Cornerstone OnDemand Announces
First Quarter 2017 Financial Results
SANTA MONICA, Calif. — May 2, 2017 — Human capital management software provider Cornerstone OnDemand, Inc. (NASDAQ: CSOD) today announced results for its first quarter ended March 31, 2017. A summary of the Company’s Operational and Financial Highlights is available on the Company’s Investor Relations website at http://investors.cornerstoneondemand.com.
“The demand environment for what we do has remained strong, and in the first quarter new client additions once again included several of the world’s leading companies,” said Adam Miller, the Company’s President and CEO. “Our dominance in the industry has allowed us to maintain consistent growth in our core business, and in Q1 we saw a return to solid performances across Europe.”
First Quarter 2017 Results:
- Revenue for the first quarter of 2017 was $111.6 million, representing a 12.3% increase compared to the same period in 2016. Revenue growth on a constant currency basis represented a 17.2% increase compared to the prior year.1
- Billings were $89.7 million for the first quarter of 2017, representing a 7.2% increase compared to the same period in 2016.1 Billings growth on a constant currency basis represented a 6.3% increase compared to the prior year.1
- The Company’s operating loss for the first quarter of 2017 was $(13.1) million, yielding an operating loss margin of (11.8)%, compared to an operating loss of $(16.7) million, yielding an operating loss margin of (16.8)%, for the first quarter of 2016. This represents an improvement of 500 basis points year-over-year.
- Non-GAAP operating income for the first quarter of 2017 was $4.9 million, yielding a non-GAAP operating income margin of 4.4%, compared to a non-GAAP operating loss of $(1.1) million, yielding a non-GAAP operating loss margin of (1.1)%, for the first quarter of 2016.1 This represents an improvement of 550 basis points year-over-year.
- The Company’s net loss for the first quarter of 2017 was $(16.2) million, or a $(0.29) diluted net loss per share, compared to a net loss of $(18.2) million, or a $(0.33) diluted net loss per share, for the first quarter of 2016.
- Non-GAAP net income for the first quarter of 2017 was $4.8 million, or a $0.08 non-GAAP diluted net income per share, compared to a non-GAAP net loss of $(0.3) million, or a $0.00 non-GAAP diluted net loss per share, for the first quarter of 2016.1
- Free cash flow for the first quarter of 2017 was $(15.7) million compared to free cash flow of $(21.0) million for the first quarter of 2016.1
“Our first quarter performance once again demonstrated our commitment to improving our profitability,” said Brian Swartz, the Company’s CFO. “We achieved both first quarter non-GAAP operating profit and non-GAAP net income for the first time in the Company’s history, and we believe there is additional margin improvement yet to be realized through our various operational excellence initiatives.”
- Admiral Group, one of the largest car insurance providers in the U.K., will use the Company’s software to drive business performance through better, more accessible learning for its global workforce.
- The Company was recognized as a Leader in the 2017 Gartner Magic Quadrant for Talent Management Suites for the fourth consecutive year.
- The Company announced that it plans to open two new data centers in Europe in early 2018. The new data centers, located in France and Germany, will meet stringent European Union regulations and give the Company’s clients more geographical options for where their talent data is stored.
- The Company ended the first quarter of 2017 with 2,998 clients and more than 31.0 million users.2
The following outlook is based on information available as of the date of this press release and is subject to change in the future. For the second quarter ending June 30, 2017, the Company provides the following outlook:
- Revenue between $115.0 million and $118.0 million, representing year-over-year growth at the mid-point of 8.9%3, or 12.8%4 on a constant currency basis.
For the year ending December 31, 2017, the Company provides the following outlook:
- Revenue between $477.0 million and $487.0 million, representing year-over-year growth at the mid-point of 13.9%5, or 16.0%6 on a constant currency basis.
- Non-GAAP operating margin of approximately 6.0% of revenue.
- Free cash flow margin of approximately 6.0% to 7.0% of revenue.
The Company has not reconciled the guidance for non-GAAP operating margin to the corresponding GAAP measures because it does not provide guidance for such GAAP measure and would not be able to present the reconciling items between such GAAP and non-GAAP measure without unreasonable efforts. For non-GAAP operating margin, the Company excludes stock-based compensation expense, which is impacted by factors that are outside of the Company’s control and can be difficult to predict. The actual amount of stock-based compensation expense in the second quarter ending June 30, 2017 and the year ending December 31, 2017 will have a significant impact on the Company’s GAAP operating margin.
1 Billings, financial measures presented on a constant currency basis, non-GAAP operating income (loss), non-GAAP operating income (loss) margin, non-GAAP net income (loss), non-GAAP diluted net income (loss) per share, free cash flow and free cash flow margin are non-GAAP financial measures. Please see the discussion in the section titled “Non-GAAP Financial Measures” and the reconciliations at the end of this press release. 2 Includes contracted clients and active users of our enterprise human capital management platform and excludes clients and users of our Cornerstone for Salesforce and Cornerstone Growth Edition products.
In order to translate the financial outlook for entities reporting in British pounds (GBP) to United States dollars (USD), the following exchange rates have been applied: 3 Exchange rate applied to revenue for the second quarter of 2017 $1.28 USD per GBP 4 Exchange rate from the second quarter of 2016 applied to calculate revenue growth for the second quarter of 2017 on a constant currency basis $1.43 USD per GBP 5 Exchange rate applied to revenue for fiscal 2017 $1.28 USD per GBP 6 Exchange rate from fiscal 2016 applied to calculate revenue growth for fiscal 2017 on a constant currency basis $1.35 USD per GBP
Quarterly Conference Call
Cornerstone OnDemand, Inc. will host a conference call to discuss its first quarter 2017 results at 2:00 p.m. PT (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 website at http://investors.cornerstoneondemand.com. The live call can be accessed by dialing (877) 445-4619 (U.S.) or (484) 653-6763 (outside the U.S.) and referencing passcode: 92013523. 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. PT on May 5, 2017 by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (outside the U.S.), and referencing passcode: 92013523.
Cornerstone is a leading global 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 their people potential. Featuring comprehensive recruiting, personalized learning, modern content delivered in the flow of work, development-driven performance management and holistic workforce data management and insights, Cornerstone’s people development solutions are used by more than 3,600 global clients of all sizes, spanning more than 40 million users across 180+ countries and 40+ languages.
Learn more at www.cornerstoneondemand.com.au