second quarter 2015 · • the company’s ability to accurately forecast revenue and appropriately...
TRANSCRIPT
Corporate Overview
Second Quarter 2015
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.
Safe Harbor
Our Evolution
3
15 Years Ago…
Our Evolution
4
Then…
Our Evolution
5
Now
The Opportunity
7
Work is Changing
WHO
WHAT
WHERE
WHEN
HOW
The Market Need is Real
8
…and the Market is Huge
Source: Adapted from Gartner, IDC, US Census Bureau
Addressable Market
19.1 Million Users
$31 Billion
400 Million Addressable Seats
72 Million Est. Users
Current Market
9
Scale to Meet the Need
Cornerstone has a Global Footprint
191 Countries
42 Languages
17 Offices
2,200+ Clients
19M+ Users
As of March 31, 2015
11
Note: User and client count figures exclude Growth Edition and Cornerstone for Salesforce.
12
“Leader” 2014 Magic Quadrant for
Talent Management Suites
“Market Leader” 2014 Integrated Talent
Management Marketscape
Industry-Leading Solution
Organically-Grown Core Suite
Acquired by
Acquired by
Acquired by
Acquired by
Acquired by
Marching to $1B
The Competitive Landscape
Focus on innovation
Organically grown
Pure SaaS
System of engagement
Focus on client success
Focus on integration
Built through acquisition
Mix of SaaS and On-Premise
System of record
Clients multiple levels removed
ERP Suite
Best Of Breed
15
CSOD has Accelerating Client Traction
2003-2004 2009 2011 2013 2007
2008 2010 2012 2014 2005-2006
Key Client Additions
12 21 44 73 105 168 280 481
805
1,237
1,631
2,153
0
400
800
1,200
1,600
2,000
2,400
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
16
Expanded Global Footprint Europe, Middle East & Africa Asia Pacific
Select Notable Clients Select Notable Clients
Germany South Africa Spain
Austria France United Kingdom
Japan China Australia
Japan India China
8 Offices
29 Languages
5.6M Est. Users
5 Offices
9 Languages
1.6M Est. Users
17
Growth Across All Metrics
$11.0 $19.6
$29.3
$46.6
$75.5
$117.9
$185.1
$263.6
2007 2008 2009 2010 2011 2012 2013 2014
Revenue Growth
105 168
280
481
805
1,237
1,631
2,153
2007 2008 2009 2010 2011 2012 2013 2014
Client Growth
0.9
2.1
3.3
4.9
7.5
10.6
14.0
18.1
2007 2008 2009 2010 2011 2012 2013 2014
User Growth (in millions) (in millions)
18
Note: User and client count figures exclude Growth Edition and Cornerstone for Salesforce.
Now with More People with More to Sell
19
Bolstered by Tier One Global Partners
Select Alliances
20
Global Global Global Global Global
Opportunities Abound
Investment Landscape
Market Segments
Vertical Opportunity
Installed Base Opportunity
Extended Enterprise
Big Data
Platform
22
Market Segment Opportunity
Many, Many Small Business Deals
8 Figure Enterprise Deals
CORE BUSINESS
23
Vertical Opportunity
24
Healthcare Life Sciences Public Sector
Installed Base Penetration
25
have 2+ modules have 3+ modules Nearly
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
Learning Performance Succession Connect Compensation Recruiting Onboarding
Existing Client Penetration Client Opportunity
Num
ber
of C
lient
s
Installed Base Opportunity
26 Calculated based on 2,237 clients with approximately 8,500 users on average.
Approximately $1.5B opportunity within installed base
60% penetration among other
products results in
nearly $700M
opportunity
Extended Enterprise Opportunity
27
Business
Bundled Purchase
Standalone Purchase
Bundled Purchase
Standalone Purchase
Training for a person to fill an ongoing need
Training for a person to close skills gap or
personal interest
Training for people for ongoing
development
Training for people to close skills gaps
Consumers Training
Coordinator
Big Data Opp: CSOD has "Massive Data"
Position Previous Position Education Skills Interests Certifications Accomplishments Languages Organization Preferences …
Connections Live Feed (Status) Feedback Actions Snapshots Teams Discussions Badges Likes Comments …
Industry Business Unit Department Division Region Groups Hierarchies Cost Center Grade Location …
Transcript Performance Skills Goals Assessments Dev Plans Succession Compensation Applicants Applicant Status …
Transactional Data | Usage Data | Effective Dating | Behavioral Data
Collaboration
Organization
Talent
User
19.1M Users | 191 Countries | Decade of Data
28
Cornerstone Analytics Suite Cornerstone Data APIs Cornerstone View Cornerstone Reporting
Standard & custom reports embedded with Cornerstone
Big data solution for predictive hiring
Cornerstone Selection formerly Evolv Selection
Cornerstone Insights formerly Evolv Insights
Highly visual dashboards that can easily slice/dice talent information
Public APIs that can be easily consumed into 3rd party apps
Cornerstone Planning
Predictive analytics for managing talent decisions
Big data solution for workforce planning
29
Platform Opportunity: Cornerstone Edge
LEARN
Cornerstone API Services Cornerstone App Builder Cornerstone Marketplace Cornerstone Developer
INTEGRATE BUILD MARKET
Developer community to learn and access key
resources for Cornerstone Edge
Review Cornerstone API library, documentation,
tutorials
Create new, unique applications leveraging Cornerstone APIs &
development tools
Easily access, download, install and configure custom
and 3rd party apps
30
Multi-tenant REST APIs Mobile-Ready
Cornerstone Apps Partner Apps Custom Apps One unified suite to recruit, train, develop, and connect employees
Marketplace of apps integrated and embedded within Cornerstone
Client-specific applications designed and built by clients or partners
31
Cornerstone Platform Changes Everything
Financial Highlights
Strong Momentum
$11.0 $19.6
$29.3 $46.6
$75.5
$117.9
$185.1
$263.6
$0
$60
$120
$180
$240
$300
2007 2008 2009 2010 2011 2012 2013 2014
$15.0 $24.9
$34.5
$60.9
$97.6
$154.3
$231.7
$316.1
$0
$65
$130
$195
$260
$325
2007 2008 2009 2010 2011 2012 2013 2014
(in millions)
33
(in millions) Revenue Bookings
Growing Revenue Per User
34
$11.27
$12.14
$13.05
$15.04
$16.40
$10
$11
$12
$13
$14
$15
$16
$17
2010 2011 2012 2013 2014
Calculated using full-year revenue for the period divided by the midpoint of the beginning and ending user base during the period.
November 1999
Founded with $700K raised from
angel investors
September 2007
$32.0M in first round of funding led by Bessemer
Venture Partners & Bay Partners
March 2009
$12.7M in second round of funding led by Meritech Capital Partners
Initial public offering
March 2011
Primarily financed through debt and
revenue
35
Bootstrapped Mentality since Inception
Clear Path to Profitability
$0.2 $2.2
$11.2
$20.6
$33.3
$43.0
$0
$9
$18
$27
$36
$45
2010 2011 2012 2013 2014 2015E
(in millions)
36
-22%
-17%
-14%
-7% -6%
-5%
-25%
-20%
-15%
-10%
-5%
0%2010 2011 2012 2013 2014 2015E
Non-GAAP Operating Cash Flow Non-GAAP Net Loss Margin
Note: 2015E non-GAAP net loss margin uses the midpoint of the revenue guidance range of $337.5 - $341.5M
Not just Software, but Service
37
95% average dollar retention since inception
Many repeat buyers
Pioneering Client Success Framework
Business consulting, client success management and solution architecture
Thank You!