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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended September 30, 2003

Commission file number: 0-25137

CONCUR TECHNOLOGIES, INC.

(Exact name of Registrant as specified in its charter)

6222 185th Avenue NE Redmond, Washington 98052

(Address of principal executive offices)

(425) 702-8808

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). x

As of December 8, 2003, 32,321,003 shares of Common Stock of the Registrant were outstanding. As of March 31, 2003, the last business day of the Registrant’s most recently completed second fiscal quarter, the aggregate market value of the shares held by non-affiliates of the Registrant (based upon the closing price of the Registrant’s Common Stock on March 31, 2003 of $5.10 per share) was approximately $94.5 million.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, which is anticipated to be filed within 120 days after the end of the Registrant’s fiscal year ended September 30, 2003, are incorporated by reference in Part III hereof.

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CONCUR TECHNOLOGIES, INC.

FORM 10-K

SEPTEMBER 30, 2003

INDEX

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PART I

ITEM 1.    BUSINESS

Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements regarding our plans, objectives, expectations, intentions, future financial performance, future financial condition, and other statements that are not historical facts. You can identify these statements by our use of the future tense, or by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “estimate,” “continue,” and other similar words and phrases. Examples of sections containing forward-looking statements include “Business” and “Management’s Discussion And Analysis Of Financial Condition And Results Of Operations.” These forward-looking statements involve many risks and uncertainties. Examples of such risks and uncertainties are described under “Factors That May Affect Financial Condition And Results Of Operations” and elsewhere in this report, as well as in our other filings with the United States Securities and Exchange Commission. You should be aware that the occurrence of any of these risks and uncertainties may cause our actual results to differ materially from those anticipated in our forward-looking statements, which could have a material adverse effect on our business, results of operations, and financial condition. All forward-looking statements included in this report are based on information available to us as of the date of this report. We assume no obligation or duty to update any such forward-looking statements.

Overview

Concur Technologies, Inc. is a leading provider of Corporate Expense Management solutions. Our solutions are designed to automate and streamline business processes, reduce operating costs, improve internal controls, and empower businesses to apply greater intelligence to their spending patterns. Our solutions include the Concur Expense^™ services and software for automating travel and entertainment expense management, Concur Payment^™ services and software for automating employee requests for vendor payments, and value-added services and software to complement our core solutions, including Concur Imaging Service^™, Concur Travel Integration^™, Concur Business Intelligence^™, Concur Total Access^™, and Concur Transaction Assessment Module^™.

Our solutions are designed to accommodate a wide range of customer business needs, technical requirements, and budget objectives for businesses worldwide. We provide our solutions as a subscription service to customers on an outsourced basis over the Internet or through a dedicated telecommunications connection. Our service offerings range from highly-configurable to standardized solutions. We also license our software to customers that want highly-configurable solutions, which are typically installed at the customers’ premises, managed by the customers, and accessed over a corporate intranet.

Since 1996, companies in over 60 countries have contracted to use our market-leading solutions. Our customers include six of the top 10 Global 100 companies, including Ford Motor Company and General Motors, and 32 of the top 100 Fortune 1000 companies, including AT&T, Citigroup, Delphi Corporation, DuPont, Pfizer, and SBC Communications. Our strategic relationships include more than 50 leading companies, such as ADP, Microsoft Business Solutions, U.S. Bank, Accenture, EDS, VISA, MasterCard, and Worldspan.

We are incorporated under the laws of the state of Delaware. Our executive offices are located at 6222 185th Avenue Northeast, Redmond, Washington 98052 and our telephone number is (425) 702-8808.

Our Internet website address is www.concur.com. We provide free access to various reports that we file with or furnish to the United States Securities and Exchange Commission through our Internet website, as soon as reasonably practicable after they have been so filed or furnished. These reports include, but are not limited to, the following: our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and any amendments to those reports. Information on our website does not constitute part of this Report.

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Concur, the Concur logo, Concur Expense, Concur Payment, Concur Imaging Service, Concur Travel Integration, Concur Business Intelligence, Concur Total Access, Concur Transaction Assessment Module, Concur Offline Access, and Concur Voice Access Service are trademarks or registered trademarks of Concur Technologies, Inc. Other names or brands appearing in this report may be claimed as the property of others.

