted.

Reason for Report: Change in Target Price Previous Ed: May 16, 2007

Recent Events: Summary

May 2: CNQR announces 2Q07 results.

February 13: CNQR announces the availability of the next generation of Concur Vendor Payment.

For more details please see further on in this report, after “Overview,” below.

Overview

Based in Redmond, Washington, Concur Technologies, Inc. (CNQR) is the market leader in electronic expense report processing and has recently expanded its offering to include on-line travel booking. It provides business services and software solutions that mechanize corporate expense management solutions.

Analysts have identified the following key factors for evaluating the investment merits of CNQR:

|Key Positive Arguments |Key Negative Arguments |

|Unique Value Proposition: CNQR introduced the first end-to-end, fully |Competition: The company faces ongoing competition from vendors such as Gelco,|

|integrated CEM solution. No other software vendor has a comparable |Oracle, and American Express. |

|solution that combines expense reporting, travel management and meeting |Ability to maintain sales: There is risk that sales productivity will decrease|

|management. |given the substantial increases in distribution resources. |

|Consistent Execution: The company has consistently met or exceeded analyst|Change in macroeconomic conditions: US GDP and Euro-area GDP are both |

|expectations while expanding operating margins over the past three years. |`expected to grow 2.3% in 2007. If actual growth would fall below these |

|Outtask Acquisition: With its acquisition of Outtask, the company became a|estimates, the overall capital expenditures and IT spending would be |

|large player in the Online Travel Management Services area, Growth: The |negatively affected. |

|company serves Global 100 companies, Fortune 1000 companies, global public|Acquisition of Outtask: It could create integration challenges with either |

|companies, and single-location private companies. |higher costs or product integration problems. |

|Distribution Partner: Increasing contribution from new distribution |Third Party Channels: ADP, U.S. Bancorp and Bank of America are meaningful |

|partner, Bank of America is yielding benefits. |contributors to the company’s revenues. A change in these relationships could|

| |impact the company's growth rate. |

The company’s solutions reach millions of employees across thousands of organizations around the world, streamlining business processes, reducing operating costs and improving internal controls while empowering companies to apply greater insight into their spending patterns. Its flagship product Concur Expense solution offers services and software for automating the travel and entertainment expense management process. The company also provides value-added services and software that integrate with Concur Expense, such as Concur Payment, Concur Imaging Service, Concur Business Intelligence, Concur Total Access, Concur Travel Integration, Concur Benchmarking Service, and Concur Compliance Solution. Additionally, it offers consulting, customer support, and training services with respect to corporate expense management solutions. Concur Technologies markets and sells its solutions through direct sales organization and indirect distribution channels, such as strategic reseller and referral partners.

For more information about the company, visit its website at .

Note: CNQR’s Fiscal Year ends September 30.

Recent Events: Details

On May 2, 2007, CNQR announced 2Q07 results. The results were driven by strong growth in new customers, enthusiastic client adoption of end-to-end travel and expense management services and solid execution across the business. The highlights are as follows:

• Total revenue increased 31.0% y-o-y to $30.9 million.

• Gross margin improved 450 bps y-o-y to 64.6%.

• Pro forma EPS (before stock based compensation) was $0.08 in 2Q07, up 14.3% y-o-y.

On February 13, 2007, CNQR announced the availability of the next generation of Concur Vendor Payment, i.e., the on-demand service that eliminates the time and cost associated with processing vendor invoices and employee check requests. With new and advanced capabilities that enable clients to quickly capture and manage vendor invoices and associated data, Concur Vendor Payment can significantly cut the cost of processing paper invoices and manual check requests thereby reducing late payment fees and duplicate payments while increasing the opportunity to take advantage of early payment discounts.

Revenue

Total revenue, as compiled by the Zacks Research Digest and the company, increased 31.0% y-o-y and 5.7% q-o-q to $30.9 million in 2Q07. The result was better than the company’s guidance of $29.5 million. Management said that part of the upside was attributable to quicker deployments of new customers, which allowed the company to recognize revenue faster than it expected.

The company signed more than 400 new customer contracts during the quarter and invested resources in expanding its direct sales force while expanding its distribution relationship with Citigroup. Approximately 70.0% of its new customer sales were generated through the direct sales force and the remaining 30.0% through the company’s channel partners in 1Q07.

The company breaks its revenues down into two areas; Subscription revenues, and Consulting & Other revenues (which contains licensing revenues).

Subscription (90.4%)

The segment consists of revenues from subscriptions to the company’s suite of expense management products, software maintenance fees, and any other fees charged on a regular basis.

With the acquisition of Outtask, subscription revenue was up 45.3% y-o-y to $27.9 million in 2Q07. Before the Outtask acquisition, subscription revenue increased 25.0% y-o-y. This reinforces the analyst to view that instead of slowing as the business matures, growth is actually accelerating as the company gains more distribution and strengthens its solutions.

