csod investor deck first quarter
TRANSCRIPT
Safe Harbor This presentation includes forward-looking statements. In this presentation, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “predict,” “potential” and similar expressions, as they relate to Cornerstone OnDemand, Inc. (“Cornerstone OnDemand” or the “Company”), business and
management, are intended to identify forward-looking statements. In light of the risks and uncertainties outlined below, the future events and circumstances discussed in this presentation may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. The Company has based
these forward-looking statements largely on its current expectations and projections about future events and financial trends affecting its business. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such
performance or results will be achieved. Forward-looking statements are based on information available at the date of this presentation and management’s good faith belief as of such date with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those
expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:
• Statements regarding the Company’s business strategies;
• The Company’s anticipated future operating results and operating expenses;
• The Company’s ability to attract new clients to enter into subscriptions for its solution;
• The Company’s ability to service those clients effectively and induce them to renew and upgrade their deployments of the Company’s solution;
• The Company’s ability to expand its sales organization to address effectively the new industries, geographies and types of organizations the company intends to target;
• The Company’s ability to accurately forecast revenue and appropriately plan its expenses; market acceptance of enhanced solutions, alternate ways of addressing learning and talent management needs or new technologies generally by the Company and its competitors; continued acceptance of SaaS as an effective method for
delivering learning and talent management solutions and other business management applications; the attraction and retention of qualified employees and key personnel;
• The Company’s ability to protect and defend its intellectual property; costs associated with defending intellectual property infringement and other claims; events in the markets for the Company’s solution and alternatives to the Company’s solution, as well as in the United States and global markets generally; future regulatory, judicial
and legislative changes in the Company’s industry; changes in the competitive environment in the Company’s industry and the markets in which the Company operates; and other factors discussed under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s
periodic reports filed with the Securities and Exchange Commission (the “SEC”).
Forward-looking statements speak only as of the date of this presentation. You should not put undue reliance on any forward-looking statement. The Company assumes no obligation to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting future performance or results,
except to the extent required by applicable laws. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.
In considering investing in the Company’s securities, you should read the documents the Company has filed with the SEC for more complete information about the
Company. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
2
7 Note: User and client count figures exclude Growth Edition and Cornerstone for Salesforce.
CLIENTS
2,500+ USERS
23M+ COUNTRIES
191 LANGUAGES
42 OFFICES
19
San Francisco
Santa Monica
Sunnyvale
Sao Paulo
Madrid Paris
London Amsterdam
Stockholm
Dusseldorf Munich
Tel Aviv
Bangalore
Mumbai
Hong Kong
Tokyo
Sydney
Auckland
Today with Global Reach…
As of December 31, 2015
New Delhi
Cornerstone is the Talent Management Leader
9
Niche Players Visionaries
Challengers Leaders
Magic Quadrant for Talent Management Suites
Lumesse
COMPLETENESS OF VISION
ABI
LITY
TO
EX
ECU
TE
Source: Gartner (August 2015)
Deltek (HRsmart)
Technomedia
Haufe PeopleFluent
SumTotal
Halogen Software
Saba
Oracle (Talent Management Cloud)
SAP (SuccessFactors)
Talentsoft
11
x
The Ability to Integrate with Everyone WDAY
removed logos:
Oracle/ People Soft
removed logos:
SAP removed logos:
OVER TIME, MORE PEOPLE + MORE TO SELL
LEARNING
PERFORMANCE
RECRUITING
ANALYTICS
Now with More People with More to Sell
Strong Results
13
$11.0 $19.6
$29.3 $46.6
$75.5
$117.9
$185.1
$263.6
$339.7
$0
$50
$100
$150
$200
$250
$300
$350
2007 2008 2009 2010 2011 2012 2013 2014 2015
$15.0 $24.9
$34.5
$60.9
$97.6
$154.3
$231.7
$316.1
$400.5
$0
$60
$120
$180
$240
$300
$360
$420
2007 2008 2009 2010 2011 2012 2013 2014 2015
(in millions) (in millions)
Revenue Bookings
Growing ASPs Across All Geographies
14
+48%
+15%
+44%
North America Europe,
Middle East & Africa
Asia Pacific
Growth Across All Metrics
15
$11.0 $19.6
$29.3
$46.6
$75.5
$117.9
$185.1
$263.6
$339.7
2007 2008 2009 2010 2011 2012 2013 2014 2015
Revenue Growth
105 168
280
481
805
1,237
1,631
2,153
2,595
2007 2008 2009 2010 2011 2012 2013 2014 2015
Client Growth
0.9
2.1
3.3
4.9
7.5
10.6
14.0
18.1
23.8
2007 2008 2009 2010 2011 2012 2013 2014 2015
User Growth (in millions) (in millions)
Note: User and client count figures exclude Growth Edition and Cornerstone for Salesforce.
Clear Path to Profitability
16
$(1.6) $(1.4)
$3.1
$10.7
$17.0
$31.8
$47.5
($5)
$5
$15
$25
$35
$45
$55
2010 2011 2012 2013 2014 2015 2016E
(in millions)
-21.9%
-17.0%
-13.4%
-6.7% -6.4% -6.2%
0.2%
-25%
-20%
-15%
-10%
-5%
0%
5%
2010 2011 2012 2013 2014 2015 2016E
Non-GAAP Free Cash Flow
Non-GAAP Net Loss Margin
*Non-GAAP free cash flow calculation does not include capitalized software development costs
Note: 2016E values reflect the latest issued guidance. 2016E non-GAAP net loss margin uses the midpoint of the revenue
guidance range of $425 - $433M
The Market Need is Real
19
Ben Schiller | May 8, 2015
What Do Workers Want from the Boss?