The Corporate Expense Management Market

We believe a significant market opportunity exists for products and services that automate and streamline processes involved in the management of corporate expenses. We call the marketplace for these products and services the “Corporate Expense Management” market. We believe two major trends are currently driving customer demand in this market:

In today’s business climate, companies are seeking innovative ways to reduce costs and improve operational efficiency. Next to payroll, corporate travel and entertainment expense is the second-largest controllable expense within an organization, according to META Group, an information technology research and consulting firm. However, for most companies, the management of corporate expenses involves manual, paper-based processes that require action by many individuals. Such manual, paper-based processes are time-consuming, inefficient, and costly because they involve the manual re-keying of data, manual tracking of forms and approvals, and limited data capture and reporting. By automating the expense management process, companies can realize significant cost savings. According to a 2002 study conducted by Aberdeen Group, an information technology market analysis firm, companies that automate the expense management process can drive down the average cost to prepare and process an expense report from $48 per expense report to less than $18 per report, an average savings of $30 per report. One of our customers, DuPont, recently reported savings in excess of $46 million over the past four years from increased operational efficiencies, tax reclassification, and negotiated vendor rates by using our solutions.

Companies are also seeking ways to improve the reliability of their financial data and visibility into their financial processes to ensure the integrity of their financial statements, particularly since the enactment of the Sarbanes-Oxley Act of 2002 and related regulations. Under these new governmental requirements, public companies are required to establish and maintain appropriate internal controls and procedures for financial management and reporting. By automating the expense management process and enhancing the reporting of captured data, companies can significantly improve the reliability of their financial data and visibility into their financial processes to reduce the potential for fraud and improve their compliance with these new governmental requirements.

Our Corporate Expense Management Solutions

Our Corporate Expense Management solutions are designed to automate and streamline business processes, reduce operating costs, improve internal controls, and empower businesses to apply greater intelligence to their spending patterns. Our subscription service and software solutions include:

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Our solutions benefit many groups within an enterprise, including corporate management, information technology professionals, and employees. For corporate management, our solutions can reduce the amount of time required to administer, manage, and process expense reports and payment requests, thereby increasing productivity and reducing operating costs. Our solutions also enable management to access information for purposes of internal controls compliance, trend analysis, vendor negotiation, and financial planning. For information technology professionals, our solutions provide simple, Web-based functionality for the administration, management, and monitoring of our products. This facilitates the management of employee information, database maintenance, and data interoperability. For employees, our solutions provide intuitive, easy-to-use interfaces for the creation of expense reports and payment requests, which reduce the amount of time required to create these documents.

We offer our solutions to customers through our subscription services and license delivery models.

Our subscription services models offer distinct advantages over traditional software licensing. Because our services are provided on a subscription basis, customers pay for the services as they receive the benefits of using them. This reduces the financial risk associated with traditional on-premise enterprise software licensing, which often requires significant up-front and continuing costs associated with licensing, installing, and maintaining the software application in-house. In addition, because our services are provided on an outsourced basis, we, as the service provider, are responsible for procuring and managing the hardware infrastructure necessary to perform the service and for delivering reliable, secure, and scalable performance, which reduces the impact on the customer’s internal information technology organization.

Concur Expense Solutions

Our flagship Concur Expense solutions are designed to automate, simplify, reduce the costs of, and improve internal controls associated with, the travel and entertainment expense management process. Concur Expense automates each step of the expense management process, from expense report preparation and approval to business policy compliance, reimbursement, and data analysis. It provides information for managing expenses while improving internal controls and business policy compliance, reimbursement speed, and expense report accuracy. By streamlining the expense management process, our customers can achieve a substantial reduction in manual processing, increased internal controls and business policy compliance, and enhanced access to expense data to facilitate better decision making. We also provide Captura Expense subscription services and software to a number of our customers, as a result of our acquisition of Captura Software, Inc. in 2002. These Captura Expense solutions offer similar features and functionality to the Concur Expense solutions.

Report Preparation.    Our intuitive, easy-to-use interface for the creation of expense reports by end users reduces the amount of time required to create these reports, while reducing errors and improving policy

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compliance. To speed expense entry and improve accuracy, corporate charge or credit card information can be used to automatically populate the expense report with key information, including transaction date, type, vendor, location, method of payment, amount, and currency conversion. Employees then supply any additional expense-related information using the user interface. To eliminate the task of sorting receipts, Concur Expense allows users to enter data in any order. Commonly-incurred expense information is retained and can be used to help complete the next expense report. Other features include simple “checkbook-style” input screens, integrated “help” screens, the ability to create “attendees” lists, mileage reimbursement tracking, and automatic flagging of non-compliant and incomplete entries.