Consulting and Other (9.5%)

This segment consists of fees paid for professional services, which includes systems implementation and integration, planning, data conversion, training and documentation of procedures. Other revenues are primarily made up of fees earned from grants of licenses to use its software products.

Revenues from consulting declined 31.8% y-o-y to $2.9 million in 2Q07.

In FY06, the company added over 1,600 customers, after adding over 900 in FY05, and one firm (Zacks Investment Research) expects the company to continue to add customers at an accelerated rate in FY07. In 1H07, the company signed an additional 800 customer contracts, which bodes well

For the remainder of FY07. The company has strengthened its direct sales team by over 30.0% to generate sustainable incremental long term sales growth.

Provided below is a summary of revenues as compiled by Zacks Digest:

|Revenue |2Q06A |

|Effect of Share Based Compensation |$0.03 |

|Amortization of Intangibles |$0.02 |

|Pro forma EPS |$0.08 |

Provided below is a summary of EPS as compiled by Zacks Digest:

|EPS |

|Positive |58.3% |

|Neutral |41.7% |

|Negative |0.0% |

|Avg. Target Price |$22.92↑ |

|Analysts with Target price/Total |9/12 |

One firm (Zacks Investment Research) is concerned that the company is being a bit too aggressive in its growth targets for 2007, which would have a negative effect on the shares if the company does not meet these expectations.

The primary risks that could impede the company from achieving the price target include the prolonged weakness in corporate IT spending, a slowdown in the economy, slow customer adoption of T&E software, acquisition integration challenges, internal review of past stock option grants, escalating pricing pressure, and contract-specific risks.

Please refer to the CNQR Zacks Research Digest spreadsheet for further details on valuation.

Capital Structure/Solvency/Cash Flow/Governance/Other

The company’s cash position stands at $22.5 million in 2Q07, up $6.0 million from the end of FY06, although it generated over $16.0 million in cash from operations in the 1H07. Most of the proceeds went to a combination of share buybacks and the Outtake acquisition.

The company repurchased approximately 114,000 shares in the quarter and has authorization for slightly less than 2 million more shares for buybacks through CY08.

Provided below is a summary (abstract) of balance sheet at the end of February 2007, as compiled by Zacks Digest:

| |Value ($ in m) |Y/Y Growth |

|Cash and Cash Equivalent |$22.5 |68.8% |

|Accounts Receivable |$21.7 |10.9% |

|Property, Plant and Equipment (Net) |$23.4 |27.8% |

|Total Assets |$187.1 |37.3% |

|Accounts Payable |$14.3 |15.5% |

|Short Term Debt |$3.8 |41.7% |

|Shareholders Equity |$126.4 |63.5% |

|Total Liabilities and Shareholders Equity |$187.1 |37.3% |

The company signed more than 400 new customer contracts in 2Q07, with 75.0% of new bookings through its direct sales team and 25.0% though partners (such as ADP, BCD, and Bank of America). Major clients added in the quarter include Illinois Tool Works, La Quinta, Land O’Lakes, the University of Colorado, and USA Hockey. The company has also entered into a partnership with Citigroup, which offers Concur’s travel and expense management solutions to all of Citigroup clients.

Potentially Severe Problems

There are none other than those discussed in other sections of this report.

Long-Term Growth

The Zacks Digest average long-term growth rate quoted by the brokerage firms is 23.3%, ranging between 17.0% (B. of America) and 30.0% (D.A. Davidson).

Most firms believe the company’s strong growth rate which is currently above the peer group average, will be facilitated by continued strong subscription revenue growth, attributable largely to more efficient deployments and the increased cross-selling opportunities resulting from the Outtask acquisition. Accelerating subscription revenue growth is projected to carry on through at least the end of FY07, with a consequential margin expansion given the fact that subscription revenues are by nature, a higher margin product.

Most of the analysts imply the following significant long-term growth potential for the company:

• Ongoing business momentum driven by increased adoption of the company’s compelling product suite and low market penetration,

• Launch of new (potentially significant) products,

• Significant cross-sell opportunities,

• High-revenue visibility,

• Attractive subscription model,

• Continually low customer churn rates,

• Emerging international opportunities,

• A largely unchanged, but favorable competitive environment,

• Market leadership position,

• Potential to be acquired,

• Strong proven management team.

Concur Vendor Payment

Complementing its existing suite of products, the company launched its vendor payment solution in 2Q07. Five companies (including La Quinta) purchased its new Concur Vendor Payment service. The solution essentially eliminates a majority of manual processes involved in the vendor payment process, helping reduce operating expenses in addition to making the workflow more efficient. This product is being offered as a module within the company’s end-to-end travel booking and expense management solution. The revenue model is based on a per-transaction basis, similar to the company’s expense management product. As such, this new solution almost doubles the total available market for the company as the number of vendor payment transactions are said to be at least equal or more than expense reporting transactions.