Walter Frick | November 3, 2015
When Treating Workers Well Leads to More
Innovation
Adam Miller | March 26, 2015
3 Things Millennials Want in a Career
(hint: it’s not more money)
Sylvia Voerhauser-Smith | October 15, 2015
Is HR Disconnected? Here’s How HR Can
Reconnect and Embrace the Future
Lauren Weber | September 30, 2015
How to Get More Women Into the Workforce
The Market is HUGE
20
23.8M USERS
ADDRESSABLE MARKET
$31B
85M EST. USERS
CURRENT MARKET
400M ADDRESSABLE SEATS
CORNERSTONE
Source: Adapted from Gartner, IDC, US Census Bureau
Opportunities Abound
ü Continued Core Market Sales
ü Global Expansion
ü Market Segmentation
ü Vertical Opportunity
ü Installed Base Opportunity
ü Extended Enterprise
21
Accelerating Client Traction
22
2003-2005 2010 2012 2014 2008
2009 2011 2013 2015 2006-2007
Key Client Additions
12 21 44 73 105 168 280 481
805
1,237
1,631
2,153
2,595
0
400
800
1,200
1,600
2,000
2,400
2,800
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Expanded Global Footprint
23
Europe, Middle East & Africa
Select Notable Clients Select Notable Clients
JAPAN CHINA
AUSTRALIA
JAPAN
INDIA CHINA
Asia Pacific
SWITZERLAND SPAIN
NETHERLANDS FRANCE UNITED KINGDOM
GERMANY
8 29 OFFICES LANGUAGES EST. USERS
7 9 1.8M OFFICES LANGUAGES EST. USERS
6.4M
24
Seven & Eight Figure Deals
ü America’s largest insurance company ü Second largest bank in the U.S. ü Largest bank in Switzerland ü Largest aerospace manufacturer in Europe ü Largest auto-parts manufacturer in the world ü Largest multinational pharma company in the world ü Largest baking company in the world
ü Largest bank in Germany ü Largest professional services firm in the world ü Largest full service restaurant company in the world ü Largest tax service provider in the world
New Sales in
Q4 2015:
25
Purpose-built talent management solution for Growing Businesses
• Mobile ready
• Self configurable
• 3 hour deployment
• Bundled training
Growth Edition for Small Business
HAVE 2+ MODULES
2 / 3
Installed Base Penetration
2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+
2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+
3+ 3+ 3+ 3+ 3+ 3+ 3+ 3+ 3+ 3+
3+ 3+ 3+
HAVE 3+ MODULES
1 / 2Nearly
26
More Than
2+
Installed Base Opportunity
27
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
Learning Performance Succession Connect Compensation Recruiting Onboarding
Existing Client Penetration Client Opportunity
Num
ber o
f Clie
nts
Nearly $2B opportunity within installed base
60% penetration
among other
products results in nearly $800M
opportunity
Calculated based on 2,595 clients with approximately 9,200 users on average
Extended Enterprise Opportunity
28
Engage & enable the entire ecosystem
• Training for profit
• Partner enablement
• Customer engagement
• Crowdsourcing
30
ü FIRST to the Cloud
ü FIRST to do Integrated Talent Management
ü FIRST to include Social Networking in Talent Management
ü FIRST to do client success management
ü FIRST to understand consumerization of the enterprise
ü FIRST to integrate full machine learning
Cornerstone is Visionary
Cornerstone has “Massive Data”
31
User
ü Position ü Previous Position ü Education ü Skills ü Certifications ü Accomplishments ü Languages ü Organization ü Preferences
Collaboration
ü Connections ü Live Feed (Status) ü Feedback ü Actions ü Snapshot ü Teams ü Discussions ü Badges ü Likes ü Comments
Talent Organization
ü Transcript ü Performance ü Skills ü Goals ü Assessments ü Dev Plans ü Succession ü Compensation ü Applicants ü Applicant Status
ü Industry ü Business Unit ü Department ü Division ü Region ü Groups ü Hierarchies ü Cost Center ü Grade ü Location
23.8M USERS | 191 COUNTRIES | DECADE OF DATA
32
REPORT
Cornerstone Reporting
Standard & custom reports embedded
with Cornerstone
DISCOVER
Cornerstone View
Highly visual dashboards that can easily slice/ dice
talent information
PLAN
Cornerstone Planning
Big data solution for workforce planning
PREDICT
Cornerstone Insights
Predictive analytics for managing
talent decisions
Cornerstone Analytics
32
LEARN
Cornerstone Developer
Developer community to learn
and access key resources for
Cornerstone Edge
INTEGRATE
Cornerstone API & Integrations
Explore the Edge API library,
documentation, tutorials
BUILD
Cornerstone Edge Builder
Create new, unique applications leveraging
Cornerstone APIs & developer tools
MARKET
Cornerstone Marketplace
Easily access, download, install
and configure custom and 3rd
party apps
33
The Power of Platform
34
Multi-tenant REST APIs Mobile-Ready
Cornerstone Apps Partner Apps Custom Apps One unified suite to recruit, train, develop, & connect
employees
Marketplace of apps integrated & embedded within
Cornerstone
Client-specific applications designed & built by clients
or partners