Report Routing and Approval.    Concur Expense allows the each customer to determine how expense reports should be processed based on customizable workflow rules. Once a report is submitted, the workflow policies defined by the company are applied, and, if manager approval is required, the designated approver receives an e-mail message containing a link to the application, where all reports awaiting approval are listed. Our solutions can be configured to route the report for approval based on cost center, dollar limit, or other criteria. Items that do not comply with corporate policy can be flagged for review, allowing approvers to reduce review time. Approvers can reject individual line items, while allowing the rest of the report to continue in the approval process. Once approved, the report is forwarded to the next phase in the process or to the customer’s accounting department, and the user is notified of the action.

Report Processing.    Concur Expense streamlines back-office processing of expense reports. Because all expense reports are prepared electronically, the processing department no longer needs to check the arithmetic of each report manually. Businesses can reduce the time spent auditing reports by choosing to audit only those reports flagged as non-compliant with corporate expense policy. Concur Expense reduces the number of status inquiries between employees and processing departments by updating the status of reports in the database, and alerting employees via e-mail to the status of their reports. It also allows significant time savings by posting expense report information to the customer’s enterprise resource planning (“ERP”) or accounting package used by our customers, eliminating the need for manual re-entry of the data. In addition, Concur Expense helps companies claim reimbursement of tax credits by tracking value added tax, goods and services tax, and other international taxes.

Data Capture and Reporting for Analysis.    Concur Expense offers business intelligence capabilities by capturing and reporting data for analysis, which gives companies greater visibility into their financial processes and allows them to make more informed business decisions, reduce the potential for fraud, and improve their compliance with governmental requirements, such as the internal controls reporting and certification requirements of the Sarbanes-Oxley Act. Concur Expense can be configured for business policy rules, which guides employees to make business-compliant decisions, flags transactions for appropriate approval, and allows for auditing when exceptions occur. Companies can use captured data to analyze trends, influence budget decisions, improve forecasting, and monitor for fraudulent activity.

Concur Payment Solutions

Concur Payment is designed to automate, simplify, and reduce the costs associated with the process of entering, approving, and managing non-purchase order vendor payments. It enables companies to streamline payment requests, facilitating flexible approval processes and automatic accounts payable system integration. The combination of increased productivity and availability of valuable data for improved cost management generates cost savings for our customers.

Streamlined Processing for Reduced Operational Costs.    Concur Payment can provide a rapid return on investment by automating the vendor payment request process from payment request preparation, account coding, and approval to payment tracking and integration with a company’s accounts payable system. It eliminates paper forms and manual processing, which, in turn, provides reductions in processing costs and the use of valuable resources.

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Automation for Increased Employee Productivity and Improved Vendor Relations.    For many companies, processing vendor payments is a paper-intensive, error-prone task. Concur Payment automates the entire process from submissions to approval. Employees and a customer’s accounts payable department are spared the administrative burden associated with employee-initiated requests and can capture the details of the payment request in advance, making information more readily available and allowing issues and questions to be resolved quickly and efficiently. By eliminating processing steps, Concur Payment also facilitates more timely payment to vendors, which enhances vendor management and relationships. Current information about each vendor payment is readily available to the employee making the request, as well as the accounts payable department, which facilitates ongoing tracking of the requests and prompt answers to vendor inquiries on payment status.

Intuitive Interface for an Improved User Experience.    An intuitive, easy-to-use interface for the payment request process reduces the amount of time required to create payment requests. Users are prompted for all necessary information, such as vendor data, account codes, special handling instructions, and payment details. The payment request is then electronically routed for approval and, once approved, it is automatically sent to the financial system for payment. Users have access to instant online status updates.

Improved Cost Control with Better Business Intelligence.    With access to comprehensive payment details, companies have the ability to analyze trends, influence budget decisions, and improve forecasting. The availability of detailed payment data provides the accounts payable department with the ability to better manage vendors, which can result in cost savings. Our solutions provide the insight and technology to help companies leverage the data they collect, allowing them to make informed, cost-saving decisions within the company.

