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Cornerstone OnDemand Announces Third Quarter 2012 Financial Results

  • Cornerstone ended the quarter with over 1,100 clients and approximately 10.3 million users, representing 57% and 44% year-over-year growth of Cornerstone’s client base and users, respectively.Q3 Bookings of $42.7 million, up 78% year-over-year

  • Record quarterly revenue of $30.8 million, up 54% year-over-year

  • Record quarterly gross profit of $21.6 million, up 48% year-over-year

  • Ended the quarter with over 1,100 clients and approximately 10.3 million users

SANTA MONICA, Calif. — November 12, 2012 — Learning and talent management software provider Cornerstone OnDemand, Inc. (NASDAQ: CSOD) today announced results for its quarter ended September 30, 2012.

Revenue for the third quarter of 2012 was $30.8 million, representing a 54% increase compared to the same period in 2011. Revenue for the first nine months of 2012 was $81.5 million, an increase of 53% compared to gross revenue for the same period in 2011.2

Gross profit for the third quarter of 2012 was $21.6 million, representing a 48% year-over-year increase compared to the same period in 2011. Gross profit for the first nine months of 2012 was $57.6 million, an increase of 51% compared to the same period in 2011, based on gross revenue.2

Bookings, which Cornerstone defines as gross revenue plus the change in deferred revenue for the period, were $42.7 million for the third quarter of 2012, representing a 78% increase compared to the same period in 2011. 1 Bookings for the first nine months of 2012 were $98.2 million, representing a 66% increase compared to the same period in 2011.1 Deferred revenue at September 30, 2012 was $72.6 million, which was 82% higher than the balance at September 30, 2011, and 20% higher than the balance at June 30, 2012.

“The third quarter was another exceptional quarter for Cornerstone OnDemand, and a continuation of what has been an outstanding year of growth for the company,” said Adam Miller, Cornerstone's President and CEO. “We believe our bookings performance demonstrates that the recent wave of consolidation in talent management has improved our competitive positioning. With our commitment to the ongoing innovation and expansion of our product suite, we believe we will continue to strengthen our position as a leading talent management partner to organizations of all sizes.”

Cornerstone’s net loss for the third quarter of 2012 was $7.6 million, or a $0.15 net loss per share.

Due to purchase accounting rules applicable to the acquisition we completed during the second quarter of 2012, Cornerstone recorded an adjustment of $1.6 million to reduce to fair value the balance of deferred revenue attributable to contracts assumed from Sonar Limited. This fair value adjustment has the impact of reducing the amount of revenue attributable to contracts assumed from Sonar Limited by $0.4 million for the quarter ended September 30, 2012 and $1.1 million for the first nine months of 2012. Non-GAAP revenue for the quarter ended September 30, 2012, which excludes the $0.4 million reduction, was $31.2 million, representing a 56% increase compared to the same period in 2011.1 Non-GAAP revenue from the acquisition date through September 30, 2012, excluding the $1.1 million reduction, was $82.6 million, representing a 56% increase compared to the same period in 2011.1

Non-GAAP net loss for the third quarter of 2012 was $3.6 million, or a $0.07 net loss per share, and non-GAAP net loss for the first nine months of 2012 was $13.1 million, or $0.26 net loss per share. Non-GAAP net loss is based on non-GAAP revenue and excludes, for the periods in which they are present, stock-based compensation and employer-related payroll taxes, amortization of intangible assets, acquisition costs, amortization of debt discount and issuance costs, early debt retirement expense, change in the fair value of preferred stock warrant liabilities, adjustments to taxes related to acquisition adjustments, and accretion related to preferred stock.1

At September 30, 2012, Cornerstone’s total cash and cash equivalents were $64.5 million and accounts receivable were $45.2 million, yielding a total of $109.7 million.

Quarterly Conference Call

  1. Non-GAAP revenue, bookings, non-GAAP net cash used in operating activities, non-GAAP net loss, non-GAAP net loss per share, non-GAAP gross profit, and non-GAAP gross margin are non-GAAP financial measures. Please see the discussion in the section “Non-GAAP Financial Measures” and the reconciliations at the end of this release.

  1. Gross revenue in the first nine months of 2011 excludes the impact of a non-cash reduction of revenue related to a common stock warrant issued to ADP of $2.5 million. Net revenue and net loss for the nine months of 2011 was impacted by this non-cash reduction of revenue.

Includes contracted clients and active users of any combination of our four integrated cloud-based solutions, consisting of recruiting, learning, performance, and extended enterprise as of the end of the period. Our client and user counts exclude our Cornerstone Small Business Solution, or “CSB”.

Cornerstone OnDemand will host a conference call to discuss its third quarter 2012 results at 2:00 p.m. PST (5:00 p.m. ET) today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company’s Investor Relations Web site at http://investors.cornerstoneondemand.com/investors/news-and-events/events/default.aspx. The live call can be accessed by dialing (888) 357-3694 (U.S.) or (973) 890-8276 (outside the U.S.) and referencing passcode: 65175817. A replay of the call will also be available at http://investors.cornerstoneondemand.com/investors/news-and-events/events/default.aspx or via telephone until 11:59 p.m. PST on November 16, 2012 by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (outside the U.S.), and referencing passcode: 65175817.

About Cornerstone

Cornerstone is a premier people development company. We believe people can achieve anything when they have the right development and growth opportunities. We offer organizations the technology, content, expertise and specialized focus to help them realize the potential of their people. Featuring comprehensive recruiting, personalized learning, modern training content, development-driven performance management and holistic employee data management and insights, Cornerstone’s people development solutions are used by approximately 7,000 clients of all sizes, spanning more than 75 million users across over 180 countries and 50+ languages. Learn more at www.cornerstoneondemand.com.

Investor Relations Contact

Jason Gold

jgold@csod.com

+1 (310) 526-2531

Media Contact

Deaira Irons

dirons@csod.com

310-752-0164
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