Management believes this product provides a long term opportunity that is comparable in size to the expense management market. One firm (Mont&Co.) expects that Vendor Payment can add substantial increments to core expense subscriptions with the company’s more than 4,000 customers, with revenue impacts coming in FY08.

Individual Analyst Opinions

POSITIVE RATINGS (58.0%)

Cantor Fitzgerald – Buy ($22.00 – target price) – 05/03/07: The firm has maintained a Buy rating on the stock as it views significant upside in the stock and has raised the price target to $22.00 from $20.00. INVESTMENT SUMMARY: Strong growth in the core expense business coupled with synergy from the Web-based travel booking service and a high-visibility, on-demand model delivers a compelling investment. Furthermore, CNQR has distanced itself from competition while increasing the likely adoption rate of its solution in an immature market, according to the firm.

McAdams – Buy ($22.00- target price) – 05/03/07: Given the strong market conditions and sustained high-level of revenue visibility, the firm has upgraded the stock to Buy from Hold and has raised the price target to $22.00 from $19.00. INVESTMENT SUMMARY: The firm believes business momentum continues to build as the company remains the undoubted market leader.

Mont&Co. – Buy ($28.00 – target price) – 05/03/07: The firm has maintained a Buy rating with the price target of $28.00. INVESTMENT SUMMARY: Stable or accelerating growth rates in FY08 and beyond, best-in-class profit levels and cash flow, and the company's industry-leading position in front of a massive industry opportunity support the bullish stance on the stock.

Deutsche Bank – Buy ($23.00 – target price) – 05/03/07: The firm has raised price target to $23.00 from $22.00. INVESTMENT SUMMARY: The firm continues to believe that the company is poised to benefit from its fortified competitive positioning momentum in its core markets and additive growth initiatives through expanded partnerships and international expansion.

Piper Jaffray – Outperform ($21.00 – target price) – 05/03/07: The firm has raised the price target to $21.00 from $19.00 attributable to the company’s strong continued momentum and new product initiatives.

RBC Cap. – Outperform ($23.00 – target price) – 06/08/07: The firm has maintained Outperform rating on the stock. INVESTMENT SUMMARY: CNQR's corporate expense management (CEM) plan which is a combination of expense reporting and travel management offers a unique value position to the company and casts a positive outlook on the growth of the company.

William Blair – Outperform (no target price) – 06/21/07: The firm has maintained an Outperform rating on the stock. INVESTMENT SUMMARY: With its strong brand recognition and solid reputation, the firm believes CNQR is the leader in corporate expense management (CEM). The company’s strategy is to be the global leader in expense management.

NEUTRAL RATINGS (42.0%)

D.A. Davidson – Neutral ($24.00 – target price) – 06/29/07: The firm has maintained a Neutral rating and has raised the price target to $24.00 from $20.00. INVESTMENT SUMMARY: The firm believes management has done a great job balancing the achievement of near-term earnings targets, while positioning the company for the long-term growth opportunity in automated expense management. While the firm does not see this pattern changing, it is cautious about chasing the stock, given its current valuation.

Zacks Investment Research – Hold ($19.25 – target price) – 05/03/07. INVESTMENT SUMMARY: While CNQR has a solid balance sheet and strong near-term fundamentals, the firm is concerned about the company’s long-term prospects as eventually it will begin to hit the top with the major industry players as it continues to grow at a significant pace.

B. of America – Neutral ($24.00 – target price) – 06/27/07. INVESTMENT SUMMARY: The firm remains neutral on CNQR shares as it believes the current trading range gives recognition to the company's market opportunity and leadership in expense workflow solutions, as well as a strong product reputation and enviable customer list. The firm is positive about CNQR’s acquisition of competitor Outtask, as the deal will expand the company’s product footprint into travel booking workflow.

CIBC – Sector Performer (no target price) – 05/03/07. INVESTMENT SUMMARY: The firm views the company’s solid top line growth appears to be sustainable for the foreseeable future, particularly as it continues to ramp sales force, benefiting from a healthy business environment. Despite the optimistic outlook for the company, however, its current valuation keeps the firm on the sidelines at the current levels.

Merrill – Neutral (no target price) – 05/03/07. INVESTMENT SUMMARY: The company has an attractive growth opportunity and market position, but the firm would be constructive at a more attractive valuation.

NEGATIVE RATINGS

None

COVERAGE CEASED

Raymond James – 05/31/07: The firm has ceased coverage on the stock owing to the departure of the covering analyst.

Research Associate: Shradha Poddar

Copy Editor: Salma Islam

Content Ed: Sweta Killa

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