Value-Added Solutions

We provide value-added services and software that are fully-integrated with our Concur Expense and Concur Payment solutions. Our primary value-added solutions are described below.

Concur Imaging Service.    The Concur Imaging Service provides companies with the ability to capture, store, archive and retrieve employee receipts and vendor invoices electronically. This enables our customers using our Concur Expense solutions to reduce the costs of handling paper receipts and invoices. Users can simply fax receipts and invoices to a designated Concur Imaging Service telephone number, and the user, approval managers, and accounting staff can then view electronic copies of the receipts and invoices online through Concur Expense. There is no postage, no need to store paper receipts and invoices in a central location, and no need to physically handle the enormous amounts of paper associated with expense reporting and invoice processing. Receipts or invoices and the associated supporting documentation are available online throughout the approval, payment, and audit processes.

Concur Travel Integration.    Concur Travel Integration provides customers an “end-to-end” travel procurement and expense management solution by integrating Concur Expense with the travel planning process. Users can access their corporate travel-booking tool to plan a trip. The itinerary is downloaded to Concur Expense and can be used to create a pre-trip authorization request, or to attach a printable version of the itinerary to the expense report. No re-keying is necessary. The user can review this information, add any additional expenses, and submit the expense report for approval. The captured itinerary data is then integrated for enhanced business intelligence reporting.

Concur Business Intelligence.    Through our strategic relationship with Cognos Inc., a leading global provider of business intelligence solutions, we offer Concur Business Intelligence to give customers enhanced reporting capabilities with respect to the data gathered by Concur Expense, providing customers an accessible means of analyzing expense data and enabling them to save money by managing spending more effectively and to transform captured data into valuable information that can be used for effective decision-making.

Concur Total Access.    Concur Total Access enables users to enter expense report data when disconnected from the Internet. Concur Total Access includes Concur Offline Access^™, which is a fully-functioning client

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software application that can be installed on a user’s laptop computer, allows the user to create and manage expense reports on the laptop when disconnected from the Internet. Upon reconnection, Concur Offline Access synchronizes with the customer’s Concur Expense solution, uploading new expense transactions that were created offline. Concur Total Access also includes Concur Access for Palm^®, which allows users to enter expense transactions using handheld computers, such as a personal digital assistant, or PDA, device running the Palm OS^® operating system. These transactions are loaded into Concur Expense when the user synchronizes the PDA device, and the transactions can then be incorporated into an expense report and routed for approval and payment. Concur Total Access also includes the Concur Voice Access Service^™, which uses voice recognition technology to allow users to “call in” their expenses transactions while they are traveling.

Concur Transaction Assessment Module.    The Concur Transaction Assessment Module provides fraud detection capability to customers of our Concur Expense solutions, adding an additional layer of oversight and intelligence to the expense reporting process. Through our strategic relationship with ACL Services, a global provider of audit and data analysis technology, we have introduced the Concur Transaction Assessment Module to help customers reduce the potential for expense-related fraud and comply with the internal controls reporting and certification requirements of the Sarbanes-Oxley Act. The solution is comprised of a set of tests that recognize patterns in the data, including excessive and duplicate claims and threshold amounts, providing administrators with the ability to review cumulative expense information to identify potential fraudulent activity and deter unauthorized use.

Professional Services

Our professional services organization offers consulting, customer support, and training services in connection with our Corporate Expense Management solutions.

Consulting.    We offer consulting services in connection with implementation of our solutions to assist customers in maximizing their return on investment in our solutions. Our consulting staff meets with customers prior to implementation to review the customers’ existing business processes and information technology infrastructure, and to provide advice on ways to improve these processes, leveraging industry best practices and our experience in the Corporate Expense Management market. Our consultants also install, configure, and test our applications and integrate them with our customers’ existing systems, as well as help customers develop a strategy for enterprise-wide deployment of our applications. After deployment, our consultants work with customers to identify additional opportunities to further improve their return on investment.

Customer Support.    We provide customer support as well as new releases and updates of our services and software through our CustomerOne Services support program. Under this program, we provide telephone and Internet support, including online case entry and review, access to technical information documents, and technical tips. We also provide new releases and updates of our services and software for customers who subscribe to our CustomerOne Services program. Our CustomerOne Services program is typically included as part of our subscription service offerings. For our license offerings, most customers subscribe for the first year of the CustomerOne Services program at the time they license an application; thereafter, support is typically renewable on an annual basis.

