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Cornerstone OnDemand, Inc. Announces Fourth Quarter and Fiscal Year 2011 Financial Results

Record full year gross revenue of $75.5 million, up 62% year-over-year

Record annual Bookings1 of $97.6 million, up 60% year-over-year

Record full year gross margin of 71%, up 400 basis points year-over-year

Annual dollar retention rate1 of 95%

Ended the year with over 800 clients and approximately 7.5 million users

SANTA MONICA, Calif. February 14, 2012 – Learning and talent management software provider Cornerstone OnDemand (NASDAQ: CSOD) today announced results for its fourth quarter and fiscal year ended December 31, 2011.

Gross revenue for the fourth quarter of 2011 was $22.4 million, representing a 59% increase compared to the same period in 2010. Gross revenue for the full fiscal year of 2011 was $75.5 million, representing a 62% increase compared to the full fiscal year of 2010.

Bookings1, which the company defines as gross revenue plus the change in deferred revenue, were $38.4 million for the fourth quarter of 2011, representing a 58% increase compared to the fourth quarter of 2010, and $97.6 million for the full fiscal year of 2011, a 60% increase compared to the full year 2010. Deferred revenue at December 31, 2011 was $55.9 million, which was 65% higher than the balance at December 31, 2010.

“We had a strong finish to an outstanding first year as a public company,” said Adam Miller, President and CEO. “It is a testament to our team’s commitment to client success that we were able to sustain our high growth, maintain our exceptional rate of client retention, and continue to improve margins.”

“Now that both of our primary competitors—Taleo and SuccessFactors—are being acquired by ERP vendors,” Miller continued, “Cornerstone is well-positioned with the scale, opportunity and momentum to be the preeminent talent management provider for organizations of all sizes.”

Gross profit for the fourth quarter of 2011 was $16 million, representing a 128% year-over-year improvement compared to the same period in 2010. Gross margin for the fourth quarter of 2011 was 71% compared to 63% in the same period in 2010. The 2010 period includes a reduction of revenue of $2.9 million associated with the issuance of a common stock warrant issued to ADP. On a non-GAAP basis1, gross margin for the fourth quarter of 2011 was 73% compared to 71% in the same period of 2010.

Gross profit for the full fiscal year of 2011 was $51.7 million, a 76% increase compared to 2010. Gross margin for the full fiscal year of 2011 was 71% compared to 67% in the same period in 2010. On a non-GAAP basis1, gross margin for the full fiscal year of 2011 was 73% compared to 70% in the same period in 2010.

Cornerstone’s loss from operations for the fourth quarter of 2011 was $4.6 million compared to a loss from operations of $6.3 million for the fourth quarter of 2010, reflecting the company’s continued investments in scaling its operations.

During the fourth quarter of 2011, net cash provided by operations was $4.9 million and the company generated approximately $4.2 million in unlevered free cash flow.1 For the full year, net cash provided by operations was $1.8 million and the company used approximately $1.4 million in unlevered free cash flow.1

At December 31, 2011, the company’s total cash and cash equivalents were $85.4 million and accounts receivable were $34.1 million.

Cornerstone ended the year with 805 clients and approximately 7.5 million users, representing 67% and 52% year-over-year growth of the company’s client base and users, respectively.

In accordance with Generally Accepted Accounting Principles, or on a “GAAP” basis, Cornerstone’s net loss for the fourth quarter of 2011 was $5.0 million compared to net loss of $16.9 million for the same period in 2010. Non-GAAP net loss1 for the fourth quarter of 2011 was $3.0 million, or $(0.06) per share compared to non-GAAP net loss1 of $3.4 million, or $(0.32) per share, for the same period in 2010.

Net loss for the full fiscal year 2011 was $63.9 million compared to net loss of $48.4 million for 2010. Non-GAAP net loss1 for 2011 was $12.8 million, or $(0.32) per share compared to non-GAAP net loss1 of $10.2 million, or $(1.11) per share for 2010.

Non-GAAP results exclude, if applicable for each given period, common stock warrant charges, expenses related to stock-based compensation and related employer-paid payroll taxes, changes in the fair value of preferred stock warrants, accretion related to preferred stock, amortization of debt discount and issuance costs, fees related to the early retirement of debt, and expenses associated with the company’s withdrawn secondary offering.

1 Bookings, unlevered free cash flow, annual dollar retention rate, non-GAAP net loss and non-GAAP net loss per share are non-GAAP measures. Please see the discussion in the section “Non-GAAP Financial Measures” and in the reconciliations at the end of the release.

Quarterly Conference Call

Cornerstone OnDemand will host a conference call to discuss its fourth quarter and fiscal year 2011 results at 2:00 p.m. PST (5:00 p.m. EST) 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: 5225-3594. 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 9:00 p.m. PST on February 18, 2012 by dialing (855) 859-2056 (U.S.) or 404-537-3406 (outside the U.S.), and referencing passcode: 5225-3594.

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 6,300 clients of all sizes, spanning more than 75 million users across over 180 countries and nearly 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

+1 (310) 752-0164
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