Training Services.    We offer a variety of training programs for our services and software. These programs are tailored to particular user groups, such as administrators, help desk personnel, or trainers. Training can be either Web-based or offered onsite for the customer. Additionally, training simulations can be designed to meet the specific needs of each customer. All training programs are designed to assist our customers with managing the transition to our products and services and minimizing help desk calls.

Customers

Since 1996, companies in over 60 countries have contracted to use our market-leading solutions. Our customers include six of the top 10 Global 100 companies, including Ford Motor Company and General Motors,

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and 32 of the top 100 Fortune 1000 companies, including AT&T, Citigroup, Delphi Corporation, DuPont, Pfizer, and SBC Communications. No customer accounted for 10% or more of our total revenues in fiscal 2003, 2002, or 2001.

Sales and Marketing

We market our solutions worldwide to companies ranging from large-market companies with 2,000 or more employees to middle-market companies with less than 2,000 employees. In the large market, we sell our solutions primarily through our direct sales organization, with field sales professionals located in metropolitan areas throughout the United States, the United Kingdom, and Australia. Field-based sales engineers provide technical sales support. Direct telemarketing representatives based at our headquarters in Redmond, Washington support the field sales force through lead-generation and lead-tracking activities. We also have a number of marketing referral alliances that provide our sales force with prospects. Our sales efforts in the large market involve contact with multiple decision makers, frequently including the prospective customer’s chief financial officer, vice president of finance, controller, and corporate travel manager. While the average large-market sales cycle varies substantially, for initial sales it has generally ranged from six to twelve months.

In the middle market, we sell our solutions through both our direct sales organization and strategic relationships with third parties. Our middle market sales efforts frequently include contact with the prospective customer’s chief financial officer, vice president of finance, or controller. While the average sales cycle varies substantially from customer to customer, for initial sales it has generally ranged from two to six months. We have several strategic relationships focused primarily on middle market sales opportunities. In 2000, we entered into a strategic relationship with ADP, Inc., a subsidiary of Automatic Data Processing, Inc., a global payroll solutions and computing services provider. Sales through our ADP channel in fiscal 2003 represented more than 75% of our overall new unit sales of subscription services in the middle market. In 2001, we entered into a strategic relationship with Microsoft Business Solutions, a leading provider of business management solutions, under which Microsoft Business Solutions is authorized to resell our subscription services in the middle market through its global value-added reseller network. More recently, in 2003, we entered into a strategic relationship with U.S. Bank, a leading provider of corporate banking service and the leading issuer of Visa corporate card products, under which U.S. Bank is authorized to resell our subscription services in the middle market.

Our marketing programs are designed to position and promote the Concur brands widely in our target markets and to extend the product leadership position of our subscription services and software. These efforts are specifically targeted to accounting, finance, information technology, and travel executives.

We engage in a variety of marketing activities, including e-mail and direct mail campaigns, co-marketing strategies designed to leverage existing strategic relationships, Web-site marketing, seminars and “webinars”, public relations campaigns, speaking engagements and forums, and industry analyst visibility initiatives. We actively participate and sponsor finance and shared-service conferences and we demonstrate and promote our products at trade shows targeted to accounting, finance, information technology, and travel executives.

We actively communicate with our existing customers in order to enhance customer satisfaction, gain input for our future product strategy, and promote the adoption of additional services and software. In addition to our standard newsletter communication and conference calls, we also sponsor regional user groups, an advisory board and an international user conference. Through these forums, as well as frequent one-on-one communications, we are able to stay abreast of emerging trends and provide information to customers to help them maximize their return on investment from our solutions.

Product Development

We believe we pioneered the development of automated subscription services and software for the Corporate Expense Management market and are a leading provider in that market today. We believe that we were

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one of the first vendors to introduce a travel and entertainment expense reporting software application, and one of the first vendors to deliver Corporate Expense Management solutions under a subscription services model.

Our software engineering organization is responsible for developing new services and software as well as enhancing our existing services and software. We believe that a technically skilled, quality-oriented, and highly productive software engineering organization will be important for the success of new product offerings. As of September 30, 2003, we employed 83 people in research and development. Our software engineering team is organized into six disciplines: development, quality assurance, documentation, product design, configuration management, and program management. Members from each of these disciplines, along with a product manager from our marketing department, form separate product teams that work closely with sales, marketing, professional services, customers, and prospects to further understand market needs and requirements. When required, we also use independent development firms or contractors to expand the capacity and technical expertise of our internal research and development team. Additionally, we may license third-party technology that is incorporated into our products. We have a well-defined software development methodology that we believe allows us to deliver products that satisfy business needs and meet commercial quality expectations.

Competition

The market for our subscription services and software solutions is highly competitive and subject to rapid change. The direct competition we face depends on the market segment focus and delivery model capabilities of our competitors. We also face indirect competition from potential customers’ internal development efforts and, at times, have to overcome their reluctance to move away from existing paper-based systems. Our principal direct competition comes from independent vendors of Corporate Expense Management services and software, and from financial institutions and providers of ERP software that sell, along with their products and services, offerings similar to ours. These competitors include, but are not limited to, American Express, Bank of America, Geac Computer Corporation, Gelco Information Systems, IBM, JD Edwards, Necho Systems Corporation, Oracle Corporation, Outtask, Inc., PeopleSoft, Inc., SAP AG, and Wells Fargo Bank. We also expect to face competition from new entrants including financial institutions and ERP vendors that do not already market products similar to ours.

We believe that the principal competitive factors considered in selecting Corporate Expense Management services and software are functionality, interoperability with existing information technology infrastructure, ability to deliver solutions on an outsourced basis, price, and an installed base of referenceable customers. With respect to functionality, we believe that we offer products with generally more features than other competing products, and that we have often been the first to offer many new features. Our products were designed and built to interoperate with existing information technology systems and to operate as a service on an outsourced basis. We believe that a significant number of companies are seeking to reduce their operating costs by outsourcing their back-office processes, such as the management of corporate expenses. We have a well-established and scalable hosting infrastructure that allows us to provide cost-competitive solutions to our customers on an outsourced basis. We believe our outsourced subscription services are cost-competitive alternatives to the customer-hosted and -managed software products provided by many of our competitors. Overall, we believe that our products are competitively priced when compared to our competitors’ products, and that our installed base of customers for expense management solutions is larger than that of our primary competitors.

Although we believe we offer highly competitive services and software, many of our competitors have longer operating histories, greater financial, technical, marketing, and other resources, greater name recognition, and a larger number of total customers for their products and services. Moreover, a number of our competitors, particularly major financial institutions and ERP vendors, have well-established relationships with our current and potential customers as well as with systems integrators and other vendors and service providers. In addition, these competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements, or to devote greater resources to the development, promotion, and sale of their products, than we can. It is also possible that new competitors or alliances among competitors or other third parties may

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emerge and rapidly acquire market share. Increased competition may result in price reductions, reduced gross margins, and change in market share, any of which could harm our business.

Intellectual Property Rights

Our success depends, in part, upon our proprietary technology, processes, trade secrets, and other proprietary information, and our ability to protect this information from unauthorized disclosure and use. We rely on a combination of copyright, trade secret, and trademark laws, confidentiality procedures, contractual provisions, and other similar measures to protect our proprietary information. Currently, we do not own any issued patents or have any patent applications pending. As part of our efforts to protect our proprietary information, we enter into license agreements with our customers and nondisclosure agreements with certain of our employees, consultants, corporate partners, customers, and prospective customers. These agreements generally contain restrictions on disclosure, use, and transfer of our proprietary information. We also employ various physical security measures to protect our software source codes, technology, and other proprietary information.

Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our products or technology that we consider proprietary, and third parties may attempt to develop similar technology independently. In particular, we provide our licensed customers with access to object code versions of our software, and to other proprietary information underlying our software. Policing unauthorized use of our products is difficult, particularly because the global nature of the Internet makes it difficult to control the ultimate destination or security of software or other data transmitted. While we are unable to determine the extent to which piracy of our software products exists, software piracy can be expected to be a persistent problem. In addition, effective protection of intellectual property rights may be unavailable or limited in certain countries. The laws of some foreign countries do not protect our proprietary rights to the same extent as the laws in the United States.

In addition, over the past several years, we have made numerous changes in our product names. Although we own registered trademarks in the United States and have filed trademark applications in the United States and in certain other countries, we do not have assurance that our strategy with respect to our trademark portfolio will prove adequate to secure all necessary intellectual property rights or to protect us from claims by third parties, either domestically or in foreign countries. There also can be no assurance that any of our copyrights or trademarks will not be challenged and invalidated.

While we are not aware that our products, trademarks, copyrights, or other proprietary rights infringe the proprietary rights of third parties, third parties may assert infringement claims against us in the future with respect to current or future products. Further, we expect that providers of expense management services and software may become subject to infringement claims as the number of products and competitors in our industry segment grows and the functionality of products in different industry segments overlaps. From time to time, we hire employees and retain consultants who have worked for independent software vendors or other companies developing products similar to those offered by us. Such vendors or companies may claim that our products are based on their products and that we have misappropriated their intellectual property. Any such claims, with or without merit, could cause a significant diversion of management attention, result in costly and protracted litigation, cause product shipment delays or require us to enter into royalty or licensing agreements with third parties. Such royalty or licensing agreements, if required, may not be available on terms acceptable to us or at all, which would have a material adverse effect upon our business and financial position.

Employees

As of September 30, 2003, we had approximately 313 full-time employees. No employees are known by us to be represented by a collective bargaining agreement, and we have never experienced a strike or similar work stoppage. We consider our relations with our employees to be good.

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ITEM 2.    PROPERTIES

Our principal administrative, sales, marketing, and research and development facility is located in Redmond, Washington and consists of approximately 81,000 square feet of office space held under leases that expire on May 31, 2005. As of September 30, 2003, we also leased sales offices in Atlanta, Chicago, Dallas, London, Miami, New York, Phoenix, and Sydney.

ITEM 3.    LEGAL PROCEEDINGS

In July 2001, we and several of our current and former officers were named as defendants in two securities class-action lawsuits filed in the United States District Court for the Southern District of New York. In April 2002, these lawsuits were consolidated. The consolidated complaint generally alleges claims against us, several of our current and former executives, and the underwriters of our initial public offering in December 1998, based on alleged errors and omissions concerning underwriting terms in the prospectus for our initial public offering. The plaintiffs in this lawsuit seek damages in unspecified amounts, which, if awarded, could be substantial. This lawsuit is one of more than 300 similar pending cases filed against companies that completed initial public offerings between 1997 and 2000 and the underwriters that took them public. In October 2002, the court dismissed the individual defendants from the consolidated lawsuit, without prejudice, pursuant to a stipulated agreement between the parties. In February 2003, the presiding judge denied a motion to dismiss all claims. In July 2003, we decided to participate in a proposed settlement being negotiated by representatives of a coalition of issuers named as defendants in similar actions and their insurers. Although we believe that the plaintiffs’ claims have no merit, we have decided to participate in the proposed settlement to avoid the cost and distraction of continued litigation. We do not believe that the proposed settlement will have any material adverse effect on our business, financial condition, or results of operations. The proposed settlement is expected to be funded by a group of insurers on behalf of the issuer defendants. The proposed settlement agreement would dispose of all remaining claims against us and the individual defendants, without any admission of wrongdoing by us or the individual defendants. The proposed settlement is subject to final approval by the parties and the court. There is no guarantee that the parties or the court will approve the proposed settlement. Should the parties and the court fail to approve the proposed settlement, we would continue to defend ourselves vigorously.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of our stockholders, through the solicitation of proxies or otherwise, during the fourth quarter of fiscal 2003.

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PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock is traded on the NASDAQ National Market under the symbol “CNQR.” The following table sets forth the range of the high and low closing sales prices by quarter for fiscal 2002 and 2003, as reported on the NASDAQ National Market:

On September 30, 2003, there were approximately 400 stockholders of record of our common stock.

Dividends

We have never paid cash dividends on our common stock. We currently intend to retain earnings for use in our business and, therefore, do not anticipate paying any cash dividends on our common stock in fiscal 2004.

Recent Sales of Unregistered Securities

None.

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ITEM 6.    SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data should be read in conjunction with our Consolidated Financial Statements and Notes thereto and “Management’s Discussion And Analysis Of Financial Condition And Results Of Operations” that are included with this report.